As filed with the Securities and Exchange Commission on November 15,January 19, 1995.
Registration No. 33-6206533-64225
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
PRE-EFFECTIVE AMENDMENT NO. 21 TO
FORM S-3
Registration Statement
Under
The Securities Act of 1933
----------------------
NEWELL CO.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 36-3514169
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
Newell Center Dale L. Matschullat
29 East Stephenson Street 4000 Auburn Street
Freeport, Illinois 61032 Rockford, Illinois 61125
(815) 235-4171 (815) 969-6101
(Address, Including Zip Code, (Name, Address, Including Zip Code,
and Telephone Number, Including and Telephone Number, Including
Area Code, of Registrant's Area Code, of Agent for Service)
Principal Executive Offices)
With CopiesPlease send copies of all communications to:
Linda J. Wight Rex E. Schlaybaugh, Jr.Andrew A. Kling
Schiff Hardin & Waite
Dykema Gossett PLLC
7200 Sears Tower
1577 N. Woodward Avenue, Suite 300
Chicago, Illinois 60606
Bloomfield Hills, Michigan 48304
(312) 876-1000 (810) 540-0700
---------------------
Approximate date of commencement of the proposed sale of the
securities to the public:
From time to time after the effective date of this Registration
Statement.
If the only securities being registered on this formForm are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. /__/[_]
If any of the securities being registered on this formForm are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. /X/[_]
If the formthis Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for
the same offering. /__/ __________[_] ______________
If the formthis 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 delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. /__/
________________________[X]
-------------------------
The Registrantregistrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrantregistrant 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 of
1933 or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a), may
determine.
PROSPECTUS
NEWELL CO.
UP TO 131,561 SHARES$500,000,000
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK, $1.00 PAR VALUE $1.00 PER SHARE
(INCLUDINGAND RELATED PREFERRED STOCK PURCHASE RIGHTS)
The shares of Common Stock,RIGHTS
------------------------------
Newell Co., a Delaware corporation (the "Company"), may
offer from time to time, together or separately, its (i) unsecured
debt securities (the "Debt Securities"); (ii) preferred stock (the
"Preferred Stock"); and (iii) common stock, par value $1.00 per share
(the "Common Stock"), togetherand related preferred stock purchase rights (the
"Rights"). The Debt Securities, Preferred Stock, Common Stock and
Rights are collectively referred to as the "Securities."
The Securities offered pursuant to this Prospectus may be
issued in one or more series or issuances at an aggregate initial
offering price not to exceed $500,000,000 (or its equivalent in
foreign currency or current units) in amounts, at prices and on terms
to be determined at or prior to the time of sale and set forth in one
or more supplements to this Prospectus (each, a "Prospectus
Supplement").
Certain specific terms of the particular Securities in
respect of which this Prospectus is being delivered will be set forth
in the accompanying Prospectus Supplement, including, where
applicable, the initial public offering price of the Securities, the
net proceeds thereof to the Company, any listing of such Securities on
a securities exchange and any other special terms. The Prospectus
Supplement will set forth with regard to the Securities being offered,
without limitation, the following: (i) in the case of the Debt
Securities, the specific designation, priority of payment, aggregate
principal amount, authorized denominations, maturity, any interest
rate (which may be fixed or variable) or method of calculation of
interest and date or dates of payment of any interest, any premium,
the place or places where principal of, premium, if any, and any
interest on such Debt Securities will be payable, any terms of
redemption at the option of the Company or the holder, any terms for
sinking fund payments, the currency or currencies, composite currency,
currency unit or currency units (collectively, the "Currency") of
denomination and payment, any terms for conversion or exchange and any
other terms in connection with the offering and sale of Debt
Securities in respect of which this Prospectus is delivered; (ii) in
the case of the Preferred Stock, Purchase Rights
(the "Rights") offeredthe designation, number of shares,
liquidation preference per share, dividend rate or method of
calculation, dividend periods, dividend payment dates, any voting
rights, any exchange, conversion, redemption, or sinking fund
provisions and any other rights, preferences, privileges, limitations
or restrictions relating to the public hereby (collectively,Preferred Stock; and (iii) in the "Shares") are outstandingcase
of the Common Stock, the number of shares and the terms of Newell Co., a Delaware corporation
(the "Company"), thatoffering
thereof. If so specified in the applicable Prospectus Supplement, the
Securities may be sold byissued in whole or in part in the Selling Stockholder as set
forth under "Selling Stockholder." The Company will not receive any
partform of the proceeds from the sale of the Shares.one or
more temporary or global securities.
The Common Stock is listed on the New York Stock Exchange Inc.
(the "NYSE") and the Chicago Stock Exchange (the "CSE") under the
symbol NWL. On November
14, 1995, the closing sale price for the"NWL." Any Common Stock (as reportedsold pursuant to a Prospectus
Supplement will be approved for listing on the Composite Tape for NYSE-listed issues) was $23-7/8.
-------------------------------such exchanges, upon notice
of issuance.
---------------------------------------
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 PROSPEC-
TUS.PROSPECTUS. ANY
REPRESENTATION TO THE CON-
TRARYCONTRARY IS A CRIMINAL
OFFENSE.
--------------------------------------------------------------------
The Company has been advised thatmay sell the Securities to or through
underwriters or dealers and may also sell the Securities directly to
other purchasers or through agents. See "Plan of Distribution." The
Prospectus Supplement will set forth the names of any underwriters,
dealers or agents involved in the sale of the Securities in respect of
which this Prospectus is being delivered and any applicable fee,
commission and discount arrangements with them. See "Plan of
Distribution" for a description of possible indemnification
arrangements between the Company and any underwriters, dealers or
agents.
This Prospectus may not be used to consummate sales of the
Shares may be
made from time to time bySecurities without delivery of one or for the account of the Selling
Stockholder on the NYSE, in the over-the-counter market, in private
transactions or otherwise through broker-dealers. Any such sales will
be made either at market prices prevailing at the time of sale or at
negotiated prices. Any broker-dealer may either act as agent for the
Selling Stockholder or may purchase any of the Shares as principal and
thereafter may sell such Shares from time to time in transactions on
the NYSE, the CSE or in the over-the-counter market at prices
prevailing at the time of sale or at negotiated prices.
-------------------------------more Prospectus Supplements.
---------------------------------------
The date of this Prospectus is November 15, 1995.
-1-January 23, 1996.
IN CONNECTION WITH ANY UNDERWRITTEN OFFERING, THE
UNDERWRITERS OF SUCH OFFERING MAY OVER-ALLOT OR EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
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
"SEC""Commission"). Reports,Such reports, proxy statements and other information
filed by the Company canmay be inspected and copied at prescribed rates
at the public reference facilities maintained by the SECCommission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
SEC'sfollowing Regional Offices located atof the Commission: New York Regional
Office, Seven World Trade Center, 13th Floor, New York, New York,
10048;10048 and the Northwestern Atrium Center,Chicago Regional Office, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. The Common Stock is listed on the
NYSE and the CSE and such reports, proxy statements and other
information concerning the Company can be inspected at the offices of
the NYSE, 20 Broad Street, New York, New York 10005 and at the offices
of the CSE, One Financial Place, 440 South LaSalle Street, Chicago,
Illinois 60605-1070.
The Company has filed with the SECCommission a registration
statement on Form S-3 (File No. 33-62065) (herein, together with all amendments and
exhibits, referred to as the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"). with respect
to the Securities offered hereby. This Prospectus does not contain
all of the information set forth in the Registration Statement and the
exhibits and schedules thereto, certain partsportions of which arehave been
omitted in
accordance withpursuant to the rules and regulations of the SEC.Commission.
Statements made in this Prospectus as to the contents of any contract,
agreement or other document are not necessarily complete. With
respect to each such contract, agreement or other document filed or
incorporated by reference as an exhibit to the Registration Statement,
reference is made to such exhibit for a more complete description of
the matter involved, and each such statement is qualified in its
entirety by such reference. For further information, reference is
hereby made to the Registration Statement.
2
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the
Commission pursuant to the Exchange Act are hereby incorporated herein
by reference:
(a) The Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994;
(b) The Company's Current Report on Form 8-K filed on February 10,dated
January 30, 1995;
(c) The Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1995;
(d) The Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1995;
(e) The Company's Report on Form 8-K filed on August 14, 1995;
(f) The Company's Report on Form 8-K Filed on October 31, 1995;
(g) The Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1995;
(f) The Company's Current Report on Form 8-K dated
August 10, 1995;
(g) The Company's Current Report on Form 8-K dated October 31,
1995;
(h) The description of the Rights contained in the Company's Registration StatementCurrent Report on Form 8-A8-K dated October 25, 1988,
including any amendment or report filed for the purpose of
updating such description;November 17,
1995;
(i) The description of the Common Stock, contained in
the Company's Registration Statement on Form 8-B
dated June 30, 1987, including any amendment or report filed for1987; and
(j) The description of the purpose of updating such description; and
-2-
(j)Rights, contained in the
Company's Registration Statement on Form 8-A dated
October 25, 1988.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 andor 15(d) of the Exchange Act subsequent to the date
of this Prospectus, and prior to the termination of the offering of
the Securities made hereby, shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date
of filing of a post-effective amendment which
indicates that all securities offered have been sold or
which deregisters all securities then remaining unsold.such documents. Any statement contained herein, in a
Prospectus Supplement or in a document incorporated by reference or
deemed to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of the Registration Statement and
this Prospectus to the extent that sucha statement is modifiedcontained herein, in a
Prospectus Supplement or superseded byin any other subsequently filed document
which also is incorporated or is deemed to be incorporated by reference herein.herein
modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or
3
superseded, to constitute a part of the Registration Statement or this
Prospectus.
The Company will provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has
been delivered, upon the written or oral request of such person, a
copy of any or all of the documents which are incorporated herein by
reference, other than exhibits to such documents (unless such exhibits
are specifically incorporated by reference into such documents).
Requests for such copies should be directed to: Richard H. Wolff,
Secretary, Newell Co., 4000 Auburn Street, Rockford, Illinois 61125
(telephone: (815) 969-6111).
THE COMPANY
The Company is a manufacturer and full-service marketer of
high-volume consumer products serving the needs of volume purchasers.
The Company's basic strategy is to merchandise a multi-product
offering of brand-name staple products, with an emphasis on excellent
customer service, in order to achieve maximum results for its
stockholders. Product categories include housewares, hardware, home
furnishings, and office products. Each group of the Company's
products is manufactured and sold by a subsidiary or division (each
referred to herein as a "division," even if separately incorporated).
The Company manages the activities of its divisions through
executives at the corporate level, to whom the divisional managers
report, and controls financial activities through centralized
accounting, capital expenditure reporting, cash management, order
processing, billing, credit, accounts receivable and data processing
operations. The production and marketing functions of each division,
however, are conducted with substantial independence. Each division
is managed by employees who make day-to-day operating and sales
decisions and participate in an incentive compensation plan that ties
a significant part of their compensation to their division's
performance. The Company believes that this allocation of
responsibility and system of incentives fosters an entrepreneurial
approach to management that has been important to the Company's
success.
