CGSH
Draft
12/16/97
As filed with the Securities and Exchange Commission on December __,
1997
Registration No. 333-__________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BLOUNT, INC.
BLOUNT INTERNATIONAL, INC.
(Exact name of each registrant as specified in
its Charter)
63-0593908
Delaware 63-0780521
(State or other (I.R.S. employer
jurisdiction of identification numbers)
incorporation or
organization)
4520 Executive Park Drive
Montgomery, AL 36116-1602
(334) 244-4000
(Address, including zip code, and telephone number, including area
code, of registrants' principal executive offices)
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Harold E. Layman
Blount International, Inc.
4520 Executive Park Drive
Montgomery, Alabama, 36116-1602
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Louis Kahn, Esq. Mary A. Bernard, Esq.
Cleary, Gottlieb, Steen & King & Spalding
Hamilton 1185 Avenue of the
One Liberty Plaza Americas
New York, New York 10006 New York, New York 10036
212-225-2230 212-556-2100
Approximate date of commencement of proposed sale of the
securities to the public: As soon as practicable following the
effective date of this Registration Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following box. |_|
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans,
check the following box. |_|
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
number of the earlier effective registration statement for the
same offering. |_|
If this form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
|_|
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. |_|
CALCULATION OF REGISTRATION FEE
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Title Of Each Class Amount To Proposed Proposed Amount Of
Of Securities To Be Registered Be Maximum Maximum Registration
Registered Offering Aggregate Fee
Price Offering
per Unit Price (1)
(1)
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__% Senior Notes Due 2008
of Blount, Inc. $150,000,000 100% $150,000,00 $44,250
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Blount International,
Inc. Guarantee - - - (2)
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(1) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457 under the Securities
Act of 1933.
(2) No fee required pursuant to Rule 457(h).
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The Registrants hereby amend this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrants 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, as amended, or until the Registration
Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
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<PAGE>
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X Information contained herein is subject to completion or X
X amendment. A registration statement relating to these securities X
X has been filed with the Securities and Exchange Commission. X
X These securities may not be sold nor may offers to buy be X
X accepted prior to the time the registration statement becomes X
X effective. This prospectus shall not constitute an offer to X
X sell or the solicitation of any offer to buy nor shall there X
X be any sale of these securities in any State in which such X
X offer, solicitation or sale would be unlawful prior to X
X registration or qualification under the securities laws of X
X any such State. X
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Subject to Completion, Dated December , 1997
Prospectus
Blount, Inc.
$150,000,000
% Senior Notes due , 2008
Fully and Unconditionally Guaranteed by
Blount International, Inc.
Interest payable and
Issue price: %
Interest on the % Senior Notes due , 2008 (the "Notes") of
Blount, Inc. (the "Company") is payable semi- annually
on and of each year, beginning , 1998. The Notes are being
offered by the Company and will be fully and unconditionally guaranteed
(the "Guarantee") by Blount International, Inc. The Notes are
redeemable, in whole or in part, at the option of the Company, at
any time, at a redemption price equal to the greater of (i) 100%
of the principal amount of such Notes and (ii) the sum of the
present values of the remaining scheduled payments of principal
and interest thereon (not including any portion of such payments
of interest accrued as of the date of redemption) discounted to
the redemption date on a semi-annual basis at the Adjusted
Treasury Rate (as defined herein) plus basis points, plus, in
each case, accrued but unpaid interest thereon to the date of
redemption.
The Notes will be represented by one or more Global Securities
registered in the name of The Depository Trust Company (the
"Depositary") or its nominee. Interests in the Global Securities
will be shown on, and transfers thereof will be effected only
through, records maintained by the Depositary and its
participants. Except as provided herein, Notes will not be issued
in definitive form. See "Description of Notes."
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.
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Underwriting
Price to discounts and Proceeds to
public(1) commissions Company(1)(3)
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Per Note % % %
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Total $ $ $
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(1) Plus accrued interest, if any, from , 1998.
(2) The Company has agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated
at $ .
The Notes are offered, subject to prior sale, when, as and if
accepted by the Underwriters and subject to approval of certain
legal matters by King & Spalding, counsel for the Underwriters.
It is expected that delivery of the Notes will be made on or
about , 1998 through the facilities of the Depositary,
against payment therefor in immediately available funds.
J.P. Morgan & Co. Salomon Smith Barney
January , 1998
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE
PRICE OF THE NOTES. SPECIFICALLY, THE UNDERWRITERS MAY
OVERALLOT IN CONNECTION WITH THE OFFERING, AND MAY BID FOR AND
PURCHASE THE NOTES IN THE OPEN MARKET. FOR A DESCRIPTION OF
THESE ACTIVITIES, SEE "UNDERWRITING."
No person has been authorized to give any information or to make
any representations other than those contained or incorporated by
reference in this Prospectus, and, if given or made, such
information or representation must not be relied upon as having
been authorized. This Prospectus does not constitute an offer to
sell or the solicitation of an offer to buy any securities other
than the securities described in this Prospectus or an offer to
sell or the solicitation of an offer to buy such securities in
any circumstances in which such offer or solicitation is
unlawful. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the
Company since the date hereof or that the information contained
or incorporated by reference herein is correct as of any time
subsequent to the date of such information.
TABLE OF CONTENTS
Page
----
Available Information....................................... 3
Incorporation of Certain Documents by Reference............. 3
The Company................................................. 4
Federal Cartridge Acquisition............................... 7
Use of Proceeds............................................. 7
Capitalization.............................................. 9
Selected Financial Data..................................... 10
Management's Discussion and Analysis
of Financial Condition and
Results of Operations.................................... 12
Description of Notes........................................ 14
Underwriting................................................ 23
Legal Matters............................................... 24
Experts..................................................... 24
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AVAILABLE INFORMATION
Blount International, Inc. ("Blount" or the "Guarantor") is
subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other
information concerning Blount can be inspected and copied at the
public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices at Seven World Trade Center, 13th
Floor, New York, New York 10048, and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can be obtained from the Commission, Public
Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates, or at the Commission's worldwide
website at http://www.sec.gov. Blount's Class A Common Stock and
Class B Common Stock are listed on the New York Stock Exchange
Inc., and such material may also be inspected at the offices of
such Exchange, 20 Broad Street, New York, New York, 10005.
The Company, a wholly-owned subsidiary of the Guarantor, is
not subject to the informational requirements of the Exchange
Act, but is required to file reports with the Commission pursuant
to the Indenture dated as of July 1, 1993 governing its 9% Senior
Subordinated Notes due 2003 ("Subordinated Notes"), which the
Company proposes to repay with a portion of the net proceeds from
the sale of the Notes offered hereby. See "Use of Proceeds." Upon
repayment of the Subordinated Notes, the Company will no longer
be obligated to file reports with the Commission pursuant to the
Indenture. As a result of the filing of the Registration
Statement (as defined herein) with the Commission, the Company
will nevertheless become subject to the informational
requirements of the Exchange Act and in accordance therewith will
be required to file reports and other information with the
Commission. The Company intends to request the Commission to
conditionally exempt the Company from the informational
requirements of the Exchange Act pursuant to Staff Accounting
Bulletin No. 53 and Rule 12(h) under the Exchange Act.
Blount and the Company have filed with the Commission a
registration statement on Form S-3 (herein, together with all
amendments and exhibits, referred to as the "Registration
Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the Notes. This Prospectus does
not contain all 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 and to the exhibits thereto. Statements contained
herein concerning the provisions of certain documents are not
necessarily complete, and in each instance, reference is made to
the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents (or portions thereof), filed with the
Commission pursuant to Section 13 of the Exchange Act or
Regulation 14A thereunder, are incorporated herein by reference
as of their respective dates: (i) the Transition Reports on Form
10-K of Blount and the Company for the period ended December 31,
1996 (the "1996 Forms 10-K"), (ii) the Quarterly Reports on Form
10-Q of Blount and the Company for the quarters ended March 31,
1997, June 30, 1997 and September 30, 1997 and (iii) the Current
Reports on Form 8-K of Blount and the Company dated November 4,
1997, and (iv) the information under the headings "Election of
Directors," "Employment Contracts, Termination of Employment and
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Change-In-Control Arrangements" and "Indebtedness of Management"
contained in the Proxy Statement relating to the Annual Meeting
of Stockholders of Blount on April 21, 1997.
All reports and definitive proxy or information statements
filed by Blount and the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of this offering shall be
deemed to be incorporated by reference into this Prospectus and
to be a part hereof from date of the filing of such documents.
Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be modified or
superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statements so modified
or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
Blount and the Company will provide without charge to each
person, including any beneficial owner, to whom a copy of this
Prospectus is delivered, on the written or oral request of any
such person, a copy of any or all of the documents incorporated
by reference herein, except the exhibits to such documents
(unless such exhibits are specifically incorporated by reference
in such documents). Requests for such copies should be directed
to Executive Vice President--Administration, Blount
International, Inc., P.O. Box 949, Montgomery, Alabama,
36101-0949, telephone (334) 244-4000.
THE COMPANY
The Company is an international manufacturing company with
operations in three business segments: Outdoor Products,
Industrial and Power Equipment and Sporting Equipment. The
Company's focus is on manufacturing and distributing products
which hold leading market share positions in a number of
attractive niche markets. The Company is a wholly-owned
subsidiary of the Guarantor, which is a holding company
conducting all of its operations through the Company. The
principal offices of the Company and the Guarantor are located at
4520 Executive Park Drive, Montgomery, Alabama, 36116 (telephone
number: (334) 244-4000).
Outdoor Products
The Company's Outdoor Products segment (45.1% of
consolidated sales for the year ended December 31, 1996) is
comprised of the Oregon Cutting Systems Division ("Oregon") and
Dixon Industries, Inc. ("Dixon"). Oregon produces a wide variety
of saw chain, chain saw guide bars, saw chain drive sprockets and
maintenance tools for use primarily on portable gasoline and
electric chain saws, and mechanical timber harvesting equipment.
The Oregon trademark is well known to end-users and the Company
believes that it is the world leader in the production of saw
chain. Oregon's saw chain and related products are used primarily
by professional loggers, construction workers, farmers, arborists
and homeowners. Oregon also markets an Industrial Cutting System
("ICS"), a diamond-segmented chain cutting system for concrete
(including steel-reinforced concrete). ICS is a faster and more
flexible concrete cutting method than others currently employed
in the construction and demolition industries.
Oregon sells its products to distributors, dealers and mass
merchandisers serving the retail replacement market. In addition,
Oregon currently sells its products to more than 50 original
equipment manufacturers ("OEMs"). The use of Oregon cutting chain
as original equipment on chain saws is promoted through
cooperation with OEMs in improving the design and specifications
of chain and saws. Due to the high level of technical expertise
and capital investment required to manufacture saw chain and
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guide bars, the Company believes that it is able to produce
durable, high-quality saw chain and guide bars more efficiently
than most of its competitors.
The Company has Oregon marketing personnel throughout the
United States and in a number of foreign countries. Sales derived
from operations outside the United States accounted for 43%, and
export sales accounted for an additional 24%, of Oregon's sales
during the year ended December 31, 1996.
Dixon, acquired by the Company in early fiscal 1991, has
manufactured ZTR (zero turning radius) lawn mowers and related
attachments since 1973. Dixon pioneered the development of ZTR
and is the only manufacturer to offer a full line of ZTR lawn
mowers for both homeowner and commercial applications.
The key element which differentiates lawn mowers
manufactured by Dixon from those of its competitors is Dixon's
unique mechanical transaxle. The transaxle transmits power
independently to the rear drive wheels and enables the operator
to move the back wheels at different speeds and turn the mower in
a circle no larger than the machine, a "zero radius turn." This
transmission enables the Dixon mower to out-maneuver conventional
ride-on mowers available in the market today and provides a cost
advantage over the more expensive hydrostatic drives used by
competitors in the market.
Dixon sells its products through full-service dealers,
North American distributors and export distributors. Sales by
Dixon accounted for 15% of sales attributable to the Outdoor
Products segment in the year ended December 31, 1996.
In January 1997 the Company acquired Frederick
Manufacturing Corp. and Orbex, Inc. for an aggregate of $19
million in cash. Frederick and Orbex are suppliers of outdoor
products, primarily accessories for lawn mowers, and sporting
goods. Their sales for 1996 aggregated approximately $20
million.
Industrial and Power Equipment
The Company's Industrial and Power Equipment segment (32.2%
of consolidated sales for the year ended December 31, 1996)
manufactures equipment for timber harvesting and log loading,
industrial tractors and loaders, rotation bearings and mechanical
power transmission components. The Company believes that it is a
world leader in the manufacture of hydraulic timber harvesting
equipment, which includes a line of self-propelled and
truck-mounted loaders and feller bunchers (tractors with
hydraulic attachments for felling timber) under the Prentice
brand name; a line of tractors, feller bunchers and related
attachments under the Hydro-Ax brand name; and a line of
delimbers, slashers, processors and self-propelled carriers under
the CTR brand name. Major users of these products include timber
harvesters, lumber and pulp mills, land reclamation companies,
contractors, scrap yard operators and waste treatment facilities.
The Company sells its products through a network of
approximately 160 dealers in over 200 locations in the United
States and currently has an additional 15 dealers overseas,
primarily in South America and Southeast Asia. Over 80% of the
sales attributable to the Industrial and Power Equipment segment
for the year ended December 31, 1996 were in the United States,
primarily in the southeastern and south central states.
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The Company emphasizes the quality, safety, comfort,
durability and productivity of its products and the after-market
service provided by its distribution and support network. The
Company's Industrial and Power Equipment segment competes
primarily on the basis of quality with a number of domestic and
foreign manufacturers of log loaders and feller bunchers.
The Company attempts to capitalize on its technological
and manufacturing expertise as a means of increasing its
participation in the market for replacement parts for products
which it manufactures, as well as of developing new product
applications both within and beyond the timber, scrap and
construction industries. The Company is committed to continuing
research and development in this segment to respond quickly to
increasing mechanization and environmental awareness in the
timber harvesting industry.
Sales attributable to the Industrial and Power Equipment
segment during the year ended December 31, 1996 included sales
aggregating $43 million from Gear Products, Inc. ("Gear"),
acquired by the Company early in fiscal 1992, and CTR
Manufacturing, Inc. ("CTR"), acquired by the Company in early
fiscal 1995. Gear designs, manufactures and distributes rotation
bearings and mechanical power transmission components for
manufacturers of equipment that serve the utility, man-lift,
construction, forestry and marine industries.
Sporting Equipment
The Company's Sporting Equipment segment (22.7% of
consolidated sales for the year ended December 31, 1996)
manufactures small arms ammunition, reloading equipment, primers,
gun care products and accessories, and is a distributor of
imported sports optical products under the Simmons and Weaver
brand names. Sales by Simmons Outdoor Corporation, acquired in
December 1995, accounted for 31% of sales attributable to the
Sporting Equipment segment for the year ended December 31, 1996.
Principal products in this segment include CCI and Speer
ammunition sold for use by hunters, sportsmen, law enforcement
and military personnel; RCBS reloading equipment for use by
hunters and sportsmen who prefer to reload their own ammunition;
Outers gun care and trap-shooting products; Ram-Line synthetic
stocks and other shooting sports accessories; Weaver shooting
mounts and scopes; and Simmons binoculars, scopes and telescopes
and other optical and hunting accessories. The Company believes
that it is a market leader in the domestic gun care and reloading
markets with high levels of brand name recognition in each of
these areas. The Sporting Equipment segment also produces
industrial powerloads which are used in the construction industry
to drive fastening pins into metal or concrete.
The market for Sporting Equipment products is characterized
by a high degree of customer loyalty to brand names and
historically has remained relatively stable notwithstanding
adverse economic conditions. A continuing focus on new and better
technologies has enabled the Company to introduce a number of new
and improved products in recent years. These products include
Nitrex, the segment's new rifle ammunition, which was previously
available only to handloaders. One of the segment's successful
products in recent years has been Blazer aluminum-case
ammunition. Up to 15% less expensive than traditional brass-case
ammunition, Blazer aluminum-case ammunition is used as training
ammunition by numerous law enforcement agencies located
throughout the world. The Company also has been successful with
the introduction of Gold Dot pistol ammunition, a high
performance service round that is used by many major law
enforcement agencies. In addition, the Company developed
Non-Toxic ammunition, which has a total copper bullet and
utilizes a Clean-Fire lead-free primer, in response to concern in
the shooting community about exposure to lead and other heavy
metals, particularly in indoor ranges.
