AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 22, 2000
REGISTRATION NO. 333-46056
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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USA EDUCATION, INC.
(Formerly known as SLM Holding Corporation)
(Exact name of registrant as specified in its charter)
DELAWARE 52-2013874
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
11600 SALLIE MAE DRIVE
RESTON, VA 20193
(703) 810-3000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
MARIANNE M. KELER, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
USA EDUCATION, INC.
11600 SALLIE MAE DRIVE
RESTON, VA 20193
(703) 810-3000
(Address, including zip code, and telephone number, including area code, of
agent for service)
COPIES TO:
DIANA DE BRITO, ESQ.
CADWALADER, WICKERSHAM & TAFT
1201 F STREET, N.W.
WASHINGTON D.C. 20004
(202) 862-2400
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME
TO TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: / / __________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / / __________
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. /X/ __________
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CALCULATION OF REGISTRATION FEE(1)
TITLE OF EACH CLASS OF SECURITIES PROPOSED MAXIMUM AMOUNT OF
PROPOSED TO BE REGISTERED(2) OFFERING PRICE REGISTRATION FEE
Debt Securities (3), Common Stock, $0.20 par value per share
(4), Preferred Stock, no par value, and Warrants.......... $1,435,000,000(5)(6)(7)(8) $384,930(1)
(1) Pursuant to Rule 429 under the Securities Act of 1933, of the $600 million
of securities previously registered on Form S-3 (File No. 333-83941),
$435,000,000 of such securities are being carried forward to this
registration statement. The registrant previously paid the Commission a
filing fee (at the rate of $278 per $1,000,000 of securities registered) in
the amount of $166,800 in connection with the filing of such Form S-3 of
which $120,930 is attributable to the $435,000,000 of securities being
carried forward.
(2) Any securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
(3) The Debt Securities to be offered hereunder will consist of one or more
series of senior debt securities or subordinated debt securities or any
combination thereof, as more fully described herein.
(4) Common Stock is registered primarily for the purpose of allowing flexibility
to make sales of Common Stock in connection with the settlement of privately
negotiated equity forward contracts. Common Stock may also be issued upon
conversion, exercise or exchange of any Debt Securities, Preferred Stock or
Warrants.
(5) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o).
(6) No separate consideration will be received for Debt Securities, Common Stock
or Preferred Stock that are issued upon the conversion of Debt Securities or
Preferred Stock.
(7) In U.S. Dollars or the equivalent thereof in one or more foreign currencies
or composite currencies.
(8) Also includes such additional principal amount as may be necessary such
that, if Debt Securities are issued with an original issue discount, the
aggregate initial offering price of all Debt Securities will equal
$1,435,000,000 less the dollar amount of other securities previously issued.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
Pursuant to Rule 429 under the Securities Act of 1933, the prospectus that
is a part of this registration statement relates to the securities to be
registered hereby as well as the securities that were originally registered but
not issued under the registrant's Registration Statement on Form S-3
(File No. 333-83941) and that are being carried forward to this registration
statement.
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INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. WE MAY NOT SELL THESE SECURITIES UNTIL THE
REGISTRATION STATEMENT IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL AND
IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE IN WHICH AN
OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION
PROSPECTUS SEPTEMBER 22, 2000
USA EDUCATION, INC.
(FORMERLY KNOWN AS SLM HOLDING CORPORATION)
$1,435,000,000
DEBT SECURITIES
PREFERRED STOCK
WARRANTS
- - This prospectus provides you with a general description of the securities we
may offer. We will provide specific terms of these securities in supplements
to this prospectus. You should read this prospectus and the applicable
supplement carefully before you invest.
- - We are registering shares of our common stock primarily to preserve our
flexibility to deliver or sell shares of our common stock in connection with
the settlement of privately negotiated equity forward purchase contracts. We
also may issue common stock upon conversion, exercise or exchange of any debt
securities, preferred stock or warrants.
- - We are required to include the following legend:
OBLIGATIONS OF USA EDUCATION, INC. AND ANY SUBSIDIARY OF USA
EDUCATION, INC. ARE NOT GUARANTEED BY THE FULL FAITH AND CREDIT OF
THE UNITED STATES OF AMERICA, AND NEITHER USA EDUCATION, INC. NOR
ANY SUBSIDIARY OF USA EDUCATION, INC. IS A GOVERNMENT-SPONSORED
ENTERPRISE (OTHER THAN STUDENT LOAN MARKETING ASSOCIATION) OR AN
INSTRUMENTALITY OF THE UNITED STATES OF AMERICA.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This prospectus is dated September , 2000
TABLE OF CONTENTS
PAGE
--------
About this Prospectus....................................... 2
Where You Can Find More Information......................... 2
Forward-Looking Statements.................................. 3
USA Education, Inc.......................................... 4
Use of Proceeds............................................. 4
Ratio of Earnings to Fixed Charges and Preferred Stock
Dividends................................................. 4
Securities We May Offer..................................... 5
Additional Information...................................... 5
Description of Debt Securities.............................. 5
Description of Capital Stock................................ 13
Description of Warrants..................................... 14
Plan of Distribution........................................ 16
Legal Matters............................................... 17
Experts..................................................... 17
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we filed with the SEC
using a "shelf" registration process. Under this shelf process, we may sell debt
securities, preferred stock and warrants in one or more offerings up to a total
dollar amount of $435,000,000. We may sell these securities either separately or
in units. We may also issue common stock upon conversion, exchange or exercise
of any of the securities mentioned above, and we may sell or deliver our common
stock in connection with the settlement of privately negotiated equity forward
or equity option transactions we have entered into or may enter into from time
to time.
This prospectus provides you with a general description of the securities we
may offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read this prospectus and the applicable prospectus
supplement together with the additional information described under the heading
"Where You Can Find More Information."
The registration statement that contains this prospectus, including the
exhibits to the registration statement, contains additional information about us
and the securities we may offer under this prospectus. You can read that
registration statement at the SEC's web site or at the SEC's offices mentioned
under the heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file periodic reports, proxy statements and other information with the
SEC. You may inspect and copy these reports and other information at the SEC's
public reference facilities in Washington, D.C. (located at 450 Fifth Street,
N.W., Washington, D.C. 20549), Chicago (located at Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661) and New York
(located at Seven World Trade Center, 13th Floor, New York, New York 10048). You
can also obtain copies of these materials from the SEC's public reference
section (located at 450 Fifth Street, N.W., Washington, D.C. 20549) at
prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information
about the public reference rooms. The SEC also maintains a site on the World
Wide Web at http:// www.sec.gov. This site contains reports, proxy and
information statements and other information about registrants that file
electronically with the SEC. You can also inspect reports and other information
we file at the office of the New York Stock Exchange, Inc. (located at 20 Broad
Street, New York, New York 10005), or at our web site at
http://www.salliemae.com.
We have filed a registration statement and related exhibits with the SEC
under the Securities Act of 1933. This registration statement contains
additional information about us and our securities. You can inspect the
registration statement and exhibits without charge at the SEC's office in
Washington, D.C. (located at 450 Fifth Street, N.W.), and you may obtain copies
from the SEC at prescribed rates.
