Pursuant to Rule 424B(2)
File No. 333-06155
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE 21, 1996
$200,000,000
ABBOTT LABORATORIES
5.40% NOTES DUE SEPTEMBER 15, 2008
-------------
Interest on the Notes is payable semi-annually on March 15 and September 15
of each year, beginning March 15, 1999. The Notes are not redeemable or
repayable prior to maturity and do not provide for any sinking fund.
The Notes will be represented by a single Global Security registered in the
name of the nominee of The Depository Trust Company, which will act as
Depository. Interests in the Global Security will be evidenced only by, and
transfers thereof will be effected only through, records maintained by DTC and
its participants. Except as described in this Prospectus Supplement, owners of
beneficial interests in the Global Security will not be considered the Holders
thereof and will not be entitled to receive physical delivery of Notes in
definitive form. See "Description of Notes". The Notes will trade in DTC's
Same-Day Funds Settlement System and secondary market trading activity for the
Notes will therefore settle in immediately available funds. All payments of
principal and interest will be made by the Company in immediately available
funds or the equivalent. See "Description of Notes".
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE (1) DISCOUNT (2) COMPANY (1)(3)
------------------ ------------------ ------------------
Per Note........................................... 99.801% 0.650% 99.151%
Total.............................................. $199,602,000 $1,300,000 $198,302,000
- ------------------------
(1) Plus accrued interest, if any, from September 15, 1998.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting expenses payable by the Company estimated at $210,000.
------------------
The Notes offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that delivery of
the Notes will be made in book-entry form only through the facilities of DTC on
or about September 15, 1998 against payment therefor in immediately available
funds.
GOLDMAN, SACHS & CO.
ABN AMRO INCORPORATED
BANCAMERICA SECURITIES, INC.
MORGAN STANLEY DEAN WITTER
SALOMON SMITH BARNEY
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The date of this Prospectus Supplement is September 10, 1998.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING
OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH SECURITIES,
AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE OFFERING. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING".
------------------
USE OF PROCEEDS
The Company will utilize the net proceeds from the Notes to repay certain
indebtedness incurred for working capital purposes. Such indebtedness is of
varying maturities of less than nine months and bears interest at rates within
the range of 5.46% to 5.51% per annum.
DESCRIPTION OF NOTES
THE FOLLOWING DESCRIPTION OF THE PARTICULAR TERMS OF THE NOTES OFFERED
HEREBY SUPPLEMENTS, AND TO THE EXTENT INCONSISTENT THEREWITH REPLACES, THE
DESCRIPTION OF THE GENERAL TERMS AND PROVISIONS OF THE SECURITIES SET FORTH IN
THE ACCOMPANYING PROSPECTUS, TO WHICH DESCRIPTION REFERENCE IS HEREBY MADE. THE
STATEMENTS HEREIN CONCERNING THE NOTES AND THE INDENTURE DO NOT PURPORT TO BE
COMPLETE. ALL SUCH STATEMENTS ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO
THE ACCOMPANYING PROSPECTUS AND THE PROVISIONS OF THE INDENTURE, THE FORM OF
WHICH HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION").
The Company's 5.40% Notes due September 15, 2008 (the "Notes") offered
hereby constitute a single series of Securities to be issued under an Indenture,
dated as of October 1, 1993, between the Company and Harris Trust and Savings
Bank, as Trustee (the "Trustee"), and will be limited to $200,000,000 aggregate
principal amount. As of June 30, 1998, $800,000,000 aggregate principal amount
of Securities was outstanding under the Indenture. The Trustee will initially be
the Securities Registrar and Paying Agent (the "Paying Agent"). The Notes will
be issued only in registered form without coupons in denominations of $1,000 and
integral multiples thereof.
The Notes will be represented by a single Global Security registered in the
name of a nominee of DTC. The ownership interests ("Book-Entry Interests") in
such Global Security will be shown on, and transfers thereof will be effected
only through, records maintained by DTC or its nominee for such Global Security
and on the records of DTC participants. Except as described below, owners of
Book-Entry Interests will not be considered the Holders thereof and will not be
entitled to receive physical delivery of Notes in definitive form. In the event
that the book-entry system is discontinued, including in the event DTC is at any
time unwilling or unable to continue as Depository, the Company will issue
individual Notes to owners of Book-Entry Interests in exchange for the Global
Security. See "--Book-Entry Securities".
Settlement for the Notes will be made by the Underwriters in immediately
available funds, and all payments of principal and interest on the Notes will be
made by the Company in immediately available funds. Secondary trading in
long-term notes and debentures of corporate issuers is generally settled in
clearinghouse or next-day funds. In contrast, the Notes will trade in the
Depository's Same-Day Funds Settlement System until maturity, and secondary
market trading activity in the Notes will therefore be required by the
Depository to settle in immediately available funds. No assurance can be given
as to the effect, if any, of settlement in immediately available funds on
trading activity in the Notes.
The Notes will mature on September 15, 2008. Interest on the Notes will be
payable semi-annually on each March 15 and September 15 (each an "Interest
Payment Date"), commencing March 15, 1999. Interest payable on each Interest
Payment Date will include interest accrued from September 15, 1998 or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for. Interest payable on any Interest Payment Date will be payable to
the person in whose name a Note (or any predecessor Note) is registered at the
close of business on the March 1 or September 1, as the case may be, next
preceding such Interest Payment Date. Payments of principal and interest to
owners of Book-Entry Interests are expected to be made in accordance with the
Depository's and its participants' procedures in effect from time to time.
