<DOCUMENT>
<TYPE>424B5
<SEQUENCE>1
<FILENAME>f72609e424b5.txt
<DESCRIPTION>PROSPECTUS SUPPLEMENT
<TEXT>
<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
File Number 333-79025
Prospectus Supplement to Prospectus dated April 10, 2000.
$300,000,000
KNIGHT-RIDDER, INC.
7.125% Notes due June 1, 2011
----------------------
Knight-Ridder, Inc. will pay interest on the notes on June 1 and December 1
of each year. The first such payment will be made on December 1, 2001. The notes
will be issued only in denominations of $1,000 and integral multiples of $1,000.
Knight Ridder has the option to redeem all or a portion of the notes at any
time at a price based on the present value on the redemption date, using a
discount rate based on a U.S. Treasury security having a remaining life to
maturity comparable to the notes, of the then remaining scheduled payments of
principal and interest on the notes to be redeemed, plus 20 basis points, plus
accrued interest. The redemption price will in no event be less than 100% of the
principal amount of the notes to be redeemed.
----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------------
<TABLE>
<CAPTION>
Per Note Total
-------- ------------
<S> <C> <C>
Initial public offering price............................... 99.789% $299,367,000
Underwriting discount....................................... 0.650% $ 1,950,000
Proceeds, before expenses, to Knight Ridder................. 99.139% $297,417,000
</TABLE>
The initial public offering price set forth above does not include accrued
interest, if any. Interest on the notes will accrue from June 4, 2001 and must
be paid by the purchaser if the notes are delivered after June 4, 2001.
----------------------
The underwriters expect to deliver the notes in book-entry form only
through the facilities of The Depository Trust Company against payment in New
York, New York, on June 4, 2001.
GOLDMAN, SACHS & CO. BANC OF AMERICA SECURITIES LLC
BARCLAYS CAPITAL
WELLS FARGO BROKERAGE SERVICES, LLC
SUNTRUST EQUITABLE SECURITIES
WACHOVIA SECURITIES, INC.
----------------------
Prospectus Supplement dated May 30, 2001.
<PAGE> 2
FORWARD-LOOKING STATEMENTS
Certain statements made in or incorporated into this prospectus supplement
and the accompanying prospectus are forward-looking statements. These
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results and events to differ materially from those
anticipated.
Potential risks and uncertainties that could adversely affect our ability
to obtain these results include, without limitation, the following factors: (a)
increased consolidation among major retailers or other events that might
adversely affect business operations of major customers and depress the level of
local and national advertising; (b) an economic downturn in some or all of our
principal newspaper markets that might lead to decreased circulation or
decreased local or national advertising; (c) a decline in general newspaper
readership patterns as a result of competitive alternative media or other
factors; (d) an increase in newsprint costs over the levels anticipated; (e)
labor disputes that might cause revenue declines or increased costs; (f)
disruptions in electricity and natural gas supplies and increases in energy
costs; (g) acquisitions of new businesses or dispositions of existing
businesses; (h) increases in interest or financing costs; and (i) rapid
technological changes and frequent new product introductions prevalent in
electronic publishing, including the evolution of the Internet.
THE COMPANY
Knight Ridder is the nation's second largest newspaper publisher, with
products in print and online. We publish 32 daily newspapers in 28 U.S. markets,
with a readership of approximately 8.5 million daily and approximately 12.6
million on Sunday. We also have investments in a variety of Internet and
technology companies and two newsprint production companies. Our Internet
operation, KnightRidder.com, creates and manages a variety of online services,
including the Real Cities Network of regional hubs in 38 U.S. markets. Our
newspapers are dedicated to serving their respective communities with high
quality and independent journalism. We have won 73 Pulitzer prizes, including 14
in the past ten years.
USE OF PROCEEDS
We will use the net proceeds from the sale of the notes to reduce
commercial paper borrowings and for general corporate purposes. Our commercial
paper bears interest at rates ranging from 4.05% to 4.95% with maturities to
September 17, 2001.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges is computed by dividing earnings (as
adjusted for fixed charges and undistributed equity income from unconsolidated
subsidiaries) by fixed charges for the period. Fixed charges include the
interest on debt (whether expensed or capitalized), the interest component of
rental expense, and the proportionate share of interest expense on guaranteed
debt of certain equity-method investees and on debt of 50%-owned companies.
<TABLE>
<CAPTION>
QUARTER ENDED YEAR ENDED
-------------------- ------------------------------------------------------------------------
APRIL 1, MARCH 26, DECEMBER 31, DECEMBER 26, DECEMBER 27, DECEMBER 28, DECEMBER 29,
2001 2000 2000 1999 1998 1997 1996
-------- --------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges...... 3.5 10.7 5.3 6.2 5.3 7.1 4.0
</TABLE>
S-2
<PAGE> 3
DESCRIPTION OF THE NOTES
The 7.125% Notes due June 1, 2011 are a series of debt securities as
described in the accompanying prospectus. The following description of the
particular terms of the notes offered hereby supplements and, to the extent
inconsistent therewith, replaces the description of the general terms and
provisions of the debt securities set forth in the accompanying prospectus.
Capitalized terms used herein and not defined in this prospectus supplement
shall have the meanings given to them in the accompanying prospectus or in the
indenture referred to in this prospectus supplement.
GENERAL
The notes will be issued under a supplemental indenture, dated as of June
1, 2001, between Knight Ridder and The Bank of New York, as series trustee, to
the indenture, dated as of November 4, 1997, between Knight Ridder and The Chase
Manhattan Bank, as original trustee, which is more fully described in the
accompanying prospectus. We will issue the notes as unsecured obligations in an
initial aggregate principal amount of $300,000,000. The notes will mature on
June 1, 2011 and will be issued only in registered form in denominations of
$1,000 and integral multiples of $1,000.
The notes will bear interest at the annual rate of 7.125% from June 4,
2001, or the most recent interest payment date to which interest has been paid
or provided for, payable semi-annually on June 1 and December 1 of each year,
commencing December 1, 2001, to the persons in whose names the notes are
registered at the close of business on the May 15 or November 15 preceding the
respective interest payment date.
The notes will not be subject to any sinking fund.