The SEC permits us to "incorporate by reference" the information and reports
we file with it. This means that we can disclose important information to you by
referring to another document. The information that we incorporate by reference
is considered to be part of this prospectus, and later information that we file
with the SEC automatically updates and supersedes this information.
Specifically, we incorporate by reference:
- our annual report on Form 10-K for the fiscal year ended December 31,
1999, which we filed on March 29, 2000 (File Number 1-13251), including
Amendment No. 1 as filed on Form 10-K/A on June 14, 2000;
- our quarterly report on Form 10-Q for the quarterly period ended
March 31, 2000, which we filed on May 15, 2000 (File Number 1-13251);
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- our quarterly report on Form 10-Q for the quarterly period ended June 30,
2000, which we filed on August 14, 2000 (File Number 1-13251);
- our current reports on Form 8-K, which we filed on January 6, 2000,
June 19, 2000 and June 22, 2000 (File No. 1-13251);
- the description of our common stock in our Form 8-A, which we filed on
August 7, 1997 and amended on July 27, 1999 (File Number 1-13251), and any
amendments or reports filed for the purpose of updating this description;
- the description of our currently outstanding preferred stock in our
form 8-A, which we filed on November 10, 1999 (File Number 1-13251); and
- all documents we file with the SEC under Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934 after the date of this
prospectus and before we sell all of the securities offered by this
prospectus.
You may request a copy of these filings at no cost by writing or telephoning
us at the following address:
Corporate Secretary
USA Education, Inc.
11600 Sallie Mae Drive
Reston, VA 20193
(703) 810-3000
You should rely only on the information incorporated by reference or
provided in this prospectus and any supplement. We have not authorized anyone
else to provide you with different information. You should not assume that the
information in this prospectus or any supplement is accurate as of any date
other than the date on the front of these documents.
FORWARD-LOOKING STATEMENTS
This prospectus and the information incorporated by reference in this
prospectus include forward-looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act . These
forward-looking statements are based on our management's beliefs and assumptions
and on information currently available to our management. Forward-looking
statements include information concerning our possible or assumed future results
of operations and statements preceded by, followed by or that include the words
"believes," "expects," "anticipates," "intends," "plans," "estimates" or similar
expressions.
Forward-looking statements involve risks, uncertainties and assumptions.
Actual results may differ materially from those expressed in these
forward-looking statements. You should not put undue reliance on any
forward-looking statements. We do not have any intention or obligation to update
forward-looking statements after we distribute this prospectus.
You should understand that the following important factors could cause our
results to differ materially from those expressed in forward-looking statements:
- changes in the terms of student loans and the educational credit
marketplace arising from the implementation of applicable laws and
regulations and from changes in these laws and regulations that may reduce
the volume, average term, costs and yields on education loans under the
Federal Family Education Loan Program or result in loans being originated
or refinanced under non-FFELP programs or affect the terms upon which
banks and others agree to sell FFELP loans to us;
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- changes in the demand for educational financing or in financing
preferences of educational institutions, students and their families,
which could reduce demand for our products and services or increase our
costs; and
- changes in the general interest rate environment and in the securitization
markets for education loans, which could increase the costs or limit the
availability of financings necessary to originate, purchase or carry
education loans.
USA EDUCATION, INC.
We were formed in 1997 in connection with the reorganization of the Student
Loan Marketing Association under the Student Loan Marketing Association
Reorganization Act of 1996. Our principal business is financing and servicing
education loans. We presently conduct a majority of this business through two
wholly owned subsidiaries: Student Loan Marketing Association, a
government-sponsored enterprise chartered by an act of Congress, and Sallie Mae
Servicing Corporation, a Delaware corporation. We are the largest
non-governmental source of financing and servicing for education loans in the
United States.
On July 31, 2000, under a purchase agreement with USA Group, Inc., USA Group
Loan Services, Inc. and USA Group Guarantee Services, Inc., we purchased
substantially all of the business of USA Group, including its guarantee
servicing, student loan servicing and secondary market operations. As part of
the transaction, we changed our name from SLM Holding Corporation to USA
Education, Inc.
Our principal executive offices are located at 11600 Sallie Mae Drive,
Reston, VA 20193, and our telephone number is (703) 810-3000.
USE OF PROCEEDS
Unless the applicable prospectus supplement states otherwise, we will use
the net proceeds from the sale of the offered securities for general corporate
purposes.
RATIO OF EARNINGS TO FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following table sets forth our ratio of earnings to fixed charges and
preferred stock dividends for the five years ended December 31, 1999 and the six
months ended June 30, 1999 and June 30, 2000.
SIX
MONTHS
ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
---------------------------------------------------- -------------------
1995 1996 1997 1998 1999 1999 2000
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Ratio of Earnings to Fixed Charges and Preferred
Stock Dividends (1)................................ 1.16 1.22 1.29 1.37 1.34 1.36 1.30
Ratio of Earnings to Fixed Charges (1)............... 1.16 1.23 1.29 1.38 1.34 1.36 1.30
- ------------------------
(1) For purposes of computing these ratios, earnings represent income before
income tax expense plus fixed charges less preferred stock dividends. Fixed
charges represent interest expense plus the estimated interest component of
net rental expense.
SECURITIES WE MAY OFFER
TYPES OF SECURITIES
The types of securities that we may offer and sell from time to time by this
prospectus are:
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- debt securities, which we may issue in one or more series;
- preferred stock, which we may issue in one or more series;
- common stock;
- warrants entitling the holders to purchase common stock, preferred stock
or debt securities;
- warrants or other rights relating to foreign currency exchange rates; or
- warrants for the purchase or sale of debt securities of, or guaranteed by,
the United States government or its agencies, units of a stock index or a
stock basket or a commodity or a unit of a commodity index.
The aggregate initial offering price of all securities we sell will not
exceed $435,000,000. We will determine when we sell securities, the amounts of
securities we will sell and the prices and other terms on which we will sell
them. We may sell securities to or through underwriters, through agents or
directly to purchasers.
ADDITIONAL INFORMATION
We will describe in a prospectus supplement, which we will deliver with this
prospectus, the terms of particular securities that we may offer in the future.
Each prospectus supplement will include the following information:
- the type and amount of securities that we propose to sell;
- the initial public offering price of the securities;
- the names of the underwriters or agents, if any, through or to which we
will sell the securities;
- the compensation, if any, of those underwriters or agents;
- information about securities exchanges or automated quotation systems on
which the securities will be listed or traded;
- any material United States federal income tax considerations that apply to
the securities; and
- any other material information about the offering and sale of the
securities.
DESCRIPTION OF DEBT SECURITIES
This section discusses debt securities we may offer under this prospectus.
We may issue debt securities under one or more indentures, entered into
between us and The Chase Manhattan Bank, New York, New York, as trustee, or
another trustee we choose that is qualified to act as trustee under the Trust
Indenture Act of 1939. The indentures will be governed by the Trust Indenture
Act.
