Pursuant to Rule 424(b)3
Reg. No. 333-64490
BRIGGS & STRATTON CORPORATION
$140,000,000
5.00% CONVERTIBLE SENIOR NOTES DUE MAY 15, 2006,
AND COMMON STOCK ISSUABLE UPON
CONVERSION OF THE CONVERTIBLE NOTES
We issued the convertible notes in a private placement in May 2001. Selling
holders will use this prospectus to sell the convertible notes and the shares of
common stock into which the notes are convertible at any time at market prices
prevailing at the time of the sale or at privately negotiated prices. There is
currently no public market for the convertible notes. Although the convertible
notes issued in the private placement are eligible for trading in the PORTAL
market, they will no longer be eligible for trading in the PORTAL market
following resale using this prospectus. The selling holders may sell the
convertible notes or the common stock directly to purchasers or through
underwriters, broker-dealers or agents, who may receive compensation in the form
of discounts, concessions or commissions. We will not receive any proceeds from
the sale of the notes or the underlying common stock.
The holders of the convertible notes may convert the notes into shares of our
common stock at a conversion rate of 20.1846 shares of common stock per $1,000
principal amount of convertible notes (equivalent to a conversion price of
approximately $49.54 per share) at any time, unless previously redeemed or
repurchased. This conversion rate, which would result in the issuance of
2,825,844 shares of our common stock if all of the convertible notes were
converted, is subject to adjustment in certain circumstances under the terms of
the notes. Our common stock is listed on the New York Stock Exchange under the
symbol "BGG." On June 27, 2002, the last reported sale price of our common stock
was $38.20 per share.
We will pay interest on the convertible notes on May 15 and November 15 of
each year. The first interest payment was made on November 15, 2001. The notes
will mature on May 15, 2006, unless previously converted, redeemed or
repurchased.
We may redeem some or all of the convertible notes at any time on or after May
15, 2004 at the redemption prices set forth in this prospectus, plus accrued and
unpaid interest. We are required to offer to repurchase the notes upon a change
in control, as defined in the indenture governing the notes, at 100% of the
principal amount thereof, plus accrued and unpaid interest to the date of
repurchase.
The convertible notes are our general unsecured obligations. The notes are
guaranteed on a general unsecured basis by our subsidiary Generac Portable
Products, LLC. The indenture governing the notes will not restrict our ability
to incur other indebtedness. As of March 31, 2002, we had $637 million of total
indebtedness.
INVESTING IN THE CONVERTIBLE NOTES AND THE COMMON STOCK ISSUABLE UPON THEIR
CONVERSION INVOLVES CERTAIN RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 7.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED THAT
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated July 2, 2002.
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY BRIGGS &
STRATTON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF BRIGGS & STRATTON SINCE THE DATE HEREOF. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY SECURITIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY OR OF ANY SECURITIES
OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THE INFORMATION CONTAINED IN THIS
PROSPECTUS SPEAKS ONLY AS OF THE DATE OF THIS PROSPECTUS UNLESS THE INFORMATION
SPECIFICALLY INDICATES THAT ANOTHER DATE APPLIES.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
We have included or may include statements in this prospectus and any
prospectus supplement (including documents incorporated by reference) that
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. You will be able to recognize a
forward-looking statement because it contains a word such as "anticipate,"
"believe," "estimate," "expect," "project," "objective" or a similar expression
to identify it as a forward-looking statement.
WE CAUTION YOU THAT ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES
OF FUTURE PERFORMANCE AND INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
OTHER FACTORS WHICH MAY CAUSE OUR ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO
DIFFER MATERIALLY FROM THE FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS WE HAVE
ANTICIPATED IN SUCH FORWARD-LOOKING STATEMENTS.
In addition to the assumptions and other factors referred to specifically
in connection with those statements, factors that could cause our actual results
to differ materially from those contemplated in the forward-looking statements
include factors discussed under "Risk Factors" in this prospectus and factors we
have described under the caption "Cautionary Statement on Forward-Looking
Statements" or similar captions in the documents we have incorporated by
reference.
The risks and uncertainties so identified are not the only ones facing us.
Additional risks and uncertainties not currently known to us or that we
currently believe to be immaterial also may adversely affect us. Should any
risks and uncertainties develop into actual events, these developments could
have material adverse effects on our business, financial condition and results
of operations. For these reasons, we caution you not to place undue reliance on
our forward-looking statements.
We caution you that any forward-looking statement reflects only our belief
at the time the statement is made. We undertake no obligation to update these
forward-looking statements, even though our situation may change in the future.
INDUSTRY AND MARKET DATA
In this prospectus we rely on and refer to information and statistics
regarding our markets and market share in the sectors in which we compete. We
obtained this information and statistics from various third-party sources,
discussions with our customers and our own internal estimates. We believe that
these sources and estimates are reasonable, but have not independently verified
them and cannot guarantee their accuracy or completeness.
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WHERE YOU CAN FIND ADDITIONAL INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available over the Internet at the
SEC's web site at http://www.sec.gov. You may also read and copy any document we
file with the SEC at its public reference facilities:
Public Reference Room Office New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 233 Broadway Citicorp Center
Room 1024 New York, New York 10048 500 West Madison Street
Washington, D.C. 20549 Suite 1400
Chicago, Illinois 60661-2511
You may also obtain copies of the documents at prescribed rates by writing
to the Public Reference Section of the SEC at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549. Please call 1-800-732-0330 for further information on
the operations of the public reference facilities. Our SEC filings are also
available at the offices of the New York Stock Exchange, 20 Broad Street, 7th
Floor, New York, New York 10005.
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INCORPORATION OF INFORMATION BY REFERENCE
We have elected to incorporate by reference information filed with the SEC,
which means that:
- incorporated documents are considered part of this prospectus;
- we may disclose important information to you by referring you to those
documents; and
- information that we file with the SEC will automatically update and
supersede the information in this prospectus and any information that was
previously incorporated in this prospectus.
We incorporate by reference the documents listed below that were filed with
the SEC under the Securities Exchange Act of 1934:
- our Amendment No. 1 to current report on Form 8-K/A filed with the SEC on
June 28, 2001, our Form 8-K filed with the SEC on October 18, 2001, our
Form 8-K filed with the SEC on November 15, 2001, our Form 8-K filed with
the SEC on December 21, 2001, our Form 8-K filed with the SEC on January
31, 2002, and our Amendment No. 1 to current report on Form 8-K/A filed
with the SEC on May 30, 2002;
- our annual report on Form 10-K for the fiscal year ended July 1, 2001;
- our quarterly reports on Form 10-Q for the quarters ended September 30,
2001, December 30, 2001 and March 31, 2002;
- the description of our common stock contained in our Registration
Statement on Form 8-B, dated October 12, 1992, and filed with the SEC on
October 14, 1992; and any amendment or report filed for the purpose of
updating such description; and
- the description of our common share purchase rights contained in our
Registration Statement on Form 8-A, dated as of August 7, 1996, and filed
with the SEC on August 9, 1996; and any amendment or report filed for the
purpose of updating such description.
We also incorporate by reference any future filings we make with the SEC
under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act until the selling
holders have sold all of the convertible notes offered by this prospectus or we
have terminated the offering.
You may obtain any of the filings incorporated by reference in this
prospectus through us or from the SEC through its web site or at the addresses
listed above. Documents incorporated by reference are available from us without
charge, excluding any exhibits to those documents that are not specifically
incorporated by reference in such documents. You may request a copy of these
filings and a copy of the indenture, registration rights agreement and other
agreements referred to in this prospectus at no cost by writing or telephoning
us at the following address or telephone number:
Briggs & Stratton Corporation
P.O. Box 702
Milwaukee, Wisconsin 53201-0702
Attn: Corporate Secretary
Telephone: (414) 259-5333
We maintain a website at http://www.briggsandstratton.com. Our website and
the information at that site, or connected to that site, is not incorporated
into this prospectus, any prospectus supplement or the registration statement of
which this prospectus is a part.
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SUMMARY
This prospectus constitutes part of a registration statement on Form S-3
that we filed with the SEC using a "shelf" registration process. Under this
shelf process, any selling holder may sell any combination of the securities
described in this prospectus in one or more transactions. All references to
"we," "us," "our," or "Briggs & Stratton" in this prospectus are to Briggs &
Stratton Corporation or Briggs & Stratton Corporation and its consolidated
subsidiaries, as appropriate in the context.
You should read this entire prospectus carefully. The following summary
highlights selected information contained in this prospectus.
THE COMPANY
We are the world's largest producer of air-cooled gasoline engines for
outdoor power equipment. We design, manufacture, market and service these
products for original equipment manufacturers worldwide. These engines are
primarily aluminum alloy gasoline engines ranging from 3 to 25 horsepower. Our
engines are used mainly in various lawn and garden equipment applications, such
as walk-behind lawnmowers, riding lawnmowers and garden tillers, as well as in
many commercial products for both industrial and consumer applications, such as
generators, pumps and pressure washers. We also manufacture replacement engines
and service parts for sale through distributors to approximately 33,000
independently owned, authorized service dealers throughout the world.
Market studies indicate that consumers of lawn and garden products prefer
our brand of engine to the competition by a significant margin. Many retailers
specify our engines on the power equipment they sell, and our brand is often
featured prominently on the products and in their advertisements. We believe our
sales represent nearly 50% of the worldwide unit sales of 3 to 25 horsepower,
four cycle engines for outdoor power equipment applications.
We strive to enhance our brand equity and our market leadership position by
developing and manufacturing our products efficiently and marketing and
servicing engines for a broad range of power products. We believe it is the
combination of our broad array of engines, the strength of our brand, the
service network supporting the markets we serve and our low cost manufacturing
capabilities that makes us a leader in providing engines for power equipment
throughout the world.
In fiscal 2001, we derived approximately 25% of our net sales from sales in
international markets, primarily Europe, where we are the market leader for
supplying gasoline engines for lawn and garden equipment. We also export to
developing and other nations that do not have established lawn and garden
markets, where our engines are used in agricultural, marine, construction and
other applications.
Briggs & Stratton is a successor to a business organized in 1909. Our
principal executive offices are located at 12301 West Wirth Street, Wauwatosa,
Wisconsin 53222, and our telephone number is 414-259-5333.
ACQUISITION OF GENERAC PORTABLE PRODUCTS, INC.
On May 15, 2001 we acquired Generac Portable Products, Inc. ("Generac").
Generac is a leading designer, manufacturer and marketer of engine-powered tools
and related accessories for use in both consumer and commercial applications.
Generac's two principal product lines are portable generators and pressure
washers, which are sold primarily to large mass merchandisers and home center
retailers throughout the United States, Canada and Europe. We estimate that, by
dollar volume, Generac accounted for 32% of all portable generator sales and 37%
of all pressure washer sales in the United Stated during calendar 2000. We
believe that the acquisition of Generac provides us with an important
opportunity to enhance our revenue and earnings growth rates and leverage our
strong brand equity.
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THE OFFERING
Securities Offered............ Up to $140,000,000 aggregate principal amount
of 5.00% Convertible Senior Notes due May 15,
2006, together with the shares of common stock
into which the convertible notes may be
converted.
Issuer........................ Briggs & Stratton Corporation, a Wisconsin
corporation.
Maturity Date................. May 15, 2006.
Interest Payment Dates........ May 15 and November 15.
Conversion.................... The convertible notes are convertible at the
option of the holder into shares of our common
stock, at any time before the close of business
on the business day immediately preceding the
maturity date, unless we have previously
redeemed or repurchased the convertible notes,
at a conversion rate of 20.1846 shares of
common stock per $1,000 principal amount of
convertible notes. This is the equivalent to a
conversion price of approximately $49.54 per
share. The conversion rate, which would result
in the issuance of 2,825,844 shares of our
common stock if all of the convertible notes
were converted, is subject to anti-dilution
adjustment in certain events. See "Description
of Convertible Notes -- Conversion Rights."
Optional Redemption........... On or after May 15, 2004, we may redeem some or
all of the convertible notes not previously
converted at the redemption prices described
under "Description of Convertible
Notes -- Redemption At Our Option."
Sinking Fund.................. None.
Ranking....................... The effective ranking of the convertible notes
is as follows:
- The convertible notes are our senior
unsecured obligations and rank equally with
all of our existing and future senior
unsecured debt.
- The convertible notes are senior to all of
our unsecured subordinated indebtedness.
- The convertible notes are effectively junior
to all of our secured indebtedness to the
extent of the value of the collateral. In the
event that the ratings of certain of our debt
are reduced our bank debt and our other
outstanding notes (but not the convertible
notes) will be entitled to participate in a
pledge of substantially all of our assets.
- The convertible notes are effectively junior
to all indebtedness and other obligations,
including trade payables, of all of our non-
guarantor subsidiaries.
As of March 31, 2002, our total senior
unsecured debt, including the convertible notes
and the $275.0 million of 8.875% Senior Notes
due March 15, 2011 that we sold concurrently
with the convertible notes, was approximately
$637 million. We currently have no indebtedness
that is expressly subordinated to the
convertible notes.
Guarantees.................... The convertible notes are or will be
unconditionally guaranteed, jointly and
severally, by each of our existing and future
significant
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domestic subsidiaries. As of the date of this
prospectus our only significant domestic
subsidiary is Generac Portable Products, LLC.
See "Description of Convertible
Notes -- Subsidiary Guarantees; No Other
Collateral."
Change in Control............. If we experience certain kinds of change in
control events, we must offer to repurchase the
convertible notes at a price of 100% of the
principal amount thereof, plus accrued but
unpaid interest, if any, to the date of
repurchase. If we pay the repurchase price in
common stock, the stock will be valued at 95%
of the average closing sales prices of the
common stock for the five trading days
preceding and including the third trading day
prior to the repurchase date. See "Description
of Convertible Notes -- Repurchase At Option of
Holders Upon a Change in Control."