As of September 30, 1995, there were 158,552,182 shares of
Common Stock and related Rights outstanding. For the fiscal year ended December 31, 1994, the Company had
net sales of approximately $2,074,934,000$ 2,074,934,000 and operating income of
approximately $357,865,000.
-3-$ 357,865,000.
The principal executive offices of the Company are located
at Newell Center, 29 East Stephenson Street, Freeport, Illinois 61032,
and its telephone number is (815) 235-4171.
SELLING STOCKHOLDER4
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus
Supplement, the net proceeds to be received by the Company from the
sale of the Securities will be used for general corporate purposes,
which may include the repayment of indebtedness, working capital
expenditures and investments in, or acquisitions of, businesses and
assets. Pending application of such net proceeds for specific
purposes, such proceeds may be invested in short-term or marketable
securities. Specific allocations of proceeds to a particular purpose
that have been made at the date of any Prospectus Supplement will be
described therein.
RATIO OF EARNINGS TO FIXED CHARGES
For the year ended December 31,
Nine Months
ended 9/30/95 1994 1993 1992 1991 1990
Ratio of
Earnings to
Fixed Charges 6.68 9.00 10.83 11.29 12.86 12.00
For purposes of calculating the ratio of earnings to fixed
charges, "earnings" consist of earnings from continuing operations
before income taxes, adjusted for the portion of fixed charges
deducted from such earnings and for minority interests in income of
majority owned subsidiaries that have fixed charges. "Fixed charges"
consist of interest on all indebtedness (including capitalized lease
obligations), amortization of debt expense and the percentage of
rental expense on operating leases deemed representative of the
interest factor.
DESCRIPTION OF DEBT SECURITIES
The Shares coveredfollowing description of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which
any Prospectus Supplement may relate. The particular terms of the
Debt Securities offered by any Prospectus Supplement and the extent,
if any, to which such general provisions are not applicable will be
described in a Prospectus Supplement relating to such Debt Securities.
The Debt Securities may be issued, in one or more series,
from time to time under either (1) an Indenture dated as of November
1, 1995 (the "Senior Indenture"), to be entered into between the
Company and The Chase Manhattan Bank (National Association), as
trustee (the "Senior Debt Securities Trustee"), providing for the
issuance of unsubordinated Debt Securities, or (2) an Indenture dated
as of November 1, 1995 (the "Subordinated Indenture"), to be entered
into between the Company and The Chase Manhattan Bank (National
5
Association), as trustee (the "Subordinated Debt Securities Trustee"),
providing for the issuance of subordinated Debt Securities.
The Senior Indenture and the Subordinated Indenture are
referred to herein individually as an "Indenture" and, collectively,
as the "Indentures," and the Senior Debt Securities Trustee and the
Subordinated Debt Securities Trustee are sometimes each referred to
herein as a "Trustee." Debt Securities which may be issued under the
Senior Indenture are referred to herein as "Senior Debt Securities,"
and Debt Securities which may be issued under the Subordinated
Indenture are referred to herein as "Subordinated Debt Securities."
Copies of the Indentures are filed as exhibits to the Registration
Statement. Capitalized terms not otherwise defined in this Prospectus
shall have the meanings set forth in the Indentures to which they
relate.
The following summaries of certain provisions of the Debt
Securities and the Indentures do not purport to be complete and are
subject to, and are qualified in their entirety by express reference
to, all of the provisions of the Indentures and the Debt Securities.
GENERAL
The Indentures do not limit the aggregate principal amount
of Debt Securities that may be issued thereunder. The Debt Securities
may be issued from time to time in one or more series up to the
aggregate principal amount which may be authorized therefor from time
to time by the Company.
Unless otherwise indicated in the Prospectus Supplement
relating thereto, the principal of, and any premium or interest on,
the Debt Securities will be payable, and the Debt Securities will be
exchangeable and transfers thereof will be registrable, and notices
and demands to or upon the Company in respect of such Debt Securities
may be served, at the Place of Payment specified therefor pursuant to
each Indenture.
The Indentures do not contain provisions to afford the
Holders of Debt Securities protection in the event of a highly
leveraged transaction or a takeover attempt nor do they contain
provisions requiring the repurchase of any Debt Securities upon a
change in control of the Company. In addition, the Indentures do not
contain any provisions that would limit the ability of the Company and
its subsidiaries to incur unsecured indebtedness. See "Particular
Terms of the Senior Debt Securities -- Ranking of Senior Debt
Securities" below. Reference is made to any Prospectus Supplement
relating to the Debt Securities offered thereby for information with
respect to any deletions from, modifications of or additions to the
Events of Default or covenants of the Company applicable to such Debt
Securities that are described herein. See "Modification or Waiver"
below.
6
The Debt Securities may be issued under the Indentures as
Original Issue Discount Securities to be offered and sold at a
discount below their principal amount. United States federal income
tax, accounting and other special considerations applicable to any
such Original Issue Discount Securities will be described in any
Prospectus Supplement relating thereto. "Original Issue Discount
Security" means any security that provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof as a result of the occurrence of
an Event of Default and the continuation thereof. In addition, the
Debt Securities may, for United States federal income tax purposes, be
deemed to have been issued with "original issue discount" ("OID") even
if such securities are offered and sold at an amount equal to their
stated principal amount. The United States federal income tax
consequences of Debt Securities deemed to be issued with OID will be
described in any Prospectus Supplement relating thereto.
Under the Indentures, the Company will have the ability to
issue Debt Securities with terms different from those of Debt
Securities previously issued, without the consent of the Holders of
previously issued series of Debt Securities, in an aggregate principal
amount determined by the Company.
REGISTRATION AND TRANSFER
The Debt Securities may be issued as Registered Securities
or Bearer Securities. Registered Securities will be exchangeable for
other Registered Securities of the same series and of a like aggregate
principal amount and tenor of different authorized denominations. If
(but only if) provided for in the Prospectus Supplement applicable
thereto, Bearer Securities (with all unmatured Coupons, except as
provided below, and all matured Coupons in default) of any series may
be exchanged for Registered Securities of the same series of any
authorized denominations and of a like aggregate principal amount and
tenor. In such event, Bearer Securities surrendered in a permitted
exchange for Registered Securities between a Regular Record Date or a
Special Record Date and the relevant date for payment of interest
shall be surrendered without the Coupon relating to such date for
payment of interest, and interest will not be payable on such date for
payment of interest in respect of the Registered Security issued in
exchange for such Bearer Security but will be payable only to the
holder of such Coupon when due, in accordance with the terms of the
Indenture. Unless otherwise specified in the Prospectus Supplement
applicable thereto, Bearer Securities will not be issued in exchange
for Registered Securities.
The Debt Securities may be presented for exchange as
described above, and Registered Securities may be presented for
registration of transfer (duly endorsed or accompanied by a written
instrument of transfer), at the corporate trust office of the Trustee
in New York, New York, or at the office of any transfer agent
designated by the Company for such purpose with respect to any series
7
of Debt Securities and referred to in the Prospectus Supplement
applicable thereto. No service charge will be made for any transfer
or exchange of Debt Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge payable
in connection therewith. If any Prospectus Supplement refers to any
transfer agent (in addition to the applicable Trustee) initially
designated by the Company with respect to any series of Debt
Securities, the Company may at any time rescind the designation of any
such transfer agent or approve a change in the location at which any
such transfer agent acts, except that, if Debt Securities of a series
are issuable solely as Registered Securities, the Company will be
required to maintain a transfer agent in each Place of Payment for
such series and, if Debt Securities of a series may be issuable both
as Registered Securities and as Bearer Securities, the Company will be
required to maintain (in addition to the applicable Trustee) a
transfer agent in a Place of Payment for such series located outside
the United States. The Company may at any time designate additional
transfer agents with respect to any series of Debt Securities.
In the event of any redemption of Debt Securities of any
series, the Company shall not be required to: (i) issue, register the
transfer of or exchange Debt Securities of such series during a period
beginning at the opening of business 15 days before any selection of
Debt Securities of that series to be redeemed and ending at the close
of business on (A) if Debt Securities of the series are issuable only
as Registered Securities, the day of mailing of the relevant notice of
redemption and (B) if Debt Securities of the series are issuable as
Bearer Securities, the day of the first publication of the relevant
notice of redemption or, if Debt Securities of the series are also
issuable as Registered Securities and there is no publication, the day
of mailing of the relevant notice of redemption; (ii) register the
transfer of or exchange any Registered Security, or portion thereof,
called for redemption, except the unredeemed portion of any Registered
Security being redeemed in part; (iii) exchange any Bearer Security
selected for redemption, except to exchange such Bearer Security for a
Registered Security of that series and like tenor that is
simultaneously surrendered for redemption; or (iv) issue, register the
transfer of or exchange any Debt Securities that have been surrendered
for repayment at the option of the Holder, except the portion if any,
thereof not to be so repaid.
CONVERSION AND EXCHANGE
If any Debt Securities will, by their terms, be convertible
into or exchangeable for Common Stock or other Securities, the
Prospectus Supplement relating thereto will set forth the terms and
conditions of such conversion or exchange, including the conversion
price or exchange ratio (or the method of calculating the same), the
conversion or exchange period (or the method of determining the same),
whether conversion or exchange will be mandatory or at the option of
the Holder or the Company, provisions for adjustment of the conversion
price or the exchange ratio and provisions affecting conversion or
8
exchange in the event of the redemption of such Debt Securities. Such
terms may also include provision under which the number of shares of
Common Stock or the number of other Securities to be received by the
Holders of such Debt Securities upon such conversion or exchange would
be calculated with reference to the market price of the Common Stock
or such other Securities as of a time stated in the Prospectus
Supplement.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in
part in the form of one or more Global Securities (as such term is
defined below), which will be deposited with, or on behalf of, a
depositary ("Depositary") or its nominee identified in the applicable
Prospectus Supplement. In such case, one or more Global Securities
will be issued in a denomination or aggregate denomination equal to
the portion of the aggregate principal amount of outstanding Debt
Securities of the series to be represented by such Global Security or
Global Securities. Unless and until it is exchanged in whole or in
part for the individual Debt Securities represented thereby, a Global
Security may not be registered for transfer or exchange except (i) as
a whole by the Depositary for such Global Security to a nominee of
such Depositary, by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or a nominee
of such Depositary to a successor Depositary or a nominee of such
successor Depositary, and (ii) in any other circumstances described in
the Prospectus Supplement applicable thereto. The term "Global
Security," when used with respect to any series of Debt Securities,
means a Debt Security that is executed by the Company and
authenticated and delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction, which shall be registered in
the name of the Depositary or its nominee and which shall represent,
and shall be denominated in an amount equal to the aggregate principal
amount of, all of the Outstanding Debt Securities of such series or
any portion thereof, in either case having the same terms, including,
without limitation, the same original issue date, date or dates on
which principal is due, and interest rate or method of determining
interest.
