<PAGE> 1
Rule 424(b)(2)
Registration File No. - 333-03087
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MAY 14, 1996)
[WORTHINGTON IND. LOGO]
$150,000,000
WORTHINGTON INDUSTRIES, INC.
6.70% NOTES DUE 2009
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The 6.70% Notes due 2009 (the "Notes") will mature on December 1, 2009.
Interest on the Notes is payable on June 1 and December 1 of each year,
commencing June 1, 1998.
The Notes will be redeemable, as a whole or in part, at the option of
Worthington Industries, Inc. at any time, at a redemption price equal to the
greater of (a) 100% of the principal amount of such Notes and (b) the sum of the
present values of the Remaining Scheduled Payments (as defined herein) thereon,
discounted on a semiannual basis at the Treasury Rate (as defined herein) plus
15 basis points, plus in either case, accrued interest to the date of
redemption. See "Description of Notes -- Optional Redemption."
The Notes offered hereby will be represented by one or more Global
Securities representing Book-Entry Securities and will be registered in the name
of Cede & Co., the nominee of The Depository Trust Company, which will act as
Depositary. Beneficial interests in Book-Entry Securities will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depositary and its participants. Except as described in the accompanying
Prospectus under "Description of Debt Securities -- Registered Global
Securities," Notes in certificated form will not be issued in exchange for the
Global Securities. Settlement for the Notes will be made in immediately
available funds. The Notes will trade in the Depositary's Same-Day Funds
Settlement System until maturity, and secondary market trading activity for the
Notes will therefore settle in immediately available funds. All payments of
principal and interest will be made by the Company in immediately available
funds. See "Description of Notes -- Same Day Funds Settlement System and
Payment" in this Prospectus Supplement and "Description of Debt Securities" in
the accompanying Prospectus.
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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 ACCOMPANYING PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
===============================================================================================
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC (1) COMMISSIONS (2) COMPANY (1)(3)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note 99.605% .675% 98.930%
- -----------------------------------------------------------------------------------------------
Total $149,407,500 $1,012,500 $148,395,000
===============================================================================================
</TABLE>
(1) Plus accrued interest, if any, from December 12, 1997 to date of delivery.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deduction of expenses payable by the Company estimated at $200,000.
------------------
The Notes are offered subject to receipt and acceptance by the
Underwriters, to prior sale and to the Underwriters' right to reject any order
in whole or in part and to withdraw, cancel or modify the offer without notice.
It is expected that delivery of the Notes will be made in book-entry form
through the facilities of The Depository Trust Company on or about December 12,
1997.
------------------
SALOMON SMITH BARNEY
MERRILL LYNCH & CO.
NATIONSBANC MONTGOMERY
December 9, 1997
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES OFFERED HEREBY,
INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE SHORT COVERING
TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."
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THE COMPANY
OVERVIEW
Worthington Industries, Inc. is a leading manufacturer of metal and plastic
products that conducts its business through three segments: processed steel
products, custom products and cast products. Worthington's net sales for its
fiscal year ended May 31, 1997 were $1.9 billion. Worthington Industries, Inc.,
individually or together with its subsidiaries as the context requires, is
herein referred to as "Worthington" or the "Company."
Worthington is the largest independent flat rolled steel processor in the
United States. Worthington's steel processing operations do not make steel, but
rather they purchase it from steel producers and then process it to exact
specifications for approximately 1,700 industrial customers primarily in the
automotive, automotive supply, appliance, electrical, communication,
construction, office furniture, office equipment, agricultural, machinery and
leisure time industries. Worthington believes it offers the widest array of
steel processing services in the industry, which include slitting, roller
leveling, cold reduction, edge rolling, blanking, coating, annealing, pickling
and other services. Worthington currently operates eleven steel processing
facilities and is a partner in four steel processing joint ventures, with a
concentration in the largest steel consuming region of the United States.
For the fiscal year ended May 31, 1997, net sales of Worthington's
processed steel products segment were $1.4 billion, representing approximately
74% of Worthington's total fiscal year 1997 sales. This segment also includes
(i) Worthington's pressure cylinder business, which management believes to be
the largest producer of portable low pressure liquid propane gas cylinders and
refrigerant gas cylinders in North America; (ii) Worthington's metal framing
products business, Dietrich Industries, which is the nation's largest producer
and supplier of metal framing products for the commercial and residential
markets; and (iii) Worthington's automotive body and panel business, The
Gerstenslager Company, a major independent producer of automotive body panels,
primarily for the aftermarket.
Worthington's other operations comprise the custom products and cast
product segments. Custom products includes (i) Worthington Custom Plastics,
Inc., which management believes to be one of the ten largest plastic injection
molding companies in the United States and which sells primarily to the
automotive, lawn and garden, appliance, furniture, business equipment, audio
equipment, airline and medical industries, and (ii) Worthington Precision
Metals, Inc., which supplies components primarily for automotive transmission,
power steering and brake applications. Worthington's cast products business
designs and produces railcar castings and undercarriages for mass transit cars.
STRATEGY
Worthington considers its operating philosophy and growth strategies to be
key elements of its success. Worthington's operating philosophy emphasizes
decentralized decision making, strong customer and supplier relationships, a
focus on quality and customer service and a significant employee cash profit
sharing plan. Under Worthington's profit sharing program, a fixed percentage of
each location's earnings is shared every fiscal quarter by virtually all
regular, full-time, non-union employees of Worthington regardless of position.
Worthington's growth strategy focuses on increasing market share,
developing new products, services and niche markets, and expanding
geographically, both domestically and internationally. Worthington has pursued
these goals by selectively investing in new and existing facilities and
equipment, joint ventures and acquisitions, while maintaining a high degree of
financial flexibility. The Company frequently evaluates strategic opportunities
and may, from time to time, pursue additional acquisitions and decide to dispose
of certain businesses. Worthington is a partner in seven joint ventures, which
have enabled it to develop new products, markets and technological capabilities
and to expand its international presence, while mitigating the risks and costs
associated with such activities.
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BUSINESSES
Worthington was founded by John H. McConnell in 1955 as an Ohio
corporation, and was reincorporated in Delaware in 1986. Worthington conducts
its business through three segments: processed steel products, custom products
and cast products.
Processed Steel Products
Worthington's processed steel products segment includes its steel
processing businesses, its pressure cylinder business, its metal framing
products business, and its automotive body panel business. For the fiscal year
ended May 31, 1997, sales of the processed steel products segment were $1.4
billion, representing approximately 74% of Worthington's total sales.
Worthington's steel processing operations are conducted through its
Worthington Steel Company operations ("Worthington Steel"). Worthington Steel
occupies a niche in the steel industry by focusing on more specialized products
requiring more exact specifications, which typically cannot be supplied as
efficiently by steel mills, metal service centers or steel end users.
Worthington Steel is the largest independent flat rolled steel processor in the
United States and operates eleven processing facilities, with a concentration in
the Michigan, Ohio and Indiana markets, the largest flat rolled steel consuming
region in the United States. Worthington opened its eleventh steel processing
facility in Delta, Ohio in the second half of fiscal 1997. This facility
includes pickling and slitting capabilities and a hot dipped galvanizing
operation, a new product for Worthington. A portion of this facility's steel
requirements will be supplied pursuant to a long term supply contract with the
North Star/BHP mini-mill which is located adjacent to Worthington's Delta
facility. Worthington is constructing its twelfth and largest steel processing
facility adjacent to the Trico Steel mini-mill in Decatur, Alabama. Pickling and
slitting are scheduled for start-up in mid-calendar 1998 with cold rolling to
begin later.
Worthington Steel buys coils of wide, open tolerance steel from major
integrated steel mills and mini-mills and processes such steel to the precise
type, thickness, length, width, shape, temper and surface quality specified by
approximately 1,700 industrial customers principally in the automotive,
automotive supply, appliance, electrical, communications, construction, office
furniture, office equipment, agricultural, machinery and leisure time
industries. Worthington purchases and supplies steel based on the specific
orders of customers and does not process steel for inventory, which reduces its
exposure to steel price movements. Worthington Steel's computer-aided processing
capabilities include among others: pickling, a chemical process using an acidic
solution to remove surface oxide which develops on hot rolled steel; slitting,
which cuts steel to specific widths; roller leveling, a method of applying
pressure to achieve precise flatness tolerances for steel which is cut into
exact lengths; cold reduction, which achieves close tolerances of thickness and
temper by rolling; edge rolling, which conditions the edges of the steel by
imparting round, smooth or knurled edges; blanking, through which steel is cut
into specific shapes; coating which includes producing painted, galvanized or
nickel plated steel; and annealing, a thermal process that changes the hardness
and certain metallurgical characteristics of steel.
Worthington Steel also "toll processes" steel for steel mills and large end
users. Toll processing is similar to Worthington's normal steel processing,
except the mill or end user retains the title to the steel and has the
responsibility for selling the product. Toll processing enables Worthington to
participate in the market for wide sheet steel and large standard orders, which
is a market generally served by steel mills, rather than by intermediate steel
processors.
Worthington Cylinder Corporation ("Worthington Cylinders") is the nation's
largest producer of portable low pressure liquid propane gas and refrigerant
cylinders. Worthington Cylinders' primary products are steel cylinders with
refrigerant gas capacities of 15 to 1,000 lbs. and steel and aluminum cylinders
with liquid propane gas capacities of 4 1/4 to 420 lbs. Worthington's
refrigerant cylinders are used primarily by major refrigerant gas producers to
contain refrigerant gases for use in charging residential, commercial,
automotive and other air conditioning and refrigeration systems. Reusable steel
and aluminum liquid propane gas cylinders are sold to manufacturers of barbecue
grills, propane and
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gas grill distributors, mass merchandisers, and manufacturers and users of
material handling, heating, cooking and camping equipment. Worthington
manufactures other low pressure cylinder products, including recapture and
recycling tanks for refrigerant gases, helium tanks and cylinders to hold other
gases. Worthington also produces high pressure acetylene, industrial, medical,
halon and electronic gas cylinders. Worthington Cylinders has over 2,000
customers. It operates six manufacturing facilities located in Ohio, Oklahoma,
Alabama and Ontario, and a joint venture near Sao Paolo, Brazil.
The Company's metal framing business is carried on by Dietrich Industries
("Dietrich"), which was acquired on February 5, 1996. Dietrich is the largest
supplier of metal framing products for the commercial and residential
construction markets in the United States. The Company believes that Dietrich is
the only national supplier of metal framing products and supplies approximately
35% of the metal framing products sold in the United States. Dietrich operates
18 facilities in 13 states.