Principal of, and interest on, Notes in definitive form will be
S-2
payable at the office or agency of the Company maintained for such purpose in
Chicago, Illinois, which initially will be the office of an affiliate of the
Paying Agent, provided that payment of interest may be made, at the option of
the Company, by check mailed to the person entitled thereto.
The Notes are not redeemable or repayable prior to maturity and do not
provide for any sinking fund.
The Indenture does not contain covenants or other provisions designed to
afford holders of the Notes protection in the event of a highly leveraged
transaction, change in credit rating or other similar occurrence.
BOOK-ENTRY SECURITIES
The Notes will be represented by a single certificate (the "Global
Security"). The Global Security representing Notes will be deposited with, or on
behalf of, The Depository Trust Company, New York, New York ("DTC"), or other
successor depository appointed by the Company (DTC or such other depository is
herein referred to as the "Depository") and registered in the name of the
Depository or its nominee. Except as provided below, Notes will not be issued in
definitive form.
DTC will act as securities depository for the Notes. The Notes will be
issued as fully-registered securities registered in the name of Cede & Co.
(DTC's partnership nominee).
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations ("Direct Participants").
DTC is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc., and the National Association
of Securities Dealers, Inc. Access to 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 Direct Participant, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Commission.
Purchases of Notes under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Notes on DTC's records. The
ownership interest of each actual purchaser of each Note ("Beneficial Owner") is
in turn to be recorded on the Direct and Indirect Participants' records. A
Beneficial Owner will not receive written confirmation from DTC of their
purchase, but Beneficial Owners are expected to receive a written confirmation
providing details of the transaction, as well as periodic statements of their
holdings, from the Direct or Indirect Participants through which such Beneficial
Owner entered into the transaction. Transfers of ownership interests in the
Notes are to be accomplished by entries made on the books of Participants acting
on behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Notes, except in the event that use of
the book-entry system for the Notes is discontinued.
To facilitate subsequent transfers, all Notes deposited by Participants with
DTC are registered in the name of DTC's partnership nominee, Cede & Co. The
deposit of Notes with DTC and their registration in the name of Cede & Co. will
effect no change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Notes; DTC's records reflect only the identity of the
Direct Participants to whose accounts such Notes are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
S-3
Delivery of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants and
Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Notes
within an issue are being redeemed, DTC's practice is to determine by lot the
amount of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to Notes. Under
its usual procedures, DTC mails a proxy (an "Omnibus Proxy") to the Company as
soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Notes are credited on the record date (identified in a listing attached to the
Omnibus Proxy).
Principal and interest payments, if any, on the Notes will be made to Cede &
Co., as nominee of DTC. DTC's practice is to credit Direct Participants'
accounts, upon DTC's receipt of funds and corresponding detail information from
the Company or the Trustee, on the payable date in accordance with their
respective holdings shown on DTC's records. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers in
bearer form or registered in "street name," and will be the responsibility of
such Participant and not of DTC, the Trustee or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to Cede & Co. is the responsibility of the
Company or Trustee, disbursement of such payments to Direct Participants shall
be the responsibility of DTC, and disbursement of such payments to Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Notes purchased or
tendered, through its Participant, to a Tender Agent, and shall effect delivery
of such Notes by causing the Direct Participants to transfer the Participant's
interest in the Notes, on DTC's records, to a Tender Agent. The requirement for
physical delivery of Notes in connection with an optional tender or a mandatory
purchase will be deemed satisfied when the ownership rights in the Notes are
transferred by Direct Participants on DTC's records and followed by a book-entry
credit of tendered Notes to the Tender Agent's account.
DTC may discontinue providing its services as securities depository with
respect to the Notes at any time by giving reasonable notice to the Company or
Trustee. Under such circumstances, in the event that a successor securities
depository is not obtained, Note certificates are required to be printed and
delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Note certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
S-4
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Company has agreed to sell to each of the Underwriters named below, and each
of the Underwriters has severally agreed to purchase, the principal amount of
the Notes set forth opposite its name below:
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
- -------------------------------------------------- ----------------
Goldman, Sachs & Co............................... $ 100,000,000
ABN AMRO Incorporated ............................ 25,000,000
BancAmerica Securities, Inc....................... 25,000,000
Morgan Stanley & Co. Incorporated................. 25,000,000
Salomon Smith Barney Inc. ........................ 25,000,000
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Total........................................... $ 200,000,000
----------------
----------------
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Notes, if any are
taken.
The Underwriters propose to offer the Notes in part directly to retail
purchasers at the initial public offering price set forth on the cover page of
this Prospectus Supplement, and in part to certain securities dealers at such
price less a concession not in excess of 0.40% of the principal amount of such
Notes. The Underwriters may allow, and such dealers may reallow, a concession
not to exceed 0.25% of the principal amount of the Notes to certain other
brokers and dealers. After the Notes are released for sale to the public, the
offering price and other selling terms may from time to time be varied by the
Underwriters.
The Notes are a new issue of securities with no established trading market
and will not be listed on any national securities exchange. The Company has been
advised by the Underwriters that they intend to make a market in the Notes, but
are not obligated to do so and may discontinue any market-making at any time
without notice. No assurance can be given as to the liquidity of the trading
market, if any, for the Notes.
In connection with the offering, the Underwriters may purchase and sell the
Notes in the open market. These transactions may include over-allotment and
stabilizing transactions and purchases to cover syndicate short positions
created in connection with the offering. Stabilizing transactions consist of
certain bids or purchases for the purpose of preventing or retarding a decline
in the market price of the Notes; and syndicate short positions involve the sale
by the Underwriters of a greater number of Notes than they are required to
purchase from the Company in the offering. The Underwriters also may impose a
penalty bid, whereby selling concessions allowed to syndicate members or other
broker-dealers in respect of the securities sold in the offering for their
account may be reclaimed by the syndicate if such Notes are repurchased by the
syndicate in stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the Notes, which may
be higher than the price that might otherwise prevail in the open market; and
these activities, if commenced, may be discontinued at any time. These
transactions may be effected in the over-the-counter market or otherwise.