The specific terms of the depositary arrangement with
respect to any portion of a series of Debt Securities to be
represented by a Global Security will be described in the Prospectus
Supplement applicable thereto. The Company expects that the following
provisions will apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus
Supplement, Debt Securities that are to be represented by a Global
Security to be deposited with or on behalf of a Depositary will be
represented by a Global Security registered in the name of such
Depositary or its nominee. Upon the issuance of such Global Security,
and the deposit of such Global Security with or on behalf of the
Depositary for such Global Security, the Depositary will credit on its
9
book entry registration and transfer system the respective principal
amounts of the Debt Securities represented by such Global Security to
the accounts of institutions that have accounts with such Depositary
or its nominee ("participants"). The accounts to be credited will be
designated by the underwriters or agents of such Debt Securities or,
if such Debt Securities are offered and sold directly by the Company,
by the Company. Ownership of beneficial interests in such Global
Security will be limited to participants or Persons that may hold
interests through participants. Ownership of beneficial interests by
participants in such Global Security will be shown on, and the
transfer of that ownership interest will be effected only through,
records maintained by the Depositary or its nominee for such Global
Security. Ownership of beneficial interests in such Global Security
by Persons that hold through participants will be shown on, and the
transfer of that ownership interest within such participant will be
effected only through, records maintained by such participant. The
laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in certificated
form. The foregoing limitations and such laws may impair the ability
to transfer beneficial interests in such Global Securities.
So long as the Depositary for a Global Security, or its
nominee, is the registered owner of such Global Security, such
Depositary or such nominee, as the case may be, will be considered the
sole owner or Holder of the Debt Securities represented by such Global
Security for all purposes under the Indenture applicable thereto.
Unless otherwise specified in the applicable Prospectus Supplement,
owners of beneficial interests in such Global Security will not be
entitled to have Debt Securities of the series represented by such
Global Security registered in their names, will not receive or be
entitled to receive physical delivery of Debt Securities of such
series in certificated form and will not be considered the Holders
thereof for any purposes under the Indenture applicable thereto.
Accordingly, each Person owning a beneficial interest in such Global
Security must rely on the procedures of the Depositary and, if such
Person is not a participant, on the procedures of the participant
through which such Person owns its interest to exercise any rights of
a Holder of Debt Securities under the Indenture applicable thereto.
The Company understands that under existing industry practices, if the
Company requests any action of Holders or an owner of a beneficial
interest in such Global Security desires to give any notice or take
any action a Holder is entitled to give or take under the Indenture
applicable thereto, then the Depositary would authorize the
participants to give such notice or take such action, and participants
would authorize beneficial owners owning through such participants to
give such notice or take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
Principal of and any premium and interest on a Global
Security will be payable in the manner described in the applicable
Prospectus Supplement.
10
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Each Indenture provides that the Company shall not
consolidate with or merge into any other Person or convey, transfer or
lease all or substantially all of the properties and assets of the
Company and its Subsidiaries on a consolidated basis to any other
Person, unless the corporation formed by such consolidation, or into
which the Company is merged, or the Person which acquires by
conveyance or transfer or which leases such properties and assets
(collectively, the "Survivor") assumes by supplemental indenture all
the obligations of the Company under such Indenture and the Debt
Securities issued thereunder, no Default or Event of Default shall
exist immediately after giving effect to the transaction, and the
Survivor is a corporation, limited liability company, partnership or
trust organized and validly existing under the laws of the United
States of America, any state thereof, or the District of Columbia.
ACCELERATION OF MATURITY
If an Event of Default occurs and is continuing with respect
to Debt Securities of a particular series, the Trustee or the Holders
of not less than 25% in principal amount of Outstanding Debt
Securities of that series may declare the Outstanding Debt Securities
of that series due and payable immediately.
At any time after a declaration of acceleration with respect
to Debt Securities of any series has been made and before a judgment
or decree for payment of the money due has been obtained by the
Trustee therefor, the Holders of a majority in principal amount of the
Outstanding Debt Securities of that series by written notice to the
Company and such Trustee, may rescind and annul such declaration and
its consequences if: (i) the Company has paid or deposited with the
Trustee a sum sufficient to pay (in the Currency in which the Debt
Securities of such series are payable, except as otherwise specified
pursuant to the applicable Indenture): (a) all overdue interest on all
Outstanding Debt Securities of that series and any related Coupons,
(b) all unpaid principal of (and premium, if any, on) any such Debt
Securities which has become due otherwise than by such declaration of
acceleration, and interest on such unpaid principal at the rate or
rates prescribed therefor in such Debt Securities, (c) to the extent
lawful, interest on overdue interest at the rate or rates prescribed
therefor in such Debt Securities, and (d) all sums paid or advanced by
such Trustee and the reasonable compensation, expenses, disbursements
and advances of such Trustee, its agents and counsel; and (2) all
Events of Default with respect to Debt Securities of that series,
other than the non-payment of amounts of principal of (or premium, if
any, on) or interest on such Debt Securities which have become due
solely by such declaration of acceleration, have been cured or waived.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
11
The Holders of not less than a majority in principal amount
of the Outstanding Debt Securities of any series may, on behalf of the
Holders of all the Debt Securities of such series and any related
Coupons, waive any past default under the applicable Indenture with
respect to such series and its consequences, except a default (i) in
the payment of the principal of (or premium, if any) or interest on
any Debt Security of such series or any related Coupon, or (ii) in
respect of a covenant or provision that cannot be modified or amended
without the consent of the Holder of each Outstanding Debt Security of
such series affected thereby.
Subject to the provisions in each Indenture relating to the
duties of the Trustee thereunder, if an Event of Default with respect
to Debt Securities of a particular series occurs and is continuing,
such Trustee shall be under no obligation to exercise any of its
rights or powers under the applicable Indenture at the request or
direction of any of the Holders of Debt Securities of such series,
unless such Holders shall have offered to such Trustee reasonable
indemnity and security against the costs, expenses and liabilities
that might be incurred by it in compliance with such request. Subject
to such provisions for the indemnification of the Trustee, the Holders
of a majority in principal amount of the Outstanding Debt Securities
of such series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the
Trustee under the applicable Indenture, or exercising any trust or
power conferred on the Trustee with respect to the Debt Securities of
that series. The Trustee may refuse to follow directions in conflict
with law or the Indenture that may involve the Trustee in personal
liability or may be unduly prejudicial to Holders not joining therein.
MODIFICATION OR WAIVER
Modification and amendment of each of the Indentures may be
made by the Company and the applicable Trustee with the consent of the
Holders of not less than a majority in principal amount of all
Outstanding Debt Securities thereunder of any series that are affected
by such modification or amendment; provided that no such modification
or amendment may, without the consent of the Holder of each
Outstanding Debt Security of such series: (i) change the Stated
Maturity of the principal of (or premium, if any, on) or any
installment of principal of or interest on any Debt Security of such
series, (ii) reduce the principal amount or the rate of interest on or
any Additional Amounts payable in respect of, or any premium payable
upon the redemption of, any Debt Security of such series, (iii) change
any obligation of the Company to pay Additional Amounts in respect of
any Debt Security of such series, (iv) reduce the amount of principal
of a Debt Security of such series that is an Original Issue Discount
Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof, (v) change the redemption
provisions of any Debt Security, (vi) adversely affect any right of
repayment at the option of the Holder of any Debt Security of such
series, (vii) change the place or currency of payment of principal of,
12
or any premium or interest on, any Debt Security of such series,
(viii) impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof or any Redemption
Date or Repayment Date therefor, (ix) reduce the above-stated
percentage of Holders of Outstanding Debt Securities of such series
necessary to modify or amend such Indenture or to consent to any
waiver thereunder or reduce the requirements for voting or quorum
described below, or (x) modify the foregoing requirements or reduce
the percentage of Outstanding Debt Securities of such series necessary
to waive any past default.
Modification and amendment of each Indenture may be made by
the Company and the Trustee thereunder without the consent of any
Holder, for any of the following purposes: (i) to evidence the
succession of another Person to the Company as obligor under such
Indenture; (ii) to add to the covenants of the Company for the benefit
of the Holders of all or any series of Debt Securities; (iii) to add
Events of Default for the benefit of the Holders of all or any series
of Debt Securities; (iv) to add or change any provisions of such
Indenture to facilitate the issuance of Bearer Securities; (v) to
change or eliminate any provisions of such Indenture, provided that
any such change or elimination shall become effective only when there
are no Outstanding Debt Securities of any series created prior thereto
that is entitled to the benefit of such provision; (vi) to establish
the form or terms of Debt Securities of any series and any related
Coupons; (vii) to secure the Debt Securities; (viii) to provide for
the acceptance of appointment by a successor Trustee or facilitate the
administration of the trusts under such Indenture by more than one
Trustee; and (ix) to close such Indenture with respect to the
authentication and delivery of additional series of Debt Securities,
to cure any ambiguity, defect or inconsistency in such Indenture or to
amend or supplement any provision contained in such Indenture or in
any supplemental indenture, provided such action does not adversely
affect the interests of Holders of Debt Securities of any series under
such Indenture in any material respect.
Each Indenture contains provisions for convening meetings of
the Holders of Debt Securities of a series. Such a meeting may be
called at any time by the applicable Trustee at its discretion or by
such Trustee pursuant to a request made to such Trustee by the Company
or the Holders of at least 10% in principal amount of the Outstanding
Debt Securities under such Indenture, but in any case, notice shall be
given as provided in such Indenture. Except for any consent that must
be given by the Holder of each Debt Security affected thereby, as
described above, any resolution presented at a meeting or adjourned
meeting duly reconvened at which a quorum is present may be adopted by
the affirmative vote of the Holders of a majority in principal amount
of the Debt Securities of that series Outstanding; provided, however,
that, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action that
may be made, given or taken by the Holders of a specified percentage
that is less than a majority in principal amount of Debt Securities of
13
a series Outstanding may be adopted at a meeting or adjourned meeting,
duly reconvened and at which a quorum is present, by the affirmative
vote of the Holders of such specified percentage in principal amount
of the Debt Securities of that series Outstanding. Any resolution
passed or decision taken at any meeting of Holders of Debt Securities
of any series duly held in accordance with the applicable Indenture
will be binding on all Holders of Debt Securities of that series and
the related Coupons. The quorum at any meeting called to adopt a
resolution, and at any reconvened meeting, will consist of persons
entitled to vote a majority in principal amount of the Debt Securities
of a series Outstanding; provided, however, that, if any action is to
be taken at such meeting with respect to a consent or waiver that may
be given by the Holders of not less than a specified percentage in
principal amount of the Debt Securities of a series Outstanding, the
Persons entitled to vote such specified percentage in principal amount
of the Debt Securities of such series Outstanding will constitute a
quorum. Notwithstanding the foregoing provisions, if any action is to
be taken at a meeting of Holders of Debt Securities of any series with
respect to any request, demand, authorization, direction, notice,
consent, waiver or other action that the applicable Indenture
expressly provides may be made, given or taken by the Holders of a
specified percentage in principal amount of all Outstanding Debt
Securities affected thereby, or of the Holders of such series and one
or more additional series, then (i) there shall be no minimum quorum
requirement for such meeting, and (ii) the principal amount of the
Outstanding Debt Securities of such series that vote in favor of such
request, demand, authorization, direction, notice, consent, waiver or
other action shall be taken into account in determining whether such
request, demand, authorization, direction, notice, consent, waiver or
other action has been made, given or taken under the applicable
Indenture.