The following is a summary of the indentures. It does not restate the
indentures entirely. We urge you to read the indentures. The indentures will be
filed or incorporated by reference as exhibits to the registration statement of
which this prospectus is a part, and you may inspect them at the office of the
trustee, or as described under the heading "Where You Can Find More
Information." References below to an "indenture" are references to the
applicable indenture under which we issue a particular series of debt
securities.
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TERMS OF THE DEBT SECURITIES
Our debt securities will be unsecured obligations of USA Education, Inc. We
may issue them in one or more series. Authorizing resolutions or a supplemental
indenture will set forth the specific terms of each series of debt securities.
We will provide a prospectus supplement for each series of debt securities that
will describe:
- the title of the debt securities and their CUSIP numbers;
- any limit upon the aggregate principal amount of the series of debt
securities;
- the date or dates on which principal and premium, if any, of the debt
securities will be payable;
- if the debt securities will bear interest:
- the interest rate on the debt securities or the method by which the
interest rate may be determined;
- the date from which interest will accrue;
- the record and interest payment dates for the debt securities; and
- any circumstances under which we may defer interest payments;
- the place or places where:
- we can make payments on the debt securities;
- the debt securities can be surrendered for registration of transfer or
exchange; and
- notices and demands can be given to us relating to the debt securities
and under the applicable indenture, and where notices to holders
pursuant to the applicable indenture will be published;
- any optional redemption provisions that would permit us or the holders of
debt securities to elect to redeem the debt securities before their final
maturity;
- any sinking fund provisions that would obligate us to redeem the debt
securities;
- whether any of the debt securities are to be issuable as registered
securities, bearer securities or both, whether debt securities are to be
issuable with or without coupons or both and, if issuable as bearer
securities, the date as of which the bearer securities will be dated (if
other than the date of original issuance of the first debt security of
that series of like tenor and term to be issued);
- whether all or part of the debt securities will be issued in whole or in
part as temporary or permanent global securities and, if so, the
depositary for those global securities and a description of any book-entry
procedures relating to the global securities;
- if we issue temporary global securities, any special provisions dealing
with the payment of interest and any terms relating to the ability to
exchange interests in a temporary global security for interests in a
permanent global security or for definitive debt securities;
- the denominations in which the debt securities will be issued, if other
than $1,000 or an integral multiple of $1,000 in the case of registered
securities or $5,000 in the case of bearer securities;
- the portion of the principal amount of debt securities payable upon a
declaration of acceleration of maturity, if other than the full principal
amount;
- the currency or currencies in which the debt securities will be
denominated and payable and, if a composite currency, any related special
provisions;
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- any circumstances under which the debt securities may be paid in a
currency other than the currency in which the debt securities are
denominated and any related provisions;
- the manner in which principal, premium and interest on debt securities
will be determined if they are determined with reference to an index based
upon a currency or currencies other than that in which the debt securities
are denominated or payable;
- any events of default that will apply to the debt securities in addition
to those contained in the applicable indenture;
- any additions or changes to the covenants contained in the applicable
indenture and the ability, if any, of the holders to waive our compliance
with those additional or changed covenants;
- whether the provisions described below under the heading "--Defeasance"
apply to the debt securities;
- the identity of the security registrar and paying agent for the debt
securities if other than the applicable trustee and
- any other terms of the debt securities.
COVENANTS CONTAINED IN INDENTURES
In the indenture, we promise not to create or guarantee any debt for
borrowed money that is secured by a lien on the capital stock of our wholly
owned subsidiary, Student Loan Marketing Association, unless we also secure the
debt securities on an equal or priority basis with the other secured debt. Our
promise, however, is subject to an important exception: we may secure debt for
borrowed money with liens on that stock without securing the debt securities if
our board of directors determines that the liens do not materially detract from
or interfere with the then-present value or control of that stock.
Except as noted above, the indenture does not restrict our ability to put
liens on our interests in our subsidiaries other than Student Loan Marketing
Association, and it does not restrict our ability to sell or otherwise dispose
of our interests in any of our subsidiaries, including Student Loan Marketing
Association.
We are required to deliver to the trustee an annual statement as to our
fulfillment of all of our obligations under the indenture.
CONSOLIDATION, MERGER OR SALE
The indenture generally permits a consolidation or merger between us and
another entity. It also permits the sale or transfer by us of all or
substantially all of our property and assets. These transactions are permitted
if:
- the resulting or acquiring entity, if other than us, is organized and
existing under the laws of a domestic jurisdiction and assumes all of our
responsibilities and liabilities under the applicable indenture, including
the payment of all amounts due on the debt securities and performance of
the covenants in the indenture; and
- immediately after the transaction, and giving effect to the transaction,
no event of default under the indenture exists; and
- we deliver to the trustee an officers' certificate and an opinion of
counsel stating that the transactions comply with these conditions.
If we consolidate or merge with or into any other entity or sell or lease
all or substantially all of our assets according to the terms and conditions of
the indenture, the resulting or acquiring entity will
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be substituted for us in the indenture with the same effect as if it had been an
original party to the indenture. As a result, the successor entity may exercise
our rights and powers under the indenture, in our name and, except in the case
of a lease of all or substantially all of our properties, we will be released
from all our liabilities and obligations under the indenture and under the debt
securities.
EVENTS OF DEFAULT AND REMEDIES
An event of default with respect to any series of debt securities will be
defined in the indenture or applicable supplemental indenture as being:
- default for 30 days in payment of any installment of interest on any debt
security of that series beyond any applicable grace period;
- default in payment of the principal of or premium, if any, on any of the
debt securities of that series when due;
- default for 60 days after notice in the observance or performance of any
other covenants in the indenture or applicable supplemental indenture
relating to that series;
- our bankruptcy, insolvency or reorganization; and
- any other event of default provided with respect to debt securities of any
series.
The indenture will provide that the trustee may withhold notice to the
holders of any series of debt securities of any default, except a default in
payment of principal, premium, if any, or interest, if any, with respect to a
series of debt securities, if the trustee considers it in the interest of the
holders of that series of debt securities to do so.
The indenture will provide that if any event of default (other than our
bankruptcy, insolvency or reorganization) has occurred and is continuing with
respect to any series of debt securities, the trustee or the holders of not less
than 25% in principal amount of all series of debt securities then outstanding
affected by any such event of default, acting together as a single class, may
declare the principal amount of and all accrued but unpaid interest on all the
debt securities of those series to be due and payable immediately. If our
bankruptcy, insolvency or reorganization causes an event of default, the
principal amount of and all accrued but unpaid interest on all series of debt
securities that are affected by the event of default will be immediately due and
payable without any declaration or action by the trustee or the holders. The
holders of a majority in principal amount of the debt securities of all series
then outstanding that are affected by an event of default, acting as a single
class, by written notice to the trustee and to us, may waive any past default,
other than any event of default in payment of principal or interest or in
respect of an indenture provision that may be amended only with the consent of
the holder of each affected debt security. Holders of a majority in principal
amount of debt securities of any series affected by an event of default that
were entitled to declare the event of default may rescind and annul the
declaration and its consequences if the recission will not conflict with any
judgment or decree for payment of money due that has been obtained by the
trustee.
