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As filed with the Securities and Exchange Commission on September 14, 1995
REGISTRATION NO. 33-61541
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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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RPM, INC.
(Exact name of registrant as specified in its charter)
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Ohio 2851 34-6550857
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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2628 Pearl Road Thomas C. Sullivan
P.O. Box 777 Chairman and Chief Executive Officer
Medina, Ohio 44258 RPM, Inc.
(216) 273-5090 2628 Pearl Road
(Address, including zip code, P.O. Box 777
and telephone number, including Medina, Ohio 44258
area code, of registrant's (216) 273-5090
principal executive offices) (Name, address, including zip code, and
telephone number, including area code,
of agent for service)
___________
Copies of communications to:
William A. Papenbrock, Esq.
Calfee, Halter & Griswold
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114
(216) 622-8200
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [ ]
_______________
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.
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RPM, INC.
CROSS REFERENCE SHEET
Furnished Pursuant to Item 501(b) of Regulation S-K
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Form S-4 Item Number and Caption Location in Prospectus
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1. Forepart of Registration Statement and Outside
Front Page of Prospectus . . . . . . . . Forepart of the Registration Statement and Outside
Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus . . . . . . . . . . . . . . . Inside Front Cover Page and Outside Back Cover
Pages of Prospectus
3. Risk Factors and Ratio of Earnings to Fixed
Charges, and Other Information . . . . . Prospectus Summary; The Company; Risk Factors
4. Terms of the Transaction . . . . . . . . . . Prospectus Summary; The Exchange Offer; Certain
Federal Income Tax Consequences; Description
of Notes
5. Pro Forma Financial Information . . . . . . Prospectus Summary; Selected Financial Data
6. Material Contracts with the Company Being
Acquired . . . . . . . . . . . . . . . . *
7. Additional Information Required for Reoffering
by Persons and Parties Deemed to be
Underwriters . . . . . . . . . . . . . . *
8. Interests of Named Expert and Counsel . . . Legal Matters; Independent Public Accountants
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities . . . . . . . . . . . . . . *
10. Information with Respect to S-3 Registrants *
11. Incorporation of Certain Information by
Reference . . . . . . . . . . . . . . . Incorporation of Certain Documents by Reference
12. Information with Respect to S-2 or S-3
Registrants . . . . . . . . . . . . . . *
13. Incorporation of Certain Information by
Reference . . . . . . . . . . . . . . . *
14. Information with Respect to Registrants Other
than S-3 or S-2 Registrants . . . . . . *
15. Information with Respect to S-3 Companies . *
16. Information with Respect to S-2 or S-3
Companies . . . . . . . . . . . . . . . *
17. Information with Respect to Companies Other
than S-2 or S-3 Companies . . . . . . . *
18. Information if Proxies, Consents or
Authorizations are to be Solicited . . . *
19. Information if Proxies, Consents or
Authorizations are not to be Solicited or
in an Exchange Offer . . . . . . . . . . Incorporated by reference to the Registrant's
Annual Report on Form 10-K for the fiscal year
ended May 31, 1995
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*Not applicable or answer thereto is negative.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
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Subject to Completion, Dated September 14, 1995
OFFER TO EXCHANGE -- PROSPECTUS
RPM, INC. LOGO
Offer to Exchange
its
7.0% Senior Notes Due 2005
($150,000,000 principal amount outstanding)
for 7.0% Senior Exchange Notes Due 2005
($150,000,000 principal amount)
____________
The Exchange Offer and withdrawal rights will expire at 5:00 P.M., New
York City time, on ______________, 1995, unless extended.
____________
RPM, Inc., an Ohio corporation (the "Company" or "RPM"), hereby
offers, upon the terms and subject to the conditions set forth in this Offer to
Exchange -- Prospectus (the "Prospectus") and the accompanying Letter of
Transmittal (which together constitute the "Exchange Offer"), to exchange its
7.0% Senior Exchange Notes Due 2005 (the "New Notes") for an equal principal
amount of its outstanding 7.0% Senior Notes Due 2005 (the "Old Notes"), of
which $150,000,000 principal amount is outstanding as of the date hereof. The
Old Notes and New Notes are collectively referred to herein as the "Notes."
The form and terms of the New Notes are the same as the form and terms of the
Old Notes except that (i) the Company's offer and exchange of the New Notes
will have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), and, therefore, the New Notes will not bear legends
restricting their transfer and (ii) holders of New Notes will not be entitled
to certain rights under the Registration Rights Agreement (as hereinafter
defined), which rights will terminate when the Exchange Offer is consummated.
The New Notes will evidence the same debt as the Old Notes (which they replace)
and will be issued under and be entitled to the benefits of the indenture
governing the Old Notes, dated as of June 1, 1995 (the "Indenture"). See "The
Exchange Offer" and "Description of Notes."
The Company will accept for exchange any and all validly tendered Old
Notes on or prior to 5:00 p.m. New York City time, on ______________, 1995 (if
and as extended, the "Expiration Date"). Tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date.
The Exchange Offer is not conditioned upon any minimum principal amount of Old
Notes being tendered for exchange. Old Notes may be tendered only in integral
multiples of $1,000.
____________
SEE "RISK FACTORS" ON PAGE 18 FOR A DISCUSSION OF CERTAIN FACTORS
WHICH INVESTORS SHOULD CONSIDER IN CONNECTION WITH THE EXCHANGE OFFER AND AN
INVESTMENT IN THE NEW NOTES.
(continued on following page)
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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. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
____________
The date of this Offer to Exchange -- Prospectus is ______________, 1995.
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The Old Notes were sold by the Company on June 20, 1995 to Chase
Securities, Inc. and Bear, Stearns & Co. Inc. (the "Initial Purchasers") in a
transaction exempt from registration under the Securities Act. The Initial
Purchasers subsequently placed the Old Notes with qualified institutional
buyers in reliance upon Rule 144A under the Securities Act or with
institutional accredited buyers within the meaning of subparagraph (a)(1), (2),
(3) or (7) of Rule 501 under the Securities Act. Accordingly, the Old Notes
may not be reoffered, resold or otherwise transferred in the United States
unless so registered or unless an applicable exemption from the registration
requirements of the Securities Act is available. The New Notes are being
offered hereunder in order to satisfy the obligations of the Company under the
Registration Rights Agreement. See "The Exchange Offer--Purpose and Effect of
the Exchange Offer."
Based on certain interpretive letters issued by the Staff of the
Division of Corporation Finance of the Securities and Exchange Commission (the
"Commission") to third parties, the Company believes that the New Notes issued
pursuant to the Exchange Offer may be offered for resale, resold and otherwise
transferred by any holder thereof (other than (i) a broker-dealer who acquired
Old Notes directly from the Company for resale pursuant to Rule 144A or any
other available exemption under the Securities Act or (ii) a person who is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act) without further compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New Notes are acquired in
the ordinary course of such holder's business and such holder has no
arrangement or understanding with any person to participate in the distribution
of such New Notes. Holders of Old Notes wishing to accept the Exchange Offer
must represent to the Company that such conditions have been met.
Each broker-dealer that receives New Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of New Notes received in exchange for Old Notes where such Old
Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that it will
make this Prospectus available to any broker-dealer for use in connection with
any such resale. See "Plan of Distribution."
As of the Record Date (as hereinafter defined), there were two
registered holders of the Old Notes and Cede & Co., as nominee for The
Depository Trust Company, New York, New York ("DTC"). DTC held Old Notes for
certain of its participants. The Company believes that no such holder is an
affiliate (as such term is defined in Rule 405 under the Securities Act) of the
Company. There previously has been only a limited secondary market and no
public market for the Old Notes. The Old Notes are eligible for trading in the
Private Offering, Resales and Trading through Automatic Linkages ("PORTAL")
market. The Company does not intend to list the New Notes on any securities
exchange or to seek approval for quotation through any automated quotation
system. Therefore, there can be no assurance that an active market for the
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New Notes will develop. If such a trading market develops for the New Notes,
future trading prices will depend on many factors, including, among other
things, prevailing interest rates, the Company's results of operations and the
market for similar securities. Depending on such factors, the New Notes may
trade at a discount from their face value. See "Risk Factors--Lack of Public
Market for New Notes."
The Company will not receive any proceeds from this offering, but,
pursuant to the Registration Rights Agreement, the Company will bear certain
offering expenses. No underwriter is being utilized in connection with the
Exchange Offer.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH
THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH
THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
Holders of Old Notes whose Old Notes are not tendered and accepted in
the Exchange Offer will continue to hold such Old Notes and will be entitled to
all the rights and preferences and will be subject to the limitations
applicable thereto under the Indenture, and with respect to transfer, under the
Securities Act. To the extent that Old Notes are tendered and accepted in the
Exchange Offer, the trading market for untendered and tendered but unaccepted
Old Notes could be adversely affected.
The New Notes will be available initially only in book-entry form.
The Company expects that the New Notes issued pursuant to this Exchange Offer
will be issued in the form of one or more fully registered global notes, which
will be deposited with, or on behalf of, DTC and registered in the its name or
in the name of Cede & Co., its nominee. Beneficial interests in the global
notes representing the New Notes will be shown on, and transfers thereof will
be effected only through, records maintained by DTC and its participants.
After the initial issuance of each global note, New Notes in certificated form
will be issued in exchange for the global note only as set forth in the
Indenture. See "Description of Notes--Book-Entry, Delivery and Form."
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street N.W., Washington D.C. 20549;
Seven World Trade Center, 13th Floor, New York, New York 10007; and 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material can be
obtained at prescribed rates from the Public Reference Section of the
Commission, 450 Fifth Street N.W., Washington, D.C. 20549.
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The Company has filed with the Commission a Registration Statement on
Form S-4 (herein, together with all amendments thereto, referred to as the
"Registration Statement") under 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 hereby made to the
Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the
Commission and are incorporated herein by reference: (i) the Company's Annual
Report on Form 10-K for the fiscal year ended May 31, 1995; and (ii) the
Company's Current Report on Form 8-K dated July 24, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the Exchange Offer shall be deemed to be incorporated in
this Prospectus by reference and to be a part hereof from the date of filing of
such documents. Any statement contained herein or in a document 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. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus has been delivered, on the written or oral request of such
person, a copy of any or all of the documents which have been or may be
incorporated in this Prospectus by reference (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference in
any such documents) and a copy of any or all other contracts or documents which
are referred to herein. Requests for such copies should be directed to RPM,
Inc., P.O. Box 777, 2628 Pearl Road, Medina, Ohio 44258, Attn: Paul A.
Granzier, Vice President, General Counsel and Secretary, telephone (216)
273-5090.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information and financial statements, including the notes thereto,
appearing elsewhere in this Prospectus. Unless the context otherwise requires,
the terms "Company" and "RPM" as used in this Prospectus refer to RPM, Inc. and
its subsidiaries. Investors should carefully consider the information set
forth under the heading "Risk Factors."
THE COMPANY
General. RPM operates principally in one business segment, the
manufacture and marketing of protective coatings. These protective coatings
products are used for both industrial and consumer applications. For
industrial applications, RPM manufactures and markets coatings for
waterproofing and general maintenance, corrosion control and other specialty
chemical applications. For consumer applications, RPM manufactures
do-it-yourself products for the home maintenance, automotive repair, and
consumer hobby and leisure markets. RPM's consumer brands, such as Testors,
Rust-Oleum, Bondo, Wolman, Bondex and Zinsser are long-established household
names.
RPM, through its operating companies, serves niche markets within
these broader categories, thus providing a foundation for its strategy of
growth through product line extensions. RPM markets its products in
approximately 110 countries and operates manufacturing facilities in 45
locations in the United States, Belgium, Canada, Luxembourg and The
Netherlands.
The Company's executive offices are located at 2628 Pearl Road, P.O.
Box 777, Medina, Ohio 44258 and its telephone number is (216) 273-5090.
Acquisition of Narragansett/DSI Acquisition Co., Inc. On September
21, 1995, the Company acquired Narragansett/DSI Acquisition Co., Inc., a
Delaware corporation ("NDSI"), through the merger (the "Merger") of the
Company's wholly owned subsidiary, RPM of Delaware, Inc., a Delaware
corporation, with and into NDSI, whereby NDSI became a wholly owned subsidiary
of the Company. For further information regarding the Company's acquisition of
NDSI, see the Company's Current Report on Form 8-K dated July 24, 1995, which
is incorporated herein by reference.
NDSI is a non-operating holding company with one direct wholly owned
operating subsidiary, Dryvit Systems, Inc., a Rhode Island corporation
("Dryvit"). Dryvit manufactures, distributes and markets insulated, exterior
wall materials which are used in both new and retrofit construction.
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TERMS OF THE EXCHANGE OFFER
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7.0% Senior Notes Due 2005 . . . . . . . . . . . . The Old Notes were sold by the Company on June 20, 1995 (the "Issue
Date" or "Closing Date"), pursuant to a Purchase Agreement, dated as of
June 15, 1995 (the "Purchase Agreement"), by and among the Company, and
Chase Securities, Inc. and Bear, Stearns & Co. Inc., the initial purchasers
of the Old Notes (the "Initial Purchasers").
Registration Rights . . . . . . . . . . . . . . . . Pursuant to the Purchase Agreement, the Company and the Initial Purchasers
entered into a Registration Rights Agreement, dated as of June 20, 1995
(the "Registration Rights Agreement"), which grants the holders of the Old
Notes certain exchange and registration rights. This Exchange Offer is
intended to satisfy such exchange rights which terminate upon consummation
of the Exchange Offer.
The Exchange Offer . . . . . . . . . . . . . . . . The Company is offering to exchange $1,000 principal amount of its New
Notes for each $1,000 principal amount of its outstanding Old Notes that
are properly tendered and accepted. As of the date of this Prospectus
$150,000,000 in aggregate principal amount of the Old Notes are
outstanding. As of the Record Date, there were two registered holders of
Old Notes.
Based on the position of the Staff of the Division of Corporation Finance
of the Commission set forth in certain interpretive letters addressed to
third parties, the Company believes that New Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for resale, resold
and otherwise transferred by any holder thereof (other than (i) a broker-
dealer who acquired Old Notes directly from the Company for resale pursuant
to Rule 144A or any other available exemption under the Securities Act or
(ii) any person who is an
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"affiliate" of the Company within the meaning of Rule 405 under the Securities Act)
without further compliance with the registration and prospectus delivery provisions of
the Securities Act, provided that such New Notes are acquired in the ordinary course of
such holder's business and that such holder does not intend to participate and has no
arrangement or understanding with any person to participate in the distribution of such
New Notes.
Each broker-dealer that receives New Notes for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection with
Prospectus (the "Letter of Transmittal") states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it may
be amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Old Notes where such
Old Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that it will make
this Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution."
Any holder of Old Notes who tenders in the Exchange Offer with the intention to
participate, or for the purpose of participating, in a distribution of the New Notes
could not rely on the position of the Staff of the Division of Corporation Finance
of the Commission enunciated in interpretive letters addressed to third parties and,
in the absence of an exemption therefrom, must comply with the registration and
prospectus
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delivery requirements of the Securities Act in connection with any resale
transaction. Failure to comply with such requirements in such instance
may result in such holder incurring liability under the Securities Act for
which the holder is not indemnified by the Company.
Expiration Date . . . . . . . . . . . . . . . . . . 5:00 p.m., New York City time, on _____ 1995. See "The Exchange Offer--
Terms of the Exchange Offer, Expiration Date; Termination."
Accrued Interest on the
New Notes and Old Notes . . . . . . . . . . . . . . The New Notes will bear interest from their respective issuance dates at
the same rate and upon the same terms as the Old Notes. Holders whose Old
Notes are accepted for exchange will receive accrued and unpaid interest
thereon to, but not including, the issuance date of the New Notes and will
be deemed to have waived the right to receive any payment in respect of
interest on the Old Notes accrued from and after the date of issuance of
the New Notes. Accrued but unpaid interest on the Old Notes will be
payable with the first interest payment on the New Notes.
Procedures for Tendering
Old Notes . . . . . . . . . . . . . . . . . . . . . Each holder of Old Notes desiring to accept the Exchange Offer must
complete and sign the Letter of Transmittal or a facsimile thereof, in
accordance with the instructions contained herein and therein, and mail or
deliver the Letter of Transmittal, together with the Old Note and any other
required documents to the Exchange Agent (as hereinafter defined) at the
address set forth herein and in the Letter of Transmittal on or prior to
the Expiration Date. By executing the Letter of Transmittal, each holder
will represent to the Company that, among other things, the New Notes
acquired pursuant to the Exchange Offer are being obtained in the
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ordinary course of business of the person receiving such New Notes, whether
or not such person is the holder, that neither the holder nor any such
other person has any arrangement or understanding with any person to
participate in the distribution of such New Notes and that neither the
holder nor any such other person is an "affiliate," as defined under Rule
405 of the Securities Act.
Untendered Old Notes . . . . . . . . . . . . . . . Following the consummation of the Exchange Offer, holders of Old Notes
eligible to participate but who do not tender their Old Notes will not have
any further registration rights and such Old Notes will continue to be
subject to certain restrictions on transfer. Accordingly, the liquidity of
the market for such Old Notes could be adversely affected.