6
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FEDERAL CARTRIDGE ACQUISITION
On November 4, 1997 the Company acquired the Federal
Cartridge Company ("Federal"), a subsidiary of Pentair, Inc., for
a purchase price of $112 million in cash, subject to post-closing
adjustments. The acquisition was funded with borrowings under the
Company's Credit Agreement, other short-term borrowings and
internally-generated funds. The Company anticipates that the
post-closing adjustments will result in an increase in the
purchase price, the amount of which is not expected to be
material to the Company. See "Use of Proceeds" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."
Federal manufactures and markets shotshell, centerfire, and
rimfire cartridges, ammunition components, and clay targets.
These products are distributed throughout the United States
through a network of distributors and directly to large retail
chains, the U.S. government and law enforcement agencies. On the
basis of Federal's 1996 sales in the ammunition business of
approximately $130 million, the acquisition would have
represented an approximately 90% increase in sales attributable
to the Company's Sporting Equipment segment for the year ended
December 31, 1996, and places the Company among the leading
United States producers of ammunition products.
The Federal acquisition both complements and significantly
expands the Sporting Equipment segment's product offerings.
Shotgun shells, a product not manufactured or sold by the
Company, represented approximately 45% of Federal's sales for the
year ended December 31, 1996. Federal is also a significant
producer and marketer of centerfire rifle ammunition, products as
to which the Company's market share is much smaller. In addition,
Federal has strong sales to the law enforcement market, a market
on which the Company only recently began to focus.
A significant portion of Federal's sales are to mass
merchandisers, such as WalMart, to whom the Company's Sporting
Equipment sales have been much less significant. The Company
believes that as a result of the acquisition of Federal, the
Company's Sporting Equipment product lines, particularly its
optical products, may gain greater access to such mass
merchandisers.
The Company believes that in recent years Federal's margins
for its products generally have been lower than those of the
Company's Sporting Equipment segment. The Company believes that
the profitability of the Sporting Equipment segment (including
Federal) can be improved through cost savings to be phased in
over several years. Such savings are expected to result primarily
from the specialization and rationalization of production
activities, combined purchasing of goods and services and more
efficient marketing and distribution.
USE OF PROCEEDS
The net proceeds from the sale of the Notes offered hereby
are estimated to be approximately $148.6 million. The Company
will use $54 million of such net proceeds to repay outstanding
indebtedness incurred in connection with the Company's
acquisition of Federal (see "Federal Cartridge Acquisition")
under the Company's $150 million unsecured revolving credit
agreement ("Credit Agreement") with a syndicate of banks. Morgan
Guaranty Trust Company of New York ("Morgan Guaranty"), an
affiliate of J.P. Morgan Securities Inc., is one of the banks and
acts as agent under the Credit Agreement. See "Underwriting." The
Credit Agreement provides for interest rates to be determined at
the time of borrowings based on a choice of formulas specified in
the Credit Agreement. Interest rates and commitment fees may vary
based on the ratio of cash flow to debt as defined in the Credit
Agreement or on the Company's credit rating. As of December 15,
1997, the Company had an
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aggregate of $54 million outstanding under the Credit
Agreement, which borrowings bore interest at such date at a
weighted average rate of approximately 6.20% per annum. The
Credit Agreement terminates in April 2002.
A portion of the net proceeds from the sale of the Notes
may be used to pay any adjustment to the purchase price of Federal.
See "Federal Cartridge Acquisition."
The Company also plans to use a portion of the net proceeds
from the sale of the Notes to redeem all of the outstanding
Subordinated Notes of the Company, which become redeemable by the
Company on June 15, 1998, unless prior to May 16, 1998 the
Company reacquires a majority of such principal amount of
Subordinated Notes through an offer to purchase Subordinated
Notes, or open market or negotiated purchases of Subordinated
Notes. If the Company redeems the Subordinated Notes, the
redemption price per Subordinated Note will be the principal
amount thereof plus a premium equal to 3.375% of such principal
amount, plus accrued and unpaid interest to the date of
redemption. If the Company repurchases Subordinated Notes through
a tender offer or open market or negotiated purchases, the
purchase price per Subordinated Note will be a negotiated price
or the prevailing market price. As of November 30, 1997, the
Company had $68.8 million aggregate principal amount of
Subordinated Notes outstanding.
The Company will use the remaining net proceeds for general
corporate purposes, which may include future acquisitions.
Pending application of the net proceeds as described
above, the Company intends to invest the net proceeds in
short-term, interest-bearing, investment-grade obligations.
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CAPITALIZATION
The following table sets forth the consolidated short-term
debt and capitalization of Blount at September 30, 1997, and as
adjusted to give effect to the sale of the Notes offered hereby
and the application of the net proceeds therefrom. See "Use of
Proceeds."
September 30, 1997
------------------
Actual As Adjusted
------ ------------
Short-term notes and current maturities of
long-term debt................................ $ 0.8 $ 0.8
====== ======
Long-term debt:
Credit Agreement (1) ....................... $ 54.0 $ --
Other (less current maturities) ............ 16.0 16.0
Notes offered hereby ....................... -- 150.0
9% Subordinated Notes due 2003 ............. 68.8 --
------ ----
Total long-term debt ......................... 138.8 166.0
------ ------
Stockholders' equity:
Common stock-par value $0.01 per share:
Class A-60 million shares authorized,
27,258,070 shares issued, 25,802,890
shares outstanding (2) ..................... 0.3 0.3
Class B-14 million shares authorized,
11,637,860 shares issued and
outstanding(2) ............................. 0.1 0.1
Capital in excess of par value of
stock (2) .................................. 37.1 37.1
Retained earnings .......................... 284.6 282.6
Accumulated translation adjustment ......... 7.2 7.2
Less Class A treasury stock at cost,
1,455,180 shares ........................... (29.3) (29.3)
----- -----
Total stockholders' equity ................. 300.0 298.0
------ ------
Total capitalization .................... $438.8 $464.0
====== ======
- ------------------------
(1) Reflects borrowings incurred on November 4, 1997 to fund the
Federal acquisition and subsequent repayment of $8 million
of such borrowings with internally generated funds. See "Use
of Proceeds" and "Federal Cartridge Acquisition."
(2) Gives effect to a 2-for-1 stock split effected on December 8,
1997.
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SELECTED FINANCIAL DATA
The following selected consolidated financial data of
Blount International, Inc. and its subsidiaries (including the
Company) for the years ended the last day of February 1993
through 1996, and for the ten months ended December 31, 1996, are
derived from the consolidated financial statements of Blount
International, Inc. and its subsidiaries (including the Company)
for such years and period, which have been audited by Coopers &
Lybrand L.L.P., independent accountants. The selected
consolidated financial data for the twelve months ended December
31, 1996 and the nine months ended September 30, 1996 and 1997
are derived from unaudited consolidated financial statements of
Blount International, Inc. and, in the opinion of management,
reflect all adjustments (consisting only of normal recurring
accruals) necessary to present fairly the data presented for such
periods. The following information should be read in conjunction
with the consolidated financial statements and notes thereto and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" included or incorporated by reference
herein. The results for the nine months ended September 30, 1997
are not necessarily indicative of results that may be expected
for the full year.
For the years ended
the last day of February, For the ten
------------------------- months ended
1993 1994 1995 1996 12/31/96
---- ---- ---- ---- --------
(Dollar amounts in millions, except per share)
Statements of
Income Data:
Sales ........... $ 426.5 $ 488.0 $ 588.4 $ 644.3 $ 526.7
Cost of sales ... 299.4 330.1 390.8 427.3 346.5
Selling, general
and
administrative
expenses ....... 98.2 114.1 121.0 126.5 105.2
Income from
operations ..... 28.9 43.9 76.6 90.5 75.0
Interest expense,
net ............ (10.4) (9.5) (8.5) (7.4) (5.6)
Income from
continuing
operations before
income taxes . 16.6 33.9 67.4 83.7 69.6
Income from
continuing
operations .... 10.3 21.6 40.7 53.6 44.0
Net income ..... 14.4 11.3 40.7 53.6 45.4
Per Share (2):
Income from
continuing
operations . .28 .56 1.05 1.38 1.12
Net Income . .39 .29 1.05 1.38 1.16
Cash dividends
declared per common share:
Class A (2) . 0.150 0.154 0.173 0.198 0.228
Class B (2) . 0.134 0.138 0.156 0.181 0.212
Other Data:
EBITDA (3) .... $ 50.5 $ 67.6 $ 101.0 116.3 $ 96.6
Depreciation and
amortization 23.4 22.8 22.9 22.2 19.2
Property, plant
and equipment
additions (4) 20.7 14.7 14.7 19.3 18.7
Ratio of earnings
to
fixed
charges (5,6). 2.2x 3.5x 6.2x 7.4x 8.2x
Long-term debt
to total
capitali-
zation (7) .. 34.4% 38.3% 32.1% 27.3% 22.5%
Balance Sheet Data
(at period end):
Working
capital ...... $ 58.2 $ 105.1 $ 123.3 $ 136.2 $ 166.2
Total assets .. 459.4 499.6 520.8 546.5 533.8
Short-term notes
and current
maturities of
long-term debt 12.8 6.1 7.8 11.7 1.2
Long-term debt
(less current
maturities) 82.0 106.2 98.3 95.9 84.6
Stockholders'
equity ........ 156.6 171.0 207.7 255.0 290.8
For the nine months
For the twelve ended September 30,
months ended ----------------------
12/31/96(1) 1996 1997
----------- ---- ----
Statements of
Income Data:
Sales ........... $ 649.3 $ 475.3 $ 512.7
Cost of sales ... 426.9 312.0 345.8
Selling, general
and
administrative
expenses ....... 130.0 96.1 97.9
Income from
operations ..... 92.4 67.2 69.0
Interest expense,
net ............ (7.5) (6.5) (4.8)
Income from
continuing
operations before
income taxes . 85.4 61.0 64.6
Income from
continuing
operations ..... 53.8 37.8 40.8
Net income ...... 55.2 37.8 40.8
Per Share (2):
Income from
continuing
operations .. 1.37 .97 1.06
Net Income .. 1.41 .97 1.06
Cash dividends declared
per common share:
Class A (2) .. 0.228 0.165 0.190
Class B (2) .. 0.212 0.153 0.177
Other Data:
EBITDA (3) ...... $ 118.2 $ 85.9 $ 89.0
Depreciation and
amortization 23.3 17.4 17.9
Property, plant
and equipment
additions (4) 21.3 13.4 13.9
Ratio of earnings
to
fixed
charges (5,6) ... 8.1x 7.6x 8.8x
Long-term debt
to total
capitalization (7) 22.5% 23.3% 22.0%
Balance Sheet Data
(at period end):
Working capital 166.2 $ 161.3 $169.9
Total assets .. 533.8 529.2 545.5
Short-term notes
and current
maturities of
long-term debt 1.2 1.5 0.8
Long-term debt
(less current
maturities) 84.6 84.8 84.8
Stockholders'
equity ........ 290.8 278.6 300.0
- -------------------------
(1) In April 1996, Blount and the Company changed their fiscal
year from one ending on the last day of February to one ending on
December 31. Unaudited financial data for the twelve months ended
December 31, 1996 is presented in the table above for comparative
purposes only.
(2) Per share amounts have been restated to reflect a 2-for-1
stock split effected on December 8, 1997.
(3) Represents income from continuing operations before income taxes,
interest expense and depreciation and amortization. EBITDA
should not be considered as an alternative to, or more meaningful
than, (i) operating
10
<PAGE>
income (as determined in accordance with generally accepted
accounting principles) as an indicator of operating performance
or (ii) cash flows from operating activities (as determined in
accordance with generally accepted accounting principles) as a
measure of liquidity. EBITDA is presented to provide information
with respect to debt service capability.
(4) Includes property, plant and equipment of acquired
companies at date of purchase of $5.0 million, $0.6 million and
$3.0 million in the twelve months ended the last day of February
1995 and 1996 and the nine months ended September 30, 1997.
(5) The ratio of earnings to fixed charges is determined by
dividing pretax income from continuing operations before interest
expense, debt expense amortization and the portion of rental
expense deemed representative of the interest factor by the sum
of interest expense, capitalized interest, debt expense
amortization and the portion of rental expense deemed
representative of the interest factor.
(6) The following unaudited pro forma ratios of earnings to
fixed charges reflect the sale of the Notes offered hereby and
the application of the net proceeds therefrom, as described under
"Use of Proceeds."
For the twelve For the nine
months ended months ended
December 31, 1996 September 30, 1997
----------------------- ----------------------
Actual Pro Forma Actual Pro Forma
------ --------- ------ ---------
Ratio of earnings to 8.1x 9.2x 8.8x 10.1x
fixed charges
(7) Total capitalization is defined as the sum of long-term debt
(excluding current maturities) and stockholders' equity.
11
<PAGE>
BLOUNT INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in
conjunction with the consolidated financial statements and notes
thereto of Blount International, Inc. incorporated by reference
in this Prospectus.
Results of Operations
In April 1996, Blount changed its fiscal year from one
ending on the last day of February to one ending on December 31.
As a result of the change in fiscal year, the audited financial
statements, incorporated in this Prospectus by reference, include
the results for the ten-month transition period ended December
31, 1996 ("transition period"). The following discussion and
analysis includes a discussion of the nine months ended September
30, 1997 compared to the similar period for the prior calendar
year. Per share amounts have been restated to reflect a 2-for-1
stock split effected on December 8, 1997.
Nine Months ended September 30, 1997 (unaudited) Compared to
Nine Months ended September 30, 1996 (unaudited)
Sales for the first nine months of 1997 were $512.7
million, compared to $475.3 million for the comparable period of
the prior year. Net income for the first nine months of 1997 was
$40.8 million ($1.06 per share) compared to net income of $37.8
million ($.97 per share) for the comparable period of the prior
year. These operating results reflect improved operating income
from the Outdoor Products segment in the current year, and lower
income from the Industrial and Power Equipment and Sporting
Equipment segments. Selling, general and administrative expenses
were 19% of sales in the first nine months of 1997 compared to
20% in the first nine months of 1996. Lower interest expense
during the nine months ended September 30, 1997 principally
reflects lower debt levels during the current year. The principal
reasons for these results are set forth below.
Sales for the Outdoor Products segment for the first nine
months of 1997 were $240.4 million compared to $220.5 million
during the same periods of 1996. Operating income was $50.3
million during the first nine months of 1997 compared to $45.7
million in the comparable period of the prior year. The higher
sales and operating income resulted principally from the
acquisition of Frederick Manufacturing Corporation and Orbex,
Inc. in the first quarter of 1997, a higher volume of saw chain
and bar sales, and higher income from operations in Brazil,
partially offset by the effect of a strong U.S. dollar on foreign
sales and income.
Sales for the Industrial and Power Equipment segment were
$168.0 million during the nine months ended September 30, 1997,
compared to $149.0 million during the same period last year.
Operating income was $21.6 million for the first nine months of
1997 compared to $22.9 million for the comparable period of the
prior year. The higher sales during the current year reflect a
higher volume of forestry equipment sold as a result of improving
market conditions and new products introduced during 1997.
Management believes that industry fundamentals are improving as
worldwide pulp prices have increased and mill inventories have
continued to decline. Although operating income was lower for the
first nine months, operating income improved during the third
quarter, reflecting the higher sales as the price discounting
seen in the first half of the year has begun to decrease.
12
<PAGE>
Sales for the Sporting Equipment segment were $104.3
million in the first nine months of 1997 compared to $105.7
million in the comparable period of 1996. Operating income was
$11.5 million during the nine months ended September 30, 1997,
compared to $13.9 million during the same period of last year.