Neither the indenture nor the notes restrict our subsidiaries from
incurring indebtedness. Holders of the notes will effectively have a junior
position to claims of creditors of our subsidiaries.
So long as the notes are represented by a global certificate, the interest
payable on the notes will be paid to Cede & Co., the nominee of The Depository
Trust Company, or DTC, as depositary, or its registered assigns as the
registered owner of the global certificate, by wire transfer of immediately
available funds on each of the applicable interest payment dates, not later than
2:30 p.m. Eastern Standard Time. If the notes are no longer represented by a
global certificate, payment of interest may, at our option, be made by check
mailed to the address of the person entitled to payment. No service charge will
be made for any transfer or exchange of notes, but we may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The notes will be subject to the defeasance and the covenant defeasance
provisions described in the accompanying prospectus under the caption
"Description of Debt Securities -- Defeasance and Covenant Defeasance."
We may without the consent of the holders of the notes, issue additional
notes of the same series, having the same ranking and the same interest rate,
maturity and other terms, as the notes.
The Bank of New York is a lender on one of our revolving credit agreements
and has in the past, and may in the future, engage in other commercial banking
transactions with us. Pursuant to the Trust Indenture Act, upon the occurrence
of a default with respect to the notes, The Bank of New York may be deemed to
have a conflicting interest by virtue of its lending and other business
relationships with us. In that event, The Bank of New York would be required to
resign as series trustee or eliminate the conflicting interest.
S-3
<PAGE> 4
OPTIONAL REDEMPTION
The notes will be redeemable, in whole or in part, at our option at any
time at a redemption price equal to the greater of (1) 100% of the principal
amount of the notes or (2) the sum of the present values of the remaining
scheduled payments of principal and interest thereon (not including the portion
of any such payments of interest accrued as of the redemption date) discounted
to the redemption date on a semiannual basis at the Adjusted Treasury Rate,
plus, in each case, accrued and unpaid interest thereon to the redemption date.
The redemption price is calculated assuming a 360-day year consisting of twelve
30-day months.
"Adjusted Treasury Rate", which is to be determined on the third Business
Day preceding the redemption date, means (1) the arithmetic mean of the yields
under the heading "Week Ending" published in the Statistical Release most
recently published prior to the date of determination under the caption
"Treasury Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the redemption date, of
the principal being redeemed plus (2) 0.20%. If no maturity set forth under such
heading exactly corresponds to the maturity of such principal, yields for the
two published maturities most closely corresponding to the maturity of such
principal will be calculated pursuant to the immediately preceding sentence, and
the Adjusted Treasury Rate will be interpolated or extrapolated from such yields
on a straight-line basis, rounding in each of the relevant periods to the
nearest month.
"Statistical Release" means the statistical release designated "H.15(519)"
or any successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively-traded United States government
securities adjusted to constant maturities, or, if such statistical release is
not published at the time of any determination under the terms of the notes,
then such other reasonably comparable index which shall be designated by us.
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 the notes to be redeemed.
Unless we default in payment of the redemption price, on and after the
redemption date, interest will cease to accrue on the notes or portions thereof
called for redemption.
BOOK-ENTRY, DELIVERY AND FORM
The notes will be represented by global debt securities that will be
deposited with, or on behalf of, DTC, as depositary, and registered in the name
of Cede & Co., the nominee of DTC.
DTC has advised us and the Underwriters as follows: DTC is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency" registered pursuant
to the provisions of Section 17A of the Securities Exchange Act of 1934, as
amended. DTC holds securities that its participants deposit with DTC. DTC
facilitates the settlement among participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct participants
include securities brokers and dealers (including the Underwriters), banks,
trust companies, clearing corporations and certain other organizations. DTC is
owned by a number of its direct participants and by the New York Stock Exchange,
Inc., the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to DTC's system is also available to others,
such as banks, securities brokers and dealers and trust companies that clear
through or maintain a custodial relationship with a direct participant, either
directly or indirectly.
S-4
<PAGE> 5
The rules applicable to DTC and its participants are on file with the Securities
and Exchange Commission.
Purchase of interests in the notes under DTC's system must be made by or
through direct participants, which will receive a credit for such interests on
DTC's records. The ownership interest of each actual purchaser of interests in
the notes, known as a beneficial owner, is in turn to be recorded on the direct
and indirect participants' records. Beneficial owners will not receive written
confirmation from DTC of their purchase, but beneficial owners are expected to
receive written confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the direct or indirect participant
through which the beneficial owner entered into the transaction. Transfers of
ownership interest in the notes are to be accomplished by entries made on the
books of participants acting on behalf of beneficial owners. Beneficial owners
will not receive certificates representing their ownership interests in the
notes, except as described below.
To facilitate subsequent transfers, all notes deposited by participants
with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The
deposit of notes with DTC and their registration in the name of Cede & Co.
effect no change in beneficial ownership. DTC has no knowledge of the actual
beneficial owners of the interest in the notes. DTC's records reflect only the
identity of the direct participants to whose accounts interests in the notes are
credited, which may or may not be the beneficial owners. The participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the notes.
Under its usual procedures, DTC mails an omnibus proxy to the issuer as soon as
possible after the record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts
interest in the notes are credited on the record date (identified in a listing
attached to the omnibus proxy).
Principal and interest payments on the notes will be made to DTC. DTC's
practice is to credit direct participants' accounts on the payment date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on the payment date. Payments
by participants to beneficial owners will be governed by standing instructions
and customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such participant and not of DTC, the trustee, us or our paying
agent. Disbursement of payments to direct participants shall be the
responsibility of DTC, and disbursement of payments to the beneficial owners
shall be the responsibility of direct and indirect participants.
DTC may discontinue providing its services as depository with respect to
the notes at any time by giving reasonable notice to us or our paying agent.
Under such circumstances, in the event that a successor depository is not
obtained, certificated notes will be printed and delivered. We may decide to
discontinue use of the system of book-entry transfers through DTC or a successor
depository. In that event, certificated notes will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we believe to be reliable, but we take no
responsibility for the accuracy thereof.
S-5
<PAGE> 6
UNDERWRITING
Knight Ridder and the underwriters for the offering named below have
entered into an underwriting agreement and a pricing agreement with respect to
the notes. Subject to certain conditions, each Underwriter has severally agreed
to purchase the principal amount of notes indicated in the following table.