Shelf Registration Statement . . . . . . . . . . . (i) If, because of any change in law or applicable interpretations thereof
by the Division of Corporation Finance of the Staff of the Commission, the
Company is not permitted to effect the Exchange Offer, (ii) if the Exchange
Offer Registration Statement (as hereinafter defined) is not declared
effective by October 19, 1995, or (iii) upon the request of either Initial
Purchaser following the consummation of the Exchange Offer (with respect to
any Old Notes which were acquired directly from the Company), to the
extent such Initial Purchaser is not eligible under applicable securities
laws to participate in the Exchange Offer and in each such case such holder
has satisfied certain conditions relating to the provision of information to
the Company for use therein, the Company has agreed to register resales of
the Old Notes on a shelf registration statement (the "Shelf Registration
Statement") and use its best efforts to cause it to be declared effective
by the Commission as promptly as practicable. The Company
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has agreed to maintain the effectiveness of the Shelf Registration
Statement for a period of three (3) years to cover resales of the Old Notes
held by any such holders.
Special Procedures for
Beneficial Owners . . . . . . . . . . . . . . . . . Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who
wishes to tender should contact such registered holder promptly and
instruct such registered holder to tender on such beneficial owner's
behalf. If such beneficial owner wishes to tender on such owner's own
behalf, such owner must, prior to completing and executing the Letter of
Transmittal and delivering its Old Notes, either make appropriate
arrangements to register ownership of the Old Notes in such owner's name or
obtain a properly completed bond power from the registered holder. The
transfer of registered ownership may take considerable time.
Guaranteed Delivery Procedures . . . . . . . . . . Holders of Old Notes who wish to tender their Old Notes and (i) whose Old
Notes are not immediately available or (ii) who cannot deliver their Old
Notes, the Letter of Transmittal and any other documents required by the
Letter of Transmittal to the Exchange Agent (or comply with the procedures
for book-entry transfers) prior to the Expiration Date, must tender their
Old Notes according to the guaranteed delivery procedures set forth in
"The Exchange Offer--Guaranteed Delivery Procedures."
Withdrawal of Tenders . . . . . . . . . . . . . . . Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New
York City time, on the Expiration Date.
Acceptance of Old Notes and
Delivery of New Notes . . . . . . . . . . . . . . . Subject to the satisfaction or waiver of all conditions of the Exchange
Offer, the Company will accept for exchange any and
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all Old Notes that are properly tendered in the Exchange Offer prior to
5:00 p.m., New York City time, on the Expiration Date. The New Notes
issued pursuant to the Exchange Offer will be delivered in exchange for the
applicable Old Notes accepted in the Exchange Offer promptly following the
Expiration Date. See "The Exchange Offer--Acceptance of Old Notes for
Exchange; Delivery of New Notes."
Certain Federal Income Tax
Consequences . . . . . . . . . . . . . . . . . . . For a discussion of certain federal income tax consequences of the exchange
of the Old Notes, see "Certain Federal Income Tax Consequences."
Exchange Agent . . . . . . . . . . . . . . . . . . The First National Bank of Chicago is the exchange agent (the "Exchange
Agent"). The address and telephone number of the Exchange Agent are set
forth in "The Exchange Offer--Exchange Agent."
DESCRIPTION OF THE NEW NOTES
The Exchange Offer applies to $150,000,000 aggregate principal amount of the Old Notes. The form and terms of the New
Notes are the same as the form and terms of the Old Notes except that (i) the offer and exchange of the New Notes will have been
registered under the Securities Act and, therefore, the New Notes will not bear legends restricting the transfer thereof and (ii)
holders of the New Notes will not be entitled to certain rights of holders of Old Notes under the Registration Rights Agreement
which will terminate upon consummation of the Exchange Offer. New Notes will evidence the same indebtedness as the Old Notes
(which they replace) and will be issued under, and be entitled to the benefits of, the Indenture governing the Old Notes. See
"Description of Notes."
Securities Offered . . . . . . . . . . . . . . . . $150,000,000 aggregate principal amount of 7.0% Senior Exchange Notes due
2005.
Maturity . . . . . . . . . . . . . . . . . . . . . June 15, 2005
Payment of Interest . . . . . . . . . . . . . . . . June 15 and December 15, commencing December 15, 1995.
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Denominations . . . . . . . . . . . . . . . . . . . The New Notes will be issued in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof.
Redemption . . . . . . . . . . . . . . . . . . . . The Notes are not redeemable prior to maturity.
Ranking . . . . . . . . . . . . . . . . . . . . . . The Notes will be general unsecured obligations of the Company. The Notes
will rank on a parity in right of payment with all existing and future
unsubordinated unsecured indebtedness of the Company for borrowed money
(approximately $414 million at June 20, 1995).
Covenants . . . . . . . . . . . . . . . . . . . . . The Indenture contains certain covenants that, among other things, limit
the ability of the Company and its subsidiaries to create certain liens
upon its Principal Properties (as hereinafter defined) or upon any Equity
Interests (as hereinafter defined) of any subsidiary or engage in certain
sale and leaseback transactions. See "Description of Notes."
Events of Default . . . . . . . . . . . . . . . . . The Indenture provides that the occurrence of one of a number of certain
events will constitute an "Event of Default" under the Indenture and may
cause the principal and accrued interest on the New Notes to be due and
payable immediately. See "Description of Notes."
</TABLE>
NO PROTECTION IN EVENT OF CREDIT DECLINE
The provisions of the Indenture do not afford the holders of Notes
protection (whether in the form of a repurchase right or otherwise) in the
event of the decline in the Company's credit quality resulting from a highly
leveraged transaction, reorganization, restructuring, merger or other similar
transaction that may adversely affect the holders of the Notes.
RISK FACTORS
Investors in the Notes should carefully consider the specific factors
set forth under "Risk Factors" as well as the other information and data
included elsewhere in this Prospectus.
13
<PAGE> 17
SUMMARY FINANCIAL DATA (1) (4)
The summary historical consolidated financial data for the five years
in the period ended May 31, 1995 set forth below are principally derived from
and should be read in conjunction with, the related audited consolidated
financial statements and accompanying notes included in the Company's Annual
Report on Form 10-K for the fiscal year ended May 31, 1995.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MAY 31,
----------------------------------------------------------------------------
1995 1995
1991 1992 1993 1994 (ACTUAL) PRO FORMA(2)
------ ------ ------ ---- -------- ------------
(IN THOUSANDS EXCEPT PER SHARE AND RATIO DATA)
<S> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Net sales . . . . . $619,613 $680,091 $768,372 $815,598 $1,016,954 $1,034,043
Net income . . . . 37,435 38,481 39,498 52,640 61,099 62,349
Primary earnings per
share . . . . . . 0.72 0.73 0.74 0.93 1.07 1.09
Fully diluted earnings
per share . . . . 0.71 0.72 0.72 0.89 1.01 1.03
Other Data:
Cash dividends per
share . . . . . . 0.399 0.442 0.473 0.510 0.550 0.550
Ratio of earnings to
fixed charges (3) 4.54 4.12 4.08 6.21 4.83 4.80
Balance Sheet Data:
Working capital . . $142,581 $205,419 $191,872 $226,994 $270,226 $270,226
Total assets . . . 457,779 623,346 648,524 660,838 959,140 959,140
Short-term debt . . 21,441 7,763 21,262 1,196 643 643
Long-term debt . . 130,800 273,871 258,712 233,039 406,375 406,375
Shareholders' equity 215,471 233,360 243,899 314,476 347,591 347,591
<FN>
___________________
(1) All information presented includes the fiscal 1994 acquisitions of
Dynatron/Bondo Corporation and Stonhard, Inc. accounted for on a
pooling-of-interests basis.
(2) On June 28, 1994, the Company acquired Rust-Oleum Corporation
("Rust-Oleum"). The pro forma data reflect the combined results of
operations of the Company and Rust Oleum for the fiscal year ended May
31, 1995. The pro forma Income Statement Data and Other Data are
shown as if the acquisition had occurred on June 1, 1994. The pro
forma amounts give effect to appropriate adjustments resulting from
the combination, but are not necessarily indicative of future results
of operations or of what results would have been for the combined
companies.
(3) For purposes of the ratio of earnings to fixed charges, earnings
consist of income from operations before income taxes and fixed
charges. Fixed charges include interest and debt expense and
one-third of rents which is deemed representative of an interest
factor.
(4) As described under the caption "Acquisition of Narragansett/DSI
Acquisition Co., Inc. and its Wholly Owned Subsidiary Dryvit Systems,
Inc.," on July 24, 1995 the Company entered into the Merger Agreement
with NDSI and its securityholders pursuant to which the Company will
acquire NDSI. The pro forma data set forth in this footnote reflect
the combined results of operations of the Company and NDSI for the
fiscal year ended May 31, 1995. The pro forma amounts give effect to
appropriate adjustments resulting from the combination, but are not
necessarily indicative of future results of operations or of what
results would have been for the combined companies.
</TABLE>
<TABLE>
<CAPTION>
Fiscal Year Ended
May 31, 1995
-----------------
(In thousands, except per share data)
<S> <C>
Net sales $1,085,043
Net income 62,266
Primary earnings per share 1.03
Fully diluted earnings per share 0.98
</TABLE>
14
<PAGE> 18
ACQUISITION OF NARRAGANSETT/DSI ACQUISITION CO., INC.
AND ITS WHOLLY OWNED SUBSIDIARY DRYVIT SYSTEMS, INC.
On September 21, 1995 the Company acquired all of the issued and
outstanding securities of NDSI and its wholly owned operating subsidiary,
Dryvit, for $47 million in cash, of which approximately $14.5 million will be
used to repay indebtedness of NDSI, and the issuance of 3,200,000 Common
Shares.
NDSI is a non-operating holding company with one wholly owned
subsidiary, Dryvit. Dryvit manufactures, distributes and markets insulated,
exterior wall materials which are used in both new and retrofit construction.
For further information regarding NDSI and Dryvit, see the Company's Current
Report on Form 8-K dated July 24, 1995, which is incorporated herein by
reference.
THE COMPANY
RPM was organized in 1947 as an Ohio corporation under the name
Republic Powdered Metals, Inc. On November 9, 1971, the Company's name was
changed to RPM, Inc. As used herein, the terms "RPM" and the "Company" refer
to RPM, Inc. and its subsidiaries, unless the context indicates otherwise. The
Company has its principal executive offices at 2628 Pearl Road, P.O. Box 777,
Medina, Ohio 44258, and its telephone number is (216) 273-5090.
BUSINESS
RPM operates principally in one business segment, the manufacture and
marketing of protective coatings. These protective coatings products are used
for both industrial and consumer applications. For industrial applications,
RPM manufactures and markets coatings for waterproofing and general
maintenance, corrosion control and other specialty chemical applications. For
consumer applications, RPM manufactures do-it-yourself products for the home
maintenance, automotive repair, and consumer hobby and leisure markets. RPM's
consumer brands, such as Testors, Rust-Oleum, Bondo, Wolman, Bondex and Zinsser
are long-established household names.
RPM, through its operating companies, serves niche markets within
these broader categories, thus providing a foundation for its strategy of
growth through product line extensions. RPM markets its products in
approximately 110 countries and operates manufacturing facilities in 45
locations in the United States, Belgium, Canada, Luxembourg and The
Netherlands.
15
<PAGE> 19
INDUSTRIAL MARKETS AND PRODUCTS
WATERPROOFING AND GENERAL MAINTENANCE. Waterproofing and general
maintenance constitute RPM's original marketplace, having been served by
Republic Powdered Metals, Inc. since the Company's founding. Operating
companies and products include: REPUBLIC POWDERED METALS - heavy- duty
protective coatings and single-ply roofing systems; RUST-OLEUM NETHERLANDS B.V.
- coatings for industrial routine maintenance; MAMECO INTERNATIONAL -
sealants, deck coatings and membranes; MARTIN MATHYS - water-based coatings for
commercial and industrial maintenance; and STONHARD - high-performance polymer
floors, linings and wall systems.
CORROSION CONTROL. RPM's CARBOLINE manufactures high-performance
corrosion-resistant protective coatings, fireproofing, tank linings and floor
coatings, and markets these products to industrial, architectural and
applicator companies throughout the world. WISCONSIN PROTECTIVE COATINGS
manufactures a complete line of liquid-applied, corrosion-resistant coatings
used for extremely harsh environments, such as rail cars, tank linings and
smoke stacks.
SPECIALTY CHEMICALS. RPM's specialty chemicals businesses address
selected niche markets within this broad industry category. Specialty chemical
companies and products include: DAY-GLO COLOR - fluorescent colorants and
pigments; MOHAWK FINISHING PRODUCTS - furniture repair, cleaning and polishing
products; ALOX - chemical additives used as rust preventatives, corrosion
inhibitors, special lubricants and metal working compounds; CHEMICAL
SPECIALTIES - chemicals used for cleaning carpet, upholstery and fabric wall
covering, and chemicals used in smoke and fire restoration clean-up; and
AMERICAN EMULSIONS - dye additives for textile dyeing and finishing, and water
treatment products for the paper industry.
CONSUMER MARKETS AND PRODUCTS
CONSUMER HOBBY AND LEISURE. The hobby and leisure marketplace is
served by TESTOR, America's largest producer and marketer of model paints and
accessory items to the hobby and model market, CRAFT HOUSE, producer of
paint-by-numbers sets, basic preschool activity sets, crafts and hobby
products, and FLOQUIL/POLY S COLOR, manufacturer of hobby, art and craft
coatings. RPM's consumer hobby and leisure products are marketed through
thousands of mass merchandise, toy and hobby stores throughout North America.
CONSUMER DO-IT-YOURSELF. RPM's six primary consumer do-it-yourself
businesses are RUST-OLEUM, WM. ZINSSER, KOP-COAT, BONDEX INTERNATIONAL,
DYNATRON/BONDO and TALSOL. RUST-OLEUM manufactures high-quality
corrosion-resistant coatings for the household maintenance and light industrial
markets. WM. ZINSSER is the nation's leading producer of shellac items used as
pharmaceutical glazes, confectioner's glazes, citrus fruit coatings and wood
coatings, including a broad line of specialty primers and
16
<PAGE> 20
sealers. KOP-COAT manufactures pleasure marine coatings and compounds and
manufactures wood treatment products. BONDEX INTERNATIONAL produces a
nationwide line of household patch and repair products, in addition to basement
waterproofing products. DYNATRON/BONDO manufactures auto and marine body
filler and related products. TALSOL manufactures automotive paints and
coatings. Other consumer do-it-yourself products include fabrics, window
treatments and wall coverings sold by DESIGN/CRAFT FABRIC and RICHARD E.
THIBAUT. RPM's consumer do-it-yourself products are marketed through thousands
of mass merchandise, home center and hardware stores throughout North America.
PATENTS, TRADEMARKS AND LICENSES
No single patent, trademark (other than the registered trademarks
Day-Glo(R), Rust-Oleum(R) and Carboline(R), which are material), name or
license, or group of these rights, is material to the Company's business.
Day-Glo Color Corp., a subsidiary of the Company, is the owner of over
50 trademark registrations of the mark and name "DAY-GLO" in numerous countries
and the United States for a variety of fluorescent products. There are also
many other foreign and domestic registrations for other trademarks of the
Day-Glo Color Corp., for a total of over 100 registrations. These
registrations are valid for a variety of terms ranging from one year to twenty
years, which terms are renewable as long as the marks continue to be used.
Many of these registrations are renewed on a regular basis.
Rust-Oleum Corporation, a subsidiary of the Company, is the owner of
over 50 United States trademark registrations for the mark and name
"RUST-OLEUM" and other trademarks covering a variety of rust-preventative
coatings sold by Rust-Oleum Corporation. There are also many foreign
registrations for "RUST-OLEUM" and the other trademarks of Rust-Oleum
Corporation, for a total of nearly 400 registrations. These registrations are
valid for a variety of terms ranging from one year to twenty years, which terms
are renewable for as long as the marks continue to be used. Many of these
registrations are renewed on a regular basis.
ACQUISITION STRATEGY
Since RPM's offering of Common Shares to the public in September 1969,
the Company has made a number of significant acquisitions that have been
described in previous reports on file with the Commission. For a description
of RPM's currently pending acquisition of NDSI see "Acquisition of
Narragansett/DSI Acquisition Co., Inc. and its Wholly Owned Subsidiary Dryvit
Systems, Inc." RPM's acquisition strategy focuses on companies with high
performance and quality products which are leaders in their respective markets.
RPM expects to continue its acquisition program, although there is no assurance
that any additional acquisitions will be made.
17
<PAGE> 21
RISK FACTORS
Investors in the Notes should carefully consider the following risk
factors in addition to the other information contained in this Prospectus.
CONSEQUENCES OF FAILURE TO EXCHANGE
The untendered Old Notes of holders who do not exchange such Old Notes
pursuant to the Exchange Offer will remain restricted securities. Such Old
Notes will continue to be subject to the restrictions on transfer, as set forth
in the Confidential Offering Memorandum, dated June 15, 1995, pursuant to which
the Old Notes were originally purchased; if in the future a holder of Old Notes
decides to resell, pledge or otherwise transfer the Old Notes, such Old Notes
may be resold, pledged or transferred only (i) to the Company (upon redemption
or otherwise), (ii) so long as such security is eligible for resale pursuant to
Rule 144A, to a person whom the seller reasonably believes is a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge
or transfer is being made in reliance on Rule 144A, (iii) in an offshore
transaction in accordance with Regulation S, but only in the case of a transfer
that is effected by the delivery of the transferee of securities registered in
its name (or its nominee's name) in the books maintained by the registrar for
the Notes, (iv) pursuant to an exemption from registration under the Securities
Act provided by Rule 144 (if available) or Rule 145 under the Securities Act,
(v) in reliance on another exemption from the registration requirements of the
Securities Act but only in the case of a transfer that is effected by the
delivery to the transferee of securities registered in its name (or its
nominee's name) in the books maintained by the registrar for the Old Notes and
subject to the receipt by the registrar or co-registrar of a certification of
the transferor and an opinion satisfactory to counsel to the Company to the
effect that such transfer is in compliance with the Securities Act or (vi)
pursuant to an effective registration statement under the Securities Act, in
each case in accordance with any applicable securities laws of any state of the
United States.