On February 21, 1997, the Company acquired The Gerstenslager Company
("Gerstenslager") in a pooling of interests transaction. Gerstenslager is a
leading independent supplier of Class A exterior body panels to the North
American automotive aftermarket and the original equipment market. Management
believes Gerstenslager to be the largest independent supplier of exposed sheet
metal products for the North American automotive aftermarket. Gerstenslager is
unique in its ability to handle a large number of low volume parts, managing
over 3,000 die sets for component parts on past and current automobile and truck
production models.
Custom Products
Worthington's custom products segment includes its custom plastics business
and its precision metals business. Sales by the custom products segment totaled
$380 million for the fiscal year ended May 31, 1997, representing approximately
20% of Worthington's net sales. Worthington's injection molded plastics business
represents the major portion of these sales.
Worthington's custom plastics business is conducted through Worthington
Custom Plastics, Inc., which Worthington believes to be one of the ten largest
producers of injection molded plastic products in the United States.
Historically, sales to the automotive market have dominated the custom plastics
business, although in recent years Worthington has increased sales to
manufacturers of appliances, lawn and garden equipment, audio equipment,
business equipment, furniture, recreational products, and other items.
Worthington believes it is now one of the two largest suppliers of injection
molded plastic parts for non-automotive uses. Worthington Custom Plastics
operates nine plants located in Ohio, North Carolina, Kentucky and South
Carolina.
Worthington's precision metals business is conducted through Worthington
Precision Metals, Inc. which supplies metal components requiring extremely
precise tolerances for use primarily in the automotive industry for
transmission, power steering and brake applications. This business operates two
facilities located in Ohio and Tennessee.
Cast Products
Worthington's cast products segment is operated through Buckeye Steel
Castings Company ("Buckeye Steel"). Buckeye Steel manufactures and designs cast
steel products ranging in size from 100 lbs. to 30 tons. These products are
offered to the railroad, mass transit, construction and off-highway equipment
markets. The cast products segment had sales of $114 million for the fiscal year
ended May 31, 1997, representing approximately 6% of total Company sales.
Joint Ventures and Investments
As part of its strategy to selectively develop new products, markets and
technological capabilities and to expand its international presence while
mitigating the risks and costs associated with such activities, Worthington is a
partner in one consolidated and six unconsolidated joint ventures.
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Spartan Steel Coating, L.L.C. ("Spartan Steel"), a 52% owned
consolidated joint venture with Rouge Steel, is constructing a cold rolled
hot dipped galvanizing facility near Monroe, Michigan. This 450,000 ton
capacity facility is expected to begin operations in mid-1998.
Worthington/Armstrong Venture ("WAVE"), a 50% owned joint venture with
Armstrong World Industries, is one of the three leading United States
manufacturers of suspended ceiling systems for concealed and lay-in panel
ceilings. WAVE operates facilities in Pennsylvania, Maryland, Nevada,
England, France, Spain and China and is building a facility in Michigan.
Worthington Specialty Processing, a 50% owned joint venture with USX
Corporation, operates primarily as a toll processor for USX Corporation.
Acerex S.A. de C.V., a 50% owned joint venture with Hylsa S.A. de
C.V., is a steel processing company located in Monterrey, Mexico.
TWB Company, a 33.3% owned joint venture with Thyssen Steel, Rouge
Steel, LTV Steel and Bethlehem Steel, produces laser welded blanks for use
in the auto industry for products such as inner door frames.
Worthington S.A., a 52% owned joint venture with three Brazilian
propane producers, operates a cylinder manufacturing facility near Sao
Paolo, Brazil.
London Industries, Inc., a 60% owned joint venture with Sumitomo and
Nissen Chemitech of Japan, produces injection molded plastics parts,
concentrating on sales to foreign transplant automakers.
The Company also owns a minority interest in Rouge Steel Company ("Rouge
Steel"), an integrated steel mill located in Dearborn, Michigan. Since
Worthington acquired its equity position in 1990, Rouge Steel has been
Worthington's largest steel supplier pursuant to a long term steel supply
agreement which has assured Worthington a steady supply of high quality steel at
competitive prices regardless of market conditions.
In March 1997, the Company issued 5,999,600 DECS(SM) (Debt Exchangeable for
Common Stock(SM)). In connection with the DECS, the Company issued $93 million
principal amount of 7 1/4% exchangeable notes due March 1, 2000. At maturity of
the notes, the principal amount of each DECS will be mandatorily exchanged by
Worthington into shares of Class A common stock of Rouge Steel (or, at the
Company's option, the cash equivalent for all or a part thereof) at a defined
exchange rate. The Company's current Rouge Steel stockholdings are sufficient to
settle the DECS liability.
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SELECTED FINANCIAL INFORMATION
(DOLLARS IN MILLIONS)
The selected financial information below should be read in conjunction with
the consolidated financial statements and notes thereto included in
Worthington's Annual Report on Form 10-K for the year ended May 31, 1997 and
Quarterly Report on Form 10-Q for the three months ended August 31, 1997. See
"Incorporation of Certain Documents by Reference" in the accompanying
Prospectus. The selected financial information at the end of and for each of the
years in the five year period ended May 31, 1997 is derived from the
consolidated financial statements of Worthington which have been audited by
Ernst & Young LLP, independent auditors. The selected financial information at
August 31, 1997 and 1996 and for the three months ended August 31, 1997 and 1996
is derived from the unaudited consolidated financial statements of Worthington,
which have been prepared on the same basis as Worthington's audited consolidated
financial statements and, in the opinion of management, contain all adjustments,
consisting only of normal, recurring adjustments, necessary for a fair
presentation of the financial position and results of operation for these
periods. Operating results for the three months ended August 31, 1997 are not
necessarily indicative of the results that may be expected for the entire fiscal
year ending May 31, 1998. All financial data includes the results of
Gerstenslager, which was acquired in February 1997 through a pooling of
interests.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
AUGUST 31, YEAR ENDED MAY 31,
----------------- --------------------------------------------------
1997 1996 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE PERIOD:
Net sales:
Processed steel products......... $ 384 $ 325 $1,418 $1,113 $1,111 $ 984 $ 823
Custom products.................. 90 80 380 321 302 250 242
Cast products.................... 26 25 114 144 153 115 103
------ ------ ------ ------ ------ ------ ------
Total net sales............. 500 430 1,912 1,578 1,566 1,349 1,168
Operating income (1):
Processed steel products......... 36 31 121 110 124 105 84
Custom products.................. 3 4 25 18 20 15 20
Cast products.................... -- 1 8 15 21 6 7
------ ------ ------ ------ ------ ------ ------
Total operating income...... 39 36 154 143 165 126 111
Interest expense................... 7 4 18 9 7 3 4
Equity in net income of
unconsolidated
affiliates -- joint ventures..... 4 3 14 7 6 -- 2
Equity in net income of
unconsolidated
affiliates -- Rouge (2).......... -- -- -- 22 32 19 3
Net earnings....................... 23 22 93 101 123 89 71
AT END OF PERIOD:
Total assets....................... 1,602 1,310 1,561 1,282 964 838 731
Long-term debt excluding DECS...... 363 311 362 316 69 60 64
DECS............................... 86 -- 88 -- -- -- --
------ ------ ------ ------ ------ ------ ------
Total long-term debt............... 449 311 450 316 69 60 64
Total debt (3)..................... 503 325 506 318 109 73 67
Shareholders' equity............... 730 678 716 667 608 525 456
RATIO OF EARNINGS TO FIXED
CHARGES(4)......................... 5.1x 7.2x 6.0x 11.0x 17.6x 25.6x 28.5x
</TABLE>
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(1) Corporate expenses are allocated on a consistent basis among industry
segments.
(2) During the first quarter of its 1997 fiscal year, Worthington took steps
relative to its investment in Rouge Steel which resulted in Worthington
changing the accounting for the investment from the equity method to the
cost method.
(3) Represents long-term debt (including current maturities) and notes payable.
(4) For the purpose of this ratio: (i) earnings consist of income from
continuing operations before fixed charges (reduced by capitalized interest)
and income taxes for Worthington and its majority-owned subsidiaries and its
proportionate share of the income of unconsolidated affiliated companies,
reduced by undistributed earnings of less than 50%-owned unconsolidated
affiliated companies; and (ii) fixed charges consist of interest on all
indebtedness (without reduction of interest capitalized) for Worthington and
its majority-owned subsidiaries (consolidated and unconsolidated), and its
proportionate share of the interest on indebtedness of 50%-owned
unconsolidated affiliates.
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USE OF PROCEEDS
The net proceeds from the sale of the Notes offered hereby are estimated to
be $148.2 million after deducting estimated expenses and underwriting discounts.
The Company intends to apply the net proceeds from the sale of the Notes (a) to
repay short-term debt incurred to fund capital expenditures, primarily for the
Decatur, Alabama, and Spartan Steel projects, and working capital; (b) to repay
debt outstanding under its Revolving Credit Agreement ("Revolver Debt") and (c)
for general corporate purposes. Both the short-term debt and the Revolver Debt
bear variable interest rates. Short-term debt is incurred under uncommitted
lines of credit extended to the Company through various commercial banks.
Maturities on these borrowings typically range from one to 30 days. At August
31, 1997, the average interest rate on the Company's short-term debt was 5.82%.
The commitment for the Revolver Debt expires April 2001 and the average interest
rate on the Revolver Debt outstanding at August 31, 1997 was 5.82%.
CAPITALIZATION
The following table sets forth the consolidated debt and shareholders'
equity of the Company at August 31, 1997, and as adjusted to give effect to the
issuance by the Company of the Notes offered hereby and the application of the
net proceeds therefrom (after deducting underwriting discounts and estimated
offering expenses), as described under "Use of Proceeds."