<TABLE>
<CAPTION>
Principal
Underwriters Amount of Notes
------------ ---------------
<S> <C>
Goldman, Sachs & Co......................................... $ 97,500,000
Banc of America Securities LLC.............................. 97,500,000
Barclays Capital Inc........................................ 31,500,000
Wells Fargo Brokerage Services, LLC......................... 31,500,000
SunTrust Equitable Securities Corporation................... 21,000,000
Wachovia Securities, Inc.................................... 21,000,000
------------
Total.................................................. $300,000,000
============
</TABLE>
Notes sold by the Underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus
supplement. Any notes sold by the Underwriters to securities dealers may be sold
at a discount from the initial public offering price of up to 0.40% of the
principal amount of the notes. Any such securities dealers may resell any notes
purchased from the Underwriters to certain other brokers or dealers at a
discount from the initial public offering price of up to 0.25% of the principal
amount of the notes. If all the notes are not sold at the initial public
offering price, the Underwriters may change the offering price and the other
selling terms.
The notes are a new issue of securities with no established trading market.
Knight Ridder has been advised by the Underwriters that the Underwriters intend
to make a market in the notes but are not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the notes.
In connection with the offering, the Underwriters may purchase and sell the
notes in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the Underwriters of a greater number of
notes than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the notes while the
offering is in progress.
The Underwriters also may impose a penalty bid. This occurs when a
particular Underwriter repays to the Underwriters a portion of the underwriting
discount received by it because the Underwriters have repurchased notes sold by
or for the account of such Underwriter in stabilizing or short covering
transactions.
These activities by the Underwriters may stabilize, maintain or otherwise
affect the market price of the notes. As a result, the price of the notes may be
higher than the price that otherwise might exist in the open market. If these
activities are commenced, they may be discontinued by the Underwriters at any
time. These transactions may be effected in the over-the-counter market or
otherwise.
Knight Ridder estimates that its share of the total expenses of the
offering, excluding underwriting discounts and commissions, will be
approximately $500,000.
Knight Ridder has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933.
S-6
<PAGE> 7
In the ordinary course of business, the Underwriters and their respective
affiliates have in the past performed, and may in the future perform, investment
banking and commercial banking services for Knight Ridder for which they have
received, and may in the future receive, fees or other compensation.
VALIDITY OF NOTES
The validity of the notes offered by this prospectus supplement and certain
other legal matters will be passed upon for Knight Ridder by Orrick, Herrington
& Sutcliffe LLP, San Francisco, California and as to certain matters of Florida
law by Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., Miami,
Florida. The validity of the notes offered by this prospectus supplement will be
passed upon for the Underwriters by Sullivan & Cromwell, Palo Alto, California.
Sullivan & Cromwell will rely as to all matters of Florida law upon the opinion
of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.
S-7
<PAGE> 8
$500,000,000
KNIGHT-RIDDER, INC.
Debt Securities
----------------------
Knight-Ridder, Inc. may from time to time issue up to $500,000,000
aggregate principal amount of debt securities. The debt securities may consist
of debentures, notes or other types of debt. The accompanying Prospectus
Supplement will specify the terms of the securities.
Knight Ridder may sell these securities to or through underwriters, and
also to other purchasers or through agents. Goldman, Sachs & Co. may be one of
the underwriters. The names of the underwriters will be set forth in the
accompanying Prospectus Supplement.
----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------------
GOLDMAN, SACHS & CO.
----------------------
Prospectus dated April 10, 2000.
<PAGE> 9
We have not authorized any dealer, salesman or other person to give any
information or to make any representation other than those contained or
incorporated by reference in this prospectus and the accompanying supplement to
this prospectus. You must not rely upon any information or representation not
contained or incorporated by reference in this prospectus or the accompanying
prospectus supplement as if we had authorized it. This prospectus and the
accompanying supplement to this prospectus do not constitute an offer to sell or
the solicitation of an offer to buy any securities other than the registered
securities to which they relate, nor do this prospectus and the accompanying
supplement to this prospectus constitute an offer to sell or the solicitation of
an offer to buy securities in any jurisdiction to any person to whom it is
unlawful to make an offer or solicitation in that jurisdiction. The information
contained in this prospectus and the supplement to this prospectus is accurate
as of the date on their covers. When we deliver this prospectus or a supplement
or make a sale pursuant to this prospectus, we are not implying that the
information is current as of the date of the delivery or sale. This prospectus
may not be used to consummate sales of debt securities unless accompanied by a
prospectus supplement.
----------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Where You Can Find More Information......................... 3
Disclosure Regarding Forward-Looking Statements............. 3
Knight-Ridder, Inc.......................................... 3
Use Of Proceeds............................................. 4
Ratio Of Earnings To Fixed Charges.......................... 4
Description Of Debt Securities.............................. 4
Plan Of Distribution........................................ 14
Validity Of The Debt Securities............................. 15
Experts..................................................... 15
</TABLE>
2
<PAGE> 10
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. The Securities and
Exchange Commission is referred to in this prospectus and the accompanying
prospectus supplement as the "Commission". You may read and copy any document we
file at the Commission's public reference rooms in Washington, D.C., New York,
New York and Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for
further information on the public reference rooms. Our Commission filings (file
number 1-7553) are also available to the public at the Commission's web site at
http://www.sec.gov. You may also read any copy of these documents at the offices
of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. The
Company's common stock, par value $.02 1/12 per share is listed on the exchange.
The Commission allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus and later information that we file with
the Commission will automatically update or supersede this information. We
incorporate by reference our Annual Report on Form 10-K for the fiscal year
ended December 26, 1999 and any future filings made with the Commission under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as
amended, until that time when all of the securities covered by this prospectus
have been sold.
You may request a copy of these filings, at no cost, by writing or
telephoning us as follows:
Knight-Ridder, Inc.
50 West San Fernando Street
San Jose, CA 95113
Attn: Corporate Secretary
Phone: (408) 938-7700
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements made in or incorporated by reference into this
prospectus, including the documents we incorporate by reference, are
forward-looking statements. These forward-looking statements are subject to
certain risks and uncertainties, which could cause actual results and events to
differ materially from those anticipated.