Sales for the third quarter of 1997 increased by $3.1 million
over the comparable period of the prior year, principally due to
a higher volume of ammunition products and sports optics. Sales
for the nine months ended September 30, 1997 reflect a higher
volume of ammunition products sales, offset by a lower volume of
sales of sports optics (riflescopes and binoculars) during the
first half of 1997. Operating income was lower during the first
nine months of 1997 as the prior year's comparable period
included the positive effect of reduced environmental cost
estimates of $1.9 million resulting from the resolution of an
environmental matter. Management believes that the fundamentals
for the shooting sports industry are improving slowly. On
November 4, 1997, Blount acquired Federal. See "Federal Cartridge
Acquisition."
Total backlog at September 30, 1997 was $107.7 million
compared to $74.2 million at December 31, 1996, principally due
to a higher backlog at the Industrial and Power Equipment and
Sporting Equipment segments.
Liquidity and Capital Resources
At September 30, 1997, no amount was outstanding under the
$150 million Credit Agreement. The long-term debt to equity ratio
was .3 to 1 at December 31, 1996 and September 30, 1997. At
September 30, 1997, $68.8 million aggregate principal amount of
the Company's Subordinated Notes were outstanding. The
Subordinated Notes mature in 2003.
Cash balances at September 30, 1997 were $34.9 million
compared to $58.7 million at December 31, 1996. Working capital
was $169.9 million at September 30, 1997 compared to $166.2
million at December 31, 1996. The reduction in cash primarily
results from cash expenditures attributable to the acquisition of
Frederick and Orbex and the purchase of treasury stock under
Blount's previously announced $50 million Class A Common Stock
buyback program, partially offset by cash flows from operations.
The increase in accounts receivable reflects higher sales and the
acquisition of Frederick and Orbex. The increase in inventories
reflects the acquisition of Frederick and Orbex and some increase
due to anticipated orders.
On November 4, 1997, Blount acquired Federal for $112
million in cash (subject to post-closing adjustments). See
"Federal Cartridge Acquisition." The sources of the $112 million
paid at closing consisted of borrowings under the Credit
Agreement, other short-term borrowings and internally-generated
funds. A portion of the net proceeds from the sale of the Notes
offered hereby will be used to repay borrowings outstanding under
the Credit Agreement. See "Use of Proceeds."
Management believes that the net proceeds from the sale of
the Notes offered hereby, together with borrowings available
under the Credit Agreement and cash from operations, will be
sufficient to fund Blount's cash needs for the foreseeable
future.
New Accounting Standards
In February 1997, the Financial Accounting Standards Board
issued Statement No. 128, "Earnings per Share." See Note 8 of
Notes to Consolidated Financial Statements contained in Blount's
Quarterly Report on Form 10-Q for the third quarter ended
September 30, 1997, incorporated herein by
13
<PAGE>
reference, for a description of Statement No. 128 and its pro
forma effects on Blount for the nine months ended September 30,
1997 and 1996.
In June 1997, the Financial Accounting Standards Board
issued Statement No. 130, "Reporting Comprehensive Income," and
Statement No. 131, "Disclosures about Segments of an Enterprise
and Related Information." Both statements are effective for
fiscal years beginning after December 15, 1997. Blount does not
believe that these statements will have a material effect on
financial condition or operating results.
DESCRIPTION OF NOTES
The Notes are to be issued under an Indenture, to be dated
as of January , 1998 (the "Indenture"), among the Company, the
Guarantor, and , as Trustee (the "Trustee"), a copy of which
is filed as an exhibit to the Registration Statement. The following
summaries of certain provisions of the Indenture do not purport
to be complete and are subject to, and are qualified in their
entirety by reference to, all of the provisions of the Indenture,
including the definitions therein of certain terms. Wherever
particular Sections or defined terms of the Indenture are
referred to herein, such Sections or defined terms are
incorporated herein by reference.
The following sets forth certain general terms and
provisions of the Notes offered hereby.
General
The Notes will be unsecured and unsubordinated obligations
of the Company, will be limited to $ aggregate principal amount
and will mature on , 2008. Payment of principal of, premium, if
any, and interest on the Notes will be fully and unconditionally
guaranteed by the Guarantor.
The Notes will bear interest at % per annum, payable
semiannually in arrears on and of each year, commencing , 1998,
to the persons in whose names the Notes are registered at the
close of business on the and , as the case may be,
immediately preceding such interest payment dates. Interest on the
Notes will be computed on the basis of a 360-day year of twelve
30-day months.
The principal of, premium, if any, and interest on the
Notes will be payable, and the transfer of Notes will be
registrable, at the Corporate Trust Office of the Trustee and at
any other office or agency maintained by the Company for such
purpose. (Sections 301, 305 and 1002). The Notes will be issued
only in fully registered form without coupons. (Section 302). No
service charge will be made for any registration of transfer or
exchange of the Notes, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge
imposed in connection therewith. (Section 305).
The Notes will be sold in minimum denominations of $1,000
and integral multiples thereof.
The Notes will not be subject to any sinking fund.
Same-Day Settlement and Payment
Settlement for the Notes will be made by the Underwriters
in same-day funds. All payments of principal and interest will be
made by the Company in immediately available funds.
14
<PAGE>
Global Notes
The Notes may be issued in the form of one or more fully
registered Global Notes (referred to herein as the "Global
Securities") that will be deposited with, or on behalf of, the
Depositary and registered in the name of the Depositary's
nominee. Unless and until it is exchanged in whole or in part for
Notes in definitive registered form, a Global Security may not be
registered for transfer or exchange except as a whole by the
Depositary to a nominee of such Depositary. (Sections 204 and
305).
The Depositary has advised the Company as follows: The
Depositary is a limited purpose trust company organized under the
laws of the State of New York, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the
Uniform Commercial Code, as amended, and a "Clearing Agency"
registered pursuant to the provisions of Section 17A of the
Exchange Act. The Depositary was created to hold securities for
its participating organizations (collectively, "participants")
and facilitate the clearance and settlement of securities
transactions between participants through electronic book-entry
changes in accounts of its participants, thereby eliminating the
need for physical transfer and delivery of certificates.
Participants include securities brokers and dealers, banks, trust
companies and clearing corporations and may include certain other
organizations. Indirect access to the Depositary system is
available to other entities such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly
("indirect participants").
Upon the issuance of a Global Security, the Depositary will
credit, on its internal system, the respective principal amount
of the individual beneficial interests represented by such Global
Securities to the accounts of the Depositary participants or
persons who hold interests through participants. Ownership of
beneficial interests in the Global Securities will be shown on,
and the transfer of that ownership will be effected only through,
records maintained by the Depositary or its nominee (with respect
to interests of participants) or by the participants and the
indirect participants (with respect to other owners of beneficial
interests in Global Securities).
The laws of some states require that certain purchasers of
securities take physical delivery of such securities in
definitive form. Such laws, as well as the limits on
participation in the Depositary's book-entry system, may impair
the ability to transfer beneficial interests in a Global
Security.
So long as the Depositary or its nominee is the registered
owner of a Global Security, such Depositary or such nominee will
be considered the sole owner or holder of the Notes represented
by such Global Security for all purposes under the Indenture.
Except as provided below, owners of beneficial interests in a
Global Security will not be entitled to have Notes represented by
such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of such Notes in
definitive form, and will not be considered the owners or holders
thereof under the Indenture.
Payments of principal of, premium, if any, and interest on
Notes registered in the name of the Depositary or its nominee
will be made to the Depositary or its nominee, as the case may
be, as the registered owner of the Global Security representing
such Notes. The Company expects that the Depositary or its
nominee, upon receipt of any payment of principal, premium or
interest, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial
interests in the principal amount of the Global Security for such
Notes, as shown on the records of the Depositary or its nominee.
The Company also expects that payments by participants and
indirect participants to owners of beneficial interests in such
Global Security held through such persons will be governed by
standing instructions and customary practices, as is now the case
with securities registered
15
<PAGE>
in "street name," and will be the responsibility of such
participants and indirect participants. Neither the Company nor
the Trustee will have any responsibility or liability for any
aspect of the records relating to, or payments made on account
of, beneficial ownership interests in the Global Security for
such Notes or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests. (Section
308).
If the Depositary is at any time unwilling or unable to
continue as Depositary, the Company has agreed to appoint a
successor depositary. If such a successor is not appointed by the
Company within 90 days, the Company will issue Notes in
definitive form in exchange for the Global Security representing
such Notes. In addition, the Company may at any time and in its
sole discretion determine not to have the Notes represented by a
Global Security and, in such event, will issue Notes in
definitive form in exchange for the Global Security representing
such Notes. Further, if the Company so specifies with respect to
the Notes, an owner of a beneficial interest in a Global Security
representing Notes may, on terms acceptable to the Company, the
Trustee and the Depositary for such Global Security, receive
Notes in definitive form. In any such instance, an owner of a
beneficial interest in a Global Security will be entitled to
physical delivery in definitive form of Notes represented by such
Global Security equal in principal amount to such beneficial
interest and to have such Notes registered in its name. (Section
305). Notes so issued in definitive form will be issued in
denominations of $1,000 and integral multiples thereof.
Guarantee
The Guarantor, as primary obligor not merely as surety,
will irrevocably and unconditionally guarantee (the "Guarantee")
the punctual payment when due, whether at maturity, by
acceleration or otherwise, the principal of, premium, if any, and
interest on the Notes. The Guarantee will be a continuing
guaranty and shall (a) remain in full force and effect until
payment in full of the guaranteed obligations, (b) be binding
upon Guarantor and (c) inure to the benefit of and be enforceable
by the Trustee, the Holders and their successors, transferees and
assigns.
Optional Redemption
The Notes will be redeemable, in whole or in part, at the
option of the Company at any time at a redemption price equal to
the greater of (i) 100% of the principal amount of such Notes or
(ii) as determined by a Quotation Agent (as defined below), the
sum of the present values of the remaining scheduled payments of
principal and interest thereon (not including any portion of such
payments of interest accrued as of the date of redemption)
discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at
the Adjusted Treasury Rate plus basis points, plus, in each case,
accrued but unpaid interest thereon to the date of redemption.
"Adjusted Treasury Rate" means, with respect to any
redemption date, the rate per annum equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States
Treasury security selected by a Quotation Agent as having a
maturity most comparable to the remaining term of the Notes to be
redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the
remaining term of such Notes.
16
<PAGE>
"Quotation Agent" means the Reference Treasury Dealer
appointed by the Trustee after consultation with the Company.
"Reference Treasury Dealer" means (i) each of J.P. Morgan
Securities Inc. and Salomon Smith Barney and their respective
successors; provided, however, that if either of the foregoing
shall cease to be a primary U.S. Government securities dealer in
New York City (a "Primary Treasury Dealer"), the Company shall
substitute another Primary Treasury Dealer; and (ii) any other
Primary Treasury Dealer selected by the Trustee after
consultation with the Company.
"Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the Reference Treasury Dealer
Quotations for such redemption date, after excluding the highest
and lowest such Reference Treasury Dealer Quotations, or (ii) if
the Trustee obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and any redemption date, the
average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case
as a percentage of its principal amount) quoted in writing to the
Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such redemption date.
Notice of any redemption will be mailed at least 30 days
but not more than 60 days before the redemption date to each
holder of the Notes to be redeemed.
Unless the Company defaults in payment of the redemption
price, on and after the redemption date, interest will cease to
accrue on the Notes or portions thereof called for redemption.
Certain Covenants
Restriction on Secured Debt
The Indenture provides that so long as any Notes are
Outstanding, the Guarantor will not, and will not permit any
Subsidiary to, incur, issue, assume or guarantee any Debt secured
by a Mortgage on any Principal Property of the Guarantor or any
Subsidiary or any shares of Capital Stock or Debt of any
Subsidiary, without effectively providing that the Notes then
Outstanding (together with, if the Guarantor shall so determine,
any other Debt of the Guarantor or such Subsidiary then existing
or thereafter created which is not subordinate to the Notes then
Outstanding) shall be secured equally and ratably with (or, at
the option of the Guarantor, prior to) such secured Debt, for so
long as such secured Debt shall be so secured; provided, however,
that this restriction will not apply to:
(i) Mortgages on Principal Property, shares of Capital
Stock or Debt of any corporation existing at the time such
corporation becomes a Subsidiary;
(ii) Mortgages on Principal Property or shares of
Capital Stock existing at the time of the acquisition of
such Principal Property or Capital Stock by the Guarantor
or a Subsidiary;
(iii) Mortgages to secure the payment of all or any
part of the price of acquisition, construction or
improvement of Principal Property or Capital Stock by the
Guarantor or a Subsidiary, or to secure any Debt incurred
by the Guarantor or a Subsidiary, prior to, at the time of,
or within 180 days after, the later of the acquisition or
completion of construction (including any improvements on
an existing property), which Debt is incurred for the
purpose of financing all or any part of the purchase,
construction or improvement of such Principal Property;
17
<PAGE>
(iv) Mortgages securing any Debt of a Subsidiary
owing to the Guarantor or to another Subsidiary;
(v) Mortgages on property or assets of a corporation
existing at the time such corporation is merged into or
consolidated with the Guarantor or a Subsidiary or at the
time of a sale, lease or other disposition of the
properties of a corporation as an entirety or substantially
as an entirety to the Guarantor or a Subsidiary in
accordance with the terms of the Indenture;
(vi) Mortgages on property or assets of a Person
existing at the time the Guarantor or the Company is merged
into or consolidated with such other Person or at the time
of a sale, lease or other disposition of the properties of
the Guarantor or the Company as an entirety or
substantially as an entirety to such other Person in
accordance with the terms of the Indenture;
(vii) Mortgages on property or assets of the Guarantor
or a Subsidiary securing Debt issued by the United States
of America or any State thereof or any department, agency
or instrumentality or political subdivision thereof, or by
any other country or any political subdivision thereof, for
the purpose of financing all or any part of the purchase
price of (or, in the case of real property, the cost of
construction on or improvement of) any property or assets
subject to such Mortgages (including, but not limited to,
Mortgages incurred in connection with pollution control,
industrial revenue or similar financings);
(viii) any extension, renewal or replacement (or
successive extensions, renewals or replacements), as a
whole or in part, of any Mortgages referred to in the
foregoing clauses (i) to (vii) inclusive; provided, that
the principal amount of the Debt being extended, renewed or
replaced shall not be increased and such extension, renewal
or replacement, in the case of Debt secured by a Mortgage,
shall be limited to all or a part of the same property,
shares of Capital Stock or Debt that secured the Mortgage
extended, renewed or replaced (plus improvements on such
property); and
(ix) Mortgages not permitted by clauses (i) through
(viii) above if at the time of and after giving effect to,
the creation or assumption of any such Mortgage, the
aggregate amount of all Debt of the Guarantor and its
Subsidiaries secured by such Mortgages not so permitted by
clauses (i) through (viii) above together with the
Attributable Debt in respect of Sale and Lease-Back
Transactions permitted by the Indenture does not exceed 15%
of Consolidated Net Tangible Assets. (Section 1005).
The Indenture will not restrict the incurrence of unsecured
Debt by the Guarantor or any Subsidiary.