The holders of a majority of the outstanding principal amount of the debt
securities of any series will have the right to direct the time, method and
place of conducting any proceedings for any remedy available to the trustee with
respect to that series, subject to limitations specified in the indenture.
DEFEASANCE
DEFEASANCE AND DISCHARGE. At the time that we establish a series of debt
securities under the indenture, we can provide that the debt securities of that
series are subject to the defeasance and discharge provisions of that indenture.
If we so provide, we will be discharged from our obligations on the debt
securities of that series if:
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- we deposit with the trustee, in trust, sufficient money or, if the debt
securities of that series are denominated and payable in U.S. dollars
only, eligible instruments, to pay the principal, any interest, any
premium and any other sums due on the debt securities of that series, such
as sinking fund payments, on the dates the payments are due under the
indenture and the terms of the debt securities;
- we deliver to the trustee an opinion of counsel that states that the
holders of the debt securities of that series will not recognize income,
gain or loss for federal income tax purposes as a result of the deposit
and will be subject to federal income tax on the same amounts and in the
same manner and at the same times as would have been the case if no
deposit had been made; and
- if the debt securities of that series are listed on any domestic or
foreign securities exchange, the debt securities will not be delisted as a
result of the deposit.
When we use the term "eligible instruments" in this section, we mean
monetary assets, money market instruments and securities that are payable in
dollars only and are essentially risk free as to collection of principal and
interest, including:
- direct obligations of the United States backed by the full faith and
credit of the United States; or
- any obligation of a person controlled or supervised by and acting as an
agency or instrumentality of the United States if the timely payment of
the obligation is unconditionally guaranteed as a full faith and credit
obligation by the United States.
In the event that we deposit money and/or eligible instruments in trust and
discharge our obligations under a series of debt securities as described above,
then:
- the indenture will no longer apply to the debt securities of that series;
but certain obligations to compensate, reimburse and indemnify the
trustee, to register the transfer and exchange of debt securities, to
replace lost, stolen or mutilated debt securities, to maintain paying
agencies and the trust funds and to pay additional amounts, if any,
required as a result of U.S. withholding taxes imposed on payments to
non-U.S. persons will continue to apply; and
- holders of debt securities of that series can only look to the trust fund
for payment of principal, any premium and any interest on the debt
securities of that series.
DEFEASANCE OF COVENANTS AND EVENTS OF DEFAULT. At the time that we
establish a series of debt securities under the applicable indenture, we can
provide that the debt securities of that series are subject to the covenant
defeasance provisions of that indenture. If we so provide and we make the
deposit and deliver the opinion of counsel described above in this section under
the heading "--Defeasance and Discharge" we will not have to comply with any
covenant we designate when we establish the series of debt securities.
In the event of a covenant defeasance, our obligations under the applicable
indenture and the debt securities, other than with respect to the covenants
specifically referred to above, will remain in effect.
If we exercise our option not to comply with any covenant and the debt
securities of the series become immediately due and payable because an event of
default has occurred, other than as a result of an event of default related to a
covenant that is subject to defeasance, the amount of money and/or eligible
instruments on deposit with the applicable trustee will be sufficient to pay the
principal, any interest, any premium and any other sums, due on the debt
securities of that series, such as sinking fund payments, on the date the
payments are due under the applicable indenture and the terms of the debt
securities, but may not be sufficient to pay amounts due at the time of
acceleration. We would remain liable, however, for the balance of the payments.
9
REGISTRATION AND TRANSFER
Unless we indicate otherwise in the applicable prospectus supplement, we
will issue debt securities only as registered securities without coupons. Debt
securities that we issue as bearer securities will have interest coupons
attached, unless we indicate otherwise in the applicable prospectus supplement.
With respect to registered securities, we will keep or cause to be kept a
register in which we will provide for the registration of registered securities
and the registration of transfers of registered securities. We will appoint a
"security registrar," and we may appoint any "co-security registrar," to keep
the security register.
Upon surrender for registration of transfer of any registered security of
any series at our office or agency maintained for that purpose in a place of
payment for that series, we will execute one or more new registered securities
of that series in any authorized denominations, with the same aggregate
principal amount and terms. At the option of the holder, a holder may exchange
registered securities of any series for other registered securities of that
series, or bearer securities (along with all necessary related coupons) of any
series for registered securities of the same series. Registered securities will
not be exchangeable for bearer securities in any event.
We will agree in the indenture that we will maintain in each place of
payment for any series of debt securities an office or agency where:
- any debt securities of each series may be presented or surrendered for
payment;
- any registered securities of that series may be surrendered for
registration of transfer;
- debt securities of that series may be surrendered for exchange or
conversion; and
- notices and demands to or upon us in respect of the debt securities of
that series and the indenture may be served.
We will not charge holders for any registration of transfer or exchange of
debt securities. We may require holders to pay for any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange, other than exchanges expressly provided in the indenture to be made
at our own expense or without expense or without charge to the holders.
GLOBAL SECURITIES
We may issue debt securities of a series, in whole or in part, in the form
of one or more global securities, registered in the name of Cede & Co., the
nominee of The Depository Trust Company, New York, New York, unless the
prospectus supplement describes another depositary or states that no global
securities will be issued. Unless and until it is exchanged in whole or in part
for the individual debt securities it represents, a global security may not be
transferred except as a whole by:
- DTC to its nominee;
- DTC's nominee to the depositary or another nominee of the depositary; or
- DTC or any nominee to a successor depositary or any nominee of that
successor.
Upon the issuance of a global security, DTC will credit, on its book-entry
registration and transfer system, the principal amount of the securities
represented by the global security to accounts of institutions that have
accounts with DTC. Institutions that have accounts with DTC are referred to as
"participants." The accounts to be credited will be designated by the agents, or
by us if we sell the securities directly. Owners of beneficial interests in a
global security that are not participants or persons that may hold through
participants but desire to purchase, sell or otherwise transfer ownership of the
securities by book-entry on the records of DTC may do so only through
participants and persons that may hold through participants. Because DTC can
only act on behalf of participants and persons that
10
may hold through participants, the ability of an owner of a beneficial interest
in a global security to pledge securities to persons or entities that do not
participate in the book-entry and transfer system of DTC, or otherwise take
actions in respect of the securities, may be limited. In addition, the laws of
some states require that some purchasers of securities take physical delivery of
such securities in definitive form. These limits and laws may impair a
purchaser's ability to transfer beneficial interests in a global security.
So long as DTC, or its nominee, is the registered owner of a global
security, DTC or its nominee will be considered the sole owner or holder of the
securities represented by the global security for all purposes under the
indenture. Generally, owners of beneficial interest in a global security will
not be entitled to have securities represented by the 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
of the securities under the applicable indenture.
Principal and interest payments on securities registered in the name of DTC
or its nominee will be made to DTC or its nominee as the registered owner of a
global security. Neither we, the trustee, any paying agent nor the security
registrar will have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in a global security or for maintaining, supervising or reviewing any
records relating to the beneficial ownership interests.