The Old Notes provide that, if the Exchange Offer is not consummated
by November 17, 1995, the interest rate borne by the Old Notes will increase by
.50% per annum following November 17, 1995 until the Exchange Offer is
consummated. See "Description of Old Notes." Following consummation of the
Exchange Offer, the Old Notes will not be entitled to any increase in the
interest rate thereon. The New Notes will not be entitled to any such increase
in the interest rate thereon.
ABSENCE OF PUBLIC MARKET
The Old Notes are currently owned by a relatively small number of
beneficial owners. The Company believes that none of such holders is an
affiliate (as defined in Rule 405 under the Securities Act) of the Company.
Prior to the Exchange Offer, there has not been any public market for the
Notes, although the Old Notes are eligible for trading in the PORTAL Market.
Certain holders of Old Notes who are not eligible to participate in the
Exchange Offer are entitled to certain registration rights and the Company is
required to file the Shelf Registration
18
<PAGE> 22
Statement with respect to resales of any such Notes. The Old Notes have not
been registered under the Securities Act and will be subject to restrictions on
transferability to the extent that they are not exchanged for New Notes by
holders who are entitled to participate in this Exchange Offer. See "--
Consequences of Failure to Exchange." The Company does not intend to list the
New Notes on any national securities exchange or to seek the admission thereof
to trading in the National Association of Securities Dealers Automated
Quotation System. Accordingly, no assurance can be given that an active public
or other market will develop for the Notes or as to liquidity of or the trading
market for the Notes. If a trading market does not develop or is not
maintained, holders of the Notes may experience difficulty in reselling the
Notes or may be unable to sell them at all. If a market for the Notes
develops, any such market may be discontinued at any time. If a public trading
market develops for the Notes, future trading prices of the Notes will depend
on many factors, including, among other things, prevailing interest rates, the
Company's results of operations and the market for similar securities.
Depending on prevailing interest rates, the market for similar securities and
other factors, including the financial condition of the Company, the Notes may
trade at a discount from their principal amount.
EXCHANGE OFFER PROCEDURES
Issuance of the New Notes in exchange for the Old Notes pursuant to
the Exchange Offer will be made only after a timely receipt by the Company of
such Old Notes, a properly completed and duly executed Letter of Transmittal
and all other required documents. Therefore, holders of the Old Notes desiring
to tender such Old Notes in exchange for New Notes should allow sufficient time
to ensure timely delivery. The Company is under no duty to give notification
of defects or irregularities with respect to the tenders of Old Notes for
exchange. Old Notes that are not tendered or are tendered but not accepted
will, following the consummation of the Exchange Offer, continue to be subject
to the existing restrictions upon transfer thereof and, upon consummation of
the Exchange Offer certain registration rights under the Registration Rights
Agreement will terminate. In addition, any holder of Old Notes who tenders in
the Exchange Offer for the purpose of participating in a distribution of the
New Notes may be deemed to have received restricted securities and, if so, will
be required to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
Each broker-dealer that receives New Notes for its own account in exchange for
Old Notes, where such Old Notes were acquired by such broker-dealer as a result
of market-making activities or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of such New Notes.
See "Plan of Distribution." To the extent that Old Notes are tendered and
accepted in the Exchange Offer, the trading market for untendered and tendered
but unaccepted Old Notes could be adversely affected. See "The Exchange
Offer."
POSSIBLE RUST LIABILITIES OF NDSI
NDSI periodically receives warranty claims relating to rust spotting
and staining that appears on a customer's exterior finished wall. These rust
claims arise from the presence of impurities in the sand component of product
manufactured by NDSI's operating subsidiary,
19
<PAGE> 23
Dryvit, prior to April 1991. The impurities consisted of ferrous and pyrite
particles which developed into rust spots when exposed to seasonal weathering
conditions. The rust spots affect only the aesthetic appearance of the
building and have no impact on its structural integrity.
NDSI has implemented comprehensive quality control procedures
specifically aimed at ensuring the elimination of impurities from the
manufacturing process. The quality control procedures include independent
inspection and analysis of sand sources prior to selecting suppliers, analysis
of sand shipments before shipping and again upon arrival at the production
facilities, and the inclusion of high powered magnets in the sand handling
process at all facilities. These quality control steps were completed and in
place by April 1991. NDSI has not received any rust warranty claims relating
to product produced after April 1991. Rust warranty expense amounted to
$2,416,983 in 1994 and $1,904,302 in 1993.
However, based on their experience with reported claims, management
believes that an estimate of future claims cannot be reasonably determined,
since not all product produced prior to April 1991 contained impurities and not
all projects having rust spots will result in a claim. Significant increases
in future rust warranty claims could have an adverse impact on the Company's
results of operations.
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Old Notes were sold by the Company on June 20, 1995 to the Initial
Purchasers pursuant to the Purchase Agreement. The Initial Purchasers
subsequently placed the Old Notes with "qualified institutional buyers" in
reliance on Rule 144A under the Securities Act or to institutional "accredited"
buyers within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
under the Securities Act. Pursuant to the Registration Rights Agreement
executed in connection with the Company's sale of the Old Notes to the Initial
Purchasers, the Company agreed (i) to file with the Commission a registration
statement under the Securities Act with respect to the Exchange Offer within 45
days of the Closing Date, (ii) use its best efforts to cause such Exchange
Offer Registration Statement (the "Exchange Offer Registration Statement") to
become effective under the Securities Act on or prior to 120 days after the
Closing Date (the "Exchange Offer Effectiveness Target Date"), and (iii) unless
the Exchange Offer would not be permitted by law or a policy of the Commission,
to commence the Exchange Offer promptly following the effectiveness of the
Exchange Offer Registration Statement and use its best efforts to issue within
150 days of the Closing Date New Notes in exchange for all Old Notes tendered
prior thereto in the Exchange Offer. This Prospectus is intended to satisfy
such Company obligations under the Registration Rights Agreement. A copy of
the Registration Rights Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part. The term "Holder"
with respect to the Exchange Offer means any person in whose name Old Notes are
registered on the books of the Company or any other person who has obtained a
properly completed bond power from the registered holder.
20
<PAGE> 24
Based on the position of the Staff of the Division of Corporation
Finance of the Commission set forth in certain interpretive letters addressed
to third parties, the Company believes that New Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for resale, resold and
otherwise transferred by any holder of such New Notes (other than (i) a
broker-dealer who acquired Old Notes directly from the Company for resale
pursuant to Rule 144A or any other available exemption under the Securities Act
or (ii) any person who is an "affiliate" of the Company within the meaning of
Rule 405 under the Securities Act) without further compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such New Notes are acquired in the ordinary course of such holder's
business and such holder does not intend to participate and has no arrangement
or understanding with any person to participate in the distribution of such New
Notes. Any Holder who tenders in the Exchange Offer with the intention to
participate, or for the purpose of participating, in a distribution of the New
Notes could not rely on the position of the Staff of the Division of
Corporation Finance of the Commission enumerated in interpretive letters
addressed to third parties and, in the absence of an exemption therefrom, must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction. In addition, any
such resale transaction should be covered by an effective registration
statement containing the selling securityholders information required by Item
507 of Regulation S-K. See "Description of Notes--Registration Rights." Each
broker-dealer that receives New Notes for its own account in exchange for Old
Notes, where such Old Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such New Notes. See
"Plan of Distribution."
By tendering in the Exchange Offer, each Holder will represent to the
Company that, among other things, (i) the New Notes acquired pursuant to the
Exchange Offer are being obtained in the ordinary course of business of the
person receiving such New Notes, whether or not such person is the Holder, (ii)
neither the Holder nor any such other person has an arrangement or
understanding with any person to participate in the distribution of such New
Notes, (iii) neither the Holder nor any such other person is an "affiliate," as
defined under Rule 405 of the Securities Act, of the Company, and (iv) the
Holder and such other person acknowledge that (a) any person participating in
the Exchange Offer for the purpose of distributing the New Notes must, in the
absence of an exemption therefrom, comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale of
the New Notes and cannot rely on the interpretive letters referenced above and
(b) failure to comply with such requirements in such instance could result in
such Holder incurring liability under the Securities Act for which such Holder
is not indemnified by the Company.
As a result of the filing and the effectiveness of the Exchange Offer
Registration Statement of which this Prospectus is a part, certain prospective
increases in the interest rate on the Old Notes provided for in the
Registration Rights Agreement will not occur. Following the consummation of
the Exchange Offer, Holders of Old Notes not tendered will generally not have
any further registration rights and the Old Notes will continue to be subject
to certain restrictions on transfer. Accordingly, the liquidity of the market
for the Old Notes could be adversely affected. See "Description of the
Notes--Registration Rights."
21
<PAGE> 25
TERMS OF THE EXCHANGE OFFER
The Company hereby offers, upon the terms and subject to the
conditions set forth herein and in the accompanying Letter of Transmittal, to
exchange $1,000 in principal amount of New Notes for each $1,000 in principal
amount of its outstanding Old Notes. New Notes will be issued only in integral
multiples of $1,000 to each tendering Holder whose Old Notes are accepted in
the Exchange Offer. The Company will accept any Old Notes validly tendered and
not withdrawn prior to 5:00 p.m., New York City time, on _________________,
1995, the Expiration Date of the Exchange Offer. Old Notes that are not
accepted for exchange will be returned as promptly as practicable after the
Expiration Date. Holders may tender all or a portion of their Old Notes
pursuant to the Exchange Offer.
The form and terms of the New Notes under the Indenture will be
identical in all material respects to the form and terms of the Old Notes,
except that (i) the offering of the New Notes will have been registered under
the Securities Act and hence the New Notes will not bear legends restricting
the transfer thereof and (ii) holders of New Notes will not be entitled to
certain rights intended for holders of unregistered securities under the
Registration Rights Agreement which will terminate upon the consummation of the
Exchange Offer. The New Notes evidence the same debt as the Old Notes (which
they replace) and will be issued under, and be entitled to the benefits of, the
Indenture governing the Old Notes. The New Notes will bear interest from their
date of issuance at the same rate and upon the same terms as the Old Notes.
See "Description of Notes." Accrued and unpaid interest on the Old Notes
accepted for exchange for the period to but not including the date of issuance
of the New Notes (the "Exchange Date") will be paid to the holders of New Notes
on the first Interest Payment Date (as defined in "Description of Notes").
Holders whose Old Notes are accepted for exchange will be deemed to have waived
the right to receive any payment in respect of interest on the Old Notes
accrued on and after the Exchange Date.
As of the date of this Prospectus, $150,000,000 aggregate principal
amount of the Old Notes was outstanding and of such amount, $148,000,000
aggregate principal amount was registered in the name of Cede & Co., as nominee
for DTC. Solely for reasons of administration (and for no other purpose) the
Company has fixed the close of business on _________, 1995, as the record date
(the "Record Date") for the Exchange Offer for purposes of determining the
persons to whom this Prospectus and the Letter of Transmittal will be mailed
initially. Only a registered holder of the Old Notes (or such holder's legal
representative or attorney-in-fact) as reflected on the records of the Trustee
under the Indenture may participate in the Exchange Offer.
Holders of Old Notes do not have any appraisal or dissenters' rights
in connection with the Exchange Offer.
The Company shall be deemed to have accepted validly tendered Old
Notes when, as and if the Company has given oral or written notice thereof to
the Exchange Agent. The Exchange
22
<PAGE> 26
Agent will act as agent for tendering Holders of Old Notes for the purposes of
receiving the New Notes from the Company.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, certificates for any such unaccepted Old Notes will be returned,
without expense, to the tendering Holder thereof as promptly as practicable
after the Expiration Date.
Tendering Holders will not be required to pay brokerage commissions or
fees or, subject to the instructions of the Letter of Transmittal, transfer
taxes with respect to the exchange of Old Notes for New Notes pursuant to the
Exchange Offer. The Company will pay all charges and expenses, other than
certain taxes which may be levied in the event of any transfer of ownership, in
connection with the Exchange Offer. See "The Exchange Offer--Fees and
Expenses."
Neither the Board of Directors of the Company nor the Company makes
any recommendation to holders of Old Notes as to whether to tender or refrain
from tendering all or any portion of their Old Notes pursuant to the Exchange
Offer. In addition, no one has been authorized to make any such
recommendation. Holders of Old Notes must make their own decision whether to
tender pursuant to the Exchange Offer and, if so, the aggregate amount of Old
Notes to tender after reading this Prospectus and the Letter of Transmittal and
consulting with their advisers, if any, based on their own financial position
and requirements.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m. New York City time, on
____________, 1995, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Company will notify the
Exchange Agent of any extension by oral or written notice and will make a
public announcement thereof, each prior to 9:00 a.m., New York City time on the
next business day after the previously scheduled Expiration Date.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Old Notes, (ii) to extend the Exchange Offer, or (iii) to amend
the terms of the Exchange Offer in any manner. Any such delay in acceptance,
extension, or amendment will be followed as promptly as practicable by a public
announcement thereof. If the Exchange Offer is amended in a manner determined
by the Company to constitute a material change, the Company will promptly
disclose such amendments by means of a prospectus supplement that will be
distributed to the registered holders of Old Notes, and the Company will extend
the Exchange Offer for a period of five to 10 business days, depending upon the
significance of the amendment and the manner of disclosure to the registered
holders, if the Exchange Offer would otherwise expire during such five to 10
business day period.
23
<PAGE> 27
Without limiting the manner in which the Company may choose to make
public announcement of any delay, extension, or amendment of the Exchange
Offer, the Company shall not have an obligation to publish, advertise or
otherwise communicate any such public announcement, other than by making a
timely release to the Dow Jones News Service.
INTEREST ON THE NEW NOTES
The New Notes will bear interest from their date of issuance. Holders
of Old Notes that are accepted for exchange will receive, in cash, accrued
interest thereon to, but not including, the date of issuance of the New Notes.
Such interest will be paid with the first interest payment of the New Notes.
Interest of the Old Notes accepted for exchange will cease to accrue on the day
prior to the issuance of the New Notes.
The New Notes bear interest (as do the Old Notes) at a rate equal to
7.0% per annum. Interest on the New Notes is payable on each June 15 and
December 15 beginning on December 15, 1995.
PROCEDURES FOR TENDERING OLD NOTES
The tender by a Holder as set forth below and the acceptance thereof
by the Company will constitute a binding agreement between the tendering Holder
and the Company upon the terms and subject to the conditions set forth in this
Prospectus and in the accompanying Letter of Transmittal. Except as set forth
below, a Holder who wishes to tender Old Notes for exchange pursuant to the
Exchange Offer must transmit such Old Notes, together with a properly completed
and duly executed Letter of Transmittal, including all other documents required
by such Letter of Transmittal, to the Exchange Agent at the address set forth
below under "--Exchange Agent" on or prior to 5:00 p.m. New York City time, on
the Expiration Date.
By executing the Letter of Transmittal, each Holder will make to the
Company the representations set forth above in the third paragraph under the
heading "--Purpose and Effect of the Exchange Offer."
THE METHOD OF DELIVERY OF OLD NOTES, LETTERS OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE ELIGIBLE HOLDER.
IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY
INSURED, WITH RETURN RECEIPT REQUESTED BE USED. INSTEAD OF DELIVERY BY MAIL,
IT IS RECOMMENDED THAT THE ELIGIBLE HOLDER USE AN OVERNIGHT OR HAND DELIVERY
SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY
DELIVERY.
Each signature on a Letter of Transmittal or a notice of withdrawal,
as the case may be, must be guaranteed unless the Old Notes surrendered for
exchange pursuant thereto are tendered (i) by a registered holder of the Old
Notes who has not completed either the box entitled
24
<PAGE> 28
"Special Exchange Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) by an Eligible Institution
(as defined below). In the event that a signature on a Letter of Transmittal
or a notice of withdrawal, as the case may be, is required to be guaranteed,
such guarantee must be by a firm which is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or is otherwise an "eligible institution"
within the meaning of Rule 17AD-15 under the Exchange Act (collectively,
"Eligible Institutions").
If Old Notes are registered in the name of a person other than a
signer of the Letter of Transmittal, the Old Notes surrendered for exchange
must either (i) be endorsed by the registered holder, with the signature
thereon guaranteed by an Eligible Institution or (ii) be accompanied by a bond
power, in satisfactory form as determined by the Company in its sole
discretion, duly executed by the registered holder, with the signature thereon
guaranteed by an Eligible Institution along with the other documents required
upon transfer by the Purchase Agreement. The term "registered holders" as used
herein with respect to the Old Notes means any person in whose name the Old
Notes are registered on the books of the Registrar for the Old Notes.
Tenders may be made only in principal amounts of $1,000 and integral
multiples thereof. Subject to the foregoing, Holders may tender less than the
aggregate principal amounts represented by the Old Notes deposited with the
Exchange Agent provided they appropriately indicate this fact in the Letter of
Transmittal accompanying the tendered Old Notes.