<TABLE>
<CAPTION>
AT AUGUST 31, 1997
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HISTORICAL AS ADJUSTED
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(IN MILLIONS)
<S> <C> <C>
Notes payable.......................................................... $ 51 $ --
Current maturities of long-term debt................................... 3 3
------- -----
Total short-term debt............................................. 54 3
------- -----
Long-term debt, less current maturities:
Conventional long-term debt:
Notes............................................................. -- 150
7 1/8% notes due 2006............................................. 200 200
Revolver debt..................................................... 140 43
Industrial development revenue bonds and other.................... 23 23
------- -----
Total conventional long-term debt, less current maturities... 363 416
------- -----
DECS................................................................. 86 86
------- -----
Total long-term debt, less current maturities................ 449 502
------- -----
Total debt............................................................. 503 505
Total shareholders' equity............................................. 730 730
------- -----
Total capitalization................................................... $1,233 $ 1,235
======= =====
</TABLE>
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DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby (referred to in the accompanying Prospectus as "Debt Securities")
supplements, and to the extent inconsistent therewith supersedes, the
description of the general terms and provisions of Debt Securities set forth in
the Prospectus, to which description reference is hereby made. Capitalized terms
not otherwise defined herein shall have the meanings given to them in the
accompanying Prospectus.
GENERAL
The Notes will be issued under the Indenture dated as of May 15, 1996
between the Company and the Trustee. The Indenture is subject to and is governed
by the Trust Indenture Act of 1939, as amended (the "TIA"), and the terms of the
Notes include those made part of the Indenture by reference to the TIA as an
effect of the date of the Indenture. The following description and the
description in the accompanying Prospectus do not purport to be complete and are
subject to and qualified in their entirety by reference to the TIA and all the
provisions of the Notes and the Indenture.
PRINCIPAL AMOUNT AND MATURITY
The Notes will be limited to $150,000,000 aggregate principal amount and
will mature on December 1, 2009.
INTEREST
Except as otherwise provided in the Indenture, interest on the Notes as set
forth on the cover page of this Prospectus Supplement will accrue from December
12, 1997 and is to be payable semi-annually on June 1 and December 1, commencing
June 1, 1998, to those persons in whose names the Notes are registered at the
close of business on the next preceding May 15 and November 15, as the case may
be.
OPTIONAL REDEMPTION
The Notes will be redeemable, as a whole or in part, at the option of the
Company at any time, at a redemption price equal to the greater of (a) 100% of
the principal amount of such Notes to be redeemed and (b) the sum of the present
values of the Remaining Scheduled Payments (as defined herein) thereon
discounted to the redemption date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus 15 basis points,
plus in either case accrued interest on the principal amount being redeemed to
the date of redemption.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Notes. "Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after consultation with the
Company.
"Comparable Treasury Price" means, with respect to any redemption date, (a)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (b) if such release (or any successor release) is not
published or does not contain such prices on such business day, (i) the
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<PAGE> 10
average of the Reference Treasury Dealer Quotations, or (ii) if the Trustee
obtains fewer than four such Reference Treasury Dealer Quotations, the average
of all such Quotations. "Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any redemption date, the average,
as determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.
on the third business day preceding such redemption date.
"Reference Treasury Dealer" means each of Salomon Brothers Inc, Merrill
Lynch, Pierce, Fenner & Smith Incorporated, NationsBanc Montgomery Securities,
Inc. and their respective successors; provided, however, that if any of the
foregoing shall cease to be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), the Company shall substitute therefor
another Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to any Note, the
remaining scheduled payments of the principal thereof to be redeemed and
interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that, if such redemption date is not an
interest payment date with respect to such Notes, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to such redemption date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Notes to be redeemed.
Unless the Company defaults in payment of the redemption price, on and
after the applicable redemption date, interest will cease to accrue on the Notes
or portions thereof called for redemption.
RANKING
The Notes will be senior unsecured obligations of the Company ranking pari
passu with other senior indebtedness of the Company. In addition, the Company
conducts many of its operations through subsidiaries, and the Notes will be
structurally subordinated to all obligations of its subsidiaries. At August 31,
1997, after giving effect to the use of proceeds from this offering as described
in "Use of Proceeds," the Company would have had $333 million of indebtedness
for borrowed money ranking pari passu in right of payment with the Notes and
subsidiaries of the Company would have had aggregate balance sheet liabilities
of approximately $239 million excluding intercompany obligations.
SINKING FUND
There will be no mandatory sinking fund payments for the Notes.
BOOK-ENTRY SYSTEM
Except as described in the Prospectus under "Description of Debt
Securities -- Registered Global Securities," owners of beneficial interests in a
Global Security will not be considered the Holders thereof and will not be
entitled to receive physical delivery of Notes in definitive form, and no Global
Security will be exchangeable except for another Global Security of like
denomination and terms to be registered in the name of the Depositary or its
nominee.
The Depositary has advised the Company that the Depositary is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "Clearing agency"
registered under the Securities Exchange Act of 1934, as amended. The Depositary
was created to hold the securities of its participants and to facilitate the
clearance and settlement of securities transactions among its participants in
such securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. The Depositary's participants include securities brokers and
dealers (including the Under-
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<PAGE> 11
writers), 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.
Persons who are not participants may beneficially own securities held by the
Depositary only through participants.
SAME-DAY FUNDS SETTLEMENT SYSTEM AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made by the
Company in immediately available funds.
The Notes will trade in the Depositary's Same-Day Funds Settlement System
until maturity, and secondary market trading activity in the Notes will
therefore be required by the Depositary to settle in immediately available
funds. No assurance can be given as to the effect, if any, of settlement in
immediately available funds on trading activity in the Notes.
CERTAIN COVENANTS
Limitation on Liens. Except as provided below, the Company may not, and
may not permit any of its Subsidiaries to, directly or indirectly, create or
permit to exist any Lien on any Principal Property or any shares of stock of or
any Indebtedness of any Restricted Subsidiary, whether owned on the date of
issuance of the Notes or thereafter acquired, securing any obligation, unless
the Company contemporaneously secures the Notes equally and ratably with (or
prior to) such obligation. The Company is not required to secure the Notes if
the Lien consists of the following: (i) a Permitted Lien; or (ii) Liens securing
Indebtedness if, after giving pro forma effect to the Incurrence of such
Indebtedness (and the receipt and application of the proceeds thereof) or the
securing of outstanding Indebtedness, the sum of (without duplication) (A) all
Indebtedness of the Company and its Subsidiaries secured by Liens (other than
Permitted Liens) and (B) all Attributable Indebtedness in respect of
Sale/Leaseback Transactions with respect to any Principal Property, at the time
of determination, does not exceed 10% of Consolidated Net Tangible Assets.
Limitation on Sale/Leaseback Transactions. The Company shall not, and
shall not permit any of its Subsidiaries to, enter into any Sale/Leaseback
Transaction with respect to any Principal Property, unless (i) the Company or
such Subsidiary would be entitled to create a Lien on such Principal Property
securing Indebtedness in an amount equal to the Attributable Indebtedness with
respect to such Sale/Leaseback Transaction without securing the Notes pursuant
to the covenant described in "Limitation on Liens" above or (ii) the Company,
within six months from the effective date of such Sale/Leaseback Transaction,
applies to the voluntary defeasance or retirement (excluding retirements of
Notes and other Indebtedness ranking pari passu with the Notes as a result of
conversions, pursuant to mandatory sinking funds or mandatory prepayment
provisions or by payment at maturity) of Notes or other Indebtedness ranking
pari passu with the Notes an amount equal to the Attributable Indebtedness with
respect to such Sale/Leaseback Transaction.
Limitation on Indebtedness of Restricted Subsidiaries. The Company will
not permit any Restricted Subsidiary to issue, assume or guarantee any
Indebtedness for borrowed money other than (1) Indebtedness secured by a Lien
which such Restricted Subsidiary is permitted to create or assume pursuant to
the provisions of the Indenture, without securing the Notes, (2) Indebtedness to
the Company or another Restricted Subsidiary, (3) Indebtedness of any
corporation that exists at the time such corporation becomes a Restricted
Subsidiary, provided that, such Indebtedness is not incurred in anticipation of
such corporation becoming a Restricted Subsidiary, (4) Indebtedness of a
corporation that exists at the time such corporation is merged with or into or
consolidated with a Restricted Subsidiary or at the time of a sale, lease or
other disposition of all or substantially all the properties of a corporation to
a Restricted Subsidiary, provided that, such Indebtedness is not incurred in
anticipation of such merger, consolidation or sale, lease or other disposition,
(5) Indebtedness incurred in connection with any industrial development bond
financing, (6) Indebtedness incurred by such Restricted
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<PAGE> 12
Subsidiary in the ordinary course of the business of such Restricted Subsidiary
and which matures not more than, and is not renewable or extendable at the
option of the obligor to a date more than, twelve months after the date such
Indebtedness is incurred, and (7) Indebtedness incurred by any Restricted
Subsidiary to extend, renew or replace, in whole or in part, any Indebtedness
referred to in the foregoing clauses (3) or (4) or Indebtedness of any
Restricted Subsidiary existing at the date of the Indenture, provided that, the
principal amount of Indebtedness so incurred shall not exceed the principal
amount of Indebtedness outstanding at the time of such extension, renewal or
replacement. The Company may permit one or more Restricted Subsidiaries to
issue, assume or guarantee any Indebtedness for borrowed money which is not
secured by a lien upon any Principal Property or shares of capital stock or
Indebtedness of any Restricted Subsidiary, provided that, the aggregate amount
of all such Indebtedness permitted by this paragraph (together with all liens
created, assumed or incurred (as measured by all Indebtedness secured by all
such liens then outstanding or to be so created or assumed) and all
Sale/Leaseback Transactions entered into (as measured by the value of all such
Transactions then outstanding or to be so entered into)) at any time outstanding
shall not exceed 10% of Consolidated Net Tangible Assets.
Limitation on Issuance of Preferred Stock by Restricted Subsidiaries. The
Company will not permit any of its Restricted Subsidiaries to issue any
preferred or preference stock (except to the Company or any wholly owned
Restricted Subsidiary) or permit any Person other than the Company or any wholly
owned Restricted Subsidiary to hold any such preferred or preference stock.
Certain Definitions. The following definitions, among others, are used in
the Indenture. Many of the definitions of terms used in the Indenture have been
negotiated specifically for the purposes of inclusion in the Indenture and may
not be consistent with the manner in which such terms are defined in other
contexts. Prospective purchasers of Notes are encouraged to read each of the
following definitions carefully and to consider such definitions in the context
in which they are used in the Indenture. Capitalized terms used herein but not
defined have the meanings assigned thereto in the Indenture.
"Attributable Indebtedness" with respect to a Sale/Leaseback Transaction
means, as of the time of determination, (i) if the obligation with respect to
such Sale/Leaseback Transaction is a Capitalized Lease Obligation, the amount of
such obligation determined in accordance with GAAP and included in the financial
statements of the lessee or (ii) if the obligation with respect to such
Sale/Leaseback Transaction is not a Capitalized Lease Obligation, the total Net
Amount of Rent required to be paid by the lessee under such lease during the
remaining term thereof (including any period for which the lease has been
extended), discounted from the respective due dates thereof to such
determination date at the rate per annum borne by the Notes compounded
semi-annually.