Use of Proceeds............... We will not receive any of the proceeds from
the sale by any selling holder of the
convertible notes or shares of common stock
offered under this prospectus.
No Public Market.............. The convertible notes issued in the initial
private placement are eligible for trading in
the PORTAL market. However, the convertible
notes sold using this prospectus will no longer
be eligible for trading in the PORTAL market.
The initial purchasers have advised us that
they intend to make a market in the convertible
notes. The initial purchasers are not
obligated, however, to make a market in the
convertible notes, and any such market-making
may be discontinued by them in their discretion
at any time without notice.
Governing Law................. The indenture and the convertible notes are
governed by the laws of the State of New York.
RISK FACTORS
You should consider carefully the information set forth in the section of
this prospectus entitled "Risk Factors" beginning on page 7 and all other
information provided to you or incorporated by reference in this prospectus in
deciding whether to invest in the convertible notes or the common stock.
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RISK FACTORS
An investment in the convertible notes or the common stock involves risks.
You should consider carefully the information set forth in this section and all
the other information provided to you or incorporated by reference in this
prospectus before deciding whether to invest in the convertible notes or the
common stock.
RISKS RELATING TO OUR BUSINESS
DEMAND FOR LAWN AND GARDEN EQUIPMENT, AND CONSEQUENTLY FOR OUR PRODUCTS,
FLUCTUATES SIGNIFICANTLY DUE TO SEASONALITY. IN ADDITION, CHANGES IN THE
WEATHER, THE LEVEL OF HOUSING STARTS AND CONSUMER DISPOSABLE INCOME IMPACT
DEMAND.
Consumer demand for lawn and garden equipment is highest in the spring, and
lower throughout the rest of the year. In addition, consumer demand for lawn and
garden equipment can be reduced by a cold or dry spring in North America, a
reduction in single family housing starts, and thus the number of households
likely to purchase new lawn and garden equipment, and reductions in the level of
disposable income. These factors in turn reduce demand from the retailers who
purchase products from the original equipment manufacturers to whom we sell our
engines.
We manufacture throughout the year although our sales are concentrated in
the second half of our fiscal year. This operating method requires us to
anticipate demand of our customers and retail purchasers of lawn and garden
equipment many months in advance. If we overestimate or underestimate demand
during a given year, we may not be able to adjust our production quickly enough
to avoid excess or insufficient inventories, and that may in turn limit our
ability to maximize our potential sales.
WE HAVE ONLY A LIMITED ABILITY TO PASS THROUGH COST INCREASES IN OUR RAW
MATERIALS TO OUR CUSTOMERS DURING THE YEAR.
We generally enter into annual purchasing plans with our largest customers,
so our ability to raise our prices during a particular year to reflect increased
raw materials costs is limited.
A SIGNIFICANT PORTION OF OUR NET SALES COMES FROM THREE MAJOR CUSTOMERS,
AND THE LOSS OF ANY OF THESE CUSTOMERS WOULD NEGATIVELY IMPACT OUR FINANCIAL
RESULTS.
Our three largest customers are AB Electrolux, MTD Products Inc. and
Murray, Inc. Sales to these three customers combined were 46% of our net sales
in fiscal 2001. The loss of a significant portion of the business of one or more
of these key customers would significantly impact our net sales and
profitability.
CHANGES IN ENVIRONMENTAL OR OTHER LAWS COULD REQUIRE EXTENSIVE CHANGES IN
OUR OPERATIONS OR TO OUR PRODUCTS.
Our operations and products are subject to a variety of foreign, federal,
state and local laws and regulations governing, among other things, emissions to
air, discharges to water, noise, the generation, handling, storage,
transportation, treatment and disposal of waste and other materials and health
and safety matters. New engine emission regulations are being phased in between
2000 and 2008 by the federal government and the State of California and our
customers are subject to the noise reduction directive applicable to outdoor
equipment sold in the European Union that became effective January 1, 2002. We
do not expect these changes to have a material adverse effect on us, but we
cannot be certain that these or other proposed changes in applicable laws or
regulations will not adversely affect our business or financial condition in the
future.
FOREIGN ECONOMIC CONDITIONS AND CURRENCY RATE FLUCTUATIONS CAN REDUCE OUR
SALES.
In fiscal 2001, we derived approximately 25% of our net sales from
international markets, primarily Europe. We sell our domestically produced
engines to foreign customers in U.S. dollars when we can, but we share some
currency risk with customers. In fiscal 2001 we began selling some products to
European customers for which we receive payments in Euros. Weak economic
conditions in Europe could reduce our sales and currency fluctuations could
adversely affect our sales or profit levels in U.S. dollar terms.
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ACTIONS OF OUR COMPETITORS COULD REDUCE OUR SALES OR PROFITS.
The small gasoline engine industry is highly competitive and we have a
number of significant competitors in each of our markets. Because the lawn and
garden equipment market is mature, meaning that most households that need a lawn
mower already have one, and because we hold a substantial market share, our
competitors are more likely to focus on reducing our market share to improve
their results. In addition, the mature nature of the market means that actions
by our competitors to reduce their costs, lower their prices or introduce
innovative products could hurt our sales or profits.
DISRUPTIONS CAUSED BY LABOR DISPUTES OR ORGANIZED LABOR ACTIVITIES COULD
HARM OUR BUSINESS.
About 28% of our workforce is currently represented by labor unions. In
addition, we may from time to time experience union organizing activities in our
non-union facilities. Disputes with the current labor union or new union
organizing activities could lead to work slowdowns or stoppages and make it
difficult or impossible for us to meet scheduled delivery times for product
shipments to our customers, which could result in loss of business. In addition,
union activity could result in higher labor costs, which could harm our
financial condition, results of operations and competitive position.
RISKS RELATING TO THE GENERAC ACQUISITION
GENERAC'S HISTORICAL FINANCIAL RESULTS SHOULD BE VIEW CAUTIOUSLY, BECAUSE
DEMAND CREATED IN ANTICIPATION OF YEAR 2000 CONCERNS WAS ABNORMAL.
Generator sales to retailers were abnormally high in 1999, primarily in
anticipation of retail purchases due to concerns among consumers about potential
disruptions associated with Year 2000 issues. Retail sales of generators were
much lower throughout 2000 and continuing into 2001, as demand fell off
dramatically and existing inventory was gradually reduced to more normal levels.
GENERATOR DEMAND DEPENDS IN LARGE PART UPON MAJOR WEATHER EVENTS, WHICH ARE
DIFFICULT TO FORECAST.
Because demand for generators depends in large part upon unpredictable
weather events, we could produce either too many or too few generators in any
particular period, resulting in excess costs or lost sales opportunities.
RISKS RELATING TO INVESTMENT IN THE CONVERTIBLE NOTES AND COMMON STOCK
WE HAVE APPROXIMATELY $508.6 MILLION OF LONG-TERM DEBT, IN ADDITION TO THE
SEASONAL BORROWINGS WE INCUR UNDER OUR WORKING CAPITAL FACILITIES. THIS LEVEL OF
DEBT COULD ADVERSELY AFFECT OUR OPERATING FLEXIBILITY AND PUT US AT A
COMPETITIVE DISADVANTAGE.
Our level of debt and the limitations imposed on us by the indenture for
the notes and our other credit agreements could have important consequences for
you, including the following:
- we will have to use a portion of our cash flow from operations for debt
service rather than for our operations;
- we may not be able to obtain additional debt financing for future working
capital, capital expenditures or other corporate purposes or may have to
pay more for such financing;
- some or all of the debt under our current or future revolving credit
facilities will be at a variable interest rate, making us more vulnerable
to increases in interest rates;
- we could be less able to take advantage of significant business
opportunities, such as acquisition opportunities, and to react to changes
in market or industry conditions;
- we will be more vulnerable to general adverse economic and industry
conditions; and
- we may be disadvantaged compared to competitors with less leverage.
8
The terms of the indenture for the senior notes do not fully prohibit us
from incurring substantial additional debt in the future and our revolving
credit facilities permit additional borrowings, subject to certain conditions.
If new debt is added to our current debt levels, the related risks we now face
could intensify.
We expect to obtain the money to pay our expenses and to pay the principal
and interest on the convertible notes, the outstanding 8.875% senior notes, the
credit facilities and other debt primarily from our operations. Our ability to
meet our expenses thus depends on our future performance, which will be affected
by financial, business, economic and other factors. We will not be able to
control many of these factors, such as economic conditions in the markets where
we operate and pressure from competitors. We cannot be certain that the money we
earn will be sufficient to allow us to pay principal and interest on our debt,
including the convertible notes, and meet our other obligations. If we do not
have enough money, we may be required to refinance all or part of our existing
debt, including the convertible notes, sell assets or borrow more money. We
cannot guarantee that we will be able to do so on terms acceptable to us. In
addition, the terms of existing or future debt agreements, including the
revolving credit facilities and our indentures, may restrict us from adopting
any of these alternatives. The failure to generate sufficient cash flow or to
achieve these alternatives could significantly adversely affect the value of the
convertible notes and related common stock and our ability to pay principal of
and interest on the convertible notes. See "Description of Convertible Notes."
WE ARE SUBSTANTIALLY RESTRICTED BY THE TERMS OF THE OUTSTANDING 8.875%
SENIOR NOTES AND OUR OTHER DEBT, WHICH COULD ADVERSELY AFFECT US AND INCREASE
YOUR CREDIT RISK.
The indentures relating to the convertible notes and the senior notes and
our revolving credit agreements each include a number of significant financial
and operating restrictions, which may prevent us from capitalizing on business
opportunities and taking some corporate actions. Most of the restrictions under
the indenture governing the senior notes will cease to apply if and when the
senior notes are rated "Investment Grade" by S&P and Moody's with at least a
stable outlook and there is no event of default with respect to the senior
notes. These covenants could adversely affect us by limiting our ability to plan
for or react to market conditions or to meet our capital needs. These covenants
include, among other things, restrictions on our ability to:
- pay dividends or make distributions in respect of our capital stock or to
make certain other restricted payments;
- incur indebtedness or issue preferred shares;
- create liens;
- make loans or investments;
- enter into sale and leaseback transactions;
- agree to payment restrictions affecting our restricted subsidiaries;
- consolidate, merge, sell or lease all or substantially all of our assets;
- enter into transactions with affiliates;
- designate our subsidiaries as unrestricted subsidiaries; and
- dispose of assets or the proceeds of sales of our assets.
In addition, our revolving credit facility contains financial covenants
that, among other things, require us to maintain a minimum interest coverage
ratio and impose a maximum leverage ratio. These covenants will continue even if
the senior notes are rated "Investment Grade."
OUR FAILURE TO COMPLY WITH RESTRICTIVE COVENANTS UNDER THE INDENTURE
GOVERNING THE SENIOR NOTES AND OUR REVOLVING CREDIT FACILITIES COULD TRIGGER
PREPAYMENT OBLIGATIONS.
Our failure to comply with the restrictive covenants described above could
result in an event of default, which, if not cured or waived, could result in us
being required to repay these borrowings before their due date.
9
If we are forced to refinance these borrowings on less favorable terms, our
results of operations and financial condition could be adversely affected by
increased costs and rates.
THE CONVERTIBLE NOTES ARE UNSECURED, AND THEREFORE ARE EFFECTIVELY
SUBORDINATED TO ANY SECURED DEBT, AND THE SUBSIDIARY GUARANTEES OF THE
CONVERTIBLE NOTES ARE UNSECURED AND EFFECTIVELY SUBORDINATED TO THE SECURED DEBT
OF THE GUARANTORS. THE CONVERTIBLE NOTES ARE ALSO EFFECTIVELY SUBORDINATED TO
OTHER OBLIGATIONS OF OUR NON-GUARANTOR SUBSIDIARIES.
The convertible notes and the guarantees are not secured by any of our
assets or those of our subsidiaries. As a result, the convertible notes and
guarantees are effectively subordinated to any secured debt we may incur and to
the secured debt of the guarantor subsidiaries to the extent of the value of the
assets securing such debt. Under our bank debt we are required to provide liens
against substantially all of our assets in the event of a reduction in the
ratings of our 8.875% senior notes and our 7.25% notes due 2007, in which event
those notes (but not the convertible notes) are required to be equally and
ratably secured. We may also be required to provide guarantees of the bank
indebtedness by subsidiaries that do not guarantee the convertible notes. In any
liquidation, dissolution, bankruptcy or other similar proceeding, the holders of
our secured debt or the debt (including guarantees) of the guarantor
subsidiaries may assert rights against the secured assets in order to receive
full payment of their debt before the assets may be used to pay the holders of
the convertible notes.
THE SUBSIDIARY GUARANTEES MAY RAISE FRAUDULENT TRANSFER ISSUES, WHICH COULD
IMPAIR THE ENFORCEABILITY OF THE SUBSIDIARY GUARANTEES.
Upon completion of the acquisition of Generac, Generac and its subsidiaries
became guarantors of the notes. Through a series of mergers between the Generac
entities, Generac Portable Products, LLC is the sole remaining Generac entity.