From time to time the Underwriters and certain of their affiliates have
engaged, and may in the future engage, in transactions with, and perform
services for, the Company in the ordinary course of business.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
S-5
LEGAL OPINIONS
Certain legal matters in connection with the offering of the Notes will be
passed upon for the Company by Jose M. de Lasa, Esq., Senior Vice President,
Secretary and General Counsel of the Company and by Mayer, Brown & Platt,
Chicago, Illinois, and for the Underwriters by Skadden, Arps, Slate, Meagher &
Flom (Illinois). As of September 10, 1998, Mr. de Lasa beneficially owned
114,946 shares of common stock of the Company and held options to acquire
399,148 shares of such common stock of which options to purchase 203,768 shares
of common stock are currently exercisable. (These amounts include approximately
668 shares of common stock held for the benefit of Mr. de Lasa in the Abbott
Laboratories Stock Retirement Trust pursuant to the Abbott Laboratories Stock
Retirement Plan.) Skadden, Arps, Slate, Meagher & Flom (Illinois) and its
affiliates from time to time represent the Company in connection with certain
other matters.
S-6
P R O S P E C T U S
$650,000,000
ABBOTT LABORATORIES
DEBT SECURITIES
------------
Abbott Laboratories (the "Company") intends from time to time to issue its
unsecured debt securities (the "Securities") from which the Company will receive
up to an aggregate amount of $650,000,000 in proceeds (or its equivalent in
foreign currencies or currency units). The Securities will be offered for sale
in amounts, at prices and on terms to be determined when an agreement to sell is
made or at the time of sale, as the case may be. The Securities may be sold for
U.S. dollars, foreign denominated currency or European Currency Units ("ECUs"),
and principal of and any interest on the Securities may likewise be payable in
U.S. dollars, foreign denominated currency or ECUs. For each issue of Securities
in respect of which this Prospectus is being delivered (the "Offered
Securities"), there is an accompanying Prospectus Supplement (the "Prospectus
Supplement") that sets forth the title, designation, aggregate principal amount,
designated currency or currency units, rate (which may be fixed or variable) or
method of calculation of interest and dates for payment thereof, maturity,
priority, premium, if any, authorized denominations, initial price, any
redemption or prepayment rights at the option of the Company or the holder, any
terms for sinking fund payments, any listing on a securities exchange and the
initial public offering price, the form of the Securities (which may be in
registered or permanent global form) and other special terms of the Offered
Securities, together with the terms of the offering of the Offered Securities
and the net proceeds to the Company from the sale thereof.
The Securities may be offered directly to purchasers or to or through
agents, underwriters or dealers designated from time to time, or through a
combination of those methods of sale. If any underwriters or agents are involved
in the offering of the Offered Securities in respect of which this Prospectus is
being delivered, the names of such agents or underwriters and any applicable
fee, commission and discount arrangements with them will be set forth in the
Prospectus Supplement. See "Plan of Distribution." The net proceeds to the
Company from such offering will also be set forth in the Prospectus Supplement.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-------------------
The date of this Prospectus is June 21, 1996.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY UNDERWRITER. NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS
SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES TO ANY PERSON IN
ANY JURISDICTION TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN
SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the office of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, as well as at the Regional Offices of the
Commission at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511, and Seven World Trade Center, Suite 1300, New York, New
York 10048. Copies of such information can be obtained by mail from the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Reports, proxy
statements and other information concerning the Company can also be inspected at
the office of the New York Stock Exchange, 20 Broad Street, New York, New York
10005, at the office of the Chicago Stock Exchange, 440 South LaSalle Street,
Chicago, Illinois 60605, and at the office of the Pacific Stock Exchange, 301
Pine Street, San Francisco, California 94104. The Company has securities listed
on each of the aforementioned exchanges.
This Prospectus constitutes a part of a registration statement (the
"Registration Statement") filed by the Company with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus omits
certain of the information contained in the Registration Statement, and
reference is hereby made to the Registration Statement and to the exhibits
thereto for further information with respect to the Company and the Securities.
The Company is not required, nor does it intend, to provide annual or other
reports to holders of the Securities. However, such reports will be available to
such holders upon request. See "Documents Incorporated by Reference."
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company under the Exchange Act with the
Commission are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the year ended December 31,
1995.
(2) The Company's Current Report on Form 8-K, dated March 29, 1996.
(3) The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Securities offered hereby shall be deemed to
be incorporated in this Prospectus by reference and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge, upon the written or oral request by
any person, including any beneficial owner, to whom this Prospectus is
delivered, a copy of any or all of the documents incorporated by reference in
this Prospectus, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Such requests
should be directed to: Jose M. de Lasa, Senior Vice President, Secretary and
General Counsel, Abbott Laboratories, 100 Abbott Park Road, Abbott Park,
Illinois 60064-3500 (telephone (847) 937-6100).
2
THE COMPANY
The Company is an Illinois corporation, incorporated in 1900. As used
throughout the text of this document, references to the "Company" include the
Company and its consolidated subsidiaries, unless otherwise indicated or unless
the context otherwise requires. The Company's corporate offices are located at
100 Abbott Park Road, Abbott Park, Illinois 60064-3500. Its telephone number is
(847) 937-6100.
The Company's principal business is the discovery, development, manufacture,
and sale of a broad and diversified line of health care products and services.