The Company understands that the Exchange Agent will make a request
promptly after the date of this Prospectus to establish accounts with respect
to the Old Notes at the book-entry transfer facility. DTC (the "Book-Entry
Transfer Facility"), for the purpose of facilitating the Exchange Offer, and
subject to the establishment thereof, any financial institution that is a
participant in the Book-Entry Transfer Facility's system may make book entry
delivery of Old Notes by causing such book entry transfer facility to transfer
such Old Notes into the Exchange Agent's account with respect to the Old Notes
in accordance with the Book-Entry Transfer Facility's procedures for such
transfer. Although delivery of the Old Notes may be effected through
book-entry transfer into the Exchange Agent's account at the Book-Entry
Transfer Facility, an appropriate Letter of Transmittal properly completed and
duly executed with any required signature guarantee and all other required
documents must in each case be transmitted to and received or confirmed by the
Exchange Agent at its address set forth below on or prior to the Expiration
Date, or, if the guaranteed delivery procedures described below are complied
with, within the time period provided under such procedures. Delivery of
documents to the Book-Entry Transfer Facility does not constitute delivery to
the Exchange Agent.
All questions as to validity, form, eligibility (including time of
receipt), acceptance and withdrawal of Old Notes tendered for exchange will be
determined by the Company in its sole, reasonable discretion, which
determination shall be final and binding. The Company reserves the absolute
right to reject any or all tenders of any particular Old Notes not properly
tendered or to reject any particular Old Notes which acceptance might, in the
judgment of the Company
25
<PAGE> 29
or its counsel, be unlawful. The Company also reserves the absolute right to
waive any defects or irregularities or conditions of the Exchange Offer as to
any particular Old Notes either before or after the Expiration Date (including
the right to waive the ineligibility of any Holder who seeks to tender Old
Notes in the Exchange Offer). The interpretation of the terms and conditions
of the Exchange Offer (including the Letter of Transmittal and the instructions
thereto) by the Company shall be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of Old Notes
for exchange must be cured within such reasonable period of time as the Company
shall determine. The Company will use reasonable efforts to give notification
of defects or irregularities with respect to tenders of Old Notes for exchange
but shall not incur any liability for failure to give such notification.
Tenders of the Old Notes will not be deemed to have been made until such
irregularities have been cured or waived.
If any Letter of Transmittal, endorsement, bond power, power of
attorney or any other document required by the Letter of Transmittal is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and, unless waived by the Company,
proper evidence satisfactory to the Company of such person's authority to so
act must be submitted.
Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender Old Notes in the Exchange Offer should contact such registered holder
promptly and instruct such registered holder to tender on such beneficial
owner's behalf. If such beneficial owner wishes to tender directly, such
beneficial owner must, prior to completing and executing the Letter of
Transmittal and tendering Old Notes, make appropriate arrangements to register
ownership of the Old Notes in such beneficial owner's name. Beneficial owners
should be aware that the transfer of registered ownership may take considerable
time.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (i) whose Old Notes are
not immediately available, (ii) who cannot deliver their Old Notes and Letter
of Transmittal or any other documents required by the Letter of Transmittal to
the Exchange Agent prior to the Expiration Date, or (iii) who cannot complete
the procedures for book-entry transfer on a timely basis must tender their Old
Notes according to the guaranteed delivered procedures set forth in the Letter
of Transmittal. Pursuant to such procedures:
a. such tender must be made by or through an Eligible Institution
and a Notice of Guaranteed Delivery (as defined in the Letter of Transmittal)
must be signed by such Holder;
b. prior to the Expiration Date, the Exchange Agent must have
received from the Holder and the Eligible Institution a properly completed and
duly executed Letter of Transmittal and a Notice of Guaranteed Delivery (by
facsimile transmission, mail or hand delivery) setting
26
<PAGE> 30
forth the name and address of the Holder, the certificate number or numbers of
the tendered Old Notes, and the principal amount of tendered Old Notes, stating
that the tender is being made thereby and guaranteeing that, within five
business days after the date of delivery of the Notice of Guaranteed Delivery,
the tendered Old Notes and any other required documents will be deposited by
the Eligible Institution with the Exchange Agent; and
c. such properly completed and executed documents required by the
Letter of Transmittal and the tendered Old Notes in proper form for transfer
must be received by the Exchange Agent within three business days after the
Expiration Date.
Any Holder who wishes to tender Old Notes pursuant to the guaranteed
delivery procedures described above must ensure that the Exchange Agent
received the Notice of guaranteed Delivery and Letter of Transmittal relating
to such Old Notes prior to 5:00 p.m. New York City time, on the Expiration
Date. Failure to complete the guaranteed delivery procedures outlined above
will not, of itself, affect the validity or effect a revocation of any Letter
of Transmittal form properly completed and executed by a Holder who attempted
to use the guaranteed delivery process.
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
The Company will accept, promptly after the Expiration Date, all Old
Notes properly tendered and will issue the New Notes promptly after the
acceptance of the Old Notes. For purposes of the Exchange Offer, the Company
shall be deemed to have accepted properly tendered Old Notes for exchange when,
as, and if the company has given oral or written notice thereof to all Holders
of properly tendered Old Notes.
In all cases, issuances of New Notes for Old Notes that are accepted
for exchange pursuant to the Exchange Offer will be made only after timely
receipt by the Exchange Agent of such Old Notes, a properly completed and duly
executed Letter of Transmittal, and all other required documents; provided,
however, that the Company reserves the absolute right to waive any defects or
irregularities in the tender or conditions of the Exchange Offer. If any
tendered Old Notes are not accepted for any reason set forth in the terms and
conditions of the Exchange Offer or if Old Notes are submitted for a greater
principal amount than the Holder desires to exchange, such unaccepted or non-
exchanged Old Notes or substitute Old Notes evidencing the unaccepted portion,
as appropriate, will be returned without expense to the tendering Holder
thereof as promptly as practicable after the expiration or termination of the
Exchange Offer.
WITHDRAWAL RIGHTS
Tenders of the Old Notes may be withdrawn at any time prior to 5:00
p.m. New York City time on the Expiration Date. For a withdrawal to be
effective, a written notice of withdrawal must be received by the Exchange
Agent at its address set forth on the back cover page of this Prospectus. Any
such notice of withdrawal must (i) specify the name of the person
27
<PAGE> 31
having deposited the Old Notes to be withdrawn (the "Depositor"), (ii) identify
the Old Notes to be withdrawn (including the certificate number or numbers and
principal amount of such Old Notes), (iii) be signed by the Holder in the same
manner as the original signature on the Letter of Transmittal by which such Old
Notes were tendered (including any required signature guarantees) or be
accompanied by a bond power in the name of the person withdrawing the tender,
in satisfactory form as determined by the Company in its sole discretion, duly
executed by the registered holder, with the signature thereon guaranteed by an
Eligible Institution along with the other documents required upon transfer by
the Registration Rights Agreement or Purchase Agreement, and (iv) specify the
name in which such Old Notes are to be re-registered, if different from the
Depositor, pursuant to such documents of transfer. All questions as to the
validity, form and eligibility (including time of receipt) of such notices will
be determined by the Company, whose determination shall be final and binding on
all parties. The Old Notes so withdrawn, if any, will be deemed not to have
been validly tendered for exchange for purposes of the Exchange Offer. Any Old
Notes which have been tendered for exchange but which are withdrawn will be
returned to the Holder thereof without cost to such Holder as soon as
practicable after withdrawal. Properly withdrawn Old Notes may be retendered
by following one of the procedures described under "Procedures for Tendering
Old Notes" above at any time on or prior to the Expiration Date.
TERMINATION OF CERTAIN RIGHTS
Holders of the Old Notes to whom this Exchange Offer is made have
special rights under the Registration Rights Agreement that will terminate upon
the consummation of the Exchange Offer. The Registration Rights Agreement
provides that certain rights under such agreement (including the right to
receive a prospective increase in the interest rate on the Old Notes) shall
terminate upon the occurrence of (i) the filing with the Commission of the
Exchange Offer Registration Statement, (ii) the effectiveness under the
Securities Act of the Exchange Offer Registration Statement, (iii) the
consummation of the Exchange Offer, and (iv) the maintenance of the Exchange
Offer Registration Statement continuously effective for a period of not less
than the minimum period required under applicable federal and state securities
laws (provided that in no event shall such Exchange Offer remain open and the
registration statement relating hereto remain continuously effective, in each
case, for less than 20 business days), and (v) the delivery by the Company to
the registrar under the Indenture of New Notes in the same aggregate principal
amount of Old Notes tendered by Holders thereof pursuant to the Exchange Offer.
EXCHANGE AGENT
The First National Bank of Chicago has been appointed as Exchange
Agent for the Exchange Offer. Questions and requests for assistance and
requests for additional copies of the Prospectus, the Letter of Transmittal,
and other related documents should be addressed to the Exchange Agent as
follows:
28
<PAGE> 32
By Registered or Certified
Mail, Overnight Courier or Han:
The First National Bank of Chicago,
c/o First Chicago Trust Company of New York
14 Wall Street
8th Floor, Window 2
New York, New York 10005
Attention: Corporate Trust Administration
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telephone or in person by officers and regular
employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptance of the Exchange Offer. The Company, however, will pay
the Exchange Agent reasonable and customary fees for its services and will
reimburse it for its reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer
will be paid by the Company and are estimated in the aggregate to be
approximately $80,000. Such expenses include fees and expenses of the Exchange
Agent and Trustee, accounting and legal fees, filing fees and printing costs,
among others.
The Company will pay all transfer taxes, if any, applicable to the
exchange of Old Notes pursuant to the Exchange Offer. If, however, a transfer
tax is imposed for any reason other than the exchange of Old Notes pursuant to
the Exchange Offer, then the amount of any transfer taxes (whether imposed on
the registered holder or any other persons) will be payable by the tendering
Holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering Holder.
CONSEQUENCES OF FAILURE TO EXCHANGE
The Old Notes which are not exchanged for New Notes pursuant to the
Exchange Offer will remain restricted securities. Accordingly, such Old Notes
may be resold only (i) to the Company (upon redemption thereof or otherwise),
(ii) so long as the Old Notes are eligible for resale pursuant to Rule 144A, to
a person whom the seller reasonably believes is a qualified institutional buyer
within the meaning of Rule 144A under the Securities Act, purchasing for its
own account or for the account of a qualified institutional buyer to whom
notice is given that
29
<PAGE> 33
the resale, pledge or other transfer is being made in reliance on Rule 144A,
(iii) in an offshore transaction in accordance with Regulation S under the
Securities Act, but only in the case of a transfer that is effected by the
delivery to the transferee of Old Notes registered in its name (or its
nominee's name) on the books maintained by the registrar of the Old Notes, (iv)
pursuant to an exemption from registration in accordance with Rule 144 (if
available) or Rule 145 under the Securities Act, (v) in reliance on another
exemption from the registration requirements of the Securities Act, but only in
the case of a transfer that is effected by the delivery to the transferee of
Old Notes registered in its name (or its nominee's name) on the books
maintained by the registrar of the Old Notes, and subject to the receipt by the
registrar or co-registrar of a certification of the transferor and an opinion
of counsel (satisfactory to the Company) to the effect that such transfer is in
compliance with the Securities Act, or (vi) pursuant to an effective
registration statement under the Securities Act, in each case in accordance
with any applicable securities laws of any state of the United States.
Following the consummation of the Exchange Offer, holders of Old Notes will
have limited rights under the Registration Rights Agreement. See "--The Shelf
Registration Statement."
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Old
Notes, as reflected in the Company's accounting records on the date of the
exchange. Accordingly, no gain or loss for accounting purposes will be
recognized. The expenses of the Exchange Offer will be amortized over the term
of the New Notes.
RESALES OF THE NEW NOTES
With respect to resales of New Notes, based on the position of the
Staff of the Division of Corporation Finance of the Commission set forth in
certain interpretive letters addressed to third parties, the Company believes
that a Holder (other than (i) a broker-dealer who purchases such New Notes
directly from the Company to resell pursuant to Rule 144A or any other
available exemption under the Securities Act or (ii) a person that is an
affiliate of the Company within the meaning of Rule 405 under the Securities
Act) who exchanges Old Notes for New Notes in the ordinary course of business
and who is not participating, does not intend to participate, and has no
arrangement or understanding with any person to participate, in the
distribution of the New Notes, will be allowed to resell the New Notes to the
public without further registration under the Securities Act and without
delivering to the purchasers of the New Notes a prospectus that satisfies the
requirements of Section 10 thereof. However, if any Holder acquires New Notes
in the Exchange Offer for the purpose of distributing or participating in a
distribution of the New Notes, such Holder cannot rely on the position of the
Staff of the Division of Corporation Finance of the Commission enunciated in
interpretive letters addressed to third parties and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction, unless an exemption from
registration is otherwise available. Further, each broker-dealer that receives
New Notes for its own account in exchange for Old Notes, where such Old Notes
were acquired by such broker-dealer as a result of market-making activities or
other trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes.
30
<PAGE> 34
As contemplated by the position of the Staff of the Division of
Corporation Finance of the Commission in the interpretive letters noted above
and the Registration Rights Agreement, each Holder accepting the Exchange Offer
is required to represent to the Company in the Letter of Transmittal that (i)
the New Notes are to be acquired by the Holder or the person receiving such New
Notes, whether or not such person is the Holder, in the ordinary course of
business, (ii) the Holder or any such other person (other than a broker-dealer
referred to in the next sentence) is not engaging and does not intend to engage
in the distribution of the New Notes, (iii) the Holder or any such other person
has no arrangement or understanding with any person to participate in the
distribution of the New Notes, (iv) neither the Holder nor any such other
person is an "affiliate" of the Company within the meaning of Rule 405 under
the Securities Act, and (v) the Holder or any such other person acknowledges
that if such Holder or other person participates in the Exchange Offer for the
purpose of distributing the New Notes it must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale of the New Notes and cannot rely on such interpretive letters. As
indicated above, each broker-dealer that receives New Notes for its own account
in exchange for Old Notes must also acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. For a description
of the procedures for such resales by broker-dealers, see "Plan of
Distribution."
THE SHELF REGISTRATION STATEMENT
The Registration Rights Agreement provides that if, (i) because of any
change in law or applicable interpretations thereof by the staff of the
Commission, the Company is not permitted to effect the Exchange Offer, (ii) the
Exchange Offer Registration Statement is not declared effective by October 19,
1995, or (iii) upon the request of either Initial Purchaser (with respect to
any Old Notes which were acquired directly from the Company), to the extent
such Initial Purchaser is not eligible under applicable securities laws, to
participate in the Exchange Offer, the Company will file with the Commission a
Shelf Registration Statement to cover resales of the Notes by the holders
thereof who satisfy certain conditions relating to the provision of information
in connection with the Shelf Registration Statement. The Company will use its
best efforts to cause the applicable registration statement to be declared
effective as promptly as possible by the Commission.
The Registration Rights Agreement further provides that, if obligated
to file the Shelf Registration Statement, the Company will file such with the
Commission, as promptly as practicable, after such obligation arises and use
its best efforts to cause such Shelf Registration Statement to be declared
effective by the Commission, in the case of an obligation to file a Shelf
Registration Statement as a result of a change in applicable law or Commission
interpretation, or in all other cases, on or prior to 180 days after the
Closing Date, and to use its best efforts to cause such Shelf Registration
Statement to remain effective and usable for a period of three years following
the initial effectiveness thereof. If the Company is obligated to file the
Shelf Registration Statement and such Shelf Registration Statement is not
declared effective in the time periods described above the interest rate on the
effected Notes shall be increased one-half of one percentage point (.5%) per
annum of the principal amount of effected Notes held by such holder.
31
<PAGE> 35
Following the effectiveness of the Shelf Registration Statement, the interest
rate shall revert back to 7.0% with respect to the effected Notes.
Holders of Notes will be required to deliver information to be used in
connection with the Shelf Registration Statement and to provide comments on the
Shelf Registration Statement within the time periods set forth in the
Registration Rights Agreement in order to have their Notes included in the
Shelf Registration Statement and benefit from the provisions regarding
increased interest rates set forth above. In addition, for so long as any
effected Notes are outstanding during any period when the Company is not
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company will continue to provide to Holders of Notes and to
prospective purchasers of such Notes the information required by Rule
144A(d)(4).
USE OF PROCEEDS
The Company will not receive any cash proceeds from the issuance of
the New Notes offered hereby. In consideration for issuing the New Notes as
contemplated in this Prospectus, the Company will receive in exchange Old Notes
in like principal amount, the terms of which are identical in all material
respects to the New Notes. The Old Notes surrendered in exchange for the New
Notes will be retired and cancelled and cannot be reissued. Accordingly,
issuance of the New Notes will not result in any increase in the indebtedness
of the Company.
CAPITALIZATION
The following table sets forth the short-term debt and the
capitalization of the Company as of May 31, 1995 and as adjusted to give effect
to the issuance of the Notes on June 20, 1995 and the repayment of long-term
debt with the net proceeds of the offering.
<TABLE>
<CAPTION>
May 31, 1995
------------
Actual As Adjusted
------ -----------
<S> <C> <C>
Short-term debt:
Current portion of long-term debt . . . . . . . . . . . . $ 643 $ 643
-------- -------
Total short-term debt . . . . . . . . . . . . . . $ 643 $ 643
======== =======
Long-term debt, less current maturities:
Senior indebtedness . . . . . . . . . . . . . . . . . . . $243,452 $ 93,452
Ten year notes . . . . . . . . . . . . . . . . . . . . . . -0- $150,000
Liquid Yield Option notes . . . . . . . . . . . . . . . . 162,923 162,923
------- -------
Total long-term debt . . . . . . . . . . . . . . . $406,375 $406,375
======== ========
Shareholders' equity:
</TABLE>
32
<PAGE> 36
<TABLE>
<S> <C> <C>
Common shares - $.023 per share; authorized 100,000,000
shares, issued and outstanding 56,957,000 shares . . . .