Restriction on Sale and Lease-Back Transactions
The Indenture provides that so long as any Notes are
Outstanding, the Guarantor will not, and will not permit any
Subsidiary to, enter into any Sale and Lease-Back Transaction
unless:
(i) the Guarantor or such Subsidiary would, at the
time of entering into such Sale and Lease-Back Transaction,
be entitled, as described in clauses (i) through (ix) set
forth under "Restriction on Secured Debt," above, to incur
Debt secured by a Mortgage on the Principal Property to be
leased in an amount at least equal to the Attributable Debt
in respect of such Sale and Lease-Back Transaction without
equally and ratably securing the Notes then Outstanding;
18
<PAGE>
(ii) the direct or indirect proceeds of the sale of
the Principal Property to be leased are at least equal to
the fair value of such Principal Property (as determined by
the Board of Directors of the Guarantor) and an amount at
least equal to the net proceeds from the sale of the
Principal Property so leased is applied, within 180 days of
the effective date of any such Sale and Lease-Back
Transaction, (a) to the purchase or acquisition of (or, in
the case of real property, the commencement of construction
on or improvement of) property or assets, or (b) to the
retirement or repayment (other than at maturity or pursuant
to a mandatory sinking fund or mandatory redemption
provision) of (1) Notes or Funded Debt of the Guarantor
ranking on a parity with or senior to the Notes, or Funded
Debt of a Subsidiary or (2) Debt incurred by the Guarantor
or a Subsidiary within 180 days prior to the effective date
of any such Sale and Lease-Back Transaction that (A) was
used solely to finance the acquisition of the Principal
Property that is the subject of such Sale and Lease-Back
Transaction and (B) is secured by a Mortgage on the
Principal Property that is the subject of such Sale and
Lease-Back Transaction; provided, however, that the amount
to be so applied will be reduced by (x) the principal
amount of Notes delivered to the Trustee for retirement and
cancellation (other than at maturity or pursuant to a
mandatory sinking fund or mandatory redemption provision)
within 180 days before or after such sale or transfer and
(y) the principal amount of any such Debt of the Guarantor
or a Subsidiary (other than Notes) voluntarily retired
(other than at maturity or pursuant to a mandatory sinking
fund or mandatory redemption provision) by the Guarantor or
such Subsidiary within 180 days before or after such sale
or transfer; or
(iii) the lease in such Sale and Lease-Back
Transaction secures or relates to Debt or other obligations
issued by the United States of America or any State thereof
or any department, agency or instrumentality or political
subdivision thereof, or by any other country or any
political subdivision thereof, for the purpose of financing
all or any part of the purchase price of (or, in the case
of real property, the cost of construction on or
improvement of) any property or assets subject to such
leases (including, but not limited to, leases incurred in
connection with pollution control, industrial revenue or
similar financings). (Section 1006).
Certain Definitions
"Attributable Debt" means, as to any particular lease under
which any Person is at the time liable, 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 (excluding any subsequent renewal or
other extension options held by the lessee), discounted from the
respective due dates thereof to such date of determination at the
rate of interest per annum implicit in the terms of such lease,
as determined in good faith by the Guarantor, compounded
annually. The net amount of rent required to be paid under any
such lease for any such period shall be the amount of the rent
payable by the lessee with respect to such period, after
excluding amounts required to be paid on account of maintenance
and repairs, reconstruction, insurance, taxes, assessments, water
rates and similar charges and contingent rents (such as those
based on sales). In the case of any lease which is terminable by
the lessee upon the payment of a penalty, such net amount shall
also include the amount of such penalty, but no rent shall be
considered as required to be paid under such lease subsequent to
the first date upon which it may be so terminated.
"Capital Stock" as applied to the stock of any corporation,
means the capital stock of every class whether now or hereafter
authorized, regardless of whether such capital stock shall be
limited to a fixed sum or percentage with respect to the rights
of the holders thereof to participate in dividends and in the
19
<PAGE>
distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of such corporation.
"Consolidated Net Tangible Assets" means, on the date on
which the determination is being made, the aggregate amount of
assets (less applicable reserves and other properly deductible
items) after deducting therefrom (i) all current liabilities
(excluding current maturities of long-term debt and capitalized
lease obligations), and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and
other like intangibles, all as set forth on the most recent
quarterly balance sheet of the Guarantor and its consolidated
Subsidiaries and computed in accordance with generally accepted
accounting principles.
"Debt" means indebtedness for money borrowed.
"Funded Debt" means, on the date on which the determination
is being made, any Debt maturing by its terms more than 12 months
from such date, including any Debt renewable or extendible at the
option of the borrower to a date later than 12 months from such
date of determination.
"Mortgage" means and includes any mortgage, pledge, lien,
security interest, conditional sale or other title retention
agreement or other similar encumbrance.
"Principal Property" means any manufacturing plant or
manufacturing facility which is (i) owned by the Guarantor or a
Subsidiary, (ii) located in the continental United States of
America and (iii) the gross book value of which, on the date as
of which the determination is being made, exceeds 2% of
Consolidated Net Tangible Assets, except any such plant or
facility which, in the opinion of the Board of Directors, is not
of material importance to the business conducted by the Guarantor
and its Subsidiaries taken as a whole, effective as of the date
such resolution is adopted.
"Sale and Lease-Back Transaction" means any arrangement
with any person providing for the leasing by the Guarantor or any
Subsidiary of any Principal Property, whether owned at the date
of the Indenture or thereafter acquired (except for temporary
leases for a term, including any renewal thereof, of not more
than three years and except for leases between the Guarantor and
any Subsidiary, between any Subsidiary and the Guarantor or
between Subsidiaries), which Principal Property has been or is to
be sold or transferred by the Guarantor or such Subsidiary to
such person with the intention of taking back a lease of such
Principal Property.
"Significant Subsidiary" means any Subsidiary that would be
a "Significant Subsidiary" of the Company within the meaning of
Rule 1-02 under Regulation S-X promulgated by the Commission.
"Subsidiary" means a corporation of which more than 50% of
the outstanding voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote
generally in the election of directors thereof is owned, directly
or indirectly, by the Company or the Guarantor, as the context
requires, or by one or more other Subsidiaries, or by the Company
or the Guarantor, as the context requires, and one or more other
Subsidiaries.
Events of Default
Any one of the following events will constitute an Event of
Default under the Indenture with respect to Notes: (a) failure to
pay any interest on any Note when due at its Maturity, continued
for 30 days; (b) failure to pay principal of (or premium, if any,
on) any Note at its Maturity; (c) failure to perform, or breach
of any covenant or warranty of the Guarantor or the Company in
the Indenture,
20
<PAGE>
continued for 90 days after written notice as provided in the
Indenture; (d) default under any bond, debenture, note or other
evidence of indebtedness for money borrowed by the Guarantor or
any Subsidiary or under any mortgage, indenture or instrument
under which there may be secured or evidenced any indebtedness
for money borrowed by the Guarantor or any Subsidiary, which
default constitutes the failure to pay indebtedness in a
principal amount in excess of $20 million when due and payable at
final maturity, after the expiration of any applicable grace
period, or which shall have resulted in such indebtedness in a
principal amount in excess of $20 million becoming or being
declared due and payable prior to the date on which it would
otherwise have become due and payable, without such indebtedness
having been discharged, or such acceleration having been
rescinded or annulled, within a period of 30 days after notice to
the Guarantor specifying such default and requiring the Guarantor
to cause such indebtedness to be discharged or such acceleration
to be rescinded or annulled; or (e) certain events of bankruptcy,
insolvency or reorganization of the Guarantor or any Significant
Subsidiary.
If any Event of Default with respect to the Notes occurs
and is continuing, either the Trustee or the Holders of not less
than 25% in principal amount of the Outstanding Notes may declare
the principal amount of all the Notes to be due and payable
immediately. At any time after a declaration of acceleration with
respect to Notes has been made, but before a judgment or decree
based on acceleration has been obtained, the Holders of a
majority in principal amount of Outstanding Notes may, under
certain circumstances, rescind and annul such acceleration.
(Section 502).
Under the Indenture, the Trustee shall, within 90 days after
the occurrence of a default with respect to the Notes, give the
holders of the Notes notice of such default known to it (the term
"default" to mean the events specified above without notice or
grace periods); provided that, except in the case of a default in
the payment of principal of, premium, if any, or interest, on any
of the Notes, the Trustee shall be protected in withholding such
notice if it in good faith determines the withholding of such
notice is in the interests of the holders of the Notes. (Section
602).
The Indenture provides that, subject to the duty of the
Trustee during a default to act with the required standard of
care, the Trustee will be under no obligation to exercise any of
its rights or powers under the Indenture at the request or
direction of any of the Holders, unless such Holders shall have
offered to the Trustee indemnity reasonably satisfactory to it.
(Sections 601, 603). Subject to such provisions for the
indemnification of the Trustee and to certain other conditions,
the Holders of at least a majority in principal amount of the
Outstanding Notes will have the right to direct the time, method,
and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Notes. (Section 512).
No Holder of Notes will have any right to institute any
proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the
Trustee a written notice of a continuing Event of Default and
unless the Holders of not less than 25% in principal amount of
the Outstanding Notes shall have made a written request, and
offered reasonable indemnity, to the Trustee to institute such
proceeding as Trustee, and the Trustee shall not have received
from the Holders of a majority in principal amount of the
Outstanding Notes a direction inconsistent with such request and
shall have failed to institute such a proceeding within 60 days.
(Section 507). However, such limitations do not apply to a suit
instituted by a Holder of a Note for enforcement of payment of
the principal of and any premium or interest on such Note on or
after the respective due dates expressed in such Note.
(Section 508).
21
<PAGE>
The Company is required to furnish to the Trustee annually
a statement as to the performance by the Company of certain of
its obligations under the Indenture and as to any default in such
performance. (Section 1004).
Modification and Waiver
Modifications and amendments of the Indenture may be made
by the Company or the Guarantor and the Trustee with the consent
of the Holders of not less than a majority in principal amount of
the Outstanding Notes affected by such modification or amendment;
provided, however, that no such modification or amendment may,
without the consent of the Holder of each Note affected thereby,
(i) change the Stated Maturity of the principal of or interest
on, any Note; (ii) reduce the principal amount of, the rate of
interest on, or premium payable on any redemption of any Note;
(iii) adversely affect the right of repayment at the option of
the Holder of any Note; (iv) change any Place of Payment where,
or the coin or currency in which, any Note or any premium or
interest thereon is payable; (v) impair the right to institute
suit for the enforcement of any payment on any Note on or after
the Stated Maturity thereof; (vi) reduce the percentage in
principal amount of Outstanding Notes, the consent of whose
Holders is required for modification or amendment of the
Indenture or for waiver of compliance with certain provisions of
the Indenture or for waiver of certain defaults; or (vii) modify
any of the provisions described in this paragraph or set forth in
certain other sections of the Indenture, except to increase any
such percentage or to limit the ability of Holders to modify or
waive certain other provisions of the Indenture. (Section 902).
The Holders of at least a majority in principal amount of
the Outstanding Notes may, on behalf of all Holders, waive
compliance by the Company with certain restrictive provisions of
the Indenture. (Section 1007). The Holders of not less than a
majority in principal amount of the Outstanding Notes may, on
behalf of all Holders, waive any past default under the
Indenture, except a default in the payment of principal of or any
premium or interest on any Note and in respect of a covenant or
provision of the Indenture that cannot be modified or amended
without the consent of the Holder of each Outstanding Note
affected thereby. (Section 513).
Consolidation, Merger and Sale of Assets
Neither the Guarantor nor the Company may consolidate with
or merge into any other Person or convey, transfer or lease its
properties and assets substantially as an entirety to any Person
and may not permit any Person to consolidate with or merge into
the Guarantor or the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the
Guarantor or the Company, unless (i) any successor or purchaser
is a corporation, partnership or trust organized under the laws
of the United States of America, or any State thereof or the
District of Columbia, and any such successor or purchaser
expressly assumes the Guarantor's or the Company's obligations on
the Guaranty or the Notes, as the case may be, under a
supplemental indenture and the performance or observance of every
covenant of the Indenture to be performed by the Guarantor or the
Company, as the case may be, (ii) immediately after giving effect
to the transaction and treating any indebtedness which becomes an
obligation of the Guarantor or a Subsidiary as a result of such
transaction as having been incurred by the Guarantor or such
Subsidiary at the time of such transaction, no Event of Default,
and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be
continuing, (iii) if as a result of such transaction properties
or assets of the Guarantor or the Company could become subject to
a Mortgage not permitted by the Indenture, the Guarantor or the
Company or such successor Person, as the case may be, takes such
steps as shall be necessary effectively to secure the Notes
equally and ratably with (or prior to) all indebtedness secured
thereby, and (iv) the Guarantor or the Company, as the
22
<PAGE>
case may be, has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel stating compliance with
these provisions. (Section 801).
Defeasance and Covenant Defeasance
The Company and the Guarantor, at their option, (a) will be
discharged from any and all obligations in respect of the Notes
(except for certain obligations to register the transfer or
exchange of Notes, replace stolen, lost or mutilated Notes,
maintain paying agencies and hold moneys for payment in trust) or
(b) need not comply with certain restrictive covenants of the
Indenture, including those described under "Certain Covenants,"
and "Consolidation, Merger and Sale of Assets" and the occurrence
of an event described in clause (c) or clause (d) under "Events
of Default" shall no longer be an Event of Default, in each case,
if the Company deposits, in trust, with the Trustee money and/or
U.S. Government Obligations, which through the payment of
interest thereon and principal thereof in accordance with their
terms will provide money in an amount sufficient, without
reinvestment, to pay all the principal of and any premium and
interest (to the Maturity or to the redemption date, as the case
may be) on the Outstanding Notes and any mandatory sinking fund
payments or analogous payments on the dates such payments are due
in accordance with the terms of the Outstanding Notes and the
Indenture. Such a trust may only be established if, among other
things, (i) no Event of Default or event which with the giving of
notice or lapse of time or both would become an Event of Default
under the Indenture shall have occurred and be continuing on the
date of such deposit, and (ii) the Company shall have delivered
an Opinion of Counsel to the effect that the Holders will not
recognize income, gain or loss for federal income tax purposes as
a result of such defeasance and will be subject to federal income
tax in the same manner as if such defeasance had not occurred. In
the event the Company omits to comply with its remaining
obligations under the Indenture after a defeasance of the
Indenture with respect to the Notes as described under clause (b)
above and the Notes are declared due and payable because of the
occurrence of any Event of Default, the amount of money and U.S.
Government Obligations on deposit with the Trustee may not be
sufficient to pay amounts due on the Notes at the time of the
acceleration resulting from such Event of Default. However, the
Company and the Guarantor will remain liable with respect to such
payments. (Article 12).
Governing Law
The Indenture and the Notes will be governed by and
construed in accordance with the laws of the State of New York.
(Section 112).
UNDERWRITING
Subject to the terms and conditions set forth in the
Underwriting Agreement, the Company has agreed to sell to each of
the Underwriters named below, and each of the Underwriters has
severally agreed to purchase, the principal amount of the Notes
set forth opposite its name below:
Principal
Underwriter Amount of Notes
- ----------- ---------------
J.P. Morgan Securities Inc............................. $
Salomon Brothers, Inc.................................. -------------
Total........................................... $=============
Under the terms and conditions of the Underwriting
Agreement, the Underwriters are committed to purchase all of the
Notes if any are purchased.
23
<PAGE>
The Underwriters initially propose to offer the Notes to
the public at the initial public offering price set forth on the
cover page of this Prospectus and to certain dealers at such
price less a concession not in excess of % of the principal
amount of the Notes. The Underwriters may allow, and such dealers
may reallow, a concession not in excess of % of the principal
amount of the Notes to certain other dealers. After the initial
public offering, the public offering price and such concession
may be changed by the Underwriters.
The Notes are a new issue of securities with no established
trading market. The Company has been advised by the Underwriters
that the Underwriters intend to make a market in the Notes but
are not obligated to do so and may discontinue market making at
any time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes or the price at
which the Notes will trade.
The Company has agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
The Company expects to use a portion of the net proceeds
from the sale of the Notes to repay indebtedness owed to a bank
syndicate in which Morgan Guaranty, an affiliate of J.P. Morgan
Securities Inc., is a lender and acts as agent. Morgan Guaranty
is expected to receive approximately 8% of such net proceeds. See
"Use of Proceeds."
In connection with the offering of the Notes, the
Underwriters may engage in transactions that stabilize, maintain
or otherwise affect the price of the Notes. Specifically, the
Underwriters may overallot in connection with the offering of the
Notes, creating a short position. In addition, the Underwriters
may bid for, and purchase, Notes in the open market to cover
shorts or to stabilize the price of the Notes. Finally, the
Underwriters may reclaim selling concessions allowed for
distributing the Notes in the offering of the Notes, if the
Underwriters repurchase previously distributed Notes covering
transactions, stabilization transactions or otherwise. Any of
these activities may stabilize or maintain the market price of
the Notes above independent market levels. The Underwriters are
not required to engage in any of these activities and may
discontinue them at any time.
In the ordinary course of their respective businesses, the
Underwriters and certain of their affiliates have provided, and
may in the future provide, investment banking services to the
Company and have received and will receive customary fees and
compensation therefor.
