<PAGE>
Rule 424(b)(2)
Registration No. 33-52789
PROSPECTUS SUPPLEMENT
(To Prospectus dated April 8, 1994)
$300,000,000
Weyerhaeuser Company
8 1/2% DEBENTURES DUE JANUARY 15, 2025
----------------
Interest payable January 15 and July 15
----------------
THE DEBENTURES WILL BEAR INTEREST FROM JANUARY 15, 1995. THE DEBENTURES ARE
NOT REDEEMABLE PRIOR TO MATURITY.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
PRICE 100% AND ACCRUED INTEREST
----------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
------------ -------------- -------------
<S> <C> <C> <C>
Per Debenture............... 100.000% .875% 99.125%
Total....................... $300,000,000 $2,625,000 $297,375,000
</TABLE>
- --------
(1) Plus accrued interest from January 15, 1995.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deduction of estimated expenses of $150,000 payable by the
Company.
----------------
The Debentures are offered, subject to prior sale, when, as and if issued by
the Company and accepted by the Underwriters, and subject to approval of
certain legal matters by Davis Polk & Wardwell, counsel for the Underwriters.
It is expected that delivery of such Debentures will be made on or about
January 23, 1995 at the office of Morgan Stanley & Co. Incorporated, New York,
N.Y., against payment therefor in New York funds.
----------------
MORGAN STANLEY & CO. GOLDMAN, SACHS & CO.
Incorporated
January 17, 1995
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE DEBENTURES
OFFERED HEREBY OR ANY OTHER NOTES OR DEBENTURES OF THE COMPANY AT LEVELS ABOVE
THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR BY THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AT
ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE THEREOF.
----------------
S-2
<PAGE>
SUMMARY FINANCIAL INFORMATION
The following summary of financial information concerning the Company has
been derived from consolidated financial statements and other information
prepared by the Company. The amounts shown for the thirty-nine week periods in
1994 and 1993, which were not examined by independent public accountants,
reflect, in the opinion of the Company, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the earnings for such
periods.
<TABLE>
<CAPTION>
THIRTY-NINE
WEEKS ENDED FISCAL YEAR END
----------------- ------------------------------------
SEPT. 25 SEPT. 26
(AMOUNTS IN MILLIONS 1994 1993 1993 1992 1991 1990 1989
EXCEPT PER SHARE AMOUNTS) -------- -------- ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales and revenues... $7,665 $6,954 $9,545 $9,266 $8,773 $9,066 $10,181
====== ====== ====== ====== ====== ====== =======
Earnings (loss) before
income taxes, extraordi-
nary item and effect of
accounting changes...... 630 667 808 563 (178) 600 514
Income taxes............. 230 241 281 191 (77) 206 173
Extraordinary item....... -- 52 52 -- -- -- --
Effect of accounting
changes................. -- -- -- -- (61) -- --
------ ------ ------ ------ ------ ------ -------
Net earnings (loss)...... $ 400 $ 478 $ 579 $ 372 $ (162) $ 394 $ 341
====== ====== ====== ====== ====== ====== =======
Per common share:
Earnings before special
items.................. $ 1.95 $ 2.08 $ 2.58 $ 1.83 $ 0.90 $ 1.87 $ 1.56
Restructuring charges... -- -- -- -- (1.40) -- --
Extraordinary item...... -- 0.25 0.25 -- -- -- --
Effect of accounting
changes................ -- -- -- -- (0.30) -- --
------ ------ ------ ------ ------ ------ -------
Net earnings (loss)..... $ 1.95 $ 2.33 $ 2.83 $ 1.83 $(0.80) $ 1.87 $ 1.56
====== ====== ====== ====== ====== ====== =======
Dividends paid.......... $ 0.90 $ 0.90 $ 1.20 $ 1.20 $ 1.20 $ 1.20 $ 1.20
====== ====== ====== ====== ====== ====== =======
</TABLE>
On January 17, 1995, the Company reported preliminary unaudited 1994 net
earnings of $588.7 million or $2.86 per common share on sales of $10.4 billion,
including $188.9 million fourth quarter net earnings or $.91 per common share
on sales of $2.73 billion in the fourth quarter. This compared to 1993 annual
net earnings of $579.3 million or $2.83 per common share on sales of $9.54
billion and fourth quarter net earnings of $101.7 million or $.50 per common
share on sales of $2.59 billion in the fourth quarter. The 1993 results include
net special items of $.55 per share for the year.
S-3
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
THIRTY-NINE
WEEKS ENDED FISCAL YEAR END
--------------- ------------------------
SEP 25, SEP 26,
1994 1993
------- ------- ---- ---- ---- ---- ----
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges
(1).................................. 2.92 3.11 2.89 2.27 0.52 2.19 1.82
</TABLE>
- --------
(1) For the purposes of the ratio, earnings consist of earnings before income
taxes, extraordinary item, effect of accounting changes and fixed charges.
Fixed charges consist of interest on indebtedness, amortization of debt
expense and one-third of rents which is deemed representative of an
interest factor. This ratio excludes the interest paid on deposit accounts
by Republic Federal Savings and Loan Association, a subsidiary of the
Company acquired during 1985 and dissolved during 1992. If such interest is
included, the ratio would be 2.25, 0.57, 2.05 and 1.71 for the fiscal years
ended December 27, 1992, December 29, 1991, December 30, 1990 and December
31, 1989, respectively. The ratio of Weyerhaeuser Company with its
Weyerhaeuser Real Estate Company and Weyerhaeuser Financial Services, Inc.
subsidiaries accounted for on the equity method, but excluding the
undistributed earnings of those subsidiaries is 4.14 and 4.42 for the
thirty-nine weeks ended September 25,1994 and September 26, 1993,
respectively and 4.02, 3.32, 0.61, 3.67 and 3.92 for the fiscal years ended
December 26, 1993, December 27, 1992, December 29, 1991, December 30,1990
and December 31, 1989, respectively.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
Debentures will be added to the Company's general funds and will be used for
general corporate purposes, including working capital, capital expenditures,
and reduction of the Company's commercial paper backed by a long-term credit
agreement. Pending such application, the net proceeds may be invested in
marketable securities.
DESCRIPTION OF DEBENTURES
The Debentures will be limited to $300,000,000 aggregate principal amount,
will be unsecured obligations of the Company and will mature on January 15,
2025. Each Debenture will bear interest at the rate per annum stated on the
cover page hereof payable on January 15 and July 15 of each year, commencing
July 15, 1995, to the person in whose name the Debenture is registered at the
close of business on the January 1 or July 1, as the case may be, next
preceding such interest payment date. Principal and interest will be payable,
and the Debentures will be transferable, at the office or agency of the Company
appointed for such purpose in The City of New York or, at the option of the
Company, payment of interest may be made by check mailed to the address of the
person entitled thereto as shown on the Debenture register. The Debentures are
to be registered without coupons in denominations of $1,000 or any integral
multiple thereof.