Among the Company's products is a line of adult and pediatric pharmaceuticals
and nutritionals. These products are sold primarily on the prescription or
recommendation of physicians or other health care professionals. This line also
includes agricultural and chemical products, bulk pharmaceuticals, and consumer
products. In addition, the Company produces a line of hospital and laboratory
products which includes diagnostic systems for blood banks, hospitals,
commercial laboratories, alternate-care testing sites, and consumers;
intravenous and irrigation fluids and related administration equipment,
including electronic drug delivery systems; drugs and drug delivery systems;
anesthetics; critical care products; and other medical specialty products for
hospitals and alternate-care sites.
The Company purchases, in the ordinary course of business, necessary raw
materials and supplies essential to the Company's operations from numerous
suppliers in the United States and overseas. The Company markets products in
approximately 130 countries through affiliates and distributors. Most of the
Company's products are sold both in and outside the United States. The Company
employs approximately 50,200 persons in its various offices, plants and
facilities located throughout North America, South America, Europe, Africa, Asia
and Australia.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of the
Company (including its majority-owned subsidiaries, whether or not consolidated,
its proportionate share of any fifty-percent-owned persons, and any income
received (but not undistributed amounts) from less-than-fifty-percent-owned
persons) for the periods indicated:
YEAR ENDED DECEMBER 31,
THREE MONTHS ENDED -----------------------------------------------------
MARCH 31, 1996 1995 1994 1993 1992 1991
- --------------------------------------------- --------- --------- --------- --------- ---------
25.5 21.9 24.1 21.3 18.0 16.0
For the purpose of calculating this ratio, (i) earnings have been calculated
by adjusting net earnings for taxes on earnings; interest expense; capitalized
interest cost, net of amortization; equity in earnings of less than
fifty-percent-owned persons, less dividends received; minority interest; and the
portion of rentals representative of the interest factor, (ii) the Company
considers one-third of rental expense to be the amount representing return on
capital, and (iii) fixed charges comprise total interest expense, including
capitalized interest and such portion of rentals. A statement setting forth the
computation of the ratios of earnings to fixed charges is filed as an exhibit to
the Registration Statement of which this Prospectus is a part.
USE OF PROCEEDS
Except as otherwise set forth in the Prospectus Supplement relating to the
Offered Securities, the net proceeds to be received by the Company from the sale
of the Securities will be added to the general funds of the Company and will be
used for general corporate purposes, including repayment of indebtedness,
retirement of long-term and short-term debt and the purchase of shares of the
Company's common stock. Pending such use, the net proceeds will be temporarily
invested in short-term instruments.
3
DESCRIPTION OF SECURITIES
The Securities are to be issued under an Indenture (the "Indenture"),
between the Company and Harris Trust and Savings Bank, as Trustee (the
"Trustee"), a copy of which is filed as an exhibit to the Registration
Statement. The following summaries of certain provisions of the Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Indenture, including the definitions
therein of certain terms. Wherever particular Sections or defined terms of the
Indenture are referred to, such Sections or defined terms are incorporated
herein by reference.
The following sets forth certain general terms and provisions of the
Securities offered hereby. The particular terms of the Securities offered by any
Prospectus Supplement (the "Offered Securities") will be described in the
Prospectus Supplement relating to such Offered Securities (the "Applicable
Prospectus Supplement").
GENERAL
The Indenture does not limit the amount of Securities that may be issued
thereunder and Securities may be issued thereunder from time to time in one or
more series. The Securities will be unsecured and unsubordinated obligations of
the Company and will rank equally and ratably with other unsecured and
unsubordinated obligations of the Company.
Unless otherwise indicated in the Applicable Prospectus Supplement,
principal of, premium, if any, and interest on the Securities will be payable,
and the transfer of Securities will be registrable, at the office or agency to
be maintained by the Company in Chicago and at any other office or agency
maintained by the Company for such purpose. The Securities will be issued only
in fully registered form without coupons and, unless otherwise indicated in the
Applicable Prospectus Supplement, in denominations of $1,000 or integral
multiples thereof. No service charge will be made for any registration of
transfer or exchange of the Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge imposed in
connection therewith.
The Applicable Prospectus Supplement will describe the following terms of
the Offered Securities: (1) the title of the Offered Securities; (2) any limit
on the aggregate principal amount of the Offered Securities; (3) the Person to
whom any interest on the Offered Securities shall be payable, if other than the
person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest; (4) the date or dates on which the principal of the Offered Securities
is payable; (5) the rate or rates (which may be fixed or variable) at which the
Offered Securities shall bear interest or the method by which such rate or rates
shall be determined, if any, the date or dates from which any such interest
shall accrue, the Interest Payment Dates on which any such interest shall be
payable and the Regular Record Date for the interest payable on any Interest
Payment Date; (6) the place or places where the principal of and any premium and
interest on the Offered Securities shall be payable; (7) the period or periods
within which, the price or prices at which and the terms and conditions upon
which the Offered Securities may be redeemed, in whole or in part, at the option
of the Company; (8) the obligation, if any, of the Company to redeem, purchase
or repay the Offered Securities pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods within
which, the price or prices at which and the terms and conditions upon which the
Offered Securities shall be redeemed, purchased or repaid, in whole or in part,
pursuant to such obligation; (9) if other than denominations of $100,000 and any
integral multiple of $1,000 in excess thereof, the denominations in which the
Offered Securities shall be issuable; (10) the currency, currencies or currency
units in which payment of the principal of and any premium and interest on any
Offered Securities shall be payable if other than the currency of the United
States of America; (11) if the amount of payments of principal of or any premium
or interest on any Offered Securities may be determined with reference to an
index or formula, the manner in which such amounts shall be determined; (12) if
the principal of or any premium or interest on any Offered Securities is to be
payable, at the election of the Company or a Holder thereof, in one or more
currencies or currency units other than that or those in which the Offered
Securities are stated to be payable, the
4
currency, currencies or currency units in which payment of the principal of and
any premium and interest on the Offered Securities as to which such election is
made shall be payable, and the periods within which and the terms and conditions
upon which such election is to be made; (13) if other than the principal amount
thereof, the portion of the principal amount of the Offered Securities which
shall be payable upon declaration of acceleration of the Maturity thereof; (14)
the applicability of the provisions described under "Defeasance and Covenant
Defeasance"; (15) if the Offered Securities will be issued in whole or in part
in the form of a Book-Entry Security as described under "Book-Entry Securities,"
the depository appointed by the Company (the "Depository") or its nominee with
respect to the Offered Securities and the circumstances under which the
Book-Entry Security may be registered for transfer or exchange or authenticated
and delivered in the name of a Person other than the Depository or its nominee;
and (16) any other terms of the Offered Securities.
