PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 1, 1993
$150,000,000
ABBOTT LABORATORIES
6.80% NOTES DUE MAY 15, 2005
-------------
Interest on the Notes is payable semi-annually on May 15 and November 15 of
each year, beginning November 15, 1995. The Notes are not redeemable or
repayable prior to maturity and do not provide for any sinking fund.
The Notes will be represented by one or more Global Securities registered in
the name of the nominee of The Depository Trust Company, which will act as
Depository. Interests in Global Securities will be evidenced only by, and
transfers thereof will be effected only through, records maintained by DTC and
its participants. Except as described in the Prospectus, owners of beneficial
interests in a 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."
------------------
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........................................... 100% 0.650% 99.350%
Total.............................................. $150,000,000 $975,000 $149,025,000
- ---------
(1) Plus accrued interest from May 15, 1995.
(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 $150,000.
------------------
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 The
Depository Trust Company on or about May 17, 1995 against payment therefor in
immediately available funds.
GOLDMAN, SACHS & CO.
LAZARD FRERES & CO.
LEHMAN BROTHERS
SALOMON BROTHERS INC
------------
The date of this Prospectus Supplement is May 10, 1995.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------
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 5.9% to 6.1% 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 Company's 6.80% Notes due May 15, 2005 (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 $150,000,000 aggregate principal
amount. As of March 31, 1995, $200,000,000 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 one or more Global Securities registered in
the name of a nominee of DTC. The ownership interests ("Book-Entry Interests")
in such Global Securities will be shown on, and transfers thereof will be
effected only through, records maintained by DTC or its nominee for such Global
Securities and on the records of DTC participants. Except as described below and
in the accompanying Prospectus, 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 Securities. See "Description of
Securities -- Book-Entry Securities" in the accompanying Prospectus.
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 May 15, 2005. Interest on the Notes will be payable
semi-annually on each May 15 and November 15 (each an "Interest Payment Date"),
commencing November 15, 1995. Interest payable on each Interest Payment Date
will include interest accrued from May 15, 1995 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
May 1 or November 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 payable at the
S-2
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.
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................................................................... $ 37,500,000
Lazard Freres & Co.................................................................... 37,500,000
Lehman Brothers Inc................................................................... 37,500,000
Salomon Brothers Inc.................................................................. 37,500,000
----------------
Total............................................................................... $ 150,000,000
----------------
----------------
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.
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.
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, Chicago, Illinois. As of April 30, 1995, Mr. de Lasa beneficially owned
20,000 shares of common stock of the Company and held options to acquire 80,002
shares of such common stock. Skadden, Arps, Slate, Meagher & Flom from time to
time represents the Company in connection with certain other matters.
S-3
P R O S P E C T U S
$500,000,000
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 $500,000,000 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 October 1, 1993.
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,
1992.
(2) The Company's Quarterly Reports on Form 10-Q for the quarter ended March
31, 1993 and the quarter ended June 30, 1993.
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 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: Lael F. Johnson,
Senior Vice President, Secretary and General Counsel, Abbott Laboratories, One
Abbott Park Road, Abbott Park, Illinois 60064-3500 (telephone (708) 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
One Abbott Park Road, Abbott Park, Illinois 60064-3500. Its telephone number is
(708) 937-6100.
The Company's principal business is the discovery, development, manufacture,
and sale of a broad and diversified line of human 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, and alternate-care testing sites;
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 49,500 persons in its various offices, plants and
facilities located throughout North America, South America, Europe, 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,
SIX MONTHS ENDED -----------------------------------------------------
JUNE 30, 1993 1992 1991 1990 1989 1988
- --------------------------------------------- --------- --------- --------- --------- ---------
21.1 18.0 16.0 12.1 13.4 11.0
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 percentage of the principal amount for which the Offered
Securities will be issued; (6) 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; (7) the place or places where the
principal of and any premium and interest on the Offered Securities shall be
payable; (8) 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; (9) the obligation, if any,
of the Company to redeem or purchase 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 or purchased,
in whole or in part, pursuant to such obligation; (10) if other than
denominations of $1,000 and any integral multiple thereof, the denominations in
which the Offered Securities shall be issuable; (11) 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; (12) 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;
(13) 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 currency, currencies or currency units
in which payment of the principal of and any
4
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; (14) 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; (15)
the applicability of the provisions described under "Defeasance and Covenant
Defeasance"; (16) if the Offered Securities will be issuable only 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 (17) 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 $150,000,000.