The Debentures are not redeemable prior to maturity. There are no covenants
or provisions relating to the Debentures that may afford debt holders
protection in the event of a highly leveraged transaction.
S-4
<PAGE>
UNDERWRITERS
Under the terms of and subject to the conditions contained in an Underwriting
Agreement dated January 13, 1995 (the "Underwriting Agreement") and the
Underwriting Agreement Standard Provisions (Debt) incorporated therein, the
Underwriters named below have severally agreed to purchase, and the Company has
agreed to sell to them, severally, the respective amounts of the Debentures set
forth opposite their names below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
NAME DEBENTURES
---- ------------
<S> <C>
Morgan Stanley & Co. Incorporated........................... $150,000,000
Goldman, Sachs & Co. ....................................... 150,000,000
------------
Total..................................................... $300,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
to pay for and accept delivery of the Debentures is subject to the approval of
certain legal matters by their counsel and to certain other conditions. The
Underwriters are committed to take and pay for all of the Debentures if any are
taken.
The Underwriters propose to offer part of the Debentures directly to the
public at the public offering price set forth on the cover page hereof and part
to certain dealers at a price which represents a concession not in excess of
.50% of the principal amount of the Debentures. The Underwriters may allow, and
such dealers may reallow, a concession not in excess of .25% of the principal
amount of the Debentures to certain other dealers. After the initial offering
of the Debentures, the offering price and other selling terms may from time to
time be varied by the Underwriters.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
The Company does not intend to apply for listing of the Debentures on a
national securities exchange, but has been advised by the Underwriters that
they presently intend to make a market in the Debentures, as permitted by
applicable laws and regulations. The Underwriters are not obligated, however,
to make a market in the Debentures and any such market making may be
discontinued at any time at the sole discretion of the Underwriters.
Accordingly, no assurance can be given as to the liquidity of, or trading
markets for, the Debentures.
S-5
<PAGE>
PROSPECTUS
Weyerhaeuser Company
Debt Securities
Preferred Shares
Preference Shares
----------------
Weyerhaeuser Company (the "Company") may offer from time to time its (i)
debt securities (the "Debt Securities") (ii) preferred shares and (iii)
preference shares, at an aggregate initial offering price not to exceed the
equivalent of $1,000,000,000, on terms to be determined at the time of sale.
The Debt Securities, preferred shares and preference shares are herein
collectively referred to as the "Securities". As used herein, Debt Securities
shall include Debt Securities denominated in U.S. dollars or, at the option of
the Company if so specified in the accompanying Prospectus Supplement (the
"Prospectus Supplement"), in any other currency, including composite
currencies such as the European Currency Unit. If this Prospectus is being
delivered in connection with a sale of Debt Securities, the specific
designation, aggregate principal amount, maturity, rate and time of payment of
any interest, purchase price, any terms for mandatory or optional redemption
(including any sinking fund), any modification of the covenants and any other
specific terms in connection with the sale of the Debt Securities in respect
of which this Prospectus is being delivered (the "Offered Debt Securities"),
are set forth in the accompanying Prospectus Supplement. If this Prospectus is
being delivered in connection with a sale of preferred shares or preference
shares, the specific designation, number of shares, purchase price and rights,
preference and privileges thereof and any qualifications or restrictions
thereon (including dividends, liquidation value, voting rights, terms of
conversion or exchange (if any), terms for mandatory or optional redemption
(if any) and any other specific terms of the preferred shares or the
preference shares in respect of which this Prospectus is being delivered (the
"Offered Shares"), are set forth in the accompanying Prospectus Supplement.
The Offered Debt Securities and the Offered Shares are herein collectively
referred to as the "Offered Securities." The Prospectus Supplement also
contains information about any listing of the Offered Securities on a
securities exchange.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------
The Securities may be offered directly, through agents designated from time
to time, through dealers or through underwriters. Such underwriters may
include Morgan Stanley & Co. Incorporated and/or Goldman, Sachs & Co. and/or
other underwriters, acting alone or with other underwriters. See "Plan of
Distribution." Any such agents, dealers or underwriters are set forth in the
Prospectus Supplement. If an agent of the Company or a dealer or underwriter
is involved in the offering of the Offered Securities, the agent's commission,
dealer's purchase price, underwriter's discount and net proceeds to the
Company will be set forth in, or may be calculated from, the Prospectus
Supplement. Any underwriters, dealers or agents participating in the offering
may be deemed "underwriters" within the meaning of the Securities Act of 1933.
----------------
April 8, 1994
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER, DEALER OR AGENT. THIS
PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN
ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS AND
ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION THEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE THEREOF.
----------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act") and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C.; Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois; and 7
World Trade Center, New York, New York. Copies of such information can be
obtained by mail from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Reports, proxy
statements and other information concerning the Company can also be inspected
at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York,
New York, at the office of the Midwest Stock Exchange, 440 South LaSalle
Street, Chicago, Illinois, and at the office of the Pacific Stock Exchange, 301
Pine Street, San Francisco, California or 618 South Spring Street, Los Angeles,
California. This Prospectus does not contain all information set forth in the
Registration Statement and the exhibits thereto which the Company has filed
with the Commission under the Securities Act of 1933, as amended, and to which
reference is hereby made.
----------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 26, 1993
filed with the Commission pursuant to Section 13 or 15(d) of the 1934 Act is
incorporated by reference in this Prospectus.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities shall
be deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute part of this Prospectus.
The Company will provide without charge upon written or oral request, to each
person to whom a copy of this Prospectus is delivered, a copy of the material
described above (not including exhibits to such documents unless such exhibits
are specifically incorporated by reference into such documents). Requests
should be directed to Weyerhaeuser Company, Tacoma, Washington 98477,
Attention: Richard J. Taggart, Director of Investor Relations, telephone (206)
924-2058.
IN CONNECTION WITH THE OFFERING OF CERTAIN SECURITIES, THE UNDERWRITERS MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES
OF SUCH OFFERED SECURITIES OR OTHER SECURITIES OF THE COMPANY AT LEVELS ABOVE
THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE>
THE COMPANY
Weyerhaeuser Company was incorporated in the state of Washington in January
1900, as Weyerhaeuser Timber Company. It is principally engaged in the growing
and harvesting of timber and the manufacture, distribution and sale of forest
products; real estate development and construction; and financial services.
Its principal business segments include timberlands and wood products, pulp
and paper products, real estate development and construction, and financial
services.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the net
proceeds to be received by the Company from the sale of the Securities offered
hereby will be added to the Company's general funds and will be used for
general corporate purposes, including working capital, capital expenditures,
reduction of the Company's short-term debt or commercial paper presently
classified as long-term debt and acquisitions. Pending such application, the
net proceeds may be invested in marketable securities.
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO FIXED CHARGES AND
PREFERRED AND PREFERENCE SHARE DIVIDENDS
The following table sets forth the ratios of earnings to fixed charges and
earnings to fixed charges and preferred and preference share dividends for the
Company for the periods indicated.