The Securities may be issued as Original Issue Discount Securities to be
offered and sold at a substantial discount below their stated principal amount.
Federal income tax consequences and other special considerations applicable to
Original Issue Discount Securities and any Securities treated as having been
issued with original issue discount for Federal income tax purposes will be
described in the Applicable Prospectus Supplement. "Original Issue Discount
Securities" means any Security which provides for an amount less than the
principal amount thereof to be due and payable upon the declaration of
acceleration of the Maturity thereof upon the occurrence of an Event of Default
and the continuation thereof.
The Indenture does not contain covenants or other provisions designed to
afford holders of the Securities protection in the event of a highly leveraged
transaction, change in credit rating or other similar occurrence.
BOOK-ENTRY SECURITIES
Unless otherwise provided in the Prospectus Supplement, the Securities will
be represented by one or more certificates (the "Global Securities"). The Global
Security representing Securities will be deposited with, or on behalf of, The
Depository Trust Company ("DTC"), or other successor depository appointed by the
Company (DTC or such other depository is herein referred to as the "Depository")
and registered in the name of the Depository or its nominee. Unless otherwise
provided in the Prospectus Supplement, Securities will not be issued in
definitive form. DTC currently limits the maximum denomination of any single
Global Security to $200,000,000.
DTC is a limited-purpose trust company organized under the laws of the State
of New York, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC was created to hold securities of its participants and
to facilitate the settlement of securities transactions among its participants
in such securities through electronic computerized book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. DTC's participants include securities brokers and
dealers, 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, Inc., and the National
Association of Securities Dealers, Inc. Access to DTC's book-entry system is
also available to others, such as banks, brokers, dealers and trust companies,
that clear through or maintain a custodial relationship with a participant,
either directly or indirectly. The rules applicable to DTC and its participants
are on file with the Commission.
Upon the issuance by the Company of Securities represented by a Global
Security, DTC will credit, on its book-entry registration and transfer system,
the respective principal amounts of the Securities represented by such Global
Security to the accounts of participants. The accounts to be credited shall be
designated by the underwriters, dealers or agents. Ownership of beneficial
interests in the Global Security will be limited to participants or persons that
hold interests through participants. Ownership of beneficial interests in
Securities represented by the Global Security will be shown on, and the transfer
of that ownership will be effected only through, records maintained by DTC (with
respect to interests of
5
participants in DTC), or by participants in DTC or persons that may hold
interests through such participants (with respect to persons other than
participants in DTC). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
the Global Security.
So long as the Depository for the Global Security, or its nominee, is the
registered owner of the Global Security, the Depositor or its nominee, as the
case may be, will be considered the sole owner or holder of the Securities
represented by such Global Security for all purposes under the applicable
Indenture. Except as provided below, owners of beneficial interests in
Securities represented by the Global Security will not be entitled to have
Securities represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of Securities in
definitive form and will not be considered the owners or holders thereof under
the applicable Indenture.
Payments of principal of, premium, if any, and interest on the Securities
represented by the Global Security registered in the name of DTC or its nominee
will be made by the Company through the Trustee under the applicable Indenture
or a paying agent (the "Paying Agent"), which may also be the Trustee under the
applicable Indenture to DTC or its nominee, as the case may be, as the
registered owner of the Global Security. Neither the Company, the Trustee, nor
the Paying Agent will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company has been advised that DTC, upon receipt of any payment of
principal of, premium, if any, or interest in respect of a Global Security, will
credit immediately the accounts of the related participants with payment in
amounts proportionate to their respective holdings in principal amount of
beneficial interests in such Global Security as shown on the records of DTC. The
Company expects that payments by participants to owners of beneficial interests
in a Global Security will be governed by standing customer instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such participants.
If the Depository with respect to a Global Security is at any time unwilling
or unable to continue as Depository and a successor Depository is not appointed
by the Company within 90 days, the Company will issue certificated notes in
exchange for the Securities represented by such Global Security.
The information in this section concerning the Depository and the
Depository's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
CERTAIN COVENANTS OF THE COMPANY
RESTRICTIONS ON SECURED DEBT. Unless otherwise provided in the Prospectus
Supplement with respect to any series of the Securities, if the Company or any
Domestic Subsidiary (as defined below) shall incur, issue, assume or guarantee
any indebtedness for borrowed money represented by notes, bonds, debentures or
other similar evidences of indebtedness, secured by a mortgage, pledge or other
lien on any Principal Domestic Property (as defined below) or on any shares of
stock or debt of any Domestic Subsidiary, the Company shall secure, or cause
such Domestic Subsidiary to secure, the Securities equally and ratably, with (or
prior to) such indebtedness, so long as such indebtedness shall be so secured,
unless after giving effect thereto the aggregate amount of all such indebtedness
so secured, together with all Attributable Debt (as defined below) in respect of
sale and leaseback transactions involving Principal Domestic Properties, would
not exceed 15% of the Consolidated Net Assets (as defined below) of the Company.