FINANCIAL INFORMATION
So long as any of the Debt Securities are outstanding, the
Company will file with the Commission, to the extent permitted under
the Exchange Act, the annual reports, quarterly reports and other
documents otherwise required to be filed with the Commission pursuant
to Section 13(a) or 15(d) of the Exchange Act as if the Company were
subject to such Sections, and the Company will also provide to all
Holders and file with the Trustees copies of such reports and
documents within 15 days after it files them with the Commission or,
if filing such reports and documents by the Company with the
Commission is not permitted under the Exchange Act, within 15 days
after it would otherwise have been required to file such reports and
documents if permitted, in each case at the Company's cost.
DEFEASANCE
Each Indenture provides that the Company may elect either
(a) to defease and be discharged from any and all obligations with
respect to any series of the Debt Securities issued thereunder and any
14
related Coupons (except for the obligation to pay Additional Amounts,
if any, upon the occurrence of certain events of tax, assessment or
governmental charge with respect to payments on such Debt Securities
and the obligations to register the transfer or exchange of Debt
Securities of such series and any related Coupons, to replace
temporary or mutilated, destroyed, lost or stolen Debt Securities and
any related Coupons, to maintain an office or agency in respect of
such series of Debt Securities and any related Coupons and to hold
moneys for payment in trust) ("defeasance") or (b) to be released from
its obligations with respect to any series of such Debt Securities and
any related Coupons with respect to certain covenants thereunder, and
any omission to comply with such obligations shall not constitute a
Default or an Event of Default with respect to such series of Debt
Securities and any related Coupons ("covenant defeasance"), in either
case upon the irrevocable deposit by the Company with the Trustee (or
other qualifying trustee), in trust, of an amount, in such Currency in
which such series of Debt Securities and any related Coupons are then
specified as payable at Stated Maturity, or Government Obligations (as
defined below), or both, applicable to such series of Debt Securities
and any related Coupons (with such applicability being determined on
the basis of the currency, currency unit or composite currency in
which such series of Debt Securities are then specified as payable at
Stated Maturity), which through the scheduled payment of principal and
interest in accordance with their terms, will provide money in an
amount sufficient to pay the principal of (and premium, if any) and
interest, if any, on such series of Debt Securities and any related
Coupons, and any mandatory sinking fund or analogous payments thereon,
on the scheduled due dates therefor.
Such a trust may only be established if, among other things,
the Company has delivered to the Trustee an Opinion of Counsel (as
specified in the applicable Indenture) to the effect that the Holders
of such series of Debt Securities and any related Coupons will not
recognize income gain or loss for United States federal income tax
purposes as a result of such defeasance or covenant defeasance and
will be subject to United States federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance or covenant defeasance had not occurred;
provided that, such Opinion of Counsel, in the case of defeasance
under clause (a) above, must refer to and be based upon a revenue
ruling of the Internal Revenue Service or a change in applicable
United States federal income tax law occurring after the date of the
applicable Indenture.
"Government Obligations" means securities that are (i)
direct obligations of the government that issued the Currency in which
the Debt Securities of a particular series are payable, for the
payment of which its full faith and credit is pledged, or (ii)
obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of the government that issued the Currency
in which the Debt Securities of such series are payable, the payment
of which is unconditionally guaranteed as a full faith and credit
15
obligation by the United States of America or such other government,
which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued
by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or
principal of any such Government Obligation held by such custodian for
the account of Thomas F. Gaffney (the "Selling Stockholder").
The Selling Stockholder wasthe holder of a stockholderdepository receipt; provided that
(except as required by law), such custodian is not authorized to make
any deduction from the amount payable to the holder of Ashland Products, Inc.
("Ashland"), which became a wholly-owned subsidiarysuch depository
receipt from any amount received by the custodian in respect of the
Government Obligation or the specific payment of interest in or
principal of the Government Obligation evidenced by such depository
receipt.
Unless otherwise provided in the Prospectus Supplement, if,
after the Company on
June 5, 1995,has deposited funds and/or Government Obligations to
effect defeasance or covenant defeasance relating thereto with respect
to the Debt Securities of any series, (i) the Holder of a Debt
Security of such series is entitled to and does elect, pursuant to the
terms of such Debt Security, to receive payment in a currency other
than that in which such deposit has been made in respect of such Debt
Security or (ii) the currency in which such deposit has been made in
respect of any Debt Security of such series ceases to be used by its
government of issuance, then the indebtedness represented by such Debt
Security shall be deemed to have been, and will be, fully discharged
and satisfied through the payment of the principal of (and premium, if
any) and interest, if any, on such Debt Security as they become due
out of the proceeds yielded by converting the amount so deposited in
respect of such Debt Security into the Currency in which such Debt
Security becomes payable as a result of such election or such
cessation of usage based on the applicable Market Exchange Rate.
Unless otherwise provided in the Prospectus Supplement, all payments
of principal of (and premium, if any) and interest, if any, and
Additional Amounts, if any, on any Debt Security that is payable in a
Currency other than Dollars that ceases to be used by its government
of issuance shall be made in Dollars.
In the event the Company effects covenant defeasance with
respect to (i) any Debt Securities and any related Coupons and (ii)
such Debt Securities and any related Coupons are declared due and
payable because of the occurrence of any Event of Default, other than
an AgreementEvent of Default with respect to any covenant for which there has
been defeasance, the Currency and/or Government Obligations on deposit
with the Trustee will be sufficient to pay amounts due on such Debt
Securities and Planany related Coupons at the time of Reorganization (the
"Reorganization Agreement"their Stated
Maturity but may not be sufficient to pay amounts due on such Debt
Securities and any related Coupons at the time of the acceleration
resulting from such Event of Default. However, the Company would
remain liable to make payment of such amounts due at the time of
acceleration.
16
The Prospectus Supplement may further describe the
provisions, if any, permitting such defeasance or covenant defeasance,
including any modifications to the provisions described above, with
respect to the Debt Securities of or within a particular series and
any related Coupons.
INFORMATION CONCERNING THE TRUSTEE
The Trustee, prior to default, undertakes to perform only
such duties as are specifically set forth in the applicable Indenture
and, after default, shall exercise the same degree of care as a
prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provision, the Trustee is under no
obligation to exercise any of the powers vested in it by the
applicable Indenture at the request of any Holder of Debt Securities,
unless offered reasonable indemnity by such Holder against the costs,
expenses and liabilities which might be incurred thereby. The Trustee
is not required to expand or risk its own funds or otherwise incur
personal financial liability in the performance of its duties if the
Trustee reasonably believes that repayment or adequate indemnity is
not reasonably assured to it.
The Chase Manhattan Bank (National Association) ("Chase") datedis
the Trustee under the Senior Indenture and the Subordinated Indenture.
Chase is also the agent for the lenders, and a lender, under certain
revolving credit facilities with the Company which, as of June 5, 1995, by and among the Company, Ashland Acquisition Co., a Delaware corporation, and Ashland.
Pursuantdate
hereof, permit an aggregate borrowing of up to the Reorganization Agreement, all of the outstanding
shares of common stock of Ashland owned by the Selling Stockholder
were converted into 131,561 Shares.
The Selling Stockholder currently owns 125,213 Shares.
Pursuant$750 million (subject
to the terms and conditions of such facilities). Chase Securities,
Inc., an Escrow Agreementaffiliate of Chase, is as of the date hereof an agent with
respect to distribution of the Senior Debt Securities. In addition,
the Company and certain of its affiliates maintain other banking and
borrowing arrangements with Chase, and Chase may perform additional
banking services for, or transact other banking business with, the
Company in the future.
The Trustee may be deemed to have a conflicting interest for
purposes of the Trust Indenture Act of 1939 and may be required to
resign as Trustee if (i) there is an Event of Default under the
Indenture under which its acts as Trustee and (ii) among other things
(a) the Trustee is a trustee under another indenture of the Company
under which securities of the Company are outstanding, (b) the Trustee
is a trustee for more than one outstanding series of Debt Securities
under a single Indenture, (c) the Trustee is a creditor of the
Company, or (d) the Trustee or an affiliate of the Trustee acts as
underwriter or agent for the Company.
The Indenture provides that an alternative Trustee may be
appointed by the Company with respect to any particular series of Debt
Securities. Any such appointment will be described in the Prospectus
Supplement relating to such series of Debt Securities.
17
GOVERNING LAW
The Indentures and the Debt Securities will be governed by,
and construed in accordance with, the internal laws of the State of
New York.
MISCELLANEOUS
The Company will have the right at all times to assign any
of its respective rights or obligations under the Indentures to a
direct or indirect wholly-owned subsidiary of the Company; provided,
that, in the event of any such assignment, the Company will remain
liable for all of their respective obligations. The Indentures will
be binding upon and inure to the benefit of the parties thereto and
their respective successors and assigns.
PARTICULAR TERMS OF THE SENIOR DEBT SECURITIES
The following description of the Senior Debt Securities sets
forth certain general terms and provisions of the Senior Debt
Securities to which any Prospectus Supplement may relate. The
particular terms of the Senior Debt Securities offered by any
Prospectus Supplement, and the extent, if any, to which such general
provisions may not apply to the Senior Debt Securities so offered,
will be described in the Prospectus Supplement relating to such Senior
Debt Securities.
GENERAL
Reference is made to the Prospectus Supplement relating to a
particular issuance of a series of Senior Debt Securities being
offered for, among other things, the following terms thereof: (1) the
title of the Senior Debt Securities of such series; (2) any limit on
the aggregate principal amount of such Senior Debt Securities; (3) the
date or dates on which the principal of such Senior Debt Securities
will be payable; (4) the rate or rates at which such Senior Debt
Securities will bear interest, or the method by which such rate or
rates shall be determined, and the date such interest shall accrue, or
the method by which such date or dates shall be determined; (5) the
dates on which such interest will be payable and the Regular Record
Dates for any Interest Payment Dates and the basis on which interest
shall be calculated if other than on the basis of a 360-day year of
twelve 30-day months; (6) the dates, if any, on which, and the price
or prices at which, such Senior Debt Securities may, pursuant to any
mandatory or optional sinking fund provisions, be redeemed by the
Company and other terms and provisions of such sinking fund; (7) the
date, if any, after which, and the price or prices at which, such
Senior Debt Securities may, pursuant to any optional redemption
provisions, be redeemed at the option of the Company or of the Holder
thereof and other terms and provisions of such optional redemption;
(8) any provisions in modification of, in addition to or in lieu of
18
any of the provisions of Article Fourteen of the Senior Indenture
relating to defeasance and covenant defeasance; (9) the percentage of
the principal amount at which such Senior Debt Securities will be
issued and, if other than the principal amount thereof, the portion of
the principal amount payable upon acceleration of the maturity
thereof, or the method by which such portion shall be determined; (10)
if other than Dollars, the Currency in which payment of the principal
of (and premium, if any, on) or interest, if any, on such Senior Debt
Securities shall be payable or denominated; (11) whether the amount of
payments of principal of (and premium, if any, on) or interest, if
any, on such Senior Debt Securities may be determined with reference
to an index, formula or other method (which index, formula or method
may be based, without limitation, on one or more Currencies,
commodities, equity indices or other indices), and the manner in which
such amounts shall be determined; (12) whether and under what
circumstances the Company will pay Additional Amounts, as contemplated
by Section 1005 of the Senior Indenture, on such Senior Debt
Securities to any Holder who is not a United States person (including
any modification to the definition of such term as contained in the
Senior Indenture as originally executed) with respect to any tax,
assessment or governmental charge and, if so, whether the Company will
have the option to redeem such Senior Debt Securities rather than pay
such Additional Amounts (and the terms of any such option); (13) any
deletions from, modifications of or additions to the Events of Default
or covenants of the Company with respect to such Senior Debt
Securities, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth herein;
and (14) any other terms of such Senior Debt Securities. For a
description of the terms of any series of Senior Debt Securities,
reference must be made to both the Prospectus Supplement relating
thereto and the description of Debt Securities set forth herein.