Generac Portable Products, LLC guarantees the convertible notes. If any of our
other domestic subsidiaries becomes a significant subsidiary, it will also
guarantee the notes. Under U.S. bankruptcy law and comparable provisions of
state fraudulent transfer laws, a court could subordinate or void any guarantee
if it found that the guarantee was incurred with actual intent to hinder, delay
or defraud creditors or the guarantor did not receive fair consideration or
reasonably equivalent value for the guarantee and the guarantor:
- was insolvent or was rendered insolvent because of the guarantee and the
application of proceeds of the notes or the guarantee;
- was engaged in a business or transaction for which its remaining assets
constituted unreasonably small capital to carry on its business;
- intended to incur, or believed that it would incur, debts beyond its
ability to pay at maturity; or
- was a defendant in an action for money damages, or had a judgment for
money damages docketed against it, if, in either case, after final
judgment the judgment is unsatisfied.
We cannot be sure as to the standard that a court would use to determine
whether or not the guarantors were solvent at the relevant time, or that the
issuance of the guarantees would not be voided or the guarantees would not be
subordinated to the guarantors' other debt. A guarantee could also be subject to
the claim that, because the guarantee was incurred for the benefit of Briggs &
Stratton, and only indirectly for the benefit of the guarantor, the obligations
of the applicable guarantor were incurred for less than fair consideration. If a
court voided a guarantee as a result of fraudulent conveyance, or held it
unenforceable for any other reason, note holders would cease to have a claim
against the guarantor and would be solely creditors of Briggs & Stratton and any
remaining guarantors.
WE MAY NOT HAVE SUFFICIENT FUNDS TO PURCHASE SENIOR NOTES UPON A CHANGE OF
CONTROL.
If there is a change of control under the terms of the indenture governing
the senior notes, each holder of senior notes may require us to purchase all or
a portion of its senior notes at a purchase price equal to 101% of the principal
amount thereof, plus accrued interest. Our ability to purchase the senior notes
upon a change of control event may be limited by the terms of our other debt
agreements at that time. In order to purchase any outstanding senior notes, we
might have to refinance our outstanding indebtedness, which we might not be able
to do. In addition, even if we were able to refinance our other indebtedness,
any financing may be on terms unfavorable to us.
10
INVESTORS MAY FIND IT DIFFICULT TO TRADE THE CONVERTIBLE NOTES.
The convertible notes were a new issue of securities and there is currently
no public market for the convertible notes. We do not intend to apply for
listing of the convertible notes on any securities exchange. Although the
initial purchasers have informed us that they intend to make a market in the
convertible notes, they are under no obligation to do so and may discontinue any
market-making activities at any time without notice. Any such market-making will
be subject to the limitations imposed by the Securities Act and the Exchange
Act. The convertible notes issued in the initial private placement are eligible
for trading in the PORTAL market, but the convertible notes sold using this
prospectus will no longer be eligible for trading in the PORTAL market.
We also cannot assure that you will be able to sell your convertible notes
at a particular time or that the prices that you receive when you sell will be
favorable. We also cannot assure you as to the level of liquidity of the trading
market for the convertible notes. Future trading prices of the convertible notes
will depend on many factors, including:
- our operating performance and financial condition;
- the interest of securities dealers in making a market for the notes and
exchange notes; and
- the market for similar securities.
Historically, the market for non-investment grade, convertible debt has
been subject to disruptions that have caused volatility in prices. It is
possible that the market for the convertible notes will be subject to
disruptions. Any disruptions may have a negative effect on the holders of the
convertible notes, regardless of our prospects and financial performance.
THE PRICE OF OUR COMMON STOCK AND THEREFORE OF OUR CONVERTIBLE NOTES MAY
FLUCTUATE SIGNIFICANTLY, WHICH MAY RESULT IN LOSSES FOR INVESTORS.
The market price for our common stock has been and may continue to be
volatile. Our stock price can fluctuate as a result of a variety of factors,
including factors listed in this "Risk Factors" section and others, many of
which are beyond our control. These factors include:
- actual or anticipated variations in our quarterly operating results;
- announcement of new products or services by us or our competitors;
- announcements relating to strategic relationships or acquisitions;
- changes in financial estimates or other statements by securities
analysts;
- changes in general economic conditions; and
- future terrorist incidents and U.S. response thereto.
Because of this volatility, we may fail to meet the expectations of our
shareholders or of securities analysts at some time in the future, and our stock
price and therefore the price of our common stock and convertible notes could
decline as a result.
OUR COMMON STOCK PURCHASE RIGHTS, CERTAIN PROVISIONS OF WISCONSIN LAW AND
OUR ARTICLES OF INCORPORATION AND BYLAWS CONTAIN CERTAIN PROVISIONS THAT COULD
MAKE A TAKEOVER OF BRIGGS & STRATTON MORE DIFFICULT.
Our common stock purchase rights, certain provisions of Wisconsin law and
our articles of incorporation and bylaws could have the effect of delaying or
preventing a third party from acquiring us, even if a change in control would be
beneficial to our shareholders. In addition to our common stock purchase rights,
these provisions of our articles of incorporation and bylaws include:
- providing for a classified board of directors with staggered, three year
terms;
- permitting removal of directors only for cause;
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- providing that vacancies on the board of directors will be filled by the
remaining directors then in office; and
- requiring advance notice for shareholder proposals and director nominees.
In addition, the Wisconsin control share acquisition statute and
Wisconsin's "fair price" and "business combination" provisions limit the ability
of an acquiring person to engage in certain transactions or to exercise the full
voting power of acquired shares under certain circumstances. These provisions
and other provisions of Wisconsin law could make it more difficult for a third
party to acquire us, even if doing so would benefit our shareholders. As a
result, offers to acquire Briggs & Stratton which represent a premium over the
available market price of our common stock may be withdrawn or otherwise fail to
be realized. See "Description of Capital Stock."
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The consolidated ratios of our earnings to fixed charges are set forth
below for the periods indicated.
NINE MONTHS ENDED FISCAL YEAR ENDED
------------------- --------------------------------------------------
MAR 31, APRIL 1, JULY 1, JULY 2, JUNE 27, JUNE 28, JUNE 29,
2002 2001 2001 2000 1999 1998 1997
------- --------- ------- ------- -------- -------- --------
Ratio of earnings to
fixed charges......... 2.0x 4.2x 3.3x 11.1x* 10.8x 6.7x 10.4x
---------------
* Includes $16.5 million pretax gain on disposition of our foundry assets.
For the purpose of calculating these ratios, we define earnings as income
before income taxes plus fixed charges. We define fixed charges as the sum of
interest expense plus interest expense of unconsolidated subsidiaries.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the convertible notes or
the common stock into which the notes are convertible. The selling holders will
receive all of the net proceeds from the sale of the convertible notes and the
common stock into which the notes are convertible that they, respectively, own.
DESCRIPTION OF CONVERTIBLE NOTES
The convertible notes constitute a series of debt securities we issued
under an indenture between us and Bank One, N.A., as trustee. The terms of the
convertible notes include those stated in the indenture and those made part of
the indenture by reference to the Trust Indenture Act of 1939.
This section summarizes selected provisions of the indenture and the
convertible notes. It does not, however, describe certain exceptions and
qualifications contained in those documents, and is subject to and qualified in
its entirety by reference to all of the provisions of the indenture. In this
section, we use capitalized words to signify defined terms that have been given
special meaning in the indenture. We describe the meaning of only the more
important terms. You should read the indenture itself for a full description of
the terms of the convertible notes. If you would like more detailed information
on the provisions of the indenture, you should review the full text of the
indenture. You can obtain a copy of the indenture from us upon request.
When referring to the notes and the indenture, references in this
prospectus to "Briggs & Stratton," "we," "our," or "us" mean Briggs & Stratton
Corporation, the parent company, and do not include our subsidiaries.
GENERAL
The convertible notes are our general unsecured obligations, rank equally
in right of payment with all of our other unsecured senior debt and are limited
to $140.0 million aggregate principal amount. Payment in full of the principal
amount of the convertible notes will be due at maturity on May 15, 2006.
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The convertible notes bear interest at the annual rate shown on the front
cover of this prospectus from May 14, 2001, or from the most recent date to
which interest has been paid or provided for, payable on May 15 and November 15
of each year, commencing November 15, 2001, until the principal is paid or made
available for payment, to the person in whose name the convertible note is
registered at the close of business on the preceding May 1 or November 1, as the
case may be. Interest is computed on the basis of a 360-day year of twelve
thirty-day months.
The convertible notes are convertible into shares of our common stock
initially at the conversion rate stated on the front cover of this prospectus at
any time following the initial issue date of the convertible notes and before
the close of business on the business day immediately preceding May 15, 2006
unless previously redeemed or repurchased by us. The conversion rate will be
subject to adjustment upon the occurrence of certain events described below
under "-- Conversion Rights."
The convertible notes are redeemable at our option at any time on or after
May 15, 2004, in whole or in part, at the redemption prices set forth below
under "-- Redemption At Our Option," plus accrued and unpaid interest to the
date of redemption. The convertible notes are also subject to repurchase by us
at the option of the holders upon a change in control of our company, as
described below under "-- Repurchase At Option of Holders Upon a Change in
Control."
The principal of, premium, if any, and interest on the convertible notes
will be payable, and the convertible notes may be surrendered for registration
of transfer, exchange and conversion, at the office or agency of the trustee in
Manhattan, New York. See "-- Payment and Conversion." Payments, transfers,
exchanges and conversions relating to beneficial interests in convertible notes
issued in book-entry form will be subject to the procedures applicable to global
notes described below. We may not impose any service charge, other than payment
of a sum sufficient to cover any applicable tax or other governmental charge, on
the transfer or exchange of any convertible note.
We have initially appointed the trustee as the paying agent, transfer
agent, registrar and conversion agent for the convertible notes. In these
capacities, the trustee is responsible for:
- maintaining a record of the aggregate holdings of convertible notes
represented by the global note described below and accepting convertible
notes for exchange and registration of transfer;
- ensuring that payments of principal, premium, if any, and interest
received by the trustee from us in respect of the convertible notes are
duly paid to The Depository Trust Company ("DTC") or its nominees;
- transmitting to us any notices from holders of the convertible notes;
- accepting conversion notices and related documents and transmitting the
relevant items to us; and
- delivering certificates representing the common stock issued upon
conversion of the notes.
We will cause each transfer agent to act as a registrar and will cause each
transfer agent to keep a register at their office in which, subject to any
reasonable regulations we may prescribe, we will provide for registration of
transfers of convertible notes. We may vary or terminate the appointment of any
paying agent, transfer agent or conversion agent, or appoint additional or other
agents, or approve any change in the office through which any agent acts.
However, we will at all times maintain a paying agent, transfer agent and a
conversion agent in Manhattan, New York. We will cause notice of any
resignation, termination or appointment of the trustee or any paying agent,
transfer agent or conversion agent, and of any change in the office through
which any agent acts, to be provided to holders of the convertible notes.
SUBSIDIARY GUARANTEES; NO OTHER COLLATERAL
The convertible notes were not guaranteed when we initially issued them,
but Generac and its subsidiaries each became a guarantor shortly after we
acquired Generac. Through a series of mergers between the Generac entities,
Generac Portable Products, LLC is the sole remaining Generac entity. Generac
Portable Products, LLC guarantees the convertible notes. It also is a guarantor
of the senior notes. In addition, if at any time a Domestic Subsidiary of Briggs
& Stratton constitutes a Significant Domestic Subsidiary, then such Domestic
Subsidiary will become a guarantor and execute a supplemental indenture and
deliver an opinion of counsel satisfactory to the trustee within 10 Business
Days of the date when such event occurs.
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Each guarantee of the convertible notes is the obligation of the guarantor
and ranks equally and ratably with all existing and future senior unsecured
obligations of that guarantor.
The Subsidiary Guarantees are full and unconditional joint and several
obligations of the guarantors. The obligations of each guarantor under its
Subsidiary Guarantee will be limited as necessary to prevent that Subsidiary
Guarantee from constituting a fraudulent conveyance under applicable law.
The Subsidiary Guarantee of a guarantor will be released at such time as
the guarantor is no longer a subsidiary of Briggs & Stratton.
Under our bank debt we are required to provide liens against substantially
all of our assets if the ratings of our 8.875% senior notes and our 7.25% notes
due 2007 are reduced in which event those notes (but not the convertible notes)
are required to be equally and ratably secured. We may also be required to
provide guarantees of the bank indebtedness by subsidiaries that do not
guarantee the convertible notes.
FORM, DENOMINATION, TRANSFER, EXCHANGE AND BOOK-ENTRY PROCEDURES
The convertible notes have been issued:
- only in fully registered form;
- without interest coupons; and
- in minimum denominations of $1,000 and integral multiples of $1,000.
The convertible notes initially are represented by one or more notes in
registered, global form, referred to as global notes. The global notes were
deposited upon issuance with the trustee as custodian for DTC, New York, New
York, and registered in the name of DTC or its nominee, for credit to an account
of a direct or indirect participant in DTC as described below.
Transfers of beneficial interests in the global notes will be subject to
the applicable rules and procedures of DTC and its direct or indirect
participants, which may change from time to time.
Except as set forth below, the global notes may be transferred, in whole
and not in part, only to DTC, its nominees and their successors. Beneficial
interests in the global notes may not be exchanged for notes in certificated
form, except in the limited circumstances described below under "-- Exchange of
Book-Entry Notes for Certificated Notes."
EXCHANGE OF BOOK-ENTRY NOTES FOR CERTIFICATED NOTES
We will issue a convertible note in certificated form in exchange for a
beneficial interest in a global note only if:
- DTC notifies us that it is unwilling or unable to continue as depository
for the global note or if DTC ceases to be a clearing agency registered
under applicable law and, in either case, we fail to appoint a successor
depository within 90 days after we become aware of such event;
- an event of default under the indenture has occurred and is continuing
and the registrar has received a request from DTC to issue convertible
notes in definitive form; or
- upon written notice given to the trustee by or on behalf of DTC in
accordance with the indenture.