<TABLE>
<CAPTION>
YEAR
------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(1)................. 2.89 2.27 0.52 2.19 1.82
Ratio of earnings to fixed charges and preferred and
preference share dividends(2)........................ 2.89 2.27 0.52 2.10 1.72
</TABLE>
- --------
(1) For the purpose of calculating the ratio of earnings to fixed charges,
earnings consist of income before income taxes, extraordinary item, effect
of accounting changes and fixed charges. Fixed charges consist of interest
on indebtedness, amortization of debt expense and one-third of rents which
is deemed representative of an interest factor. This ratio excludes the
interest paid on deposit accounts by Republic Federal Savings and Loan
Association, a subsidiary of the Company acquired during 1985 and
dissolved during 1992. If such interest is included, the ratio would be
2.89, 2.25, 0.57, 2.05 and 1.71 for the fiscal years ended December 26,
1993, December 27, 1992, December 29, 1991, December 30, 1990 and December
31, 1989, respectively. The ratio of Weyerhaeuser Company with its
Weyerhaeuser Real Estate Company and Weyerhaeuser Financial Services, Inc.
subsidiaries accounted for on the equity method, but excluding the
undistributed earnings of those subsidiaries is 4.02, 3.32, 0.61, 3.67 and
3.92 for the fiscal years ended December 26, 1993, December 27, 1992,
December 29, 1991, December 30, 1990 and December 31, 1989, respectively.
(2) For the purpose of calculating the ratio of earnings to fixed charges and
preferred and preference share dividends, earnings consist of income
before income taxes, extraordinary item, effect of accounting changes,
fixed charges and preferred and preference share dividends. Fixed charges
consist of interest on indebtedness, amortization of debt expense and one-
third of rents which is deemed representative of an interest factor. This
ratio excludes the interest paid on deposit accounts by Republic Federal
Savings and Loan Association, a subsidiary of the Company acquired during
1985 and dissolved during 1992. If such interest is included, the ratio
would be 2.89, 2.25, 0.57, 1.97 and 1.63 for the fiscal years ended
December 26, 1993, December 27, 1992, December 29, 1991, December 30, 1990
and December 31, 1989, respectively. The ratio of Weyerhaeuser Company
with its Weyerhaeuser Real Estate Company and Weyerhaeuser Financial
Services, Inc. subsidiaries accounted for on the equity method, but
excluding the undistributed earnings of those subsidiaries is 4.02, 3.32,
0.61, 3.32 and 3.30 for the fiscal years ended December 26, 1993, December
27, 1992, December 29, 1991, December 30, 1990 and December 31, 1989,
respectively.
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Offered Debt Securities are to be issued in one or more series under an
Indenture, dated as of April 1, 1986, as supplemented by the First Supplemental
Indenture, dated as of February 15, 1991 and the Second Supplemental Indenture,
dated as of February 1, 1993 (the "Indenture"), between the Company and
Chemical Bank, as Trustee (the "Trustee"). A copy of the Indenture dated April
1, 1986 is filed as an exhibit to the Company's Annual Report on Form 10-K
(File No. 1-4825) for the year ended December 28, 1986 and copies of the First
Supplemental Indenture and the Second Supplemental Indenture have been filed as
exhibits to the Company's Registration Statement on Form S-3 (No. 33-52982).
The following summary of certain provisions of the Indenture does not purport
to be complete and is qualified in its entirety by reference to the Indenture.
The numerical references in parentheses below are to provisions of the
Indenture. Whenever a defined term is indicated, the definition thereof is
contained in the Indenture.
GENERAL
The Indenture does not limit the amount of debentures, notes or other
evidences of indebtedness ranking pari passu with the Debt Securities which may
be issued thereunder (such securities issued under the Indenture being herein
referred to as "Debt Securities"). The Indenture provides that Debt Securities
may be issued from time to time in one or more series and may be denominated
and payable in foreign currencies or units based on or relating to foreign
currencies, including European Currency Units ("ECUs"). The ECU is an
accounting unit calculated as the weighted average of currencies of the
European Community countries in which relative weights are derived based on
each country's share in intra-European trade and output. Such weights are
subject to periodic realignment upon the deviation of any such currency beyond
its prescribed band of fluctuation. The ECU serves primarily as the accounting
unit for the European Monetary System. Special United States federal income tax
considerations applicable to any Debt Securities as denominated are described
in the relevant Prospectus Supplement. The Debt Securities will be unsecured
and will rank on a parity with any other unsecured and unsubordinated
obligations of the Company.
Reference is made to the Prospectus Supplement for the following terms of the
Offered Debt Securities (to the extent such terms are applicable to such Debt
Securities): (i) designation, aggregate principal amount, purchase price and
denomination; (ii) currency or units based on or relating to currencies in
which such Debt Securities are denominated and/or in which principal (and
premium, if any) and/or any interest will or may be payable; (iii) any date of
maturity; (iv) interest rate or rates (or method by which such rate will be
determined), if any; (v) the dates on which any such interest will be payable;
(vi) the place or places where the principal of, premium, if any, and interest,
if any, on the Offered Debt Securities will be payable; (vii) any redemption or
sinking fund provisions; (viii) any applicable United States federal income tax
consequences, including whether and under what circumstances the Company will
pay additional amounts on Offered Debt Securities held by a person who is not a
U.S. person (as defined in the Prospectus Supplement) in respect of any tax,
assessment or governmental charge withheld or deducted and, if so, whether the
Company will have the option to redeem such Debt Securities rather than pay
such additional amounts; and (ix) any other specific terms of the Offered Debt
Securities, including additional events of default or covenants provided for
with respect to such Debt Securities and any terms which may be required by or
advisable under United States laws or regulations.
Debt Securities may be presented for exchange and registered Debt Securities
may be presented for transfer in the manner, at the places and subject to the
restrictions set forth in the Debt Securities and the Prospectus Supplement.
See "Description of Debt Securities-Global Securities" below. Such services
will be provided without charge, other than any tax or other governmental
charge payable in connection therewith, but subject to the limitations provided
in the Indenture.
Debt Securities may be issued under the Indenture as Original Issue Discount
Securities (bearing either no interest or bearing interest at a rate which at
the time of issuance is below the prevailing market rate) to be sold at a
substantial discount below their stated principal amount. Any special United
States federal
4
<PAGE>
income tax and other considerations applicable to such Original Issue Discount
Securities will be described in the Prospectus Supplement relating thereto.
Debt Securities may be issued, from time to time, with the principal amount
payable on any principal payment date, or the amount of interest payable on any
interest payment date, to be determined by reference to one or more currency
exchange rates, commodity prices, equity indices or other factors. Holders of
such Debt Securities may receive a principal amount on any principal payment
date, or a payment of interest on any interest payment date, that is greater
than or less than the amount of principal or interest otherwise payable on such
dates, depending upon the value on such dates of the applicable currency,
commodity, equity index or other factor. Information as to the methods for
determining the amount of principal or interest payable on any date, the
currencies, commodities, equity indices or other factors to which the amount
payable on such date is linked and certain additional tax considerations will
be set forth in the applicable Prospectus Supplement.