"Capitalized Lease Obligations" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP; and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Commodity Price Protection Agreement" means, in respect of any Person, any
forward contract, commodity swap agreement, commodity option agreement or other
similar agreement or arrangement designed to protect such Person against
fluctuations in commodity prices.
"Consolidated Net Tangible Assets" means, as of any date of determination,
the sum of the amounts that would appear on a consolidated balance sheet of the
Company and its Subsidiaries for the total assets (less accumulated depletion,
depreciation and amortization, allowances for doubtful receivables, other
applicable reserves and other properly deductible items) of the Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP, after
giving effect to purchase accounting and after deducting therefrom, to the
extent included in total assets, in each case as determined on a consolidated
basis in accordance with GAAP (without duplication): (i) the aggregate
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<PAGE> 13
amount of liabilities of the Company and its Subsidiaries that may properly be
classified as current liabilities (including taxes accrued as estimated); (ii)
current Indebtedness and current maturities of long-term Indebtedness; (iii)
minority interests in the Company's Subsidiaries held by Persons other than the
Company or a wholly-owned Subsidiary of the Company; and (iv) unamortized debt
discount and expenses and other unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, licenses, organization or
developmental expenses and other intangible items.
"Currency Exchange Protection Agreement" means, in respect of any Person,
any foreign exchange contract, currency swap agreement, currency option or other
similar agreement or arrangement designed to protect such Person against
fluctuations in currency exchange rates.
"Disqualified Stock" of a Person means Redeemable Stock of such Person as
to which the maturity, mandatory redemption, conversion or exchange or
redemption at the option of the holder thereof occurs, or may occur, on or prior
to the first anniversary of the Stated Maturity of the Notes.
"GAAP" means generally accepted accounting principles in the United States
as in effect as of the date on which the Notes are issued, including those set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
the Indenture will be computed in conformity with GAAP consistently applied.
"Government Contract Lien" means any Lien required by any contract,
statute, regulation or order in order to permit the Company or any of its
Subsidiaries to perform any contract or subcontract made by it with or at the
request of the United States or any State thereof or any department, agency or
instrumentality of either or to secure partial, progress, advance or other
payments by the Company or any of its Subsidiaries to the United States or any
State thereof or any department agency or instrumentality of either pursuant to
the provisions of any contract, statute, regulation or order.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any Interest Rate Protection Agreement, Currency Exchange Protection
Agreement, Commodity Price Protection Agreement or other similar agreement.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication); (i) the principal in respect of
indebtedness of such Person for borrowed money; (ii) the principal in respect of
obligations of such Person evidenced by bonds, Notes, notes or other similar
instruments; (iii) all Capitalized Lease Obligations of such Person; (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services (except trade payables); (v) all obligations of such Person
in respect of letters of credit, banker's acceptances or other similar
instruments or credit transactions (including reimbursement obligations with
respect thereto), other than obligations with respect to letters of credit
securing obligations (other than obligations described in (i) through (iv)
above) entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if and to the extent drawn
upon, such drawing is reimbursed not later than the third business day following
receipt by such Person of a demand for reimbursement following payment of the
letter of credit; (vi) the amount of all obligations of such Person with respect
to the redemption, repayment or other repurchase of any Disqualified Stock, or
with respect to any Subsidiary of the Company, any Preferred Stock (but
excluding, in each case, any accrued dividends); (vii) all Indebtedness of other
Persons secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided, however, that the amount of
such Indebtedness shall be the lesser of (A) the fair market value of such asset
at such date of determination and (B) the amount of such Indebtedness of such
other Persons; (viii) all Indebtedness of other Persons to the extent guaranteed
by such Person; and (ix) to the extent not otherwise included in this
definition, obligations in respect of Hedging Obligations except those secured
by Permitted Liens. For purposes of this definition, the maximum fixed
redemption, repayment or repurchase price of any Disqualified Stock or Preferred
Stock that does not have a fixed redemption, repayment or repurchase price shall
be calculated in accordance
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<PAGE> 14
with the terms of such Stock as if such Stock were redeemed, repaid or
repurchased on any date on which Indebtedness shall be required to be determined
pursuant to the Indenture; provided, however, that if such stock is not then
permitted to be redeemed, repaid or repurchased, the redemption, repayment or
repurchase price shall be the book value of such stock as reflected in the most
recent financial statements of such Person. The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability, upon the
occurrence of the contingency giving rise to the obligation, of any contingent
obligations at such date.
"Interest Rate Protection Agreement" means, in respect of any Person, any
interest rate swap agreement, interest rate option agreement, interest rate cap
agreement, interest rate collar agreement, interest rate floor agreement or
other similar agreement or arrangement designed to protect such Person against
fluctuations in interest rates.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Net Amount of Rent" as to any lease for any period means the aggregate
amount of 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
that 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 payable under such lease subsequent to the first date upon which it may be so
terminated.
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under worker's compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to
which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or United States government bonds
to secure performance, surety or appeal bonds to which such Person is a party or
which are otherwise required of such Person, or deposits as security for
contested taxes or import duties or for the payment of rent or other obligations
of like nature, in each case incurred in the ordinary course of business; (b)
Liens imposed by law, such carriers', warehousemen's, laborers', materialmen's,
landlords', vendors', workmen's, operators', producers' and mechanics' Liens, in
each case for sums not yet due or being contested in good faith by appropriate
proceedings; (c) Liens for property taxes, assessments and other governmental
charges or levies not yet delinquent or subject to penalties for non-payment or
which are being contested in good faith by appropriate proceedings; (d) minor
survey exceptions, minor encumbrances, easements or reservations of or with
respect to, or rights of others for or with respect to, licenses, rights-of-way,
sewers, electric and other utility lines and usages, telegraph and telephone
lines, pipelines, surface use, operation of equipment permits, servitudes and
other similar matters or zoning or other restrictions as to the use of real
property or Liens incidental to the conduct of the business of such Person or to
the ownership of its properties which were not Incurred in connection with
Indebtedness and which do not in the aggregate materially adversely affect the
value of such properties or materially impair their use in the operation of the
business of such Person; (e) Liens existing on or provided for under the terms
of agreements existing on the date the Notes are issued (including, without
limitation, under the Company's credit agreement as defined in the Indenture);
(f) Liens on property at the time the Company or any of its Subsidiaries
acquired the property or the entity owning such property, including any
acquisition by means of a merger or consolidation with or into the Company;
provided, however, that any such Lien may not extend to any other property owned
by the Company or any of its Subsidiaries; (g) Liens securing a Hedging
Obligation so long as such Hedging Obligation is of the type customarily entered
into in connection with, and is entered into for the purpose of, limiting risk;
(h) Purchase Money Liens; (i) Liens securing only Indebtedness of a wholly-owned
Subsidiary of the Company to the Company or one or more wholly-owned
Subsidiaries of the Company; (j) Liens on any property to secure Indebtedness
incurred in connection with the construction, installation or financing of
pollution control or abatement facilities or other forms of industrial revenue
bond financing or Indebtedness issued or Guaranteed
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<PAGE> 15
by the United States, any state or any department, agency or instrumentality
thereof; (k) Government Contract Liens; (l) Liens securing Indebtedness of joint
ventures in which the Company or a Subsidiary has an interest to the extent such
Liens are on property or assets of such joint ventures; (m) Liens resulting from
the deposit of funds or evidences of Indebtedness in trust for the purpose of
defeasing Indebtedness of the Company or any of its Subsidiaries; (n) legal or
equitable encumbrances deemed to exist by reason of negative pledges or the
existence of any litigation or other legal proceeding and any related lis
pendens filing (excluding any attachment prior to judgment lien or attachment
lien in and of execution on a judgment); (o) any attachment Lien being contested
in good faith and by proceedings promptly initiated and diligently conducted,
unless the attachment giving rise thereto will not, within sixty days after the
entry thereof, have been discharged or fully bonded or will not have been
discharged within sixty days after the termination of any such bond; (p) any
judgment Lien, unless the judgment it secures will not, within sixty days after
the entry thereof, have been discharged or execution thereof stayed pending
appeal, or will not have been discharged within sixty days after the expiration
of any such stay; (q) Liens to banks arising from the issuance of letters of
credit issued by such banks ("issuing banks") on the following: (i) any and all
shipping documents, warehouse receipts, policies or certificates of insurance
and other document accompanying or relative to drafts drawn under any credit,
and any draft drawn thereunder (whether or not such documents, goods or other
property be released to or upon the order of the Company or any Subsidiary under
a security agreement or trustor bailee receipt of otherwise), and the proceeds
of each and all of the foregoing; (ii) the balance of every deposit account, now
or at the time hereafter existing, of the Company or any Subsidiary with the
issuing banks, and any other claims of the Company or any Subsidiary against the
issuing banks; and all property claims and demands and all rights and interests
therein of the Company or any Subsidiary and all evidences thereof and all
proceeds thereof which have been or at any time will be delivered to or
otherwise come into the issuing bank's possession, custody or control, or into
the possession, custody or control of any bailee for the issuing bank or of any
of its agents or correspondents for the account of the issuing bank, for any
purpose, whether or not the express purpose of being used by the issuing bank as
collateral security or for the safekeeping or for any other or different
purpose, the issuing bank being deemed to have possession or control of all of
such property actually in transit to or from or set apart for the issuing bank,
any bailee for the issuing bank or any of its correspondents for other acting in
its behalf, it being understood that the receipt at any time by the issuing
bank, or any of its bailees, agents or correspondents, or other security, of
whatever nature, including cash, will not be deemed a waiver of any of the
issuing bank's rights or power hereunder; (iii) all property shipped under or
pursuant to or in connection with any credit or drafts drawn thereunder or in
any way related thereto, and all proceeds thereof; (iv) all additions to and
substitutions for any of the property enumerated above in this subsection; (r)
rights of a common owner of any interest in property held by such Person; (s)
farmout, carried working interest, joint operating, unitization, royalty,
overriding royalty, sales and similar agreements relating to the exploration or
development of, or production from, oil and gas properties entered into the
ordinary course of business; (t) any defects, irregularities or deficiencies in
title to easements, rights-of-way or other properties that do not in the
aggregate materially adversely affect the value of such properties or materially
impair their use in the operation of the business of such Person; and (u) Liens
to secure any refinancing, refunding, extension, renewal or replacement (or
successive refinancings, refundings, extensions, renewals or replacements), as a
whole or in part, of any Indebtedness secured by any Lien referred to in the
foregoing clauses (e) through (l); provided, however, that (i) such new Lien
shall be limited to all or part of the same property that secured the original
Lien, plus improvements on such property and (ii) the Indebtedness secured by
such Lien at such time is not increased to any amount greater than the sum of
(A) the outstanding principal amount or, if greater, committed amount of the
Indebtedness described under clauses (e) through (l) at the time the original
Lien became a Permitted Lien and (B) an amount necessary to pay any fees and
expenses, including premiums, relating to such refinancing, refunding,
extension, renewal or replacement.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
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<PAGE> 16
"Principal Property" means any manufacturing plant or other similar
facility (including production machinery and equipment located thereon) or
warehouse, owned or leased by the Company or any Subsidiary, which is located
within the United States other than (a) any such plant or facility which the
Board of Directors determines in good faith by board resolution is not of
material importance to the total business conducted, or assets owned, by the
Company and its Subsidiaries as an entirety, or (b) any portion of any such
plant or facility which the Board of Directors determines by Board Resolution in
good faith not to be of material importance to the use or operation thereof.