In all cases, certificated notes delivered in exchange for a beneficial
interest in a global note will be registered in the names, and issued in any
approved denominations, requested by or on behalf of the depository, in
accordance with its customary procedures.
CERTAIN BOOK-ENTRY PROCEDURES FOR GLOBAL NOTES
Beneficial interests in global notes are shown on, and transfers of global
notes will be made only through, records maintained by DTC and its participants.
If you are not a participant in DTC, you may beneficially own convertible notes
held by DTC only through a participant.
14
The descriptions of the operations and procedures of DTC that follow are
provided solely as a matter of convenience. These operations and procedures are
solely within DTC's control and are subject to changes by DTC from time to time.
We take no responsibility for these operations and procedures and urge you to
contact DTC or its participants directly to discuss these matters.
DTC has provided us the following information:
- 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 under the provisions of Section 17A of
the Securities Exchange Act of 1934.
- DTC was created to hold securities for its participants and to facilitate
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.
- Participants in DTC include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations.
- DTC is owned by a number of its participants and by the New York Stock
Exchange, Inc., the American Stock Exchange LLC and the National
Association of Securities Dealers, Inc.
- Access to the DTC system is also available to others such as securities
brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly.
- The rules applicable to DTC and its participants are on file with the
SEC.
As long as DTC, or its nominee, is the registered holder of a global note,
we and the trustee will treat DTC or such nominee as the sole owner of the
convertible notes represented by such global note for all purposes. Except in
the limited circumstances described above under "-- Exchange of Book-Entry Notes
for Certificated Notes," owners of beneficial interests in a global note:
- will not be entitled to have any portion of the convertible notes
represented by that global note registered in their names;
- will not receive or be entitled to receive physical delivery of the
convertible notes in certificated form; and
- will not be considered the owners or holders of the global note, or the
convertible notes represented by that global note, under the indenture or
the convertible notes.
Accordingly, each person owning a beneficial interest in a global note must rely
on the procedures of DTC and, if such person is not a participant, those of the
participant through which that person owns its interest, in order to exercise
any rights of a holder under the indenture or the convertible notes.
On each relevant payment date, we will wire transfer the principal of,
premium or interest on, or redemption or repurchase price to DTC or its nominee,
as the case may be, as the registered owner of the global note. Accordingly, we,
the trustee and any paying agent will have no direct responsibility or liability
to pay amounts due on the global notes to owners of beneficial interests in the
global notes.
DTC has advised us that its current practice, upon receipt of any payment
of principal, premium, interest or the redemption or repurchase price, is to
credit participants' accounts on the payment date in amounts proportionate to
their respective beneficial interests in the global note as shown on DTC's
records. In addition, it is DTC's current practice to assign any consenting or
voting rights to participants whose accounts are credited with convertible notes
on a record date, by using an omnibus proxy. Payments by participants to owners
of beneficial interests in the global notes and voting by participants will be
governed by standing instructions and customary practices between the
participants and owners of beneficial interests, as is the case
15
with convertible notes held for the account of customers registered in "street
name." But payments will be the responsibility of the participants and not of
DTC, the trustee or us.
Redemption notices will be sent to DTC or its nominee. If less than all of
the convertible notes are being redeemed, DTC's practice is to determine by lot
the amount of the holdings of each participant in the issue to be redeemed.
DTC has advised us that it will take any action permitted to be taken by a
holder of convertible notes, including the presentation of convertible notes for
exchange as described below and the conversion of convertible notes:
- only at the direction of one or more participants to whose account with
DTC beneficial interests in the global notes are credited; and
- only in respect of the portion of the aggregate principal amount the
convertible notes as to which the participant or participants has or have
given that direction.
However, if there is an event of default under the convertible notes, DTC
reserves the right to exchange the global notes for convertible notes in
certificated form and to distribute the convertible notes to its participants.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of beneficial ownership interests in the global notes among
participants, it is under no obligation to perform or to continue to perform
those procedures, and those procedures may be discontinued at any time.
None of us, the trustee or any of our respective agents will have any
responsibility for the performance by DTC or its participants of their
respective obligations under the rules and procedures governing its operations,
including maintaining, supervising or reviewing the records relating to, or
payments made on account of, beneficial ownership interests in global notes.
PAYMENT AND CONVERSION
The principal of the convertible notes will be paid in U.S. dollars,
against surrender of the convertible notes at the office or agency of the
trustee in Manhattan, New York, by dollar check or by transfer to a dollar
account maintained by the holder with a bank in New York City. Payment of
interest on a convertible note may be made by dollar check mailed to the person
entitled to the interest at that person's address as it appears in our security
register, or, upon written application by the holder to the security registrar
not later than the relevant record date, by transfer to a dollar account
maintained by the holder with a bank in the United States. Transfers to dollar
accounts will be made only to holders of an aggregate principal amount of
convertible notes in excess of $2,000,000.
As previously stated, payments in respect of the principal of, and premium,
if any, and interest on, any global note registered in the name of DTC or its
nominee will be payable by the trustee to DTC or its nominee, as the case may
be, in its capacity as the registered holder under the indenture. Under the
terms of the indenture, we and the trustee will treat the persons in whose names
the convertible notes, including the global notes, are registered as the owners
of those notes for the purpose of receiving payments and for any and all other
purposes. Consequently, we, the trustee and any paying agent will have no
responsibility or liability for:
- any aspect of DTC's records or any participant's records relating to, or
payments made on account of, beneficial ownership interests in the global
notes;
- maintaining, supervising or reviewing any of DTC's records or any
participant's records relating to the beneficial ownership interests in
the global notes; or
- any other matter relating to the actions and practices of DTC or any of
its participants.
Any payment on a convertible note due on any day that is not a business day
may be made the next succeeding business day with the same force and effect as
if made on the due date, and no interest will accrue on the payment for the
period from and after that date.
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Convertible notes may be surrendered for conversion at the office or agency
of the trustee in Manhattan, New York. In the case of global notes, conversion
will be effected by DTC upon notice from the holder of a beneficial interest in
a global note in accordance with its rules and procedures. Convertible notes
surrendered for conversion must be accompanied by a conversion notice and any
payments in respect of interest, as applicable, as described below under "--
Conversion Rights."
All money for the payment of principal of, and premium, if any, or interest
on, any convertible note that is deposited with the trustee or any paying agent
or then held by us in trust which remains unclaimed at the end of two years
after the payment has become due and payable may be repaid to us. Thereafter,
the holder of such convertible note will look only to us for payment and no
interest will accrue on the amount that we hold.
CONVERSION RIGHTS
The holder of any outstanding convertible note has the option to convert
all or any portion of the principal amount of the convertible note that is an
integral multiple of $1,000 into shares of our common stock at any time before
the close of business on the business day immediately preceding the maturity
date, unless the note has been previously redeemed or repurchased by us. The
conversion rate is equal to the number of shares per $1,000 principal amount of
convertible notes shown on the front cover of this prospectus and is subject to
adjustment in certain events as described below. The right to convert a
convertible note called for redemption or delivered for repurchase will
terminate at the close of business on the business day immediately preceding the
redemption or repurchase date, as the case may be, for that note, unless we
default in making the payment due upon redemption or repurchase.
A holder may exercise the right of conversion by delivering the convertible
note at the office or agency of the trustee in Manhattan, New York, accompanied
by a properly signed and completed notice of conversion, a copy of which may be
obtained from the trustee. A holder of a convertible note will cease to have any
further rights as a holder of such note at the time of conversion. The
conversion date will be the date on which the convertible note and the properly
signed and completed notice of conversion are so delivered.
As promptly as practicable after the conversion date, we will issue and
deliver to the trustee a certificate or certificates for the number of full
shares of our common stock issuable upon conversion, together with payment in
lieu of any fraction of a share, which will then be sent by the trustee to the
conversion agent for delivery to the holder. Shares of our common stock issuable
upon conversion of the notes, in accordance with the provisions of the
indenture, will be fully paid and nonassessable and will rank equally with the
other shares of our common stock outstanding from time to time. All shares of
our common stock are subject to the personal liability which may be imposed on
shareholders by Section 180.0622(2)(b) of the Wisconsin Business Corporation
Law, as judicially interpreted, for debts owing to employees for services
performed, but not exceeding six months service in any one case. If a
convertible note is surrendered for partial conversion, we will also issue to
the holder of that note a new convertible note in a principal amount equal to
the unconverted portion of the surrendered convertible note.
Except as described below, holders that surrender convertible notes for
conversion on a date that is not an interest payment date under the indenture
are not entitled to receive any interest for the period from the next preceding
interest payment date to the date of conversion. However, holders of convertible
notes on a regular record date, including convertible notes surrendered for
conversion after such date, will receive the interest payable on the convertible
notes on the next succeeding interest payment date. Accordingly, any convertible
note surrendered for conversion during the period from the close of business on
a regular record date to the opening of business on the next succeeding interest
payment date must be accompanied by payment of an amount equal to the interest
payable on that interest payment date on the principal amount of the convertible
notes being surrendered for conversion. However, no payment will be required
upon the conversion of any convertible note, or portion thereof, that has been
called for redemption or that is eligible for repurchase if, as a result, the
right to convert such convertible note would terminate during the period between
the regular record date and the close of business on the next succeeding
interest payment date.
No other payment or adjustment for interest will be made upon conversion.
Holders of our common stock issued upon conversion will not be entitled to
receive any dividends payable to holders of our common stock as
17
of any record date before the close of business on the conversion date. We will
not issue any fractional shares upon conversion but, instead, will pay an
appropriate amount in cash based on the market price of our common stock at the
close of business on the trading day immediately preceding the conversion date.
A holder surrendering a convertible note for conversion will not be
required to pay any taxes or duties in respect of the issue or delivery of our
common stock upon conversion. However, we will not be required to pay any tax or
duty that may be payable in respect of any transfer involved in the issue or
delivery of our common stock in a name other than that of the holder of the
convertible note so surrendered, and we will not issue or deliver certificates
representing shares of our common stock unless the person requesting such issue
has paid to us the amount of any such tax or duty or has established to our
satisfaction that any such tax or duty has been paid.
The conversion rate may be adjusted in certain events, including:
- the payment of a dividend or other distribution in shares of our common
stock to holders of our common stock;
- the issuance to all holders of our common stock of rights, options or
warrants entitling them to subscribe for or purchase shares of our common
stock, or securities convertible into shares of our common stock, at a
price per share less than the then current market price of our common
stock (determined as provided in the indenture);
- the subdivision, combination or reclassification of our common stock;
- the distribution to all holders of our common stock of cash, evidences of
our indebtedness, shares of our capital stock or other property,
including securities, but excluding those dividends, distributions,
rights, options and warrants referred to in the first two bullet points
above, dividends and distributions paid exclusively in cash and
distributions upon mergers or consolidations to which the next bullet
point applies;
- the distribution to all holders of our common stock consisting
exclusively of cash, excluding any cash portion of distributions referred
to in the immediately preceding bullet point, or cash distributed upon a
merger or consolidation to which the next bullet point applies, in an
aggregate amount that, combined together with:
-- other all-cash distributions made within the 12 months preceding the
date of payment in respect of which no adjustment has been made; and
-- any cash and the fair market value of other consideration payable in
respect of any tender offer by us or any of our subsidiaries for our
common stock concluded within the 12 months preceding the date of
payment in respect of which no adjustment has been made;
exceeds 10% of our market capitalization, being the product of the current
market price per share of our common stock on the record date for that
distribution and the number of shares of our common stock then outstanding; and
- the successful completion of a tender offer made by us or any of our
subsidiaries for our common stock which involves an aggregate
consideration that, combined together with:
-- any cash and the fair market value of other consideration payable in
respect of any other tender offer by us or any of our subsidiaries for
our common stock expiring within the 12 months preceding the expiration
of the tender offer in respect of which no adjustment has been made;
and
-- the aggregate amount of any all-cash distributions referred to in the
immediately preceding bullet point to all holders of our common stock
within the 12 months preceding the expiration of the tender offer in
respect of which no adjustment has been made;
exceeds 10% of our market capitalization on the expiration of such tender
offer.
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We reserve the right to make any additional adjustments in the conversion
rate as we consider necessary in order that any event treated for U.S. federal
income tax purposes as a dividend of stock or stock rights will not be taxable
to the recipients. No adjustment of the conversion rate will be required until
the cumulative adjustments amount to 1.0% or more of the conversion rate. We
will compute any adjustments to the conversion rate as provided in the indenture
and will give notice of such adjustments to the holders of convertible notes
then outstanding.
In the case of any consolidation or merger of our company with or into
another person or upon the sale or conveyance of all or substantially all of our
property and assets to another person, each convertible note then outstanding
will become convertible only into the kind and amount of securities, cash and
other property receivable upon such consolidation, merger, sale or conveyance by
a holder of the number of shares of common stock into which the convertible note
was convertible immediately prior to such event, assuming such holder failed to
exercise any rights of election and that such convertible note was then
convertible. The provision described in the preceding sentence will not apply,
however, to a consolidation or merger in which we are the surviving corporation
and which does not result in any reclassification, conversion, exchange or
cancellation of our common stock.
We may from time to time increase the conversion rate for any period of at
least 20 days if our board of directors determines that an increase would be in
our best interests, which determination will be conclusive. We will give at
least 15 days' prior notice of the increase to the holders of the convertible
notes then outstanding. No increase shall be taken into account for purposes of
determining whether the closing price of our common stock exceeds the conversion
price by 105% in connection with an event that would otherwise be a change in
control.