LEGAL MATTERS
The validity of the Notes offered hereby will be passed
upon for the Company and the Guarantor by Cleary, Gottlieb, Steen
& Hamilton, New York, New York and for the Underwriters by King &
Spalding, New York, New York.
EXPERTS
The consolidated financial statements and financial
statement schedules of Blount and the Company incorporated by
reference in this Prospectus have been audited by Coopers &
Lybrand L.L.P., independent accountants, to the extent and for
the periods indicated in their reports thereon which appear in
Blount's and the Company's Transition Reports on Form 10-K for
the period ended December 31, 1996. The consolidated financial
statements and financial statement schedules covered by the
reports of Coopers & Lybrand L.L.P. have been incorporated by
reference herein in reliance upon the reports of said firm and
upon the authority of said firm as experts in accounting and
auditing.
24
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of
Issuance and Distribution.*
Commission Registration Fee.. $44,250
Accounting Fees..............
Trustees' Fees and Expenses..
Printing and Engraving Fees..
Rating Agency Fees...........
Legal Fees and Expenses......
Miscellaneous................ ___________
Total..................... $
===========
----------------
* All amounts are estimated except for the Commission
registration fee.
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware Corporation Law authorizes a
court to award, or a corporation to grant, indemnity to directors
and officers in terms sufficiently broad to permit
indemnification under certain circumstances against liabilities
(including expenses incurred) arising under the securities laws.
Article VI of the By-laws of each of Blount International, Inc.
and Blount, Inc. provides for indemnification of the respective
company's directors and officers against certain liabilities,
including certain liabilities under the securities laws, incurred
in their capacity as such.
The Underwriting Agreement (Exhibit 1 hereto) provides for
indemnification by each Underwriter of the Company and the
Guarantor and, each of their directors, each of their officers
who signs this Registration Statement and each person who
controls the Company or the Guarantor within the meaning of the
Securities Act of 1933, as amended, from certain liabilities
under the securities laws.
In addition, the Company and the Guarantor maintain
officers' and directors' liability insurance.
II - 1
<PAGE>
Item 16. Exhibits.
1 Form of Underwriting Agreement.
2 Stock Purchase Agreement, dated November 4, 1997, by and
among Blount, Inc., Hoffman Enclosures Inc., Pentair,
Inc. and Federal-Hoffman, Inc., relating to the
acquisition of Federal Cartridge Company (filed by
incorporation by reference to Exhibit 2 to Form 8-K dated
November 4, 1997 , file no. OO1-11549).
*4(a) Form of Indenture relating to the Notes and Guarantee
between the Company, the Guarantor and , as Trustee.
*4(b) Form of Note and Guarantee (included in Sections 202 and 203
of Exhibit 4(a) above).
*5 Opinion of Cleary, Gottlieb, Steen & Hamilton as to legality
of the Notes and Guarantee.
12 Computation of ratio of earnings to fixed charges.
23(a) Consent of Coopers & Lybrand L.L.P., Independent Accountants.
*23(b) Consent of Cleary, Gottlieb, Steen & Hamilton (included in
their opinion filed as Exhibit 5).
24 Powers of Attorney.
*25 Form T-1 Statement of Eligibility and Qualification
of under the Trust Indenture
Act of 1939.
--------------
* To be filed by amendment.
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933, as amended, may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the provisions described under Item 15 above, or
otherwise, the registrants have been advised that in the opinion
of the Securities and Exchange Commission such indemnification is
against public policy as expressed in such 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 registrants 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 hereby, the registrants will, unless in the
opinion of their counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by them is
against public policy as expressed in such Act and will be
governed by the final adjudication of such issue.
The undersigned registrants hereby undertake that:
For purposes of determining any liability under the
Securities Act of 1933, as amended, the information omitted from
the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrants pursuant to Rule 424(b) (1)
or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was
declared effective.
For the purpose of determining any liability under the
Securities Act of 1933, as amended, each post-effective
amendment that contains a form of prospectus 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.
For purposes of determining any liability under the
Securities Act of 1933, each filing of the registrants' annual
reports pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II - 2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANTS CERTIFY THAT THEY HAVE REASONABLE GROUNDS TO
BELIEVE THAT THEY MEET ALL OF THE REQUIREMENTS FOR FILING ON FORM
S-3 AND HAVE DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT
THERETO TO BE SIGNED ON THEIR BEHALF BY THE UNDERSIGNED THEREUNTO
DULY AUTHORIZED, IN THE CITY OF MONTGOMERY, STATE OF ALABAMA, ON
THE 17TH DAY OF DECEMBER, 1997.
BLOUNT INTERNATIONAL, INC. BLOUNT, INC.
By: /s/ Harold E. Layman By: /s/ Harold E. Layman
---------------------- ----------------------
Executive Vice Executive Vice
President Finance President Finance
Operations and Chief Operations and Chief
Financial Officer Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THIS REGISTRATION STATEMENT OR AMENDMENT THERETO HAS BEEN SIGNED
BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES (FOR BOTH
REGISTRANTS) AND ON THE DATES INDICATED.
Signatures Title Date
---------- ----- ----
* Chairman of the Board December 17, 1997
---------------------- and Director
Winton M. Blount
* President and Chief December 17, 1997
---------------------- Executive Officer
John M. Panetierre and Director
* Director December 17, 1997
----------------------
Haley Barbour
* Director December 17, 1997
----------------------
W. Houston Blount
* Director December 17, 1997
----------------------
R. Eugene Cartledge
* Director December 17, 1997
----------------------
C. Todd Conover
II - 3
<PAGE>
* Director December 17, 1997
----------------------
H. Corbin Day
* Director December 17, 1997
----------------------
Herbert J. Dickson
* Director December 17, 1997
----------------------
Emory M. Folmar
* Director December 17, 1997
----------------------
Mary D. Nelson
* Director December 17, 1997
----------------------
Arthur P. Ronan
* Director December 17, 1997
----------------------
Andrew A. Sorensen
/s/ Harold E. Layman Executive Vice December 17, 1997
---------------------- President Finance
Harold E. Layman Operations and Chief
Financial Officer
/s/ Rodney W. Blankenship Vice President and December 17, 1997
---------------------- Controller (Chief
Rodney W. Blankenship Accounting Officer)
*By /s/ Richard H. Irving III
---------------------- Attorney-in-fact
Richard H. Irving III
II - 4
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
- ------- ----------- ----
1 Form of Underwriting Agreement....................
2 Stock Purchase Agreement, dated November 4, 1997, by
and among Blount, Inc., Hoffman Enclosures Inc.,
Pentair, Inc. and Federal-Hoffman, Inc., relating to
the acquisition of Federal Cartridge Company (filed by
incorporation by reference to Exhibit 2 to Form 8-K
dated November 4, 1997, file no.
OO1-11549).
*4(a) Form of Indenture relating to the Notes and
Guarantee between the Company and
, as Trustee..........................
*4(b) Form of Note and Guarantee (included as Exhibit A
to Exhibit 4(a) above)
*5 Opinion of Cleary, Gottlieb, Steen & Hamilton as to
legality of the Notes and Guarantee
12 Computation of ratio of earnings to fixed
charges...........................................
23(a) Consent of Coopers & Lybrand L.L.P., Independent
Accountants
*23(b) Consent of Cleary, Gottlieb, Steen & Hamilton
(included in their opinion filed as Exhibit 5)
24 Powers of Attorney................................
*25 Form T-1 Statement of Eligibility and Qualification
of under the Trust Indenture Act of 1939
- ---------------------------------
* To be filed by amendment.
[K&S Draft - 12/12/97]
$150,000,000
BLOUNT, INC.
___% Senior Notes Due _________________, 2008
Guaranteed by
BLOUNT INTERNATIONAL, INC.
Underwriting Agreement
____________, 1998
J.P. Morgan Securities Inc.
Salomon Smith Barney Inc.
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
Blount, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters listed in
Schedule I hereto (the "Underwriters"), for whom you are acting
as representatives (the "Representatives"), $150,000,000
principal amount of its _____% Senior Notes Due __________, 2008
(the "Notes"). The Notes will be unconditionally guaranteed (the
"Guarantees" and, together with the Notes, the "Securities") as
to payment of principal, premium (if any) and interest by Blount
International, Inc., a Delaware corporation, as guarantor (the
"Guarantor"). The Securities will be issued pursuant to the
provisions of an Indenture to be dated as of ______________, 1998
among the Company, the Guarantor and ____________________, as
Trustee (the "Trustee").
The Company and the Guarantor have prepared and filed with
the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as
amended, and the rules and regulations of the Commission
thereunder (collectively, the "Securities Act"), a registration
statement, including a prospectus, relating to the Securities.
The
<PAGE>
registration statement as amended at the time when it shall
become effective, or, if a post-effective amendment is filed with
respect thereto, as amended by such post-effective amendment at
the time of its effectiveness, including in each case information
(if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Securities
Act, is referred to in this Agreement as the "Registration
Statement", and the prospectus in the form first used to confirm
sales of Securities is referred to in this Agreement as the
"Prospectus". If the Company and the Guarantor have filed an
abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any
reference herein to the term "Registration Statement" shall be
deemed to include such Rule 462 Registration Statement. Any
reference in this Agreement to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act, as of
the effective date of the Registration Statement or the date of
such preliminary prospectus or the Prospectus, as the case may
be, and any reference to "amend" "amendment" or "supplement" with
respect to the Registration Statement, any preliminary prospectus
or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Exchange Act") that are
deemed to be incorporated by reference therein.
The Company and the Guarantor hereby agree with the
Underwriters as follows:
1. The Company and the Guarantor agree to issue and sell
the Securities to the several Underwriters as hereinafter
provided, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to
the conditions hereinafter stated, agrees to purchase, severally
and not jointly, from the Company and the Guarantor the
respective principal amount of Securities set forth opposite such
Underwriter's name in Schedule I hereto at a price equal to
______% of their principal amount plus accrued interest, if any,
from ______________, 1998 to the date of payment and delivery.
2. The Company and the Guarantor understand that the
Underwriters intend (i) to make a public offering of their
respective portions of the Securities as soon after (A) the
Registration Statement has become effective and (B) the parties
hereto have executed and delivered this Agreement, as in the
judgment of the Representatives is advisable and (ii) initially
to offer the Securities upon the terms set forth in the
Prospectus.
3. Payment for the Securities shall be made by wire
transfer in immediately available funds to the account specified
by the Company to the Representatives on _______________, 1998,
or at such other time on the same or such other date, not later
than the third Business Day thereafter, as the Representatives
and the Company may agree upon in writing. The time and date of
such payment is referred to herein as the "Closing Date". As used
herein, the term "Business Day" means any day other than a day on
which banks are permitted or required to be closed in New York
City.
2
<PAGE>
Payment for the Securities shall be made against delivery
to the nominee of The Depository Trust Company for the respective
accounts of the several Underwriters of the Securities of one or
more global notes (collectively, the "Global Note") representing
the Securities, with any transfer taxes payable in connection
with the transfer to the Underwriters of the Securities duly paid
by the Company and the Guarantor. The Global Note will be made
available for inspection by the Representatives at the office of
the Trustee, ___________________________________________________
not later than 1:00 P.M., New York City time, on the Business Day
prior to the Closing Date.
4. Each of the Company and the Guarantor, jointly and
severally, represents and warrants to each Underwriter that:
(a) no order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission,
and each preliminary prospectus filed as part of the Regis-
tration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material
respects with the Securities Act, and did not contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading; provided that
this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in
conformity with information relating to any Underwriter
furnished to the Company and the Guarantor in writing by
such Underwriter through the Representatives expressly
for use therein;
(b) the Registration Statement has been declared
effective by the Commission under the Securities Act, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of the
Company and the Guarantor, threatened by the Commission;
and the Registration Statement and Prospectus (as amended
or supplemented if the Company and the Guarantor shall have
furnished any amendments or supplements thereto) comply, or
will comply, as the case may be, in all material respects
with the Securities Act and the Trust Indenture Act of
1939, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Trust Indenture
Act") and do not and will not, as of the applicable
effective date as to the Registration Statement and any
amendment thereto and as of the date of the Prospectus and
any amendment or supplement thereto, contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, as
amended or supplemented, if applicable, at the Closing Date
will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the state-
ments therein, in the light of the circumstances under
which they were made, not misleading; except that the
foregoing representations and warranties shall not apply to
(i) that part of the Registration Statement which
constitutes the Statement of Eligibility and Qualification
(Form T-1) of the Trustee under the Trust Indenture Act,
and (ii) statements
3
<PAGE>
or omissions in the Registration Statement or the
Prospectus made in reliance upon and in conformity with
information relating to any Underwriter furnished to the
Company and the Guarantor in writing by such Underwriter
through the Representatives expressly for use therein;
(c) the documents incorporated by reference in the
Prospectus, when they become effective or were filed with
the Commission as the case may be, conformed in all
material respects to the requirements of the Securities Act
or the Exchange Act as applicable and none of such
documents contained an untrue statement of a material fact
or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; and any further
documents so filed and incorporated by reference in the
Prospectus, when such documents are filed with the Commis-
sion, will conform in all material respects to the
requirements of the Exchange Act, and will not contain an
untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in
the light of the circumstances under which they were made,
not misleading;
(d) the financial statements, and the related notes
thereto, included or incorporated by reference in the
Registration Statement and the Prospectus present fairly
the consolidated financial position of the Company and the
Guarantor, as the case may be, and their respective
consolidated subsidiaries as of the dates indicated and the
results of their respective operations and the changes in
their respective consolidated cash flows for the periods
specified; said financial statements have been prepared in
conformity with generally accepted accounting principles
applied on a consistent basis, and the supporting schedules
included or incorporated by reference in the Registration
Statement present fairly the information required to be
stated therein; and the pro forma financial information,
and the related notes thereto, included or incorporated by
reference in the Registration Statement and the Prospectus
has been prepared in accordance with the applicable
requirements of the Securities Act and the Exchange Act, as
applicable, and is based on good faith estimates and
assumptions believed by the Company and the Guarantor to be
reasonable;
(e) since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital
stock or long-term debt of the Guarantor or any of its
subsidiaries (including the Company, the "Subsidiaries"),
or any material adverse change, or any development
involving a prospective material adverse change, in or
affecting the general affairs, business, prospects,
management, financial position, stockholders' equity or
results of operations of the Guarantor and the
Subsidiaries, taken as a whole, otherwise than as set forth
or contemplated in the Prospectus; and except as set forth
or contemplated in the Prospectus neither the Guarantor nor
any of the Subsidiaries has entered into any transaction or
agreement (whether or not in the ordinary course of
business) material to the Guarantor and the Subsidiaries
taken as a whole;
4
<PAGE>
(f) each of the Company and the Guarantor has been
duly incorporated and is validly existing as a corporation
in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its
properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which
it owns or leases properties, or conducts any business, so
as to require such qualification, other than where the
failure to be so qualified or in good standing would not
have a material adverse effect on the Guarantor and the
Subsidiaries, taken as a whole;
(g) each of the Subsidiaries (other than the Company)
has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its
jurisdiction of incorporation, with power and authority
(corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each
jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification,
other than where the failure to be so qualified or in
good standing would not have a material adverse effect
on the Guarantor and the Subsidiaries taken as a whole;
and all the outstanding shares of capital stock of
each Subsidiary has been duly authorized and validly
issued, are fully-paid and non-assessable, and (except in
the case of foreign Subsidiaries, for directors' qualifying
shares) are owned by the Guarantor, directly or indirectly,
free and clear of all liens, encumbrances, security
interests and claims;
(h) this Agreement has been duly authorized, executed
and delivered by the Company and the Guarantor;
(i) the Notes have been duly authorized, and, when
issued and delivered pursuant to this Agreement, will have
been duly executed, authenticated, issued and delivered and
will constitute valid and binding obligations of the
Company entitled to the benefits provided by the Indenture;
the Guarantees have been duly authorized, and when issued
and delivered together with the Notes pursuant to this
Agreement, will have been duly executed, issued and
delivered and will constitute valid and binding obligations
of the Guarantor entitled to the benefits provided by the
Indenture; the Indenture has been duly authorized and upon
effectiveness of the Registration Statement will have been
duly qualified under the Trust Indenture Act and, when
executed and delivered by the Company, the Guarantor and
the Trustee, the Indenture will constitute a valid and
binding instrument; and the Securities and the Indenture
will conform to the descriptions thereof in the Prospectus;
(j) neither the Guarantor nor any of the Subsidiaries
is, or with the giving of notice or lapse of time or both
would be, in violation of or in default under, its Certifi-
cate of Incorporation or Bylaws or any indenture, mortgage,
deed of trust, loan agreement or other agreement or
instrument to which the Guarantor or any of the
Subsidiaries is a
5
<PAGE>
party or by which it or any of them or any of their
respective properties is bound, except for violations and
defaults which individually and in the aggregate are not
material to the Guarantor and the Subsidiaries taken as a
whole or to the holders of the Securities; the issue and
sale by the Company of the Notes and the issue and delivery
by the Guarantor of the Guarantees and the performance by
each of the Company and the Guarantor of all of the
provisions of its respective obligations under the
Securities, the Indenture and this Agreement and the
consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the
Guarantor, the Company or any of the other Subsidiaries is
a party or by which the Guarantor, the Company or any of
the other Subsidiaries is bound or to which any of the
property or assets of the Guarantor, the Company or any of
the other Subsidiaries is subject, nor will any such action
result in any violation of the provisions of the
Certificate of Incorporation or the Bylaws of the Company
or the Guarantor or any applicable law or statute or any
order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Guarantor, the
Company, the other Subsidiaries or any of their respective
properties; and no consent, approval, authorization, order,
license, registration or qualification of or with any such
court or governmental agency or body is required for the
issue and sale of the Securities or the consummation by the
Company and the Guarantor of the transactions contemplated
by this Agreement or the Indenture, except such consents,
approvals, authorizations, orders, licenses, registrations
or qualifications as have been obtained under the
Securities Act, the Trust Indenture Act and as may be
required under state securities or Blue Sky Laws in
connection with the purchase and distribution of the
Securities by the Underwriters;
(k) other than as set forth or contemplated in the
Prospectus, there are no legal or governmental
investigations, actions, suits or proceedings pending or,
to the knowledge of the Company and the Guarantor,
threatened against or affecting the Guarantor or any of the
Subsidiaries or any of their respective properties or to
which the Guarantor or any of the Subsidiaries is or may be
a party or to which any property of the Guarantor or any of
the Subsidiaries is or may be the subject which, if
determined adversely to the Guarantor or any of the
Subsidiaries, could individually or in the aggregate have,
or reasonably be expected to have, a material adverse
effect on the general affairs, business, prospects,
management, financial position, stockholders' equity or
results of operations of the Guarantor and the
Subsidiaries, taken as a whole, and, to the best of the
Company's and the Guarantor's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others; and there are no
statutes, regulations, contracts or other documents that
are required to be filed as an exhibit to the Registration
Statement or required to be described in the Registration
Statement or the Prospectus which are not filed or
described as required;
6
<PAGE>
(l) Coopers & Lybrand L.L.P. who have certified certain
financial statements of the Guarantor and the Subsidiaries are
independent public accountants as required by the Securities Act;
(m) the Guarantor and the Subsidiaries have good and
marketable title in fee simple to all items of real
property and good and marketable title to all personal
property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are
described or referred to in the Prospectus or such as do
not materially affect the value of such property and do not
interfere with the use made or proposed to be made of such
property by the Guarantor and the Subsidiaries; and any
real property and buildings held under lease by the
Guarantor and the Subsidiaries are held by them under
valid, existing and enforceable leases with such exceptions
as are not material and do not interfere with the use made
or proposed to be made of such property and buildings by the
Guarantor or the Subsidiaries;
(n) no relationship, direct or indirect, exists
between or among the Guarantor or any of the Subsidiaries
on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Guarantor or any of the
Subsidiaries on the other hand, which is required by the
Securities Act to be described in the Registration
Statement and the Prospectus which is not so described;
(o) neither the Company nor the Guarantor is and,
after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as
described in the Prospectus, neither will be an "investment
company" or an entity "controlled" by an "investment
company", as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company
Act");
(p) the Company and the Guarantor have complied with
all provisions of Section 517.075, Florida Statutes
(Chapter 92-198, Laws of Florida) relating to doing
business with the Government of Cuba or with any person or
affiliate located in Cuba;
(q) the Guarantor and the Subsidiaries have filed all
federal, state, local and foreign tax returns which have
been required to be filed and have paid all taxes shown
thereon and all assessments received by them or any of them
to the extent that such taxes have become due and are not
being contested in good faith; and, except as disclosed in
the Prospectus there is no tax deficiency which has been or
might reasonably be expected to be asserted or threatened
against the Guarantor or any Subsidiary;
(r) each of the Guarantor and the Subsidiaries owns,
possesses or has obtained all licenses, permits,
certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and
filings with, all federal, state, local and other
governmental authorities (including foreign regulatory
agencies), all self-regulatory organizations and all courts
and other tribunals, domestic or foreign, necessary to own
or
7
<PAGE>
lease, as the case may be, and to operate its properties
and to carry on its business as conducted as of the date
hereof, and neither the Guarantor nor any such Subsidiary
has received any actual notice of any proceeding relating
to revocation or modification of any such license, permit,
certificate, consent, order, approval or other
authorization, except as described in the Registration
Statement and the Prospectus; and each of the Guarantor and
the Subsidiaries is in compliance with all laws and
regulations relating to the conduct of its business as
conducted as of the date hereof;
(s) there are no existing or, to the best knowledge
of the Company and the Guarantor, threatened labor disputes
with the employees of the Guarantor or any of the
Subsidiaries which are likely to have a material adverse
effect on the Guarantor and the Subsidiaries taken as a
whole;
(t) the Guarantor and the Subsidiaries (i) are in
compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the
protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all
permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure
to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such
permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Guarantor
and the Subsidiaries, taken as a whole;
(u) in the ordinary course of its business, the
Guarantor conducts a periodic review of the effect of
Environmental Laws on the business, operations and
properties of the Guarantor and the Subsidiaries, in the
course of which it identifies and evaluates associated
costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws
or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company
and the Guarantor have reasonably concluded that such
associated costs and liabilities would not, singly or in
the aggregate, have a material adverse effect on the
Guarantor and the Subsidiaries, taken as a whole;
(v) each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended, ("ERISA") that is maintained,
administered or contributed to by the Company, the
Guarantor or any of their respective affiliates for
employees or former employees of the Company and the
Guarantor and their respective affiliates has been
maintained in compliance with its terms and the
requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the
Internal Revenue Code of 1986, as amended, ("Code"). No
prohibited
8
<PAGE>
transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code has occurred with respect to any
such plan excluding transactions effected pursuant to a
statutory or administrative exemption. For each such plan
which is subject to the funding rules of Section 412 of the
Code or Section 302 of ERISA no "accumulated funding
deficiency" as defined in Section 412 of the Code has been
incurred, whether or not waived, and the fair market value
of the assets of each such plan (excluding for these
purposes accrued but unpaid contributions) exceeded the
present value of all benefits accrued under such plan
determined using reasonable actuarial assumptions; and
(w) the conditions for use of a Registration
Statement on Form S-3 set forth in the General Instructions
to Form S-3 have been satisfied with respect to the Company
and the Guarantor and the transactions contemplated by this
Agreement, the Indenture and the Registration Statement.
5. Each of the Company and the Guarantor covenants and
agrees with each of the several Underwriters as follows:
(a) to use its best efforts to cause the Registration
Statement to become effective at the earliest possible time
and, if required, to file the final Prospectus with the
Commission within the time periods specified by Rule 424(b)
and Rule 430A under the Securities Act; and to file
promptly all reports and any definitive proxy or
information statements required to be filed by it with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus is required
in connection with the offering or sale of the Securities;
and to furnish copies of the Prospectus to the Underwriters
in New York City prior to 10:00 a.m., New York City time,
on the Business Day next succeeding the date of this
Agreement in such quantities as the Representatives may
reasonably request;
(b) to deliver, at the expense of the Company and the
Guarantor, to the Representatives, three signed copies of
the Registration Statement (as originally filed) and each
amendment thereto, in each case including exhibits and
documents incorporated by reference therein, and to each
other Underwriter a conformed copy of the Registration
Statement (as originally filed) and each amendment thereto,
in each case without exhibits but including the documents
incorporated by reference therein and, during the period
mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including
all amendments and supplements thereto) as the
Representatives may reasonably request;
(c) before filing any amendment or supplement to the
Registration Statement or the Prospectus, whether before or
after the time the Registration Statement becomes
effective, to furnish to the Representatives a copy of the
proposed amendment or supplement
9
<PAGE>
for review and not to file any such proposed amendment or
supplement to which the Representatives reasonably object;
(d) to advise the Representatives promptly, and to
confirm such advice in writing, (i) when the Registration
Statement has become effective, (ii) when any amendment to
the Registration Statement has been filed or becomes
effective, (iii) when any supplement to the Prospectus or
any amendment to the Prospectus has been filed and to
furnish the Representatives with copies thereof, (iv) of
any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to
the Prospectus or for any additional information, (v) of
the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary
prospectus or the Prospectus or the initiation or
threatening of any proceeding for that purpose, (vi) of the
occurrence of any event, within the period referenced in
paragraph (e) below, as a result of which the Prospectus as
then amended or supplemented would include an untrue
statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in
the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, and (vii) of the
receipt by the Company or the Guarantor of any notification
with respect to any suspension of the qualification of the
Securities for offer and sale in any jurisdiction or the
initiation or threatening of any proceeding for such
purpose; and to use its best efforts to prevent the
issuance of any such stop order, or of any order preventing
or suspending the use of any preliminary prospectus or the
Prospectus, or of any order suspending any such
qualification of the Securities, or notification of any
such order thereof and, if issued, to obtain as soon as
possible the withdrawal thereof;
(e) if, during such period of time after the first
date of the public offering of the Securities as in the
opinion of counsel for the Underwriters a prospectus
relating to the Securities is required by law to be
delivered in connection with sales by an Underwriter or
dealer, any event shall occur as a result of which it is
necessary to amend or supplement the Prospectus in order to
make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to amend
or supplement the Prospectus to comply with law, forthwith
to prepare and furnish, at the expense of the Company and
the Guarantor, to the Underwriters and to the dealers
(whose names and addresses the Representatives will furnish
to the Company and the Guarantor) to which Securities may
have been sold by the Representatives on behalf of the
Underwriters and to any other dealers upon request, such
amendments or supplements to the Prospectus as may be
necessary so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus will
comply with law;
(f) to endeavor to qualify the Securities for offer
and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives shall reasonably
request and to continue such qualification in effect so
long as reasonably required for
10
<PAGE>
distribution of the Securities; provided that neither the
Company nor the Guarantor shall not be required to file a
general consent to service of process in any jurisdiction;
(g) to make generally available to its security
holders and to the Representatives as soon as practicable
an earnings statement which will satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 of the
Commission promulgated thereunder covering a period of at
least twelve months beginning with the first fiscal quarter
of the Company and the Guarantor occurring after the
"effective date" (as defined in Rule 158) of the
Registration Statement;
(h) so long as the Securities are outstanding, to
furnish to the Representatives copies of all reports or
other communications (financial or other) furnished to
holders of the Securities, and copies of any reports and
financial statements furnished to or filed with the
Commission or any national securities exchange;
(i) during the period beginning on the date hereof
and continuing to and including the Business Day following
the Closing Date, not to offer, sell, contract to sell, or
otherwise dispose of any debt securities of or guaranteed
by the Company or the Guarantor which are substantially
similar to the Securities;
(j) to use the net proceeds received by the Company from
the sale of the Securities pursuant to this Agreement in the
manner specified in the Prospectus under the caption "Use of
Proceeds";
(k) whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is
terminated, to pay or cause to be paid all costs and
expenses incident to the performance of its obligations
hereunder, including without limiting the generality of the
foregoing, all costs and expenses (i) incident to the
preparation, issuance, execution, authentication and
delivery of the Securities, including any expenses of the
Trustee, (ii) incident to the preparation, printing and
filing under the Securities Act of the Registration
Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and
supplements thereto), (iii) incurred in connection with the
registration or qualification and determination of
eligibility for investment of the Securities under the laws
of such jurisdictions as the Underwriters may designate
(including fees of counsel for the Underwriters and their
disbursements), (iv) in connection with the listing of the
Securities on any stock exchange, (v) related to any filing
with National Association of Securities Dealers, Inc., (vi)
in connection with the printing (including word processing
and duplication costs) and delivery of this Agreement, the
Indenture, the Preliminary and Supplemental Blue Sky Memo-
randa and any Legal Investment Survey and the furnishing to
Underwriters and dealers of copies of the Registration
Statement and the Prospectus, including mailing and
shipping, as herein provided, (vii) payable to rating
agencies in connection with the rating of the Securities,
(viii) any expenses incurred by the Company and the
Guarantor in connection
11
<PAGE>
with a "road show" presentation to potential investors and
(ix) the cost and charges of any transfer agent.