"Production machinery and equipment" means production machinery and equipment in
such manufacturing plants used directly in the production of the Company's or
any Subsidiary's products.
"Purchase Money Lien" means a Lien on property securing Indebtedness
Incurred by the Company or any of its Subsidiaries to provide funds for all or
any portion of the cost of acquiring, constructing, altering, expanding,
improving or repairing such property or assets used in connection with such
property.
"Redeemable Stocks" means, with respect to any person, any Capital Stock
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or upon the happening of any event (i) matures
or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise,
(ii) is convertible or exchangeable for Indebtedness (other than Preferred
Stock) or Disqualified Stock or (iii) is redeemable at the option of the holder
thereof, in whole or in part.
"Restricted Subsidiary" means any Subsidiary of the Company, which shall at
the time, directly or indirectly, through one or more Subsidiaries or in
combination with one or more other Subsidiaries or the Company, own or lease a
Principal Property.
"Sale/Leaseback Transaction" means an arrangement relating to property
owned on the date of issuance of the Notes or thereafter acquired whereby the
Company or any of its Subsidiaries transfers such property to a Person and the
Company or any of its Subsidiaries leases it from such Person.
"Subsidiary" of any Person means any corporation, association, partnership
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock entitled (without regarding to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person.
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<PAGE> 17
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement,
dated December 9, 1997, between the Company and the Underwriters (the
"Underwriting Agreement"), the Company has agreed to sell to each of the
Underwriters, and each of the Underwriters has severally agreed to purchase from
the Company, the principal amount of the Notes set forth opposite its name
below.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
--------------------------------------------------------------------- ------------
<S> <C>
Salomon Brothers Inc................................................. $ 50,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................. 50,000,000
NationsBanc Montgomery Securities, Inc. ............................. 50,000,000
------------
Total........................................................... $150,000,000
=============
</TABLE>
In the Underwriting Agreement, the several Underwriters have agreed,
subject to the terms and conditions set forth herein, to purchase all the Notes
offered hereby if any of the Notes are purchased.
The Underwriters have advised the Company that they propose initially to
offer the Notes to the public at the public offering price set forth on the
cover page of this Prospectus Supplement and to certain dealers at such price
less a concession not in excess of .40% of the principal amount of the Notes.
The Underwriters may allow, and such dealers may reallow, a concession not in
excess of .25% of the principal amount of the Notes to certain other dealers.
After the initial public offering, the public offering price and such concession
may be changed.
The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended, or contribute to payments the Underwriters may be required to make in
respect thereof.
The Notes will not have an established trading market when issued. The
Company has been advised by the Underwriters that they intend to make a market
in the Notes, but the Underwriters are not obligated to do so and may
discontinue making a market in the Notes at any time without notice. The Company
currently has no intention to list the Notes on any securities exchange, and
there can be no assurance given as to the development or liquidity of a trading
market for the Notes.
In the ordinary course of their respective businesses, certain of the
Underwriters and their respective affiliates have engaged in and may in the
future engage in commercial and investment banking activities with the Company
and its affiliates.
LEGAL MATTERS
Certain legal matters with respect to the Notes are being passed upon for
the Company by Dale T. Brinkman, General Counsel of the Company, and Vorys,
Sater, Seymour and Pease, Columbus, Ohio, and for the Underwriters by Jones,
Day, Reavis & Pogue, Cleveland, Ohio. Mr. Brinkman beneficially owns 18,002
shares of Worthington Common Stock and also has exercisable options to purchase
an additional 18,750 shares of Worthington Common Stock. Pursuant to its
By-laws, the Company is required to indemnify Mr. Brinkman to the fullest extent
permitted by Delaware law against any expenses actually and reasonably incurred
by him in connection with any action, suit or proceeding in which he is made
party by reason of his being an officer of the Company. Attorneys employed by
Vorys, Sater, Seymour and Pease, including Charles D. Minor, of counsel, a
director of the Company, together with members of their immediate families,
beneficially own an aggregate of 351,248 shares of the Company's Common Stock.
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<PAGE> 19
PROSPECTUS [WORTHINGTON IND. LOGO]
WORTHINGTON INDUSTRIES, INC.
DEBT SECURITIES
Worthington Industries, Inc. ("Worthington") may offer and sell from time to
time unsecured debentures, notes or other evidences of indebtedness ("Debt
Securities"), with an initial offering price not to exceed $450,000,000 in the
aggregate (or the equivalent in foreign denominated currency or units based on
or related to currencies, including European Currency Units). All specific terms
of the offering and sale of the Debt Securities, including the specific
designation, rights and restrictions and whether the Debt Securities are senior
or subordinated, the currencies or composite currencies in which the Debt
Securities are denominated, the aggregate principal amount, the maturity, rate
and time of payment of interest, and any conversion, exchange, redemption or
sinking fund provisions, and initial public offering price, listing on any
securities exchange, and the agents, dealers or underwriters, if any, to be
utilized in connection with the sale of the Debt Securities, will be set forth
in an accompanying Prospectus Supplement (the "Prospectus Supplement"). The Debt
Securities may be sold for U. S. Dollars or foreign denominated currency or
currency units; principal of and any interest may likewise be payable in U.S.
Dollars, foreign denominated currency or currency units -- in each case, as
Worthington specifically designates. The managing underwriters with respect to
each series sold to or through underwriters will be named in the Prospectus
Supplement.
The Debt Securities may be offered through dealers, through underwriters or
through agents designated from time to time as set forth in the Prospectus
Supplement. Net proceeds to Worthington will be the purchase price in the case
of a dealer, the public offering price less discount in the case of an
underwriter or the purchase price less commission in the case of an agent -- in
each case, less other expenses attributable to issuance and distribution. See
"Plan of Distribution" for possible indemnification arrangements for dealers,
underwriters and agents.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OTHER THAN THE DEBT SECURITIES DESCRIBED IN
THE ACCOMPANYING PROSPECTUS SUPPLEMENT.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------
The date of this Prospectus is May 14, 1996
<PAGE> 20
NO DEALER, SALESPERSON OR 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 OR THE ACCOMPANYING PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY WORTHINGTON OR ANY UNDERWRITER,
DEALER OR AGENT. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING
PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
WORTHINGTON SINCE THE DATE OF THIS PROSPECTUS. NEITHER THIS PROSPECTUS NOR THE
ACCOMPANYING PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE DEBT SECURITIES IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
AVAILABLE INFORMATION
Worthington is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act") and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission") all of which may be inspected and copied
at the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549 and at the following regional
offices of the Commission: Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and Seven World Trade Center, Suite 1300, New
York, New York 10048. Copies of such material can be obtained at prescribed
rates from the Public Reference Section of the Commission at 450 Fifth Street,
N.W. Room 1024, Washington, D.C. 20549.
Worthington has filed a registration statement on Form S-3 (together with
all amendments and exhibits thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, reference is made to the
Registration Statement and the exhibits filed as part thereof. Statements
contained herein are qualified in their entirety by reference to the
Registration Statement and such exhibits.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this Prospectus the following
documents and information heretofore filed with the Commission: (i)
Worthington's Annual Report on Form 10-K for the fiscal year ended May 31, 1995
filed pursuant to the 1934 Act; (ii) Worthington's Quarterly Reports on Form
10-Q for the quarters ended August 31, 1995, November 30, 1995 and February 29,
1996 filed pursuant to the 1934 Act; and (iii) Worthington's Current Report on
Form 8-K dated February 20, 1996 together with the Form 8-K/A dated April 19,
1996.
All documents filed by Worthington pursuant to Section 13, 14 or 15(d) of
the 1934 Act after the date of this Prospectus and prior to the termination of
the offering of the Debt 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 contained herein or in a document, all or a
portion of which is incorporated or deemed to be incorporated by reference
herein, shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement.
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<PAGE> 21
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus. Worthington
will provide without charge to each person, including any beneficial owner, to
whom a copy of this Prospectus is delivered, upon written or oral request of
such person, a copy (without exhibits unless such documents are specifically
incorporated by reference into such documents) of any or all of the documents
that have been incorporated by reference in this Prospectus. Such requests
should be made to Shareholder Relations, Worthington Industries, Inc., 1205
Dearborn Drive, Columbus, Ohio 43085 (telephone 614/438-3210).
THE COMPANY
Worthington, together with its subsidiaries (collectively, the "Company"),
is a leading manufacturer of metal and plastic products. The Company processes
flat rolled steel to close tolerances for sale to industrial customers who
require steel of precise specifications for their own product fabrications. The
Company also manufactures metal pressure cylinders, metal framing products for
use in construction, injection molded plastic parts, precision metal parts and
cast steel products.
Worthington is incorporated under the laws of the State of Delaware. Its
principal executive offices are located at 1205 Dearborn Drive, Columbus, Ohio
43085; and its telephone number is (614) 438-3210.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the net
proceeds from the sale of the Debt Securities will be used for general corporate
purposes, which may include funding of Worthington's capital expenditures,
repayment of indebtedness, additions to working capital and acquisitions.