$ 1,296 $ 1,296
Paid-in capital . . . . . . . . . . . . . . . . . . . . . 146,509 146,509
Retained earnings . . . . . . . . . . . . . . . . . . . . $199,206 199,206
Cumulative translation adjustment . . . . . . . . . . . . (580) (580)
------ ------
Total shareholders' equity . . . . . . . . . . . . $347,591 $347,591
-------- --------
Total Capitalization . . . . . . . . . . . . . . . . . . . $753,966 $753,966
======== ========
</TABLE>
33
<PAGE> 37
SELECTED FINANCIAL INFORMATION(1)
The selected historical consolidated financial data for the five years
in the period ended May 31, 1995 set forth below are principally derived from,
and should be read in conjunction with, the related audited consolidated
financial statements and accompanying notes included in the Company's Annual
Report on Form 10-K for the fiscal year ended May 31, 1995.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MAY 31,
-----------------------------------------------------------------------
1995 1995
1991 1992 1993 1994 ACTUAL PRO FORMA(2)
------ ------ ------ ---- ------ ------------
(IN THOUSANDS EXCEPT PER SHARE AND RATIO DATA)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Net sales . . . . $619,613 $680,091 $768,372 $815,598 $1,016,954 $1,034,043
Cost of sales . . (356,480) (393,677) (448,079) (476,146) (581,246) (590,220)
-------- -------- -------- -------- -------- ----------
Gross profit . . 263,133 286,414 320,293 339,452 435,708 443,823
Selling, general and
administrative
expenses . . . (195,546) (208,822) (236,955) (237,931) (305,429) (310,404)
Interest expense, net (12,972) (16,491) (17,202) (13,427) (23,422) (24,234)
-------- -------- -------- -------- -------- ----------
Income before income
taxes . . . . . 54,615 61,101 66,136 88,094 106,857 109,185
Provision for income
taxes . . . . . (17,180) (22,620) (26,638) (35,454) (45,758) (46,836)
-------- -------- -------- -------- -------- ----------
Net income . . . $ 37,435 $ 38,481 $ 39,498 $ 52,640 $ 61,099 $ 62,349
======== ======== ======== ======== ======== ==========
Primary earnings per
share . . . . . $0.72 $ 0.73 $ 0.74 $ 0.93 $ 1.07 $ 1.09
Fully diluted earnings
per share . . . 0.71 0.72 0.72 0.89 1.01 1.03
Other Data:
Cash dividends per
share . . . . . 0.399 0.442 0.473 0.510 0.550 0.550
Average common shares
outstanding . . 52,219 52,790 53,267 56,717 57,243 57,243
Ratio of earnings to
fixed charges (3) 4.54 4.12 4.08 6.21 4.83 4.80
Balance Sheet Data:
Working capital . $142,581 $205,419 $191,872 $230,512 $270,226 $270,226
Total assets . . 457,779 623,346 648,524 660,838 959,140 959,140
Short-term debt . 21,441 7,763 21,262 1,196 643 643
Long-term debt . 130,800 273,871 258,712 233,039 406,375 406,375
Shareholders'
equity . . . . 215,471 233,360 243,899 314,476 347,591 347,591
<FN>
-------------------
(1) All information presented includes the fiscal 1994 acquisitions of
Dynatron/Bondo Corporation and Stonhard, Inc. accounted for on a
pooling-of-interests basis.
(2) On June 28, 1994, the Company acquired Rust-Oleum. The pro forma data
reflect the combined results of operations of the Company and
Rust-Oleum for the fiscal year ended May 31, 1995. The pro forma
Income Statement Data and Other Data are shown as if the acquisition
of Rust-Oleum had occurred on June 1, 1993. The pro forma amounts
give effect to appropriate adjustments resulting from the combination,
but are not necessarily indicative of future results of operations or
of what results would have been for the combined companies.
(3) For purposes of the ratio of earnings to fixed charges, earnings
consist of income from operations before income taxes and fixed
charges. Fixed charges include interest and debt expense and
one-third of rents which is deemed representative of an interest
factor.
</TABLE>
34
<PAGE> 38
DESCRIPTION OF NOTES
The New Notes are to be issued as a separate series of notes under the
same Indenture under which the Old Notes have been issued, dated as of June 1,
1995, between the Company and The First National Bank of Chicago, as trustee
(the "Trustee"). No New Notes are currently outstanding. The terms of the
Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (the "Trust Indenture
Act"). The Notes are subject to all such terms, and holders of Notes are
referred to the Indenture and the Trust Indenture Act for a statement thereof.
The definitions of certain terms used in the following summary are set forth
below under " -- Certain Definitions."
The Indenture does not limit the aggregate principal amount of debt
securities which may be issued thereunder and provides that debt securities may
be issued thereunder from time to time in one or more series (such other debt
securities issued under the Indenture, together with the Notes, are hereinafter
collectively referred to as the "Debt Securities"). The following summary of
the material provisions of the Indenture does not purport to be complete, and
where reference is made to particular provisions of the Indenture, such
provisions, including the definitions of certain terms, some of which are not
otherwise defined herein, are qualified in their entirety by reference to all
of the provisions of the Indenture and those terms made a part of the Indenture
by the Trust Indenture Act. There is no requirement that future issues of debt
securities of the Company be issued under the Indenture, and the Company is
free to employ other indentures or documentation containing provisions
different from those included in the Indenture in connection with future issues
of such other debt securities.
GENERAL
The Notes mature on June 15, 2005, are limited to $150,000,000
aggregate principal amount at any one time outstanding and are unsecured senior
obligations of the Company. Each Note bears interest at 7.0% from June 20,
1995 or from the most recent interest payment date to which interest has been
paid, payable semi-annually on June 15 and December 15 in each year, commencing
December 15, 1995, to the person in whose name the Note (or any predecessor
Note) is registered at the close of business on the June 1 or the December 1
next preceding such interest payment date.
The Old Notes and the New Notes will constitute a single series of
debt securities under the Indenture. If the Exchange Offer is consummated,
holders of the Old Notes who do not exchange their Old Notes for New Notes will
vote together with the holders of New Notes for all relevant purposes under the
Indenture. In that regard, the Indenture requires that certain actions by the
holders thereunder (including acceleration following an Event of Default) must
be taken, an certain rights must be exercised, by specified minimum percentages
of the aggregate principal amount of the outstanding debt securities of the
relevant series. In determining whether holders of the requisite percentage in
principal amount have given any notice, consent or waiver or taken any other
action permitted under the Indenture, any Old Notes which remain outstanding
after the Exchange Offer will be aggregated with the New Notes and the holders
of such Old Notes and New Notes will vote together as a single series for all
such purposes.
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Accordingly, all references herein to specified percentages in aggregate
principal amount of the outstanding Notes shall be deemed to mean, at any time
after the Exchange Offer is consummated, such percentage in aggregate principal
amount of the Old Notes and New Notes then outstanding.
Principal of and interest on the Notes are exchangeable and
transferable, at the office or agency of the Company in the City of New York
maintained for such purposes (which initially will be the office of the Trustee
maintained at The First National Bank of Chicago, c/o First Chicago Trust
Company of New York, 14 Wall Street -- 8th Floor, Window 2, New York, New York
10005, Attention: Corporate Trust Administration); provided, however, that
payment of principal or interest may be made at the option of the Company by
check mailed to the person entitled thereto as shown on the security register.
The Old Notes are issued only in fully registered form without coupons, in
denominations of $250,000 and any integral multiple of $1,000 in excess
thereof. The New Notes will be issued only in fully registered form without
coupons in denominations of $1,000 and any integral multiple of $1,000 in
excess thereof. No service charge will be made for any registration of
transfer, exchange or redemption of Notes, except in certain circumstances for
any tax or other governmental charge that may be imposed in connection
therewith.
[/R]
The provisions of the Indenture do not afford the holders of the Notes
protection (whether in the form of a repurchase right or otherwise) in the
event of the decline in the Company's credit quality resulting from a highly
leveraged transaction, reorganization, restructuring, merger or other similar
transaction that may adversely affect the holders of the Notes.
OPTIONAL REDEMPTION
The Notes are not subject to redemption prior to maturity.
SINKING FUND
The Notes are not entitled to the benefit of any sinking fund or other
mandatory redemption obligation prior to maturity.
RANKING; HOLDING COMPANY STRUCTURE
The Notes are unsecured unsubordinated obligations of the Company and
rank on a parity in right of payment with all other unsecured and
unsubordinated indebtedness of the Company for borrowed money.
The Notes are obligations exclusively of the Company. The Company is
a holding company substantially all of whose consolidated assets are held by
its subsidiaries. Accordingly, the cash flow of the Company and the consequent
ability to service its debt, including the Notes, are largely dependent upon
the earnings of such subsidiaries.
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Because the Company is a holding company, the Notes will be
effectively subordinated to all existing and future indebtedness, trade
payables, guarantees, lease obligations and letter of credit obligations of the
Company's subsidiaries. Therefore, the Company's rights and the rights of its
creditors, including the holders of the Notes, to participate in the assets of
any subsidiary upon the latter's liquidation or reorganization will be subject
to the prior claims of such subsidiary's creditors, except to the extent that
the Company may itself be a creditor with recognized claims against the
subsidiary, in which case the claims of the Company would still be effectively
subordinate to any security interest in, or mortgages or other liens on, the
assets of such subsidiary and would be subordinate to any indebtedness of such
subsidiary senior to that held by the Company.
LIMITATION ON LIENS
The Indenture generally provides that the Company may not, and may not
permit any Subsidiary of the Company to, incur or suffer to exist any Lien upon
any Principal Property, or upon any Equity Interests of any Subsidiary of the
Company (whether such Principal Property or Equity Interest were owned as of
the date of the Indenture or thereafter acquired), to secure any Indebtedness
without making, or causing such Subsidiary to make, effective provision for
securing the Debt Securities issued under the Indenture equally and ratably
with (or prior to) such Indebtedness, unless after giving effect thereto, the
sum of (A) the principal amount of Indebtedness secured by all Liens incurred
after the date of the Indenture and otherwise prohibited by the Indenture and
(B) the Attributable Value of all Sale and Leaseback Transactions entered into
after the date of the Indenture and otherwise prohibited by the Indenture does
not exceed the greater of $50,000,000 or 10% of the Consolidated Shareholders'
Equity of the Company. The foregoing restrictions will not apply to Liens or
to, among other things, (i) Liens securing only the Securities issued under the
Indenture; (ii) Liens on property of a Person existing at the time such Person
is merged into or consolidated with the Company or any Subsidiary of the
Company (but only to the extent such Liens cover such property); (iii) Liens on
property existing immediately prior to the time of acquisition thereof (and not
in anticipation of the financing of such acquisition); (iv) any Lien upon any
Principal Property (including any property that becomes a Principal Property
after acquisition thereof) to secure Indebtedness incurred for the purpose of
financing all or any part of the purchase price or the cost of construction or
improvement thereof, provided that such Principal Property first becomes a
Principal Property after, or construction or development of such Principal
Property is underway on and completed after, June 1, 1995, and provided,
further, that the principal amount of any Indebtedness secured by such Lien (A)
does not exceed 100% of such purchase price or cost and (B) in incurred within
24 months after the later of the purchase thereof and the completion of
construction or improvements thereof; (v) any Lien securing certain
Indebtedness owing to the Company or to a wholly owned subsidiary of the
Company; (vi) certain Liens, as described in the Indenture, arising in the
ordinary course of business other that in connection with Indebtedness for
borrowed money; and (vii) Liens to secure Indebtedness incurred to extend,
render, refinance or refund Indebtedness secured by any Lien referred to in the
foregoing clauses (i) to (vi).
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"Attributable Value" means, as to any particular lease under which any
Person is at the time liable other than a Capital Lease Obligation, and at any
date as of which the amount thereof is to be determined, the total net amount
of rent required to be paid by such Person under such lease during the
remaining term thereof as determined in accordance with generally accepted
accounting principles, discounted from the respective due dated thereof to the
date of determination at a rate per annum equal to the discount rate that would
be applicable to a Capital Lease Obligation with like term in accordance with
generally accepted accounting principles. The net amount of rent required to
be paid under any such lease for any such period shall be the aggregate amount
of rent payable by the lessee with respect to such period after excluding, in
accordance with generally accepted accounting principles, amounts required to
be paid on account of insurance, taxes, assessments, utility, operating and
labor cost and similar charges and rents charged as a percentage of sales in
excess of a base amount. In the case of any lease which is terminable by the
lessee upon the payment of a penalty, such net amount shall also include the
amount of such penalty, but no rent shall be considered as required to be paid
under such lease subsequent to the first date upon which it may be so
terminated. "Attributable Value" means, as to Capital Lease Obligation under
which any Person is at the time liable and at any date as of which the amount
thereof is to be determined, the capitalizes amount thereof that would appear
on the face of a balance sheet of such Person in accordance with generally
accepted accounting principles.
"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other indebtedness
arrangements conveying the right to use) real or personal property of such
Person which is required to be classified and accounted for as a capital lease
or a liability on the face of a balance sheet of such Person in accordance with
generally accepted accounting principles. The stated maturity of such
obligation, as of any date (the "measurement date"), shall be the date of the
last payment of rent or any other amount due under such lease after the
measurement date upon or after which such lease may be terminated by the
lessee, at its sole option, without payment of a penalty.
"Consolidated Shareholders' Equity" of any Person means the
consolidated shareholders' equity of such Person, determined on a consolidated
basis in accordance with generally accepted accounting principles.
"Equity Interest" in any Person is defined to mean any and all shares,
interests, participations or other equivalents (however designated) of
corporate stock of or other ownership interests in such Person, and any options
or other rights to acquire, and any securities or other interests convertible
into or exchangeable for, any of the foregoing.
"Indebtedness," with respect to any Person, means indebtedness for
borrowed money or for the unpaid purchase price of real or personal property
of, or guaranteed by, such Person (other than trade accounts payable arising in
the ordinary course of business) and computed in accordance with generally
accepted accounting principles.
"Lien" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, security interest, lien,
encumbrance, or other security
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arrangement of any kind of nature whatsoever on or with respect to such
property or assets (including any conditional sale or other title retention
agreement having substantially the same economic effect as any of the
foregoing).
"Principal Property" means any manufacturing, assembly or storage
facility owned or used by the Company or any Subsidiary which is located within
the United States (including its territories and possessions) or Canada, other
than any such facility the gross book value of which (including related land
and improvements thereon and all machinery and equipment included therein
without deduction of any depreciation reserves) does not exceed 4% of
Consolidated Shareholders' Equity of the Company.
"Sale and Leaseback Transaction" of any Person means an arrangement
with any lender or investor or to which such lender or investor is a party
providing for the leasing by such Person of any Principal Property that, within
12 months of the start of such lease and after the Reference Date, has been or
is being sold, conveyed, transferred to or otherwise disposed of by such Person
to such lender or investor or to any Person to whom funds have been or are to
be advanced by such lender or investor of the security of such property. The
term of such arrangement, as of any date (the "measurement date"), shall end on
the date of the last payment of rent or any other amount due under such
arrangement after the measurement date on or after which such arrangement may
be terminated by the lessee, at its sole option, without payment of a penalty.
"Sale Transaction" means any such sale, conveyance, transfer or other
disposition. The "Reference Date" means, for any property that becomes a
Principal Property after, or the construction or development of which is
underway on and completed after June 1, 1995 the last day of the 24th month
after the date of the acquisition, completion of construction and commencement
of operation of such property and, for any other property, June 1, 1995.
"Subsidiary" means any Corporation of which at the time of
determination the Company or one or more Subsidiaries owns or controls directly
or indirectly more than 50% of the shares of Voting Stock.
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS
The Indenture generally provides that the Company may not, and may not
permit any Subsidiary of the Company to, enter into any Sale and Leaseback
Transaction (except for a period not exceeding 36 months), unless, (i) after
giving effect thereto, the sum of (A) the principal amount of Indebtedness
secured by all Liens incurred after the date of the Indenture and otherwise
prohibited by the Indenture and (B) the Attributable Value of all Sale and
Leaseback Transactions entered into after the date of the Indenture and
otherwise prohibited by the Indenture does not exceed the greater of
$50,000,000 or 10% of Consolidated Shareholders' Equity of the Company or (ii)
the Company or such Subsidiary applies or commits to apply, within 180 days
before or after the Sale Transaction pursuant to such Sale and Leaseback
Transaction, an amount equal to the Net Available Proceeds therefrom to the
repayment of Indebtedness of the Company (including any Debt Securities) which
is pari passu with or prior to the Debt Securities issued under the Indenture
(or, if none, other Indebtedness of the Company or, if non, Indebtedness of any
Subsidiary of the Company),
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"Net Available Proceeds" from any Sale Transaction by any Person means
cash or readily marketable cash equivalents received (including by way of sale
or discounting of a note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquiree of indebtedness or obligations relating to the properties or assets
that are the subject of such Sale Transaction or received in any other noncash
form) therefrom by such Person, net of (i) al legal, title and recording taxes,
expenses, commissions and other fees and expenses incurred an all federal,
state, provincial, foreign and local taxes required to be accrued as a
liability as a consequence of such Sale Transaction, (ii) all payments made by
such Person or its Subsidiaries on any Indebtedness which is secured in whole
or in part by any such properties and assets in accordance with the terms of
any Lien upon or with respect to any such properties and assets of which must,
by the terms of such Lien, or in order to obtain a necessary consent to such
Sale Transaction or by applicable law, be repaid out of the proceeds from such
Sale Transaction, and (iii) all distributions and other payments made to
minority interest holder in subsidiaries of such persons or joint ventures as a
result of such Sale Transaction.