6. The several obligations of the Underwriters hereunder
to purchase the Securities on the Closing Date are subject to the
performance by each of the Company and the Guarantor of its
respective obligations hereunder and to the following additional
conditions:
(a) the Registration Statement shall have become
effective (or if a post-effective amendment is required to
be filed under the Securities Act, such post-effective
amendment shall have become effective) not later than 5:00
P.M., New York City time, on the date hereof; and no stop
order suspending the effectiveness of the Registration
Statement or any post-affective amendment shall be in
effect, and no proceedings for such purpose shall be
pending before or threatened by the Commission; the
Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations
under the Securities Act and in accordance with Section
5(a) hereof; and all requests for additional information
shall have been complied with to the satisfaction of the
Representatives;
(b) the representations and warranties of each of the
Company and the Guarantor contained herein are true and
correct on and as of the Closing Date as if made on and as
of the Closing Date and each of the Company and the
Guarantor shall have complied with all agreements and all
conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date;
(c) subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, there shall not
have occurred any downgrading, nor shall any notice have
been given of (i) any downgrading, (ii) any intended or
potential downgrading or (iii) any review or possible
change that does not indicate an improvement in the rating
accorded any securities of or guaranteed by the Company or
the Guarantor by any "nationally recognized statistical
rating organization", as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act;
(d) since the respective dates as of which
information is given in the Prospectus there shall not have
been any change in the capital stock or long-term debt of
the Guarantor or any of the Subsidiaries or any material
adverse change, or any development involving a prospective
material adverse change, in or affecting the general
affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of
the Guarantor and the Subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the
Prospectus, the effect of which in the judgment of the
Representatives makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the
Securities on the Closing Date on the terms and in the
manner contemplated in the Prospectus; and neither the
Guarantor nor any of the Subsidiaries has sustained since
the date of the latest audited financial statements
included in the
12
<PAGE>
Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor
dispute or court or governmental action, order to decree,
otherwise than as set forth or contemplated in the
Prospectus;
(e) the Representatives shall have received on and as
of the Closing Date a certificate of an executive officer
of each of the Company and the Guarantor, with specific
knowledge about the financial matters of the Company and
the Guarantor, satisfactory to the Representatives to the
effect set forth in subsections (a) through (c) (with
respect to the respective representations, warranties,
agreements and conditions of the Company and the Guarantor)
of this Section and to the further effect that there has
not occurred any material adverse change, or any
development involving a prospective material adverse
change, in or affecting the general affairs, business,
prospects, management, financial position, stockholders'
equity or results of operations of the Guarantor and the
Subsidiaries taken as a whole from that set forth or
contemplated in the Registration Statement;
(f) Richard H. Irving III, General Counsel for the
Company and the Guarantor, shall have furnished to the
Representatives his written opinion, dated the Closing
Date, in form and substance satisfactory to the
Representatives, to the effect that:
(i) each of the Company and the Guarantor has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
State of Delaware, with power and authority (corporate
and other) to own its properties and conduct its
business as described in the Prospectus;
(ii) each of the Company and the Guarantor has
been duly qualified as a foreign corporation for the
transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns
or leases properties, or conducts any business, so as
to require such qualification, other than where the
failure to be so qualified or in good standing would
not have a material adverse effect on the Guarantor
and the Subsidiaries taken as a whole;
(iii) each of the Subsidiaries (other than the
Company) has been duly incorporated and is validly
existing as a corporation under the laws of its
jurisdiction of incorporation with power and authority
(corporate and other) to own its properties and
conduct its business as described in the Prospectus
and has been duly qualified as a foreign corporation
for the transaction of business and is in good
standing under the laws of each other jurisdiction in
which it owns or leases properties, or conducts any
business, so as to require such qualification, other
than where the failure to be so qualified and in good
standing would not have a material adverse effect on
the Guarantor and the Subsidiaries taken as a whole;
and all of the outstanding shares of capital stock of
each Subsidiary have been duly and
13
<PAGE>
validly authorized and issued, are fully paid and
non-assessable, and (except in the case of foreign
subsidiaries, for directors' qualifying shares) are
owned directly or indirectly by the Guarantor, free
and clear of all liens, encumbrances, equities or
claims;
(iv) other than as set forth or contemplated in
the Prospectus, there are no legal or governmental
investigations, actions, suits or proceedings pending
or, to the best of such counsel's knowledge,
threatened against or affecting the Guarantor or any
of the Subsidiaries or any of their respective
properties or to which the Guarantor or any of the
Subsidiaries is or may be a party or to which any
property of the Guarantor or the Subsidiaries is or
may be the subject which, if determined adversely to
the Guarantor or any of the Subsidiaries, could
individually or in the aggregate have, or reasonably
be expected to have, a material adverse effect on the
general affairs, business, prospects, management,
financial position, stockholders' equity or results of
operations of the Guarantor and the Subsidiaries taken
as a whole; to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and
such counsel does not know of any statutes,
regulations, contracts or other documents required to
be described in the Registration Statement or
Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed
as required;
(v) neither the Guarantor nor any of the
Subsidiaries is, or with the giving of notice or lapse
of time or both would be, in violation of or in
default under, its Certificate of Incorporation or
Bylaws or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to
such counsel to which the Guarantor or any of the
Subsidiaries is a party or by which it or any of them
or any of their respective properties is bound, except
for violations and defaults which individually and in
the aggregate are not material to the Guarantor and
the Subsidiaries taken as a whole or to the holders of
the Securities; the issue and sale by the Company of
the Notes and by the Guarantor of the Guarantees and
the performance by each of the Company and the
Guarantor of its respective obligations under the
Securities, the Indenture and this Agreement and the
consummation of the transactions herein and therein
contemplated will not conflict with or result in a
breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company,
the Guarantor or any of the other Subsidiaries is a
party or by which the Company, the Guarantor or any of
the other Subsidiaries is bound or to which any of the
property or assets of the Company, the Guarantor or
any of the other Subsidiaries is subject;
(vi) each of the Guarantor and the Subsidiaries owns,
possesses or has obtained all licenses, permits, certificates,
consents, orders, approvals and
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<PAGE>
other authorizations from, and has made all
declarations and filings with, all federal, state,
local and other governmental authorities (including
foreign regulatory agencies), all self-regulatory
organizations and all courts and other tribunals,
domestic or foreign, necessary to own or lease, as the
case may be, and to operate its properties and to
carry on its business as conducted as of the date
hereof, and neither the Guarantor nor any such
Subsidiary has received any actual notice of any
proceeding relating to revocation or modification of
any such license, permit, certificate, consent, order,
approval or other authorization, except as described
in the Registration Statement and the Prospectus; and
each of the Guarantor and the Subsidiaries is in
compliance in all material respects with all laws and
regulations relating to the conduct of its business as
conducted as of the date of the Prospectus;
(vii) each of the Guarantor and the Subsidiaries
owns, possesses or has the right to use the Intellectual
Property employed by it in connection with the business
conducted by it as of the date hereof;
(viii) the Guarantor and the Subsidiaries have good
and marketable title in fee simple to all real
property and good and marketable title to all personal
property owned by them, in each case free and clear of
all liens, encumbrances and defects except such as are
described or referred to in the Prospectus or such as
do not materially affect the value of such property
and do not interfere with the use made and proposed to
be made of such property by the Guarantor and the
Subsidiaries; and any real property and buildings held
under lease by Guarantor and the Subsidiaries are held
by them under valid, existing and enforceable leases
with such exceptions as are not material and do not
interfere with the use made or proposed to be made of
such property and buildings by the Guarantor or the
Subsidiaries; and
(ix) each of the Guarantor and the Subsidiaries
is in compliance with all Environmental Laws, except,
in each case, where noncompliance, individually or in
the aggregate, would not have a material adverse
effect on the Guarantor and the Subsidiaries taken as
a whole; there are no legal or governmental
proceedings pending or, to the knowledge of such
counsel, threatened against or affecting the Guarantor
or any of the Subsidiaries under any Environmental Law
which, individually or in the aggregate, could
reasonably be expected to have a material adverse
effect on the Guarantor and the Subsidiaries taken as
a whole;
In rendering such opinions, such counsel may rely (A)
as to matters involving the application of laws other than
the laws of the United States and the States of Delaware
and Alabama, to the extent such counsel deems proper and to
the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably
satisfactory to Underwriters' counsel) of other counsel
reasonably acceptable to the
15
<PAGE>
Underwriters' counsel, familiar with the applicable laws;
(B) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of the
Company and the Guarantor and certificates or other written
statements of officials of jurisdictions having custody of
documents respecting the corporate existence or good
standing of the Company or the Guarantor. The opinion of
such counsel for the Company and the Guarantor shall state
that the opinion of any such other counsel upon which they
relied is in form satisfactory to such counsel and, in such
counsel's opinion, the Underwriters and they are justified
in relying thereon.
The opinion of Richard H. Irving III described above
shall be rendered to the Underwriters at the request of the
Company and the Guarantor and shall so state therein.
(g) Cleary, Gottlieb, Steen & Hamilton, counsel for
the Company and the Guarantor, shall have furnished to the
Representatives their written opinion, dated the Closing
Date, in form and substance satisfactory to the
Representatives, to the effect
that:
(i) each of the Company and the Guarantor has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
State of Delaware, with power and authority (corporate
and other) to own its properties and conduct its
business as described in the Prospectus;
(ii) other than as set forth or contemplated in
the Prospectus, there are no legal or governmental
investigations, actions, suits or proceedings pending
or, to the best of such counsel's knowledge,
threatened against or affecting the Guarantor or any
of the Subsidiaries or any of their respective
properties or to which the Guarantor or any of the
Subsidiaries is or may be a party or to which any
property of the Guarantor or the Subsidiaries is or
may be the subject which, if determined adversely to
the Guarantor or any of the Subsidiaries, could
individually or in the aggregate have, or reasonably
be expected to have, a material adverse effect on the
general affairs, business, prospects, management,
financial position, stockholders' equity or results of
operations of the Guarantor and the Subsidiaries taken
as a whole; to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and
such counsel does not know of any statutes,
regulations, contracts or other documents required to
be described in the Registration Statement or
Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed
as required;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company and the Guarantor;
16
<PAGE>
(iv) the Notes have been duly authorized,
executed and delivered by the Company and, when they
have been duly authenticated in accordance with the
terms of the Indenture and the Securities have been
delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, the Notes
will constitute valid and binding obligations of the
Company entitled to the benefits provided by the
Indenture subject, as to enforcement of remedies, to
bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally,
general equitable principles and the discretion of
courts in granting equitable remedies;
(v) the Guarantees have been duly authorized,
executed and delivered by the Guarantor, and when the
Notes have been duly authenticated in accordance with
the terms of the Indenture and the Securities have
been delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, the
Guarantees will constitute valid and binding
obligations of the Guarantor entitled to the benefits
provided by the Indenture subject, as to enforcement
of remedies, to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors' rights generally, general equitable
principles and the discretion of courts in granting
equitable remedies;
(vi) the Indenture has been duly authorized,
executed and delivered by the Company and the
Guarantor and constitutes a valid and binding
instrument of each of the Company and the Guarantor
subject, as to enforcement of remedies, to bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, general
equitable principles and the discretion of courts in
granting equitable remedies; and the Indenture has
been duly qualified under the Trust Indenture Act;
(vii) neither the Guarantor nor any of the
Subsidiaries is, or with the giving of notice or lapse
of time or both would be, in violation of or in
default under, its Certificate of Incorporation or
Bylaws or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to
such counsel to which the Guarantor or any of the
Subsidiaries is a party or by which it or any of them
or any of their respective properties is bound, except
for violations and defaults which individually and in
the aggregate are not material to the Guarantor and
the Subsidiaries taken as a whole or to the holders of
the Securities; the issue and sale by the Company of
the Notes and by the Guarantor of the Guarantees and
the performance by each of the Company and the
Guarantor of its respective obligations under the
Securities, the Indenture and this Agreement and the
consummation of the transactions herein and therein
contemplated will not conflict with or result in a
breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company,
the Guarantor or any of the other
17
<PAGE>
Subsidiaries is a party or by which the Company, the
Guarantor or any of the other Subsidiaries is bound or
to which any of the property or assets of the Company,
the Guarantor or any of the other Subsidiaries is
subject, nor will any such action result in any
violation of the provisions of the Certificate of
Incorporation or the Bylaws of the Company or the
Guarantor or any applicable law or statute or any
order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company,
the Guarantor, the other Subsidiaries or any of their
respective properties;
(viii) no consent, approval, authorization, order,
license, registration or qualification of or with any
court or governmental agency or body is required for
the issue and sale of the Securities or the
consummation of the other transactions contemplated by
this Agreement or the Indenture, except such consents,
approvals, authorizations, orders, licenses,
registrations or qualifications as have been obtained
under the Securities Act and the Trust Indenture Act
and as may be required under state securities or Blue
Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(ix) the statements in the Prospectus (A) under
"Description of Notes" and "Underwriting", (B)
incorporated by reference in the Prospectus from Item
3 of Part 1 of the Company's and the Guarantor's
respective Annual Reports on Form 10-K for the period
ended December 31, 1996, (C) under "Employment
Contracts, Termination of Employment and
Change-In-Control Arrangements" in the Guarantor's
Proxy Statement relating to its Annual Meeting of
Stockholders on April 21, 1997 and incorporated by
reference in the Prospectus and in the Registration
Statement in Item 15, insofar as such statements
constitute a summary of the legal matters, documents
or proceedings referred to therein, fairly present the
information called for with respect to such legal
matters, documents or proceedings;
(x) such counsel is of the opinion that the
Registration Statement and the Prospectus and any
amendments and supplements thereto (other than the
financial statements included therein as to which such
counsel need express no opinion) comply as to form in
all material respects with the requirements of the
Securities Act and the Trust Indenture Act and
believes that (other than the financial statements
included therein, as to which such counsel need
express no belief and other than that part of the
Registration Statement which constitutes the Form T-1
of the Trustee under the Trust Indenture Act) the
Registration Statement and the prospectus included
therein at the time the Registration Statement became
effective did not contain any untrue statement of a
material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, and that the
Prospectus, as amended or supplemented, if applicable,
does not contain any untrue statement of a material
fact or omit to state a material
18
<PAGE>
fact necessary in order to make the statements therein,
in the light of the circumstances under which they were
made, not misleading;
(xi) neither the Company nor the Guarantor is
and, after giving effect to the offering and sale of
the Securities, neither will be an "investment
company" or an entity "controlled" by an "investment
company", as such terms are defined in the Investment
Company Act;
(xii) the conditions for use of a Registration
Statement on Form S-3 set forth in the General
Instructions to Form S-3 have been satisfied with
respect to the Company and the Guarantor and the
transactions contemplated by this Agreement and the
Registration Statement;
In rendering such opinions, such counsel may rely (A)
as to matters involving the application of laws other than
the laws of the United States and the States of Delaware
and New York, to the extent such counsel deems proper and
to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably
satisfactory to Underwriters' counsel) of other counsel
reasonably acceptable to the Underwriters' counsel,
familiar with the applicable laws; (B) as to matters of
fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and the
Guarantor and certificates or other written statements of
officials of jurisdictions having custody of documents
respecting the corporate existence or good standing of the
Company or the Guarantor. The opinion of such counsel for
the Company and the Guarantor shall state that the opinion
of any such other counsel upon which they relied is in form
satisfactory to such counsel and, in such counsel's
opinion, the Underwriters and they are justified in relying
thereon. With respect to the matters to be covered in
subparagraph (x) above, counsel may state their opinion and
belief is based upon their participation in the preparation
of the Registration Statement and the Prospectus and any
amendment or supplement thereto but is without independent
check or verification except as specified.
The opinion of Cleary, Gottlieb, Steen & Hamilton
described above shall be rendered to the Underwriters at
the request of the Company and the Guarantor and shall so
state therein.
(h) on the effective date of the Registration
Statement and the effective date of the most recently filed
post-effective amendment to the Registration Statement and
also on the Closing Date, Coopers & Lybrand L.L.P. shall
have furnished to you letters, dated the respective dates
of delivery thereof, in form and substance satisfactory to
you, containing statements and information of the type
customarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and
certain financial information contained in the Registration
Statement and the Prospectus;
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<PAGE>
(i) the Representatives shall have received on and as
of the Closing Date an opinion of King & Spalding, counsel
to the Underwriters, with respect to the validity of the
Indenture, the Notes and the Guarantees, the Registration
Statement, the Prospectus and other related matters as the
Representatives may reasonably request, and such counsel
shall have received such papers and information as they may
reasonably request to enable them to pass upon such
matters;
(j) on or prior to the Closing Date, each of the
Company and the Guarantor shall have furnished to the
Representatives such further certificates and documents as
the Representatives shall reasonably request.
7. The Company and the Guarantor agree, jointly and
severally, to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, the legal
fees and other expenses incurred in connection with any suit,
action or proceeding or any claim asserted) caused by any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company and the Guarantor shall
have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Underwriter furnished
to the Company and the Guarantor in writing by such Underwriter
through the Representatives expressly for use therein.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Guarantor, their
respective directors, their respective officers who sign the
Registration Statement and each person who controls the Company
or the Guarantor within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company and the
Guarantor to each Underwriter, but only with reference to
information relating to such Underwriter furnished to the Company
and the Guarantor in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement,
the Prospectus, any amendment or supplement thereto, or any
preliminary prospectus.
If any suit, action, proceeding (including any governmental
or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, such
person (the "Indemnified Person") shall promptly notify the
person against whom such indemnity may be sought (the
"Indemnifying Person") in writing, and the Indemnifying Person,
upon request of the Indemnified Person, shall retain counsel
reasonably satisfactory to the Indemnified Person to represent
the Indemnified Person and any others the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses
of such counsel related to such proceeding. In any such proceed-
20
<PAGE>
ing, any Indemnified Person shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be
at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has
failed within a reasonable time to retain counsel reasonably
satisfactory to the Indemnified Person or (iii) the named parties
in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them. It is understood that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in
the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel)
for all Indemnified Persons, and that all such fees and expenses
shall be reimbursed as they are incurred. Any such separate firm
for the Underwriters and such control persons of the Underwriters
shall be designated in writing by J.P. Morgan Securities Inc. and
any such separate firm for the Company, the Guarantor, their
respective directors, their respective officers who sign the
Registration Statement and such control persons of the Company
and the Guarantor shall be designated in writing by the Company
and the Guarantor. The Indemnifying Person shall not be liable
for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an
Indemnified Person shall have requested an Indemnifying Person to
reimburse the Indemnified Person for fees and expenses of counsel
as contemplated by the third sentence of this paragraph, the
Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after
receipt by such Indemnifying Person of the aforesaid request and
(ii) such Indemnifying Person shall not have reimbursed the
Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without
the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of
which any Indemnified Person is or could have been a party and
indemnity could have been sought hereunder by such Indemnified
Person, unless such settlement includes an unconditional release
of such Indemnified Person from all liability on claims that are
the subject matter of such proceeding.