If we make a distribution of property to our stockholders that would be
taxable to them as a dividend for U.S. federal income tax purposes, and, under
the anti-dilution provisions of the indenture, the number of shares of common
stock into which convertible notes are convertible is increased, that increase
will be deemed for U.S. federal income tax purposes to be the payment of a
taxable dividend to holders of convertible notes. This might occur with
distributions of our evidences of indebtedness or assets, but generally would
not occur with stock dividends on common stock or rights to subscribe for common
stock.
REDEMPTION AT OUR OPTION
On or after May 15, 2004, we may redeem the convertible notes, in whole or
in part, at the prices set forth below. If we elect to redeem all or any part of
the convertible notes, we will give at least 30, but no more than 60, days prior
notice to each holder of the convertible notes to be redeemed. Promptly after
giving such notice, we will make a public announcement thereof by release made
to Reuters Economic Services and Bloomberg Business News.
The redemption price, expressed as a percentage of principal amount, is as
follows for the 12-month periods beginning on:
DATE REDEMPTION PRICE
---- ----------------
May 15, 2004................................................ 102%
May 15, 2005................................................ 101%
in each case together with accrued interest to the date of redemption.
No sinking fund is provided for the convertible notes, which means that the
indenture does not require us to redeem or retire the convertible notes
periodically.
We may, to the extent permitted by applicable law, purchase convertible
notes at any time in the open market, by tender at any price or by private
agreement. Any convertible note that we purchase may, to the extent permitted by
applicable law and subject to the restrictions contained in the purchase
agreement with the initial purchasers, be re-issued or resold or may, at our
option, be surrendered to the trustee for cancellation. Any convertible notes
surrendered for cancellation may not be re-issued or resold and will be canceled
promptly.
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REPURCHASE AT OPTION OF HOLDERS UPON A CHANGE IN CONTROL
Within 30 days after the occurrence of a change in control, we must deliver
to all holders of convertible notes then outstanding, with a copy to the
trustee, written notice of the change in control and of the resulting repurchase
right described below. The holder of any outstanding convertible note will then
have the right to require us to repurchase all or any portion of the convertible
note that is an integral multiple of $1,000 not previously called for
redemption. To exercise this right, the holder must deliver to the trustee
irrevocable written notice of such exercise, together with the convertible note,
on or before the 30th day after the date on which we notified the holders of
such change in control. The repurchase price will be equal to 100% of the
principal amount of the convertible note to be repurchased, together with
interest accrued to the repurchase date.
A change in control will be deemed to have occurred if at any time after
the original issue date of the convertible notes any of the following occurs:
- the acquisition, directly or indirectly, through a purchase, merger or
other acquisition transaction or series of transactions, by any person,
other than us, any of our subsidiaries or any of our employee benefit
plans, of beneficial ownership of shares of our capital stock entitling
that person to exercise 50% or more of the total voting power of all
shares of our capital stock entitled to vote generally in elections of
directors; or
- the consolidation or merger of our company with or into any other entity,
any merger of another entity into us, or any conveyance, transfer, sale,
lease or other disposition of all or substantially all of our properties
and assets to another person or entity, other than:
-- any transaction (x) that does not result in any reclassification,
conversion, exchange or cancellation of our outstanding shares of
capital stock and (y) pursuant to which holders of our common stock
immediately prior to such transaction are entitled to exercise,
directly or indirectly, 50% or more of the total voting power of all
shares of the capital stock entitled to vote generally in the election
of directors of the continuing or surviving entity immediately after
such transaction, and
-- any merger which is effected solely to change our jurisdiction of
incorporation and results in a reclassification, conversion or exchange
of outstanding shares of common stock solely into shares of common
stock of the surviving entity.
"Beneficial owner" will be determined in accordance with Rule 13d-3 promulgated
by the SEC under the Exchange Act. "Person" includes any syndicate or group that
would be deemed to be a "person" under Section 13(d)(3) of the Exchange Act.
However, a change in control will not be deemed to have occurred if either:
- the closing sales price per share of our common stock for any five
trading days within the period of 10 consecutive trading days ending
immediately after the later of the change in control or the public
announcement of the change in control, in the case of a change in control
under the first bullet point in the preceding paragraph above, or the
period of 10 consecutive trading days ending immediately before the
change in control, in the case of a change in control under the second
bullet point above, equals or exceeds 105% of the conversion price in
effect on each such trading day; or
- all of the consideration, excluding cash payments for fractional shares
and cash payments made pursuant to dissenters' appraisal rights, in a
merger or consolidation otherwise constituting a change in control under
the first or second bullet point in the preceding paragraph above
consists of shares of common stock traded on a national securities
exchange or quoted on The Nasdaq National Market, or will be so traded or
quoted immediately following such merger or consolidation, and as a
result of such merger or consolidation the convertible notes become
convertible solely into such common stock.
For purposes of these provisions, the conversion price is equal to $1,000
divided by the conversion rate.
We may, at our option, in lieu of paying the repurchase price in cash, pay
it in shares of our common stock valued at 95% of the average of the closing
sales prices of our common stock for the five trading days
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immediately preceding and including the third trading day prior to the date of
repurchase. However, payment may not be made in common stock unless we satisfy
certain conditions prior to the repurchase date as provided in the indenture.
Rule 13e-4 under the Exchange Act requires that we disseminate certain
information to security holders in the event of an issuer tender offer and this
requirement may apply in the event that the repurchase option becomes available
to holders of the convertible notes. We will comply with this rule to the extent
applicable at that time.
The definition of change in control includes a phrase relating to the
conveyance, transfer, sale, lease or disposition of "all or substantially all"
of our assets. There is no precise, established definition of the phrase
"substantially all" under applicable law. Accordingly, your ability to require
us to repurchase your notes as a result of conveyance, transfer, sale, lease or
other disposition of less than all of our assets may be uncertain.
The foregoing provisions would not necessarily provide you with protection
if we are involved in a highly leveraged or other transaction that may adversely
affect you.
CONSOLIDATION, MERGER OR SALE OF ASSETS
We may not consolidate or merge with or into any other person or entity or
sell or transfer all or substantially all of our property and assets to any
other person or entity, unless:
- the entity formed by such consolidation or merger, or the person or
entity to which our property and assets are sold or transferred, is a
corporation, limited liability company, partnership or trust organized
and existing under the laws of the United States, any state thereof or
the District of Columbia and expressly assumes our obligations under the
indenture; and
- immediately after such 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 occurred and be continuing.
Upon any permitted consolidation, merger or sale, we will be discharged
from, and the surviving or successor corporation will succeed to, all of our
obligations under the indenture and the convertible notes.
EVENTS OF DEFAULT
Each of the following would be an "event of default" under the indenture
with respect to the convertible notes:
- failure to pay principal of or premium, if any, on any convertible note
when due;
- failure to pay interest on any convertible note when due, continuing for
a period of 30 days;
- failure to comply with any of our other agreements contained in the
indenture or in the convertible notes, continuing for a period of 60 days
after written notice to us by the trustee or the holders of at least 25%
in aggregate principal amount of the outstanding convertible notes;
- failure to pay when due the principal of, or acceleration of, any debt
for money borrowed by us or any subsidiary in excess of $10 million if
such debt is not discharged, or such acceleration is not remedied, cured
or waived, within 30 days after written notice to us by the trustee or
the holders of at least 25% in aggregate principal amount of the
outstanding convertible notes;
- certain events of bankruptcy, insolvency or reorganization of our company
or certain of our subsidiaries; and
- failure to provide a notice to holders of outstanding convertible notes
in the event of a change in control or failure to pay the change in
control price.
In general, the trustee is required to give notice of a default with
respect to the convertible notes to the holders of those notes. However, the
trustee may withhold notice of any such default (except a default in
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payment of principal of or interest on any convertible note) if the trustee
determines it is in the best interest of the holders of the convertible notes to
do so.
If there is a continuing event of default with respect to the convertible
notes, then the trustee or the holders of at least 25% in principal amount of
the outstanding convertible notes may accelerate the maturity of all convertible
notes. However, the holders of a majority in principal amount of the outstanding
convertible notes may, under certain circumstances provided in the indenture,
rescind and annul the acceleration and waive any past defaults. A continuing
default in payment of principal of, or premium, if any, or interest on the
convertible notes may be waived only by all holders of outstanding convertible
notes. For more information on waivers of defaults, see "-- Modification and
Waiver" below.
Prior to an event of default, the trustee is required to perform only the
specific duties stated in the indenture, and after an event of default, the
trustee must exercise the same degree of care as a prudent individual would
exercise or use under the circumstances in the conduct of his or her own
affairs.
Except during the continuance of an event of default, the trustee may
refuse to exercise any of its rights or powers at the request or direction of
any of the holders of convertible notes, unless those holders have offered to
the trustee satisfactory security or indemnity. Subject to certain limitations
specified in the indenture, the holders of a majority in principal amount of the
convertible notes will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee with respect
to the convertible notes.
No holder of any convertible note may institute any proceeding with respect
to the indenture or any remedy thereunder, unless:
- that holder has previously given to the trustee written notice of a
continuing event of default with respect to the convertible notes;
- the holders of at least 25% in aggregate principal amount of the
outstanding convertible notes have made written request, and offered
satisfactory indemnity, to the trustee to institute that proceeding as
trustee;
- the trustee shall not have received from the holders of a majority in
aggregate principal amount of the outstanding convertible notes a
direction inconsistent with such request; and
- the trustee shall have failed to institute such proceeding within 60 days
after receipt of the written request and offer of indemnity.
However, these limitations do not apply to a suit for the enforcement of payment
of the principal of, or premium, if any, or interest on, a convertible note on
or after the respective due dates or of the right to convert a convertible note.
We must furnish annually to the trustee an officers' certificate stating
whether or not, to the knowledge of the certifying officers in the course of
performance of their duties as officers, we are in compliance with the
requirements of the indenture and no default exists and, if a default has
occurred, identifying the nature of the default of which the officers are aware.
MODIFICATION AND WAIVER
We may modify or amend certain of our rights and obligations and the rights
of the holders of convertible notes under the indenture, and certain past
defaults by us may be waived, with the consent of the holders of a majority in
aggregate principal amount of the outstanding convertible notes. But, we may not
make any modification or amendment without the consent of every holder of
outstanding convertible notes affected that would:
- change the stated maturity of the principal of, or premium, if any, or
any installment of interest on, any convertible note;
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- reduce the amount of any principal of, or premium, if any, or interest
on, any convertible note payable upon redemption, repurchase or
repayment;
- change the city of any place of payment or the currency of payment of
principal of, or premium, if any, or interest on, any convertible note,
including any payment of the redemption or repurchase price in respect of
that convertible note;
- impair the right to institute suit for the enforcement of any payment on
or with respect to any convertible note;
- reduce the percentage in aggregate principal amount of outstanding
convertible notes required for modifications or amendments to the
indenture or required for a waiver of defaults;
- adversely affect the right of holders to convert or to require us to
repurchase any convertible note other than as provided in the indenture,
except as otherwise allowed or contemplated by provisions concerning
consolidation, merger, sale or transfer of all or substantially all of
our property and assets; or
- modify our obligation to deliver information required under Rule 144A to
permit resales of the convertible notes and common stock issued upon
conversion of the notes if we cease to be subject to the Exchange Act.
In certain circumstances, we may modify or amend the indenture without the
consent of the holders of outstanding convertible notes to effect the assumption
of our obligations under the indenture by a successor corporation, to impose
additional restrictions and events of default with respect to the convertible
notes, to correct any mistakes or defects in the indenture, to add a guarantor
or for other specified purposes.
The indenture contains provisions for convening meetings of the holders of
the convertible notes to consider matters affecting their interests.
REGISTRATION RIGHTS
In connection with the private sale of the convertible notes in May, 2001,
we entered into a registration rights agreement with the initial purchasers. In
the registration rights agreement we agreed, for the benefit of the holders of
the convertible notes and the shares of common stock issuable upon conversion of
the notes during the period that they are "restricted securities" as defined in
the registration rights agreement (together, the "Registrable Securities") that
we would, at our expense:
- file with the SEC, within 90 days after the date the convertible notes
were originally issued, a shelf registration statement covering resales
of the Registrable Securities;
- use our reasonable best efforts to cause the shelf registration statement
to be declared effective under the Securities Act within 180 days after
the date the convertible notes were originally issued, subject to our
right to postpone having the shelf registration statement declared
effective for an additional 90 days in limited circumstances; and
- use our reasonable best efforts to keep effective the shelf registration
statement until two years after the date the convertible notes were
issued or, if earlier, until there are no outstanding Registrable
Securities (the "Effectiveness Period").
We have now satisfied the first two of the requirements listed above. The
registration statement of which this prospectus is a part is the shelf
registration statement required by the registration rights agreement.
We are permitted to suspend the use of the prospectus that is part of the
shelf registration statement in connection with the sales of Registrable
Securities during prescribed periods of time for reasons relating to pending
corporate developments, public filings with the SEC and other events. We have
provided to each holder of Registrable Securities copies of this prospectus,
have notified each holder that the shelf registration statement has become
effective and will take certain other actions required to permit public resales
of the Registrable Securities.
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Under the registration rights agreement, if:
- the shelf registration statement ceases to be effective, or we otherwise
prevent or restrict holders of Registrable Securities from making sales
under the shelf registration statement, for more than 30 days, whether or
not consecutive, during any 90-day period; or
- the shelf registration statement ceases to be effective, or we otherwise
prevent or restrict holders of Registrable Securities from making sales
under the shelf registration statement, for more than 90 days, whether or
not consecutive, during any 12-month period
then we will pay liquidated damages at a rate of 0.50% of the principal amount
(or the conversion price) per annum from the 31st day of the 90-day period or
the 91st day of the 12-month period. The liquidated damages will continue to
accrue until the earlier of the following:
- the time the shelf registration statement again becomes effective or the
holders of Registrable Securities are again able to make sales under the
shelf registration statement, depending on which event triggered the
increase in interest rate; or
- the date the Effectiveness Period expires.
