As filed with the Securities and Exchange Commission on October 12th,November 29, 2001.
Registration No. 333-71518
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CARPENTER TECHNOLOGY CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 3312 23-0458500
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
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1047 N. Park Road
Wyomissing, Pennsylvania 19610
(610) 208-2000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
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John R. Welty, Esq.
Carpenter Technology Corporation
1047 N. Park Road
Wyomissing, Pennsylvania 19610
(610) 208-2000
(Name, address including zip code, and telephone number, including area code,
of agent for service)
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With Copies to:
Herbert F. Goodrich, Jr., Esq.
Dechert
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, Pennsylvania 19103
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Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
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. [_]
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CALCULATION OF REGISTRATION FEE
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Proposed Propose
Amount Maximum Maximum
Title of each Class of to be Offering Price Aggregate Amount of
Securities to be Registered Registered Per Unit Offering Price (1) Registration Fee
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7 5/8% Notes due 2011... $100,000,000 100% $100,000,000 $30,000
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(1)Estimated pursuant to Rule 457(f) under the Securities Act of 1933, as
amended, solely for purposes of calculating the registration fee.
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The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall have
filed 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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED OCTOBER 12,NOVEMBER 29, 2001
PROSPECTUS
[LOGO] CARPENTER
OFFER TO EXCHANGE
7 5/8% Notes due 2011 for all outstanding
7 5/8% Notes due 2011
of
Carpenter Technology Corporation
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME ON , 2001, UNLESS EXTENDED.
Terms of the exchange offer:
. We will exchange all old notes that are validly tendered and not
withdrawn prior to the expiration of the exchange offer.
. You may withdraw tenders of old notes at any time prior to the
expiration of the exchange offer.
. We believe that the exchange of old notes will not be a taxable event
for U.S. federal income tax purposes, but you should see "United States
Federal Income Tax Considerations" on page 3132 for more information.
. We will not receive any proceeds from the exchange offer.
. The terms of the new notes are substantially identical to the old notes,
except that the new notes are registered under the Securities Act of
1933 and the transfer restrictions and registration rights applicable to
the old notes do not apply to the new notes.
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See "Risk Factors" beginning on page 56 for a discussion of risks that should
be considered by holders prior to tendering their old notes.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
The date of this prospectus is , 2001.
The information in this prospectus is not complete and may be changed. We
may not exchange these securities as described in this prospectus until the
registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to exchange these securities and is
not soliciting tenders of old notes in any state where the offer or sale is not
permitted.
This prospectus incorporates important business and financial information
about Carpenter that is not included in or delivered with this prospectus. See
"Where You Can Find More Information" for more information regarding these
matters. We have not authorized any other person to provide you with different
information. If anyone provides you with different or inconsistent information,
you should not rely on it. You should assume that the information appearing in
this prospectus is accurate as of the date on the front cover of this
prospectus only. Our business, financial condition, results of operations and
prospects may have changed since that date. Neither the delivery of this
prospectus nor any sale made hereunder shall under any circumstances imply that
the information herein is correct as of any date subsequent to the date on the
cover of this prospectus.
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TABLE OF CONTENTS
Page
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FORWARD-LOOKING STATEMENTS........ iii
SUMMARY........................... 1
RISK FACTORS...................... 56
USE OF PROCEEDS................... 78
RATIO OF EARNINGS TO FIXED CHARGES 89
CAPITALIZATION.................... 910
SELECTED HISTORICAL CONSOLIDATED
FINANCIAL DATA.................. 1011
DESCRIPTION OF NOTES.............. 1213
THE EXCHANGE OFFER................ 2223
Page
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PLAN OF DISTRIBUTION................ 3031
UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES...................... 3132
LEGAL MATTERS....................... 3536
EXPERTS............................. 3536
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE...................... 3536
WHERE YOU CAN FIND MORE INFORMATION. 3536
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Carpenter Technology Corporation is a Delaware corporation. Our principal
executive offices are located at 1047 N. Park Road, Wyomissing, Pennsylvania
19610, and our telephone number at that address is (610) 208-2000. Our World
Wide Web site address is www.cartech.com. The information in our web site is
not part of this prospectus. Our common stock is listed on the New York Stock
Exchange under the symbol "CRS."
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Each broker-dealer that receives new notes for its own account pursuant to
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of new notes. The letter of transmittal states that
by so acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act of 1933, as amended, which we refer to as the Securities Act.
This prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of new notes received in
exchange for old notes where the old notes were acquired by the broker-dealer
as a result of market-making activities or other trading activities. We have
agreed that, for a period of 180 days after the expiration date, we will make
this prospectus available to any broker-dealer for use in connection with any
such resale. See "Plan of Distribution."
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ii
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. In particular, statements
about Carpenter' s expectations, beliefs, plans, objectives, assumptions or
future events or performance, including, among other matters, statements
concerning future revenues and continued growth in various market segments,
contained in this prospectus or any document incorporated by reference herein
or therein under the headings ''Risk Factors" and ''Management's Discussion and
Analysis of Financial Condition and Results of Operations" are forward-looking
statements. Carpenter has based these forward-looking statements on Carpenter's
current expectations about future events. While Carpenter believes these
expectations are reasonable, such forward-looking statements are inherently
subject to risks and uncertainties, many of which are beyond Carpenter's
control. Carpenter's actual results may differ materially from those suggested
by these forward-looking statements for various reasons, including those
discussed in this prospectus or the registration statement of which it is a
part or any document incorporated by reference herein or therein under the
headings "Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations." Some of the key factors that could cause
actual results to differ from Carpenter's expectations are:
. the cyclical nature of the specialty materials business and certain
end-use markets, including, but not limited to, aerospace, automotive,
industrial products and consumer durables, which are subject to changes
in general economic conditions;
. the continuing high levels of stainless steel imports into the United
States;
. the ability of Carpenter, along with other domestic producers of
stainless steel products, to obtain and retain favorable rulings in
dumping and countervailing duty claims against foreign producers;
. the ability of Carpenter to recoup increased costs of electricity,
natural gas and raw materials through increased prices and surcharges;
. worldwide excess manufacturing capacity for certain alloys which
Carpenter produces and fluctuations in currency exchange rates,
resulting in increased competition and downward pricing pressure on
certain Carpenter products;
. fluctuations in financial markets that could impact the valuation of the
assets in Carpenter's pension trusts and the accounting for pension
assets;
. the critical importance of certain raw materials used by Carpenter, some
of which are acquired from foreign sources and may be located in
countries subject to unstable political and economic conditions which
may affect the prices or supply of these materials;
. the susceptibility of export sales to the effects of export controls,
changes in legal and regulatory requirements, policy changes affecting
the markets, changes in tax laws and tariffs, exchange rate fluctuations
and political and economic instability; and
. the effects on operations of changes in domestic and foreign
governmental laws and public policy, including environmental regulations.
Given these risks and uncertainties, you are cautioned not to place undue
reliance on such forward-looking statements. The forward-looking statements
included in this prospectus or the registration statement of which it is a part
or any document incorporated by reference herein or therein are made only as of
the date hereof or thereof. Carpenter does not undertake and specifically
declines any obligation to update any such statements or to publicly announce
the results of any revisions to any of such statements to reflect future events
or developments.
iii
SUMMARY
This summary highlights information contained elsewhere in this prospectus.
You should read carefully the entire prospectus and the documents incorporated
by reference into this prospectus, including the risks of investing discussed
under "Risk Factors," before making an investment decision.
In this prospectus, "Company," "we," "our," "us" and "Carpenter" refer to
Carpenter Technology Corporation. With respect to the descriptions of our
business contained in this prospectus, such terms refer to Carpenter Technology
Corporation and our subsidiaries.
The Exchange Offer
On August 13, 2001, we issued and sold $100.0 million aggregate principal
amount 7 5/8% Notes Due 2011, which we refer to as the old notes. In connection
with that sale, we entered into an exchange and registration rights agreement
with the initial purchasers of the old notes in which we agreed to deliver this
prospectus to you and to complete an exchange offer for the old notes. As
required by the exchange and registration rights agreement, we are offering to
exchange $100.0 million aggregate principal amount of our new 7 5/8% Notes Due
2011, which we refer to as the new notes, the issuance of which will be
registered under the Securities Act, for a like aggregate principal amount of
our old notes. We refer to this offer to exchange new notes for old notes in
accordance with the terms set forth in this prospectus and the accompanying
letter of transmittal as the exchange offer. You are entitled to exchange your
old notes for new notes. We urge you to read the discussions under the headings
"The Exchange Offer" and "The New Notes" in this summary for further
information regarding the exchange offer and the new notes.
The Company
Carpenter Technology Corporation, founded in 1904, is engaged in the
manufacture, fabrication and distribution of specialty metals and certain
engineered products. Carpenter primarily processes basic raw materials such as
chromium, nickel, titanium, iron scrap and other metal alloying elements
through various melting, hot forming and cold working facilities to produce
finished products in the form of billet, bar, rod, wire, narrow strip, special
shapes and hollow forms in many sizes and finishes and produces certain metal
powders and fabricated metal products. In addition, Carpenter produces ceramic
and metal-injection molded products from various raw materials using molding,
heating and other processes. Specialty metals production includes the
manufacture and distribution of stainless steels, titanium, high temperature
alloys, electronic alloys, tool steels and other alloys in billet, bar, wire,
rod and strip forms. Carpenter distributes products directly from its
production plants and from its distribution network.
Carpenter is organized on a product basis and managed in three segments:
Specialty Alloys, Titanium Alloys and Engineered Products. For reporting
purposes, because of the similarities in products, processes, customers,
distribution methods and economic characteristics, the Specialty Alloys and
Titanium Alloys segments have been aggregated into one reportable segment,
Specialty Metals.
Recent Developments
Executive Management Change
Dennis M. Draeger, previously Carpenter's President and Chief Operating
Officer, succeeded Robert W. Cardy as Chairman and Chief Executive Officer on
July 1, 2001 and became Chairman, President and Chief Executive Officer. Mr.
Cardy retired June 30, 2001 after 39 years of service. The transition was
pursuant to Carpenter's previously announced chief executive officer succession
plan. Mr. Draeger joined Carpenter's executive ranks in 1996 as senior vice
president of Specialty Alloys Operations (then called Steel Operations). He was
named executive vice president in 1998. He previously worked 34 years for
Armstrong World Industries, lastly as president of Worldwide Floor Products
Operations. Mr. Draeger originally joined Carpenter's Board of Directors in
1992.
1
Special Charge
During the fourth quarter of fiscal 2001, Carpenter incurred a special
charge of $37.6 million before taxes that was recognized in the consolidated
statement of income as a separate $36.0 million special charge, an addition to
cost of sales of $1.2 million as a result of a writedown of inventory and an
addition to selling and administrative expenses of $.4 million due to a
writedown of accounts receivable. The components of this special charge are
indicated below.
. Due to the pending divestiture of four Engineered Products Group (EPG)
business units that were considered non-strategic, we recorded a pre-tax
charge of $19.3 million consisting of $15.7 million in writedowns of
long-lived assets, $1.2 million in writedowns of inventory, $.4 million in
writedowns of accounts receivable, $1.0 million in writedowns of other
current and non-current assets, and $1.0 million for related exit costs.
The $15.7 million writedown of long-lived assets consisted of machinery
and equipment - $9.2 million (book value prior to writedown of
approximately $12.7 million), buildings - $2.1 million (book value prior
to writedown of approximately $2.5 million), land - $.3 million (book
value prior to writedown of approximately $.3 million), and goodwill -
$4.1 million (book value prior to writedown of $4.1 million). The book
value of other current and non-current assets prior to the writedown was
approximately $1.1 million. These business units had combined fiscal 2001
annual sales and a net operating loss (before the special charge) of about
$25.0 million and $3.0 million, respectively. Operating results of the
four EPG business units were immaterial for the three month periods ended
September 30, 2001 and 2000. As of September 30, 2001, none of the
business units were sold, but all are expected to be sold by June 30, 2002.
. A reduction in workforce of approximately 100 salaried positions as a
result of the realignment of Specialty Alloys Operations (SAO) and
corporate staff. As of September 30, 2001, this workforce reduction was
substantially complete. The pre-tax charge of $9.1 million consisted
primarily of various personnel-related costs to cover severance payments,
enhanced pension benefits, medical coverage and related items.
Approximately $7.6 million of the charge will be paid from our qualified
pension plan and, accordingly, this portion of the special charge reduced
the prepaid pension cost account on our balance sheet. There was also a
$1.7 million pre-tax charge to writeoff certain SAO construction in
progress due to the decision in the fourth quarter of fiscal 2001 to
discontinue the capital project.
. Carpenter incurred a one-time, non-cash charge of $7.5 million before
taxes as a result of a May 2001 settlement agreement reached with the City
of Bridgeport, Connecticut and the Bridgeport Port Authority in connection
with the disposal of Carpenter's former steel mill property in Bridgeport.
Under the settlement agreement, Carpenter received $9.25 million and
retained responsibility for an existing oil deposit on the property,
except to the extent the oil deposit is disturbed by the City of
Bridgeport or the Bridgeport Port Authority or a third party acting on
their behalf to develop the site.
2
The Exchange Offer
Securities Offered.......... $100,000,000 aggregate principal amount of 7 5/8%
Notes Due August 15, 2011, issued under
Carpenter's Medium-Term Note Program, Series C.
The terms of the new notes and old notes are
identical in all material respects, except for
transfer restrictions and registration rights
relating to the old notes.
The Exchange Offer.......... We are offering the new notes to you in exchange
for a like principal amount of old notes. Old
notes may be exchanged only in integral multiples
of $1,000. We intend by the issuance of the new
notes to satisfy our obligations contained in the
exchange and registration rights agreement.
Expiration Date; Withdraw of
Tender.................... The exchange offer will expire at 5:00 p.m., New
York City time, on , 2001,2002, or such later date
and time to which it may be extended by us. The
tender of old notes pursuant to the exchange
offer may be withdrawn at any time prior to the
expiration date of the exchange offer. Any old
notes not accepted for exchange for any reason
will be returned without expense to the tendering
holder thereof as promptly as practicable after
the expiration or termination of the exchange
offer.
Conditions to the Exchange
Offer..................... Our obligation to accept for exchange, or to
issue new notes in exchange for, any old notes is
subject to customary conditions relating to
compliance with any applicable law or any
applicable interpretation by the staff of the
Securities and Exchange Commission, the receipt
of any applicable interpretation by the staff of
the Securities and Exchange Commission, the
receipt of any applicable governmental approvals
and the absence of any actions or proceedings of
any governmental agency or court which could
materially impair our ability to consummate the
exchange offer. See "The Exchange
Offer--Conditions to the Exchange Offer."
Procedures for Tendering Old
Notes..................... If you wish to participate in the exchange offer
and tender your old notes, you must complete,
sign and date the letter of transmittal, or a
facsimile of the letter of transmittal, in
accordance with its instructions and the
instructions in this prospectus, and mail or
otherwise deliver the letter of transmittal, or
the facsimile, together with the old notes and
any other required documentation, to the exchange
agent at the address set forth herein. See "The
Exchange Offer--Procedures for Tendering Old
Notes."