GLOBAL SECURITIES
The registered Debt Securities of a series may be issued in the form of one
or more fully registered global Securities (a "Registered Global Security")
that will be deposited with a depositary (a "Depositary") or with a nominee for
a Depositary identified in the Prospectus Supplement relating to such series
and registered in the name of the Depositary or a nominee thereof. In such
case, one or more Registered Global Securities will be issued in a denomination
or aggregate denominations equal to the portion of the aggregate principal
amount of outstanding registered Debt Securities of the series to be
represented by such Registered Global Security or Securities. Unless and until
it is exchanged in whole for Debt Securities in definitive registered form, a
Registered Global Security may not be transferred except as a whole by the
Depositary for such Registered Global Security to a nominee of such Depositary
or by a nominee of such Depositary to such Depositary or another nominee of
such Depositary or by such Depositary or any such nominee to a successor of
such Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Registered Global
Security will be described in the applicable Prospectus Supplement. The Company
anticipates that the following provisions will apply to all depositary
arrangements.
The Depositary has advised the Company as follows: The Depositary is a
limited-purpose trust company organized under the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The Depositary holds securities that its
Participants (as defined below) deposit with the Depositary. The Depositary
also facilitates the settlement among Participants of securities transactions
through electronic computerized book-entry changes in Participants' accounts
thereby eliminating the need for physical movement of securities certificates.
Participants include securities brokers and dealers (including one or more
underwriters or agents of the Company), banks, trust companies, clearing
corporations and certain other organizations, some of whom (and/or their
representatives) own the Depositary. Access to the Depositary's book-entry
system is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly. The rules applicable to the
Depositary and its Participants are on file with the Commission.
Ownership of beneficial interests in a Registered Global Security registered
in the name of Depositary (a "Book-Entry Note") will be limited to persons that
have accounts with the Depositary ("Participants") or persons that may hold
interests through Participants. Upon the issue of a Book-Entry Note, the
Depositary will credit, on its book-entry registration and transfer system, the
Participants' accounts with the respective principal amounts of the Book-Entry
Notes beneficially owned by such Participants. The accounts to be credited
shall be designated by any dealers, underwriters or agents participating in the
distribution of such Debt Securities. Ownership of beneficial interests in such
Registered Global Security will be shown on, and the transfer of such ownership
interests will be effected only through, records maintained by the Depositary
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(with respect to interests of Participants) and on the records of Participants
(with respect to interests of persons holding through Participants).
So long as the Depositary, or its nominee, is the registered owner of a
Registered Global Security, such Depositary or such nominee, as the case may
be, will be considered the sole owner or holder of the Book-Entry Notes
represented by such Registered Global Security for all purposes under the
Indenture or a Registered Global Security. Except as provided below, owners of
beneficial interests in a Registered Global Security will not be entitled to
have the Book-Entry Notes represented by such Registered Global Securities
registered in their names, will not receive or be entitled to receive physical
delivery of Certificated Notes exchanged for Book-Entry Notes and will not be
considered the owners or holders thereof under the Indenture. Accordingly, each
Person owning a beneficial interest in a Registered Global Security must rely
on the procedures of the Depositary and, if such Person is not a Participant,
on the procedures of the Participant through which such Person owns its
interest, to exercise any rights of a holder under the Indenture or a
Registered Global Security. The Company understands that under existing policy
of the Depositary and industry practices, in the event that the Company
requests any action of holders or that an owner of a beneficial interest in
such a Registered Global Security desires to give any notice or take any action
(including, without limitation, any action pursuant to Section 5.7 of the
Indenture) which a holder is entitled to give or take under the Indenture or a
Registered Global Security, the Depositary would authorize the Participants
holding the relevant beneficial interests to give such notice or take such
action. Any beneficial owner that is not a Participant must rely on the
contractual arrangements it has directly, or indirectly through its financial
intermediary, with a Participant to give such notice or take such action.
Payment of principal of and premium, if any, and interest on Notes registered
in the name of the Depositary or its nominee will be made to the Depositary or
its nominee, as the case may be, as the registered owner of the Registered
Global Security representing such Book-Entry Notes. None of the Company, the
Trustee or any other agent of the Company or agent of the Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. The Company expects that the Depositary, upon receipt of any payment
of principal and premium, if any, and interest in respect of a Registered
Global Security, will immediately credit the accounts of the Participants with
payment in amounts proportionate to their respective beneficial interests in
such Registered Global Security as shown on the records of the Depositary. The
Company also expects that payments by Participants to owners of beneficial
interests in a Registered Global Security will be governed by standing customer
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name",
and will be the responsibility of such Participants.
If (x) the Depositary is at any time unwilling or unable to continue as
Depositary or ceases to be a clearing agency registered under the Exchange Act,
and a successor Depositary registered as a clearing agency under the Exchange
Act is not appointed by the Company within 90 days, (y) the Company executes
and delivers to the Trustee or its agent a Company Order to the effect that the
Registered Global Securities shall be transferable and exchangeable for
Certificated Notes or (z) an Event of Default has occurred and is continuing
with respect to the Notes, the Registered Global Securities will be
transferable or exchangeable for Certificated Notes of like tenor and of an
equal aggregate principal amount. Such Certificated Notes shall be registered
in such name or names as the Depositary shall instruct the Trustee. It is
expected that such instructions may be based upon directions received by the
Depositary from Participants with respect to ownership of beneficial interests
in such Registered Global Securities.
CERTAIN RESTRICTIONS
The following restrictions apply to the Offered Debt Securities unless the
Prospectus Supplement provides otherwise.
Limitation on Liens. The Indenture states that, unless the terms of any
series of Debt Securities provide otherwise, if the Company or any Subsidiary
shall issue, assume or guarantee any indebtedness for money
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borrowed ("Debt") secured by a mortgage, pledge, security interest or other
lien ("Mortgage") upon or with respect to any timber or timberlands of the
Company or such Subsidiary located in the States of Washington, Oregon,
California, Arkansas or Oklahoma or any principal manufacturing plant of the
Company or such Subsidiary located anywhere in the United States, the Company
will secure or cause such Subsidiary to secure the Debt Securities equally and
ratably with such Debt, unless the aggregate amount of all such Debt, together
with all Attributable Debt (as defined) in respect of Sale and Lease-Back
Transactions existing at such time (with the exception of transactions which
are excluded as described in "Limitation on Sale and Lease-Back Transactions,"
below), would not exceed 5% of the shareholders' interest in the Company and
its consolidated Subsidiaries, as shown on the audited consolidated balance
sheet contained in the latest annual report to shareholders of the Company. The
term "principal manufacturing plant" shall not include any manufacturing plant
which in the opinion of the Board of Directors is not a principal manufacturing
plant of the Company and its Subsidiaries. The exercise of the Board of
Directors' discretion in determining which of the Company's plants are
"principal manufacturing plants" could have the effect of limiting the
application of the limitation on liens. The following types of transactions
shall not be deemed to create Debt secured by a Mortgage: (a) the sale,
Mortgage or other transfer of timber in connection with an arrangement under
which the Company or a Subsidiary is obligated to cut such timber or a portion
thereof in order to provide the transferee with a specified amount of money
however determined; and (b) the Mortgage of any property of the Company or any
Subsidiary in favor of the United States, or any State, or any department, or
agency or instrumentality of either, to secure partial, progress, advance or
other payments to the Company or any Subsidiary pursuant to the provisions of
any contract or statute.