We expect that DTC, upon receipt of any payment of principal or interest,
will credit immediately participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of a global security as shown on the records of DTC. We also expect that
payments by participants to owners of beneficial interests in a global security
held through the participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers and registered in "street name," and will be the responsibility of
such participants. Owners of beneficial interests in a global security that hold
through DTC under a book-entry format (as opposed to holding certificates
directly) may experience some delay in the receipt of interest payments since
DTC will forward payments to its participants, which in turn will forward them
to persons that hold through participants.
If DTC is at any time unwilling or unable to continue as depositary and a
successor depositary is not appointed by us or DTC within ninety days, we will
issue securities in definitive registered form in exchange for a global
security. In addition, either we or DTC may at any time, in our sole discretion,
determine not to have the securities represented by a global security and, in
that event, we will issue securities in definitive registered form in exchange
for the global security. In either instance, an owner of a beneficial interest
in a global security will be entitled to have securities equal in principal
amount to the beneficial interest registered in its name and will be entitled to
physical delivery of the securities in definitive form.
DTC has advised us as follows: 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 Exchange Act. DTC was created to hold
securities of its participants and to facilitate the clearance and settlement of
securities transactions among its participants in those 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 whom own DTC.
Access to DTC's book-entry system is also available to others, including banks,
brokers, dealers and trust companies, that clear through or maintain a custodian
relationship with a participant, whether directly or indirectly.
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PAYMENT AND PAYING AGENTS
Unless we indicate otherwise in a prospectus supplement:
- we will maintain an office or agency in each place of payment for any
series of debt securities where debt securities of that series may be
presented or surrendered for payment; we may also from time to time
designate one or more other offices or agencies where debt securities of
one or more series may be presented or surrendered for payment and may
appoint one or more paying agents for the payment of debt securities, in
one or more other cities, and may from time to time rescind these
designations and appointments;
- at our option, we may pay any interest by check mailed to the address of
the person entitled to payment as that address appears in the applicable
security register kept by us or by wire transfer; and
- we will pay any installment of interest on registered securities to the
person in whose name the debt security is registered at the close of
business on the regular record date for that payment.
The holder of any coupon relating to a bearer security will be entitled to
receive the interest payable on that coupon upon presentation and surrender of
the coupon on or after the interest payment date of the coupon. We will not make
payment with respect to any bearer security at any of our offices or agencies in
the United States, by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States.
MODIFICATION AND AMENDMENT
Some of our rights and obligations and some of the rights of holders of the
debt securities may be modified or amended with the consent of the holders of at
least a majority of the aggregate principal amount of the outstanding debt
securities of all series of debt securities affected by the modification or
amendment, acting as one class. The following modifications and amendments,
however, will not be effective against any holder without its consent:
- a change in the stated maturity date of any payment of principal or
interest;
- a reduction in payments due on the debt securities;
- a change in the place of payment or currency in which any payment on the
debt securities is payable;
- a limitation of a holder's right to sue us for the enforcement of payments
due on the debt securities;
- a change in the ranking or priority of any debt securities;
- a reduction in the percentage of outstanding debt securities required to
consent to a modification or amendment of the applicable indenture or
required to consent to a waiver of compliance with certain provisions of
the applicable indenture or past defaults under the applicable indenture;
- a reduction in the requirements contained in the applicable indenture for
quorum or voting;
- a limitation of a holder's right, if any, to repayment of debt securities
at the holder's option; and
- a modification of any of the foregoing requirements contained in the
applicable indenture.
CONCERNING THE TRUSTEE
The Chase Manhattan Bank, the trustee, provides and may continue to provide
various services to us in the ordinary course of its business. The indenture
will contain limitations on the rights of the
12
trustee, should it become our creditor, to obtain payment of claims in specified
cases or to realize on property received in respect of any claim as security or
otherwise. The indenture will permit the trustee to engage in other
transactions; but if it acquires any conflicting interest, it must eliminate the
conflict or resign.
The indenture will provide that in case an event of default occurs and is
not cured, the trustee will be required, in the exercise of its power, to use
the degree of care of a prudent person in similar circumstances in the conduct
of its own affairs. The trustee may refuse to perform any duty or exercise any
right or power under the indenture, unless it receives indemnity satisfactory to
it against any loss, liability or expense.
GOVERNING LAW
The laws of the State of New York will govern the indenture and the debt
securities.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock is 250,000,000 shares of common stock, $.20 par
value, and 20,000,000 shares of preferred stock, $.20 par value. As of June 30,
2000, 155,203,848 shares of our common stock and 3,300,000 shares of our
preferred stock were outstanding.
COMMON STOCK
We are registering shares of our common stock primarily to preserve our
flexibility to deliver or sell shares of our common stock in connection with the
settlement of privately negotiated equity forward purchase contracts. We may
also issue common stock upon conversion, exercise or exchange of any debt
securities, preferred stock or warrants.
Our common stock is described in our registration statement on Form 8-A,
which we filed with the SEC on August 7, 1997, as amended by our Form 8-A/A,
which we filed with the SEC on July 27, 1999. These documents are incorporated
by reference into this prospectus.
We will distribute a prospectus supplement with regard to each issue of
common stock. Each prospectus supplement will describe the specific terms of the
common stock offered through that prospectus supplement and any general terms
outlined in our Form 8-A, as amended, that will not apply to that common stock.
PREFERRED STOCK
We may issue preferred stock in one or more series with any rights and
preferences that may be authorized by our board of directors. Our currently
outstanding preferred stock is described in our registration statement on
Form 8-A, which we filed with the SEC on November 10, 1999 and which is
incorporated by reference into this prospectus.
We will distribute a prospectus supplement with regard to each particular
series of preferred stock. Each prospectus supplement will describe, as to the
series of preferred stock to which it relates:
- the title of the series of preferred stock;
- any limit upon the number of shares of the series of preferred stock that
may be issued;
- the preference, if any, to which holders of the series of preferred stock
will be entitled upon our liquidation;
- the date or dates, if any, on which we will be required or permitted to
redeem the preferred stock;
13
- the terms, if any, on which we or holders of the preferred stock will have
the option to cause the preferred stock to be redeemed or purchased;
- the voting rights, if any, of the holders of the preferred stock;
- the dividends, if any, that will be payable with regard to the series of
preferred stock, which may be fixed dividends or participating dividends,
and may be cumulative or non-cumulative;
- the right, if any, of holders of the preferred stock to convert it into
another class of our stock or securities, including provisions intended to
prevent dilution of those conversion rights;
- any provisions by which we will be required or permitted to make payments
to a sinking fund to be used to redeem preferred stock, or a purchase fund
to be used to purchase preferred stock; and
- any other material terms of the preferred stock.
Any or all of these rights may be greater than the rights of the holders of
common stock.
Our board of directors, without shareholder approval, may issue preferred
stock with voting, conversion or other rights that could adversely affect the
voting power and other rights of the holders of our common stock. The terms of
the preferred stock that might be issued could conceivably prohibit us from:
- consummating a merger;
- reorganizing;
- selling substantially all of our assets;
- liquidating; or
- engaging in other extraordinary corporate transactions without shareholder
approval.