This restriction will not apply to, and there shall be excluded in computing
secured indebtedness for the purpose of such restriction, indebtedness secured
by (a) mortgages on property of, or on any shares of stock or debt of, any
corporation existing at the time such corporation becomes a Domestic Subsidiary,
(b) mortgages in favor of the Company or any Domestic Subsidiary, (c) mortgages
in favor of U.S. or foreign governmental bodies to secure partial,
6
progress, advance or other payments, (d) mortgages on property, shares of stock
or debt existing at the time of acquisition thereof (including acquisition
through merger or consolidation), purchase money mortgages and construction cost
mortgages existing at or incurred within 120 days of the time of acquisition
thereof, (e) mortgages existing on the first date on which a Security is
authenticated by the Trustee, (f) mortgages incurred in connection with
pollution control, industrial revenue or similar financings, and (g) any
extension, renewal or replacement of any debt secured by any mortgage referred
to in the foregoing clauses (a) through (f), inclusive.
The term "Subsidiary" of the Company means any corporation of which the
Company directly or indirectly owns or controls stock which under ordinary
circumstances (not dependent upon the happening of a contingency) has the voting
power to elect a majority of the board of directors of such corporation;
provided that the term does not include any corporation that does not own a
Principal Domestic Property and the principal executive officer, president and
principal financial officer of the Company determine in good faith that the then
aggregate investments by the Company and its Domestic Subsidiaries in such
corporation are not of material importance to the total business conducted, or
assets owned, by the Company and its Domestic Subsidiaries. The term "Domestic
Subsidiary" means a Subsidiary of the Company which transacts substantially all
of its business or maintains substantially all of its property within the United
States (excluding its territories, possessions and Puerto Rico), except a
Subsidiary which (a) is engaged primarily in financing operations outside of the
United States or in leasing personal property or financing inventory,
receivables or other property or (b) does not own a Principal Domestic Property.
The term "Principal Domestic Property" means any building, structure or other
facility (together with the land on which it is erected and fixtures comprising
a part thereof) used primarily for manufacturing, processing, research,
warehousing or distribution, located in the United States (excluding its
territories, possessions and Puerto Rico), owned or leased by the Company or a
Subsidiary of the Company and having a net book value in excess of 2% of
Consolidated Net Assets, other than any such building, structure or other
facility or portion thereof which is a pollution control facility financed by
state or local governmental obligations or which the principal executive
officer, president and principal financial officer of the Company determine in
good faith is not of material importance to the total business conducted or
assets owned by the Company and its Subsidiaries as an entirety. The term
"Consolidated Net Assets" means the aggregate amount of assets (less reserves
and other deductible items) after deducting current liabilities, as shown on the
consolidated balance sheet of the Company and its Subsidiaries contained in the
latest annual report to the stockholders of the Company and prepared in
accordance with generally accepted accounting principles. The term "Attributable
Debt" means the present value (discounted at the rate of 8% per annum compounded
monthly) of the obligations for rental payments required to be paid during the
remaining term of any lease of more than 12 months.
RESTRICTIONS ON SALES AND LEASEBACKS. Unless otherwise provided in the
Prospectus Supplement with respect to any series of the Securities, neither the
Company nor any Domestic Subsidiary may enter into any sale and leaseback
transaction involving any Principal Domestic Property, the acquisition or
completion of construction and commencement of full operation of which has
occurred more than 120 days prior thereto, unless (a) the Company or such
Domestic Subsidiary could incur a mortgage on such property under the
restrictions described above under "Restrictions on Secured Debt" in an amount
equal to the Attributable Debt with respect to the sale and leaseback
transaction without equally and ratably securing the Securities or (b) the
Company, within 120 days after the sale or transfer by the Company or any
Domestic Subsidiary, applies to the retirement of its funded debt (defined as
indebtedness for borrowed money having a maturity of, or by its terms extendible
or renewable for, a period of more than 12 months after the date of
determination of the amount thereof) an amount equal to the greater of (i) the
net proceeds of the sale of the Principal Domestic Property sold and leased
pursuant to such arrangement or (ii) the fair market value of the Principal
Domestic Property so sold and leased (subject to credits for certain voluntary
retirements of funded debt).
7
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default under
the Indenture with respect to Securities of any series: (a) failure to pay any
interest on any Security of that series when due, continued for 30 days; (b)
failure to pay principal of or any premium on any Security of that series when
due; (c) failure to deposit any sinking fund payment, when due, in respect of
any Security of that series; (d) failure to perform, or breach of, any other
covenant or warranty of the Company in the Indenture (other than a covenant
included in the Indenture solely for the benefit of a series of Securities
thereunder other than that series) continued for 90 days after written notice as
provided in the Indenture; (e) certain events in bankruptcy, insolvency or
reorganization of the Company; or (f) any other Event of Default provided with
respect to Securities of that series.
If any Event of Default with respect to the Securities of any series at the
time Outstanding occurs and is continuing, either the Trustee or the Holders of
at least 25 percent in aggregate principal amount of the Outstanding Securities
of that series may declare the principal amount (or, if the Securities of that
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms thereof) of all the Securities of that
series to be due and payable immediately by a notice in writing to the Company
(and to the Trustee if given by Holders), and upon any such declaration such
principal amount (or specified amount) will be immediately due and payable. At
any time after a declaration of acceleration with respect to Securities of any
series has been made, but before a judgment or decree based on acceleration has
been obtained, the Holders of a majority in aggregate principal amount of
Outstanding Securities of that series may, under certain circumstances, rescind
and annul such acceleration.