We agreed in the registration rights agreement to use our reasonable best
efforts to cause the shares of common stock issuable upon conversion of the
notes to be listed on the New York Stock Exchange.
This summary of certain provisions of the registration rights agreement may
not contain all the information important to you. You may request from us a copy
of the registration rights agreement.
NOTICES
Notice to holders of the convertible notes will be given by mail to their
addresses as they appear in the security register. These notices will be deemed
to have been given on the date they are mailed.
Notice of a redemption of convertible notes will be given at least once not
less than 30 nor more than 60 days prior to the redemption date. A redemption
notice will be irrevocable and will specify the redemption date.
REPLACEMENT OF CONVERTIBLE NOTES
We will replace convertible notes that become mutilated, destroyed, stolen
or lost at the expense of the holder upon delivery to the trustee of the
mutilated convertible notes or evidence of the loss, theft or destruction of the
convertible notes satisfactory to us and the trustee. In the case of a lost,
stolen or destroyed convertible note, indemnity satisfactory to the trustee and
us may be required at the expense of the holder of such convertible note before
a replacement convertible note will be issued.
GOVERNING LAW
The indenture and the convertible notes are governed by and will be
construed in accordance with the laws of the State of New York.
CONCERNING THE TRUSTEE
Bank One, N.A. is the trustee under the indenture, the indenture under
which our 7.25% notes due 2007 are outstanding and the indenture under which the
8.875% senior notes were issued. Affiliates of the trustee perform services for
us in the ordinary course of business and an affiliate of the trustee is a
lender bank under our credit facility. Bank One Trust Company, N.A., the
exchange agent for our exchange offer of registered 8.875% senior notes, is also
an affiliate of the trustee. Frederick P. Stratton, Jr., our Chairman of the
Board and former Chief Executive Officer, is a director of Bank One Corporation.
Bank One Corporation is the corporate parent of the trustee, the affiliate of
the trustee that is a lender bank under our credit facility, and the exchange
agent for the senior notes.
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If the trustee becomes a creditor of Briggs & Stratton or any guarantor,
the indenture limits its right to obtain payment of claims in certain cases, or
to realize on certain property received in respect of any such claim as security
or otherwise. The trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the SEC for permission to continue or resign.
The holders of a majority in principal amount of the then outstanding
convertible notes have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to the trustee,
subject to certain exceptions. The indenture provides that in case an Event of
Default occurs and is continuing, the trustee will be required, in the exercise
of its power, to use the degree of care of a prudent man in the conduct of his
own affairs. Subject to such provisions, the trustee will be under no obligation
to exercise any of its rights or powers under the indenture at the request of
any holder of convertible notes, unless such holder has offered to the trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
DESCRIPTION OF CAPITAL STOCK
This summary highlights selected information about our common stock and the
associated rights, and may not contain all of the information that is important
to you. Under our articles of incorporation we are currently authorized to issue
up to 60,000,000 shares of a single class of common stock, par value one cent
($0.01) per share. We have no preferred stock authorized. We encourage you to
read our articles of incorporation and the rights agreement creating the rights
because they, and not this summary, define the rights of holders of common stock
and the associated rights. We have filed our articles of incorporation and the
rights agreement with the SEC. See "Where You Can Find Additional Information"
for information on how to obtain copies of these documents and our bylaws.
COMMON STOCK
Voting Rights. Each holder of common stock is entitled to one vote for
each share held on all matters to be voted upon by the shareholders, except as
otherwise described herein. Unless a greater vote is required by Wisconsin law
or our articles of incorporation, all matters to be voted upon by the
shareholders, including the election of directors, must be approved by the
affirmative vote of a majority of the votes represented at a meeting at which a
quorum is present. Holders of shares of common stock are not entitled to
cumulate their votes in the election of directors. They are, however, permitted
to take any action that could be taken at a meeting by written consent, provided
consents are signed by shareholders with voting power sufficient to cast not
less than the minimum number of votes that would be necessary to take the same
action at a meeting at which all shares entitled to vote were present and voted.
Dividends. Subject to any applicable restrictions on the payment of
dividends and the requirements of applicable law, our board of directors may
declare dividends on the common stock from time to time, in which the holders of
the common stock will share ratably.
Liquidation and Dissolution. If Briggs & Stratton is liquidated or
dissolved, the holders of the common stock will be entitled to share in the
assets available for distribution to shareholders in proportion to the amount of
common stock they own. The amount available for common shareholders is
calculated after the payment of liabilities.
Assessability. All issued and outstanding shares of common stock are, and
any shares of common issued upon conversion of the notes will be, fully paid and
non-assessable. However, Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law imposes upon shareholders of Wisconsin corporations personal
liability for debts owing to employees for services performed for the
corporation, but not exceeding six months service in any one case.
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Other Rights. Holders of the common stock, as such, have no right to:
- convert the stock into any other security;
- have the stock redeemed; or
- purchase additional stock or maintain their proportionate ownership
interest.
Transfer Agent and Registrar. Firstar Bank, N.A. is the transfer agent and
registrar for the common stock.
RIGHTS ASSOCIATED WITH THE COMMON STOCK
On August 6, 1996, our board of directors declared a dividend of one common
stock purchase right for each share of common stock outstanding on August 19,
1996. Each right entitles the registered holder to purchase from us one-half of
one share of our common stock at a purchase price of $160 per full common share,
subject to adjustment. The description and terms of the rights are set forth in
a rights agreement between us and Firstar Bank, N.A., as rights agent, a copy of
which may be obtained as described above. As with most rights agreements, the
terms of our rights agreement are complex and not easily summarized,
particularly as they relate to the acquisition of our common stock and the
exercisability of the rights. This summary may not contain all of the
information that is important to you. Accordingly, if you want more complete
information, you should read the rights agreement.
The rights are attached to all common stock certificates representing
outstanding shares, and no separate rights certificates have been distributed.
The rights will separate from the common stock and be represented by separate
certificates approximately 10 business days after someone acquires or commences
a tender offer for 15% or more of the outstanding common stock. After the rights
separate from the common stock, certificates representing the rights will be
mailed to record holders of the common stock. Once distributed, the rights
certificates alone will represent the rights.
All shares of common stock issued prior to the date the rights separate
from the common stock will be issued with the rights attached. The rights are
not exercisable until the date the rights separate from the common stock. The
rights will expire on August 19, 2006, unless earlier redeemed or exchanged by
us.
Triggering Events. If someone acquires 15% or more of the outstanding
shares of our common stock, then each right will entitle the holder to purchase,
at the current purchase price, that number of shares of our common stock which
has a market value of twice the current purchase price of the rights.
If we are acquired in a merger or other business combination transaction
(including by way of a purchase of 50% or more of our consolidated assets or
earning power), the holder of each right will thereafter be entitled to receive,
upon the exercise thereof at the current purchase price, that number of shares
of common stock of the acquirer which has a market value of twice the current
purchase price of the rights.
After an acquirer obtains 15% or more, but less than 50%, of our
outstanding common stock, our board of directors may, at its option, exchange
all or part of the then outstanding and exercisable rights (other than rights
owned by the acquirer, which shall have become void) for common stock at an
exchange ratio of one share of common stock per right.
Redemption Provisions. Our board of directors may, at its option, redeem
all of the outstanding rights at any time prior to the acquisition by any person
of 15% or more of the outstanding shares of our common stock, at a redemption
price of $.01 per right. Upon redemption, the rights will terminate and the only
right of the holders of the rights will be to receive the redemption price.
Other Matters. Holders of rights have no rights as shareholders, including
the right to vote or receive dividends, simply by virtue of holding the rights.
The rights agreement may be amended by our board of directors without the
approval of the holders of the rights prior to the date the rights separate from
the common stock. However, after that date, the rights
26
agreement may not be amended in any manner that would adversely affect the
interests of the holders of the rights.
The rights may have anti-takeover effects. The rights may cause substantial
dilution to a person or group that attempts to acquire Briggs & Stratton without
conditioning the offer on redemption of the rights or on a substantial number of
the rights being acquired. The rights should not interfere with any merger or
other business combination approved by our board of directors since our Board
may, at its option, redeem all the rights as described above. In addition, the
rights should not interfere with a proxy contest.
ANTI-TAKEOVER EFFECTS OF OUR ARTICLES OF INCORPORATION AND BYLAWS
Our articles of incorporation and bylaws contain provisions that could make
it more difficult to acquire Briggs & Stratton by means of a tender offer, proxy
contest or otherwise. The description set forth below is intended as a summary
only. For complete information you should read our articles of incorporation and
bylaws, which may be obtained as described above.
Classified Board of Directors; Number of Directors. Our articles of
incorporation divide the board of directors into three classes. Each class is to
consist as nearly as possible of one-third of the directors. Each director
serves for a term of three years and until his or her successor is elected and
qualified. Under the articles of incorporation, the number of directors
constituting the entire board will be fixed from time to time by the board of
directors, but the number cannot be less than seven or more than twelve.
Removal of Directors by Shareholders; Filling Vacancies. Our articles of
incorporation provide that directors may be removed by the shareholders, but
only for cause and only by the affirmative vote of a majority of the votes then
entitled to be cast in an election of directors. The board of directors, acting
by a majority vote of the directors then in office, may fill any newly created
directorships or vacancies on the board of directors.
Special Meetings. Our bylaws provide that special meetings of shareholders
may be called by our Chairman of the Board, by our President, or by a majority
of the directors and shall be called by the President upon the proper written
demand of shareholders representing at least 10% of all the votes entitled to be
cast on any issue proposed to be considered at the meeting. Any such demand must
contain a description of the specific purpose or purposes for which the special
meeting is to be held. The bylaws contain detailed provisions regarding special
meetings upon shareholder demand.
Advance Notice Requirements for Shareholder Proposals and Director
Nominees. Our bylaws require advance notice with regard to business proposed to
be submitted by a shareholder at any annual or special meeting of our
shareholders, including the nomination of candidates for election as directors.
Notice of proposed shareholder business must be timely given in writing to our
Corporate Secretary prior to the meeting. To be timely, notice must be received
at our principal executive offices within the time frames specified in our
bylaws. The notice must also contain certain information specified in our
bylaws, including, with respect to a director nomination, the written consent of
the nominee to serve as a director if elected. The chairman of a meeting of
shareholders has the power and duty to determine whether a nomination or any
business proposed to be brought before the meeting was made in accordance with
the procedures set forth in our bylaws, and if not in compliance, to declare
that the defective proposal be disregarded.
ANTI-TAKEOVER EFFECTS OF WISCONSIN LAW
Wisconsin law, under which we are incorporated, contains certain provisions
that may have anti-takeover effects. The description set forth below is intended
as a summary only. For complete information you should review the applicable
provisions of the Wisconsin Business Corporation Law.
Control Share Acquisition. Wisconsin law provides that, unless a
corporation's articles of incorporation provide otherwise (which ours do not),
the voting power of shares of a "resident domestic corporation" such as Briggs &
Stratton held by any person (including two or more persons acting as a group) in
excess of 20% of the voting power in the election of directors is limited (in
voting on any matter) to 10% of the full voting power of those shares. This
restriction does not apply to shares acquired directly from us, or in certain
specified
27
transactions, or incident to a transaction in which our shareholders have
approved restoration of the full voting power of the otherwise restricted
shares.
Anti-Greenmail Provisions. Wisconsin law restricts the ability of certain
publicly held corporations, such as Briggs & Stratton, to repurchase voting
shares at above market value from certain large shareholders, absent approval
from the shareholders as a whole, unless an identical or better offer to
purchase is made to all owners of voting shares and securities which may be
converted into voting shares. These provisions apply during a takeover offer to
purchases of more than 5% of the corporation's shares from a person or group
that holds more than 3% of the corporation's voting shares and has held the
shares for less than two years.
Wisconsin law also provides that shareholder approval is required for the
corporation, during a takeover offer, to sell or option assets of the
corporation which amount to at least 10% of the market value of the corporation,
unless the corporation has at least three independent directors (directors who
are not officers or employees) and a majority of the independent directors vote
not to have this provision apply to the corporation.
Fair Price Provisions. Wisconsin law provides that in addition to any
approval otherwise required, certain mergers, share exchanges or sales, leases,
exchanges or other dispositions involving a resident domestic corporation, such
as Briggs & Stratton, and any significant shareholder are subject to a
supermajority vote of shareholders unless certain fair price standards have been
met. For this purpose, a significant shareholder is defined as either a 10%
shareholder or an affiliate of the resident domestic corporation who was a 10%
shareholder at any time within the preceding two years. The super-majority vote
that is required by the statute consists of:
- approval of 80% of the total voting power of the corporation, and
- approval of at least 66 2/3% of the voting power not beneficially owned
by the significant shareholder or its affiliates or associates.
However, a supermajority vote is not required if the following "fair price"
standards are satisfied:
- the consideration is in cash or in the form of consideration used to
acquire the greatest number of shares, and
- the amount of the consideration equals the greater of:
-- the highest price paid by the significant shareholder within the prior
two-year period;
-- in the case of a tender offer, the market value of the shares on the
date the significant shareholder commences the tender offer; or
-- the highest liquidation or dissolution distribution to which the
shareholders would be entitled.