Worthington anticipates that it will raise additional funds from time to time
through debt financings, including borrowings under its revolving credit
facilities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table represents Worthington's consolidated ratio of earnings
to fixed charges for the periods shown.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
--------------------- YEAR ENDED MAY 31,
FEB. 29, FEB. 28, ----------------------------------------
1996 1995 1995 1994 1993 1992 1991
-------- -------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Actual............................. 12.3 16.3 16.5 24.4 27.3 19.2 9.6
Supplemental(1).................... 6.8 8.8
</TABLE>
- ---------------
(1) To give effect to the purchase by Worthington of the stock of Dietrich
Industries, Inc. as reflected in the pro forma condensed consolidated
statements of income included in Worthington's Form 8-K/A filed on April 19,
1996.
For the purpose of this ratio: (i) earnings consist of income from
continuing operations before fixed charges (reduced by capitalized interest) and
income taxes for Worthington and its majority-owned subsidiaries and its
proportionate share of the income of unconsolidated affiliated companies,
reduced by undistributed earnings of less than 50%-owned unconsolidated
affiliated companies; and (ii) fixed charges consist of interest on all
indebtedness (without reduction of interest capitalized) for Worthington and its
majority-owned subsidiaries (consolidated and unconsolidated), and its
proportionate share of the interest on indebtedness of 50%-owned unconsolidated
affiliates.
3
<PAGE> 22
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Debt Securities so offered will be described
in the Prospectus Supplement relating to such Debt Securities. Accordingly, for
a description of the terms of a particular issue of Debt Securities, reference
must be made to both the Prospectus Supplement relating thereto and to the
following description.
The Debt Securities will be general obligations of Worthington and may be
either senior debt or subordinated debt of Worthington to the extent set forth
in the Prospectus Supplement relating thereto. See "Description of Debt
Securities -- Subordination" below. Debt Securities that will be senior debt
will be issued under an indenture (the "Indenture") between Worthington and PNC
Bank, Ohio, National Association (the "Trustee"). A copy of the form of
Indenture has been filed as an exhibit to the Registration Statement filed with
the Commission. Debt Securities that will be subordinated debt will be issued
under an indenture that will be entered into by Worthington and one or more
commercial banks to be selected as trustees prior to the issuance of such
subordinated debt. The following discussion of certain provisions of the
Indenture is a summary only and does not purport to be a complete description of
the terms and provisions of the Indenture. Accordingly, the following discussion
is qualified in its entirety by reference to the provisions of the Indenture,
including the definition therein of terms used below with their initial letters
capitalized.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities that can be issued thereunder. The Debt Securities may be issued in
one or more series as may be authorized from time to time by Worthington.
Reference is made to the applicable Prospectus Supplement for the following
terms of the Debt Securities of the series with respect to which such Prospectus
Supplement is being delivered:
(a) The title of the Debt Securities of the series;
(b) Any limit on the aggregate principal amount of the Debt Securities
of the series that may be authenticated and delivered under the Indenture;
(c) The date or dates on which the principal and premium with respect
to the Debt Securities of the series are payable;
(d) The rate or rates (which may be fixed or variable) at which the
Debt Securities of the series shall bear interest (if any) or the method of
determining such rate or rates, the date or dates from which such interest
shall accrue, the interest payment dates on which such interest shall be
payable or the method by which such dates will be determined, the record
dates for the determination of holders thereof to whom such interest is
payable (in the case of Registered Securities), and the basis upon which
interest will be calculated if other than that of a 360-day year of twelve
30-day months;
(e) The place or places, if any, in addition to or instead of the
corporate trust office of the Trustee where the principal, premium, and
interest with respect to Debt Securities of the series shall be payable;
(f) The price or prices at which, the period or periods within which,
and the terms and conditions upon which Debt Securities of the series may
be redeemed, in whole or in part, at the option of Worthington or
otherwise;
(g) The obligation, if any, of Worthington to redeem, purchase, or
repay Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a holder thereof and the price or
prices at which, the period or periods within which, and the terms and
conditions upon
4
<PAGE> 23
which Debt Securities of the series shall be redeemed, purchased, or
repaid, in whole or in part, pursuant to such obligations;
(h) If other than denominations of $1,000 or any integral multiple
thereof, the denominations in which Debt Securities of the series shall be
issuable;
(i) If the amount of principal, premium, or interest with respect to
the Debt Securities of the series may be determined with reference to an
index or pursuant to a formula, the manner in which such amounts will be
determined;
(j) If the principal amount payable at the stated maturity of Debt
Securities of the series will not be determinable as of any one or more
dates prior to such stated maturity, the amount that will be deemed to be
such principal amount as of any such date for any purpose, including the
principal amount thereof which will be due and payable upon any maturity
other than the stated maturity or which will be deemed to be outstanding as
of any such date (or, in any such case, the manner in which such deemed
principal amount is to be determined), and if necessary, the manner of
determining the equivalent thereof in United States currency;
(k) The coin or currency or currencies or units of two or more
currencies in which payment of the principal, premium, and interest with
respect to Debt Securities of the series shall be payable;
(l) If the Debt Securities of the series shall be issued in whole or
in part in the form of a Global Security, the terms and conditions, if any,
upon which such Global Security may be exchanged in whole or in part for
other individual Debt Securities in definitive registered form and the
Depositary for such Global Security;
(m) The classification of such Debt Securities as senior debt or
subordinated debt; and
(n) Any other specific terms of the Debt Securities including any
additional events of default or covenants provided for with respect to such
Debt Securities, and any term which may be required by or advisable under
U.S. Courts and regulations.
The Prospectus Supplement will also describe any material United States
federal income tax consequences or other special considerations applicable to
the series of Debt Securities to which such Prospectus Supplement relates,
including those applicable to (a) Debt Securities with respect to which payments
of principal, premium, or interest are determined with reference to an index or
formula (including changes in prices of particular securities, currencies, or
commodities), (b) Debt Securities with respect to which principal, premium, or
interest is payable in a foreign or composite currency, (c) Debt Securities that
are issued at a discount below their stated principal amount, bearing no
interest or interest at a rate that at the time of issuance is below market
rates ("Original Issue Discount Debt Securities"), and (d) variable rate Debt
Securities that are exchangeable for fixed rate Debt Securities.
Payments of interest on Debt Securities may be made at the option of
Worthington by check mailed to the registered holders thereof or, if so provided
in the applicable Prospectus Supplement, at the option of a holder by wire
transfer to an account designated by such holder.
Unless otherwise provided in the applicable Prospectus Supplement,
Securities may be transferred or exchanged at the office of the Trustee at which
its corporate trust business is principally administered in the United States or
at the office of the Trustee or the Trustee's agent in the Borough of Manhattan,
the City and State of New York, at which its corporate agency business is
conducted, subject to the limitations provided in the Indenture, without the
payment of any service charge, other than any tax or governmental charge payable
in connection therewith.
REGISTERED GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more fully registered global securities (a "Global Security")
that will be deposited with a depositary (the "Depositary"), or with a nominee
for a Depositary identified in the Prospectus Supplement relating to such
5
<PAGE> 24
series. In such case, one or more Global Securities will be issued in a
denomination or aggregate denomination equal to the portion of the aggregate
principal amount of outstanding registered Debt Securities of the series to be
represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for Debt Securities in definitive registered form,
a Global Security may not be transferred except as a whole by the Depositary for
such 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 Global Security
will be described in the Prospectus Supplement relating to such series.
Worthington anticipates that the following provisions will apply to all
depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of persons that have accounts with such Depositary
("participants"). The accounts to be credited shall be designated by any
underwriters or agents participating in the distribution of such Debt
Securities. Ownership of beneficial interests in a Global Security will be
limited to participants or persons that may hold interests through participants.
Ownership of beneficial interests in such Global Security will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by the Depositary for such Global Security (with respect to interests of
participants) or by participants or persons that hold through participants (with
respect to interests of persons other than participants). So long as the
Depositary for a Global Security, or its nominee, is the registered owner of
such Global Security, such Depositary or such nominee, as the case may be, will
be considered the sole owner or Holder of the Debt Securities represented by
such Global Security for all purposes under the applicable indenture. Except as
set forth below, owners of beneficial interests in a Global Security will not be
entitled to have the Debt Securities represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of such Debt Securities in definitive form and will not be considered
the owners or Holders thereof under the applicable indenture.
Principal, premium, if any, and interest payments on Debt Securities
represented by a Global Security registered in the name of a Depositary or its
nominee will be made to such Depositary or its nominee, as the case may be, as
the registered owner of such Global Security. None of Worthington, the Trustee
or any paying agent for such Debt Securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in such Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Worthington expects that the Depositary for any Debt Securities represented
by a Global Security, upon receipt of any payment of principal, premium or
interest, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security as shown on the records of such Depositary.
Worthington also expects that payments by participants to owners of beneficial
interest in such Global Security held through such participants will be governed
by standing instructions and customary practices, as is now the case with the
securities held for the accounts of customers registered in "street names" and
will be the responsibility of such participants.
If the Depositary for any Debt Securities represented by a Global Security
is at any time unwilling or unable to continue as Depositary and a successor
Depositary is not appointed by Worthington within ninety (90) days, Worthington
will issue such Debt Securities in definitive form in exchange for such Global
Security. In addition, Worthington may at any time and in its sole discretion
determine not to have any of the Debt Securities of a series represented by one
or more Global Securities and, in such
6
<PAGE> 25
event, will issue Debt Securities of such series in definitive form in exchange
for all of the Global Security or Securities representing such Debt Securities.
SUBORDINATION
Debt Securities may be subordinated ("Subordinated Debt Securities") to
senior debt to the extent set forth in the Prospectus Supplement and indenture
relating thereto. Worthington currently conducts substantially all its
operations through Subsidiaries and the holders of Debt Securities (whether or
not Subordinated Debt Securities) will be structurally subordinated to the
creditors of Worthington's Subsidiaries.
Subordinated Debt Securities will be subordinate in right of payment, to
the extent and in the manner set forth in the indenture and the Prospectus
Supplement relating to such Subordinated Debt Securities, to the prior payment
of all Indebtedness of Worthington that is designated as "Senior Indebtedness"
(as defined in the indenture relating to such Subordinated Debt Securities) with
respect to such Subordinated Debt Securities. By reason of such subordination,
in the event of insolvency, creditors of Worthington who are holders of Senior
Indebtedness, as well as certain general creditors of Worthington, may recover
more, ratably, than the holders of the Subordinated Debt Securities.