Potential risks and uncertainties which could adversely affect our ability
to obtain these results include, without limitation, the following factors: (a)
increased consolidation among major retailers or other events which may
adversely affect business operations of major customers and depress the level of
local and national advertising; (b) an economic downturn in some or all of our
principal newspaper markets that may lead to decreased circulation or decreased
local or national advertising; (c) a decline in general newspaper readership
patterns as a result of competitive alternative media or other factors; (d) an
increase in newsprint costs over the levels anticipated; (e) labor disputes
which may cause revenue declines or increased labor costs; (f) acquisitions of
new businesses or dispositions of existing businesses; (g) increases in interest
or financing costs; and (h) rapid technological changes and frequent new product
introductions prevalent in electronic publishing, including the evolution of the
Internet.
KNIGHT-RIDDER, INC.
We are a communications company engaged in newspaper publishing and news
and information services. We publish 31 daily newspapers in 28 U.S. markets,
reaching 8.7 million readers daily and 12.9 million on Sunday. Our newspapers
are dedicated to serving their respective communities with high quality and
independent journalism. We have won 67 Pulitzer
3
<PAGE> 11
prizes, including 14 in the past ten years. Our internet operation,
KnightRidder.com, creates and maintains a variety of online services, including
RealCities.com, a national network of regional hubs in 31 U.S. markets.
Our principal executive offices are located at 50 West San Fernando Street,
San Jose, California 95113 (telephone (408) 938-7700).
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus Supplement, the
net proceeds from the sale of debt securities will be used for general corporate
purposes, including refinancing of indebtedness, working capital increases,
capital expenditures, share repurchases and possible future acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for
the periods indicated:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
----------------------------------------------------------------
DEC. 31, DEC. 29, DEC. 28, DEC. 27, DEC. 26,
1995 1996 1997 1998 1999
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
3.2:1 4.0:1 7.1:1 5.3:1 6.2:1
</TABLE>
The ratio of earnings to fixed charges is computed by dividing earnings (as
adjusted for fixed charges and undistributed equity income from unconsolidated
subsidiaries) by fixed charges for the period. Fixed charges include the
interest on debt (before capitalized interest), the interest component of rental
expense, and the proportionate share of interest expense on guaranteed debt of
certain equity-method investees and on debt of 50%-owned companies.
DESCRIPTION OF DEBT SECURITIES
We may issue as many distinct series of debt securities under the Indenture
as we wish. This section summarizes the financial and legal terms of the debt
securities that are common to all series. Most of the financial terms and other
specific terms of the series in which you may invest are described in the
Prospectus Supplement attached to the front of this Prospectus. Those terms may
vary from the terms described here. The Prospectus Supplement may also describe
special Federal income tax consequences of the debt securities.
As required by Federal law for all bonds and notes of companies that are
publicly offered, the debt securities are governed by a document called the
"Indenture". The Indenture is a contract between us and The Chase Manhattan
Bank, which acts as Trustee. The Trustee has two main roles. First, the Trustee
can enforce your rights against us if we default. There are some limitations on
the extent to which it acts on your behalf, described on page 13 under "Remedies
If an Event of Default Occurs".
Second, the Trustee performs administrative duties for us, such as
arranging to send you interest payments, transferring your debt securities to a
new buyer if you sell and sending you notices.
The Indenture and its associated documents contain the full legal text of
the matters described in this section. The Indenture and the debt securities are
governed by New York law. A copy of the Indenture has been filed with the
Commission as part of our Registration Statement. See "Where You Can Find More
Information" on page 3 for information on how to obtain a copy.
4
<PAGE> 12
Because this section is a summary, it does not describe every aspect of the
debt securities. This summary is subject to and qualified in its entirety by
reference to all the provisions of the Indenture, including definitions of
certain terms used in the Indenture. For example, in this section we use
capitalized words to signify defined terms that have been given special meaning
in the Indenture. We describe the meaning for only the more important terms. We
also include references in parentheses to certain sections of the Indenture.
Wherever we refer to particular sections or defined terms of the Indenture in
this Prospectus or in the Prospectus Supplement, those sections or defined terms
are incorporated by reference here or in the Prospectus Supplement. This summary
also is subject to and qualified by reference to the description of the
particular terms of your series described in the Prospectus Supplement.
GENERAL
As noted above, we may issue debt securities in distinct series at various
times. The Indenture does not place any limit on the maximum amount of debt
securities we may issue, although we may specify a maximum aggregate principal
amount for any particular series of debt securities. (Section 301)
The debt securities are not secured by any of our property or assets.
Accordingly, your ownership of debt securities means you are one of our
unsecured creditors. The debt securities are not subordinated to any of our
other debt obligations and therefore they rank equally with all our other
unsecured and unsubordinated indebtedness.