CONSOLIDATION, MERGER, SALE OF ASSETS
The Company may consolidate or merge with or into, or transfer it
assets substantially as an entirety to, any corporation organized under the
laws of any domestic jurisdiction, provided that the successor corporation
assumes the Company's obligations on the Debt Securities and under the
Indenture, that after giving effect to the transaction no Event of Default, and
no event which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing, and that certain other
conditions are met.
EVENTS OF DEFAULT
The following will be "Events of Default" under the Indenture:
(i) failure to pay any interest on any Debt Security when it
becomes due and payable, and such failure shall continue for a period
of 30 days;
(ii) failure to pay the principal of (or premium, if any, on)
any Debt Security at its maturity (upon acceleration, optional or
mandatory redemption, required repurchase or otherwise);
(iii) failure to perform, or breach of, any covenant or
agreement of the Company under the Indenture (other than a default in
the performance of, or breach of, a covenant or agreement which is
specifically dealt with in clause (i) or (ii) and such default or
breach shall continue for a period of 60 days after written notice of
such failure has been given, by certified mail, (x) to the Company by
the Trustee or (y) to the Company and the Trustee by the holders of at
least 25% in aggregate principal amount of the outstanding Notes,
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" under the Indenture;
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(iv) one or more defaults shall have occurred under any
agreements, indentures or instruments under which the Company (or any
subsidiary) then has outstanding Indebtedness in excess of a principal
amount equal to in the aggregate the greater of $50 million or 10% of
Consolidated Shareholders' Equity of the Company and, if not already
matured at its final maturity in accordance with its terms, such
Indebtedness shall have been accelerated;
(v) one or more judgments, orders or decrees for the payment
of money in excess of $50 million, either individually or in the
aggregate (net of amounts covered by insurance, bond, surety or
similar instrument), shall be entered against the Company or any
Subsidiary, or any of their respective properties, and shall not be
discharged and either (a) any creditor shall have commenced an
enforcement proceeding upon such judgment, order or decree or (b)
there shall have been a period of 60 consecutive days during which a
stay of enforcement of such judgment or order, by reason of an appeal
or otherwise, shall not be in effect;
(vi) there shall have been the entry by a court of competent
jurisdiction of (a) a decree or order for relief in respect of the
Company or any Material Subsidiary in an involuntary case or
proceeding under any applicable Bankruptcy Law of (b) a decree or
order adjudging the Company or any Material Subsidiary under any
applicable federal or state law, or appointing a custodian, receive,
liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or any Material Subsidiary or of any
substantial part of their respective properties, or ordering the
signing up or liquidation of their affairs, and any such decree or
order for relief shall continue to be in effect, or any such other
decree or order shall be unstayed and in effect, for a period of 60
consecutive days; or
(vii) (a) the Company or any Material Subsidiary commences a
voluntary case or proceeding under any applicable Bankruptcy Law or
any other case or proceeding to be adjudicated bankrupt or insolvent,
(b) the Company or any Material Subsidiary consents to the entry or a
decree or order for relief in respect of the Company of any Material
Subsidiary in an involuntary case or proceeding under any applicable
Bankruptcy Law or to the commencement of any bankruptcy or insolvency
case or proceeding against it, (c) the Company or any Material
Subsidiary files a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law,
(d) the Company or any Material Subsidiary (x) consents to the filing
of such petition or the appointment of, or taking possession by, a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company of any Material Subsidiary or of any
substantial part of their respective properties or (y) makes an
assignment for the benefit of creditors or (e) the Company or any
Material Subsidiary takes any corporate action in furtherance of any
such actions in this paragraph (vii).
If an Event of Default (other than as specified in clauses (vi) and
(vii) of the prior paragraph) shall occur and be continuing, the
Trustee or the holders of not less than 25% in aggregate principal
amount of the Debt Securities then outstanding may, and the
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Trustee at the request of such Holders shall, declare all unpaid
principal of (and premium, if any, on) and accrued interest on all the
Debt Securities to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by the Holders of
the Debt Securities) provided that so long as the Revolving Credit
Facility is in effect, such declaration shall not become effective
until the earlier of (a) five business days after receipt of such
notice of acceleration from the Holders or the Trustee by the agent
under the Revolving Credit Facility or (b) acceleration of the
Indebtedness under the Revolving Credit Facility. Thereupon such
principal shall become immediately due and payable, and the Trustee
may, at its discretion, proceed to protect and enforce the rights of
the holders of Debt Securities by appropriate judicial proceeding. If
an Event of Default specified in clause (vi) and (vii) of the prior
paragraph occurs, then all the Debt Securities shall IPSO FACTO become
and be immediately due and payable, in an amount equal to the
principal amount of the Debt Securities, together with accrued and
unpaid interest, if any, to the date the Debt Securities become due
and payable, without any declaration or other act on the part of the
Trustee or any Holder.
After a declaration of acceleration, but before a judgment or decree
for payment of the money due has been obtained by the Trustee, the holders of a
majority in aggregate principal mounts of Debt Securities outstanding, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if (a) the Company has paid or deposited with
the Trustee a sum sufficient to pay (i) all sums paid or advanced by the
Trustee under the Indenture and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, (ii) all
overdue interest on all Debt Securities, and (iii) to the extent that payment
of such interest is lawful, interest upon overdue interest at the rate borne by
the Debt Securities; and (b) all Events of Default, other than the non-payment
of principal of the Debt Securities which has become due solely by such
declaration of acceleration, have been cured or waived; and (c) the rescission
will not conflict with any judgment or decree.
"Bankruptcy Law" means Title 11, United States Bankruptcy Code of
1978, as amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization
or relief of debtors or any amendment to, succession to or change in any such
law.
"Material Subsidiary" means any Corporation of which at the time of
determination the Company or one or more Subsidiaries owns or controls directly
or indirectly more than 50% of the shares of Voting Stock and whose net sales
exceed 4% of the Company's consolidated net sales as determined in accordance
with generally accepted accounting principles consistently applied.
The holders of not less than a majority in aggregate principal amount
of the Debt Securities outstanding may on behalf of the holders of all the Debt
Securities waive any past defaults under the Indenture and its consequences,
except a default in the payment of the principal of (and premium, if any, on)
or interest on any Debt Security, or in respect of a
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covenant or provision which under the Indenture cannot be modified or amended
without the consent of the holder of each Debt Security outstanding.
The Company is also required to notify the Trustee within five
business days of the occurrence of any default.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company may discharge certain obligations to holders of any series
of Debt Securities that have not already been delivered to the Trustee for
cancellation and that either have become due and payable or will become due and
payable within one year (or scheduled for redemption within one year) by
depositing with the Trustee, in trust, funds in U.S. Dollars or in such Foreign
Currency in which such Debt Securities are payable in an amount sufficient to
pay the entire indebtedness on such Debt Securities in respect of principal
(and premium, if any) and interest to the date of such deposit (if such Debt
Securities have become due and payable) or to the maturity thereof, as the case
may be.
The Indenture provides that, if the provisions of Section 402 thereof
are made applicable to the Debt Securities of or within any series pursuant to
Section 301 thereof, the Company may elect either (a) to defease and be
discharged from any and all obligations with respect to such Debt Securities
(except for, among other things, the obligation to pay Additional Amounts, if
any, upon the occurrence of certain events of taxation, assessment or
governmental charge with respect to payments on such Debt Securities and the
obligations to register the transfer or exchange of such Debt Securities, to
replace temporary or mutilated, destroyed, lost or stolen Debt Securities, to
maintain an office or agency in respect of such Debt Securities and to hold
moneys for payment in trust) ("defeasance") or (b) to be release from its
obligations with respect to such Debt Securities under the covenants described
in "--- Limitation on Liens" and "---Limitation on Sale and Leaseback
Transactions" above or, if provided pursuant to Section 301 of the Indenture,
its obligations with respect to any other covenant, and any omission to comply
with such obligations shall not constitute a default or an Event of Default
with respect to such Debt Securities ("covenant defeasance"), in either case
upon the irrevocable deposit by the Company with the Trustee, in trust, of an
amount, in U.S. Dollars or in such Foreign Currency in which such Debt
Securities are payable at stated maturity, or Government Obligations (as
defined below), or both, applicable to such Debt Securities which through the
scheduled payment of principal and interest in accordance with their terms will
provide money in an amount sufficient to pay the principal of (and premium, if
any) and interest on such Debt Securities, and any mandatory sinking fund or
analogous payments thereon, on the scheduled due dates therefor.
Such a trust may only be established if, among other things, (i) the
applicable defeasance or covenant defeasance does not result in a breach or
violation of, or constitute a default under, the Indenture or any other
material agreement or instrument to which the Company is a party or by which is
bound, (ii) no default or Event of Default with respect to the Debt Securities
to be defeased shall have occurred and be continuing on the date of the
establishment of such a trust and (iii) the Company has delivered to the
Trustee an Opinion of Counsel (as specified in the Indenture) to the effect
that the holders of such Debt Securities will not recognize income,
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gain or loss for U.S. federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to U.S. federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such defeasance or covenant defeasance had not occurred, and
such Opinion of Counsel, in the case of defeasance, must refer to and be based
upon a letter ruling of the Internal Revenue Service received by the Company, a
Revenue ruling published by the Internal Revenue Service or a change in
applicable U.S. federal income tax law occurring after the date of the
Indenture.
"Foreign Currency" means any currency, currency unit or composite
currency, including, without limitation, the ECU, issued by the government of
one or more countries other than the United States of America or by any
recognized confederation or association of such governments.
"Government Obligations" means securities which are (i) direct
obligations of the United States of America or the government or the
governments in the confederation which issued the Foreign Currency in which the
Debt Securities of a particular series are payable, for the payment of which
its full faith and credit is pledged or (ii) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United
States of America or such government or governments which issued the Foreign
Currency in which the Debt Securities of such series are payable, the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government or
governments, which, in the case of clauses (i) and (ii), are not callable or
redeemable at the option of the issuer or issuers thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian
with respect to any such Government Obligation or a specific payment of
interest on or principal of or any other amount with respect to any such
Government Obligation held by such custodian for the account of the holder of a
depository receipt, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Obligation or the specific payment of interest on or principal
of or any other amount with respect to the Government Obligation evidenced by
such depository receipt.
If after the Company has deposited funds and/or Government Obligations
to effect defeasance or covenant defeasance with respect to Debt Securities of
any series, (a) the holder of a Debt Security of such series is entitled to,
and does, elect pursuant to Section 301 of the Indenture or the terms of such
Debt Security to receive payment in a currency other than that in which such
deposit has been made in respect of such Debt Security, or (b) a Conversion
Event (as defined below) occurs in respect of the Foreign Currency in which
such deposit has been made, the indebtedness represented by such Debt Security
shall be deemed to have been, and will be, fully discharged and satisfied
through the payment of the principal of (and premium, if any) and interest, if
any, on such Debt Security as such Debt Security becomes due out of the
proceeds yielded by converting the amount so deposited in respect of such Debt
Security into the currency in which such Debt Security becomes payable as a
result of such election or such Conversion Event based on (x) in the case of
payments made pursuant to clause (a) above, the applicable market exchange rate
for such currency in effect on the second business day prior to
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such payment date, or (y) with respect to a Conversion Event, the applicable
market exchange rate for such Foreign Currency in effect (as nearly as
feasible) at the time of the Conversion Event.
"Conversion Event" means the cessation of use of (i) a Foreign
Currency both by the government of the country or the confederation which
issued such Foreign Currency and for the settlement of transactions by a
central bank or other public institutions of or within the international
banking community, (ii) the ECU both within the European Monetary System and
for the settlement of transactions by public institutions of or within the
European Union or (iii) any currency unit or composite currency other than the
ECU for the purposes for which it was established. All payments of principal
of (and premium, if any) and interest on any Debt Security that is payable in a
Foreign Currency that ceases to be used by its government or confederation of
issuance shall be made in U.S. dollars.
In the event the Company effects covenant defeasance with respect to
any Debt Securities and such Debt Securities are declared due and payable
because of the occurrence of any Event of Default other than an Event of
Default with respect to Sections 1005 and 1006 of the Indenture (which Sections
would no longer be applicable to such Debt Securities after such covenant
defeasance) or with respect to any other covenant as to which there has been
covenant defeasance, the amount in such Foreign Currency in which such Debt
Securities are payable, and Government Obligations on deposit with the Trustee,
will be sufficient to pay amounts due on such Debt Securities at the time of
their stated maturity but may not be sufficient to pay amounts due on such Debt
Securities at the time of the acceleration resulting from such Event of
Default. However, the Company would remain liable to make payment of such
amounts due at the time of acceleration.
Under the Indenture, the Company is required to furnish to the Trustee
annually a statement as to performance by the Company of certain of its
obligations under the Indenture and as to any default in such performance. The
Company is also required to delivery to the Trustee, within five days after the
occurrence thereof, written notice of any event which after notice or lapse of
time or both would constitute an Event of Default.
SATISFACTION AND DISCHARGE
The Indenture will be discharged and will cease to be of further
effect (except as to surviving rights of registration of transfer or exchange
of Debt Securities, as expressly provided for in the Indenture) as to all
outstanding Debt Securities when (a) either (i) all the Debt Securities
theretofore authenticated and delivered (other than lost, stolen or destroyed
Debt Securities which have been replaced or paid) have been delivered to the
Trustee for cancellation or (ii) all Debt Securities not theretofore delivered
to the Trustee for cancellation (x) have become due and payable, (y) will
become due and payable at their stated maturity within one year or (z) are to
be called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company, and the Company has irrevocably deposited or
caused to be deposited
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with the Trustee funds in an amount sufficient to pay and discharge the entire
Indebtedness on the Debt Securities not theretofore delivered to the Trustee
for cancellation, including principal of (and premium, if any, on) and accrued
interest at such stated maturity or redemption date; (b) the Company has paid
or caused to be paid all other sums payable under the Indenture by the Company;
and (c) the Company has delivered to the Trustee an Officers' Certificate and
an opinion of counsel each stating that (i) all conditions precedent under the
Indenture relating to the satisfaction and discharge of the Indenture has been
complied with and (ii) such satisfaction and discharge will not result in a
breach or violation of, or constitute a default under, the Indenture or any
other material agreement or instrument to which the Company is a party or by
which the Company is bound.
MODIFICATIONS AND AMENDMENTS
Without the consent of any holders, the Company and Trustee, at any
time and form time to time, may enter into one or more indentures supplemental
to the Indenture for any of the following purposes: (1) to evidence the
succession of another Person to the Company; (2) to add to the covenants of the
Company for the benefit of the holders, or to surrender any right or power
therein conferred upon the Company; (3) to add or change any provisions of the
Indenture to facilitate the issuance of bearer Debt Securities; (4) to
establish the form or terms of Debt Securities of any series and related
coupons; (5) to evidence and provide for the acceptance of the appointment
under the Indenture by a successor Trustee; (6) to cure any ambiguity, to
correct or supplement any provision in the Indenture which may be defective or
inconsistent with any other provision in the Indenture, provided that such
actions pursuant to this clause do not adversely affect the interests of the
holders of Debt Securities of any series or any related coupons in any material
respect; (7) to add to, or delete from or revise the conditions, limitations
and restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Debt Securities; (8) to add any additional
Events of Default; (9) to supplement any of the provisions of the Indenture to
such extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Debt Securities, provided that such action pursuant
to this clause does not adversely affect the interests of holders of Debt
Securities of such series or any related coupons in any material respect; (10)
to secure the Debt Securities; (11) to make provision with respect to
conversion rights of holders of Debt Securities of any series; and (12) to
amend or supplement any provision contained in the Indenture or in any
supplemental indenture, provided that such amendment or supplement does not
materially adversely affect the interests of the holders of any Debt Securities
then outstanding; provided that certain legal opinions and Officers'
Certificates are delivered.
Modifications and amendments of the Indenture may be made by the
Company and the Trustee with the consent of the holders of not less than
66-2/3% in aggregate outstanding principal amount of the Debt Securities;
provided, however, that no such modification or amendment may, without the
consent of the holder of each outstanding Debt Security affected thereby: (i)
change the stated maturity of the principal of, or any installment of interest
on, andy Debt Security or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption thereof, or change
the coin or currency in which the
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principal of any Debt Security or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of any such
payment on or after the stated maturity thereof; (ii) reduce the percentage in
principal amount of outstanding Debt Securities, the consent of whose holders
is required for any such modifications and amendments or the consent of whose
holders is required for any waiver; (iii) modify any of the provisions relating
to supplemental indentures requiring the consent of holders or relating to the
waiver of past defaults or relating to the waiver of certain covenants, except
to increase the percentage of outstanding Debt Securities required for such
actions or to provide that certain other provisions of the Indenture cannot be
modified or waived without the consent of the holder of each Debt Security
affected thereby; or (iv) make any change that adversely affects the right to
convert or exchange any Debt Security.
GOVERNING LAW
The Indenture and the Notes will be governed by, and construed in
accordance with the laws of the State of New York, without giving effect to the
conflicts of law principles thereof.
BOOK-ENTRY; DELIVERY AND FORM
The certificates representing the Notes will be issued in full
registered form, without coupons. Except as described under CERTIFICATED NOTES
below, the New Notes will be deposited with, or on behalf of, The Depository
Trust Company ("DTC"), New York, New York, as depository (the "Depository"),
and registered in the name of Cede & Co., as DTC's nominee, in the form of a
global Note certificate (the "Global Certificate").