Unless otherwise indicated in the Prospectus Supplement
relating thereto, the Senior Debt Securities will be issued in Dollars
in fully registered form, without Coupons.
DENOMINATIONS
Unless otherwise indicated in the Prospectus Supplement
relating thereto, Senior Debt Securities that are Registered
Securities will be issuable in denominations of $1,000 and integral
multiples of $1,000, and Senior Debt Securities that are Bearer
Securities will be issuable in denominations of $5,000.
RANKING OF SENIOR DEBT SECURITIES
The Senior Debt Securities will rank pari passu with all
other Senior Debt Securities and all other unsecured and
unsubordinated indebtedness of the Company. The Company presently has
no subordinated debt outstanding. Since the Company is a holding
company, the right of the Company, and hence the right of creditors of
the Company (including the Holders), to participate in any
19
distribution of the assets of any subsidiary upon its liquidation or
reorganization or otherwise is necessarily subject to the prior claims
of creditors of such subsidiary, except to the extent that claims of
the Company itself as a creditor of such subsidiary may be recognized.
The Indenture does not limit the amount of unsecured indebtedness
which the Company or its subsidiaries may incur. Substantially all of
the consolidated accounts payable represent obligations of the
Company's subsidiaries, and as of December 31, 1995, the aggregate
principal amount of money borrowed by the Company's subsidiaries was
approximately $88.2 million (the current portion of which was
approximately $79.4 million).
LIMITATION ON LIENS
Pursuant to the Senior Indenture, so long as any of the
Senior Debt Securities thereunder or Coupons appertaining thereto
shall remain outstanding, the Company will not, and will not permit
any of its Subsidiaries (as defined below) to, create, incur, assume
or suffer to exist any Lien (as defined below) of any kind upon any of
its or their property or assets, now owned or hereafter acquired,
without making effective provision whereby all of the Senior Debt
Securities shall be directly secured equally and ratably with the
obligation or liability secured by such Lien, except for:
(i) Liens existing as of the date of the Senior Indenture;
(ii) Liens, including Sale and Lease-back Transactions (as
defined below), on any property acquired, constructed or improved
after the date of the Senior Indenture, which are created or
assumed contemporaneously with, or within 180 days after, such
acquisition or completion of such construction or improvement, or
within six months thereafter pursuant to a commitment for
financing arranged with a lender or investor within such 180-day
period, to secure or provide for the payment of all or a portion
of the purchase price of such property or the cost of such
construction or improvement incurred after the date of the Senior
Indenture (or prior to the date of such Indenture in the case of
any construction or improvement which is at least 40% completed
at the date of such Indenture) or, in addition to Liens
contemplated by clauses (iii) and (iv) below, Liens on any
property existing at the time of acquisition thereof (including
acquisition through merger or consolidation); provided, that any
such Lien (other than a Sale and Lease-back Transaction meeting
the requirements of this clause) does not apply to any property
theretofore owned by the Company or a Subsidiary other than, in
the case of any such construction or improvement, and theretofore
unimproved real property on which the property so constructed or
the improvement, is located;
(iii) Liens existing on any property of a Person at the
time such Person is merged with or into,or consolidates with, the
Company or a Subsidiary;
20
(iv) Liens on any property of a Person (including, without
limitation, shares of stock or debt securities) or its
subsidiaries existing at the time such Person becomes a
Subsidiary, is otherwise acquired by the Company or a Subsidiary
or becomes a successor to the Company pursuant to Section 802 of
the Senior Indenture;
(v) Liens to secure an obligation or liability of a
Subsidiary to the Company or to another Subsidiary;
(vi) Liens in favor of the United States of America or any
State thereof, or any department, agency or instrumentality or
political subdivision of the United States of America or any
State thereof, to secure partial progress, advance or other
payments pursuant to any contract or statute or to secure any
indebtedness incurred for the purpose of financing all or any
part of the purchase price or the cost of constructing or
improving the property subject to such Liens;
(vii) Liens to secure tax-exempt private activity bonds
under the Internal Revenue Code of 1986, as amended;
(viii) Liens arising out of or in connection with a Sale
and Lease-back Transaction if the net proceeds of such Sale and
Lease-back Transaction are at least equal to the fair value (as
determined by the Board of Directors, the Chairman of the Board,
the Vice Chairman of the Board, the President or the principal
financial officer of the Company) of the property subject to such
Sale and Lease-back Transaction;
(ix) Liens for the sole purpose of extending, renewing or
replacing in whole or in part indebtedness secured by any Lien
referred to in the foregoing clauses (i) to (viii), inclusive, or
in this clause (ix); provided, however, that the principal amount
of indebtedness secured thereby shall not exceed the principal
amount of indebtedness so secured at the time of such extension,
renewal or replacement, and that such extension, renewal or
replacement shall be limited to all or a part of the property
which secured the Lien so extended, renewed or replaced (plus
improvements on such property);
(x) Liens arising out of or in connection with a Sale and
Lease-back Transaction in which the net proceeds of such Sale and
Lease-back Transaction are less than the fair value (as
determined by the Board of Directors, the Chairman of the Board,
the Vice Chairman of the Board, the President or the principal
financial officer of the Company) of the property subject to such
Sale and Lease-back Transaction if the Company provides in a
Board Resolution that it shall, and in any such case the Company
covenants that it will, within 180 days of the effective date of
any such arrangement (or in the case of (C) below, within six
months thereafter pursuant to a firm purchase commitment entered
21
into within such 180-day period), apply an amount equal to the
fair market value (as so determined) of such property (A) to the
redemption of Senior Debt Securities of any series which are, by
their terms, at the time redeemable or the purchase and
retirement of Senior Debt Securities, if permitted, (B) to the
payment or other retirement of Funded Debt (as defined below)
incurred or assumed by the Company which ranks senior to or pari
passu with the Senior Debt Securities or of Funded Debt incurred
or assumed by any Subsidiary (other than, in either case, Funded
Debt owned by the Company or any Subsidiary) or (C) to the
purchase of property (other than the property involved in such
sale);
(xi) Liens on accounts receivable (and related general
intangibles and instruments) arising out of or in connection with
a sale or transfer by the Company or such Subsidiary of such
accounts receivable;
(xii) Permitted Liens (as defined below); and
(xiii) Liens other than those referred to in clauses (i)
through (xii) above which are created, incurred or assumed after
the date of the Senior Indenture (including those in connection
with purchase money mortgages, Capitalized Lease Obligations (as
defined below) and Sale and Lease-back Transactions), provided
that the aggregate amount of indebtedness secured by such Liens,
or, in the case of Sale and Lease-back Transactions, the Value
(as defined below) of such Sale and Lease-back Transactions,
referred to in this clause (xiii), does not exceed 15% of
Consolidated Total Assets (as defined below).
The term "Capitalized Lease Obligations" means, as to any
Person, the obligations of such Person to pay rent or other amounts
under a lease of (or other agreement conveying the right to use) real
or personal property which obligations are required to be classified
and accounted for as capital lease obligations on a balance sheet of
such Person under generally accepted accounting principles and, for
purposes of the Senior Indenture, the amount of such obligations at
any date shall be the capitalized amount thereof at such date,
determined in accordance with generally accepted accounting
principles.
The term "Consolidated Total Assets" means the total of all
the assets appearing on the consolidated balance sheet of the Company
and its Subsidiaries determined in accordance with generally accepted
accounting principles applicable to the type of business in which the
Company and such Subsidiaries are engaged, and may be determined as of
a date not more than 60 days prior to the happening of the event for
which such determination is being made.
The term "Funded Debt" means any indebtedness which by its
terms matures at or is extendable or renewable at the sole option of
22
the obligor without requiring the consent of the obligee to a date
more than 12 months after the date of the creation of such
indebtedness.
The term "Lien" means, as to any Person, any mortgage, lien,
collateral assignment, pledge, charge, security interest or other
encumbrance in respect of or on, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person
under any conditional sale or other title retention agreement or
Capitalized Lease Obligation, purchase money mortgage or Sale and
Lease-back Transaction with respect to, any property or asset
(including without limitation income and rights thereto) of such
Person (including without limitation capital stock of any Subsidiary
of such Person), or the signing by such Person and filing of a
financing statement which names such Person as debtor, or the signing
by such Person of any security agreement agreeing to file, or
authorizing any other party as the secured party thereunder to file,
any financing statement.
The term "Permitted Liens" means mechanics, materialmen,
landlords, warehousemen and carriers liens and other similar liens
imposed by law securing obligations incurred in the ordinary course of
business which are not past due or which are being contested in good
faith by appropriate proceedings and for which appropriate reserves
have been established; Liens under workmen's compensation,
unemployment insurance, social security or similar legislation; Liens,
deposits, or pledges to secure the performance of bids, tenders,
contracts (other than contracts for the payment of money), leases,
public or statutory obligations, surety, stay, appeal, indemnity,
performance or other similar bonds, or similar obligations arising in
the ordinary course of business; judgment and other similar Liens
arising in connection with court proceedings, provided the execution
or other enforcement of such Liens is effectively stayed and the
claims secured thereby are being actively contested in good faith and
by appropriate proceedings; and easements, rights of way, restrictions
and other similar encumbrances which, in the aggregate, do not
materially interfere with the occupation, use and enjoyment by the
Company or any Subsidiary of the property or assets encumbered thereby
in the normal course of its business or materially impair the value of
the property subject thereto.
The term "Sale and Lease-back Transaction" means, with
respect to any Person, any direct or indirect arrangement with any
other Person or to which any other Person is a party, providing for
the leasing to such first Person of any property, whether now owned or
hereafter acquired (except for temporary leases for a term, including
any renewal thereof, of not more than three years and except for
leases between the Company and a Subsidiary or between Subsidiaries),
which has been or is to be sold or transferred by such first Person to
such other Person or to any Person to whom funds have been or are to
be advanced by such other Person on the Selling Stockholder, James J. Prete, Larry D.
Adkisson,security of such property.
23
The term "Subsidiary" means any corporation of which at the
time of determination the Company or one or more Subsidiaries owns or
controls directly or indirectly more than 50% of the shares of Voting
Stock.