Use of Proceeds............. We will not receive any proceeds from the
exchange offer.
Exchange Agent.............. U.S. Bank Trust National Association is serving
as the exchange agent in connection with the
exchange offer.
Federal Income Tax
Consequences.............. The exchange of notes pursuant to the exchange
offer should not be a taxable event for federal
income tax purposes. See "United States Federal
Income Tax Consequences."
23
Consequences of Exchanging Old Notes Pursuant to the Exchange Offer
Based on certain interpretive letters issued by the staff of the Securities
and Exchange Commission to third parties in unrelated transactions, we are of
the view that holders of old notes (other than any holder who is an "affiliate"
of our company within the meaning of Rule 405 under the Securities Act) who
exchange their old notes for new notes pursuant to the exchange offer generally
may offer the new notes for resale, resell the new notes and otherwise transfer
the new notes without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided:
. the new notes are acquired in the ordinary course of the holders' business;
. the holders have no arrangement with any person to participate in a
distribution of the new notes; and
. neither the holder nor any other person is engaging in or intends to
engage in a distribution of the new notes.
Each broker-dealer that receives new notes for its own account in exchange
for old notes must acknowledge that it will deliver a prospectus in connection
with any resale of the new notes. See "Plan of Distribution." In addition, to
comply with the securities laws of applicable jurisdictions, the new notes may
not be offered or sold unless they have been registered or qualified for sale
in the applicable jurisdiction or in compliance with an available exemption
from registration or qualification. We have agreed, under the exchange and
registration rights agreement and subject to limitations specified in the
exchange and registration rights agreement, to register or qualify the new
notes for offer or sale under the securities or blue sky laws of the applicable
jurisdictions as any holder of the notes reasonably requests in writing. If a
holder of old notes does not exchange the old notes for new notes according to
the terms of the exchange offer, the old notes will continue to be subject to
the restrictions on transfer contained in the legend printed on the old notes.
In general, the old notes may not be offered or sold, unless registered under
the Securities Act, except under an exemption from, or in a transaction not
subject to, the Securities Act and applicable state securities laws. Holders of
old notes do not have any appraisal or dissenters' rights under the Delaware
General Corporation Law in connection with the exchange offer. See "The
Exchange Offer--Consequences of Failure to Exchange; Resales of New Notes."
34
The New Notes
The terms of the new notes and the old notes are identical in all material
respects, except for transfer restrictions and registration rights relating to
the old notes.
Issuer...................... Carpenter Technology Corporation
Notes Offered............... $100,000,000 aggregate principal amount of 7 5/8%
Notes Due August 15, 2011, issued under
Carpenter's Medium-Term Note Program, Series C.
Issue Price................. 99.421%
Issue Date.................. August 13, 2001
Denominations............... $1,000 with integral multiples of $1,000
Stated Maturity Date........ August 15, 2011
Interest Basis.............. Fixed Rate Notes
Interest Rate............... 7 5/8% per annum
Interest Payment Dates...... February 15 and August 15, commencing February
15, 2002
Regular Record Dates........ February 1 and August 1
Optional Redemption......... The new notes will not be subject to redemption
by Carpenter prior to maturity.
Ranking..................... The new notes will rank equally in right of
payment with all of Carpenter's existing and
future unsecured senior debt and will be senior
in right of payment to any future subordinated
debt. The indenture relating to the new notes
does not limit Carpenter's ability or the ability
of Carpenter's subsidiaries to incur additional
unsecured indebtedness.
Certain Covenants........... Carpenter will issue the new notes under an
existing indenture with U.S. Bank Trust National
Association, as successor trustee. The indenture,
among other things, limits Carpenter's ability
and the ability of Carpenter's subsidiaries to:
. incur debt secured by liens; and
. engage in sale/leaseback transactions.
Use of Proceeds............. Carpenter will not receive any cash proceeds from
this offering. See "Use of Proceeds."
Further Issuances........... Carpenter may from time to time without the
consent of the holders of the new notes create
and issue further notes having the same terms and
conditions as the new notes so that each further
issuance is consolidated and forms a single
series with the previously outstanding notes.
For a more detailed description of the new notes, see "Description of Notes."
45
RISK FACTORS
Our business involves a number of risks, some of which are beyond our
control. You should carefully consider each of the risks and uncertainties we
describe below and all of the other information in this prospectus before
making an investment decision. The risks and uncertainties we describe below
are not the only ones we face. Additional risks and uncertainties that we do
not currently know or that we currently believe to be immaterial may also
adversely affect our business.
RISKS RELATING TO OUR BUSINESS
Cyclical Nature of Business and Sensitivity to General Economic, Political and
Military Conditions
Demand for certain Carpenter products, such as titanium, stainless steel and
high-temperature alloys, is cyclical in nature and sensitive to general
economic conditions. The prices of certain Carpenter products have had, and in
the future may have, significant fluctuations as a result of general economic
conditions, imports and other factors beyond Carpenter's control. The demand
for Carpenter's products and for products in certain end-use markets,
including, but not limited to, aerospace, automotive, certain industrial
products and consumer durables, is affected by domestic economic and financial
market fluctuations, as well as changes in the world economy. For example,
demand for stainless bar, rod and wire for the automotive and fastener markets
has declined sharply due to the general economic slowdown in the United States.
Because of the comparatively high level of fixed costs associated with
Carpenter's manufacturing processes, changes in production volumes can result
in significant variations in net income. Any significant decrease in demand for
Carpenter's products or a decline in prices for such products could have a
material adverse effect on Carpenter's business, financial condition or results
of operations.
Although Carpenter's operations have not been adversely affected to date by
political or military conditions resulting from the events in New York City on
September 11, 2001, a disruption of its operations due to political, military
or other conditions could have a material adverse effect on its operations and
financial results.
Availability of Raw Materials
Carpenter's Specialty Metals segment depends on continued delivery of
critical raw materials for its day-to-day operations. These raw materials
include nickel, ferrochrome, cobalt, molybdenum, titanium, manganese and iron
scrap. The sources of some of these raw materials are located in countries
subject to potential interruptions of supply. These potential interruptions
could cause material shortages and adversely affect the availability and prices
of these raw materials.
Highly Competitive Environment
Carpenter's competitors are located throughout the world. Currently, there
is worldwide excess manufacturing capacity for certain alloys that Carpenter
produces, resulting in increased competition and downward pricing pressure.
Carpenter competes generally on the basis of quality, the ability to meet
customers' product specifications, price requirements and delivery schedules.
Carpenter supplies materials to a wide variety of end-use markets, none of
which consumes more than about 30 percent of Carpenter's output, and competes
with various companies depending on end-use markets, product or geography.
There are approximately 10 domestic companies producing one or more similar
specialty metal products that are considered to be major competitors to
Carpenter's specialty metals operations in one or more product sectors. There
are several dozen smaller producing companies and converting companies in the
United States that are competitors. Carpenter also competes directly with
several hundred independent distributors of products similar to those
distributed by Carpenter's distribution system.
Additionally, foreign producers export to the United States various
stainless steel and specialty metal products similar to those produced by
Carpenter. The continuing high levels of stainless steel imports and the excess
inventories of these products in the distributor supply chain result in
increased competition based on price and delivery. Carpenter has joined other
domestic producers in filing dumping and countervailing duty claims in the
United States against competitors from six foreign countries. A determination
of such claims adverse to Carpenter may make it more difficult for Carpenter to
compete in certain markets. Furthermore, a number of different products may, in
certain instances, be substituted for Carpenter's products.
56
Stringent Federal, State, Local and Foreign Environmental Laws and Regulations
Carpenter is subject to various stringent federal, state, local and foreign
environmental laws and regulations relating to pollution, protection of public
health and the environment, natural resource damages and occupational safety
and health. Although compliance with these laws and regulations may affect the
costs of Carpenter's operations, compliance costs to date have not been
material. The liability for future environmental remediation costs is evaluated
by management on a quarterly basis. Carpenter accrues amounts for environmental
remediation costs which represent management's best estimate of the probable
and reasonably estimable costs relating to environmental remediation. Estimates
of the amount and timing of future costs of environmental remediation
requirements are necessarily imprecise because of the continuing evolution of
environmental laws and regulatory requirements, the availability and
application of technology, the identification of currently unknown remediation
sites and the allocation of costs among the potentially responsible parties.
For further information on environmental matters, see "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in Carpenter's
Report on Form 10-K filed with the Securities and Exchange Commission on
September 24, 2001 and incorporated herein by reference.
Absence of a Public Market for the New Notes
The new notes are a new issue of securities with no established trading
market and will not be listed on any securities exchange. JP Morgan Securities
Inc. and Credit Suisse First Boston Corporation acted as initial purchasers in
connection with the offer and sale of the old notes. The initial purchasers
have informed us that they intend to make a market in the new notes. However,
these initial purchasers may cease their market-making at any time. In
addition, the liquidity of the trading market in the new notes, and the market
price quoted for the new notes, may be adversely affected by changes in the
overall market for high yield securities and by changes in our financial
performance or prospects or in the prospects for companies in our industry
generally. As a result, we cannot assure you that an active trading market will
develop for the new notes.
Failure to Tender Your Old Notes for New Notes Could Limit Your Ability to
Resell the Old Notes
The old notes were not registered under the Securities Act or under the
securities laws of any state and may not be resold, offered for resale or
otherwise transferred unless they are subsequently registered or resold under
an exemption from the registration requirements of the Securities Act and
applicable state securities laws. If you do not exchange your old notes for new
notes in the exchange offer, you will not be able to resell, offer to resell or
otherwise transfer the old notes unless they are registered under the
Securities Act or unless you resell them, offer to resell or otherwise transfer
them under an exemption from the registration requirements of, or in a
transaction not subject to, the Securities Act. In addition, we will no longer
be under an obligation to register the old notes under the Securities Act
except in the limited circumstances provided under the exchange and
registration rights agreement. If you want to exchange your old notes in the
exchange offer for the purpose of participating in a distribution of the new
notes, you may be deemed to have received restricted securities, and, if so,
will be required to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
67
USE OF PROCEEDS
We will not receive any proceeds from the exchange offer. In consideration
for issuing the new notes, we will receive in exchange old notes of like
principal amount, the terms of which are identical in all material respects to
the new notes. The old notes surrendered in exchange for new notes will be
retired and canceled and cannot be reissued. Accordingly, issuance of the new
notes will not result in any increase in our indebtedness. We have agreed to
bear the expenses of the exchange offer. No underwriter is being used in
connection with the exchange offer.
The net proceeds from the sale of the old notes was $98.4 million, after
deducting discounts, commissions and expenses of this offering. The proceeds
from the sale of the old notes were used to reduce the outstanding principal
amount under Carpenter's short-term revolving credit agreements. We expect to
continue to utilize financing available under these revolving credit agreements
for general corporate purposes, including possible acquisitions and capital
expenditures.
The following table sets forth Carpenter's historical short-term debt and
long-term debt as of June 30, 2001 and its unaudited pro forma short-term debt
and long-term debt as of such date after giving effect to the offering of all
the notes available for issuance under Carpenter's Medium-Term Note Program,
Series C. This table should be read in conjunction with "Selected Historical
Consolidated Financial Data" and "Capitalization" included elsewhere in this
prospectus.
Pro Forma
As of Proceeds As of
June 30, from June 30,
2001 Notes 2001
- - -------- -------- ---------
- - ($ in millions)
Short-Term Debt:
Syndicated Revolver........................................ $135.0 $(100.0) $ 35.0
Multi-Currency Revolver.................................... 35.6 -- 35.6
------ ------- ------
Total Short-Term Debt.................................. 170.6 (100.0) 70.6
------ ------- ------
Long-Term Debt:
Medium-Term Notes, Series C at 7.625% due 2011............. -- 100.0 100.0
Medium-Term Notes, Series B at 6.28% to 7.10% due from
April 2003 to 2018........................................ 198.0 -- 198.0
9% Sinking Fund Debentures due 2022, callable beginning in
March 2002 at 104.2%...................................... 99.7 -- 99.7
Medium-Term Notes, Series A at 6.78% to 7.8% due from
September 2000 to 2005................................... 45.0 -- 45.0
Secured Note due April 2010................................ 7.5 -- 7.5
Other...................................................... 1.9 -- 1.9
------ ------- ------
Total Long-Term Debt................................... 352.1 100.0 452.1
------ ------- ------
Total Debt.................................................... $522.7 $ 0.0 $522.7
====== ======= ======
78
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges:
Year Ended June 30,
-----------------------------
2001 2000 1999 1998 1997 1996
---- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges 2.3x 2.8x 2.4x 5.1x 5.0x 5.7x
For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income before income taxes, extraordinary charges and cumulative
effect of changes in accounting principles, gains and losses related to
less-than-fifty-percent-owned persons, fixed charges (excluding capitalized
interest) and the amount of previously capitalized interest amortized during
the period. Fixed charges consist of interest costs (which include amortization
of debt discount and debt issue costs) and an amount representing the interest
component of non-capitalized leases. Interests costs are before reductions for
capitalized interest relating to significant plant, equipment and software
projects.
89
CAPITALIZATION
The following table sets forth Carpenter's consolidated cash and cash
equivalents and capitalization as of June 30, 2001 and June 30, 2000. This
table should be read in conjunction with "Selected Historical Consolidated
Financial Data" included elsewhere in this prospectus. Carpenter anticipates
establishing a receivables purchase facility in a maximum amount of $75.0
million.
June 30, June 30,
2001 2000
-------- --------
($ in millions)
Cash and Cash Equivalents....................................................... $ 7.8 $ 9.5
======== ========
Short-Term Debt:
Revolving Credit Facilities (1).............................................. $ 170.6 $ 219.9
-------- --------
Long-Term Debt:
Medium-Term Notes, Series B at 6.28% to 7.10% due from April 2003 to 2018.... 198.0 198.0
9% Sinking Fund Debentures due 2022, callable beginning in March 2002 at
104.2% (2)................................................................. 99.7 99.6
Medium-Term Notes, Series A at 6.78% to 7.8% due from September 2000 to 2005. 45.0 55.0
Secured Note due April 2010 (3).............................................. 7.5 7.6
Other........................................................................ 1.9 2.5
-------- --------
Total Long-Term Debt..................................................... 352.1 362.7
-------- --------
Total Debt...................................................................... 522.7 582.6
Stockholders' Equity............................................................ 648.6 653.6
-------- --------
Total Capitalization..................................................... $1,171.3 $1,236.2
======== ========
Total Debt to Capital Ratio..................................................... 44.6% 47.1%
======== ========
- ---------------------
(1)Revolving credit facilities with outstanding balances at June 30, 2001 have
maturities of November 30, 2001 and February 21, 2002.
(2)Sinking fund requirements are $5.0 million annually from 2003 to 2021.
(3)The secured note is payable in monthly installments of $0.1 million
including interest of 8% with a final payment of $6.1 million due April 2010.
910
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The following table presents selected historical consolidated financial data
for Carpenter for the periods indicated.
You should read this historical information together with the consolidated
financial statements and related notes of Carpenter in the annual reports and
other information that Carpenter has filed with the Securities and Exchange
Commission and incorporated herein by reference.