Such limitation will not apply to (a) Mortgages upon or with respect to any
property of a Subsidiary securing Debt of such Subsidiary to the Company or
another Subsidiary; (b) Mortgages upon or with respect to any property
acquired, constructed or improved by the Company or any Subsidiary which are
created, incurred or assumed contemporaneously with, or within 90 days after,
such acquisition or improvement or secure or provide for the payment of any
part of the purchase price of such property or the cost of such construction or
improvement, provided that in the case of construction or improvement, the
Mortgage shall not apply to any property theretofore owned by the Company or
any Subsidiary other than unimproved real property on which the property so
constructed, or the improvement, is located; (c) Mortgages upon or with respect
to any property existing at the time of acquisition thereof; or (d) any
extension, renewal or replacement of any of the Mortgages described in (b) and
(c), not in excess of the principal amount of such Debt and limited to all or
part of the same property secured by the Mortgage so extended, renewed or
replaced. (Section 3.6)
Limitation on Sale and Lease-Back Transactions. The Indenture states that,
unless the terms of any series of Debt Securities provide otherwise, neither
the Company nor any Subsidiary may enter into any arrangement with any person
providing for the leasing by the Company or Subsidiary of any real property in
the United States (except for temporary leases for a term of not more than
three years), which property has been or is to be sold or transferred by the
Company or Subsidiary to such person (herein referred to as a "Sale and Lease-
Back Transaction"), unless the aggregate amount of all Attributable Debt with
respect to such transactions together with all Debt upon property described
under "Limitation on Liens," above (with the exception of Debt which is
excluded as described therein) would not exceed 5% of the shareholders'
interest in the Company and its consolidated Subsidiaries, as shown on the
audited consolidated balance sheet contained in the latest annual report to
shareholders of the Company. (Sections 3.6 and 3.7)
Such limitation will not apply to any Sale and Lease-Back Transaction if (a)
the Company or such Subsidiary would be entitled to incur Debt secured by a
Mortgage on the property to be leased without equally and ratably securing the
Debt Securities as described in "Limitation on Liens," above or (b) the
Company, within 90 days of the effective date of any such Sale and Lease-Back
Transaction, applies an amount equal to the fair value (as determined by the
Board of Directors of the Company) of the property so leased to the retirement
of Debt incurred or assumed by the Company which by its terms matures at, or is
extendable or renewable at the option of the obligor to, a date more than 12
months after the date of the creation of such Debt. (Section 3.7)
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Other than the above-described restrictions, there are no covenants or
provisions within the Indenture that may afford debt holders protection in the
event of a highly leveraged transaction. Any such covenant or provision
relating to a particular series of Debt Securities will be described in the
Prospectus Supplement relating thereto.
EVENTS OF DEFAULT
An Event of Default will occur under the Indenture with respect to Debt
Securities of any series if (a) the Company shall fail to pay when due any
installment of interest on any of the Debt Securities of such series and such
default shall continue for 30 days, (b) the Company shall fail to pay when due
all or any part of the principal of (and premium, if any, on) any of the Debt
Securities of such series (whether at maturity, upon redemption, upon
acceleration or otherwise), (c) the Company shall fail to deposit any sinking
fund payment when due on any of the Debt Securities of such series, (d) the
Company shall fail to perform or observe any other term, covenant or agreement
contained in the Indenture (other than a covenant included in the Indenture
solely for the benefit of a series of Debt Securities other than such series)
for a period of 90 days after written notice thereof, as provided in the
Indenture, (e) certain events of bankruptcy, insolvency or reorganization shall
have occurred, or (f) the Company has not complied with any other covenant the
noncompliance with which would specifically constitute an Event of Default with
respect to Debt Securities of such series. (Section 5.1)
The Indenture provides that, (a) if an Event of Default due to the default in
payment of principal of, or interest on, any series of Debt Securities, or due
to the default in the performance or breach of any other covenant or warranty
of the Company applicable to the Debt Securities of such series but not
applicable to all outstanding Debt Securities, shall have occurred and be
continuing, either the Trustee or the holder or holders of 25% in principal
amount of the Debt Securities of such series then may declare the principal of
all Debt Securities of such series and interest accrued thereon to be due and
payable immediately and (b) if an Event of Default due to default in the
performance of any other of the covenants or agreements in the Indenture
applicable to all outstanding Debt Securities or due to certain events of
bankruptcy, insolvency and reorganization of the Company, shall have occurred
and be continuing, either the Trustee or the holder or holders of 25% in
principal amount of all Debt Securities then outstanding (treated as one class)
may declare the principal of all Debt Securities and interest accrued thereon
to be due and payable immediately. Such declarations may be annulled provided
that, if prior to the obtention or entry of a judgment or decree with respect
to such acceleration, the Company shall pay or deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon the outstanding
Debt Securities and all the principal of the Debt Securities which shall have
become due otherwise than by acceleration and such sum covers certain other
expenses and if all other Events of Default under the Indenture should have
been cured, waived or otherwise remedied as permitted by the Indenture or prior
to a declaration of the acceleration of the maturity of the Debt Securities
past defaults may be waived (except a continuing default in payment of
principal of (or premium, if any) or interest on the Debt Securities) by the
holders of a majority in principal amount of the Debt Securities of such series
(or of all series, as the case may be) then outstanding. (Sections 5.1 and
5.10)
The holder or holders of a majority in principal amount of the outstanding
Debt Securities of any series may 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, provided that such direction shall
not be in conflict with any rule of law or the Indenture. (Section 5.9) Before
proceeding to exercise any right or power under the Indenture at the direction
of such holder or holders, the Trustee shall be entitled to receive from such
holder or holders reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with any such
direction. (Section 5.6)
The Company will be required to furnish to the Trustee annually a statement
of certain officers of the Company to the effect that, to the best of their
knowledge, the Company is not in default in the performance of the terms of the
Indenture or, if they have knowledge that the Company is in default, specifying
such default. (Section 3.5)
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The Indenture requires the Trustee to give to all holders of outstanding Debt
Securities of any series notice of any default by the Company with respect to
that series, unless such default shall have been cured or waived; however,
except in the case of a default in the payment of principal of (and premium, if
any) or interest on any outstanding Debt Securities of that series or in the
payment of any sinking fund installment, the Trustee is entitled to withhold
such notice in the event that the board of directors, the executive committee
or a trust committee of directors or certain officers of the Trustee in good
faith determine that withholding such notice is in the interest of the holder
or holders of the outstanding Debt Securities of that series.