The term "Value" means, with respect to a Sale and Firstar TrustLease-
back Transaction, as of any particular time, the amount equal to the
greater of (i) the net proceeds from the sale or transfer of the
property leased pursuant to such Sale and Lease-back Transaction or
(ii) the fair value in the opinion of the Board of Directors, the
Chairman of the Board, the Vice Chairman of the Board, the President
or the principal financial officer of the Company (the "Escrow Agent"),of such property at
the Selling
Stockholder hastime of entering into such Sale and Lease-back Transaction, in
either case multiplied by a fraction, the numerator of which shall be
equal to the number of full years of the term of the lease remaining
at the time of determination and the denominator of which shall be
equal to the number of full years of such term, without regard to any
renewal or extension options contained in the lease.
The term "Voting Stock" means stock of a corporation of the
class or classes having general voting power under ordinary
circumstances to elect at least a majority of the board of directors,
managers or trustees of such corporation provided that, for the
purposes hereof, stock which carries only the right to receive upvote
conditionally on the happening of an event shall not be considered
voting stock whether or not such event shall have happened.
EVENTS OF DEFAULT
The Senior Indenture provides, with respect to any series of
Senior Debt Securities outstanding thereunder, that any one or more of
the following events that has occurred and is continuing shall
constitute an Event of Default: (i) default in the payment of any
interest upon any Senior Debt Security of that series, or of any
Coupon appertaining thereto, when the same becomes due and payable and
continues for 30 days; (ii) default in the payment of the principal of
or any premium on any Senior Debt Security of that series when due,
whether at maturity, upon redemption by declaration or otherwise;
(iii) default in the deposit of any sinking fund payment, when and as
due by the terms of any Senior Debt Senior Securities of that series;
(iv) default in the performance or breach of any covenant or agreement
of the Company in the Senior Indenture with respect to any Senior Debt
Security of that series (other than those referred to in (i), (ii) and
(iii) above) and continuance thereof for 60 days after written notice
to the Company from the Trustee or from the holders of at least 25% of
the Outstanding Debt Securities of that series; (v) certain events in
bankruptcy, insolvency or reorganization of the Company or a Principal
Subsidiary (as defined below); (vi) an event of default as defined in
any mortgage, indenture or instrument under which there may be issued,
or by which there may be secured or evidenced, any indebtedness of the
Company or any Principal Subsidiary for money borrowed, whether such
indebtedness now exists or shall hereafter be created, shall happen
24
and shall result in such indebtedness in principal amount in excess of
$10,000,000 becoming or being declared due and payable prior to the
date on which it would otherwise become due and payable, and such
acceleration shall not be rescinded or annulled, or such indebtedness
shall not have been discharged, within 30 days after written notice to
the Company from the Trustee or from the Holders of at least 25% of
the Outstanding Debt Securities of that series; and (vii) any other
Event of Default provided with respect to Senior Debt Securities of
that series.
The term "Principal Subsidiary" means, as of any date of
determination thereof, any Subsidiary the consolidated net revenues of
which for the 12-month period ending on the last day of the month then
most recently ended exceed 10% of consolidated net revenues of the
Company for such period, determined on a pro forma basis after giving
effect to any acquisition or disposition of a Subsidiary or a business
effected on or prior to the determination date and after the beginning
of such 12-month period (including acquisition and dispositions
accomplished through a purchase or sale of assets or through a merger
or consolidation).
The Company is required to file annually with the Trustee
under the Senior Indenture an officer's certificate as to the
Company's compliance with all conditions and covenants under such
Indenture. The Senior Indenture provides that the Trustee thereunder
may withhold notice to the Holders of Senior Debt Securities of any
default, except in the case of a default in the payment of the
principal of (or premium), if any, or interest on any Senior Debt
Securities or the payment of any sinking fund installment with respect
to such Senior Debt Securities if it considers it in the interests of
the Holders of such Senior Debt Securities to do so.
PARTICULAR TERMS OF THE SUBORDINATED DEBT SECURITIES
The following description of the Subordinated Debt
Securities sets forth the general terms and provisions of the
Subordinated Debt Securities to which any Prospectus Supplement may
relate. The particular terms of the Subordinated Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which
such general provisions may not apply will be described in the
Prospectus Supplement relating to such Subordinated Debt Securities.
GENERAL
Reference is made to the Prospectus Supplement relating to a
particular issuance of a series of Subordinated Debt Securities being
offered for, among other things, the following terms thereof: (1) the
title of the Subordinated Debt Securities of such series; (2) any
limit on the aggregate principal amount of such Subordinated Debt
Securities; (3) the percentage of the principal amount at which such
Subordinated Debt Securities will be issued and, if other than the
25
principal amount thereof, the portion of the principal amount thereof
payable upon acceleration of the maturity thereof, or the method by
which such portion shall be determined; (4) the date or dates, on
which the principal of such Subordinated Debt Securities will be
payable; (5) the rights, if any, to defer payments of interest on the
Subordinated Debt Securities by extending the interest payment period,
and the duration of such extensions; (6) the subordination terms of
the Subordinated Debt Securities of such series; (7) the rate or rates
at which such Subordinated Debt Securities will bear interest, or the
method by which such rate or rates shall be determined, and the date
such interest shall accrue, or the method by which such date or dates
shall be determined; (8) the dates on which such interest will be
payable and the Regular Record Dates for any Interest Payment Dates
and the basis on which interest shall be calculated if other than on
the basis of a 360-day year of twelve 30-day months; (9) the dates, if
any, on which, and the price or prices at which, such Subordinated
Debt Securities may, pursuant to any mandatory or optional sinking
fund provisions, be redeemed by the Company and other terms and
provisions of such sinking fund; (10) the date, if any, after which,
and the price or prices at which, such Subordinated Debt Securities
may, pursuant to any optional redemption provisions, be redeemed at
the option of the Company or of the Holder thereof and other terms and
provisions of such optional redemption; (11) any provisions in
modification of, in addition to or in lieu of any of the provisions of
Article Fourteen of the Subordinated Indenture relating to defeasance
and covenant defeasance; (12) whether and under what circumstances
the Company will pay Additional Amounts, as contemplated by
Section 1005 of the Subordinated Indenture, on such Subordinated Debt
Securities to any Holder who is not a United States person (including
any modification to the definition of such term as contained in the
Subordinated Indenture as originally executed) with respect to any
tax, assessment or governmental charge and, if so, whether the Company
will have the option to redeem such Subordinated Debt Securities
rather than pay such Additional Amounts (and the terms of any such
option); (13) any deletions from, modifications of or additions to the
Events of Default or covenants of the Company with respect to such
Subordinated Debt Securities, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants set
forth herein; (14) if other than Dollars, the Currency in which
payment of the principal of (and premium, if any, on) or interest, if
any, on such Subordinated Debt Securities shall be payable or
denominated; (15) whether the amount of payments of principal of (and
premium, if any, on) or interest, if any, on such Subordinated Debt
Securities may be determined with reference to an additional 6,348 Shares.
Suchindex, formula or
other method (which index, formula or method may be based, without
limitation, on one or more Currencies, commodities, equity indices or
other indices), and the manner in which such amounts shall be
determined; and (16) any other terms of such Subordinated Debt
Securities. For a description of the terms of any series of
Subordinated Debt Securities, reference must be made to both the
Prospectus Supplement relating thereto and to the description of Debt
Securities set forth herein.
26
Unless otherwise indicated in the Prospectus Supplement
relating thereto, the Subordinated Debt Securities will be issued in
Dollars in fully registered form, without Coupons.
DENOMINATIONS
Unless otherwise indicated in the Prospectus Supplement
relating thereto, Subordinated Debt Securities that are Registered
Securities will be issuable in denominations of $25 and integral
multiples of $25 and Subordinated Debt Securities that are Bearer
Securities will be issuable in denominations of $5,000.
SUBORDINATION
The Subordinated Debt Securities will be subordinated to the
prior payment in full of (i) the Senior Debt Securities and all other
unsecured and unsubordinated indebtedness of the Company ranking pari
passu with the Senior Debt Securities and (ii) certain other
indebtedness of the Company to the extent set forth in the Prospectus
Supplement relating to such Subordinated Debt Securities.
EVENTS OF DEFAULT
The Subordinated Indenture provides, with respect to any
series of Subordinated Debt Securities outstanding thereunder, that
any one or more of the following events that has occurred and is
continuing shall constitute an Event of Default: (i) default in the
payment of any interest upon any Subordinated Debt Security of that
series, or of any Coupon appertaining thereto, when the same becomes
due and payable and continues for 60 days; provided that, a valid
extension of the interest payment period by the Company in accordance
with the terms of any supplemental indenture shall not constitute a
default in the payment of interest or such Coupon for this purpose;
(ii) default in the payment of the principal of or any premium on any
Subordinated Debt Security of that series when due, whether at
maturity, upon redemption by declaration or otherwise; provided that a
valid extension by the Company of the maturity of the Subordinated
Debt Securities of such series in accordance with the terms of any
supplemental indenture shall not constitute a default in the payment
of principal or any premium for this purpose; (iii) default in the
deposit of any sinking fund payment, when and as due by the terms of
any Subordinated Debt Securities of that series; (iv) default in the
performance or breach of any covenant or agreement of the Company in
the Subordinated Indenture with respect to any Subordinated Debt
Security of that series (other than those referred to in (i), (ii) and
(iii) above), and continuance thereof for 90 days after written notice
to the Company from the Trustee or from the holders of at least 25% of
the Outstanding Debt Securities of that series; (v) certain events in
bankruptcy, insolvency or reorganization of the Company; (vi) an event
of default as defined in any mortgage, indenture or instrument under
which there may be issued, or by which there may be secured or
evidenced, any indebtedness of the Company for money borrowed, whether
27
such indebtedness now exists or shall hereafter be created, shall
happen and shall result in such indebtedness in principal amount in
excess of $15,000,000 becoming or being declared due and payable prior
to the date on which it would otherwise become due and payable, and
such acceleration shall not be rescinded or annulled, or such
indebtedness shall not have been discharged, within 30 days after
written notice to the Company from the Trustee or from the Holders of
at least 25% of the Outstanding Debt Securities of that series; and
(vii) any other Event of Default provided with respect to Subordinated
Debt Securities of that series. The Company is required to file
annually with the Trustee under the Subordinated Indenture an
officer's certificate as to the Company's compliance with all
conditions and covenants under such Indenture. The Subordinated
Indenture provides that the Trustee thereunder may withhold notice to
the Holders of Subordinated Debt Securities of any default, except in
the case of a default in the payment of the principal of (or premium),
if any, or interest on any Subordinated Debt Securities or the payment
of any sinking fund installment with respect to such Subordinated Debt
Securities if it considers it in the interests of the Holders of such
Subordinated Debt Securities to do so.