INFORMATION THAT WILL BE SPECIFIED IN THE PROSPECTUS SUPPLEMENT
The Prospectus Supplement specifies the following terms of the particular
debt securities we are offering you:
- Price of the debt securities;
- Title of the debt securities;
- Any limit on the maximum aggregate principal amount of the debt
securities;
- Stated Maturity date on which we must repay principal;
- Interest rate which the debt securities will bear, date from which
interest will accrue, the dates on which we must pay interest and record
dates for interest;
- Place where principal and interest will be paid or other means for us to
pay you principal and interest;
- Whether and how the debt securities may be redeemed before maturity,
whether by us at our option or by you at your option, including the price
at which the debt securities may be so redeemed;
- Whether we must periodically set aside monies in a "sinking fund" to
redeem part of the debt securities from time to time, and if so, the
terms for that arrangement;
- The denominations in which the debt securities will be issued, if other
than $1,000 and integral multiples of $1,000;
- Whether any amount payable on the debt securities will be determined by
reference to an index or by a formula, and how those amounts will be
determined;
- Any foreign currency in which we may pay the debt securities; the manner
in which the principal amount would be translated into U.S. dollars if
necessary, such as to determine the principal amount outstanding when
voting with other series of debt securities;
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<PAGE> 13
- Any alternate currency in which we may pay the debt securities (whether
at our option or yours), and the periods and terms for payment;
- How much of the principal amount of the debt securities will be payable
upon declaration of acceleration of their Maturity, if more or less than
the entire principal amount;
- If the actual principal amount payable at the Stated Maturity of any debt
securities will not be known at all times prior to the Stated Maturity,
the amount to be the principal amount (or the manner of calculating it),
including the principal amount that will be due and payable upon any
Maturity earlier than the Stated Maturity or that will be treated as
outstanding;
- Whether some or all of the debt securities are defeasible as described
under "Defeasance and Covenant Defeasance -- Defeasance and Discharge" on
page 16 or "Defeasance and Covenant Defeasance -- Covenant Defeasance" on
page 16;
- Whether any debt securities will be in the form of a Global Security, the
wording of any legal legend to be placed on any Global Security in
addition to or instead of the legend referred to under "Global
Securities" on page 8 and, if different from those described in that
subsection, any circumstances under which a Global Security may be
exchanged for debt securities registered in the names of Persons other
than the Depositary for the Global Security or its nominee;
- Any addition to or change in the Events of Default described on page 13
for the debt securities and any change in the right of the Trustee or the
Holders to declare the principal amount of any of the debt securities due
and payable prior to their Stated Maturity;
- Any addition to or change in the covenants in the Indenture described
under "Restrictive Covenants" on page 10 applicable to any of the debt
securities;
- Whether the debt securities may be converted to or exchanged for stock or
other securities of ours or another entity, the terms of conversion or
exchange and any adjustments thereto, and the period during which the
debt securities may be converted or exchanged; and
- Any other terms of the debt securities.
If applicable, the Prospectus Supplement also describes any special United
States Federal income tax or other considerations relating to the debt
securities, such as when debt securities are sold at original issue discount or
denominated in a foreign currency.
FORM, EXCHANGE AND TRANSFER
Except as provided in the Prospectus Supplement, the debt securities will
be issued:
- only in fully registered form;
- without interest coupons; and
- in denominations of $1,000 and greater multiples or as described in the
Prospectus Supplement. (Section 302)
You may exchange your debt securities for other debt securities of the same
series and terms with different authorized denominations and aggregate principal
amount. (Section 305)
You may arrange to exchange or transfer your debt securities at the office
of the Trustee, which will act as the Security Registrar and transfer agent.
(Section 305) You will not be required to pay a service charge to transfer or
exchange debt securities, but you may be required to pay for any tax or other
governmental charge associated with the exchange or
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<PAGE> 14
transfer. The transfer or exchange will be made after the Security Registrar is
satisfied with your evidence of title.
If we have designated additional transfer agents, they are named in the
Prospectus Supplement. We may cancel the designation of any particular transfer
agent. We may approve a change in the office through which the transfer agent
acts, but we must have a transfer agent in each Place of Payment for the debt
securities. (Section 1002)
If we redeem less than all of the debt securities of a particular series,
we are not required to (1) register the transfer of or exchange any debt
security during the period beginning 15 days before the day we mail the notice
of redemption and ending on the day of the mailing or (2) register the transfer
of or exchange any debt security selected for redemption (except the unredeemed
portion of any debt security being redeemed in part). (Section 305)
GLOBAL SECURITIES
The Prospectus Supplement indicates whether any of the debt securities we
are offering you may be represented by a Global Security. The aggregate
principal amount of the Global Security equals the sum of the principal amounts
of all the debt securities it represents. The Global Security will be registered
in the name of a Depositary, which is identified in the Prospectus Supplement,
or its nominee and will be deposited with the Depositary or nominee or a
custodian.
There will be a legend on the Global Security that describes the
restrictions on exchanges and transfers explained in the next paragraph.
LIMITATION ON YOUR ABILITY TO OBTAIN SECURITIES REGISTERED IN YOUR NAME
The Global Security will not be registered in the name of any person, or
exchanged for debt securities that are registered in the name of any person,
other than the Depositary unless:
- the Depositary notifies us that it is unwilling, unable or no longer
qualified to continue acting as Depositary;
- an Event of Default with respect to the debt securities represented by
the Global Security has occurred and is continuing; or
- any other circumstances described in the Prospectus Supplement exist.
In those circumstances, the Depositary will determine in whose names any
securities issued in exchange for the Global Security shall be registered.
(Sections 204 and 305)
The Depositary or its nominee will be considered the sole owner and Holder
of the Global Security for all purposes, and as a result:
- You cannot get debt securities registered in your name if they are
represented by the Global Security;
- You cannot receive certificated (physical) debt securities in exchange
for your beneficial interest in the Global Security;
- You will not be considered to be the owner or Holder of the Global
Security or any debt securities it represents for any purpose; and
- All payments on the Global Security will be made to the Depositary or its
nominee.
Note that the laws of some jurisdictions require that certain kinds of
purchasers (for example, certain insurance companies) can only own securities in
definitive (certificated) form. These laws may limit your ability to transfer
your beneficial interests in the Global Security to these types of purchasers.
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<PAGE> 15
BENEFICIAL INTERESTS IN GLOBAL SECURITIES
Only institutions (such as a securities broker or dealer) that have
accounts with the Depositary or its nominee (and are called "participants") and
persons that may hold beneficial interests through participants can own a
beneficial interest in the Global Security. The only place where the ownership
of beneficial interests in the Global Security will appear and the only way the
transfer of those interests can be made will be on the records kept by the
Depositary (the interests of the participants) and on the records kept by those
participants (the interests of Persons holding their interests through
participants).
The policies and procedures of the Depositary, which may change
periodically, will apply to payments, transfers, exchanges and other matters
relating to beneficial interests in the Global Security. We and the Trustee have
no responsibility or liability for any aspect of the Depositary's or any
participants' records relating to beneficial interests in the Global Security,
including for payments made on the Global Security, and we and the Trustee are
not responsible for maintaining, supervising or reviewing any of those records.