Year Ended June 30,
---------------------------------------------------------
2001(1) 2000(2) 1999(2)(3) 1998(2) 1997(2) 1996(2)
-------- -------- ---------- -------- -------- -------
($ in millions, except per share data)
Statement of Income Data:
Net sales........................................................ $1,324.1 $1,109.1 $1,049.3 $1,189.7 $ 950.7 $877.3
Cost of sales.................................................... 1,039.3 862.7 808.4 882.2 729.5 665.5
-------- -------- -------- -------- -------- ------
Gross profit..................................................... 284.8 246.4 240.9 307.5 221.2 211.8
Selling and administrative expenses.............................. 152.4 146.4 142.1 139.5 106.5 96.2
Special charges.................................................. 36.0 -- 14.2 -- -- --
Interest expense................................................. 40.3 33.4 29.3 29.0 19.9 18.9
Other (income) expense, net...................................... (2.3) (13.3) (0.5) 2.1 (3.1) 1.5
-------- -------- -------- -------- -------- ------
Income before income taxes and cumulative effect of accounting
change.......................................................... 58.4 79.9 55.8 136.9 97.9 95.2
Income taxes..................................................... 23.2 26.6 18.7 52.9 37.9 35.1
-------- -------- -------- -------- -------- ------
Income before cumulative effect of accounting change, net of tax. 35.2 53.3 37.1 84.0 60.0 60.1
Cumulative effect of accounting change, net of $9.4 million tax.. (14.1) -- -- -- -- --
-------- -------- -------- -------- -------- ------
Net income....................................................... $ 21.1 $ 53.3 $ 37.1 $ 84.0 $ 60.0 $ 60.1
======== ======== ======== ======== ======== ======
Earnings per share:
Basic
Income before cumulative effect of accounting
change......................................................... $ 1.52 $ 2.35 $ 1.61 $ 4.01 $ 3.32 $ 3.54
Cumulative effect of accounting change.......................... (0.64) -- -- -- -- --
-------- -------- -------- -------- -------- ------
Net income...................................................... $ 0.88 $ 2.35 $ 1.61 $ 4.01 $ 3.32 $ 3.54
======== ======== ======== ======== ======== ======
Diluted
Income before cumulative effect of accounting change............ $ 1.50 $ 2.31 $ 1.58 $ 3.84 $ 3.16 $ 3.38
Cumulative effect of accounting change.......................... (0.62) -- -- -- -- --
-------- -------- -------- -------- -------- ------
Net income...................................................... $ 0.88 $ 2.31 $ 1.58 $ 3.84 $ 3.16 $ 3.38
======== ======== ======== ======== ======== ======
Cash dividends on common stock..................................... $ 29.1 $ 29.0 $ 29.2 $ 26.9 $ 22.8 $ 21.7
Balance Sheet Data (at period end):
Working capital.................................................. $ 115.0 $ 88.6 $ 135.5 $ 296.4 $ 144.2 $152.5
Property, plant and equipment, net............................... 752.2 789.9 750.4 644.1 513.6 419.5
Total assets..................................................... 1,691.5 1,745.9 1,607.8 1,698.9 1,223.0 912.0
Total debt....................................................... 522.7 582.6 510.4 526.8 330.6 214.0
Stockholders' equity............................................. 648.6 653.6 632.5 659.5 449.3 309.1
Other Data:
EBITDA--before special charges(4)................................ $ 185.3 $ 181.7 $ 165.0 $ 224.1 $ 160.5 $150.7
Net cash provided from operations................................ 118.6 62.4 87.4 108.4 74.7 50.6
Net cash used for investing activities........................... (35.2) (98.6) (54.3) (250.2) (153.1) (28.0)
Net cash provided from (used for) financing activities........... (85.1) 40.2 (80.0) 175.6 83.9 (29.6)
Capital expenditures............................................. 50.5 105.0 153.1 99.5 93.6 48.6
Depreciation and amortization.................................... 72.5 68.3 65.7 58.2 42.7 36.6
Pension credit................................................... 47.9 45.7 36.1 23.6 11.1 10.3
1011
- ---------------------
(1)Fiscal 2001 reflects the adoption of Staff Accounting Bulletin 101 (Revenue
Recognition in Financial Statements) effective July 1, 2000. In addition,
fiscal 2001 includes a special charge of $37.6 million ($24.4 million
after-tax or $1.07 per diluted share) related principally to the realignment
of Specialty Alloys Operations, planned divestitures of certain Engineered
Products Group businesses and a loss on the disposal of the Bridgeport,
Connecticut site. The special charge of $37.6 million is recognized in the
consolidated statement of income as a separate $36.0 million special charge,
an addition to cost of sales of $1.2 million as a result of a writedown of
inventory and an addition to selling and administrative expenses of $0.4
million due to a writedown of accounts receivable. The $37.6 million special
charge is reflected in Business Segments as follows: $19.3 million in
Engineered Products Group, $9.6 million in Specialty Metals and $8.7 million
in corporate costs.
(2)Net sales, cost of sales and selling and administrative costs prior to
fiscal 2001 have been restated due to the adoption, effective July 1, 2000,
of the Financial Accounting Standards Board Emerging Issues Task Force's
issuance of EITF 00-10 regarding the classification of freight and handling
costs billed to customers.
(3)Fiscal 1999 includes a special charge of $14.2 million ($8.5 million
after-tax or $0.37 per diluted share) related to a salaried work force
reduction and a reconfiguration of the U.S. distribution network.
(4)Carpenter defines EBITDA as earnings before interest expense, taxes,
depreciation and amortization and the pre-tax effects of the cumulative
effect of the accounting change. This definition of EBITDA may differ from
the definition of EBITDA used by other companies and should not be
considered as an alternative to net income, cash flows, or any other items
calculated in accordance with generally accepted accounting principles, or
as an indicator of Carpenter's operating performance. EBITDA is presented
because it is a common measure used in evaluating a company's financial
performance.
1112
DESCRIPTION OF NOTES
General
The new notes will be issued under an indenture, dated as of January 12,
1994, between Carpenter and U.S. Bank Trust National Association (formerly
known as First Trust of New York, National Association), as successor trustee
(the "Trustee"), as it may be amended or supplemented from time to time (the
"Indenture"). Carpenter previously issued Medium-Term Notes, Series A, due from
September 2000 to 2005, and Medium-Term Notes, Series B, due from April 2003 to
2018, pursuant to the Indenture. The following summary of certain provisions of
the Indenture does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all provisions of the Indenture,
including the definitions therein of certain terms which are not otherwise
defined in this offering memorandum. The terms of the Indenture are also
governed by certain provisions contained in the Trust Indenture Act of 1939.
Certain capitalized terms used below but not defined herein have the meanings
ascribed to them in the Indenture. As used in this Section, the terms "Note"
and "Notes" refer to the new notes.
Principal, Maturity and Interest
The Indenture provides that Securities in separate series may be issued
thereunder from time to time without limitation as to aggregate principal
amount. The Indenture provides that Carpenter may specify a maximum aggregate
principal amount for the Securities of any series and such terms and provisions
therefor which are not inconsistent with the Indenture, including as to
maturity, principal and interest, as Carpenter may determine. The Notes will
constitute a single series of Securities for purposes of the Indenture. The
Notes will be initially limited in aggregate principal amount to $100.0
million. Such limit may be increased by Carpenter in the future if it
determines that it may wish to sell additional Notes. The Notes will be
unsecured obligations of Carpenter and will rank on a parity with all of its
other unsecured and unsubordinated indebtedness. The Notes will mature on
August 15, 2011. Interest on the Notes will accrue at the rate of 7 5/8% per
annum and will be payable in cash semi-annually in arrears on February 15 and
August 15 of each year, commencing on February 15, 2002. We will make each
interest payment to the holders of record of the Notes on the immediately
preceding February 1 and August 1. Interest on the Notes will accrue from the
date of original issuance or, if interest has already been paid, from the date
that it was most recently paid. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months. With respect to any Note, the
description of the Notes herein is qualified in its entirety by reference to,
and to the extent inconsistent therewith is superseded by, such Note.
The Notes will be issuable as Book-Entry Notes. See "--Book-Entry Global
Notes". The Notes will be issued in denominations of $1,000 and integral
multiples of $1,000 in excess thereof, unless otherwise specified in the Notes.
The Indenture and Notes do not contain any covenants other than those set
forth herein. Accordingly, Carpenter may, subject to such covenants and
Carpenter's other obligations and restrictions, incur additional indebtedness,
pay dividends, engage in transactions with stockholders and affiliates, make
investments, create liens, transfer assets among subsidiaries and engage in
sales of assets and subsidiary stock.
The Notes may be sold at a substantial discount below their principal
amount. Certain special United States federal income tax considerations (if
any) applicable to Notes sold with original issue discount are described herein
under "United States Federal Income Tax Consequences."
Payment of Principal and Interest
Interest will be payable to the person in whose name a Note is registered at
the close of business on the Regular Record Date next preceding each February
15 or August 15, as applicable; provided, however, that interest payable at
maturity will be payable to the person to whom principal shall be payable. The
first payment of interest on any Note originally issued between a Regular
Record Date and February 15 or August 15, as applicable or on February 15 or
August 15, as applicable will be made on the February 15 or August 15, as
applicable following the next succeeding Regular Record Date to the registered
owner on such next succeeding Regular Record Date. The "Regular Record Date"
with respect to any Note shall be the immediately preceding February 1 or
August 1, as applicable.
1213
Payments of interest will include interest accrued to but excluding such
February 15 or August 15, as applicable. Any payment on any Note due on any day
which is not a Business Day need not be made on such day, but may be made on
the next succeeding Business Day with the same force and effect as if made on
the due date, and no interest shall accrue for the period from and after such
date. The term "Business Day," as used herein, means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in New York, New York are authorized or obligated by law or executive order to
close.
The Indenture provides that principal of and any premium and interest on the
Securities of a particular series will be payable at the office of such Paying
Agent or Paying Agents as Carpenter may designate for such purpose from time to
time, except that at Carpenter's option payment of any interest may be made by
check mailed to the address of the person entitled thereto as such address
appears in the Security Register.
The Trustee will be designated as Carpenter's sole Paying Agent for payments
with respect to the Notes. Payment of the principal (and premium, if any) and
any interest due with respect to any Note will be paid at the corporate trust
office of the Trustee in New York, New York; provided, however, that all
payments of principal, premium, if any, and interest on Book-Entry Global Notes
shall be payable as described under "--Book-Entry Global Notes." Carpenter may
at any time designate additional Paying Agents or rescind the designation of
any Paying Agent or approve a change in the office through which any Paying
Agent acts, except that Carpenter will be required to maintain a Paying Agent
in each Place of Payment for the Notes.
All moneys paid by Carpenter to a Paying Agent for the payment of the
principal of or any premium or interest on any Note which remain unclaimed at
the end of two years after such principal premium or interest has become due
and payable will be repaid to Carpenter, and the Holder of such Note thereafter
may look only to Carpenter for payment thereof.
Form, Exchange and Transfer
The Notes will be issuable only in fully registered form, without coupons,
and only in denominations of $1,000 and integral multiples thereof.
At the option of the Holder, subject to the terms of the Indenture and the
limitations applicable to Global Notes, Notes will be exchangeable for other
Notes of the same series of any authorized denomination and of a like tenor and
aggregate principal amount.
Subject to the term of the Indenture and the limitations applicable to
Global Notes, Notes may be presented for exchange as provided above or for
registration of transfer (duly endorsed or with the form of transfer endorsed
thereon duly executed) at the office of the Security Registrar or at the office
of any transfer agent designated by Carpenter for such purpose. No service
charge will be made for any registration of transfer or exchange of Notes, but
Carpenter may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Such transfer or exchange
will be effected upon the Security Registrar or such transfer agent, as the
case may be, being satisfied with the documents of title and identity of the
person making the request. Carpenter will appoint the Trustee as Security
Registrar. Carpenter may at any time designate additional transfer agents or
rescind the designation of any transfer agent or approve a change in the office
through which any transfer agent acts, except that Carpenter will be required
to maintain a transfer agent in each Place of Payment for the Notes.
If the Notes are to be redeemed in part, Carpenter will not be required to
(i) issue, register the transfer of or exchange any Note during a period
beginning at the opening of business 15 days before the day of mailing of a
notice of redemption of any such Note that may be selected for redemption and
ending at the close of business on the day of such mailing or (ii) register the
transfer of or exchange any Note so selected for redemption, in whole or in
part, except the unredeemed portion of any such Note being redeemed in part.
1314
Book-Entry Global Notes
Some or all of the Notes may be represented, in whole or in part, by one or
more global certificates (the "Global Notes") which will have an aggregate
principal amount equal to that of the Notes represented thereby. Each Global
Note will be registered in the name of DTC or a nominee of DTC (the
"Depositary"), will be deposited with such Depositary or nominee or a custodian
therefor and will bear a legend regarding the restrictions on exchanges and
registration of transfer thereof referred to below and any such other matters
as may be provided for pursuant to the Indenture. Carpenter has been informed
by DTC that its nominee will be Cede &Co. ("CEDE"). Accordingly, CEDE is
expected to be the initial registered holder of the Notes. No person acquiring
an interest in a Note (a "Holder") will be entitled to receive a certificate
representing such person's interest in such Note except as set forth herein.
Unless and until definitive Notes are issued under the limited circumstances
described herein, all references to actions by Holders shall refer to actions
taken by DTC upon instructions from its Participants, and all references herein
to payments and notices to Holders shall refer to payments and notices to DTC
or CEDE, as the registered holder of the Notes, as the case may be, for
distribution to Holders in accordance with the DTC procedures.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to Section 17A of the Securities Exchange Act of 1934. DTC
was created to hold securities for its participating organizations
("Participants") and to facilitate the clearance and settlement of securities
transactions between Participants through electronic book-entry, thereby
eliminating the need for physical movement of certificates. Participants
include securities brokers and dealers, banks, trust companies and clearing
corporations, and may include certain other organizations. Indirect access to
the DTC system also is available to others such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly ("Indirect Participants").
As long as the Depositary, or its nominee, is the registered Holder of a
Global Note, the Depositary or such nominee, as the case may be, will be
considered the sole owner and Holder of such Global Note and the Notes
represented thereby for all purposes under the Notes and the Indenture. Except
in the limited circumstances referred to below, owners of beneficial interests
in a Global Note will not be entitled to have such Global Note or any Notes
represented thereby registered in their names, and will not be considered to be
the owners or Holders of such Global Note or any Notes represented thereby for
any purpose under the Notes or the Indenture. All payments of principal of and
any premium and interest on a Global Note will be made to the Depositary or its
nominee, as the case may be, as the Holder thereof. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. These laws may impair the
ability to transfer beneficial interests in a Global Note. Ownership of
beneficial interests in a Global Note will be limited to Participants and
Indirect Participants. In connection with the issuance of any Global Note, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of Notes represented by the Global Note to the
accounts of its Participants.