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 clearance and settlement of securities transactions among its
participants in such securities through electronic 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, some of which (and/or their representatives) own DTC. 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 and interest, if any, 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 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, assume or guarantee any
indebtedness for borrowed money 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, 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, or arising thereafter otherwise than
in connection with borrowing money and pursuant to contracts entered into prior
to such corporation becoming a Domestic Subsidiary, (b) mortgages securing
indebtedness of a Domestic Subsidiary to the Company or to another Domestic
Subsidiary, (c) mortgages in favor of U.S. or foreign governmental bodies to
secure partial, progress, advance or other payments, (d) mortgages on property,
shares of stock or debt, purchase money mortgages and construction cost
mortgages
6
existing at or incurred within 120 days of the time of acquisition thereof
(including acquisition through merger or consolidation), (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 refunding of 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 in which the Company's investment, in the
opinion of the Chief Executive Officer, President and Chief Financial Officer of
the Company, is not of material importance to the total business conducted, or
assets owned, by the Company and its Domestic Subsidiaries as an entirety. The
term "Domestic Subsidiary" means a Subsidiary of the Company which transacts
substantially all of its business and maintains substantially all of its fixed
assets 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
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 facility or portion thereof which
is a pollution control facility financed by state or local governmental
obligations or 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 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 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 or a wholly-owned Domestic
Subsidiary, within 120 days, 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 not less than the greater
of (i) the net proceeds of the sale of the Principal Domestic Property leased
pursuant to such arrangement or (ii) the fair value of the Principal Domestic
Property so leased (subject to credits for certain voluntary retirements of
funded debt). This restriction will not apply to any sale and leaseback
transaction (a) between the Company and a wholly-owned Domestic Subsidiary or
between wholly-owned Domestic Subsidiaries or (b) involving the taking back of a
lease for a period of less than three years.
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
7
(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. 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 any 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 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
8
Date); or (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.
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
transfer or lease its assets substantially as an entirety to any Person and may
not permit any Person to merge into or consolidate with the Company or transfer
or lease its assets substantially as an entirety to the Company, unless (i) any
successor or purchaser is a corporation, partnership, or trust organized under
the laws of the United States of America, any State or the District of Columbia,
and any such successor or purchaser 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 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 principal of 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, (ii) such
deposit will not cause the Trustee to have any conflicting interest with respect
to other securities of the Company and (iii) 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
9
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 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 Lael F. Johnson, 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 August 31, 1993, Mr. Johnson beneficially owned
122,645 shares of common stock of the Company and held options to acquire
200,801 shares of such common stock. (These
10
amounts include 26,827 shares held by his spouse, of which Mr. Johnson disclaims
beneficial ownership, and 20,679 shares held for the benefit of Mr. Johnson in
the Abbott Laboratories Stock Retirement Trust pursuant to the Abbott
Laboratories Stock Retirement Plan). The opinions of Mr. Johnson, 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. Johnson, 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, 1992, incorporated by
reference in this Registration Statement, have been audited by Arthur Andersen &
Co., 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 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-3
Legal Opinions..................................... S-3
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..................................... 10
Experts............................................ 11
$150,000,000
ABBOTT LABORATORIES
6.80% NOTES DUE MAY 15, 2005
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
LAZARD FRERES & CO.
LEHMAN BROTHERS
SALOMON BROTHERS INC
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