PAYMENT AND PAYING AGENTS
We will pay interest on a debt security that is due on an Interest Payment
Date to the Person in whose name the debt security is registered at the close of
business on the Regular Record Date for that interest. (Section 307)
We will pay amounts due on the debt securities at the office of the Paying
Agent or Paying Agents that we designate for that purpose from time to time. We
have designated the corporate trust office of the Trustee in The City of New
York as a Paying Agent for payments with respect to the debt securities. If we
have designated additional initial Paying Agents, they are named in the
Prospectus Supplement. We may cancel the designation of any particular Paying
Agent or approve a change in the office through which any Paying Agent acts, but
we must have a Paying Agent in each Place of Payment for the debt securities.
(Section 1002)
All money paid by us to a Paying Agent for the payment of amounts due on
the debt securities which remain unclaimed at the end of two years will be
repaid to us, and after that time the Holder may look only to us and not to the
Trustee or the Paying Agent or any other person for payment. (Section 1003)
RESTRICTIVE COVENANTS
RESTRICTIONS ON MORTGAGES
Some of our property may be subject to a mortgage or other legal mechanism
that gives our lenders preferential rights in that property over other lenders
(including you and the other direct Holders of the debt securities) or over our
general creditors if we fail to pay them back. These preferential rights are
called "Mortgages". We promise that we will not become obligated on any new debt
that is secured by a Mortgage on any of our Principal Properties, or on any
shares of stock or debt of any of our Restricted Subsidiaries, unless we grant
an equivalent or higher-ranking Mortgage on the same property to you and the
other direct Holders of the debt securities.
We do not need to comply with this restriction if the amount of all debt
that would be secured by Mortgages on Principal Properties (but not including
secured debt described in the next paragraph) is less than 15% of our
shareholders' equity as of the end of the latest fiscal year.
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<PAGE> 16
This Restriction on Mortgages does not apply to debt secured by certain
types of Mortgages, and we can disregard this debt when we calculate the limits
imposed by this restriction. These types of Mortgages are:
- Mortgages on the property of any of our Restricted Subsidiaries, or on
their shares of stock or debt, if those Mortgages existed at the time
that corporation became a Restricted Subsidiary;
- Mortgages in favor of us or our Restricted Subsidiaries;
- Certain mortgages in favor of governmental entities;
- Mortgages on property that existed at the time we acquired the property
(including property we may acquire through a merger or similar
transaction) or that we granted in order to purchase the property
(sometimes called "purchase money mortgages");
- Mortgages that extend, renew or replace any of the types of Mortgages
listed above;
- Certain statutory liens or other similar liens arising in the ordinary
course of business of the Company or a Restricted Subsidiary;
- Certain pledges, deposits or liens made or arising under worker's
compensation or similar legislation, self-insurance arrangements or in
certain other circumstances;
- Certain liens in connection with legal proceedings, including certain
liens arising out of judgments or awards;
- Liens for certain taxes or assessments, landlord's liens, leases made in
the ordinary course of business which were not incurred in connection
with the borrowing of money and which do not, in the opinion of the
Company, materially impair the use of the property; and
- Mortgages on property created in contemplation of the sale of the
property; provided that we must have disposed of the property within 180
days after the creation of the Mortgages and that any debt secured by
these Mortgages is without recourse to us or any of our subsidiaries.
(Section 1007)
We and our subsidiaries are permitted to have as much unsecured debt as we
may choose.
RESTRICTIONS ON SALES AND LEASEBACKS
We promise that neither we nor any of our Restricted Subsidiaries will
enter into any sale and leaseback transaction involving a Principal Property,
unless we comply with this Restrictive Covenant. A "sale and leaseback
transaction" generally is an arrangement between us or a Restricted Subsidiary
and a bank, insurance company or other lender or investor where we or the
Restricted Subsidiary lease a property which was or will be sold by us or the
Restricted Subsidiary to that lender or investor.
We can comply with this Restrictive Covenant in either of two different
ways. First, we will be in compliance if we or our Restricted Subsidiary could
grant a Mortgage on the Principal Property in an amount equal to the
Attributable Debt for the sale and leaseback transaction without being required
to grant an equivalent or higher-ranking Mortgage to you and the other direct
Holders of the debt securities under the Restriction on Mortgages described
above. Second, we can comply if we retire an amount of Debt, within 90 days of
the transaction, equal to at least the Attributable Debt for the sale and
leaseback transaction.
This Restriction on Sales and Leasebacks does not apply to any sale and
leaseback transaction that is between us and one of our Restricted Subsidiaries
or between Restricted Subsidiaries, or that involves a lease for a period of
three years or less or that involves a lease
9
<PAGE> 17
entered into within 120 days after the latest of the acquisition, completion of
construction or commencement of full operation of the Principal Property.
CERTAIN DEFINITIONS RELATING TO OUR RESTRICTIVE COVENANTS
Following are the meanings of the terms that are important in understanding
the Restrictive Covenants previously described.
"Attributable Debt" means the present value (discounted at the rate of
interest implicit in the terms of the relevant transaction) of the total net
amount of rent that is required to be paid by a lessee during the remaining term
of any lease.
A "Principal Property" is any building or other structure or facility, and
the land on which it sits and its associated fixtures, which would be reflected
on our consolidated balance sheet prepared in accordance with United States
generally accepted accounting principles, except for tangible property located
outside the United States and for any of those properties that our Board of
Directors has determined are not of material importance to the total business
that we and our subsidiaries conduct.
A "Restricted Subsidiary" means any of our subsidiaries except one which
does not transact a substantial portion of its business in the United States or
does not regularly keep a substantial portion of its physical properties in the
United States, or one that does not own or hold any Principal Property. A
"subsidiary" is a corporation in which we and/or one or more of our other
subsidiaries owns more than 50% of the voting stock, which is a kind of stock
that ordinarily permits its owners to vote for the election of directors.
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
We are generally permitted to consolidate or merge with another Person, or
to convey, transfer or lease all or substantially all of our property or assets
or acquire all or substantially all of the property or assets of another Person.