EVENTS OF DEFAULT AND REMEDIES
The following events are defined in the Indenture as "Events of Default"
with respect to a series of Debt Securities:
(a) Default in the payment of any installment of interest on any Debt
Securities of that series as and when the same shall become due and payable
and continuance of such default for a period of 30 days;
(b) Default in the payment of principal or premium with respect to any
Debt Securities of that series as and when the same become due and payable,
whether at maturity, upon redemption, by declaration, upon required
repurchase, or otherwise;
(c) Default in the payment of any sinking fund payment with respect to
any Debt Securities of that series as and when the same shall become due
and payable;
(d) Failure on the part of Worthington to comply with the provisions
of the Indenture relating to consolidations, mergers and sales of assets;
(e) Failure on the part of Worthington duly to observe or perform any
other of the covenants or agreements on the part of Worthington in the Debt
Securities of that series, in any resolution of the Board of Directors of
Worthington authorizing the issuance of that series of Debt Securities, in
the Indenture with respect to such series, or in any supplemental Indenture
with respect to such series (other than a covenant a default in the
performance of which is otherwise specifically dealt with) continuing for a
period of 60 days after the date on which written notice specifying such
failure and requiring Worthington to remedy the same shall have been given
to Worthington by the Trustee or to Worthington and the Trustee by the
holders of at least 25% in aggregate principal amount of the Debt
Securities of that series at the time outstanding;
(f) Indebtedness of Worthington or any Subsidiary of Worthington is
not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default, the total amount
of such Indebtedness unpaid or accelerated exceeds $20 million or the
United States dollar equivalent thereof at the time, and such default
remains uncured or such acceleration is not rescinded for 10 days after the
date on which written notice specifying such failure and requiring
Worthington to remedy the same shall have been given to Worthington by the
Trustee or to Worthington and the Trustee by the holders of at least 25% in
aggregate principal amount of the Debt Securities of that series at the
time outstanding;
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<PAGE> 26
(g) Worthington or any of its Restricted Subsidiaries shall (1)
voluntarily commence any proceeding or file any petition seeking relief
under the United States Bankruptcy Code or other federal or state
bankruptcy, insolvency, or similar law, (2) consent to the institution of,
or fail to controvert within the time and in the manner prescribed by law,
any such proceeding or the filing of any such petition, (3) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator,
or similar official for Worthington or any such Restricted Subsidiary or
for a substantial part of its property, (4) file an answer admitting the
material allegations of a petition filed against it in any such proceeding,
(5) make a general assignment for the benefit of creditors, (6) admit in
writing its inability or fail generally to pay its debts as they become
due, (7) take corporate action for the purpose of effecting any of the
foregoing, or (8) take any comparable action under any foreign laws
relating to insolvency;
(h) The entry of an order or decree by a court having competent
jurisdiction for (1) relief with respect to Worthington or any of its
Restricted Subsidiaries or a substantial part of any of their property
under the United States Bankruptcy Code or any other federal or state
bankruptcy, insolvency, or similar law, (2) the appointment of a receiver,
trustee, custodian, sequestrator, or similar official for Worthington or
any such Restricted Subsidiary or for a substantial part of any of their
property (except any decree or order appointing such official of any
Restricted Subsidiary pursuant to a plan under which the assets and
operations of such Restricted Subsidiary are transferred to or combined
with another Restricted Subsidiary or Subsidiaries of Worthington or to
Worthington), or (3) the winding-up or liquidation of Worthington or any
such Restricted Subsidiary (except any decree or order approving or
ordering the winding-up or liquidation of the affairs of a Restricted
Subsidiary pursuant to a plan under which the assets and operations of such
Restricted Subsidiary are transferred to or combined with another
Restricted Subsidiary or Subsidiaries of Worthington or to Worthington),
and such order or decree shall continue unstayed and in effect for 60
consecutive days, or any similar relief is granted under any foreign laws
and the order or decree stays in effect for 60 consecutive days;
(i) Any judgment or decree for the payment of money in excess of $20
million or the United States dollar equivalent thereof at the time is
entered against Worthington or any Subsidiary of Worthington by a court of
competent jurisdiction, which judgment is not covered by insurance, and is
not discharged and either (1) an enforcement proceeding has been commenced
by any creditor upon such judgment or decree or (2) there is a period of 60
days following the entry of such judgment or decree during which such
judgment or decree is not discharged or waived or the execution thereof
stayed and, in either case, such default continues for 10 days after the
date on which written notice specifying such failure and requiring
Worthington to remedy the same shall have been given to Worthington by the
Trustee or to Worthington and the Trustee by the holders of at least 25% in
aggregate principal amount of the Debt Securities of that series at the
time outstanding; and
(j) Any other Event of Default provided with respect to Debt
Securities of that series.
An Event of Default with respect to one series of Debt Securities is not
necessarily an Event of Default for another series.
If an Event of Default described in clause (a), (b), (c), (d), (e), (f),
(i), or (j) above occurs and is continuing with respect to any series of Debt
Securities, unless the principal and interest with respect to all the Debt
Securities of such series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Debt Securities of such series then outstanding may declare the principal of
(or, if Original Issue Discount Debt Securities, such portion of the principal
amount as may be specified in such series) and interest on all the Debt
Securities of such series due and payable immediately. If an Event of Default
described in clause (g) or (h) above occurs, unless the principal and interest
with respect to all the Debt Securities of the series shall have become due and
payable, the principal of (or, if any series are Original Issue Discount Debt
Securities, such portion of the principal amount as may be specified in such
series) and interest on all
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<PAGE> 27
Debt Securities of all series then outstanding shall become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any holder of Debt Securities.
If an Event of Default occurs and is continuing, the Trustee shall be
entitled and empowered to institute any action or proceeding for the collection
of the sums so due and unpaid or to enforce the performance of any provision of
the Debt Securities of the affected series or the Indenture, to prosecute any
such action or proceeding to judgment or final decree, and to enforce any such
judgment or final decree against Worthington or any other obligor on the Debt
Securities of such series. In addition, if there shall be pending proceedings
for the bankruptcy or reorganization of Worthington or any other obligor on the
Debt Securities, or if a receiver, trustee, or similar official shall have been
appointed for its property, the Trustee shall be entitled and empowered to file
and prove a claim for the whole amount of principal, premium, and interest (or,
in the case of Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms of such series) owing and
unpaid with respect to the Debt Securities. No holder of any Debt Security of
any series shall have any right to institute any action or proceeding upon or
under or with respect to the Indenture, for the appointment of a receiver or
trustee, or for any other remedy, unless (a) such holder previously shall have
given to the Trustee written notice of an Event of Default with respect to Debt
Securities of that series and of the continuance thereof, (b) the holders of not
less than 25% in aggregate principal amount of the outstanding Debt Securities
of that series shall have made written request to the Trustee to institute such
action or proceeding with respect to such Event of Default and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses, and liabilities to be incurred therein or thereby, and (c) the
Trustee, for 60 days after its receipt of such notice, request, and offer of
indemnity shall have failed to institute such action or proceeding and no
direction inconsistent with such written request shall have been given to the
Trustee pursuant to the provisions of the Indenture.
Prior to the acceleration of the maturity of the Debt Securities of any
series, the holders of a majority in aggregate principal amount of the Debt
Securities of that series at the time outstanding may, on behalf of the holders
of all Debt Securities of that series, waive any past default or Event of
Default and its consequences for that series, except (a) a default in the
payment of the principal, premium, or interest with respect to such Debt
Securities or (b) a default with respect to a provision of the Indenture that
cannot be amended without the consent of each holder affected thereby. In case
of any such waiver, such default shall cease to exist, any Event of Default
arising therefrom shall be deemed to have been cured for all purposes, and
Worthington, the Trustee, and the holders of the Debt Securities of that series
shall be restored to their former positions and rights under the Indenture.
The Trustee shall, within 90 days after the occurrence of a default known
to it with respect to a series of Debt Securities, give to the holders of the
Debt Securities of such series notice of all uncured defaults with respect to
such series known to it, unless such defaults shall have been cured or waived
before the giving of such notice; provided, however, that except in the case of
default in the payment of principal, premium, or interest with respect to the
Debt Securities of such series or in the making of any sinking fund payment with
respect to the Debt Securities of such series, the Trustee shall be protected in
withholding such notice if it in good faith determines that the withholding of
such notice is in the interest of the holders of such Debt Securities.
MODIFICATION OF THE INDENTURE
Worthington and the Trustee may enter into supplemental indentures without
the consent of the holders of Debt Securities issued under the Indenture for one
or more of the following purposes:
(a) To evidence the succession of another person to Worthington
pursuant to the provisions of the Indenture relating to consolidations,
mergers, and sales of assets and the assumption by such successor of the
covenants, agreements, and obligations of Worthington in the Indenture and
in the Debt Securities;
(b) To surrender any right or power conferred upon Worthington by the
Indenture, to add to the covenants of Worthington such further covenants,
restrictions, conditions, or provisions for the
9
<PAGE> 28
protection of the holders of all or any series of Debt Securities as the
Board of Directors of Worthington shall consider to be for the protection
of the holders of such Debt Securities, and to make the occurrence, or the
occurrence and continuance, of a default in any of such additional
covenants, restrictions, conditions, or provisions a default or an Event of
Default under the Indenture (provided, however, that with respect to any
such additional covenant, restriction, condition, or provision, such
supplemental Indenture may provide for a period of grace after default,
which may be shorter or longer than that allowed in the case of other
defaults, may provide for an immediate enforcement upon such default, may
limit the remedies available to the Trustee upon such default, or may limit
the right of holders of a majority in aggregate principal amount of any or
all series of Debt Securities to waive such default);
(c) To cure any ambiguity or to correct or supplement any provision
contained in the Indenture, in any supplemental indenture, or in any Debt
Securities that may be defective or inconsistent with any other provision
contained therein, to convey, transfer, assign, mortgage, or pledge any
property to or with the Trustee, or to make such other provisions in regard
to matters or questions arising under the Indenture as shall not adversely
affect the interests of any holders of Debt Securities of any series;
(d) To modify or amend the Indenture in such a manner as to permit the
qualification of the Indenture or any supplemental indenture under the
Trust Indenture Act as then in effect;
(e) To add or change any of the provisions of the Indenture to change
or eliminate any restrictions on the payment or principal or premium with
respect to Debt Securities so long as any such action does not adversely
affect the interests of the holders of Debt Securities in any material
respect or permit or facilitate the issuance of Debt Securities of any
series in uncertificated form;
(f) To comply with the provisions of the Indenture relating to
consolidations, mergers, and sales of assets;
(g) To add guarantees with respect to the Debt Securities or to secure
the Debt Securities;
(h) To make any change that does not adversely affect the rights of
any holder;
(i) To add to, change, or eliminate any of the provisions of the
Indenture with respect to one or more series of Debt Securities, so long as
any such addition, change, or elimination not otherwise permitted under the
Indenture shall (1) neither apply to any Debt Security of any series
created prior to the execution of such supplemental indenture and entitled
to the benefit of such provision nor modify the rights of the holders of
any such Debt Security with respect to such provision or (2) become
effective only when there is no such Debt Security outstanding;
(j) To evidence and provide for the acceptance of appointment by a
successor or separate Trustee with respect to the Debt Securities of one or
more series and to add to or change any of the provisions of the Indenture
as shall be necessary to provide for or facilitate the administration of
the Indenture by more than one Trustee; and
(k) To establish the form or terms of Debt Securities of any series,
as described under "Description of Debt Securities -- General" above.