GLOBAL CERTIFICATES. Ownership of beneficial interests in a Global
Certificate will be limited to persons who have accounts with DTC
("participants") or persons who hold interests through participants. Ownership
of beneficial interests in the Global Certificates will be shown on, and the
transfer of these ownership interests will be effected only through, records
maintained by DTC or its nominee (with respect to interests of participants)
and the records of participants (with respect to interests of persons other
than participants).
So long as DTC, or its nominee, is the registered owner or holder of a
Global Certificate, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Notes represented by such Global Certificate
for all purposes under the Indenture and the New Notes. In addition, no
beneficial owner of an interest in a Global Certificate will be able to
transfer that interest except in accordance with DTC's applicable procedures
(in additional to those under the Indenture referred to herein).
Payments on Global Certificates will be made to DTC, or its nominee,
as the registered owner thereof. Neither the Company, the Trustee nor any
paying agent will have any responsibility or liability for any aspect of the
records relating to or payment made on account
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of beneficial ownership interests in the Global Certificates or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that DTC, or its nominee, upon receipt of any
payment in respect of a Global Certificate representing any New Notes held by
it or its nominee, will immediately credit participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the
principal amount of such Global Certificate for such New Notes as shown on the
records of DTC or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in such Global Certificate held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers registered in the names of nominees for such customers. Such
payments will be the responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary
way in accordance with DTC rules. The laws of some states require that certain
persons take physical delivery of securities in definitive form. Consequently,
the ability to transfer beneficial interests in a Global Certificate to such
persons may be limited. Because DTC can only act on behalf of participants,
who in turn act on behalf of indirect participants (defined below) and certain
banks, the ability of a person having a beneficial interest in a Global
Certificate to pledge such interest to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
interest, may be affected by the lack of a physical certificate of such
interest.
The Company believes that it is the policy of DTC that it will take
any action permitted to be taken by a holder of Notes (including the
presentation of Notes for exchange as described below under "Exchange Offer;
Registration Rights") only at the direction of one or more participants to
whose account interests in the Global Certificates are credited and only in
respect of such portion of the aggregate principal amount at maturity of the
Notes as to which such participant or participants has or have given such
direction.
The Indenture provides that if (i) the Depository notifies the Company
that it is unwilling or unable to continue as Depository or if the Depository
ceases to be eligible under the Indenture and a successor depository is not
appointed by the Company within 90 days, (ii) the Company determines that the
Notes shall no longer be represented by Global Certificates and executes and
delivers to the Trustee a Company order to such effect or (iii) an Event of
Default or event which, with notice or lapse of time or both, would constitute
and Event of Default with respect to the Notes shall have occurred and be
continuing, the Global Certificates will be exchanged for Notes in definitive
form of like tenor and of an equal aggregate principal amount, in authorized
denominations. Such definitive Notes shall be registered in such name or names
as the Depository shall instruct the Trustee. It is expected that such
instructions may be based upon directions received by the Depository from
participants with respect to ownership of beneficial interests in Global
Certificates.
DTC has advised the Company as follows: DTC is a limited-purpose
trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation"
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within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC holds securities that its participants
deposit with DTC and facilitates the settlement among participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. Access to
the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a direct participant, either directly or indirectly
("indirect participants"). The rules applicable to DTC and its participants
are on file with the Commission.
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Certificates among participants
of DTC, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. Neither the
Company nor the Trustee will have any responsibility for the performance by DTC
or its participants or indirect participants of their respective obligations
under the rules and procedures governing their operations.
CERTIFICATED NOTES. Notes originally purchased by or transferred to
(i) institutional "accredited investors" (as defined in Rule 501 (a)(1), (2),
(3) or (7) under the Securities Act) who are not "qualified institutional
buyers" (as defined in Rule 144A under the Securities Act) ("QIBs"), (ii)
except as described below, Persons outside the United States pursuant to sales
in accordance with Regulation S under the Securities Act or (iii) any other
Persons who are not QIBs (collectively, "Non-Global Purchasers") will be issued
in registered form (the "Certified Notes"). Upon the transfer to a QIB of
Certificated Notes initially issued to a Non-Global Purchaser, such
Certificated Notes will be exchanged for an interest in the Global Certificate
representing the principal amount of Notes being transferred.
Notes originally purchased by persons outside the United States of
America pursuant to sales in accordance with Regulation S under the Securities
Act will be represented upon issuance by a temporary global Note certificate
(the "Temporary Certificate") which will not be exchangeable for Certificated
Notes until the expiration of the "40-day restricted period" within the meaning
of Rule 903(c)(3) of Regulation S under the Securities Act. The Temporary
Certificate will be registered in the name of, and held by, a temporary
certificate holder until the expiration of such 40-day restricted period, at
which time the Temporary Certificate will be delivered to the Trustee in
exchange for Certificated Notes registered in the names requested by such
temporary certificate holder. In addition, until the expiration of such 40-day
restricted period, transfers of interest in the Temporary Certificate can be
effected only through such temporary certificate holder in accordance with the
requirements set forth in "Notice to Investors."
In case any Note shall become mutilated, defaced, destroyed, lost or
stolen, the Company will execute and, upon the Company's request, the Trustee
will authenticate and deliver a new
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Note, of like tenor and equal principal amount in exchange and substitution for
such Note (upon surrender and cancellation thereof) or in lieu of and
substitution for such Note. In case such Note is destroyed, lost or stolen,
the applicant for a substituted Note shall furnish to the Company and the
Trustee such security or indemnity as may be required by them to hold each of
them harmless, and, in every case of destruction, loss or theft of such Note,
the applicant shall also furnish to the Company or the Trustee satisfactory
evidence of the destruction, loss or theft of such Note and of the ownership
thereof. Upon the issuance of any substituted Note, the Company may require
the payment by the registered holder thereof of a sum sufficient to cover fees
and expenses connected therewith.
REGARDING THE TRUSTEE
The Trust Indenture Act contains limitations on the rights of the
Trustee, should it become a creditor of the Company, to obtain payment of
claims in certain cases or to realize on certain property received by it in
respect of any such claims, as security or otherwise. The Trustee is permitted
to engage in other transactions with the Company and its subsidiaries from time
to time, provided that if the Trustee acquires any conflicting interest it must
eliminate such conflict upon the occurrence of an Event of Default, or else
resign. The Trustee currently acts as trustee with respect to the Company's
Liquid Yield Option Notes and as a Co-Agent with respect to the Company's
Revolving Credit Facility. The Company also has normal banking relationships
with the Trustee.
REGISTRATION RIGHTS
Pursuant to the Registration Rights Agreement, the Company agreed to
file with the Commission the Exchange Offer Registration Statement and, upon
its effectiveness, offer to the Holders of Transfer Restricted Securities
pursuant to the Exchange Offer who are able to make certain representations the
opportunity to exchange their Transfer Restricted Securities for New Notes. If
(i) the Company is not permitted to consummate the Exchange Offer because the
Exchange Offer is not permitted by applicable law or Commission policy or (ii)
any Holder of Transfer Restricted Securities notifies the Company that (A) it
is prohibited by law or Commission policy from participating in the Exchange
Offer or (B) that it may not resell the New Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and the prospectus
contained int he Exchange Offer Registration Statement is not appropriate or
available for such resales or (c) that it is a broker-dealer and holds Notes
acquired directly from the Company or an affiliate of the Company, the Company
will file with the Commission a Shelf Registration Statement to cover resales
of the Notes by the holders thereof who satisfy certain conditions relating to
the provision of information in connection with the Shelf Registration
Statement. The Company will use its best efforts to cause the applicable
registration statement to be declared effective as promptly as possible by the
Commission. For purposes of the foregoing, "Transfer Restricted Securities"
means each Old Note until (i) the date on which such Old Note has been
exchanged by a person other than a broker-dealer for a New Note in the Exchange
Offer, (ii) following the exchange by a broker-dealer in the Exchange Offer of
an Old
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Note for a New Note, the date on which such New Note is sold to a purchaser who
receives from such broker-dealer on or prior to the date of such sale a copy of
this Prospectus, (iii) the date on which such Old Note has been effectively
registered under the Securities Act and disposed of in accordance with the
Shelf Registration Statement or (iv) the date on which such Old Note is
distributed to the public pursuant to Rule 144 or Rule 145 under the Act.
The Registration Rights Agreement also provides that if obligated to
file the Shelf Registration Statement, the Company will use its best efforts to
cause such Shelf Registration Statement to be declared effective by the
Commission on or prior to 120 days after such obligation arises and to use its
best efforts to cause such Shelf Registration Statement to remain effective and
usable for a period of three years following the initial effectiveness thereof.
If the Company is obligated to file the Shelf Registration Statement and such
Shelf Registration Statement is not declared effective within 1880 days after
the Closing Date of the Old Notes (such event being a "Shelf Registration
Default"), then the Company will pay to each holder of Transfer Restricted
Securities, with respect to the first 90-day period immediately following such
Shelf Registration Default, liquidated damages in an amount equal to one-half
of one percentage point (.5%) per annum of the principal amount of Transfer
Restricted Securities held by such holder. Following the cure of all Shelf
Registration Defaults, the payment of liquidated damages will cease.
Holders of Notes will be required to make certain representations to
the Company in order to participate in the Exchange Offer and will be required
to deliver information to be used in connection with the Shelf Registration
Statement and to provide comments on the Shelf Registration Statement within
the time periods set forth in the Registration Rights Agreement in order to
have their Notes included in the Shelf Registration Statement and benefit form
the provisions regarding liquidated damages set forth above. In addition, for
so long as any Transfer Restricted Securities are outstanding during any period
when the Company is not subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, the Company will continue to provide to Holders of
Transfer Restricted Securities and to prospective purchasers of such Transfer
Restricted Securities the information required by Rule 144A(d)(4).
DESCRIPTION OF OLD NOTES
The terms of the Old Notes are identical in all material respects to
the New Notes, except that (i) the Old Notes have not been registered under the
Securities Act, are subject to certain restrictions on transfer and are
entitled to certain registration rights under the Registration Rights Agreement
(which rights will terminate upon consummation of the Exchange Offer, except to
the extent that the Initial Purchasers may have certain registration rights
under limited circumstances); (ii) the New Notes are issuable in minimum
denominations of $1,000 and integral multiples thereof compared to minimum
denominations of $250,000 and integral multiples of $1,000 in excess thereof
for the Old Notes; and (iii) the New Notes will not provide for any increase in
the interest rate thereon. In that regard, the Old Notes provide that, in the
event that the Exchange Offer is not consummated or a shelf registration
statement (the "Shelf Registration Statement") with respect to the resale of
the Old Notes is not declared effective on
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or prior to November 17, 1995, the interest rate on the Old Notes will increase
by 0.50% per annum following November 17, 1995; provided, however, that if the
Company requests holders of Old Notes to provide certain information called for
by the Registration Statement, then Old Notes owned by holders who do not
deliver such information to the Company or who do not provide comments on the
Shelf Registration Statement when required pursuant to the Registration Rights
Agreement will not be entitled to any such increase in the interest rate. Upon
the consummation of the Exchange Offer or the effectiveness of a Shelf
Registration Statement, as the case may be, after November 17,1995, the
interest rate on any Old Notes which remain outstanding will be reduced, from
the date of such consummation or effectiveness, as the case may be, to 7.0% per
annum and the Old Notes will not thereafter be entitled to any increase in the
interest rate thereon. The New Notes are not entitled to any such increase in
the interest rate thereon. In addition, the Old Notes and the New Notes will
constitute a single series of debt securities under the Indenture.
Accordingly, holders of Old Notes should review the information set forth under
"Risk Factors-- Consequences of Failure to Exchange" and "Description of
Notes."
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States Federal income
tax considerations to holders of the New Notes who are subject to U.S. net
income tax with respect to the New Notes ("U.S. persons") and who will hold the
New Notes as capital assets. There can be no assurance that the U.S. Internal
Revenue Service (the "IRS") will take a similar view of the purchase, ownership
or disposition of the New Notes. This discussion is based upon the provisions
of the Internal Revenue Code of 1986, as amended, and regulations, rulings and
judicial decisions now in effect, all of which are subject to change. It does
not include any description of the tax laws of any state, local or foreign
governments or any estate or gift tax considerations that may be applicable to
the New Notes or holders thereof. It does not discuss all aspects of U.S.
Federal income taxation that may be relevant to a particular investor in light
of his particular investment circumstances or to certain types of investors
subject to special treatment under the U.S. Federal income tax laws (for
example, dealers in securities or currencies, S corporations, life insurance
companies, tax-exempt organizations, taxpayers subject to the alternative
minimum tax and non-U.S. persons) and also does not discuss New Notes held as
a hedge against currency risks or as part of a straddle with other investments
or as part of a "synthetic security" or other integrated investment (including
a "conversion transaction") comprised of a New Note and one or more other
investments, or situations in which the functional currency of the holders is
not the U.S. dollar.
EXCHANGE OF NOTES
The exchange of Old Notes for New Notes should not be a taxable event
to holders for federal income tax purposes. The exchange of Old Notes for the
New Notes pursuant to the Exchange Offer should not be treated as an "exchange"
for federal income tax purposes because the New Notes should not be considered
to differ materially in kind or extent from the Old
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Notes. If, however, the exchange of the Old Notes for the New Notes were
treated as an exchange for federal income tax purposes, such exchange should
constitute a recapitalization for federal income tax purposes. Accordingly,
the New Notes should have the same issue price as the Old Notes, and a holder
should have the same adjusted basis and holding period in the New Notes as it
had in the Old Notes immediately before the exchange.
INTEREST ON THE NEW NOTES
A holder of a New Note will be required to report as ordinary interest
income for U.S. Federal income tax purposes interest earned on the New Note in
accordance with the holder's method of tax accounting.
DISPOSITION OF NEW NOTES
A holder's tax basis for a New Note generally will be the holder's
purchase price for the Old Note. Upon the sale, exchange, redemption,
retirement or other disposition of a New Note, a holder will recognize gain or
loss equal to the difference (if any) between the amount realized and the
holder's tax basis in the New Note. Such gain or loss will be long-term
capital gain or loss (with certain exceptions to the characterization as
capital gain if the New Note was acquired at a market discount).
BACKUP WITHHOLDING
A holder of a New Note may be subject to backup withholding at the
rate of 31% with respect to interest paid on the New Note and proceeds from the
sale, exchange, redemption or retirement of the New Note, unless such holder(s)
is a corporation or comes within certain other exempt categories and, when
required, demonstrates that fact or (b) provides a correct taxpayer
identification number, certifies as to no loss of exemption from backup
withholding and otherwise complies with applicable requirements of the backup
withholding rules. A holder of a New Note who does not provide the Company
with his correct taxpayer identification number may be subject to penalties
imposed by the IRS.
A holder of a New Note who is not a U.S. person will generally be
exempt from backup withholding and information reporting requirements, but may
be required to comply with certification and identification procedures in order
to obtain an exemption from backup withholding and information reporting.
Any amount paid as backup withholding will be creditable against the
holder's U.S. Federal income tax liability.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. This Prospectus,
as it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of New Notes received in exchange for
Old Notes where such Old Notes were acquired as a result of market-making
activities or other trading activities. The Company has agreed that for a
period of 90 days after the Expiration Date, it will make this Prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale.
The Company will not receive any proceeds from any sale of New Notes
by broker-dealers. New Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Notes. Any broker-dealer
that resells New Notes that were received by it for its own account pursuant to
the Exchange Offer and any broker or dealer that participates in a distribution
of such New Notes may be deemed to be an "underwriter" within the meaning of
the Securities Act and any profit on any such resale of New Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 270 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer other than commissions or concessions of any
brokers or dealers and will indemnify the holders of the Notes (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
DESCRIPTION OF CAPITAL STOCK
GENERAL
RPM's authorized capital stock consists of 100,000,000 Common Shares,
without par value. There were 56,957,000 shares outstanding as of May 31,
1995. All presently outstanding RPM Common Shares have been duly authorized
and validly issued, and are fully paid and nonassessable. Dividends, which may
be declared at the discretion of the Board of Directors of RPM, must be paid
equally on all issued and outstanding RPM Common Shares out
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of funds legally available therefor. Upon liquidation, any excess net assets
after all payments of debts and costs must be paid to shareholders in
proportion to the number of RPM Common Shares held. RPM Common Shares are not
subject to preemptive rights, conversion rights, redemption provisions or
sinking fund provisions.
The holder of each RPM Common Share is entitled to one vote on all
matters submitted to shareholders generally, except that shareholders have the
right to cumulate their votes for the election of directors as permitted by
Ohio law. The Board of Directors is divided into three Classes with the term
of office of one of such Classes expiring in each year. At each Annual Meeting
of Shareholders the successors to the Directors of the Class whose term is
expiring at that time are elected to hold office for a term of three years.
Classification of the Board of Directors increases the number of RPM Common
Shares necessary under cumulative voting to elect a Director in any given year.
Subject to the provisions of Articles Seventh and Eighth of RPM's Amended
Articles of Incorporation (the "Amended Articles"), as hereinafter summarized,
all matters submitted to a vote of shareholders are determined by a vote of the
holders of shares entitling them to exercise a majority of the voting power of
RPM present in person or by proxy at a meeting called to consider such matter.
Article Seventh of RPM's Amended Articles provides, in essence, that
proposals (i) with respect to a merger, consolidation or acquisition wherein
the existing shareholders of RPM would hold less than two-thirds of the voting
power of RPM, or of the surviving or new corporation, immediately after
consummation of the transaction, and (ii) with respect to a sale of
substantially all of the assets of RPM, both require adoption or approval by
two-thirds of the voting power of RPM.