Preferred stock could therefore be issued with terms calculated to delay,
defer or prevent a change in our control or to make it more difficult to remove
our management. Our issuance of preferred stock may have the effect of
decreasing the market price of the common stock.
DESCRIPTION OF WARRANTS
We may issue:
- warrants for the purchase of debt securities, preferred stock, common
stock or units of two or more of these types of securities;
- currency warrants, which are warrants or other rights relating to foreign
currency exchange rates; or
- index warrants, which are warrants for the purchase or sale of debt
securities of, or guaranteed by, the United States government or its
agencies, units of a stock index or a stock basket or a commodity or a
unit of a commodity index.
Warrants may be issued independently or together with debt securities,
preferred stock or common stock, and may be attached to or separate from any
offered securities. Each series of warrants will be issued under a separate
warrant agreement to be entered into between us and a bank or trust company, as
warrant agent. The warrant agent will act solely as our agent in connection with
the warrants and will not assume any obligation or relationship of agency or
trust for or with any registered holders of warrants or beneficial owners of
warrants.
14
We will distribute a prospectus supplement with regard to each issue of
warrants. Each prospectus supplement will describe:
- in the case of warrants to purchase debt securities, the designation,
aggregate principal amount, currencies, denominations and terms of the
series of debt securities purchasable upon exercise of the warrants, and
the price at which you may purchase the debt securities upon exercise;
- in the case of warrants to purchase preferred stock, the designation,
number of shares, stated value and terms, such as liquidation, dividend,
conversion and voting rights, of the series of preferred stock purchasable
upon exercise of the warrants, and the price at which you may purchase
shares of preferred stock of that series upon exercise;
- in the case of warrants to purchase common stock, the number of shares of
common stock purchasable upon the exercise of the warrants and the price
at which you may purchase shares of common stock upon exercise;
- in the case of currency warrants, the designation, aggregate principal
amount, whether the currency warrants are put or call currency warrants or
both, the formula for determining any cash settlement value, exercise
procedures and conditions, the date on which your right to exercise the
currency warrants commences and the date on which your right expires, and
any other terms of the currency warrants;
- in the case of index warrants, the designation, aggregate principal
amount, the procedures and conditions relating to the exercise of the
index warrants, the date on which your right to exercise the index
warrants commences and the date on which your right expires, the national
securities exchange on which the index warrants will be listed, if any,
and any other material terms of the index warrants;
- in the case of warrants to purchase units of two or more securities, the
type, number and terms of the units purchasable upon exercise of the
warrants and the price at which you may purchase units upon exercise;
- the period during which you may exercise the warrants;
- any provision adjusting the securities that may be purchased on exercise
of the warrants, and the exercise price of the warrants, to prevent
dilution or otherwise;
- the place or places where warrants can be presented for exercise or for
registration of transfer or exchange; and
- any other material terms of the warrants.
Unless we provide otherwise in the applicable prospectus supplement,
warrants for the purchase of preferred stock and common stock will be offered
and exercisable for U.S. dollars only, and will be issued in registered form
only. The exercise price for warrants will be subject to adjustment as described
in the applicable prospectus supplement.
Prior to the exercise of any warrants to purchase debt securities, preferred
stock or common stock, holders of the warrants will not have any of the rights
of holders of the securities purchasable upon exercise, including:
- in the case of warrants for the purchase of debt securities, the right to
receive payments of principal of or any premium or interest on the debt
securities purchasable upon exercise, or to enforce covenants in the
applicable indenture; or
- in the case of warrants for the purchase of preferred stock or common
stock, the right to vote or to receive any payments of dividends on the
preferred stock or common stock purchasable upon exercise.
15
PLAN OF DISTRIBUTION
We may sell any of the securities being offered by this prospectus
separately or together:
- through agents;
- to or through underwriters;
- through dealers;
- through a block trade in which the broker or dealer engaged to handle the
block trade will attempt to sell the securities as agent, but may position
and resell a portion of the block as principal to facilitate the
transaction;
- in exchange for our outstanding indebtedness;
- directly to purchasers, through a specific bidding, auction or other
process; or
- through a combination of any of these methods of sale.
If the securities offered under this prospectus are issued in exchange for
our outstanding securities, the applicable prospectus supplement will describe
the terms of the exchange, and the identity and the terms of sale of the
securities offered under this prospectus by the selling security holders.
The distribution of securities may be effected from time to time in one or
more transactions at a fixed price or prices that may be changed, at market
prices prevailing at the time of sale or prices related to prevailing market
prices or at negotiated prices.
Agents designated by us from time to time may solicit offers to purchase the
securities. We will name any agent involved in the offer or sale of the
securities and set forth any commissions payable by us to an agent in the
prospectus supplement. Unless otherwise indicated in the prospectus supplement,
any agent will be acting on a best efforts basis for the period of its
appointment. Any agent may be deemed to be an "underwriter" of the securities as
that term is defined in the Securities Act.
If we utilize an underwriter or underwriters in the sale of securities, we
will execute an underwriting agreement with the underwriter or underwriters at
the time we reach an agreement for sale. We will set forth in the prospectus
supplement the names of the specific managing underwriter or underwriters, as
well as any other underwriters, and the terms of the transactions, including
compensation of the underwriters and dealers. This compensation may be in the
form of discounts, concessions or commissions. Underwriters and others
participating in any offering of securities may engage in transactions that
stabilize, maintain or otherwise affect the price of securities. We will
describe any of these activities in the prospectus supplement.
If a dealer is utilized in the sale of the securities, we or an underwriter
will sell securities to the dealer, as principal. The dealer may then resell the
securities to the public at varying prices to be determined by the dealer at the
time of resale. The prospectus supplement will set forth the name of the dealer
and the terms of the transactions.
We may directly solicit offers to purchase the securities, and we may sell
directly to institutional investors or others. These persons may be deemed to be
underwriters within the meaning of the Securities Act with respect to any resale
of the securities. The prospectus supplement will describe the terms of any
direct sales, including the terms of any bidding or auction process, if
utilized.
Agreements we enter into with agents, underwriters and dealers may entitle
them to indemnification by us against specified liabilities, including
liabilities under the Securities Act, or to contribution by us to payments they
may be required to make in respect of these liabilities. The prospectus
supplement will describe the terms and conditions of indemnification or
contribution. Some
16
of the agents, underwriters or dealers, or their affiliates, may be our
customers, or engage in transactions with or perform services for us and our
subsidiaries in the ordinary course of business.
No securities may be sold under this prospectus without delivery (in paper
format, in electronic format on the Internet, or both) of the applicable
prospectus supplement describing the method and terms of the offering.
LEGAL MATTERS
Marianne M. Keler, Esq., who is our Senior Vice President and General
Counsel, or another of our lawyers, will issue an opinion about the legality of
the securities offered by this prospectus. Ms. Keler owns shares of our common
stock and holds stock options and stock-based awards under our compensation and
management incentive plans. She may receive additional awards under these plans
in the future. Certain legal matters will be passed upon for any underwriters or
agents by Cadwalader, Wickersham & Taft, Washington, DC. Cadwalader, Wickersham
& Taft represents us in other legal matters.