DEFEASANCE AND DISCHARGE
The following defeasance provision will apply to the Offered Debt Securities
unless the Prospectus Supplement provides otherwise.
The Indenture provides that, unless the terms of any series of Debt
Securities provide otherwise, the Company will be discharged from obligations
in respect of the Indenture and the outstanding Debt Securities of such series
(including its obligation to comply with the provisions referred to under
"Certain Restrictions," if applicable, but excluding certain other obligations,
such as the obligation to pay principal of (and premium, if any) and interest
on the Debt Securities of such series then outstanding, obligations of the
Company in the event of acceleration following default under clause (a)
referred to above under "Events of Default" and obligations to register the
transfer or exchange of such outstanding Debt Securities and to replace stolen,
lost or mutilated certificates), upon the irrevocable deposit, in trust, of
cash or U.S. Government obligations (as defined) which through the payment of
interest and principal thereof in accordance with their terms will provide cash
in an amount sufficient to pay any installment of principal of (and premium, if
any) and interest on and mandatory sinking fund payments in respect of such
outstanding Debt Securities on the stated maturity of such payments in
accordance with the terms of the Indenture and such outstanding Debt
Securities, provided that the Company has received an opinion of counsel to the
effect that such a discharge will not be deemed, or result in, a taxable event
with respect to holders of the outstanding Debt Securities of such series and
that certain other conditions are met. (Section 10.1)
MODIFICATION OF THE INDENTURE
The Indenture provides that the Company and the Trustee may enter into
supplemental indentures without the consent of the holders of Debt Securities
to: (a) secure any Debt Securities, (b) evidence the assumption by a successor
corporation of the obligations of the Company, (c) add covenants for the
protection of the holders of Debt Securities, (d) cure any ambiguity or correct
any inconsistency in the Indenture, (e) establish the form or terms of Debt
Securities of any series, and (f) evidence the acceptance of appointment by a
successor trustee. (Section 8.1)
The Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holder or holders of not less than a majority
in principal amount of Debt Securities of each series then outstanding and
affected, to add any provisions to, or change in any manner or eliminate any of
the provisions of, the Indenture or modify in any manner the rights of the
holder or holders of the Debt Securities of each series so affected, provided
that the Company and the Trustee may not, without the consent of the holder of
each outstanding Debt Security affected thereby, (a) extend the stated maturity
of the principal of any Debt Security, or reduce the principal amount thereof
or reduce the rate or extend the time of payment of interest thereon, or reduce
any amount payable on redemption thereof, or impair the right to institute suit
for the enforcement of any such payment when due, or (b) reduce the aforesaid
percentage in principal amount of Debt Securities of any series the consent of
the holder or holders of which is required for any such modification. (Section
8.2)
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
The Company may, without the consent of the Trustee or the holders of Debt
Securities, consolidate or merge with, or convey, transfer or lease its
properties and assets substantially as an entirety to any other
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corporation, provided that any successor corporation is a corporation organized
under the laws of the United States of America or any state thereof and that
such successor corporation expressly assumes all obligations of the Company
under the Debt Securities and that certain other conditions are met, and,
thereafter, except in the case of a lease, the Company shall be relieved of all
obligations thereunder. (Article Nine)
APPLICABLE LAW
The Debt Securities and the Indenture will be governed by and construed in
accordance with the laws of the State of New York. (Section 11.8)
CONCERNING THE TRUSTEE
Chemical Bank is the Trustee under the Indenture.
DESCRIPTION OF PREFERRED SHARES
The following is a description of certain general terms and provisions of the
preferred shares of the Company. The particular terms of any series of
preferred shares will be set forth in the related Prospectus Supplement. If so
indicated in a Prospectus Supplement, the terms of any such series may differ
from the terms set forth below. The summary of the terms of the Company's
preferred shares contained in this Prospectus and the relevant Prospectus
Supplement does not purport to be complete and is subject to, and qualified in
its entirety by, the provisions of the Company's Restated Articles of
Incorporation and the statement regarding amendment of articles of
incorporation relating to the applicable series of preferred shares (the
"Statement"), which will be filed as an exhibit to or incorporated by reference
in the Registration Statement of which this Prospectus is a part at the time of
issuance of such series of preferred shares.
The Company's Restated Articles of Incorporation authorizes the issuance of
7,000,000 preferred shares having a par value of $1.00 per share. The Board of
Directors has the authority to divide the preferred shares into series, to
designate for each series established such rights and preferences as voting
rights, dividend rate, terms and conditions of redemption, amount payable upon
liquidation, sinking fund provisions and terms and conditions of conversion,
and to issue the shares so designated in such amounts and to such persons as
they lawfully determine without further action by the Company's shareholders.
Thus, the Board of Directors, without shareholder approval, could authorize the
issuance of preferred shares with voting, conversion, and other rights that
could adversely affect the voting power and other rights of holders of common
shares or other series of preferred shares or that could have the effect of
delaying, deferring or preventing a change in control of the Company. The
aggregate amount payable upon liquidation shall not exceed $350,000,000 with
respect to all series of preferred shares. All preferred shares rank senior to
common and preference share with respect to accrued dividends and assets
available on liquidation. There are currently no series of preferred shares
outstanding.
GENERAL
Reference is made to the Prospectus Supplement for the following terms of and
information relating to the preferred shares of any series (to the extent such
terms are applicable to such preferred shares): (i) the specific designation,
number of shares and purchase price; (ii) any liquidation preference per share;
(iii) any date of maturity; (iv) any redemption, payment or sinking fund
provisions; (v) any dividend rate or rates and the dates on which any such
dividends will be payable (or the method by which such rates or dates will be
determined); (vi) any voting rights; (vii) the currency or units based on or
relating to currencies in which such preferred shares are denominated and/or
payment will or may be payable; (viii) the methods by which amounts payable in
respect in respect of such preferred shares may be calculated and any
commodities, currencies or indices, or value, rate or price, relevant to such
calculation; (ix) the place or places where dividends and other payments on the
preferred shares will be payable; (x) and any additional voting, dividend,
liquidation, redemption, sinking fund and other rights, preferences,
privileges, limitations and restrictions.
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The preferred shares offered hereby will be issued in one or more series. The
preferred shares offered hereby will not be convertible or exchangeable into
common shares of the Company or into securities convertible or exchangeable
into common shares of the Company. The holders of preferred shares will have no
preemptive rights. Preferred shares, upon issuance against full payment of the
purchase price therefor, will be fully paid and nonassessable. Neither the par
value nor the liquidation preference is indicative of the price at which the
preferred shares will actually trade on or after the date of issuance. All
preferred shares shall be of equal rank with each other, regardless of series.