Ownership of beneficial interests in a Global Note will be shown only on,
and the transfer of those ownership interests will be effected only through,
records maintained by the Depositary (with respect to Participants' interests)
or any such Participant (with respect to Indirect Participants). Payments,
transfers, exchanges and other matters relating to beneficial interests in a
Global Note may be subject to various policies and procedures adopted by the
Depositary from time to time. Neither Carpenter, the Trustee nor any agent of
Carpenter or the Trustee will have any responsibility or liability for any
aspect of the Depositary's or any Participant's records relating to, or for
payments made on account of, beneficial interests in a Global Note, or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
Secondary trading in Notes and debentures of corporate issuers is generally
settled in clearing-house or next-day funds. In contrast, beneficial interests
in a Global Note, in some cases, may trade in the Depositary's same-day funds
settlement system, in which secondary market trading activity in those
beneficial interests would
1415
be required by the Depositary to settle in immediately available funds. There
is no assurance as to the effect, if any, that settlement in immediately
available funds would have on trading activity in such beneficial interests.
Also, settlement for purchases of beneficial interests in a Global Note upon
the original issuance thereof may be required to be made in immediately
available funds.
Holders that are not Participants or Indirect Participants but desire to
purchase, sell or otherwise transfer ownership of, or other interests in, Notes
may do so only through Participants and Indirect Participants. Under a
book-entry format, Holders may experience some delay in their receipt of
payments, since such payments will be forwarded by the agent designated by
Carpenter to CEDE, as nominee for DTC. DTC will forward such payments to its
Participants, which thereafter will forward them to Indirect Participants or
Holders. Holders will not be recognized by either of the Trustees as registered
holders of the Notes entitled to the benefits of the relevant Indenture.
Holders that are not Participants will be permitted to exercise their rights as
such only indirectly through Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC will be required to make book-entry transfers of Notes
among Participants and to receive and transmit payments to Participants.
Participants and Indirect Participants with which Holders have accounts with
respect to the Notes similarly are required to make book-entry transfers and
receive and transmit such payments on behalf of their respective Holders.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants, and on behalf of certain banks, trust
companies and other persons approved by it, the ability of a Holder to pledge
Notes to persons or entities that do not participate in the DTC system, or to
otherwise act with respect to such Notes, may be limited due to the absence of
physical certificates for such Notes.
DTC has advised Carpenter that it will take any action permitted to be taken
by a Holder under the relevant Indenture only at the direction of one or more
Participants to whose accounts with DTC the Notes are credited. The Global
Security shall be exchangeable for Notes registered in the names of persons
other than DTC or its nominee only if (i) DTC notifies Carpenter that it is
unwilling or unable to continue as depository for such Global Security or if at
any time DTC ceases to be a clearing agency registered under the Securities
Exchange Act of 1934 at a time when DTC is required to be so registered to act
as such depository or (ii) Carpenter executes and delivers to the Trustee a
Company Order that such Global Security shall be so exchangeable. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Notes registered in such names as DTC shall direct. Upon the
occurrence of any event described in the immediately preceding paragraph, DTC
is generally required to notify all Participants of the availability through
DTC of definitive Notes. Upon surrender by DTC of the Global Security
representing the Notes and instructions for registration, the Trustee will
reissue the Notes as definitive Notes, and thereafter the Trustee will
recognize the holders of such definitive Notes as registered holders of Notes
entitled to the benefits of the Indenture.
The Global Note may not be transferred except as a whole by DTC with respect
to such Note to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or to a successor depository appointed by the Corporation. DTC
may not sell, assign, transfer or otherwise convey any beneficial interest in a
Global Note evidencing all or part of the Notes unless such beneficial interest
is an amount equal to an authorized denomination for the Notes.
Certain Covenants
Restrictions on Secured Debt. If Carpenter or any Restricted Subsidiary
shall incur, issue, assume or guarantee any loans or notes, bonds, debentures
or other similar evidences of indebtedness for money borrowed ("Debt") secured
by a mortgage, pledge or lien ("Mortgage") on any Principal Property of
Carpenter or any Restricted Subsidiary, or on any shares of Capital Stock or
Debt of any Restricted Subsidiary, Carpenter will provide or cause such
Restricted Subsidiary to provide that the Notes (together with, if Carpenter
shall so determine, any other Debt of Carpenter or such Restricted Subsidiary
then existing or thereafter created which is not subordinated to the Notes) be
secured equally and ratably with (or, at Carpenter's option, prior to) such
secured Debt, unless the aggregate amount of all such secured Debt, together
with all Attributable Debt with
1516
respect to sale and leaseback transactions involving Principal Properties (with
the exception of such transactions which are excluded as described in
"Restrictions on Sales and Leasebacks" below), would not exceed 5% of
Consolidated Net Tangible Assets. The above restrictions will not apply to, and
there will be excluded from secured Debt in any computation under such
restriction, Debt secured by (i) Mortgages on property of, or on any shares of
Capital Stock of or Debt of, any corporation existing at the time such
corporation becomes a Restricted Subsidiary, (ii) Mortgages in favor of
Carpenter or a Restricted Subsidiary, (iii) Mortgages in favor of governmental
bodies to secure progress, advance or other payments, (iv) Mortgages on
property, shares of Capital Stock or Debt existing at the time of acquisition
thereof (including acquisition through merger or consolidation) and purchase
money and construction Mortgages which are entered into within specified time
limits, (v) Mortgages securing industrial revenue or pollution control bonds
and (vi) any extension, renewal or replacement of any Mortgage referred to in
the foregoing clauses (i) through (v) inclusive.
Restrictions on Sales and Leasebacks. Neither Carpenter nor any Restricted
Subsidiary will enter into any sale and leaseback transaction involving any
Principal Property, unless the aggregate amount of all Attributable Debt with
respect to such transactions plus all Debt secured by Mortgages on Principal
Properties (with the exception of secured Debt which is excluded as described
in "Restrictions on Secured Debt" above) would not exceed 5% of Consolidated
Net Tangible Assets.
This restriction will not apply to, and there will be excluded from
Attributable Debt in any computation under such restriction, any sale and
leaseback transaction if (i) the lease is for a period, including renewal
rights, of not in excess of three years, (ii) the sale and leaseback
transaction of the Principal Property is made prior to, at the time of or
within a specified period after its acquisition or construction, (iii) the
lease secures or relates to industrial revenue or pollution control bonds, (iv)
the transaction is between Carpenter and a Restricted Subsidiary or between
Restricted Subsidiaries or (v) Carpenter or such Restricted Subsidiary within
180 days after the sale or transfer applies an amount equal to the greater of
the net proceeds of the sale of the Principal Property leased pursuant to such
arrangement or the fair market value of the Principal Property so leased at the
time of entering into such arrangement to (a) the retirement of the Notes or
certain Funded Debt of Carpenter or a Restricted Subsidiary or (b) the purchase
of other property which will constitute Principal Property having a fair market
value, in the opinion of Carpenter's Board of Directors, at least equal to the
fair market value of the Principal Property so leased. The amount to be applied
to the retirement of such Funded Debt of Carpenter or a Restricted Subsidiary
shall be reduced by (x) the principal amount of any Notes (or other Notes or
debentures constituting such Funded Debt) delivered within such 180-day period
to the Trustee or other applicable trustee for retirement and cancellation and
(y) the principal amount of such Funded Debt other than items referred to in
the preceding clause (x), voluntarily retired by Carpenter or a Restricted
Subsidiary within 180 days after such sale, provided that, notwithstanding the
foregoing, no retirement referred to in this paragraph may be effected by
payment at maturity or pursuant to any mandatory sinking fund payment or any
mandatory prepayment provision.
Except as described in "Restrictions on Secured Debt" and "Restrictions on
Sales and Leasebacks," the Indenture will not contain any covenants or
provisions that may afford holders of the Notes protection in the event of a
highly leveraged transaction.
Successor Company
The Indenture will provide that no consolidation or merger of Carpenter with
or into any other corporation and no conveyance, transfer or lease of its
properties and assets substantially as an entirety to any person may be made
unless (i) the person formed by or resulting from any such consolidation or
merger or which shall have received the transfer of such property and assets
shall be a corporation organized and existing under the laws of the United
States, any State thereof or the District of Columbia and shall expressly
assume by a supplemental indenture payment of the principal of, premium (if
any) and interest on the Notes and the performance and
1617
observance of the Indenture, (ii) immediately after giving effect to such
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default shall have occurred and be
continuing and (iii) Carpenter shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that the consolidation,
merger, conveyance, transfer or lease, and if a supplemental indenture is
required for such transaction, such supplemental indenture, complies with the
above requirements of the Indenture.
Events of Default
Each of the following will constitute an Event of Default under the
Indenture with respect to the Notes: (a) failure to pay principal of or any
premium on any Note when due; (b) failure to pay any interest on any Note when
due, continued for 30 days; (c) failure to deposit any sinking fund payment,
when due, in respect of any Note; (d) failure to perform any other covenant of
Carpenter in the Indenture (other than a covenant included in the Indenture
solely for the benefit of a series of Securities other than the Notes),
continued for 60 days after written notice has been given by the Trustee, or
the Holders of at least 25% in principal amount of the Outstanding Notes as
provided in the Indenture; (e) certain defaults by Carpenter or any of
Carpenter's Restricted Subsidiaries under any bond, debenture, Note or other
evidence of indebtedness for money borrowed in excess of $3,000,000, under any
capitalized lease or under any mortgage, indenture or instrument, which default
(i) consists of a failure to pay any such indebtedness or liability upon its
stated maturity or (ii) results in such indebtedness or liability becoming or
being declared due and payable prior to the date on which it would otherwise
have become due and payable, and continuance thereof for 10 days after written
notice has been given by the Trustee, or the Holders of at least 25% in
principal amount of the Outstanding Notes, as provided in the Indenture; and
(f) certain events in bankruptcy, insolvency or reorganization.
If an Event of Default (other than an Event of Default described in clause
(f) above) with respect to the Notes at the time Outstanding shall occur and be
continuing, either the Trustee or the Holders of at least 25% in aggregate
principal amount of the Outstanding Notes by notice as provided in the
Indenture may declare the principal amount of the Notes (or, in the case of any
Note that is an Original Issue Discount Security or the principal amount of
which is not then determinable, such portion of the principal amount of such
Note, or such other amount in lieu of such principal amount, as may be
specified in the terms of such Note) to be due and payable immediately. If an
Event of Default described in clause (f) above with respect to the Notes at the
time Outstanding shall occur, the principal amount of all the Notes (or, in the
case of any such Original Issue Discount Security or other Note, such specified
amount) will automatically, and without any action by the Trustee or any
Holder, become immediately due and payable. After any such acceleration, but
before a judgment or decree based on acceleration, the Holders of a majority in
aggregate principal amount of the Outstanding Notes may, under certain
circumstances, rescind and annul such acceleration if all Events of Default,
other than the non-payment of accelerated principal (or other specified
amount), have been cured or waived as provided in the Indenture. For
information as to waiver of defaults, see "--Modification and Waiver."
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such
Holders shall have offered to the Trustee reasonable indemnity. Subject to such
provisions for the indemnification of the Trustee, the Holders of a majority in
aggregate principal amount of the Outstanding Notes will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to the Notes.
No Holder of a Note will have any right to institute any proceeding with
respect to the Indenture, or for the appointment of a receiver or a trustee, or
for any other remedy thereunder, unless (i) such Holder has previously given to
the Trustee written notice of a continuing Event of Default with respect to the
Notes, (ii) the Holders of at least 25% in aggregate principal amount of the
Outstanding Notes have made written request, and such Holder or Holders have
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee and (iii) the
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Trustee has failed to institute such proceeding, and has not received from the
Holders of a majority in aggregate principal amount of the Outstanding Notes a
direction inconsistent with such request, within 60 days after such notice,
request and offer. However, such limitations do not apply to a suit instituted
by a Holder of a Note for the enforcement of payment of the principal of or any
premium or interest on such Note on or after the applicable due date specified
in such Note.
Carpenter will be required to furnish to the Trustee annually a statement by
certain of its officers as to whether or not, to Carpenter's knowledge,
Carpenter is in default in the performance or observance of any of the terms,
provisions and conditions of the Indenture and, if so, specifying all such
known defaults.
Modification and Waiver
Modifications and amendments of the Indenture may be made by Carpenter and
the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of each series affected by such
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Security
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, (b) reduce the
principal amount of, or any premium or interest on, any Security, (c) reduce
the amount of principal of an Original Issue Discount Security or any other
Security payable upon acceleration of the Maturity thereof, (d) change the
place or currency of payment of principal of, or any premium or interest on,
any Security, (e) impair the right to institute suit for the enforcement of any
payment on or with respect to any Security, (f) reduce the percentage in
principal amount of Outstanding Securities of any series, the consent of whose
Holders is required for modification or amendment of the Indenture, (g) reduce
the percentage in principal amount of Outstanding Securities of any series
necessary for waiver of compliance with certain provisions of the Indenture or
for waiver of certain defaults or (h) modify such provisions with respect to
modification and waiver.
The Holders of a majority in principal amount of the Outstanding Securities
of any series may waive compliance by Carpenter with certain restrictive
provisions of the Indenture. The Holders of a majority in principal amount of
the Outstanding Securities of any series may waive any past default under the
Indenture, except a default in the payment of principal, premium or interest
and certain covenants and provisions of the Indenture which cannot be amended
without the consent of the Holder of each Outstanding Security of such series
affected.
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given or taken
any direction, notice, consent, waiver or other action under the Indenture as
of any date, (i) the principal amount of an Original Issue Discount Security
that will be deemed to be Outstanding will be the amount of the principal
thereof that would be due and payable as of such date upon acceleration of the
Maturity thereof to such date, (ii) if, as of such date, the principal amount
payable at the Stated Maturity of a Security is not determinable (for example,
because it is based on an index), the principal amount of such Security deemed
to be Outstanding as of such date will be an amount determined in the manner
prescribed for such Security and (iii) the principal amount of a Security
denominated in one or more foreign currencies or currency units that will be
deemed to be Outstanding will be the U.S. dollar equivalent, determined as of
such date in the manner prescribed for such Security, of the principal amount
of such Security (or, in the case of a Security described in clause (i) or (ii)
above, of the amount described in such clause).
Certain Securities, including those for whose payment or redemption money
has been deposited or set aside in trust for the Holders and those that have
been fully defeased pursuant to Section 1302 of the Indenture, will not be
deemed to be Outstanding.
Except in certain limited circumstances, Carpenter will be entitled to set
any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to give or take any direction,
notice, consent, waiver or other action under the Indenture, in the manner and
subject to the limitations provided in the Indenture. In certain limited
circumstances, the Trustee also will be entitled to set a record date for
action by 18
Holders. If a record date is set for any action to be taken by
Holders of a particular series such action may be
19
taken only by persons who are Holders of Outstanding Securities of that series
on the record date. To be effective, such action must be taken by Holders of
the requisite principal amount of such Securities within a specified period
following the record date. For any particular record date, this period will be
180 days or such shorter period as may be specified by Carpenter (or the
Trustee, if it set the record date), and may be shortened or lengthened (but
not beyond 180 days) from time to time.