However, we may not do so unless the following conditions are met:
- the successor Person (if any) is a corporation, partnership, trust or
other entity organized under the laws of any domestic jurisdiction and it
assumes our obligations on the debt securities;
- immediately after giving effect to the transaction, and treating any
indebtedness which becomes our obligation or the obligation of our
subsidiary as a result of the transaction as having been incurred by us
at the time of the transaction, no Event of Default (and no event which,
after notice or lapse of time or both, would become an Event of Default)
shall have happened and be continuing;
- if, as a result of the transaction, any of our property would become
subject to a Mortgage that would not be permitted under the limitation on
Mortgages described above under "Restrictive Covenants" on page 10, we
take whatever steps as are necessary to secure the debt securities
equally and ratably with (or prior to) the indebtedness secured by that
Mortgage; and
- certain other conditions are met. (Section 801)
EVENTS OF DEFAULT
The term "Event of Default" means any of the following:
- we do not pay interest on any debt security for 30 days;
- we do not pay the principal or any premium on any debt security when due;
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<PAGE> 18
- we do not deposit any sinking fund payment when due;
- we do not perform any other covenant in the Indenture for 90 days after
written notice by the Trustee or the Holders of at least 25% of the
Outstanding debt securities of that series;
- certain events in bankruptcy, insolvency or reorganization; and
- any other Event of Default described in the Prospectus Supplement.
(Section 501)
REMEDIES IF AN EVENT OF DEFAULT OCCURS
If an Event of Default (other than certain events in bankruptcy, insolvency
or reorganization) has occurred and is continuing, the Trustee or the Holders of
at least 50% in aggregate principal amount of the debt securities of the
relevant series may declare the entire principal amount of all the debt
securities of that series to be due and immediately payable.
If an Event of Default occurs because of certain events in bankruptcy,
insolvency or reorganization, the principal amount of all the debt securities of
that series will be due and immediately payable automatically, without any
action by the Trustee or any Holder.
Subject to certain conditions, any declaration of acceleration may be
rescinded by the Holders of not less than 50% in aggregate principal amount of
the debt securities of that series. (Section 502)
Except in cases of default, where the Trustee has certain duties, the
Trustee is not obligated to exercise any of its rights or powers under the
Indenture at the request of any Holders unless the Holders offer the Trustee
reasonable indemnity. (Section 603) If reasonable indemnity is provided, the
Holders of a majority in aggregate principal amount of the Outstanding debt
securities of the relevant series may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, for debt securities of that
series. (Section 512)
Before you may take any action to institute any proceeding relating to the
Indenture, or to appoint a receiver or a trustee, or for any other remedy, the
following must occur:
- you must have given the Trustee written notice of a continuing Event of
Default;
- the Holders of at least 33 1/3 % of the aggregate principal amount of all
Outstanding debt securities of the relevant series must make a written
request of the Trustee to take action because of the default and must
have offered reasonable indemnification to the Trustee against the cost,
liabilities and expenses of taking action; and
- the Trustee must not have taken action for 60 days after receipt of
notice and offer of indemnification. (Section 507)
However, you are entitled at any time to bring a lawsuit for the payment of
amounts due on your debt security on or after the due date. (Section 508)
We will furnish to the Trustee every year a statement of certain of our
officers as to their knowledge of any default by us in performing our
obligations under the Indenture. (Section 1009)
MODIFICATION AND WAIVER
The consent of the Holders of at least a majority in principal amount of
the Outstanding debt securities of each series affected by a modification or
amendment is required to make the
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<PAGE> 19
modification or amendment to the Indenture. However, the following actions
require the consent of the Holder of each Outstanding debt security affected:
- change the Stated Maturity of the principal or interest on a debt
security;
- reduce any amounts due on a debt security;
- reduce the amount of principal payable upon acceleration of the Maturity
of a debt security;
- change the place or currency of payment on a debt security;
- impair the right to institute suit for the enforcement of any payment on
any debt security;
- reduce the percentage of Holders whose consent is needed to modify or
amend the Indenture;
- reduce the percentage of Holders whose consent is needed to waive
compliance with certain provisions of the Indenture or to waive certain
defaults; and
- modify the provisions dealing with modification and waiver of the
Indenture. (Section 902)
The Holders of at least a majority in principal amount of the Outstanding
debt securities of the affected series must consent to waive compliance by us
with certain restrictive provisions of the Indenture. The Holders of a majority
in principal amount of the Outstanding debt securities of the affected series
may waive any past default, except a payment default and default in the certain
covenants and provisions of the Indenture which cannot be amended without the
consent of the Holder of each Outstanding debt security of that series. (Section
513)
In determining what constitutes "Outstanding debt securities":
- for Original Issue Discount debt securities, the principal amount that
would be due and payable on the date in question if the Maturity of those
debt securities were accelerated to that date will be considered
Outstanding;
- for debt securities the principal amount of which is not determinable
(for example, because it is based on an index), an amount determined in
the manner prescribed for that debt security will be considered to be
Outstanding; and
- for debt securities denominated in one or more foreign currencies or
currency units, the U.S. dollar translation of the amount calculated in
the manner prescribed for that debt security will be considered
Outstanding.
Debt securities will not be considered Outstanding if money for their
payment or redemption has been deposited or set aside in trust for the Holders
or if they have been fully defeased as described under "Defeasance and Covenant
Defeasance -- Defeasance and Discharge" on page 16. (Section 101)
We will generally be entitled to set any day as a record date for the
purpose of determining the Holders of Outstanding debt securities that are
entitled to take any action under the Indenture. In certain limited
circumstances, the Trustee will be entitled to set a record date for action by
Holders. If a record date is set for any action to be taken by Holders of a
particular series, the action may be taken only by persons who are Holders of
Outstanding debt securities of that series on the record date and must be taken
within 180 days following the record date or any other shorter period as we may
specify (or as the Trustee may specify, if it set the record date), which period
may be shortened or lengthened (but not beyond 180 days) from time to time.