DIVIDENDS
Holders of preferred shares of each series will be entitled to receive, when
and as declared by the Board of Directors of the Company out of funds legally
available therefor, cumulative dividends at the rate determined by the Board of
Directors for such series, and no more. Dividends on the preferred shares shall
accrue on a daily basis from such date as may be fixed by the Board of
Directors for any series. Unless dividends at the rate prescribed for each
series of preferred shares shall have been declared and paid or set apart for
payment in full on all outstanding preferred shares for all past dividend
periods and the current dividend period, no dividends shall be declared or paid
upon any class of shares ranking as to dividends subordinate to the preferred
shares, and no sum or sums shall be set aside for the redemption of preferred
shares of any series (including any sinking fund payment therefor) or for the
purchase, redemption (including any sinking fund payment therefor) or other
acquisition for value of any class or series of shares ranking as to dividends
or assets on a parity with or subordinated to any such series of preferred
shares. Accrued and unpaid dividends on the preferred shares will not bear
interest.
REDEMPTION
The terms, if any, on which preferred shares of any series may be redeemed
will be set forth in the related Prospectus Supplement.
If fewer than all of the outstanding preferred shares of any series are to be
redeemed, the number of shares of such series and the method of effecting such
redemption, whether by lot or pro rata, will be as determined by the Company
(with adjustment to avoid redemption of fractional shares).
LIQUIDATION
In the event of voluntary or involuntary liquidation of the Company, before
any distribution of assets shall be made to the holders of any class of shares
ranking as to assets subordinate to the preferred shares, the holders of the
preferred shares of each series shall be entitled to receive out of the assets
of the Company available for distribution to its shareholders the sum of the
liquidation preference for such series and the amount per share equal to all
accrued and unpaid dividends thereon. Neither the consolidation nor merger of
the Company with or into any other corporation or corporations, the sale or
lease of all or substantially all of the assets of the Company, nor the merger
or consolidation of any other corporation into and with the Company, shall be
deemed to be a voluntary or involuntary liquidation.
VOTING
The preferred shares of a series will not be entitled to vote, except as
provided below or in the applicable Prospectus Supplement and as required by
applicable law. Unless otherwise indicated in the Prospectus Supplement
relating to a series of preferred shares, each series of shares will be
entitled to one vote on matters which holders of such series are entitled to
vote. Notwithstanding the foregoing, the Company may not alter certain rights
and preferences of a series of preferred shares without the affirmative vote of
the holders of at least two-thirds of the shares of such affected series and
whenever dividends on the preferred shares shall be in arrears in an aggregate
amount equal to six quarterly dividend periods, then the holders of preferred
shares, voting as a class, shall be entitled to elect two additional directors
beyond the number specified in the bylaws to be elected by all shareholders and
beyond the number that may be elected by the holders of the preference shares.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the preferred shares is Chemical Bank.
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DESCRIPTION OF PREFERENCE SHARES
The following is a description of certain general terms and provisions of the
preference shares of the Company. The particular terms of any series of
preference shares will be set forth in the related Prospectus Supplement. If so
indicated in a Prospectus Supplement, the terms of any such series may differ
from the terms set forth below. The summary of the terms of the Company's
preference shares contained in this Prospectus and the relevant Prospectus
Supplement does not purport to be complete and is subject to, and qualified in
its entirety by, the provisions of the Company's Restated Articles of
Incorporation and the statement regarding amendment of articles of
incorporation relating to the applicable series of preference shares (the
"Statement"), which will be filed as an exhibit to or incorporated by reference
in the Registration Statement of which this Prospectus is a part at the time of
issuance of such series of preference shares.
The Company's Restated Articles of Incorporation authorizes the issuance of
40,000,000 preference shares having a par value of $1.00 per share. The Board
of Directors has the authority to divide the preference shares into series, to
designate for each series established such rights and preferences as voting
rights, dividend rate, terms and conditions of redemption, amount payable upon
liquidation, sinking fund provisions and terms and conditions of conversions,
and to issue the shares so designated in such amounts and to such persons as
they lawfully determine without further action by the Company's shareholders.
Thus, the Board of Directors, without shareholder approval, could authorize the
issuance of preference shares with voting, conversion, and other rights that
could adversely affect the voting power and other rights of holders of common
shares or other series of preferred or preference shares or that could have the
effect of delaying, deferring or preventing a change in control of the Company.
The aggregate amount payable upon liquidation of all series of preference
shares is unlimited. All preference shares rank senior to common shares but
subordinate to the preferred shares with respect to accrued dividends and
assets available on liquidation. The Company has reserved but not issued
2,000,000 shares of cumulative preference shares, fourth series, for the
exercise of certain rights relating to the Company's common shares.
GENERAL
Reference is made to the Prospectus Supplement for the following terms of and
information relating to the preference shares of any series (to the extent such
terms are applicable to such preference shares): (i) the specific designation,
number of shares and purchase price; (ii) any liquidation preference per share;
(iii) any date of maturity; (iv) any redemption, payment or sinking fund
provisions; (v) any dividend rate or rates and the dates on which any such
dividends will be payable (or the method by which such rates or dates will be
determined); (vi) any voting rights; (vii) the currency or units based on or
relating to currencies in which such preference shares are denominated and/or
payments will or may be payable; (viii) the methods by which amounts payable in
respect of such preference shares may be calculated and any commodities,
currencies or indices, or value, rate or price, relevant to such calculation;
(ix) the place or places where dividends and other payments on the preference
shares will be payable; (x) and any additional voting, dividend, liquidation,
redemption, sinking fund and other rights, preferences, privileges, limitations
and restrictions.
The preference shares offered hereby will be issued in one or more series.
The preference shares offered hereby will not be convertible or exchangeable
into common shares of the Company or into securities convertible or
exchangeable into common shares of the Company. The holders of preference
shares will have no preemptive rights. Preference shares, upon issuance against
full payment of the purchase price therefor, will be fully paid and
nonassessable. Neither the par value nor the liquidation preference is
indicative of the price at which the preference shares will actually trade on
or after the date of issuance. All preference shares shall be of equal rank
with each other, regardless of series.
DIVIDENDS
Holders of preference shares of each series will be entitled to receive, when
and as declared by the Board of Directors of the Company out of funds legally
available therefor, cumulative dividends at the rate
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determined by the Board of Directors for such series, and no more. Dividends on
the preference shares shall accrue on a daily basis from such date as may be
fixed by the Board of Directors for any series. Unless dividends at the rate
prescribed for each series of preferred shares shall have been declared and
paid or set apart for payment in full on all outstanding preferred shares for
all past dividend periods and the current dividend period, no dividends shall
be declared or paid upon any class of shares ranking as to dividends
subordinate to the preferred shares, and no sum or sums shall be set aside for
the redemption of preferred shares of any series (including any sinking fund
payment therefor) or for the purchase, redemption (including any sinking fund
payment therefor) or other acquisition for value of any class or series of
shares ranking as to dividends or assets on a parity with or subordinate to any
such series of preferred shares. Unless dividends at the rate prescribed for
each series of preference shares shall have been declared and paid or set apart
for the payment in full on all outstanding preference shares for all past
dividend periods and the current dividend period, no dividends shall be
declared or paid upon any class of shares ranking as to dividends subordinate
to the preference shares, and no sum or sums shall be set aside for the
redemption of preference shares of any series (including any sinking fund
payment therefor) or for the purchase, redemption (including any sinking fund
payment therefor) or other acquisition for value of any class or series of
shares ranking as to dividends or assets on a parity with or subordinate to any
series of preference shares. Accrued and unpaid dividends on the preference
shares will not bear interest.