DESCRIPTION OF CAPITAL STOCK
Under the Company's Restated Certificate of Incorporation,
as amended (the "Restated Certificate of Incorporation"), the Company
is authorized to issue 400,000,000 shares areof Common Stock, par value
$1.00 per share, and 10,000,000 shares of preferred stock which is
issuable in one or more series and of which 9,990,000 shares have a
par value of $1.00 per share and 10,000 shares have no par value
(collectively, the "Preferred Stock"). As of December 31, 1995,
158,618,011 shares of Common Stock (excluding treasury shares) were
issued and outstanding and there were no shares of Preferred Stock
issued and outstanding. In addition, as of December 31, 1995, the
Company had 9,100,661 shares of Common Stock reserved for issuance
under the Company's stock option plans, leaving 232,986,546 authorized
shares of Common Stock (including 7,591 shares of Common Stock held in
escrow with the Escrow AgentCompany's treasury) available for satisfactionissuance. The number of
authorized shares of Preferred Stock includes 500,000 authorized
shares of Junior Participating Preferred Stock, Series B (the "Series
B Preferred Stock") issuable pursuant to the rights agreement dated as
of October 20, 1988 between the Company and First Chicago Trust
Company of New York (formerly known as Morgan Shareholders Services
Trust Company) (the "Rights Plan"), none of which were outstanding as
of December 31, 1995, leaving 9,500,000 authorized shares of Preferred
Stock available for issuance as of September 30, 1995. See "-- Stock
Purchase Rights."
COMMON STOCK
The holders of the indemnification obligationsCommon Stock have one vote for each share
held. Subject to the prior rights of holders of any issued and
28
outstanding Preferred Stock that may be issued in the future, holders
of the Selling StockholderCommon Stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors out of funds
legally available therefor. In the event of a liquidation (whether
voluntary or involuntary) or reduction in the Company's capital
resulting in any distribution of assets to stockholders, the holders
of the Common Stock are entitled to receive, pro rata according to the
number of shares held by each, all of the assets of the Company
remaining for distribution after payment to creditors and the holders
of any issued and outstanding Preferred Stock of the full preferential
amounts to which they are entitled.
Holders of the Common Stock do not have preemptive rights to
subscribe for and purchase any new or additional issue of Common Stock
or securities convertible into Common Stock. Shares of the Common
Stock are not subject to redemption.
The outstanding shares of Common Stock are listed on the New
York Stock Exchange and the Chicago Stock Exchange. The transfer
agent and registrar of the shares of Common Stock is First Chicago
Trust Company of New York.
STOCK PURCHASE RIGHTS
Each outstanding share of Common Stock includes one
preferred stock purchase right (individually a "Right" and
collectively the "Rights") provided under the Reorganization Agreement. The escrow will terminate onRights Plan. Each Right
entitles the holder, until the earlier of June 9, 1996October 31, 1998 or the
final resolutionredemption of the last claim
permittedRights, to buy one four-hundredth of a share of
Series B Preferred Stock at a price of $25 per one four-hundredth of a
share (as adjusted to reflect stock splits since the issuance of the
Rights). The Series B Preferred Stock is nonredeemable and will have
100 votes per share. The Company has reserved 500,000 shares of
Series B Preferred Stock for issuance upon exercise of such Rights.
The Rights will be exercisable only if a person or group acquires 20%
or more of voting power of the Company or announces a tender offer
following which it would hold 30% or more of the Company's voting
power.
In the event that any person becomes the beneficial owner of
30% or more of the Company's voting power, the Rights (other than
Rights held by the 30% stockholder) would become exercisable for that
number of shares of the Common Stock having a market value of two
times the exercise price of the Right. Furthermore, if, following the
acquisition by a person or group of 20% or more of the Company's
voting power, the Company were acquired in a merger or other business
combination or 50% or more of its assets were sold, or in the event of
certain types of self-dealing transactions by a 20% stockholder, each
Right (other than Rights held by the 20% stockholder) would become
exercisable for that number of shares of Common Stock (or securities
of the surviving company in a business combination) having a market
value of two times the exercise price of the Right.
29
The Company may redeem the Rights at one cent per Right
prior to the occurrence of an event that causes the Rights to become
exercisable for Common Stock. The Board of Directors may terminate
the Company's right to redeem the Rights under certain circumstances
at any time after a group or person acquires 20% or more of the
Company's voting power.
One Right will be issued in respect of each share of Common
Stock issued before the earlier of October 31, 1998 or the redemption
of the Rights. As of the date of this Prospectus, the Rights are not
exercisable, certificates representing the Rights have not been issued
and the Rights automatically trade with the shares of Common Stock.
The Rights will expire on October 31, 1998 unless earlier redeemed.
PREFERRED STOCK
Under the Restated Certificate of Incorporation, shares of
Preferred Stock may be issued in the future in such series as may be
designated by the Board of Directors. In creating any such series,
the Board of Directors has the authority, without any further vote or
action by the Company's stockholders, to fix the dividend rights and
rates, voting and conversion rights, redemption provisions,
liquidation preferences and other relative, participating, optional or
other special rights, qualifications, limitations or restrictions of
such series.
The specific terms of a particular series of Preferred Stock
offered hereby will be described in the Prospectus Supplement relating
to such series of Preferred Stock, which may include the following:
(i) The maximum number of shares to constitute the series
and the distinctive designations thereof;
(ii) The annual dividend rate, if any, on shares of the
series, whether such rate is fixed or variable or both, the date
or dates from which dividends will begin to accrue or accumulate,
whether the dividends will be cumulative, and the dividend
preference, if any, applicable to the shares of the series;
(iii) Whether the shares of the series will be
redeemable and, if so, the price at and the terms and conditions
on which the shares of the series may be redeemed, including the
time during which the shares of the series may be redeemed and
any accumulated dividends thereon that the holders of the shares
of the series shall be entitled to receive upon redemption
thereof;
(iv) The liquidation preference, if any, applicable to
shares of the series;
(v) Whether the shares of the series will be subject to
operation of a retirement or sinking fund and, if so, the extent
30
and manner in which any such fund shall be applied to the
purchase or redemption of the shares of the series for retirement
or for other corporate purposes, and the terms and provisions
relating to the operation of such fund;
(vi) The terms and conditions, if any, on which the shares
of the series shall be convertible into, or exchangeable for,
shares of any other class or classes of capital stock of the
Company, or any series of any other class or classes, or of any
other series of the same class, including the price or prices or
the rate or rates of conversion or exchange and the method, if
any, of adjusting the same;
(vii) The voting rights, if any, of the shares of the
series; and
(viii) Any other preferences and relative, participating,
optional or other special rights or qualifications, limitations
or restrictions thereof.
Although the Company is not required to seek stockholder
approval prior to designating any future series of Preferred Stock,
the Board of Directors has a policy of seeking stockholder approval
prior to designating any future series of Preferred Stock with a vote
or convertible into stock having a vote in excess of 13% of the vote
represented by all voting stock immediately subsequent to such
issuance, except for the purpose of (i) raising capital in the
ordinary course of business or (ii) making acquisitions, the primary
purpose of which is not to effect a change of voting power.
The only series of Preferred Stock currently authorized by
the Board of Directors for issuance is the Series B Preferred Stock
issuable under the Rights Plan. See "-- Stock Purchase Rights."
PROVISIONS WITH POSSIBLE ANTI-TAKEOVER EFFECTS
As discussed above, the Company has adopted a Rights Plan
which has the effect of providing stockholders with rights to purchase
shares of Common Stock (or securities of an acquiring company) at half
of the market price under certain circumstances involving a potential
change in control of the Company that has not been approved by the
Board of Directors. In addition, the Delaware General Corporate Law
provides, among other things, that any beneficial owner of more than
15% of the Company's voting stock is prohibited, without the prior
approval of the Board of Directors, from entering into any business
combination with a company for three years from the date such 15%
ownership interest is acquired. Additionally, the "fair price
provisions" of the Restated Certificate of Incorporation require that
certain proposed business combinations between the Company and an
"interested party" (a beneficial owner of 5% or more of the voting
shares of the Company) must be approved by the holders of 75% of the
voting shares, unless certain fair price and procedural requirements
31
are met or the business combination is approved by the directors of
the Company who are not affiliated with the interested party. A vote
of the holders of 75% of the Company's outstanding voting stock is
required to amend the fair price provisions of the Restated
Certificate of Incorporation.
The Restated Certificate of Incorporation and the Company's
by-laws (the "By-Laws") contain certain other provisions which may be
viewed as having an anti-takeover effect. The Restated Certificate of
Incorporation classifies the Board of Directors into three classes and
provides that vacancies on the Board of Directors are to be filled by
a majority vote of directors and that directors so chosen shall hold
office until the end of the full term of the class in which the
vacancy occurred. A vote of the holders of 75% of the Company's
outstanding voting stock is required to amend these provisions. Under
the Delaware General Corporation Law, directors of the Company may
only be removed for cause. The Restated Certificate of Incorporation
and the By-Laws also contain provisions that may reduce surprise and
disruptive tactics at stockholders' meetings. The Restated
Certificate of Incorporation provides that no action may be taken by
stockholders except at an annual meeting or special meeting, and does
not permit stockholders to directly call a special meeting of
stockholders. A stockholder must give written notice to the Company
of an intention to nominate a director for election at an annual
meeting 90 days prior to the anniversary date of the immediately
preceding annual meeting. Each of these provisions tends to make a
change of control of the Board of Directors more difficult and time
consuming.
PLAN OF DISTRIBUTION
The Company may sell the Securities in any of the following
ways: (i) through underwriters or dealers; (ii) directly to a limited
number of purchasers or to a single purchaser; (iii) through agents;
or (iv) through any combination of the above. The Prospectus
Supplement with respect to the Securities will set forth the terms of
the Escrow Agreement. At thatoffering, the purchase price of the Securities and the proceeds to
the Company from such sale, any underwriters, dealers or agents, any
fees, underwriting discounts and other items constituting
underwriters' compensation, any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers. Any
initial public offering price and any discounts or concessions allowed
or reallowed or paid to dealers may be changed from time any
Shares not used to satisfytime.
If underwriters are involved in the Selling Stockholder's indemnification
obligations and still held in escrowsale, the Securities
will be distributed toacquired by the Selling Stockholderunderwriters for their own account and may be
sold pursuant to this Prospectus.
PLAN OF DISTRIBUTION
The Selling Stockholder has advised the Company that sales
of Shares may be made from time to time for its account on the NYSE,
the CSE, in the over-the-counter market, in private transactions or
otherwise through broker-dealers. Any such sales will be made either
at market prices prevailing at the time of sale or at negotiated
prices. Whether any such sales will be made, and the time of any such
sales, will rest within the Selling Stockholder's discretion.
The Selling Stockholder has not identified to the Company
any broker-dealer that may participate in the offer. Any such broker-
dealer either may act as agent for the Selling Stockholder or may
purchase any of the Shares as principal and thereafter may sell such
Sharesresold from time to time in one or more transactions, on the NYSE, the CSEincluding
negotiated transactions, at a fixed public offering price or in
the over-the-counter market at
varying prices prevailingdetermined at the time of sale
or at negotiated prices. Any broker-dealer thatsale. The Securities may be
offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by one or
32
more firms acting as underwriters. The underwriter or underwriters
with respect to a particular underwritten offering of the Securities
to be named in the Prospectus Supplement relating to such offering or,
if an underwriting syndicate is used, the managing underwriter or
underwriters, will be set forth on the cover of such Prospectus
Supplement. Unless otherwise set forth in the Prospectus Supplement
relating thereto, the obligations of the underwriters to purchase the
Securities will be subject to conditions precedent and the
underwriters will be obligated to purchase all the Securities offered
by the Selling Stockholder might be deemedProspectus Supplement if any are purchased.