Article Eighth of RPM's Amended Articles provides, in essence, that
the affirmative vote of at least 80% of the voting power of RPM is required to
effect a merger, consolidation, sale, lease or exchange of substantially all of
the assets of RPM where the other party to the transaction, including its
"affiliates" and "associated persons," as defined, is a holder, directly or
indirectly, of 5% or more of the outstanding shares of any class of RPM
entitled to vote at a meeting called to consider such a proposed transaction,
as of the record date used to determine the shareholders entitled to vote upon
such transaction. The Board of Directors, acting in good faith, shall make a
conclusive determination as to whether the proposed transaction requires an 80%
vote of shareholders. The requirement for approval by an 80% vote shall not be
applicable to proposals which received the formal approval of the Board of
Directors of RPM prior to the acquisition of the 5% share interest by the other
party, provided that with respect to any proposed transaction as to which the
80% voting requirement would otherwise be applicable there has also been a
disclosure to all shareholders of any inducements in connection with the
proposed transaction offered to officers and Directors of RPM which are not
extended to all shareholders.
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OHIO LAW
As an Ohio corporation, RPM is subject to certain provisions of Ohio
law which may discourage or render more difficult an unsolicited takeover of
RPM. Among these are provisions that (i) prohibit certain mergers, sales of
assets, issuances or purchases of securities, liquidation or dissolution, or
reclassification of the then outstanding shares of an Ohio corporation
involving certain holders of stock representing 10% or more of the voting
power, unless such transactions are either approved by the directors in office
prior to the 10% shareholder becoming such or involve a 10% shareholder which
has been such for at least three years and certain requirements related to the
price and form of consideration to be received by shareholders are met; and
(ii) provide Ohio corporations with the right to recover profits realized under
certain circumstances by persons engaged in "greenmailing" or who otherwise
sell securities of a corporation within 18 months of proposing to acquire such
corporation.
In addition, pursuant to Section 1701.831 of the Ohio Revised Code,
the purchase of certain levels of voting power of RPM (one-fifth or more,
one-third or more, or a majority) can be made only with the prior authorization
of the holders of at least a majority of the total voting power of RPM and the
separate prior authorization of the holders of at least a majority of the
voting power held by shareholders other than the proposed purchaser, officers
of RPM and Directors of RPM who are also employees.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for RPM's Common Shares is Society
National Bank, Cleveland, Ohio.
LEGAL MATTERS
Certain legal matters in connection with the Notes offered hereby will
be passed upon for the Company by Calfee, Halter & Griswold, Cleveland, Ohio
and Brown & Wood, New York, New York. William A. Papenbrock, Esq., a partner
of Calfee, Halter & Griswold, is a Director of the Company and as of May 31,
1995 owned 8,907 Common Shares of the Company.
56
<PAGE> 60
INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated financial statements of the Company included in its
Annual Report on Form 10-K for the fiscal year ended May 31, 1995 have been
examined by Ciulla Stephens & Co., independent public accountants, as set forth
in their report included therein and incorporated herein by reference. The
consolidated financial statements of NDSI for the fiscal year ended December
31, 1994 included in the Company's Current Report on Form 8-K dated July 24,
1995 have been examined by KPMG Peat Marwick LLP, independent public
accountants, as set forth in their report therein and incorporated herein by
reference. The report of KPMG Peat Marwick LLP covering the December 31, 1994
financial statements of NDSI contains an explanatory paragraph that states that
NDSI's wholly owned subsidiary, Dryvit Systems, Inc., has experienced rust
related warranty expense arising from prior years sales. No reasonable
estimate of unreported claims could be made at December 31, 1994 and
accordingly, the financial statements do not include any adjustments relating
to the outcome of this uncertainty. The consolidated financial statements
referred to above are incorporated herein by reference in reliance upon such
reports and upon the authority of such firms as experts in accounting and
auditing.
57
<PAGE> 61
<TABLE>
<CAPTION>
<S> <C>
=================================================== ===================================================
No person is authorized in connection with any
offering made hereby to give any information or to
make any representation not contained in this
Prospectus and, if given or made, such information
or representation must not be relied upon as
having been authorized by the Company. This
Prospectus does not constitute an offer to sell or
a solicitation of an offer to buy any security
other than the Notes offered hereby, nor does it
constitute an offer to sell or a solicitation of [RPM, INC. LOGO]
an offer to buy any of the Notes to any person in
any jurisdiction in which it is unlawful to make
such an offer or solicitation to such person.
Neither the delivery of this Prospectus or the
accompanying Letter of Transmittal nor any sale
made hereunder shall under any circumstances
create any implication that the information
contained herein is correct as of any date
subsequent to the date hereof.
____________________
TABLE OF CONTENTS
Page
----
<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . 4 Offer to Exchange
INCORPORATION OF CERTAIN DOCUMENTS its
BY REFERENCE . . . . . . . . . . . . . . . 5 7.0% Senior Notes Due 2005
PROSPECTUS SUMMARY . . . . . . . . . . . . . 6 ($150,000,000 principal amount
ACQUISITION OF NARRAGANSETT/DSI outstanding)
ACQUISITION CO., INC. AND ITS for 7.0% Senior Exchange Notes
WHOLLY OWNED SUBSIDIARY Due 2005
DRYVIT SYSTEMS, INC. . . . . . . . . . . . 15
THE COMPANY . . . . . . . . . . . . . . . . . 15
BUSINESS . . . . . . . . . . . . . . . . . . 15 ($150,000,000 principal amount
RISK FACTORS . . . . . . . . . . . . . . . . 18 outstanding)
THE EXCHANGE OFFER . . . . . . . . . . . . . 20
USE OF PROCEEDS . . . . . . . . . . . . . . . 32
CAPITALIZATION . . . . . . . . . . . . . . . 32
SELECTED FINANCIAL INFORMATION . . . . . . . 34
DESCRIPTION OF NOTES . . . . . . . . . . . . 35
DESCRIPTION OF OLD NOTES . . . . . . . . . . 51
CERTAIN UNITED STATES FEDERAL INCOME
TAX CONSEQUENCES . . . . . . . . . . . . . 52 _________________
PLAN OF DISTRIBUTION . . . . . . . . . . . . 54
DESCRIPTION OF CAPITAL STOCK . . . . . . . . 54 OFFER TO EXCHANGE --
LEGAL MATTERS . . . . . . . . . . . . . . . . 56 PROSPECTUS
INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . 57 _________________
______________________ _____________, 1995
=================================================== ===================================================
</TABLE>
58
<PAGE> 62
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
-----------------------------------------
Ohio Revised Code Section 1701.13(E) and Article VI of Registrant's
Amended Code of Regulations (incorporated herein by reference as Exhibit 3.2)
provide for indemnification of Directors and officers against certain
liabilities.
The Registrant has purchased a Directors and Officers Liability
Insurance Policy (incorporated herein by reference as Exhibit 99.1).
The Registrant has entered into Indemnification Agreements with each
of its Directors and executive officers providing for additional
indemnification protection beyond that provided by the Directors and Officers
Liability Insurance Policy. A copy of the form of Indemnification Agreement is
incorporated herein by reference and is filed as Exhibit 99.2 to this
Registration Statement.
Reference is made to Section 5 of the Registration Rights Agreement
(Exhibit 4.6 to the Registration Statement) which provides indemnification to
the Registrant's officers, Directors and controlling persons against certain
civil liabilities, including liabilities under the Securities Act.
Item 21. Exhibits and Financial Statement Schedules.
------------------------------------------
(a) EXHIBITS. See the Exhibit Index at page E-1 of this
Registration Statement.
(b) FINANCIAL STATEMENT SCHEDULES. The financial statement
schedules required by this item are incorporated by reference from the
Company's Annual Report on Form 10-K for the fiscal year ended May 31, 1994.
II-1
<PAGE> 63
Item 22. Undertakings.
------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during the period in which offers or sales
are being made, a post-effective amendment to this Registration Statement:
(A) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(B) To reflect in the prospectus any facts or
event arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set
forth in the registration statement;
(C) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement;
PROVIDED, HOWEVER, that paragraphs (1)(A) and 1(B) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(c) The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the prospectus
pursuant to Items 4, 10(b), 11, or 13 of this Form within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
(d) The undersigned registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a transaction,
and the company being acquired involved therein, that was not the subject of
and included in the registration statement when it became effective.
II-2
<PAGE> 64
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused Amendment No. 1 to this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Cleveland and State of Ohio, on the ____ day of September, 1995.
RPM, Inc.
By /s/ Thomas C. Sullivan
--------------------------------
Thomas C. Sullivan, Chairman of
the Board of Directors and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
Amendment No. 1 to this Registration Statement has been signed by the following
persons in the capacities indicated and on the ____ day of September, 1995.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Thomas C. Sullivan Chairman of the Board of
-------------------------------------- Directors and Chief Executive Officer (principal
Thomas C. Sullivan executive officer)
/s/ James A. Karman President, Chief Operating
--------------------------------------
James A. Karman Officer and Director
/s/ Frank C. Sullivan Vice President and Chief
---------------------------------------- Financial Officer (principal financial officer)
Frank C. Sullivan
/s/ Glenn R. Hasman Vice President --
-------------------------------------- Administration (principal accounting officer)
Glenn R. Hasman
/s/ Max D.Amstutz* Director
---------------------------------------
Max D. Amstutz
/s/ Edward B. Brandon* Director
--------------------------------------
Edward B. Brandon
/s/ Lorrie Gustin* Director
------------------------------------------
Lorrie Gustin
</TABLE>
II-3
<PAGE> 65
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Roy H. Holdt* Director
----------------------------------------
Roy H. Holdt
/s/ E. Bradley Jones* Director
-----------------------------------------
E. Bradley Jones
/s/ Donald K. Miller* Director
----------------------------------------
Donald K. Miller
/s/ John H. Morris, Jr. Director
----------------------------------------
John H. Morris, Jr.
/s/ Kevin O'Donnell* Director
---------------------------------------
Kevin O'Donnell
/s/ William A. Papenbrock* Director
-------------------------------------
William A. Papenbrock
/s/ Stephen Stranahan* Director
----------------------------------------
Stephen Stranahan
<FN>
* The undersigned, by signing his name hereto, does hereby sign this Amendment
No. 1 to this Registration Statement on behalf of the above-named Directors
and executive officers of RPM, Inc. pursuant to a Power of Attorney executed on
behalf of each of such Directors and executive officers and which has been
filed with the Securities and Exchange Commission.
By/s/ James A. Karman
James A. Karman, Attorney-in-Fact
</TABLE>
II-4
<PAGE> 66
Exhibit 23.1
CONSENT OF
INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of our report
dated July 7, 1995 which appears in the Annual Report on Form 10-K for the
fiscal year ended May 31, 1995 of RPM, Inc. and of our report on the Financial
Statement Schedules which appears in such Annual Report on Form 10-K. We also
consent to the reference to our firm made under the heading "INDEPENDENT PUBLIC
ACCOUNTANTS" in the Prospectus.
/s/ CIULLA STEPHENS & CO.
CIULLA STEPHENS & CO.
Cleveland, Ohio
September 6, 1995
II-5
<PAGE> 67
Exhibit 23.2
CONSENT OF
INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Prospectus constituting
part of this Amendment No. 1 to Registration Statement on Form S-4 of our
report dated February 28, 1995 which appears in the Current Report on Form 8-K,
dated July 24, 1995, of RPM, Inc. and to the reference to our firm made under
the heading "INDEPENDENT PUBLIC ACCOUNTANTS" in the Prospectus.
Our report dated February 28, 1995 contains an explanatory paragraph that
states that Narragansett/DSI Acquisition Co., Inc.'s wholly owned subsidiary,
Dryvit Systems, Inc., has experienced rust related warranty expense arising
from prior years sales. Dryvit Systems, Inc. has made provision for reported
claims; however, no provision has been made for unreported claims as they
cannot be reasonably estimated. Accordingly, no additional provision for any
liability that may result has been recognized in the financial statements.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Providence, Rhode Island
September 6, 1995
II-6
<PAGE> 68
Exhibit 23.3
CONSENT OF COUNSEL
The consent of Calfee, Halter & Griswold is contained in their opinion
filed as Exhibit 5.1 to this Registration Statement.
II-7
<PAGE> 69
Exhibit 23.4
CONSENT OF COUNSEL
The Consent of Brown & Wood is contained in their opinion filed as
Exhibit 5.2 to this Registration Statement.
II-8
<PAGE> 70
<TABLE>
RPM, INC.
Exhibit Index
-------------
<CAPTION>
Sequential
----------
Exhibit No. Description Page
----------- ----------- ----
<S> <C> <C>
3.1 Amended Articles of Incorporation, as amended . . . . . . . . . . . . . . . (A)(B)(C)
3.2 Amended Code of Regulations . . . . . . . . . . . . . . . . . . . . . . . . (D)
4.1 Specimen Certificate of Common Shares, without par value, of RPM, Inc. . .
(E)
4.2 Specimen LYONs Certificate . . . . . . . . . . . . . . . . . . . . . . . . (C)
4.3 Specimen Note Certificate for New Notes . . . . . . . . . . . . . . . . . . *
4.4 Specimen Note Certificate for Old Notes . . . . . . . . . . . . . . . . . . *
4.5 Indenture, dated as of June 1, 1995, between RPM, Inc. and The First
National Bank of Chicago, as Trustee . . . . . . . . . . . . . . . . . . . *
4.6 Registration Rights Agreement, dated as of June 20, 1995, among RPM, Inc.,
Chase Securities, Inc. and Bear, Stearns & Co. Inc. . . . . . . . . . . . . *
5.1 Opinion of Calfee, Halter & Griswold as to the validity of the Notes . . . *
5.2 Opinion of Brown & Wood as to the validity of the Notes . . . . . . . . . .
23.1 Consent of Ciulla Stephens & Co. (See page II-5 of this Registration
Statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23.2 Consent of KPMG Peat Marwick LLP. (See page II-6 of this Registration
Statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23.3 Consent of Calfee, Halter & Griswold. (See page II-7 of this Registration
Statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23.4 Consent of Brown & Wood. (See page II-8 of this Registration
Statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24.1 Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
25.1 Form T-1 Statement of Eligibility of The First National Bank of Chicago . . *
99.1 Executive Risk Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . (F)
99.2 Form of Indemnification Agreement entered into by and between the Company
and each of its Directors and Executive Officers . . . . . . . . . . . . . (G)
99.3 Plan and Agreement of Merger among RPM, Inc., Narragansett/DSI Acquisition
Co., Inc. ("NDSI") and NDSI's securityholders. . . . . . . . . . . . . . . (H)
99.4 Form of Letter of Transmittal . . . . . . . . . . . . . . . . . . . . . . . **
99.5 Form of Notice of Guaranteed Delivery . . . . . . . . . . . . . . . . . . . **
99.6 Form of Exchange Agent Agreement . . . . . . . . . . . . . . . . . . . . . **
<FN>
---------------------
* Previously filed
** To be filed by Amendment
(A) Incorporated herein by reference to the appropriate
exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended
May 31, 1984.
(B) Incorporated herein by referenced to the appropriate
exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended
May 31, 1987.
</TABLE>
E-1
<PAGE> 71
(C) Incorporated herein by reference to the appropriate
exhibit to the Company's Form S-3 Registration Statement (Reg. No. 33-50868).
(D) Incorporated herein by reference to the appropriate
exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended
May 31, 1988.
(E) Incorporated herein by reference to the appropriate
exhibit to the Company's Registration Statement on Form S-3 (Reg. No.
33-39849).
(F) Incorporated herein by reference to the appropriate
exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended
May 31, 1989.
(G) Incorporated herein by reference to the appropriate
exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended
May 31, 1991.
(H) Incorporated herein by reference to the appropriate
exhibit to the Company's Current Report on Form 8-K, dated July 24, 1995.
E-2
<PAGE> 1
EXHIBIT 5.2
-----------
September 14, 1995
RPM, Inc.
2628 Pearl Road
Medina, Ohio 44258
Gentlemen:
We have acted as special New York counsel to RPM, Inc. (the
"Company") in connection with the filing by the Company with the
Securities and Exchange Commission under the provisions of the
Securities Act of 1933, as amended, of a Registration Statement on
Form S-4 (the "Registration Statement") with respect to
$150,000,000 aggregate principal amount of 7.O% Senior Notes Due
2005 of the Company (the "Notes").
We have examined such documents and records as we deemed
appropriate, including the following:
(a) a copy of the Indenture, dated as of June 1, 1995,
between the Company and The First National Bank of Chicago, as
Trustee (the "Indenture"), in the form filed as an exhibit to
the Registration Statement;
(b) a copy of the Specimen Note Certificate representing
the Notes, in the form filed as an exhibit to the Registration
Statement; and
(c) a copy of the opinion of Calfee, Halter & Griswold
as to the due authorization, execution and delivery of the
Indenture and the due authorization of the Notes under Ohio
law.
Based upon the foregoing and upon such further investigation
as we deemed relevant, and subject to the assumption and qualification set
forth herein, we are of the opinion that:
1. The Indenture constitutes a valid and binding agreement
of the Company.
2. The Notes, when duly authenticated by the Trustee and
duly issued and delivered by the Company under the Indenture in
exchange for the Company's outstanding 7.0% Senior Notes Due 2005,
will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms,
except to the extent that such enforcement may be limited by
bankruptcy, insolvency or other laws relating to or affecting
<PAGE> 2
enforcement of creditors' rights or by general equity principals.
The opinions expressed herein are limited to the laws of the State of
New York.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name wherein appearing in the
Registration Statement and any amendment thereto.
Very truly yours,
/s/ Brown & Wood