Defeasance and Covenant Defeasance
The provisions of Section 1302 of the Indenture, relating to defeasance and
discharge of indebtedness, or Section 1303 of the Indenture, relating to
defeasance of certain restrictive covenants in the Indenture, are applicable to
the Notes.
Defeasance and Discharge. The Indenture provides that, upon Carpenter's
exercise of its option (if any) to have Section 1302 of the Indenture apply to
any Notes, Carpenter will be discharged from all of its obligations with
respect to such Notes (except for certain obligations to exchange or register
the transfer of Notes, to replace stolen, lost or mutilated Notes, to maintain
paying agencies and to hold moneys for payment in trust) upon the deposit in
trust for the benefit of the Holders of such Notes of money or U.S. Government
Obligations, or both, which, through the payment of principal and interest in
respect thereof in accordance with their terms, will provide money in an amount
sufficient to pay the principal of and any premium and interest on such Notes
on the respective Stated Maturities in accordance with the terms of the
Indenture and such Notes. Such defeasance or discharge may occur only if, among
other things, Carpenter has delivered to the Trustee an Opinion of Counsel to
the effect that Carpenter has received from, or there has been published by,
the United States Internal Revenue Service a ruling, or there has been a change
in tax law, in either case to the effect that Holders of such Notes will not
recognize gain or loss for federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to federal income tax on
the same amount, in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge were not to occur.
Defeasance of Certain Covenants. The Indenture provides that, upon
Carpenter's exercise of its option (if any) to have Section 1303 of the
Indenture apply to any Notes, Carpenter may omit to comply with certain
restrictive covenants, including those described under "--Certain Covenants,"
and the occurrence of certain Events of Default, which are described above in
clause (d) (with respect to such restrictive covenants) and clause (e) under
"--Events of Default," will be deemed not to be or result in an Event of
Default, in each case with respect to such Notes. In order to exercise such
option, Carpenter will be required to deposit, in trust for the benefit of the
Holders of such Notes, money or U.S. Government Obligations, or both, which,
through the payment of principal and interest in respect thereof in accordance
with their terms, will provide money in an amount sufficient to pay the
principal of and any premium and interest on such Notes on the respective
Stated Maturities in accordance with the terms of the Indenture and such Notes.
Carpenter will also be required, among other things, to deliver to the Trustee
an Opinion of Counsel to the effect that Holders of such Notes will not
recognize gain or loss for federal income tax purposes as a result of such
deposit and defeasance of certain obligations and will be subject to federal
income tax on the same amount, in the same manner and at the same times as
would have been the case if such deposit and defeasance were not to occur. In
the event Carpenter exercised this option with respect to any Notes and such
Notes were declared due and payable because of the occurrence of any Event of
Default, the amount of money and U.S. Government Obligations so deposited in
trust would be sufficient to pay amounts due on such Notes at the time of their
respective Stated Maturities but may not be sufficient to pay amounts due on
such Notes upon any acceleration resulting from such Event of Default. In such
case, Carpenter would remain liable for such payments.
Notices
Notices to Holders of Notes will be given by mail to the addresses of such
Holders as they may appear in the Security Register.
Title
Carpenter, the Trustee and any agent of Carpenter or the Trustee may treat
the person in whose name a Note is registered as the absolute owner thereof
(whether or not such Note may be overdue) for the purpose of making payment and
for all other purposes.
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Governing Law
The Indenture and the Notes will be governed by, and construed in accordance
with, the law of the State of New York.
Regarding the Trustee
U.S. Bank Trust National Association, formerly known as First Trust of New
York, National Association, is the successor Trustee under the Indenture. U.S.
Bank Trust National Association also acts as the successor trustee under the
Indenture for Carpenter's 9% Debentures due 2022 (the "9% Indenture").
Upon the occurrence of an Event of Default, or any event of default under
the 9% Indenture, the Trustee may be deemed to have a conflicting interest with
respect to the Securities for purposes of the Trust Indenture Act of 1939, and,
accordingly, may be required to resign as Trustee under the Indenture.
Certain Definitions
"Attributable Debt" means, as to any particular lease under which any person
is at the time liable and at any date as of which the amount thereof is to be
determined, the total net amount of rent required to be paid by such person
under such lease during the remaining primary term thereof, discounted from the
respective due dates thereof to such date at the same rate per annum as the
rate of interest borne by the Outstanding Notes, on a weighted average basis.
The net amount of rent required to be paid under any such lease for any such
period shall be the aggregate amount of the rent payable by the lessee with
respect to such period after excluding amounts required to be paid on account
of maintenance and repairs, insurance, taxes, assessments, water rates and
similar charges. In the case of any lease which is terminable by the lessee
upon the payment of a penalty, such net amount shall also include the amount of
such penalty, but no rent shall be considered as required to be paid under such
lease subsequent to the first date upon which it may be so terminated.
"Capital Stock" as applied to the stock of any corporation, means the
capital stock of every class whether now or hereafter authorized, regardless of
whether such capital stock shall be limited to a fixed sum or percentage with
respect to the rights of the holders thereof to participate in dividends and in
the distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of such corporation.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (i) all liabilities other than (a) deferred income taxes, (b) Funded
Debt and (c) shareholders' equity (including all preferred stock whether or not
redeemable) and (ii) all goodwill, trade names, trademarks, patents,
organization expenses and other like intangibles, all as set forth on the most
recent balance sheet of Carpenter and its consolidated Subsidiaries and
computed in accordance with generally accepted accounting principles.
"Funded Debt" means (i) all indebtedness for money borrowed having a
maturity of more than 12 months from the date as of which the determination is
made or having a maturity of 12 months or less but by its terms being renewable
or extendible beyond 12 months from such date at the option of the borrower and
(ii) rental obligations payable more than 12 months from such date under leases
which are capitalized in accordance with generally accepted accounting
principles (such rental obligations to be included as Funded Debt at the amount
so capitalized at the date of such computation and to be included for the
purposes of the definition of Consolidated Net Tangible Assets both as an asset
and as Funded Debt at the respective amounts so capitalized).
"Principal Property" means any manufacturing or processing plant or
warehouse owned at the date of the Indenture or thereafter acquired by
Carpenter or any Restricted Subsidiary of Carpenter which is located within the
United States of America and the gross book value (including related land and
improvements thereon and all
2021
machinery and equipment included therein without deduction of any depreciation
reserves) of which on the date as of which the determination is being made
exceeds 2% of Consolidated Net Tangible Assets, other than (i) any property
which in the opinion of Carpenter's Board of Directors is not of material
importance to the total business conducted by Carpenter as an entirety or (ii)
any portion of a particular property which is similarly found not to be of
material importance to the use or operation of such property.
"Restricted Subsidiary" means a Subsidiary of Carpenter (i) substantially
all the property of which is located, or substantially all the business of
which is carried on, within the United States of America and (ii) which owns a
Principal Property.
"Subsidiary" means any corporation more than 50% of the outstanding voting
stock of which is owned or controlled, directly or indirectly, by (i)
Carpenter, (ii) Carpenter and one or more Subsidiaries or (iii) one or more
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class has such voting power by reason of any
contingency.
"U.S. Government Obligation" means (x) any security which is (i) a direct
obligation of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or (ii) an
obligation of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case (i) or (ii), is not callable or
redeemable at the option of the issuer thereof, and (y) any depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any U.S. Government Obligation which is specified in
clause (x) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any such payment of principal of or
interest on any U.S. Government Obligation which is so specified and held,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal or interest
evidenced by such depositary receipt.
2122
THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
We issued and sold the old notes to the initial purchasers on August 13,
2001. The initial purchasers subsequently sold the old notes to qualified
institutional buyers in reliance on Rule 144A under the Securities Act. Because
the old notes are subject to transfer restrictions, we and the initial
purchasers entered into an exchange offer and registration rights agreement
dated August 13, 2001 under which we agreed:
. not later than 60 days following August 13, 2001, to prepare and file with
the SEC the registration statement of which this prospectus is a part;
. not later than 120 days following August 13, 2001, to use our reasonable
best efforts to cause the registration statement to become effective under
the Securities Act;
. upon the effectiveness of the registration statement, to offer the new
notes in exchange for surrender of the old notes; and
. to keep the exchange offer open for not less than 20 business days (or
longer if required by applicable law) after the date notice of the
exchange offer is mailed to the holders of the old notes.
The registration statement is intended to satisfy in part our obligations
relating to the old notes under the exchange and registration rights agreement.
Under existing interpretations of the SEC, the new notes will be freely
transferable by holders other than our affiliates after the exchange offer
without further registration under the Securities Act if the holder of the new
notes represents that:
. it is acquiring the new notes in the ordinary course of its business;
. it has no arrangement or understanding with any person to participate in
the distribution of the new notes;
. it is not our affiliate, as that term is interpreted by the SEC; and
. is not an agent, as that term is interpreted by the SEC, holding
securities that have, or that are reasonably likely to have, the status of
an unsold allotment in an initial distribution.
However, broker-dealers receiving new notes in the exchange offer will have
a prospectus delivery requirement regarding resales of the new notes. The SEC
has taken the position that broker-dealers receiving new notes in the exchange
offer may fulfill their prospectus delivery requirements relating to new notes
(other than a resale of an unsold allotment from the original sale of the old
notes) with this prospectus. Under the exchange and registration rights
agreement, we are required to allow broker-dealers receiving new notes in the
exchange offer and other persons, if any, with similar prospectus delivery
requirements to use this prospectus in connection with the resale of the new
notes. Each broker-dealer that receives new notes for its own account in
exchange for old notes, where the old notes were acquired by the broker-dealer
as a result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
the new notes. See "Plan of Distribution."
Terms of Exchange Offer; Period for Tendering Old Notes
Upon the terms and subject to the conditions set forth in this prospectus
and in the accompanying letter of transmittal (which together constitute the
exchange offer), we will accept for exchange old notes which are properly
tendered on or prior to the expiration date of the exchange offer and not
withdrawn as permitted below. The expiration date of the exchange offer shall
be 5:00 p.m., New York City time, on , 2001,2002, unless extended by us, in our
sole discretion.
As of the date of this prospectus, $100.0 million aggregate principal amount
of the old notes are outstanding. This prospectus, together with the letter of
transmittal, is first being sent on or about , 2001 to all holders of old
notes known to us. Our obligation to accept old notes for exchange pursuant to
the exchange offer is subject to conditions as set forth under "--Conditions to
the Exchange Offer" below.
2223
We expressly reserve the right, at any time or from time to time, to extend
the period of time during which the exchange offer is open, and thereby delay
acceptance for any exchange of any old notes, by giving notice of the extension
to the holders of old notes as described below. During any extension, all old
notes previously tendered will remain subject to the exchange offer and may be
accepted for exchange by us. Any old notes not accepted for exchange for any
reason will be returned without expense to the tendering holder as promptly as
practicable after the expiration or termination of the exchange offer.
We expressly reserve the right to amend or terminate the exchange offer, and
not to accept for exchange any old notes not previously accepted for exchange,
upon the occurrence of any of the conditions of the exchange offer specified
below under "--Conditions to the Exchange Offer." We will give notice of any
extension, amendment, non-acceptance or termination to the holders of the old
notes as promptly as practicable, the notice in the case of any extension to be
issued no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date of the exchange offer.
Holders of old notes do not have any appraisal or dissenters' rights under
the Delaware General Corporation Law in connection with the exchange offer.
Procedures for Tendering Old Notes
The tender to us of old notes by a holder of old notes as set forth below
and the acceptance of the tender by us will constitute a binding agreement
between the tendering holder and us upon the terms and subject to the
conditions set forth in this prospectus and in the accompanying letter of
transmittal. Except as set forth below, a holder who wishes to tender old notes
for exchange under the exchange offer must transmit a properly completed and
duly executed letter of transmittal, including all other documents required by
the letter of transmittal, at the address set forth below under "--Exchange
Agent" on or prior to the expiration date of the exchange offer. In addition,
the exchange agent must receive:
. certificates for the old notes along with the letter of transmittal, or
. prior to the expiration date of the exchange offer, a timely confirmation
of a book-entry transfer of the old notes into the exchange agent's
account at The Depository Trust Company in accordance with the procedure
for book-entry transfer described below, or
. the holder must comply with the guaranteed delivery procedure described
below.
The method of delivery of old notes, letters of transmittal and all other
required documents is at your election and risk. If delivery is by mail, we
recommend that you use registered mail, properly insured, with return receipt
requested. In all cases, you should allow sufficient time to assure timely
delivery. You should not send letters of transmittal or old notes to us.
Signatures on a letter of transmittal or a notice of withdrawal, as the case
may be, must be guaranteed unless the old notes surrendered for exchange are
tendered:
. by a registered holder of the old notes who has not completed the box
entitled "Special Issuance Instruction" or "Special Delivery Instruction"
on the letter of transmittal; or
. for the account of a firm which is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the United States.
In the event the signatures on a letter of transmittal or a notice of
withdrawal, as the case may be, are required to be guaranteed, the guarantees
must be by a firm which is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc. or
by a commercial bank or trust company having an office or correspondent in the
United States. If old notes are registered in the name of a person other than a
signer of the letter of transmittal, the old notes surrendered for exchange
must be endorsed by, or be accompanied by a written instrument or instruments
of transfer or exchange, in satisfactory form as determined by us in our sole
discretion, duly executed by the registered holder with the signature on the
old notes or the written instrument or instruments of transfer or exchange
guaranteed by a firm which is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc. or
a commercial bank or trust company having an office or correspondent in the
United States.
2324
Any beneficial owner whose old notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee, and who wishes to
tender, should contact the registered holder promptly and instruct the
registered holder to tender on the beneficial owner's behalf. If the beneficial
owner wishes to tender on the owner's own behalf, the owner must, prior to
completing and executing the letter of transmittal and delivering the owner's
old notes, either (1) make appropriate arrangements to register ownership of
the old notes in the owner's name or (2) obtain a properly completed bond power
from the registered holder. The transfer of registered ownership may take
considerable time.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of old notes tendered for exchange will be determined
by us in our sole discretion. This determination shall be final and binding. We
reserve the absolute right to reject any and all tenders of any old notes not
properly tendered or to not accept any old notes which acceptance might, in our
judgment or our counsel's judgment, be unlawful. We also reserve the absolute
right to waive any defects or irregularities or conditions of the exchange
offer as to any old notes either before or after the expiration date of the
exchange offer (including the right to waive the ineligibility of any holder
who seeks to tender old notes in the exchange offer). The interpretations of
the terms and conditions of the exchange offer as to any old notes either
before or after the expiration date of the exchange offer (including the letter
of transmittal and the instructions to the letter of transmittal) by us shall
be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of old notes for exchange must be
cured within a reasonable period of time as we shall determine. Neither we, the
exchange agent nor any other person shall be under any duty to give
notification of any defect or irregularity regarding any tender of old notes
for exchange, nor shall any of them incur any liability for failure to give
notification.
If the letter of transmittal or any old notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporation or others acting in a fiduciary or representative
capacity, these persons should so indicate when signing, and, unless waived by
us, proper evidence satisfactory to us of their authority to so act must be
submitted.