With the consent of the holders of a majority in aggregate principal amount
of the outstanding Debt Securities of each series affected thereby, Worthington
and the Trustee may from time to time and at any time enter into a supplemental
indenture for the purpose of adding any provisions to, changing in any manner,
or eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the Debt
Securities of such series; provided, however, that without the consent of the
holders of each Debt Security so affected, no such supplemental indenture shall
(a) reduce the percentage in principal amount of Debt Securities of any series
whose holders must consent to an amendment, (b) reduce the rate of or extend the
time for payment of interest on any Debt Security, (c) reduce the principal of
or extend the stated maturity of any Debt Security,
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(d) reduce the premium payable upon the redemption of any Debt Security or
change the time at which any Debt Security may or shall be redeemed, (e) make
any Debt Security payable in a currency other than that stated in the Debt
Security, (f) release any security that may have been granted with respect to
the Debt Securities, or (g) make any change in the provisions of the Indenture
relating to waivers of defaults or amendments that require unanimous consent.
CONSOLIDATION, MERGER, AND SALE OF ASSETS
Worthington may not consolidate with or merge with or into any person, or
convey, transfer, or lease all or substantially all of its assets, unless the
following conditions have been satisfied:
(a) Either (1) Worthington shall be the continuing person in the case
of a merger or (2) the resulting, surviving, or transferee person, if other
than Worthington (the "Successor Company"), shall be a corporation
organized and existing under the laws of the United States, any State, or
the District of Columbia and shall expressly assume all of the obligations
of Worthington under the Debt Securities and the Indenture;
(b) Immediately after giving effect to such transaction (and treating
any Indebtedness that becomes an obligation of the Successor Company or any
subsidiary of Worthington as a result of such transaction as having been
incurred by the Successor Company or such subsidiary at the time of such
transaction), no Default or Event of Default would occur or be continuing;
and
(c) Worthington shall have delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that such
consolidation, merger, or transfer complies with the Indenture.
SATISFACTION AND DISCHARGE OF THE INDENTURE; DEFEASANCE
The Indenture shall generally cease to be of any further effect with
respect to a series of Debt Securities if (a) Worthington has delivered to the
Trustee for cancellation all Debt Securities of such series (with certain
limited exceptions) or (b) all Debt Securities of such series not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year, and Worthington shall have deposited with the
Trustee as trust funds the entire amount in the currency in which the Debt
Securities are denominated sufficient to pay at maturity or upon redemption all
such Debt Securities (and if, in either case, Worthington shall also pay or
cause to be paid all other sums payable under the Indenture by Worthington).
In addition, Worthington shall have a "legal defeasance option" (pursuant
to which it may terminate, with respect to the Debt Securities of a particular
series, all of its obligations under such Debt Securities and the Indenture with
respect to such Debt Securities) and "covenant defeasance option" (pursuant to
which it may terminate, with respect to the Debt Securities of a particular
series, its obligations with respect to such Debt Securities under certain
specified covenants contained in the Indenture). If Worthington exercises its
legal defeasance option with respect to a series of Debt Securities, payment of
such Debt Securities may not be accelerated because of an Event of Default. If
Worthington exercises its covenant defeasance option with respect to a series of
Debt Securities, payment of such Debt Securities may not be accelerated because
of an Event of Default related to the specified covenants.
Worthington may exercise its legal defeasance option or its covenant
defeasance option with respect to the Debt Securities of a series only if (a)
Worthington irrevocably deposits in trust with the Trustee cash or U.S.
Government Obligations (as defined in the Indenture) for the payment of
principal, premium, and interest with respect to such Debt Securities to
maturity or redemption, as the case may be, (b) Worthington delivers to the
Trustee a certificate from a nationally recognized firm of independent
accountants expressing their opinion that the payments of principal and interest
when due and without reinvestment on the deposited U.S. Government Obligations
plus any deposited money without investment will provide cash at such times and
in such amounts as will be sufficient to pay the principal,
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<PAGE> 30
premium, and interest when due with respect to all the Debt Securities of such
series to maturity or redemption, as the case may be, (c) 123 days pass after
the deposit is made and during the 123-day period no default described in clause
(g) or (h) under "Description of Debt Securities -- Events of Default and
Remedies" above with respect to Worthington occurs that is continuing at the end
of such period, (d) no Default has occurred and is continuing on the date of
such deposit and after giving effect thereto, (e) the deposit does not
constitute a default under any other agreement binding on Worthington, (f)
Worthington delivers to the Trustee an opinion of counsel to the effect that the
trust resulting from the deposit does not constitute, or is qualified as, a
regulated investment company under the Investment Company Act of 1940, (g)
Worthington shall have delivered to the Trustee an opinion of counsel addressing
certain federal income tax matters relating to the defeasance, and (h)
Worthington delivers to the Trustee an officers' certificate and an opinion of
counsel, each stating that all conditions precedent to the defeasance and
discharge of the Debt Securities of such series as contemplated by the Indenture
have been complied with.
The Trustee shall hold in trust cash or U.S. Government Obligations
deposited with it as described above and shall apply the deposited cash and the
proceeds from deposited U.S. Government Obligations to the payment of principal,
premium, and interest with respect to the Debt Securities of the defeased
series.
THE TRUSTEE
Worthington may maintain banking and other commercial relationships with
the Trustee and its affiliates in the ordinary course of business and the
Trustee may own Debt Securities.
PLAN OF DISTRIBUTION
Worthington may sell the Debt Securities in the following ways: (i) through
agents; (ii) through underwriters; (iii) through dealers; and (iv) directly to
purchasers.
Offers to purchase the Debt Securities may be solicited by agents
designated by Worthington from time to time. Any such agent, who may be deemed
to be an underwriter as that term is defined in the Securities Act, involved in
the offer or sale of the Debt Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by Worthington to such
agent 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.
If any underwriters are utilized in the sale, Worthington will enter into
an underwriting agreement with such underwriters at the time of sale to them and
the names of the underwriters and the terms of the transaction will be set forth
in the Prospectus Supplement, which will be used by the underwriters to make
resales to the public of the Debt Securities in respect of which this Prospectus
is delivered.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, Worthington will sell such Debt Securities
to the dealer, as principal. The dealer may then resell such Debt Securities to
the public at varying prices to be determined by such dealer at the time of
resale.
Agents, dealers and underwriters may be entitled under agreements entered
into with Worthington to indemnification by Worthington against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such agents, dealers or underwriters may be
required to make in respect thereof. Agents, dealers and underwriters may be
customers of, engage in transactions with, or perform services for Worthington
in the ordinary course of business.
If so indicated in the Prospectus Supplement, Worthington will authorize
agents and underwriters or dealers to solicit offers by certain purchasers to
purchase the Debt Securities from Worthington at the public offering price set
forth in the Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. Such
contracts will be subject to
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<PAGE> 31
only those conditions set forth in the Prospectus Supplement, and the Prospectus
Supplement will set forth the commission payable for solicitation of such
offers.
VALIDITY OF DEBT SECURITIES
The validity of the Debt Securities will be passed upon for Worthington by
Dale T. Brinkman, General Counsel of Worthington. Mr. Brinkman beneficially owns
10,702 shares of Worthington's Common Stock and also has exercisable options to
purchase an additional 24,250 shares of Worthington's Common Stock. Pursuant to
its By-laws, Worthington is required to indemnify Mr. Brinkman to the fullest
extent permitted by Delaware law against any expenses actually and reasonably
incurred by him in connection with any action, suit or proceeding in which he is
made party by reason of his being an officer of Worthington.
EXPERTS
The consolidated financial statements and financial statement schedule of
Worthington (Worthington Industries, Inc. and Subsidiaries) at May 31, 1995 and
1994, and for each of the three years in the period ended May 31, 1995,
incorporated by reference or, in the case of the financial statement schedule,
included in Worthington Industries, Inc.'s Annual Report on Form 10-K for the
year ended May 31, 1995, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon incorporated by reference or, in
the case of their report on the financial statement schedule, included therein
and incorporated herein by reference. Such consolidated financial statements and
schedule are incorporated herein by reference in reliance upon such reports
given upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Dietrich Industries, Inc. and
subsidiaries incorporated in this Prospectus by reference from Worthington
Industries, Inc.'s Amendment No. 1 to Current Report on Form 8-K/A dated April
19, 1996 have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated herein by reference, and have been
so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
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NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION, OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED
IN THIS PROSPECTUS SUPPLEMENT, AND THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY WORTHINGTON OR THE UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL
UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF WORTHINGTON SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS ARE NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITY IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Company........................... S-3
Selected Financial Information........ S-7
Use of Proceeds....................... S-8
Capitalization........................ S-8
Description of Notes.................. S-9
Underwriting.......................... S-17
Legal Matters......................... S-17
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Company........................... 3
Use of Proceeds....................... 3
Ratio of Earnings to Fixed Charges.... 3
Description of Debt Securities........ 4
Plan of Distribution.................. 12
Validity of Debt Securities........... 13
Experts............................... 13
</TABLE>
======================================================
======================================================
$150,000,000
WORTHINGTON
INDUSTRIES, INC.
6.70% NOTES DUE 2009
[WORTHINGTON IND. LOGO]
------------
PROSPECTUS SUPPLEMENT
DECEMBER 9, 1997
(INCLUDING PROSPECTUS
DATED MAY 14, 1996)
------------
SALOMON SMITH BARNEY
MERRILL LYNCH & CO.
NATIONSBANC MONTGOMERY
======================================================