(Section 104)
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<PAGE> 20
DEFEASANCE AND COVENANT DEFEASANCE
The following discussion of defeasance and covenant defeasance will be
applicable to the debt securities we are offering you only to the extent
specified in the Prospectus Supplement. (Section 1301)
DEFEASANCE AND DISCHARGE
We can elect to be discharged from all of our obligations under the debt
securities if:
- we deposit in trust for the benefit of you and the other Holders of the
debt securities money and/or government securities sufficient to pay
amounts due on the debt securities on their respective Stated Maturities;
and
- we deliver an opinion of counsel to the Trustee to the effect that an IRS
ruling or a change in tax law provides that the Holders of the debt
securities will be subject to Federal income tax with respect to the debt
securities as if that deposit, defeasance and discharge did not occur and
will not recognize gain or loss for Federal income tax purposes as a
result of that deposit, defeasance and discharge. (Sections 1302 and
1304)
COVENANT DEFEASANCE
We can elect not to comply with certain restrictive covenants, including
those described under "Restrictive Covenants" on page 10 and in the third bullet
point under "Consolidation, Merger, Conveyance, Transfer or Lease" on page 12
and any that may be described in the applicable Prospectus Supplement and that
the occurrence of certain Events of Default, which are described in the fourth
and fifth bullet points under "Events of Default" on page 13 and any that are
described in the Prospectus Supplement, will not be Events of Default, provided
that we:
- deposit in trust for the benefit of you and the other Holders of debt
securities money and/or government securities sufficient to pay amounts
due on the debt securities on their respective Stated Maturities; and
- deliver to the Trustee an Opinion of Counsel to the effect that Holders
of the debt securities will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would have been the
case if that deposit and defeasance did not occur and will not recognize
gain or loss for Federal income tax purposes as a result of that deposit
and defeasance.
Note that the amount of moneys and U.S. government obligations deposited in
trust may not be sufficient to pay amounts due on debt securities upon an
acceleration resulting from an Event of Default. In such a case, we will remain
liable for the payments. (Sections 1303 and 1304)
NOTICES
Notices to you will be mailed to your address as it appears in the Security
Register. (Section 106)
TITLE
We and the Trustee and our respective agents may treat the Person in whose
name your debt security is registered as the absolute owner thereof for all
purposes, including making payment to that Person.
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<PAGE> 21
CONCERNING THE TRUSTEE
We maintain deposit accounts and banking and borrowing relations with the
Trustee, including our revolving credit agreements, under which the Trustee is a
lending bank. As of December 26, 1999, we had no outstanding borrowings under
our revolving credit agreements. The Trustee is the issuing and paying agent for
our commercial paper borrowings and serves as registrar and transfer agent for
our common stock.
The Trustee is also trustee of the 6.3% Senior Notes due 2005, the 8.5%
Amortizing Notes due 2001 and the 9.875% Debentures due 2009 issued pursuant to
an Indenture, dated as of February 15, 1986, as supplemented by the First
Supplemental Indenture, dated as of April 15, 1989, each between us and the
Trustee (as successor to Manufacturers Hanover Trust Company) and the 6.625%
Notes due 2007, the 7.15% Debentures due 2027 and the 6.875% Debentures due 2029
issued pursuant to an Indenture dated as of November 4, 1997 between us and the
Trustee (collectively, the "Other Indenture Securities"). Under the provisions
of the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), upon
the occurrence of a default under an indenture, if a trustee has a conflicting
interest (as defined in the Trust Indenture Act) the trustee must, within 90
days, either eliminate the conflicting interest or resign. Under the provisions
of the Trust Indenture Act, an indenture trustee shall be deemed to have a
conflicting interest if the trustee is a creditor of the obligor. If the trustee
fails either to eliminate the conflicting interest or to resign within 10 days
after the expiration of the 90-day period, the trustee is required to notify
security holders to this effect and any security holder who has been a bona fide
holder for at least six months may petition a court to remove the trustee and to
appoint a successor trustee.
PLAN OF DISTRIBUTION
We may sell debt securities to or through one or more underwriters or
dealers and also may sell debt securities to other investors directly or through
agents. Goldman, Sachs & Co. may be one of these underwriters.
The distribution of the debt securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to those
prevailing market prices or at negotiated prices.
In connection with the sale of debt securities, underwriters may receive
compensation from us or from purchasers of debt securities for whom they may act
as agents in the form of discounts, concessions or commissions. Underwriters may
sell debt securities to or through dealers, and those dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution of
debt securities may be deemed to be underwriters, and any discounts or
commissions received by them from us and any profit on the resale of debt
securities by them may be deemed to be underwriting discounts and commissions
under the Securities Act. Any underwriter or agent will be identified, and any
compensation received from us will be described, in the applicable Prospectus
Supplement.
Under agreements which may be entered into by us, underwriters and agents
who participate in the distribution of debt securities may be entitled to
indemnification by us against certain liabilities, including liabilities under
the Securities Act.
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<PAGE> 22
VALIDITY OF THE DEBT SECURITIES
Unless otherwise indicated in a Prospectus Supplement relating to offered
debt securities, the validity of the debt securities will be passed upon by
Orrick, Herrington & Sutcliffe LLP, San Francisco, California, and by Sullivan &
Cromwell, Los Angeles, California, counsel for the underwriters or agents.
EXPERTS
Our consolidated financial statements as of December 26, 1999 and December
27, 1998 and for each of the three fiscal years in the period ended December 26,
1999, incorporated in this Prospectus and Registration Statement by reference
from our Annual Report on Form 10-K for the fiscal year ended December 26, 1999
have been audited by Ernst & Young LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of that firm given upon their authority as experts
in accounting and auditing.
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No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the notes offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.
----------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Supplement
Forward-Looking Statements............ S-2
The Company........................... S-2
Use of Proceeds....................... S-2
Ratio of Earnings to Fixed Charges.... S-2
Description of the Notes.............. S-3
Underwriting.......................... S-6
Validity of Notes..................... S-7
Prospectus
Where You Can Find More
Information......................... 3
Disclosure Regarding Forward-Looking
Statement........................... 3
Knight-Ridder, Inc.................... 3
Use of Proceeds....................... 4
Ratio of Earnings to Fixed Charges.... 4
Description of Debt Securities........ 4
Plan of Distribution.................. 14
Validity of The Debt Securities....... 15
Experts............................... 15
</TABLE>
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$300,000,000
KNIGHT-RIDDER, INC.
7.125% Notes
due June 1, 2011
----------------------
PROSPECTUS SUPPLEMENT
----------------------
GOLDMAN, SACHS & CO.
BANC OF AMERICA
SECURITIES LLC
BARCLAYS CAPITAL
WELLS FARGO BROKERAGE
SERVICES, LLC
SUNTRUST EQUITABLE SECURITIES
WACHOVIA SECURITIES, INC.
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</TEXT>
</DOCUMENT>