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 the dealers as principals. The dealers may then
resell such Securities to the public at varying prices to be
an "underwriter" as defineddetermined by such dealers at the time of resale. The names of the
dealers and the terms of the transaction will be set forth in the
Prospectus Supplement relating thereto.
The Securities Act,may be sold directly by the Company or
through agents designated by the Company from time to time. Any agent
involved in the offer or sale of the Securities in respect to which
this Prospectus is delivered will be named, and any commissions
paidpayable by the Company to such broker-dealer
(and, if such broker-dealer purchases Shares as a principal, any
profits received onagent will be set forth in, the
resale of such Shares)Prospectus Supplement relating thereto.
The Securities may be sold directly by the Company to
institutional investors or others, who may be deemed to be
underwriting discounts or commissions under the Securities Act. In
addition, the Selling Stockholder may be deemed to be an underwriterunderwriters within the meaning of the Securities Act with respect to
any resale thereof. The terms of any such sales will be described in
the Shares,Prospectus Supplement relating thereto.
Agents, dealers and any profits realized by such personunderwriters may be deemedentitled under
agreements entered into with the Company to indemnification by the
Company against certain civil liabilities, including liabilities under
the Securities Act, or to contribution with respect to payments which
such agents, dealers or underwriters may be underwriting commissions.
-4-required to make in
respect thereof. Agents, dealers and underwriters may be customers
of, engage in transactions with, or perform services for the Company
in the ordinary course of business.
Other than the Common Stock, which will be approved for
listing upon notice of issuance on the New York Stock Exchange and the
Chicago Stock Exchange, the Securities may or may not be listed on a
national securities exchange. No assurances can be given that there
will be a market for the Securities.
LEGAL OPINION
The legalityvalidity of the SharesSecurities offered hereby has beenwill be passed
upon for the Company by Schiff Hardin & Waite, 7200 Sears Tower,
Chicago, Illinois, 60606.and
33
for any underwriters or agents as specified in the Prospectus
Supplement. The opinions with respect to the Securities may be
conditioned upon, and subject to certain assumptions regarding, future
action to be taken by the Company and the applicable Trustee in
connection with the issuance and sale of particular Securities, the
specific terms of the Securities and other matters that may affect the
validity of the Securities but that cannot be ascertained on the date
of such opinions. Schiff Hardin & Waite has advised the Company that,
as of the date hereof, a member of the firm participating in the
representation of the Company in this offering owns approximately
3,700 Shares.shares of Common Stock.
EXPERTS
The consolidated financial statements and schedule of the
Company incorporated herein by reference, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their
reportreports with respect thereto, and are incorporated herein by reference
in reliance upon the authority of said firm as experts in accounting
and auditing in giving said report.
-5-reports.
34
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ItemITEM 14. Other Expenses of Issuance and DistributionOTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses in connection
with the distribution of the shares ofDebt Securities, Preferred Stock, Common
Stock (and the Preferred
Stock Purchaseand Rights related thereto) being registered. All amounts shown below are
estimates, except the registration fee:
Registration fee of Securities and
Exchange Commission . . . . . . . . . . . . . . . . . . . $1,163.00
Stock Exchange Listing Fees . . . . . . . . . . . 2,158.00$100,000
Accountants' fees and expenses . . . . . . . . 5,000.0050,000
Legal fees and expenses . . . . . . . . . . . . 10,000.00200,000
Printing Registration Statement, prospectus
and exhibits and other printing expenses . . 100,000
Trustee fees and expenses . . . . . . . . . . . 20,000
Rating agency fees . . . . . . . . . . . . . . 125,000
Blue sky fees, expenses and legal fees . . . . 15,000
Miscellaneous . . . . . . . . . . . . . . 1,679.00
----------
$20,000.00. . . 25,000
-----------
TOTAL . . . . . . . . . . . . . . . . . . . ==========
Item$ 635,000
ITEM 15. Indemnification of Directors and OfficersINDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation and By-Laws of the
registrant provide for indemnification by the registrant of each of
its directors and officers to the fullest extent permitted by law for
liability (including liability arising under the Securities Act of
1933 (the "Act"))Act) of
such director or officer arising by reason of his or her status as a
director or officer of the registrant, provided that he or she met the
standards established in the Restated Certificate of Incorporation,
which include requirements that he or she acted in good faith and in a
manner he or she reasonably believed to be in the registrant's best
interest.interests. The registrant will also advance expenses prior to final
disposition of an action, suit or proceeding upon receipt of an
undertaking by the director or officer to repay such amount if the
director or officer is not entitled to indemnification. All rights to
indemnification and advancement of expenses are deemed to be a
contract between the registrant and its directors and officers. The
determination that a director or officer has met the standards
established in the Restated Certificate of Incorporation and By-Laws
may be made by majority vote of a quorum consisting of disinterested
directors, an opinion of counsel (regardless of whether such quorum is
available), a majority vote of stockholders, or a court (which may
also overturn any of the preceding determinations). The registrant
has purchased insurance against liabilities of directors or officers,
as permitted by the Restated Certificate of Incorporation and By-Laws.
The registrant also has entered into indemnification agreements with
each of its directors and officers which provide that the directors
II-1
and officers will be entitled to their indemnification rights as they
existed at the time they entered into the agreement, regardless of
subsequent changes in the registrant's indemnification policy.
-6-
ItemITEM 16. ExhibitsEXHIBITS
The Exhibits filed herewith are set forth on the Index to
Exhibits filed as a part of this Registration Statement on page II-6
hereof.
ItemITEM 17. UndertakingsUNDERTAKINGS
The undersigned registrant hereby undertakes:
1.(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(a)(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(b)(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or the most recent post-effectivepost-
effective amendment thereof) which, individually
or in the aggregate, represent a fundamental
change in the information set forth in the
registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price
represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement;
(c)(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.statement;
provided, however, that the undertakings set forth in paragraphs 1(a)(i)
and 1(b)(ii) above do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included
in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
II-2
Exchange Act of 1934 that are incorporated by reference in thethis
registration statement.
2.(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
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.
3.(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.(4) That, 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 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 therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
-7-Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions described under
Item 15 above, 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 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 its 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 and will be governed by the final
adjudication of such issue.
-8-II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Registrantthe registrant certifies that it has reasonable grounds to believe
that it meets all the requirements for filing on Form S-3 and has duly
caused this registration statementRegistration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Rockford, State
of Illinois, on this 15th19th day of November, 1995.January, 1996.
NEWELL CO.
(Registrant)
By: /s/ William T. Alldredge
-------------------------------
William T. Alldredge
Vice President - Finance
Pursuant to the requirements of the Securities Act of 1933,
this registration statementRegistration Statement has been signed by the following persons
in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ William P. Sovey* Vice Chairman and Chief
- ------------------------------------------------------------------ Executive Officer (Principal
William P. Sovey Executive Officer) and Director
/s/ William T. Alldredge Vice President - Finance
November 15, 1995
- ------------------------------------------------------------------ (Principal Financial Officer) January 19, 1996
William T. Alldredge
/s/ Thomas A. Ferguson, Jr.* President and Chief
- ---------------------------------------------------------------------- Operating Officer and Director
Thomas A. Ferguson, Jr.
-9-
Signature Title Date
--------- ----- ----
/s/ Donald L. Krause* Senior Vice President - Controller
- ---------------------------------------------------------------------- (Principal Accounting Officer)
Donald L. Krause
/s/ Daniel C. Ferguson* Chairman of the Board of Directors
- ----------------------------------------------------------------------
Daniel C. Ferguson
II-4
Signature Title Date
/s/ Alton F. Doody* Director
- ----------------------------------------------------------------------
Alton F. Doody
/s/ Gary H. Driggs* Director
- ----------------------------------------------------------------------
Gary H. Driggs
/s/ Robert L. Katz* Director
- ----------------------------------------------------------------------
Robert L. Katz
/s/ John J. McDonough* Director
- ----------------------------------------------------------------------
John J. McDonough
/s/ Elizabeth Cuthbert Millett* Director
- ----------------------------------------------------------------------
Elizabeth Cuthbert Millett
Director
- ----------------------------------
Cynthia A. Montgomery
/s/ Allan P. Newell* Director
- ----------------------------------------------------------------------
Allan P. Newell
/s/ Henry B. Pearsall* Director
- ----------------------------------------------------------------------
Henry B. Pearsall
* By: /s/ William T. Alldredge
November 15, 1995
- ----------------------------------------------------------------- January 19, 1996
William T. Alldredge,
Attorney-in-FactAttorney-in-fact
-10-II-5
EXHIBIT INDEX
TO EXHIBITS
Exhibit
IndexNumber Description
1 Form of Underwriting Agreement.
4.1 Restated Certificate of Incorporation of Newell
Co., as amended as of May 10, 1995 (incorporated
by reference to Exhibit - --------- -------
2.1 Agreement and Plan3.1 to the Company's
Form 10-Q for the quarter ended June 30, 1995).
4.2 By-Laws of ReorganizationNewell Co., as amended through
November 9, 1995.
4.3 Form of Indenture, dated as of June
5,November 1, 1995,
byto be entered into between the Company and among Newell Co.The
Chase Manhattan Bank (National Association), Ashland Acquisition
Co.as
Trustee, relating to the Senior Debt
Securities.*
4.4 Form of Indenture, dated as of November 1, 1995,
to be entered into between the Company and The
Chase Manhattan Bank (National Association), and Ashland Products, Inc.as
Trustee, relating to the Subordinated Debt
Securities.*
2.2 Escrow4.5 Rights Agreement dated as of June 9, 1995October 20, 1988
between the Company and First Chicago Trust
Company of New York (formerly known as Morgan
Shareholders Services Trust Company)
(incorporated by and among
Newell Co., Thomas F. Gaffney, James J. Prete, Larry D.
Adkisson and Firstar Trust Company*reference to Exhibit 4 to the
Company's Current Report on Form 8-K dated
October 25, 1988).
5 Opinion of Schiff Hardin & Waite*Waite.
12 Computation of Ratios of Earnings to Fixed
Charges and Earnings to Combined Fixed Charges
and Preferred Dividends.
23.1 Consent of Arthur Andersen LLP*
23.2 Consent of Schiff Hardin & Waite (contained in
their opinion filed as Exhibit 5).
23.2 Consent of Arthur Andersen LLP.*
II-6
EXHIBIT INDEX - (continued)
Exhibit
Number Description
24 Powers of attorney (set forth on the signature
page of this registration statement)Registration Statement).*
__________________________25.1 Form T-1 Statement of Eligibility under the
Trust Indenture Act of 1939 of Trustee for
Senior Indenture.
25.2 Form of T-1 Statement of Eligibility under the
Trust Indenture Act of 1939 of Trustee for
Subordinated Indenture.
______________________
* Previously Filedfiled.
II-7