Business combination provisions. Wisconsin law restricts resident domestic
corporations, such as Briggs & Stratton, from engaging in specified business
combinations involving an "interested stockholder" or an affiliate or associate
of an interested stockholder. For this purpose, an interested stockholder is a
shareholder who beneficially owns at least 10% of the voting power of the
outstanding stock of the resident domestic corporation, or is an affiliate or
associate of the resident domestic corporation and beneficially owned at least
10% of the voting power of the then outstanding stock within the preceding three
years. The specified business combinations include:
- a merger or statutory share exchange;
- a sale or other disposition of assets having a market value equal to at
least 5% of the market value of the assets or outstanding stock of the
corporation or representing at least 10% of its earning power or income;
- the issuance or transfer of stock or rights to purchase stock with a
market value equal to at least 5% of the outstanding stock;
- the adoption of a plan or proposal for liquidation or dissolution;
28
- receipt by the interested stockholder or the interested stockholder's
affiliates or associates of a disproportionate direct or indirect benefit
or a loan or other financial benefit provided by or through the resident
domestic corporation or its subsidiaries; or
- certain other transactions that have the direct or indirect effect of
materially increasing the proportionate share of voting stock
beneficially owned by the interested stockholder or the interested
stockholder's affiliates or associates.
For a period of three years following the date that the interested
stockholder becomes an interested stockholder, the resident domestic corporation
is prohibited from engaging in any of the specified transactions with an
interested stockholder unless the specified transaction or the purchase of stock
by the interested stockholder is approved by the board of directors of the
resident domestic corporation before the share acquisition date. Following the
three year period, a specified transaction is permitted only if:
- the acquisition of shares by the interested stockholder was approved by
the board of directors of the resident domestic corporation before the
share acquisition date;
- the specified transaction is approved by a majority of the voting stock
of the resident domestic corporation that is not owned by the interested
stockholder; or
- the consideration to be received by the corporation's shareholders
satisfies the "fair price" provisions of the statute as to form and
amount.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Wisconsin law and our bylaws provide our officers and directors with
certain indemnification rights. The description set forth below is intended as a
summary only. For complete information you should review the applicable
provisions of the Wisconsin Business Corporation Law and a copy of our bylaws.
Under Wisconsin law, we are required to indemnify a director or officer, to
the extent that person is successful on the merits or otherwise in the defense
of a proceeding, for all reasonable expenses incurred in the proceeding if the
person was a party because he or she was a director or officer of Briggs &
Stratton. In all other cases, we are required to indemnify a director or officer
against liability incurred in a proceeding to which that person was a party
because he or she was a director or officer, unless it is determined that he or
she breached or failed to perform a duty owed to Briggs & Stratton and the
breach or failure to perform constitutes:
- willful failure to deal fairly with Briggs & Stratton or its shareholders
in connection with a matter in which the director or officer has a
material conflict of interest;
- a violation of criminal law, unless the director or officer had
reasonable cause to believe his or her conduct was lawful or no
reasonable cause to believe his or her conduct was unlawful;
- a transaction from which the director or officer derived an improper
personal profit; or
- willful misconduct.
Wisconsin law provides that, with some limitations, the mandatory
indemnification provisions do not prevent any additional right to
indemnification or allowance of expenses that a director or officer may have
under our articles of incorporation, bylaws, any written agreement or a
resolution of the board of directors or shareholders.
Wisconsin law provides that it is the public policy of the State of
Wisconsin to require or permit indemnification, allowance of expenses and
insurance to the extent required or permitted under the Wisconsin Business
Corporation Law, for any liability incurred in connection with a proceeding
involving a federal or state statute, rule or regulation regulating the offer,
sale or purchase of securities.
Wisconsin law also provides that, with some exceptions, a director is not
liable to a corporation, its shareholders, or any person asserting rights on
behalf of the corporation or its shareholders, for damages, settlements, fees,
fines, penalties or other monetary liabilities arising from a breach of, or
failure to perform,
29
any duty resulting solely from his or her status as a director, unless the
person asserting liability proves that the breach or failure to perform
constitutes any of the four statutory exceptions to mandatory indemnification
listed above.
Our bylaws contain provisions that generally parallel the indemnification
provisions of Wisconsin law and cover certain procedural matters not dealt with
in the statutes.
Our directors and officers are covered by directors' and officers'
liability insurance under which they are insured (subject to exceptions and
limitations specified in the policy) against expenses and liabilities arising
out of proceedings to which they are parties by reason of being or having been
directors or officers.
SELLING HOLDERS AND PLAN OF DISTRIBUTION
The convertible notes were originally issued by us and sold by Goldman,
Sachs & Co. and Banc of America Securities LLC (the "initial purchasers") in
transactions exempt from the registration requirements of the Securities Act to
persons reasonably believed by the initial purchasers to be "qualified
institutional buyers" as defined by Rule 144A under the Securities Act. The
selling holders may from time to time offer and sell pursuant to this prospectus
any or all of the convertible notes listed below and the shares of common stock
issued upon conversion of such convertible notes. When we refer to the "selling
holders" in this prospectus, we mean those persons listed in the table below, as
well as the pledgees, donees, assignees, transferees, successors and others who
later hold any of the selling holders' interests, provided that those interests
still are "restricted securities" as defined in the registration rights
agreement.
The table below sets forth the name of each selling holder, the principal
amount of convertible notes that each selling holder may offer pursuant to this
prospectus and the number of shares of common stock into which such convertible
notes may be converted. Unless set forth below, to our knowledge and based on
information provided by the selling holders, none of the selling holders has, or
within the past three years has had, any material relationship with us or any of
our predecessors or affiliates or beneficially owns in excess of 1% of our
outstanding common stock.
The principal amounts of the convertible notes provided in the table below
are based on information provided to us by each of the selling holders as of the
date they provided such information, and the percentages are based on
$140,000,000 principal amount of convertible notes outstanding. The total
principal amount of convertible notes included in this prospectus is less than
$140,000,000 because some of the registered convertible notes have been resold
and are, therefore, no longer included in this prospectus. The number of shares
of common stock that may be sold is calculated based on the current conversion
rate of 20.1846 shares of common stock per $1,000 principal amount of the
convertible notes.
Since the date on which each selling holder provided this information, each
selling holder identified below may have sold, transferred or otherwise disposed
of all or a portion of the selling holder's convertible notes in a transaction
exempt from registration under the Securities Act. Information concerning the
selling holders may change from time to time and any changed information will be
set forth in a prospectus that will supercede this prospectus to the extent
required. In addition, the conversion ratio, and therefore the number of shares
of our common stock issuable upon conversion of the notes, is subject to
adjustment. Accordingly, the number of shares of common stock issuable upon
conversion of the notes may increase or decrease.
The selling holders may from time to time offer and sell any or all of the
securities under this prospectus. Because the selling holders are not obligated
to sell the convertible notes or the shares of common stock
30
issuable upon conversion of the notes, we cannot estimate the amount of
convertible notes or how many shares of common stock that the selling holders
will hold upon consummation of any sales.
AGGREGATE NUMBER OF
PRINCIPAL AMOUNT PERCENTAGE OF SHARES OF PERCENTAGE OF
OF CONVERTIBLE CONVERTIBLE COMMON STOCK SHARES OF
NOTES THAT MAY NOTES THAT MAY BE COMMON STOCK
NAME BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
---- ---------------- ----------------- ------------ --------------
1976 Distribution Trust FBO Jane
A. Lauder...................... 10,000 * 202 *
1976 Distribution Trust FBO A.R.
Lauder/Zinterhofer............. 5,000 * 101 *
2000 Revocable Trust FBO A.R.
Lauder/Zinterhofer............. 5,000 * 101 *
Advent Convertible Master Caymen
Fund........................... 3,750,000 2.68% 75,692 *
Alexandra Global Investment Fund
1, Ltd......................... 2,250,000 1.61% 45,415 *
American Motorist Insurance
Company........................ 369,000 * 7,448 *
Ameritas Life Insurance
Company........................ 450,000 * 9,083 *
Arapahoe County Colorado......... 36,000 * 727 *
Arbitex Master Fund L.P.......... 10,000,000 7.14% 201,846 *
Arkansas PERS.................... 1,200,000 * 24,222 *
Associated Electric & Gas
Insurance Services Limited..... 200,000 * 4,037 *
Aventis Pension Master Trust..... 230,000 * 4,642 *
Bankgesellschaft Berlin AG....... 4,000,000 2.86% 80,738 *
Bay County PERS.................. 175,000 * 3,532 *
Bear Stearns & Co., Inc.......... 2,000,000 1.43% 40,369 *
Boilermakers Blacksmith Pension
Trust.......................... 1,625,000 1.16% 32,800 *
Boilermaker -- Blacksmith Pension
Trust.......................... 1,450,000 1.04% 29,268 *
British Virgin Islands Social
Security Board................. 28,000 * 565 *
BTES -- Convertible ARB.......... 1,500,000 1.07% 30,277 *
BTPO Growth Vs Value............. 5,000,000 3.57% 100,923 *
CALAMOS Convertible Fund --
CALAMOS Investment Trust....... 3,200,000 2.29 64,591 *
CALAMOS Convertible Portfolio --
CALAMOS Advisors Trust......... 135,000 * 2,725 *
CALAMOS Market Neutral Fund --
CALAMOS Investment Trust....... 6,850,000 4.89% 138,265 *
City of Albany Pension Plan...... 130,000 * 2,624 *
City of Knoxville Pension
System......................... 300,000 * 6,055 *
City of New Orleans.............. 148,000 * 2,987 *
Clarica Life Insurance
Co. -- US...................... 360,000 * 7,266 *
Clinton Multistrategy Master
Fund, Ltd...................... 1,860,000 1.33% 37,543 *
Clinton Riverside Convertible
Fund........................... 2,585,000 1.85% 52,177 *
31
AGGREGATE NUMBER OF
PRINCIPAL AMOUNT PERCENTAGE OF SHARES OF PERCENTAGE OF
OF CONVERTIBLE CONVERTIBLE COMMON STOCK SHARES OF
NOTES THAT MAY NOTES THAT MAY BE COMMON STOCK
NAME BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
---- ---------------- ----------------- ------------ --------------
Delaware PERS.................... 1,400,000 1.00% 28,258 *
Delta Airlines Master Trust...... 2,155,000 1.5% 43,498 *
Delta Airlines Master Trust...... 345,000 * 6,964 *
Delta Pilots Disability and
Survivorship Trust............. 200,000 * 4,037 *
Delta Pilots Disability and
Survivorship Trust............. 300,000 * 6,055 *
Dorinco Reinsurance Company...... 850,000 * 17,157 *
Drury University................. 50,000 * 1,009 *
First Union International Capital
Markets, Inc................... 2,000,000 1.43% 40,369 *
F.R. Convt. Sec. Fn.............. 200,000 * 4,037 *
Goldman Sachs & Company.......... 2,750,000 1.96 55,508 *
Golf Investment Corporation...... 350,000 * 7,065 *
Grady Hospital................... 78,000 * 1,574 *
Greek Catholic Union............. 50,000 * 1,009 *
Greek Catholic Union II.......... 35,000 * 706 *
HFR Convertible Arbitrage Fund... 170,000 * 3,431 *
H.K. Porter Company, Inc......... 35,000 * 706 *
ICI American Holdings Trust...... 525,000 * 10,597 *
KBC Financial Products USA,
Inc............................ 385,000 * 7,771 *
KD Offshore CV................... 500,000 * 10,092 *
Kettering Medical Center Funded
Depreciation Account........... 90,000 * 1,817 *
Knoxville Utilities Board
Retirement System.............. 200,000 * 4,037 *
Lincoln Memorial Life Insurance
Company........................ 200,000 * 4,037 *
Louisiana Workers' Compensation
Corporation.................... 200,000 * 4,037 *
Macomb County Employees'
Retirement System.............. 375,000 * 7,569 *
McMahan Securities Co. L.P....... 1,400,000 1.00% 28,258 *
MFR Master Trust................. 200,000 * 4,037 *
Minnesota Power and Light........ 95,000 * 1,918 *
Motion Picture Industry Health
Plan -- Retiree Member Fund.... 65,000 * 1,312 *
Municipal Employees.............. 78,000 * 1,574 *
New Orleans Firefighters Pension/
Relief Fund.................... 80,000 * 1,615 *
Occidental Petroleum
Corporation.................... 149,000 * 3,008 *
OCM Convertible Trust............ 935,000 * 18,873 *
Partner Reinsurance Company
Ltd............................ 260,000 * 5,248 *
Pioneer High Yield Fund.......... 6,175,000 4.41% 124,640 *
32
AGGREGATE NUMBER OF
PRINCIPAL AMOUNT PERCENTAGE OF SHARES OF PERCENTAGE OF
OF CONVERTIBLE CONVERTIBLE COMMON STOCK SHARES OF
NOTES THAT MAY NOTES THAT MAY BE COMMON STOCK
NAME BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
---- ---------------- ----------------- ------------ --------------
Pioneer High Yield VCT
Portfolio...................... 100,000 * 2,018 *
Pioneer Strategic Income VCT
Portfolio...................... 75,000 * 1,514 *
Policemen and Firemen Retirement
System of the City of
Detroit........................ 263,000 * 5,309 *
Port Authority of Allegheny
County Retirement and
Disability Allowance Plan for
the Employees Represented by
Local 85 of the Amalgamated
Transit Union.................. 1,500,000 1.07% 30,277 *
Prime Convertible Fund........... 1,000,000 * 20,185 *
ProMutual........................ 437,000 * 8,821 *
Raytheon Master Pension Trust.... 100,000 * 2,018 *
Sage Capital..................... 100,000 * 2,018 *
SCI Endowment Care Common Trust
Fund -- First Union............ 100,000 * 2,018 *
SCI Endowment Care Common Trust
Fund -- National Fiduciary
Services....................... 220,000 * 4,441 *
SCI Endowment Care Common Trust
Fund -- Suntrust............... 100,000 * 2,018 *
SEI Trust Company................ 675,000 * 13,625(5) *
S G Cowen Securities Corp........ 1,000,000 20,185
Shell Pension Trust.............. 167,000 * 3,371 *
Southdown Pension Plan........... 200,000 * 4,037 *
Southern Farm Bureau Life
Insurance Company.............. 800,000 * 16,148 *
SPT.............................. 1,700,000 1.21% 34,314 *
State of Maryland Retirement
Agency......................... 1,860,000 1.33% 37,543 *
Syngenta AG...................... 250,000 * 5,046 *
TCW Group, Inc................... 4,120,000 2.9% 83,161 *
The City University of New
York........................... 88,000 * 1,776 *
The Dow Chemical Company
Employees' Retirement Plan..... 2,900,000 2.07% 58,535 *
The Estate of James Campbell..... 98,000 * 1,978 *
The Fondren Foundation........... 90,000 * 1,817 *
The Grable Foundation............ 69,000 * 1,393 *
The James Campbell Corporation... 130,000 * 2,624 *
The Northern Income Equity
Fund........................... 2,500,000 1.79% 50,462 *
Tribeca Investments, L.L.C....... 1,000,000 * 20,185 *
Union Carbide Retirement
Account........................ 900,000 * 18,166 *
United Food and Commercial
Workers Local 1262 and
Employers Pension Fund......... 675,000 * 13,625 *
33
AGGREGATE NUMBER OF
PRINCIPAL AMOUNT PERCENTAGE OF SHARES OF PERCENTAGE OF
OF CONVERTIBLE CONVERTIBLE COMMON STOCK SHARES OF
NOTES THAT MAY NOTES THAT MAY BE COMMON STOCK
NAME BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
---- ---------------- ----------------- ------------ --------------
Vanguard Convertible Securities
Fund, Inc...................... 1,705,000 1.2% 34,415 *
Vopak USA, Inc. Retirement Plan
(f/k/a Van Walters & Rogers,
Inc. Retirement Plan).......... 400,000 * 8,074 *
White River Securities L.L.C..... 4,000,000 2.86% 80,738 *
Zazove Hedged Convertible Fund
L.P............................ 1,500,000 1.07% 30,277 *
Zazove Income Fund L.P........... 900,000 * 18,166 *
Zeneca Holdings Trust............ 350,000 * 7,065 *
Zurich Institutional Benchmarks
Master Fund LTD................ 828,000 * 16,713 *
Zurich Institutional Benchmarks
Master Fund Ltd................ 172,000 * 3,472 *
Total(6)......................... $105,803,000 75.57% 2,135,591 8.73%
------------ ----- --------- -----
---------------
* Less than one percent (1%).