By tendering, each holder of old notes will represent to us in writing that,
among other things:
. the new notes acquired in the exchange offer are being obtained in the
ordinary course of business of the holder and any beneficial holder;
. neither the holder nor any beneficial holder has an arrangement or
understanding with any person to participate in the distribution of the
new notes; and
. neither the holder nor any other person is an "affiliate," as defined
under Rule 405 of the Securities Act, of our company. If the holder is not
a broker-dealer, the holder must represent that it is not engaged in or
does it intend to engage in distribution of the new notes.
If any holder or any other person is an "affiliate," as defined under Rule
405 of the Securities Act, of ours, or is engaged in, or intends to engage in,
or has an arrangement or understanding with any person to participate in, a
distribution of the new notes to be acquired in the exchange offer, the holder
or any other person must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
If any holder is a broker-dealer, the holder must represent that it will
receive new notes for its own account in exchange for old notes that were
acquired as a result of market-making activities or other trading activities.
Each broker-dealer that receives new notes for its own account in exchange for
old notes, where the old notes were acquired by the broker-dealer as a result
of market-making activities or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of the new notes.
See "Plan of Distribution."
Acceptance of Old Notes for Exchange; Delivery of New Notes
Upon satisfaction or waiver of all of the conditions to the exchange offer,
we will accept, as soon as is reasonably practicable after the expiration date
of the exchange offer, all old notes properly tendered, and will issue the new
notes as soon as is reasonably practicable after acceptance of the old notes.
See "--Conditions to the Exchange Offer" below. For purposes of the exchange
offer, we shall be deemed to have accepted properly tendered old notes for
exchange when, as and if we have given oral and written notice to the exchange
agent.
2425
The new notes will bear interest from the most recent date to which interest
has been paid on the old notes, or if no interest has been paid on old notes,
from August 13, 2001. Accordingly, registered holders of new notes on the
relevant record date for the first interest payment date following the
consummation of the exchange offer will receive interest accruing from the most
recent date to which interest has been paid or, if no interest has been paid,
from August 13, 2001. Old notes accepted for exchange will cease to accrue
interest from and after the date of consummation of the exchange offer. Holders
of old notes whose old notes are accepted for exchange will not receive any
payment for accrued interest on the old notes otherwise payable on any interest
payment date the record date for which occurs on or after consummation of the
exchange offer and will be deemed to have waived their rights to receive
accrued interest on the old notes.
In all cases, issuance of new notes for old notes that are accepted for
exchange in the exchange offer will be made only after timely receipt by the
exchange agent of (1) certificates for the old notes or a timely confirmation
of book-entry transfer of the old notes into the exchange agent's account at
The Depository Trust Company, (2) a properly completed and duly executed letter
of transmittal and (3) all other required documents. If any tendered old notes
are not accepted for any reason set forth in the terms and conditions of the
exchange offer or if old notes are submitted for a greater principal amount
than the holder desires to exchange, the unaccepted or non-exchanged old notes
will be returned without expense to the tendering holder of the old notes (or,
in the case of old notes tendered by book-entry transfer into the exchange
agent's account at The Depository Trust Company according to the book-entry
transfer procedures described below, the non-exchanged old notes will be
credited to an account maintained with the Depository Trust Company) as
promptly as practicable after the expiration of the exchange offer.
Book-Entry Transfer
Any financial institution that is a participant in The Depository Trust
Company's systems may make book-entry delivery of old notes by causing The
Depository Trust Company to transfer the old notes into the exchange agent's
account at The Depository Trust Company in accordance with The Depository Trust
Company's procedures for transfer. However, although delivery of old notes may
be affected through book-entry transfer at The Depository Trust Company, the
letter of transmittal or facsimile of the letter of transmittal with any
required signature guarantees and any other required documents must, in any
case, be transmitted to and received by the exchange agent at the address set
forth below under "--Exchange Agent" on or prior to the expiration date of the
exchange offer, unless the holder has strictly complied with the guaranteed
delivery procedures described below.
We understand that the exchange agent has confirmed with The Depository
Trust Company that any financial institution that is a participant in The
Depository Trust Company's system may utilize The Depository Trust Company's
Automated Tender Offer Program to tender old notes. We further understand that
the exchange agent will request, within two business days after the date the
exchange offer commences, that The Depository Trust Company establish an
account for the old notes for the purpose of facilitating the exchange offer,
and any participant may make book-entry delivery of old notes by causing The
Depository Trust Company to transfer the old notes into the exchange agent's
account in accordance with The Depository Trust Company's Automated Tender
Offer Program procedures for transfer. However, the exchange of the old notes
so tendered will only be made after timely confirmation of the book-entry
transfer and timely receipt by the exchange agent of, in addition to any other
documents required, an appropriate letter of transmittal with any required
signature guarantee and an agent's message, which is a message, transmitted by
The Depository Trust Company and received by the exchange agent and forming
part of a confirmation of a book-entry transfer, which states that The
Depository Trust Company has received an express acknowledgement from a
participant tendering old notes which are the subject of the confirmation of a
book-entry transfer and that the participant has received and agrees to be
bound by the terms of the letter of transmittal and that we may enforce the
agreement against that participant.
Guaranteed Delivery Procedures
If a registered holder of the old notes desires to tender the old notes and
the old notes are not immediately available, or time will not permit the
holder's old notes or other required documents to reach the exchange agent
2526
before the expiration date of the exchange offer, or the procedure for
book-entry transfer cannot be completed on a timely basis, a tender may
nonetheless be effected if:
. the tender is made through a firm which is a member of a registered
national securities exchange or a member of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an
office or correspondent in the United States;
. prior to the expiration date of the exchange offer, the exchange agent
received from the firm which is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the United States a properly completed and duly executed
letter of transmittal (or a facsimile of the letter of transmittal) and
Notice of Guaranteed Delivery, substantially in the form provided by us
(by telegram, telex, facsimile transmission, mail or hand delivery),
setting forth the name and address of the holder of old notes and the
amount of old notes tendered, stating that the tender is being made and
guaranteeing that within five New York Stock Exchange trading days after
the date of execution of the Notice of Guaranteed Delivery, the
certificates for all physically tendered old notes, in proper form for
transfer, or a confirmation of a book-entry transfer, as the case may be,
and any other documents required by the letter of transmittal will be
deposited by the firm which is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or commercial bank or trust company having an office or
correspondent in the United States with the exchange agent; and
. the certificates for all physically tendered old notes, in proper form for
transfer, or a confirmation of a book-entry transfer, as the case may be,
and all other documents required by the letter of transmittal are received
by the exchange agent within five New York Stock Exchange trading days
after the date of execution of the Notice of Guaranteed Delivery.
Withdrawal Rights
Tenders of old notes may be withdrawn at any time prior to the expiration
date of the exchange offer. For a withdrawal to be effective, a written notice
of withdrawal must be received by the exchange agent at the address set forth
below under "--Exchange Agent." Any notice of withdrawal must:
. specify the name of the person having tendered the old notes to be
withdrawn;
. identify the old notes to be withdrawn (including the principal amount of
the old notes); and
. where certificates for old notes have been transmitted specify the name in
which the old notes are registered, if different from that of the
withdrawing holder.
If certificates for old notes have been delivered or otherwise identified to
the exchange agent, then, prior to the release of the certificates, the
withdrawing holder must also submit the serial numbers of the particular
certificates to be withdrawn and a signed notice of withdrawal with signatures
guaranteed by a firm which is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc. or
a commercial bank or trust company having an office or correspondent in the
United States unless the holder is a firm which is a member of a registered
national securities exchange or a member of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an office
or correspondent in the United States.
If old notes have been tendered in accordance with the procedure for
book-entry transfer described above, any notice of withdrawal must specify the
name and number of the account at The Depository Trust Company to be credited
with the withdrawn old notes and otherwise comply with the procedures of the
facility. All questions as to the validity, form and eligibility (including
time of receipt) of the notices will be determined by us, whose determination
shall be final and binding on all parties. Any old notes so withdrawn will be
deemed not to have been validly tendered for exchange for purposes of the
exchange offer. Any old notes which have been tendered for exchange but which
are not exchanged for any reason will be returned to the holder without cost to
the holder (or in the case of old notes tendered by book-entry transfer into
the exchange agent's account at The Depository
2627
Trust Company according to the book-entry transfer procedures described above,
the old notes will be credited to an account maintained with The Depository
Trust Company for the old notes) as soon as practicable after withdrawal,
rejection of tender or termination of the exchange offer. Properly withdrawn
old notes may be retendered by following one of the procedures described under
"--Procedures for Tendering Old Notes" above at any time on or prior to the
expiration date of the exchange offer.
Conditions To The Exchange Offer
Notwithstanding any other provision of the exchange offer, we shall not be
required to accept for exchange, or to issue new notes in exchange for, any old
notes and may terminate or amend the exchange offer if at any time before the
acceptance of the old notes for exchange or the exchange of new notes for the
old notes, we determine that:
. the exchange offer does not comply with any applicable law or any
applicable interpretation of the staff of the Securities and Exchange
Commission;
. we have not received all applicable governmental approvals; or
. any actions or proceedings of any governmental agency or court exist which
could materially impair our ability to consummate the exchange offer.
The foregoing conditions are for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to any condition or may be waived
by us in whole or in part at any time and from time to time in our reasonable
discretion. Our failure at any time to exercise any of the foregoing rights
shall not be deemed a waiver of that right and each right shall be deemed an
ongoing right which may be asserted at any time and from time to time.
In addition, we will not accept for exchange any old notes tendered, and no
new notes will be issued in exchange for any old notes, if at that time any
stop order shall be threatened or in effect with respect to the registration
statement of which this prospectus constitutes a part or the qualification of
the indenture under the Trust Indenture Act of 1939, as amended. In any event
we are required to use every reasonable effort to obtain the withdrawal of any
stop order at the earliest possible time.
Exchange Agent
U.S. Bank Trust National Association has been appointed as the exchange
agent for the exchange offer. All executed letters of transmittal should be
directed to the exchange agent at the address set forth below. Questions and
requests for assistance, requests for additional copies of this prospectus or
of the letter of transmittal and request for Notices of Guaranteed Delivery
should be directed to the exchange agent addressed as follows:
U.S. Bank Trust National Association
100 Wall Street
Suite 1600
New York, NY 10005
Delivery other than as set forth above will not constitute a valid delivery.
Fees and Expenses
We will not make any payments to brokers, dealers or others soliciting
acceptances of the exchange offer. The principal solicitation is being made by
mail; however, additional solicitations may be made in person or by telephone
by our officers and employees.
The expenses to be incurred in connection with the exchange offer will be
paid by us. These expenses include fees and expenses of the exchange agent and
trustee under the indenture governing the notes, accounting and legal fees and
printing costs, among others.
2728
Accounting Treatment
The new notes will be recorded at the same carrying amount as the old notes,
which is the principal amount as reflected in our accounting records on the
date of the exchange and, accordingly, no gain or loss will be recognized. The
debt issuance costs will be capitalized and amortized to interest expense over
the term of the new notes.
Transfer Taxes
Holders who tender their old notes for exchange will not be obligated to pay
any transfer taxes in connection with the tender, except that holders who
instruct us to register new notes in the name of, or request that old notes not
tendered or not accepted in the exchange offer be returned to, a person other
than the registered tendering holder will be responsible for the payment of any
applicable transfer tax thereon.
Consequences of Failure To Exchange; Resales of New Notes
Holders of old notes who do not exchange their old notes for new notes in
the exchange offer will continue to be subject to the restrictions on transfer
of the old notes as set forth in the legend on the old notes as a consequence
of the issuance of the old notes in accordance with exemptions from, or in
transactions not subject to, the registration requirements of, the Securities
Act and applicable state securities laws. Old notes not exchanged in accordance
with the exchange offer will continue to accrue interest at 7 5/8% per annum
and will otherwise remain outstanding in accordance with their terms. Holders
of old notes do not have any appraisal or dissenters' rights under the Delaware
General Corporation Law in connection with the exchange offer. In general, the
old notes may not be offered or sold unless registered under the Securities
Act, except in accordance with an exemption from, or in a transaction not
subject to, the Securities Act and applicable state securities laws. We do not
currently anticipate that we will register the old notes under the Securities
Act. However, (1) if because of any change in law or applicable interpretations
by the staff of the SEC, we are not permitted to effect the exchange offer, (2)
if the exchange offer is not consummated within 150 days after August 13, 2001,
(3) if any of the old notes tendered pursuant to the exchange offer are not
exchanged for new notes within 10 days of being accepted in the exchange offer,
(4) if any initial purchaser so requests with respect to the old notes not
eligible be exchanged for new notes in the exchange offer and held by it
following consummation of the exchange offer, (5) if any applicable law or
interpretations do not permit any holder to participate in the exchange offer
or (6) if any holder of old notes that participates in the exchange offer, does
not receive new notes in exchange for old notes that may be sold without
restriction under state and federal securities laws, we are obligated to file a
shelf registration statement on the appropriate form under the Securities Act
relating to the old notes held by such persons.
Based on interpretive letters issued by the staff of the SEC to third
parties in unrelated transactions, we are of the view that new notes issued in
accordance with the exchange offer may be offered for resale, resold or
otherwise transferred by the holders (other than (1) any holder which is an
"affiliate" of us within the meaning of Rule 405 under the Securities Act or
(2) any broker-dealer that purchases notes from us to resell in accordance with
Rule 144A or any other available exemption) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that the new notes are acquired in the ordinary course of the holders' business
and the holders have no arrangement or understanding with any person to
participate in the distribution of the new notes. If any holder has any
arrangement or understanding regarding the distribution of the new notes to be
acquired in accordance with the exchange offer, the holder (1) could not rely
on the applicable interpretations of the staff of the SEC and (2) must comply
with the registration and prospectus delivery requirements of the Securities
Act in connection with a secondary resale transaction. A broker-dealer who
holds old notes that were acquired for its own account as a result of
market-making or other trading activities may be deemed to be an "underwriter"
within the meaning of the Securities Act and must, therefore, deliver a
prospectus meeting the requirements of the Securities Act in connection with
any resale of new notes. Each broker-dealer that receives new notes for its own
account in exchange for old notes, where the old notes were acquired by the
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge in the letter of 28
transmittal that it will deliver
a prospectus in connection with any resale of the new
29
notes. See "Plan of Distribution." We have not requested the staff of the SEC
to consider the exchange offer in the context of a no-action letter, and there
can be no assurance that the staff would take positions similar to those taken
in the interpretive letters referred to above if we were to make a no-action
request.
In addition, to comply with the securities laws of applicable jurisdictions,
the new notes may not be offered or sold unless they have been registered or
qualified for sale in the applicable jurisdictions or an exemption from
registration or qualification is available and is complied with. We have
agreed, under the registration rights agreement and subject to specified
limitations therein, to register or qualify the new notes for offer or sale
under the securities or blue sky laws of the applicable jurisdictions in the
United States as any selling holder of the notes reasonably requests in writing.