EXPERTS
The audited financial statements and schedules included in our annual report
on Form 10-K for the fiscal year ended December 31, 1999 and incorporated by
reference in this prospectus and registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses payable by us in connection with
the offering of the securities being registered, other than discounts and
commissions.
Registration Fee............................................ $ 384,930
Printing Expenses........................................... $ 150,000*
Legal Fees and Expenses..................................... $ 150,000*
Accounting Fees and Expenses................................ $ 60,000*
Blue Sky Fees and Expenses.................................. $ 10,000*
Trustee, Transfer Agent and Registrar Fees and Expenses..... $ 30,000*
Rating Agency Fees and Expenses............................. $ 600,000*
Miscellaneous............................................... $ 4,070*
----------
Total....................................................... $1,389,000
==========
- ------------------------
* estimated
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Article VIII of USA Education, Inc.'s By-Laws provides for indemnification
of the officers and directors of USA Education, Inc. to the fullest extent
permitted by applicable law. Section 145 of the Delaware General Corporation Law
provides, in relevant part, that a corporation organized under the laws of
Delaware shall have the power, and in certain cases the obligation, to indemnify
any person who was or is a party or is threatened to be made a party to any suit
or proceeding because such person is or was a director, officer, employee or
agent of the corporation or is or was serving, at the request of the
corporation, as a director, officer, employee or agent of another corporation,
against all costs actually and reasonably incurred by him in connection with
such suit or proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation and,
with respect to any criminal proceeding, he had no reason to believe his conduct
was unlawful. Similar indemnity is permitted to be provided to such persons in
connection with an action or suit by or in right of the corporation, provided
such person acted in good faith and in a manner he believed to be in or not
opposed to the best interests of the corporation, and provided further (unless a
court of competent jurisdiction otherwise determines) that such person shall not
have been adjudged liable to the corporation.
The directors and officers of USA Education, Inc. and its subsidiaries are
covered by a policy of insurance under which they are insured, within limits and
subject to certain limitations, against certain expenses in connection with the
defense of actions, suits or proceedings, and certain liabilities that might be
imposed as a result of such actions, suits or proceedings in which they are
parties by reason of being or having been directors or officers.
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ITEM 16. EXHIBITS
The following exhibits are filed herewith or incorporated by reference:
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
- --------------------- ------------------------------------------------------------
***1.1 Standard Underwriting Provisions (Debt Securities)
1.2 Standard Underwriting Provisions (Preferred Stock)
(incorporated by reference to the registrant's current
report on Form 8-K filed November 12, 1999 (File
No. 1-13251))
***1.3 Standard Underwriting Provisions (Warrants)
*4.1 Form of Indenture
***4.2 Form of Warrant Agreement
4.3 Amended and Restated Certificate of Incorporation of USA
Education, Inc. (incorporated by reference to the
registrant's registration statement of Form S-1 (File No.
333-21217))
4.4 Bylaws of USA Education, Inc. (incorporated by reference to
the registrant's quarterly report on Form 10-Q for the
period ended June 30, 2000) (File No. 1-13251)
**5.1 Opinion of Marianne M. Keler, Esq.
*12.1 Statement of Computation of Ratio of Earnings to Fixed
Charges and Preferred Stock Dividends.
*23.1 Consent of Arthur Andersen LLP
*24.1 Power of Attorney
*25.1 Statement of Eligibility of Trustee on Form T-1
- ------------------------
* Previously filed.
** Filed herewith.
*** To be filed pursuant to an amendment or incorporated by reference.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in the post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities
II-2
offered herein, and the offering of such securities at that time shall be deemed
to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) For purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE offering
thereof.
(5) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
(6) That, for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(7) That, for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial BONA FIDE offering thereof.
(8) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, USA Education,
Inc. certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Reston, Virginia on September 22, 2000.
USA EDUCATION, INC.
/S/ EDWARD A. FOX*
-----------------------------------------
By: Edward A. Fox
Its: CHAIRMAN OF THE BOARD OF DIRECTORS
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ EDWARD A. FOX* Chairman of the Board of Directors
- ----------------------------------
Edward A. Fox September 22, 2000
/s/ ALBERT L. LORD* Chief Executive Officer (principal
- ---------------------------------- executive officer)
Albert L. Lord September 22, 2000
/s/ JOHN F. REMONDI* Senior Vice President and Treasurer
- ---------------------------------- (principal financial and
John F. Remondi accounting officer) September 22, 2000
Director
- ----------------------------------
Charles L. Daley
/s/ WILLIAM M. DIEFENDERFER* Director
- ----------------------------------
William M. Diefenderfer September 22, 2000
Director
- ----------------------------------
Thomas J. Fitzpatrick
Director
- ----------------------------------
Diane S. Gilleland
Director
- ----------------------------------
Earl A. Goode
/s/ ANN TORRE GRANT* Director
- ----------------------------------
Ann Torre Grant September 22, 2000
/s/ RONALD F. HUNT* Director
- ----------------------------------
Ronald F. Hunt September 22, 2000
/s/ BENJAMIN J. LAMBERT, III* Director
- ----------------------------------
Benjamin J. Lambert, III September 22, 2000
II-4
SIGNATURE TITLE DATE
--------- ----- ----
/s/ JAMES C. LINTZENICH* Director
- ----------------------------------
James C. Lintzenich September 22, 2000
/s/ BARRY A. MUNITZ* Director
- ----------------------------------
Barry A. Munitz September 22, 2000
/s/ A. ALEXANDER PORTER* Director
- ----------------------------------
A. Alexander Porter September 22, 2000
/s/ WOLFGANG SCHOELLKOPF* Director
- ----------------------------------
Wolfgang Schoellkopf September 22, 2000
/s/ STEVEN L. SHAPIRO* Director
- ----------------------------------
Steven L. Shapiro September 22, 2000
/s/ BARRY L. WILLIAMS* Director
- ----------------------------------
Barry L. Williams September 22, 2000
*By /s/ MARY F. EURE
-----------------------------
Mary F. Eure
Attorney-in-fact
II-5
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
- --------------------- ------------------------------------------------------------
***1.1 Standard Underwriting Provisions (Debt Securities)
1.2 Standard Underwriting Provisions (Preferred Stock)
(incorporated by reference to the registrant's current
report on Form 8-K filed November 12, 1999 (File
No. 1-13251))
***1.3 Standard Underwriting Provisions (Warrants)
*4.1 Form of Indenture
***4.2 Form of Warrant Agreement
4.3 Amended and Restated Certificate of Incorporation of USA
Education, Inc. (incorporated by reference to the
registrant's registration statement of Form S-1 (File
No. 333-21217))
4.4 Bylaws of USA Education, Inc. (incorporated by reference to
the registrant's quarterly report on Form 10-Q for the
period ended June 30, 2000 (File No. 1-13251)
**5.1 Opinion of Marianne M. Keler, Esq.
***12.1 Statement of Computation of Ratio of Earnings to Fixed
Charges and Preferred Stock Dividends.