Reference is made to the Applicable Prospectus Supplement relating to any
series of Offered Securities that are Original Issue Discount Securities for the
particular provisions relating to acceleration of the Stated Maturity of a
portion of the principal amount of such series of Original Issue Discount
Securities upon the occurrence of an Event of Default and the continuation
thereof.
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. Subject to such provisions for the
indemnification of the Trustee and to certain other conditions, the Holders of a
majority in aggregate principal amount of the Outstanding Securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee, with respect to the Securities of that
series.
No Holder of any series of Securities will have any right to institute any
proceeding with respect to the Indenture, or for the appointment of a receiver
or trustee, or for any other remedy thereunder, unless such Holder shall have
previously given to the Trustee written notice of a continuing Event of Default
and unless the Holders of at least 25 percent in principal amount of the
Outstanding Securities of that series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a majority
in aggregate principal amount of the Outstanding Securities of that series a
direction inconsistent with such request and shall have failed to institute such
proceeding within 60 days. However, such limitations do not apply to a suit
instituted by a Holder of a Security for enforcement of payment of the principal
of and premium, if any, or interest on such Security on or after the respective
due dates expressed in such Security.
The Company is required to furnish to the Trustee annually a statement as to
the performance by the Company of certain of its obligations under the Indenture
and as to any default in such performance.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of not less than the majority in
aggregate principal amount of the
8
Outstanding Securities of each series issued under the Indenture and affected by
the modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holders of all Securities affected
thereby, (i) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Security; (ii) reduce the principal amount
of, or the premium, if any, or (except as otherwise provided in the Applicable
Prospectus Supplement) interest on, any Security (including in the case of an
Original Issue Discount Security the amount payable upon acceleration of the
maturity thereof); (iii) change the place or currency of payment of principal
of, premium, if any, or interest on any Security; (iv) impair the right to
institute suit for the enforcement of any payment on any Security on or at the
Stated Maturity thereof (or in the case of redemption, on or after the
Redemption Date); (v) reduce the percentage in principal amount of Outstanding
Securities of any series, the consent of whose Holders is required for
modification or amendment of the Indenture or for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults; or (vi)
modify certain provisions of the Indenture, except to increase any such
percentage or to provide that certain other provisions of the Indenture cannot
be modified or waived without the consent of each Holder affected thereby.
The Holders of at least a majority in aggregate principal amount of the
Outstanding Securities of any series may, on behalf of all Holders of that
series, waive compliance by the Company with certain restrictive provisions of
the Indenture. The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of any series may, on behalf of all Holders
of that series, waive any past default under the Indenture, except a default in
the payment of principal, premium or interest and in respect of a covenant or
provision of the Indenture that cannot be modified or amended without the
consent of the Holder of each Outstanding Security of such series affected
thereby.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person and may not permit any Person to merge into or consolidate with
the Company or convey, transfer or lease its properties and assets substantially
as an entirety to the Company, unless (i) in case the Company consolidates with
or merges into another person or conveys, transfers or leases its properties
substantially as an entirety to any person, the person formed by such
consolidation or into which the Company is merged or the person which acquires
by conveyance or transfer, or which leases, the properties and assets of the
Company substantially as an entirety is a corporation, partnership, or trust
organized under the laws of the United States of America, any State or the
District of Columbia, and expressly assumes the Company's obligations on the
Securities under a supplemental indenture, (ii) immediately after giving effect
to the transaction no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have occurred and
be continuing, (iii) if properties or assets of the Company become subject to a
mortgage, pledge, lien, security interest or other encumbrance not permitted by
the Indenture, the Company or such successor Person, as the case may be, takes
such steps as shall be necessary effectively to secure the Securities equally
and ratably with (or prior to) all indebtedness secured thereby, and (iv) the
Company has delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel stating compliance with these provisions.
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides, unless otherwise indicated in the Applicable
Prospectus Supplement with respect to the Offered Securities, that the Company,
at the Company's option, (a) will be discharged from any and all obligations in
respect of the Securities of any series (except for certain obligations to
register the transfer of or exchange of Securities of such series, replace
stolen, lost or mutilated Securities of such series, maintain paying agencies
and hold moneys for payment in trust) or (b) need not comply with certain
restrictive covenants of the Indenture, including those described under "Certain
Covenants of the Company," and the occurrence of an event described in clause
(d) under "Events of Default" shall no longer be an Event of Default, in each
case, if the Company deposits, in trust, with the Trustee money or U.S.
Government Obligations, which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money, in an
amount sufficient to pay all the
9
principal of and premium, if any, and interest on the Securities of such series
on the dates such payments are due (which may include one or more redemption
dates designated by the Company) in accordance with the terms of the Securities
of such series. Such a trust may be established only if, among other things, (i)
no Event of Default or event which with the giving of notice or lapse of time,
or both, would become an Event of Default under the Indenture shall have
occurred and be continuing on the date of such deposit or insofar as an Event of
Default resulting from certain events of bankruptcy or insolvency of the
Company, at any time during the period ending on the 121st day after the date of
such deposit or, if longer, ending on the day following the expiration of the
longest preference period applicable to the Company in respect of such deposit,
(ii) such deposit will not cause the Trustee to have any conflicting interest
with respect to other securities of the Company or result in the trust arising
from such deposit to constitute, unless it is qualified as, a "regulated
investment company," (iii) such defeasance will not result in a breach or
violation of, or constitute a default under, the Indenture or any other
agreement or instrument to which the Company is a party or by which it is bound,
and (iv) the Company shall have delivered an Opinion of Counsel to the effect
that the Holders will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit or defeasance and will be subject to
Federal income tax in the same manner as if such defeasance had not occurred,
which Opinion of Counsel, in the case of clause (a) above, must refer to and be
based upon a published ruling of the Internal Revenue Service, a private ruling
of the Internal Revenue Service addressed to the Company, or otherwise a change
in applicable Federal income tax law occurring after the date of the Indenture.