REDEMPTION
The terms, if any, on which preference shares of any series may be redeemed
will be set forth in the related Prospectus Supplement.
If fewer than all of the outstanding preference shares of any series are to
be redeemed, the number of shares of such series and the method of effecting
such redemption, whether by lot or pro rata, will be as determined by the
Company (with adjustment to avoid redemption of fractional shares).
LIQUIDATION
In the event of voluntary or involuntary liquidation of the Company, before
any distribution of assets shall be made to the holders of any class of shares
ranking as to assets subordinate to the preference shares, the holders of the
preference shares of each series shall be entitled to receive out of the assets
of the Company available for distribution to its shareholders the sum of the
liquidation preference for such series and the amount per share equal to all
accrued and unpaid dividends thereon, but the holders of the preference shares
will not be entitled to receive the liquidation price of such shares until the
liquidation price of the preferred shares at the time outstanding shall have
been paid in full. The holders of all series of preference shares are entitled
to share ratably, in accordance with the respective amounts payable thereon, in
any such distribution which is not sufficient to pay in full the aggregate
amounts payable thereon. After payment in full of the liquidation price of the
preference shares the holders of such shares are not entitled to any further
participation in any distribution of assets by the Company. Neither the
consolidation nor merger of the Company with or into any other corporation or
corporations, the sale or lease of all or substantially all of the assets of
the Company, nor the merger or consolidation of any other corporation into and
with the Company, shall be deemed to be a voluntary or involuntary liquidation.
VOTING
The preference shares of a series will not be entitled to vote, except as
provided below or in the applicable Prospectus Supplement and as required by
applicable law. Unless otherwise indicated in the Prospectus Supplement
relating to a series of preference shares, each series of shares will be
entitled to one vote on matters which holders of such series are entitled to
vote. Notwithstanding the foregoing, the Company may not alter certain rights
and preferences of a series of preference shares without the affirmative vote
of the holders of at least two-thirds of the shares of such affected series and
whenever dividends on the preference
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shares shall be in arrears in an aggregate amount equal to six quarterly
dividend periods, then the holders of preference shares, voting as a class,
shall be entitled to elect two additional directors beyond the number specified
in the bylaws to be elected by all shareholders and beyond the number that may
be elected by the holders of the preferred shares.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the preference shares is Chemical Bank.
PLAN OF DISTRIBUTION
The Company may sell Offered Securities (i) through agents, (ii) through
underwriters, (iii) through dealers or (iv) directly to purchasers (through a
specific bidding or auction process or otherwise).
Securities may be offered and sold through agents designated by the Company
from time to time. Any such agent involved in the offer or sale of the Offered
Securities will be named, and any commissions payable by the Company to such
agent will be set forth, in the Prospectus Supplement. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting on a best
efforts basis for the period of its appointment. Any such agent may be deemed
to be an underwriter, as that term is defined in the Securities Act of 1933, as
amended (the "1933 Act") of the Securities so offered and sold. Agents may be
entitled under agreements which may be entered into with the Company to
indemnification by the Company against certain liabilities, including
liabilities under the 1933 Act, and may be customers of, engage in transactions
with or perform services for the Company in the ordinary course of business.
If an underwriter or underwriters are utilized in the sale of Offered
Securities, the Company will execute an underwriting agreement with such
underwriter or underwriters at the time an agreement for such sale is reached,
and the names of the specific managing underwriter or underwriters, as well as
any other underwriters, and the terms of the transaction, including
compensation of the underwriters and dealers, if any, will be set forth in the
Prospectus Supplement, which will be used by the underwriters to make resales
of Offered Securities. The underwriters may be entitled, under the relevant
underwriting agreement, to indemnification by the Company against certain
liabilities, including liabilities under the 1933 Act. Morgan Stanley & Co.
Incorporated and/or Goldman, Sachs & Co. and/or other underwriters named in the
Prospectus Supplement may act as managing underwriter with respect to an
offering of Securities effected through underwriters. Only underwriters named
in the Prospectus Supplement are deemed to be underwriters in connection with
the Offered Securities and if Morgan Stanley & Co. Incorporated or Goldman,
Sachs & Co. is not named in the Prospectus Supplement, it will not be a party
to the underwriting agreement relating to such Securities, will not be
purchasing any such Securities from the Company in connection with such
offering and will have no direct or indirect participation in the underwriting
of such Securities, although it may participate in the distribution of such
Securities under circumstances where it may be entitled to a dealer's
commission.
If a dealer is utilized in the sale of Offered Securities, the Company will
sell such Securities to the dealer, as principal. The dealer may then resell
such Securities to the public at varying prices to be determined by such dealer
at the time of resale. Dealers may be entitled, under agreements which may be
entered into with the Company, to indemnification by the Company against
certain liabilities, including liabilities under the 1933 Act. The name of the
dealer and the terms of the transaction will be set forth in the Prospectus
Supplement relating thereto.
Offers to purchase Securities may be solicited directly by the Company and
sales thereof may be made by the Company directly to institutional investors or
others. The terms of any such sales, including the terms of any bidding or
auction process, if utilized, will be described in the Prospectus Supplement
relating thereto.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters to solicit offers by certain institutions to purchase
Securities from the Company at the public offering price set
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forth in the Prospectus Supplement pursuant to Delayed Delivery Contracts
("Contracts") providing for payment and delivery on the date stated in the
Prospectus Supplement. Each Contract will be for an amount not less than, and
unless the Company otherwise agrees the aggregate principal amount of
Securities sold pursuant to Contracts shall be not less nor more than, the
respective amounts stated in the Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions but shall in all cases be
subject to the approval of the Company. Contracts will not be subject to any
conditions except that any related sale of Securities covered by its Contract
shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject. A
commission indicated in the Prospectus Supplement will be paid to underwriters
and agents soliciting purchases of Securities pursuant to Contracts accepted by
the Company.
The place and time of delivery of Offered Securities are set forth in the
accompanying Prospectus Supplement.
LEGAL OPINIONS
The validity of the Offered Securities will be passed upon for the Company by
Sandy D. McDade, Esq., Secretary and Senior Legal Counsel of the Company. Mr.
McDade beneficially owns 2,265 common shares of the Company.
Certain legal matters relating to Offered Securities will be passed upon for
underwriters and certain other purchasers by Davis Polk & Wardwell, New York,
New York.
EXPERTS
The financial statements and schedules incorporated by reference in this
Prospectus by reference to the Company's Annual Report on Form 10-K for the
year ended December 26, 1993 have been audited by Arthur Andersen & Co.,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said reports. Reference is
made to said reports, which call attention to the Company's changes in
accounting principles with respect to accounting for income taxes and
postretirement benefits other than pensions.
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