2930
PLAN OF DISTRIBUTION
Each broker-dealer that receives new notes for its own account pursuant to
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of the new notes. This prospectus as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of new notes received in exchange for old notes where
the old notes were acquired as a result of market-making activities or other
trading activities. We have agreed that, for a period of 180 days after the
expiration date of the exchange offer, we will make this prospectus, as amended
or supplemented, available to any broker-dealer for use in connection with any
such resale. In addition, until , 20012002 (90 days after the date of this
prospectus), all dealers effecting transactions in the new notes may be
required to deliver a prospectus.
We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the new notes or a combination of those
methods of resale, at market prices prevailing at the time of resale, at or to
or through brokers or dealers who may receive compensation in the form of
commissions or concessions that were received by it for its own account
pursuant to the exchange offer and any broker or dealer that participates in a
distribution of the new notes may be deemed to be an "underwriter" within the
meaning of the Securities Act and any profit on any resale of new notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The letter of transmittal
states that, by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 180 days after the expiration date of the exchange offer, we
will promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such documents
in the letter of transmittal. We have agreed to pay all expenses incident to
the exchange offer (including the expenses of one counsel for the holders of
the notes) other than commissions or concessions of any brokers or dealers and
will indemnify the holders of the securities (including any broker-dealers)
against certain liabilities, including liabilities under the Securities Act.
3031
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material United States federal income tax
consequences of the exchange offer and the ownership and disposition of the new
notes. Unless otherwise stated, this summary deals only with the new notes
received in the exchange offer in exchange for the old notes that were
purchased for cash on original issue. This summary assumes that the old notes
were and the new notes are held as capital assets. For purposes of this
summary, U.S. holders are holders of new notes that are:
(1)citizens or residents of the United States,
(2)corporations or other entities taxable as corporations created or
organized in or under the laws of the United States, any state thereof
or the District of Columbia,
(3)estates, the income of which is subject to United States federal income
taxation regardless of its source, or
(4)trusts if (A) a court within the United States is able to exercise
primary supervision over the administration of the trust and (B) one or
more United States persons have the authority to control all substantial
decisions of the trust.
If a partnership or other entity treated as a partnership for United States
federal income tax purposes holds new notes, the tax treatment of a partner
will generally depend on the status of the partner and the activities of the
partnership. If you are a partner of a partnership holding notes, we suggest
that you consult your tax advisor.
This summary does not deal with special classes of holders such as banks,
thrifts, real estate investment trusts, regulated investment companies,
insurance companies, dealers in securities or currencies, or tax-exempt
investors and does not discuss securities held as part of a hedge, straddle,
"synthetic security" or other integrated transaction.
This summary also does not address the tax consequences to persons that have
a functional currency other than the U.S. dollar or the tax consequences to
shareholders, partners or beneficiaries of a holder of securities. Further, it
does not include any description of any alternative minimum tax consequences or
the tax laws of any state or local government or of any foreign government that
may be applicable to the notes.
This summary is based on the Internal Revenue Code, the Treasury regulations
promulgated thereunder and administrative and judicial interpretations thereof,
all as of the date hereof, and all of which are subject to change, possibly on
a retroactive basis.
You should consult with your own tax advisor regarding the federal, state,
local and foreign income, franchise, personal property, and any other tax
consequences of the exchange offer and the ownership and disposition of the new
notes.
Tax Consequences to U.S. Holders
This subsection describes the material United States federal income tax
consequences of the exchange offer and of owning, selling and disposing of the
new notes.
The Exchange Offer
The exchange of old notes for new notes in the exchange offer should not be
a taxable event for holders because there should not be a significant
modification of the terms of the notes. Instead, the notes will be treated as a
continuation of the old notes for federal income tax purposes. Therefore, if
you exchange your old notes for new notes pursuant to the exchange offer:
(1)you will not recognize gain or loss in connection with the exchange
offer;
(2)you will have the same tax basis in the new notes that you had in the
old notes immediately prior to the exchange offer;
3132
(3)you will have the same holding period in the new notes that you had in
the old notes immediately prior to the exchange; and
(4)the federal income tax consequences associated with owning the old notes
will continue to apply to the new notes.
Interest Income
Under applicable Treasury Regulations, the old notes are not treated as
having been issued with original issue discount because the difference between
the old note's stated redemption price at maturity ($1,000 per note) and their
issue price ($994.21 per note) is considered to be de minimis.
Because the new notes are treated as a continuation of the old notes, a new
note received in the exchange offer for an old note will have the same original
issue discount characteristics as the old note for which it is exchanged. As a
result:
. If you are a cash method taxpayer, you must report the stated interest on
the new note in your income when it is received by you.
. If you are an accrual method taxpayer, you must report the stated interest
on the new note as it accrues.
. You will not be required to include the de minimis original issue discount
in your income as it accrues. Instead, you will include such discount in
your computation of gain or loss when you sell, exchange or otherwise
dispose of the new note (including by way of retirement or redemption).
Sale or Exchange of Notes
A holder will generally recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange or other
disposition of the new note and the holder's adjusted tax basis in the new
note. A holder who exchanged old notes for new notes in the exchange offer will
have the same basis in the new note that the holder had in the old note. Gain
recognized on the sale of a new note will be long term capital gain provided
the holder's holding period for the new note exceeds one year. A holder's
holding period for the old notes will be added to the holder's holding period
in the new notes, if the holder participates in the exchange offer. In the case
of a holder other than a corporation, the current maximum marginal United
States federal income tax rate applicable to long term capital gain recognized
on the sale of a note is 20% (or 18% if held more than five years).
If the selling price is less than the holder's adjusted tax basis, the
holder will recognize a capital loss. Capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes except
that a non-corporate taxpayer may offset a capital loss against ordinary income
to the extent of $3,000 per year (or $1,500 per year for a married person
filing a separate return).
Information Reporting and Backup Withholding Tax
In general, information reporting requirements will apply to payments of
principal and interest on the new notes and payments of the proceeds of the
sale of the new notes, and backup withholding tax (currently at a rate of
30.5%) may apply to those payments if:
(i)the holder fails to furnish or certify his correct taxpayer
identification number to us in the manner required,
(ii)we are notified by the Internal Revenue Service that the holder has
failed to report payments of interest and dividends properly, or
(iii)under certain circumstances, the holder fails to certify that the holder
has not been notified by the Internal Revenue Service that the holder is
subject to backup withholding for failure to report interest and
dividend payments.
3233
Any amounts withheld under the backup withholding rules from a payment to a
holder will be allowed as a credit against the holder's United States federal
income tax and may entitle the holder to a refund, provided that the required
information is furnished to the Internal Revenue Service.
Non-U.S. Holders of New Notes
The rules governing United States federal income taxation of a beneficial
owner of new notes that, for United States federal income tax purposes, is a
holder who is not a United States person as that term is defined in the
Internal Revenue Code are complex and no attempt will be made herein to provide
more than a summary of those rules. Non-U.S. holders should consult with their
own tax advisors to determine the effect of federal, state, local and foreign
income tax laws, as well as treaties, with regard to an investment in the
notes, including any reporting requirements.
This discussion assumes that the note or interest payment is not subject to
the rules of Section 871(h)(4)(A) of the Internal Revenue Code, relating to
interest payments that are determined by reference to income, profits, changes
in value of property or other attributes of Carpenter or a related party.
Interest Income
Generally, interest income of a non-U.S. holder that is not effectively
connected with a United States trade or business will be subject to a
withholding tax at a 30% rate (or, if applicable, a lower tax rate specified by
a treaty). However, interest income earned on a new note held by a non-U.S.
holder will qualify for the "portfolio interest" exemption and therefore will
not be subject to United States federal income tax or withholding tax, provided
that the interest income is not effectively connected with a United States
trade or business of the non-U.S. holder and provided that:
(1)the non-U.S. holder does not actually or constructively own 10% of more
of the total combined voting power of all classes of our stock entitled
to vote;
(2)the non-U.S. holder is not a controlled foreign corporation that is
related to us through stock ownership;
(3)the non-U.S. holder is not a bank which acquired the note in
consideration for an extension of credit made pursuant to a loan
agreement entered into in the ordinary course of business; and
(4)either (A) the non-U.S. holder certifies to us or our or its agent,
under penalties of perjury, that it is not a United States person and
provides its name and address or (B) an authorized representative of a
securities clearing organization, bank or other financial institution
that holds customer securities in the ordinary course of its trade or
business and holds the notes in that capacity, certifies to us or our
agent, under penalties of perjury, that such a statement on Form W-8BEN
or a similar substitute has been received from the beneficial owner by
it or by a financial institution between it and the beneficial owner and
furnishes to us or our agent a copy thereof.
Except to the extent that an applicable treaty otherwise provides, a
non-U.S. holder generally will be taxed with respect to interest in the same
manner as a holder that is a United States person if the interest is
effectively connected with a United States trade or business of the non-U.S.
holder. Effectively connected interest income received or accrued by a
corporate non-U.S. holder may also, under certain circumstances, be subject to
an additional "branch profits" tax at a 30% rate (or, if applicable, at a lower
tax rate specified by a treaty). Even though such effectively connected income
is subject to income tax, and may be subject to the branch profits tax, it is
not subject to withholding tax if the non-U.S. holder delivers a properly
executed Internal Revenue Service Form W-8ECI (or successor form) to the payor.
Sale or Exchange of New Notes
A non-U.S. holder generally will not be subject to United States federal
income tax or withholding tax on any gain realized on the sale, exchange or
other disposition of a new note unless:
(1)the gain is effectively connected with the conduct of a United States
trade or business of the non-U.S. holder,
3334
(2)in the case of a non-U.S. holder who is an individual, such holder is
present in the United States for a period or periods aggregating 183
days or more during the taxable year of the disposition, or
(3)the non-U.S. holder is subject to tax pursuant to the provisions of the
Internal Revenue Code applicable to certain United States expatriates.
Information Reporting and Backup Withholding Tax
United States backup withholding tax will not apply to payments on the new
notes to a non-U.S. holder if the statement described in "Interest Income" is
duly provided by such holder, provided that the payor does not have actual
knowledge that the holder is a United States person. Information reporting may
still apply with respect to payments of interest. Information reporting and
backup withholding tax will not apply to payments of the proceeds of the sale
of new notes to a non-U.S. holder effected by a broker, provided that either a
sale occurs through a foreign office of a foreign broker that has no connection
with the United States, as described in applicable regulations or such broker
has in its records certain documentary evidence allowed by Treasury regulations
that the beneficial owner is a non-U.S. holder, certain other conditions are
met, and the broker does not have actual knowledge that the holder is a United
States person.
The United States federal income tax discussion set forth above is included
for general information only and may not be applicable depending upon a
holder's particular situation. Holders should consult their tax advisors with
respect to the tax consequences to them of the purchase, ownership and
disposition of the notes, including the tax consequences under state, local,
foreign and other tax laws and the possible effects of changes in United States
federal or other tax laws.
3435
LEGAL MATTERS
The validity of the notes will be passed upon for Carpenter by Dechert,
Philadelphia, Pennsylvania.
EXPERTS
The financial statements of Carpenter Technology Corporation incorporated in
this Prospectus by reference to the Annual Report on Form 10-K for the year
ended June 30, 2001 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Commission permits us to "incorporate by reference" certain of our
publicly-filed documents into this prospectus, which means that information
included in those documents is considered part of this prospectus. Information
that we file with the Commission after the effective date of this prospectus
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the
Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, or until we terminate the effectiveness of this registration
statement.
The following documents filed by us with the Commission are incorporated by
reference in this prospectus:
1. Our Quarterly Report on Form 10-Q filed on November 14, 2001.
2. Our Annual Report on Form 10-K filed on September 24, 2001.
2.3. Our Definitive Proxy Statement filed on September 24, 2001.
3.4. Our Current Report on Form 8-K filed on August 21, 2001.
4.5. Our Current Report on Form 8-K filed on July 27, 2001.
5.6. Our Current Report on Form 8-K filed on July 10, 2001.
WHERE YOU CAN FIND MORE INFORMATION
Carpenter Technology Corporation files annual and quarterly reports with the
Commission. These documents include specific information regarding Carpenter
Technology Corporation. These documents, including exhibits and schedules
thereto, may be inspected without charge at the Commission's principal office
in Washington, D.C., and copies of all or any part thereof may be obtained from
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional office located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
after payment of fees prescribed by the Commission. The Commission also
maintains a World Wide Web site which provides online access to reports, proxy
and information statements and other information regarding registrants that
file electronically with the Commission at the address http://www.sec.gov.
We have filed with the SEC a registration statement on Form S-4 under the
Securities Act of 1933, covering the notes to be issued in the exchange offer
(Registration No. ).333-71518). This prospectus, which is a part of the
registration statement, does not contain all of the information included in the
registration statement. Any statement made in this prospectus concerning the
contents of any contract, agreement or other document is not necessarily
complete. For further information regarding our company and the notes to be
issued in the exchange offer, please reference the registration statement,
including its exhibits. If we have filed any contract, agreement or other
document as an exhibit to the registration statement, you should read the
exhibit for a more complete understanding of the documents or matter involved.
3536
[LOGO] CARPENTER
Until , all dealers that effect transactions in these securities,
whether or not participating in this exchange offer may be required to deliver
a prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Under Section 145 of the General Corporation Law of the State of Delaware,
Carpenter has broad powers to indemnify its directors and officers against
liabilities they may incur in such capacities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"). Carpenter's bylaws
also provide for mandatory indemnification of its directors and executive
officers, and permissive indemnification of its employees and agents, to the
fullest extent permissible under Delaware law.
Carpenter's certificate of incorporation provides that the liability of its
directors for monetary damages shall be eliminated to the fullest extent
permissible under Delaware law. Pursuant to Delaware law, this includes
elimination of liability for monetary damages for breach of the directors'
fiduciary duty of care to Carpenter and its stockholders. These provisions do
not eliminate the directors' duty of care and, in appropriate circumstances,
equitable remedies such as injunctive or other forms of non-monetary relief
will remain available under Delaware law. In addition, each director will
continue to be subject to liability for breach of the director's duty of
loyalty to Carpenter, for acts or omissions not in good faith or involving
intentional misconduct, for knowing violations of law, for any transaction from
which the director derived an improper personal benefit, and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware law. The provision also does not affect a director's
responsibilities under any other laws, such as the federal securities laws or
state or federal environmental laws.
Item 21. Exhibits and Financial Statement Schedules
(1) Exhibits
Incorporated by reference to the Exhibit Index following page II-4.
Item 22. Undertakings
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, 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.
The undersigned registrant hereby undertakes 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 section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3
II-1
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such
interim financial information.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Wyomissing, Commonwealth
of Pennsylvania, on the 12/29/th/ day of October,November, 2001.
CARPENTER TECHNOLOGY CORPORATION
/s/ Terrence E. Geremski
By: _________________________________
Terrence E. Geremski
Sr. Vice President-Finance &
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Chairman, President and Chief October 12, 2001
Executive Officer and Director
/s/ Dennis M. Draeger (Principal Executive Officer)
---------------------------
Dennis M. Draeger
Sr. Vice President-Finance & Chief October 12, 2001
/s/ Terrence E. Geremski Financial Officer
---------------------------
Terrence E. Geremski
Vice President and Corporate October 12, 2001
Controller (Principal Accounting
/s/ Richard D. Chamberlain Officer)
---------------------------
Richard D. Chamberlain
* Director October 12, 2001
---------------------------
Marcus C. Bennett
* Director October 12, 2001
---------------------------
William S. Dietrich II
* Director October 12, 2001
---------------------------
C. McCollister Evarts, M.D.
* Director October 12, 2001
---------------------------
J. Michael Fitzpatrick
* Director October 12, 2001
---------------------------
William J. Hudson
* Director October 12, 2001
---------------------------
Robert J. Lawless
* Director October 12, 2001
---------------------------
Marlin Miller, Jr.