*23.1 Consent of Arthur Andersen LLP
*24.1 Power of Attorney
*25.1 Statement of Eligibility of Trustee on Form T-1
- ------------------------
* Previously filed.
** Filed herewith.
*** To be filed pursuant to an amendment or incorporated by reference.
EXHIBIT 5.1
September 18, 2000
USA Education, Inc.
11600 Sallie Mae Drive
Reston, Virginia 20193
Ladies and Gentlemen:
I am Senior Vice President and General Counsel of USA Education,
Inc. (the "Corporation") and, as such, I have acted as counsel for the
Corporation in the preparation of a Registration Statement on Form S-3 (File
No. 333-46056) (the "Registration Statement") filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the
"Securities Act") in connection with the proposed offer and sale of the
following securities from time to time (the "Securities") of the Corporation
having an aggregate initial offering price of up to $1,435,000,000: (i) debt
securities (the "Debt Securities"), (ii) preferred stock, no par value (the
"Preferred Stock"), (iii) common stock, par value .20 per share (the "Common
Stock"), of the Corporation issuable upon conversion of Debt Securities or
Preferred Stock, or upon exercise of warrants or in connection with the
settlement of privately negotiated equity forward purchase contracts, and
(iv) warrants to purchase Debt Securities, Preferred Stock, or Common Stock;
warrants or other rights relating to foreign currency exchange rates; or
warrants for the purchase or sale of debt securities of, or guaranteed by,
the United States government or its agencies, units of a stock index or stock
basket or a commodity or a unit of a commodity index (collectively, the
"Warrants"). The Securities may be offered separately or as part of units
with other Securities, in separate series, in amounts, at prices, and on
terms to be set forth in the prospectus and one or more supplements to the
prospectus (collectively, the "Prospectus") constituting a part of the
Registration Statement, and in the Registration Statement.
The Debt Securities are to be issued under one or more indentures in
the form to be filed with the Securities and Exchange Commission, with
appropriate insertions (the "Indenture"), to be entered into by the Corporation
and a trustee or trustees to be named by the Corporation. Each series of
Preferred Stock is to be issued under the Certificate of Incorporation, as
amended, (the "Certificate of Incorporation") of the Corporation and a
certificate of designations (a "Certificate of Designations") to be approved by
the board of directors of the Corporation or a committee thereof and filed with
the Secretary of State of the State of Delaware (the "Delaware Secretary of
State") in accordance with section 151 of the General Corporation Law of the
State of Delaware. The Common Stock is to be issued under the Certificate of
Incorporation. The Warrants are to be issued under a warrant agreement in the
form to be filed with the Securities and Exchange Commission, with appropriate
insertions (the "Warrant Agreement"), to be entered into by the Corporation and
a warrant agent to be named by the Corporation.
Certain terms of the Securities to be issued by the Corporation from
time to time will be approved by the Board of Directors of the Corporation or a
committee thereof or certain authorized officers of the Corporation as part of
the corporate action taken and to be taken (the "Corporate Proceedings") in
connection with issuance of the Securities. I have examined or am otherwise
familiar with the Certificate of Incorporation, the By-Laws of the Corporation,
as amended, the Registration Statement, such of the Corporate Proceedings as
have occurred as of the date hereof, and such other documents, records, and
instruments as I have deemed necessary or appropriate of the purposes of this
opinion.
Based on the foregoing, I am of the opinion that (i) upon the execution
and delivery by the Corporation of the Indenture and the execution and delivery
of the Warrant Agreement, the completion of all required Corporate Proceedings,
and the execution, issuance, and delivery, and the authentication by a duly
appointed trustee, of the Debt Securities and the Warrants, respectively,
pursuant to such agreements, such Indenture, or Warrant Agreement, as the case
may be, any Debt Securities issuable thereunder will be legal, valid, and
binding obligations of the Corporation, and any Preferred Stock (assuming
completion of the actions referred to in clause (ii) below) or Common Stock
(assuming completion of the actions referred to in
clause (iii) below) issuable thereunder will be duly and validly authorized and
issued, fully paid, and nonassessable; (ii) upon the authorization, execution,
acknowledgment, delivery, and filing with, and recording by, the Delaware
Secretary of State of the applicable Certificate of Designations, the completion
of all required Corporate Proceedings and the execution, issuance and delivery
of the Preferred Stock pursuant to such Certificate of Designations, the
Preferred Stock will be duly and validly authorized and issued, fully paid, and
nonassessable; and (iii) upon the authorization of issuance of the Common Stock,
the completion of all required Corporate Proceedings, and the execution,
issuance, and delivery of the Common Stock, the Common Stock will be duly and
validly authorized and issued, fully paid, and nonassessable; except in each
case as enforcement of provisions of such instruments and agreements may be
limited by bankruptcy or other laws of general application affecting the
enforcement of creditors' rights and by general equity principles. The foregoing
opinions assume that (a) the consideration designated in the applicable
Corporate Proceedings for any Preferred Stock or Common Stock shall have been
received by the Corporation in accordance with applicable law; (b) the Indenture
and Warrant Agreement shall have been duly authorized, executed, and delivered
by all parties thereto other than the Corporation; (c) the Registration
Statement shall have become effective under the Securities Act and will continue
to be effective; (d) the Indenture shall have become duly qualified under the
Trust Indenture Act of 1939, as amended; and (e) that, at the time of the
authentication and delivery of the Securities, the Corporate Proceedings related
thereto will not have been modified or rescinded, there will not have occurred
any change in the law affecting the authorization, execution, delivery, validity
or enforceability of such Securities, none of the particular terms of such
Securities will violate any applicable law and neither the issuance and sale
thereof nor the compliance by the Corporation with the terms thereof will result
in a violation of any agreement or instrument then binding upon the Corporation
or any order of any court or governmental body having jurisdiction over the
Corporation.
I have also assumed (a) the accuracy and truthfulness of all public
records of the Corporation and of all certifications, documents and other
proceedings examined by me that have been produced by officials of the
Corporation acting within the scope of their official capacities, without
verifying the accuracy or truthfulness of such representations, and (b) the
genuineness of such signatures appearing upon such public records,
certifications, documents and proceedings. I express no opinion as to the laws
of any jurisdiction other than the laws of the District of Columbia, the General
Corporation Law of the State of Delaware, and the federal laws of the United
States of America. I express no opinion as to whether, or the extent to which,
the laws of any particular jurisdiction apply to the subject matter hereof,
including, without limitation, the enforceability of the governing law provision
contained in the Indenture and the Warrant Agreement (the "Agreements"). Because
the governing law provision of the Agreements may relate to the law of a
jurisdiction as to which I express no opinion, the opinion set forth in clause
(a) of the preceding paragraph are given as if the law of the District of
Columbia governs the Agreements.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to being named in the Prospectus included therein
under the caption "Legal Matters" with respect to the matters stated therein
without implying or admitting that I am an "expert" within the meaning of the
Securities Act, or other rules and regulations of the Securities and Exchange
Commission issued thereunder with respect to any part of the Registration
Statement, including this exhibit.
Very truly yours,
/s/ MARIANNE M. KELER
Marianne M. Keler