In the event the Company omits to comply with its remaining obligations under
the Indenture after a defeasance of the Indenture with respect to the Securities
of any series as described under clause (b) above and the Securities of such
series are declared due and payable because of the occurrence of any Event of
Default, the amount of money and U.S. Government Obligations on deposit with the
Trustee may be insufficient to pay amounts due on the Securities of such series
at the time of the acceleration resulting from such Event of Default. However,
the Company will remain liable in respect of such payments.
CONCERNING THE TRUSTEE
Harris Trust and Savings Bank is Trustee under the Indenture. The Trustee
performs services for the Company in the ordinary course of business.
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby through agents,
through underwriters and through dealers, and Securities may be sold to other
purchasers directly or through agents or through a combination of any such
methods of sale.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Offers to purchase Securities may be solicited by agents designated by the
Company from time to time. Any such agent, who may be deemed to be an
underwriter, as that term is defined in the Securities Act, involved in the
offer or sale of the Securities in respect of which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent set
forth, in the Applicable Prospectus Supplement. Agents may be entitled under
agreements that may be entered into with the Company to indemnification by the
Company against certain liabilities, including liabilities under the Securities
Act, and such agents or their affiliates may be customers of, extend credit to
or engage in transactions with or perform services for the Company in the
ordinary course of business. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a reasonable efforts basis for the
period of its appointment.
If any underwriters are utilized in the sale, the Company will enter into an
underwriting agreement with such underwriters at the time of sale to them and
the names of the underwriters and the terms of the
10
transaction will be set forth in the Applicable Prospectus Supplement that will
be used by the underwriters to make resales of the Securities in respect of
which this Prospectus is delivered to the public. The underwriters may be
entitled under the relevant underwriting agreement to indemnification by the
Company against certain liabilities, including liabilities under the Securities
Act, and such underwriters or their affiliates may be customers of, extend
credit to or engage in transactions with or perform services for the Company in
the ordinary course of business.
If dealers are utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to such
dealers, as principal. The dealers may then resell such Securities to the public
at varying prices to be determined by such dealers at the time of resale.
Dealers may be entitled to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act, and such dealers or
their affiliates may be customers of, extend credit to or engage in transactions
with or perform services for the Company in the ordinary course of business.
The Securities are not proposed to be listed on a securities exchange, and
any underwriters or dealers will not be obligated to make a market in
Securities. The Company cannot predict the activity or liquidity of any trading
in the Securities.
LEGAL OPINIONS
Unless otherwise indicated in a supplement to this Prospectus, certain legal
matters in connection with the Securities offered hereby will be passed upon for
the Company by Jose M. de Lasa, Esq., Senior Vice President, General Counsel and
Secretary of the Company and by Mayer, Brown & Platt, Chicago, Illinois, and for
the underwriters, dealers and agents, if any, by Skadden, Arps, Slate, Meagher &
Flom, Chicago, Illinois. As of May 28, 1996, Mr. de Lasa beneficially owned
approximately 20,044 shares of common stock of the Company and held options to
acquire 130,002 shares of such common stock of which options to purchase 26,668
shares of common stock are currently exercisable. (These amounts include
approximately 44 shares held for the benefit of Mr. de Lasa in the Abbott
Laboratories Stock Retirement Trust pursuant to the Abbott Laboratories Stock
Retirement Plan). The opinions of Mr. de Lasa, Mayer, Brown & Platt and Skadden,
Arps, Slate, Meagher & Flom may be conditioned upon, and may be subject to
certain assumptions regarding, future action required to be taken by the Company
and any underwriter(s), dealer(s) or agent(s) in connection with the issuance
and sale of any particular series of Offered Securities. The opinions of Mr. de
Lasa, Mayer, Brown & Platt and Skadden, Arps, Slate, Meagher & Flom with respect
to certain series of Offered Securities may be subject to other conditions and
assumptions, as indicated in the Prospectus Supplement describing such series.
Skadden, Arps, Slate, Meagher & Flom from time to time represents the Company in
connection with certain other matters.
EXPERTS
The consolidated financial statements and schedules included in the Annual
Report on Form 10-K for the year ended December 31, 1995, incorporated by
reference in this 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 in giving said reports.
11
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH
OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE
INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF SUCH INFORMATION.
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TABLE OF CONTENTS
PAGE
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PROSPECTUS SUPPLEMENT
Use of Proceeds........................................................... S-2
Description of Notes...................................................... S-2
Underwriting.............................................................. S-5
Legal Opinions............................................................ S-6
PROSPECTUS
Available Information..................................................... 2
Documents Incorporated by Reference....................................... 2
The Company............................................................... 3
Ratio of Earnings to Fixed Charges........................................ 3
Use of Proceeds........................................................... 3
Description of Securities................................................. 4
Plan of Distribution...................................................... 10
Legal Opinions............................................................ 11
Experts................................................................... 11
$200,000,000
ABBOTT LABORATORIES
5.40% NOTES DUE SEPTEMBER 15, 2008
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
ABN AMRO INCORPORATED
BANCAMERICA SECURITIES, INC.
MORGAN STANLEY DEAN WITTER
SALOMON SMITH BARNEY
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