II-3
Signature Title Date
--------- ----- ----
* Director October 12, 2001
--------------------
Signature Title Date
--------- ----- ----
Chairman, President and Chief November 29, 2001
Executive Officer and Director
/s/ Dennis M. Draeger (Principal Executive Officer)
- --------------------------
Dennis M. Draeger
Sr. Vice President-Finance & Chief November 29, 2001
/s/ Terrence E. Geremski Financial Officer
- --------------------------
Terrence E. Geremski
Vice President and Corporate November 29, 2001
Controller (Principal Accounting
/s/ Richard D. Chamberlain Officer)
- --------------------------
Richard D. Chamberlain
* Director November 29, 2001
- --------------------------
Marcus C. Bennett
* Director November 29, 2001
- --------------------------
William S. Dietrich II
* Director November 29, 2001
- --------------------------
J. Michael Fitzpatrick
* Director November 29, 2001
- --------------------------
William J. Hudson
* Director November 29, 2001
- --------------------------
Robert J. Lawless
* Director November 29, 2001
- --------------------------
Marlin Miller, Jr.
* Director November 29, 2001
- --------------------------
Robert N. Pokelwaldt
* Director October 12, 2001
--------------------
Peter C. Rossin
* Director October 12, 2001
--------------------
Kathryn C. Turner
* Director October 12, 2001
--------------------
Stephen M. Ward, Jr.
* Director October 12,
II-3
Signature Title Date
--------- ----- ----
* Director November 29, 2001
--------------------
Peter C. Rossin
* Director November 29, 2001
--------------------
Kathryn C. Turner
* Director November 29, 2001
--------------------
Stephen M. Ward, Jr.
* Director November 29, 2001
--------------------
Kenneth L. Wolfe
* Terrence E. Geremski, pursuant to a Power of Attorney executed by each of
the directors noted above and included as an exhibit to this registration
statement, by signing his name hereto, does hereby sign and execute this
registration statement on behalf of each of the persons noted above, in the
capacities indicated, and does hereby sign and execute this registration
statement on his own behalf, in the capacities indicated.
/s/ Terrence E. Geremski
_____________________________________
Terrence E. Geremski
II-4
EXHIBIT INDEX
Exhibit No. Title
- ----------- -----
3. Articles of Incorporation and By-Laws
3.1 Restated Certificate of Incorporation is incorporated herein by reference to Exhibit 3 of
Carpenter's Form 10-Q Quarterly Report for the quarter ended September 30, 19981998.
3.2 By-Laws, as amended as of December 5, 1996,effective October 22, 2001, are incorporated herein by reference to Exhibit
3B of Carpenter's 1996 Annual Report on Form 10-K and to Exhibit 3 of Carpenter's Form 10-Q Quarterly Report for the quarter ended December 31, 1996.September 30, 2001.
4. Instruments Defining Rights of Security Holders, Including Indentures
4.1 Restated Certificate of Incorporation and By-Laws set forth in Exhibit Nos. 3.1 and 3.2, above.
4.2 Rights Agreement relating to Rights distributed to holders of Carpenter's Stock, amended as of
June 12, 2000, is incorporated herein by reference to Exhibit 4B of Carpenter's Form 10-K Annual
Report for the year ended June 30, 2001.
4.3 Carpenter's Registration Statement No. 333-44757, as filed on Form S-3 on January 22, 1998, and
amended on February 13, 1998, with respect to issuance of Common Stock and unsecured debt is
incorporated herein by reference.
4.4 Prospectus, dated February 13, 1998 and Prospectus Supplement, dated March 31, 1998, File No.
333-44757, with respect to issuance of $198,000,000 of Medium Term Notes are incorporated by
reference.
4.5 Indenture dated as of January 12, 1994, between Carpenter and U.S. Bank Trust National
Association, formerly known as First Trust of New York, National Association, as successor
Trustee to Morgan Guaranty Trust Company of New York, related to Carpenter's i) $100,000,000
of unsecured medium term notes registered on Registration Statement No. 33-51613 and ii)
$198,000,000 of unsecured medium term notes registered on Registration Statement
No. 333-44757 is incorporated by reference to Exhibit 4(c) to Carpenter's Form S-3 filed
January 6, 1994.
4.6 Forms of Fixed Rate and Floating Rate Medium-Term Note, Series B are incorporated by
reference to Exhibit 20 to Carpenter's Current Report on Form 8-K filed on April 15, 1998.
4.7 Pricing Supplements No. 1 through 25 dated and filed from April 2, 1998 to June 11, 1998,
supplements to Prospectus dated February 13, 1998 and Prospectus Supplement dated March 31,
1998, File No. 333-44757 with respect to issuance of $198,000,000 of Medium Term Notes are
incorporated herein by reference.
4.8 Form of 7 5/8% Note Due 2011 is incorporated by reference to Exhibit 4.8 to Carpenter's
Registration Statement on Form S-4 (File No. 333-71518) filed October 12, 2001.
4.9 Exchange and Registration Rights Agreement dated August 13, 2001 among Carpenter
Technology Corporation, J.P. Morgan Securities Inc. and Credit Suisse First Boston Corporation.Corporation is
incorporated by reference to Exhibit 4.9 to Carpenter's Registration Statement on Form S-4 (File
No. 333-71518) filed October 12, 2001.
5.1 Opinion of Dechert.Dechert is incorporated by reference to Exhibit 5.1 to Carpenter's Registration
Statement on Form S-4 (File No. 333-71518) filed October 12, 2001.
10. Material Contracts
10.1 Agreement and Plan of Merger dated January 6, 1997, by and among Dynamet Incorporated,
Stockholders of Dynamet Incorporated and Carpenter is incorporated herein by reference to
Exhibit 1 to Carpenter's Current Report on Form 8-K filed on March 27, 1997.
10.2 Supplemental Retirement Plan for Executive Officers, amended as of January 1, 2001, is
incorporated herein by reference to Exhibit 10B of Carpenter's Form 10-K Annual Report for the
year ended June 30, 2001.
10.3 Management and Officers Capital Appreciation Plan, an Incentive Stock Option Plan, amended as
of April 26, 2001, is incorporated herein by reference to Exhibit 10C of Carpenter's Form 10-K
Annual Report for the year ended June 30, 2001.
10.4 Incentive Stock Option Plan for Officers and Key Employees, amended as of August 9, 1990, is
incorporated herein by reference to Exhibit 10D to Carpenter's 2000 Annual Report on Form
10-K.
10.5 Deferred Compensation Plan for Non-management Directors of Carpenter Technology
Corporation, amended as of December 7, 1995, is incorporated herein by reference to Exhibit 10E
of Carpenter's Form 10-K Annual Report for the year ended June 30, 2001.
10.6 Deferred Compensation Plan for Corporate and Division Officers of Carpenter Technology
Corporation, amended as of April 1, 1997, is incorporated by reference to Exhibit E-9 to
Carpenter's 1997 Annual Report on Form 10-K.
10.7 Executive Annual Compensation Plan, amended as of July 1, 1997 is incorporated by reference to
Exhibit E-20 to Carpenter's 1997 Annual Report on Form 10-K.
10.8 Stock-Based Incentive Compensation Plan For Non-Employee Directors, amended as of April 26,
2001, is incorporated herein by reference to Exhibit 10H of Carpenter's Form 10-K Annual Report
for the year ended June 30, 2001.
10.9 Officers' Supplemental Retirement Plan of Carpenter Technology Corporation is incorporated
herein by reference to Exhibit 10-I to Carpenter's 2000 Annual Report on Form 10-K.
10.10 Trust Agreement between Carpenter and the Chase Manhattan Bank, N.A., dated September 11,
1990 as amended and restated on May 1, 1997, relating in part to the Supplemental Retirement
Plan for Executive Officers, Deferred Compensation Plan for Corporate and Division Officers and
the Officers' Supplemental Retirement Plan of Carpenter Technology Corporation is incorporated
by reference to Exhibit E 28 to Carpenter's 1997 Annual Report on Form 10-K.
10.11 Form of Indemnification Agreement, entered into between Carpenter and each of the directors and
the following executive officers: Dennis M. Draeger, Terrence E. Geremski, Robert W. Lodge,
Michael L. Shor, Robert J. Torcolini and John R. Welty is incorporated herein by reference to
Exhibit 10K to Carpenter's 2000 Annual Report on Form 10-K.
10.12 Stock-Based Incentive Compensation Plan for Officers and Key Employees, amended as of
April 26, 2001, is incorporated herein by reference to Exhibit 10L of Carpenter's Form 10-K
Annual Report for the year ended June 30, 2001.
10.13 Carpenter Technology Corporation Change of Control Severance Plan, adopted April 26, 2001, is
incorporated herein by reference to Exhibit 10M of Carpenter's Form 10-K Annual Report for the
year ended June 30, 2001.
10.14 Form of amended and restated Special Severance Agreement entered into between Carpenter and
each of the following executive officers: Terrence E. Geremski, Michael L. Shor and Robert J.
Torcolini is incorporated herein by reference to Exhibit 10N of Carpenter's Form 10-K Annual
Report for the year ended June 30, 2001.
10.15 Form of amended and restated Special Severance Agreement entered into between Carpenter and
each of the following executive officers: Dennis M. Draeger, Robert W. Lodge and John R. Welty
is incorporated herein by reference to Exhibit 10O of Carpenter's Form 10-K Annual Report for
the year ended June 30, 2001.
10.16 Trust Agreement between Carpenter and the Chase Manhattan Bank, N.A., dated December 7,
1990 as amended and restated on May 1, 1997, relating in part to the Directors' Retirement Plan
and the Deferred Compensation Plan for Non-management Directors, is incorporated by reference
to Exhibit E-83 to Carpenter's 1997 Annual Report on Form 10-K.
10.17 Distribution Agreement dated July 31, 2001 among Carpenter Technology Corporation, J.P.
Morgan Securities Inc. and Credit Suisse First Boston Corporation.Corporation is incorporated by reference to
Exhibit 10.17 to Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed
October 12, 2001.
12. Computation of Ratios of Earnings to Fixed Charges (unaudited) is incorporated herein by reference to
Exhibit 12 to Carpenter's 2000 Annual Report on Form 10-K.
21. Subsidiaries of the Registrant.Registrant is incorporated by reference to Exhibit 21 to Carpenter's Registration
Statement on Form S-4 (File No. 333-71518) filed October 12, 2001.
23. Consent of Experts and Counsel
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Dechert (included in Exhibit 5.1).
25 is incorporated by reference to Exhibit 5.1 to
Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed October 12, 2001.
25. Statement of Eligibility and Qualification of U.S. Bank Trust National Association is incorporated by
reference to Exhibit 25 to Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed
October 12, 2001.
99. Additional Exhibits
99.1 Form of Letter of Transmittal is incorporated by reference to Exhibit 99.1 to Carpenter's
Registration Statement on Form S-4 (File No. 333-71518) filed October 12, 2001.
99.2 Form of Notice of Guaranteed Delivery is incorporated by reference to Exhibit 99.2 to Carpenter's
Registration Statement on Form S-4 (File No. 333-71518) filed October 12, 2001.
99.3 Letter to Holders of 7 5/8% Notes due 2011 Concerning Offer For All Outstanding 7 5/8% Notes
Due 2011 in Exchange for 7 5/8% Notes due 2011 of Carpenter Technology Corporation that Have
Been Registered Under the Securities Act of 1933, as amended.amended is incorporated by reference to
Exhibit 99.3 to Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed
October 12, 2001.
99.4 Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees Concerning
Offer for All Outstanding 7 5/8% Notes Due 2011 in Exchange for 7 5/8% Notes Due 2011 of
Carpenter Technology Corporation that Have Been Registered Under the Securities Act of 1933,
as amended.amended is incorporated by reference to Exhibit 99.4 to Carpenter's Registration Statement on
Form S-4 (File No. 333-71518) filed October 12, 2001.
99.5 Letter to Clients Concerning Offer For All Outstanding 7 5/8% Notes Due 2011 in Exchange for
7 5/8% Notes Due 2011 of Carpenter Technology Corporation that Have Been Registered Under
the Securities Act of 1933, as amended.amended is incorporated by reference to Exhibit 99.5 to Carpenter's
Registration Statement on Form S-4 (File No. 333-71518) filed October 12, 2001.
99.6 Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.W-9 is
incorporated by reference to Exhibit 99.6 to Carpenter's Registration Statement on Form S-4 (File
No. 333-71518) filed October 12, 2001.
99.7 Powers of Attorney
99.7A Power of Attorney dated October 8, 2001 of Marcus C. Bennett.Bennett is incorporated by reference to
Exhibit 99.7A to Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed
October 12, 2001.
99.7B Power of Attorney dated October 4, 2001 of William S. Dietrich II.II is incorporated by reference to
Exhibit 99.7B to Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed
October 12, 2001.
99.7C Power of Attorney dated October 2, 2001 of C. McCollister Evarts.Evarts is incorporated by reference to
Exhibit 99.7C to Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed
October 12, 2001.
99.7D Power of Attorney dated October 3, 2001 of J. Michael Fitzpatrick.Fitzpatrick is incorporated by reference to
Exhibit 99.7D to Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed
October 12, 2001.
99.7E Power of Attorney dated October 2, 2001 of William J. Hudson.Hudson is incorporated by reference to
Exhibit 99.7E to Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed
October 12, 2001.
99.7F Power of Attorney dated October 4, 2001 of Robert J. Lawless.Lawless is incorporated by reference to
Exhibit 99.7F to Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed
October 12, 2001.
99.7G Power of Attorney dated October 2, 2001 of Marlin Miller, Jr. is incorporated by reference to
Exhibit 99.7G to Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed
October 12, 2001.
99.7H Power of Attorney dated October 4, 2001 of Robert N. Pokelwaldt.Pokelwaldt is incorporated by reference to
Exhibit 99.7H to Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed
October 12, 2001.
99.7I Power of Attorney dated October 3, 2001 of Peter C. Rossin.Rossin is incorporated by reference to
Exhibit 99.7I to Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed
October 12, 2001.
99.7J Power of Attorney dated October 4, 2001 of Kathryn C. Turner.Turner is incorporated by reference to
Exhibit 99.7J to Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed
October 12, 2001.
99.7K Power of Attorney dated October 4, 2001 of Stephen M. Ward, Jr. is incorporated by reference to
Exhibit 99.7K to Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed
October 12, 2001.
99.7L Power of Attorney dated October 4, 2001 of Kenneth L. Wolfe.Wolfe is incorporated by reference to
Exhibit 99.7L to Carpenter's Registration Statement on Form S-4 (File No. 333-71518) filed
October 12, 2001.