(1) Assumes conversion of all of the holder's convertible notes at a conversion
rate of 20.1846 shares per $1,000 principal amount of convertible notes.
The conversion rate is subject to adjustment as described under
"Description of Convertible Notes -- Conversion Rights." As a result, the
number of shares of common stock issuable upon conversion of the notes may
increase or decrease in the future.
(2) Calculated based on Rule 13d-3(d)(1) under the Exchange Act, using
21,638,984 shares of common stock outstanding as of June 19, 2002. In
calculating this amount for each holder, we treated as outstanding the
number of shares of common stock issuable upon conversion of all of that
holder's convertible notes, but we did not assume conversion of any other
holder's convertible notes.
(3) Only selling holders identified above who beneficially own the convertible
notes set forth opposite their names in the foregoing table on the
effective date of the amendment to the registration statement of which this
prospectus is a part may sell the convertible notes or shares of common
stock issuable upon conversion of the convertible notes pursuant to the
registration statement. Prior to any use of the prospectus in connection
with the offering of convertible notes or common stock by any holder not
identified above, the registration statement of which this prospectus is a
part will be amended as required to set forth the name of that holder and
principal amount or number of securities to be offered.
(4) Assumes that any other holders of the convertible notes or any future
pledgees, donees, assignees, transferees or successors of or from any other
such holders of the convertible notes do not beneficially own any shares of
common stock other than the common stock issuable upon conversion of the
notes at the current conversion rate.
(5) Does not include 7,928 shares of outstanding common stock held by SEI Trust
Company.
(6) The total principal amount of convertible notes included in this prospectus
is less than $140,000,000 because some of the registered convertible notes
have been resold and are, therefore, no longer included in this prospectus.
The selling holders will be offering and selling all of the securities
offered and sold under this prospectus. We will not receive any of the proceeds
from the offering of the convertible notes or the shares of common stock by the
selling holders. In connection with the initial sales of the convertible notes,
we entered into the registration rights agreement with the initial purchasers.
Securities may only be offered or sold under this prospectus pursuant to the
terms of the registration rights agreement. However, selling holders may resell
all or a portion of the securities in open market transactions in reliance upon
Rule 144 or Rule 144A under the
34
Securities Act, provided that they meet the criteria and conform to the
requirements of those rules. We are registering the convertible notes and shares
of common stock covered by this prospectus in order to permit holders to sell
the securities publicly from time to time, provided that this prospectus does
not cover resales of securities that are no longer "restricted securities" as
defined in the registration rights agreement. We have agreed, among other
things, to bear all expenses, other than underwriting discounts and selling
commissions, in connection with the registration and sale of the convertible
notes and shares of common stock covered by this prospectus. We estimate those
expenses to be approximately $355,000, excluding expenses associated with the
original issuance of the convertible notes.
The selling holders may sell all or a portion of the convertible notes and
any shares of common stock received upon conversion beneficially owned by them
and offered hereby from time to time:
- directly; or
- through underwriters, broker-dealers or agents, who may receive
compensation in the form of discounts, commissions or concessions from
the selling holders and/or from the purchasers of the convertible notes
and shares of common stock for whom they may act as agent.
The convertible notes and the shares of common stock received upon
conversion may be sold from time to time in one or more transactions at:
- fixed prices, which may be changed;
- prevailing market prices at the time of sale;
- varying prices determined at the time of sale; or
- negotiated prices.
These prices will be determined by the selling holders or by agreement
between the selling holders and underwriters or dealers who may receive fees or
commissions in connection with the sale. The aggregate proceeds to the selling
holders from the sale of the convertible notes or shares of common stock offered
by them will be the purchase price of the convertible notes or shares of common
stock less discounts and commissions, if any.
The sales described in the preceding paragraph may be effected in
transactions:
- on any national securities exchange or quotation service on which the
convertible notes or shares of common stock may be listed or quoted at
the time of sale, including the New York Stock Exchange in the case of
the shares of common stock;
- in the over-the-counter market;
- in transactions otherwise than on such exchanges or services or in the
over-the-counter market; or
- through the writing of options.
These transactions may include block transactions or crosses. Crosses are
transactions in which the same broker acts as an agent on both sides of the
trade.
In connection with sales of the convertible notes and shares of common
stock or otherwise, the selling holders may enter into hedging transactions with
broker-dealers. These broker-dealers may in turn engage in short sales of the
convertible notes and shares of common stock in the course of hedging their
positions. The selling holders may also sell the convertible notes and shares of
common stock short and deliver the convertible notes and shares of common stock
to close out short positions, or loan or pledge convertible notes and shares of
common stock to broker-dealers that in turn may sell the convertible notes and
shares of common stock.
To our knowledge, there are currently no plans, arrangements or
understandings between any selling holders and any underwriter, broker-dealer or
agent regarding the sale of the convertible notes and the shares of common stock
by the selling holders. Selling holders may not sell any, or may not sell all,
of the convertible
35
notes and the shares of common stock offered by them pursuant to this
prospectus. In addition, we cannot assure you that a selling holder will not
transfer, devise or give the convertible notes and the shares of common stock by
other means not described in this prospectus. In addition, any securities
covered by this prospectus that qualify for sale pursuant to Rule 144 or Rule
144A of the Securities Act may be sold under one of those rules rather than
pursuant to this prospectus.
Our common stock is listed and traded on the New York Stock Exchange. The
convertible notes have no established trading market. We do not intend to apply
for the convertible notes to be listed on any securities exchange or to be
quoted on any automated quotation system. The initial purchasers advised us that
they intend to make a market in the convertible notes, but they are not
obligated to do so and may discontinue market making at any time without notice.
The convertible notes issued in the private placement are eligible for trading
in the PORTAL market. However, the convertible notes sold using this prospectus
are not eligible for PORTAL and there is no other market for those notes.
Accordingly, we cannot give you any assurance as to the liquidity of the trading
market for the convertible notes.
The selling holders and any broker and any broker-dealers, agents or
underwriters that participate with the selling holders in the distribution of
the convertible notes or the shares of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act. If so, any commissions
received by these broker-dealers, agents or underwriters and any profit on the
resale of the convertible notes or the shares of common stock purchased by them
may be deemed underwriting commissions or discounts under the Securities Act. In
addition, any profits realized by the selling holders may be deemed to be
underwriting discounts and commissions under the Securities Act. To the extent
the selling holders may be deemed to be underwriters, the selling holders may be
subject to statutory liabilities, including, without limitation, liabilities
under Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the
Exchange Act.
Because the selling holders may be deemed to be underwriters within the
meaning of the Securities Act, they will be subject to the prospectus delivery
requirements of the Securities Act. At any time a particular offer of the
securities is made, a revised prospectus or prospectus supplement, if required,
will be distributed that will disclose:
- the name of the selling holder and any participating underwriters,
broker-dealers or agents;
- the aggregate amount and type of securities being offered;
- the price at which the securities are being sold and other material terms
of the offering;
- any discounts, commissions, concessions or other items constituting
compensation from the selling holders and any discounts, commissions or
concessions allowed or reallowed or paid to dealers; and
- that the participating broker-dealers did not conduct any investigation
to verify the information in this prospectus or incorporated in this
prospectus by reference.
The prospectus supplement or a post-effective amendment will be filed with
the SEC to reflect the disclosures of additional information with respect to the
distribution of the securities. In addition, if we receive notice from a selling
holder that a donee or pledgee intends to sell more than 500 shares of our
common stock, a supplement to this prospectus will be filed.
As described above, the convertible notes were issued and sold in May 2001
in transactions exempt from the registration requirements of the Securities Act
to persons reasonably believed by the initial purchasers to be "qualified
institutional buyers" as defined in Rule 144A under the Securities Act. Pursuant
to the registration rights agreement, we have agreed to indemnify each selling
holder, and each selling holder has agreed to indemnify us, against specified
liabilities arising under the Securities Act. The selling holders may also agree
to indemnify any broker-dealer or agent that participates in transactions
involving the sales of securities against some liabilities, including
liabilities that arise under the Securities Act.
The selling holders and any other person participating in the distribution
of the securities will be subject to the Exchange Act. The Exchange Act rules
include, among others, Regulation M, which may limit the timing of purchases and
sales of any of the convertible notes and the underlying shares of common stock
by
36
the selling holders and any such other person. Regulation M may also restrict
the ability of any person engaged in the distribution of the convertible notes
and the underlying shares of common stock being distributed for a period of up
to five business days prior to the commencement of the distribution. This may
affect the marketability of the convertible notes and the underlying shares of
common stock and the ability of any person or entity to engage in market-making
activities with respect to the convertible notes and the underlying shares of
common stock.
LEGAL MATTERS
Certain legal matters in connection with the convertible notes offered
hereby and the shares of common stock issuable upon conversion of the notes have
been passed upon for Briggs & Stratton by Quarles & Brady LLP, Milwaukee,
Wisconsin.
EXPERTS
The consolidated financial statements of Briggs & Stratton Corporation as
of July 1, 2001 and for the three years then ended, incorporated by reference in
this prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts (or, as experts in accounting and auditing) in
giving said reports.
The consolidated financial statements of Generac Portable Products, Inc.
incorporated in this prospectus by reference to the Annual Report on Form 10-K
of Generac Portable Products, Inc. for the year ended December 31, 2000 have
been so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
37
EXHIBIT A
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
Bank One, N.A.
100 East Broad Street
Columbus, OH 43071-0181
Attn: Corporate Trust Division
Attention: Trust Offer
Re: Briggs & Stratton Corporation (the "Company")
5.00% Convertible Senior Notes due May 15, 2006 (the "Notes")
Dear Sirs:
Please be advised that has transferred
aggregate principal amount of the above-referenced Notes pursuant to an
effective Registration Statement on Form S-3 (file No. 333-64490) filed by the
Company.
We hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied and that the
above-named-beneficial owner of the Notes is named as a "Selling Holder" in the
Prospectus dated July 2, 2002, or in supplements thereto, and that the aggregate
principal amount of the Notes transferred are the Notes listed in such
Prospectus opposite such owner's name.
Dated:
Very truly yours,
--------------------------------------
(Name)
By: --------------------------------------
(Authorized Signature)
A-1
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TABLE OF CONTENTS
PAGE
----
Disclosure Regarding Forward-Looking
Statements......................... 1
Industry and Market Data............. 1
Where You Can Find Additional
Information........................ 2
Incorporation of Information by
Reference.......................... 3
Summary.............................. 4
Risk Factors......................... 7
Consolidated Ratios of Earnings to
Fixed Charges...................... 12
Use of Proceeds...................... 12
Description of Convertible Notes..... 12
Description of Capital Stock......... 25
Selling Holders and Plan of
Distribution....................... 30
Legal Matters........................ 37
Experts.............................. 37
Notice of Transfer Pursuant to
Registration Statement............. A-1
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$140,000,000
BRIGGS & STRATTON
CORPORATION
5.00% CONVERTIBLE
SENIOR NOTES
DUE MAY 15, 2006
AND COMMON STOCK
ISSUABLE UPON CONVERSION THEREOF
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