If the indemnification provided for in the first and second
paragraphs of this Section 7 is unavailable to an Indemnified
Person or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then each Indemnifying Person
under such paragraph, in lieu of indemnifying such Indemnified
Person thereunder, shall contribute to the amount paid or payable
by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the
Guarantor on the one hand and the Underwriters on the other hand
from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the
relative fault of the Company and the Guarantor on the one hand
and the Underwriters on the other in connection with the
statements or omissions that resulted in such
21
<PAGE>
losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received
by the Company and the Guarantor on the one hand and the
Underwriters on the other shall be deemed to be in the same
respective proportions as the net proceeds from the offering
(before deducting expenses) received by the Company and the total
underwriting discounts and the commissions received by the
Underwriters, in each case as set forth in the table on the cover
of the Prospectus, bear to the aggregate public offering price of
the Securities. The relative fault of the Company and the
Guarantor on the one hand and the Underwriters on the other shall
be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company and the Guarantor or by the
Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such
statement or omission.
The Company, the Guarantor and the Underwriters agree that
it would not be just and equitable if contribution pursuant to
this Section 7 were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or
by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above,
any legal or other expenses incurred by such Indemnified Person
in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 7, in no
event shall an Underwriter be required to contribute any amount
in excess of the amount by which the total price at which the
Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations
to contribute pursuant to this Section 7 are several in
proportion to the respective principal amount of Securities set
forth opposite their names in Schedule I hereto, and not joint.
The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in
equity.
The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of each of the
Company and the Guarantor set forth in this Agreement shall
remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by
or on behalf of any Underwriter or any person controlling any
Underwriter or by or on behalf of the Company or the Guarantor,
their respective officers or directors or any other person
controlling the Company or the Guarantor and (iii) acceptance of
and payment for any of the Securities.
22
<PAGE>
8. Notwithstanding anything herein contained, this
Agreement may be terminated in the absolute discretion of the
Representatives, by notice given to the Company and the
Guarantor, if after the execution and delivery of this Agreement
and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may
be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc.,
the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any
securities of or guaranteed by the Company or the Guarantor shall
have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal
or New York State authorities, or (iv) there shall have occurred
any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment
of the Representatives, is material and adverse and which, in the
judgment of the Representatives, makes it impracticable to market
the Securities on the terms and in the manner contemplated in the
Prospectus.
9. This Agreement shall become effective upon the later
of (x) execution and delivery hereof by the parties hereto and
(y) release of notification of the effectiveness of the
Registration Statement (or, if applicable, any post-effective
amendment) by the Commission.
If on the Closing Date any one or more of the Underwriters
shall fail or refuse to purchase Securities which it or they have
agreed to purchase hereunder on such date, and the aggregate
principal amount of Securities which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase is not
more than one-tenth of the aggregate principal amount of the
Securities to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the principal
amount of Securities set forth opposite their respective names in
Schedule I bears to the aggregate principal amount of Securities
set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Representatives
may specify, to purchase the Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the
principal amount of Securities that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this
Section 9 by an amount in excess of one-tenth of such principal
amount of Securities without the written consent of such
Underwriter. If on the Closing Date any Underwriter or
Underwriters shall fail or refuse to purchase Securities which it
or they have agreed to purchase hereunder on such date, and the
aggregate principal amount of Securities with respect to which
such default occurs is more than one-tenth of the aggregate
principal amount of Securities to be purchased on such date, and
arrangements satisfactory to the Representatives and the Company
for the purchase of such Securities are not made within 36 hours
after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter, the
Company or the Guarantor. In any such case either you or the
Company shall have the right to postpone the Closing Date, but in
no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve
any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
23
<PAGE>
10. If this Agreement shall be terminated by the
Underwriters, or any of them, because of any failure or refusal
on the part of the Company or the Guarantor to comply with the
terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company or the Guarantor shall be unable to
perform its obligations under this Agreement or any condition of
the Underwriters' obligations cannot be fulfilled, the Company
and the Guarantor agree, jointly and severally, to reimburse the
Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and expenses of their
counsel) reasonably incurred by such Underwriters in connection
with this Agreement or the offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be
binding upon the Company, the Guarantor, the Underwriters, any
controlling persons referred to herein and their respective
successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other
person, firm or corporation any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision
herein contained. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such
purchase.
12. Any action by the Underwriters hereunder may be taken
by the Representatives jointly or by J.P. Morgan Securities Inc.
alone on behalf of the Underwriters, and any such action taken by
the Representatives jointly or by J.P. Morgan Securities Inc.
alone shall be binding upon the Underwriters. All notices and
other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the Underwriters
shall be given to the Representatives c/o J.P. Morgan Securities
Inc., 60 Wall Street, New York, New York 10260-0060
(telefax:______); Attention: Syndicate Department. Notices to the
Company shall be given to it at Blount, Inc., 4250 Executive Park
Drive, Montgomery, Alabama 36116-1602, (telefax:______);
Attention:__________. Notices to the Guarantor shall be given to
it at Blount International, Inc., 4250 Executive Park Drive,
Montgomery, Alabama 36116-1602, (telefax:______);
Attention:__________.
13. This Agreement may be signed in counterparts, each of
which shall be an original and all of which together shall
constitute one and the same instrument.
24
<PAGE>
14. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving
effect to the conflicts of laws provisions thereof.
If the foregoing is in accordance with your understanding,
please sign and return four counterparts hereof.
Very truly yours,
BLOUNT, INC.
By:_______________________
Title:
BLOUNT INTERNATIONAL, INC.
By:_______________________
Title:
Accepted: __________, 1998
J.P. Morgan Securities Inc.
Salomon Smith Barney Inc.
Acting on behalf of themselves
and the several Underwriters
listed in Schedule I hereto.
By: J.P. Morgan Securities Inc.
By:___________________________
Title:
25
<PAGE>
SCHEDULE I
Principal
Amount of
Securities To
Underwriter Be Purchased
- ----------- -------------
J.P. Morgan Securities Inc.............. $[ ]
Salomon Brothers, Inc................... _______
Total ............................ $150,000
26
Exhibit 12
BLOUNT INTERNATIONAL, INC.
COMPUTATION OF FIXED RATIO OF EARNINGS
TO FIXED CHARGES
(In millions)
For the years ended the last day of February
--------------------------------------------
1993 1994 1995 1996
---- ---- ---- ----
Income from
continuing operations
before income taxes .......... $16.6 $33.9 $67.4 $83.7
Amortization
of capitalized interest ...... 0.1 0.1 0.1 0.1
Amortization of
debt expense ................. 0.5 0.4 0.5 0.3
Interest expense ............... 10.6 10.9 10.6 10.5
Interest portion
of rentals ................... 1.8 1.9 1.7 2.1
------- ------- ------- -----
Earnings available
for fixed charges .......... $29.6 $47.2 $80.3 $96.7
===== ===== ===== =====
Interest expense ............... $10.6 $10.9 $10.6 $10.5
Amortization of
capitalized interest ......... 0.1 0.1 0.1 0.1
Amortization of
debt expense ................. 0.5 0.4 0.5 0.3
Capitalized
interest ..................... 0.6 0.1 - -
Interest portion
of rentals ................... 1.8 1.9 1.7 2.1
------- ------- ------- -------
Fixed charges .............. $13.6 $13.4 $12.9 $13.0
===== ===== ===== =====
Ratio of earnings
to fixed charges ........... 2.2x 3.5x 6.2x 7.4x
For the 10 For the 12
months months For the 9 months ended
ended ended September 30,
12/31/96 12/31/96(1) 1996 1997
-------- ----------- ---- -----
(Unaudited) (Unaudited)
Income from
continuing operations
before income taxes ......... $69.6 $85.4 $61.0 $64.6
Amortization
of capitalized interest ..... 0.1 0.1 0.1 0.1
Amortization of
debt expense ................ 0.2 0.3 0.2 0.2
Interest expense .............. 7.7 9.6 7.4 6.5
Interest portion
of rentals .................. 1.7 2.0 1.5 1.5
------- ------ ----- ----
Earnings available
for fixed charges ......... $79.3 $97.4 $70.2 $72.9
======= ======= ===== =====
Interest expense .............. $7.7 $9.6 $7.4 $6.5
Amortization of
capitalized interest ........ 0.1 0.1 0.1 0.1
Amortization of
debt expense ................ 0.2 0.3 0.2 0.2
Capitalized
interest .................... - - - -
Interest portion
of rentals .................. 1.7 2.0 1.5 1.5
------ ---- ----- -------
Fixed charges ............. $ 9.7 $12.0 $ 9.2 $ 8.3
====== ===== ===== ======
Ratio of earnings
to fixed charges .......... 8.2x 8.1x 7.6x 8.8x
ProForma ratio of earnings to fixed charges
- -------------------------------------------
For the 10 For the 12
months months For the
ended ended 9 months ended
12/31/96(1) 12/31/96(1) 9/30/97
----------- ----------- -----------------
Income from
continuing operations
before income taxes .........$70.8 $86.8 $65.7
Amortization
of capitalized interest ..... 0.1 0.1 0.1
Amortization of
debt expense ................ 0.2 0.2 0.2
Interest expense .............. 6.6 8.2 5.4
Interest portion
of rentals .................. 1.7 2.0 1.5
--- --- ---
Earnings available
for fixed charges .........$79.4 $97.3 $72.9
==== ==== ====
Interest expense .............. $6.6 $8.2 $5.4
Amortization of
capitalized interest ........ 0.1 0.1 0.1
Amortization of
debt expense ................ 0.2 0.2 0.2
Capitalized
interest .................... -- -- --
Interest portion
of rentals .................. 1.7 2.0 1.5
--- --- ---
Fixed charges ............. $8.6 $10.5 $7.2
==== ==== ====
Ratio of earnings
to fixed charges .......... 9.3x 9.2x 10.1x
- --------------------------
(1) In April 1996, Blount changed its fiscal year from one
ending on the last day of February to one ending on
December 31. Unaudited financial data for the twelve
months ended December 31, 1996 is also presented in the
table above for comparative purposes only.
Exhibit 23a
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this
registration statement on Form S-3 of our reports dated January
28, 1997, on our audits of the consolidated financial statements
and financial statement schedules of Blount International, Inc.
and Blount, Inc. as of December 31, 1996 and February 29, 1996
and for the ten month period ended December 31, 1996 and for
each of the two years ended February 29, 1996. We also consent to
the reference to our Firm under the caption "Experts."
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P
Atlanta, Georgia
December 17, 1997
POWER OF ATTORNEY
KNOW ALL MEN OF THESE PRESENTS, that the undersigned
director of each of Blount International, Inc. and Blount, Inc.
whose signature appears below constitutes and appoints Richard
H. Irving, III and L. Daniel Morris, Jr., and each of them, his
or her true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution for him or her and in
his or her name, place and stead, in any and all capacities, to
sign a Registration Statement on Form S-3, or any other
applicable form prescribed by the Securities and Exchange Commission
(the "Commission") under the provisions of the Securities
Act of 1933, as amended (the "Act"), for the registration under
the Act of certain debt securities issued by Blount, Inc. and
guaranteed by Blount International, Inc., the same being
authorized by the respective Boards of Directors of said
Companies at a meeting on November 10, 1997, and any and all
amendments thereto and to file the same, with all exhibits
thereto and other documents (including Prospectuses and
Prospectus Supplements) in connection therewith, with the
Commission, granting unto such attorneys-in-fact and agents and
each of them full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as
they might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney as of the 15th day of December, 1997.
/s/ WINTON M. BLOUNT
---------------------------------------
Winton M. Blount, Chairman of the Board
and Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN OF THESE PRESENTS, that the undersigned
director of each of Blount International, Inc. and Blount, Inc.
whose signature appears below constitutes and appoints Richard
H. Irving, III and L. Daniel Morris, Jr., and each of them, his
or her true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution for him or her and in
his or her name, place and stead, in any and all capacities, to
sign a Registration Statement on Form S-3, or any other
applicable form prescribed by the Securities and Exchange Commission
(the "Commission") under the provisions of the Securities
Act of 1933, as amended (the "Act"), for the registration under
the Act of certain debt securities issued by Blount, Inc. and
guaranteed by Blount International, Inc., the same being
authorized by the respective Boards of Directors of said
Companies at a meeting on November 10, 1997, and any and all
amendments thereto and to file the same, with all exhibits
thereto and other documents (including Prospectuses and
Prospectus Supplements) in connection therewith, with the
Commission, granting unto such attorneys-in-fact and agents and
each of them full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as
they might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney as of the 15th day of December, 1997.
/s/ JOHN M. PANETIERRE
-------------------------------------------
John M. Panetierre, Director
/s/ JOHN M. PANETIERRE
-------------------------------------------
John M. Panetierre, President
& Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN OF THESE PRESENTS, that the undersigned
director of each of Blount International, Inc. and Blount, Inc.
whose signature appears below constitutes and appoints Richard
H. Irving, III and L. Daniel Morris, Jr., and each of them, his
or her true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution for him or her and in
his or her name, place and stead, in any and all capacities, to
sign a Registration Statement on Form S-3, or any other
applicable form prescribed by the Securities and Exchange Commission
(the "Commission") under the provisions of the Securities
Act of 1933, as amended (the "Act"), for the registration under
the Act of certain debt securities issued by Blount, Inc. and
guaranteed by Blount International, Inc., the same being
authorized by the respective Boards of Directors of said
Companies at a meeting on November 10, 1997, and any and all
amendments thereto and to file the same, with all exhibits
thereto and other documents (including Prospectuses and
Prospectus Supplements) in connection therewith, with the
Commission, granting unto such attorneys-in-fact and agents and
each of them full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as
they might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney as of the 11th day of December, 1997.
/s/ C. TODD CONOVER
-------------------------------
C. Todd Conover, Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN OF THESE PRESENTS, that the undersigned
director of each of Blount International, Inc. and Blount, Inc.
whose signature appears below constitutes and appoints Richard
H. Irving, III and L. Daniel Morris, Jr., and each of them, his
or her true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution for him or her and in
his or her name, place and stead, in any and all capacities, to
sign a Registration Statement on Form S-3, or any other
applicable form prescribed by the Securities and Exchange Commission
(the "Commission") under the provisions of the Securities
Act of 1933, as amended (the "Act"), for the registration under
the Act of certain debt securities issued by Blount, Inc. and
guaranteed by Blount International, Inc., the same being
authorized by the respective Boards of Directors of said
Companies at a meeting on November 10, 1997, and any and all
amendments thereto and to file the same, with all exhibits
thereto and other documents (including Prospectuses and
Prospectus Supplements) in connection therewith, with the
Commission, granting unto such attorneys-in-fact and agents and
each of them full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as
they might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney as of the 11th day of December, 1997.
/s/ EMORY M. FOLMAR
-------------------------------
Emory M. Folmar, Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN OF THESE PRESENTS, that the undersigned
director of each of Blount International, Inc. and Blount, Inc.
whose signature appears below constitutes and appoints Richard
H. Irving, III and L. Daniel Morris, Jr., and each of them, his
or her true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution for him or her and in
his or her name, place and stead, in any and all capacities, to
sign a Registration Statement on Form S-3, or any other
applicable form prescribed by the Securities and Exchange Commission
(the "Commission") under the provisions of the Securities
Act of 1933, as amended (the "Act"), for the registration under
the Act of certain debt securities issued by Blount, Inc. and
guaranteed by Blount International, Inc., the same being
authorized by the respective Boards of Directors of said
Companies at a meeting on November 10, 1997, and any and all
amendments thereto and to file the same, with all exhibits
thereto and other documents (including Prospectuses and
Prospectus Supplements) in connection therewith, with the
Commission, granting unto such attorneys-in-fact and agents and
each of them full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as
they might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney as of the 11th day of December, 1997.
/s/ ANDREW A. SORENSEN
--------------------------------
Andrew A. Sorensen, Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN OF THESE PRESENTS, that the undersigned
director of each of Blount International, Inc. and Blount, Inc.
whose signature appears below constitutes and appoints Richard
H. Irving, III and L. Daniel Morris, Jr., and each of them, his
or her true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution for him or her and in
his or her name, place and stead, in any and all capacities, to
sign a Registration Statement on Form S-3, or any other
applicable form prescribed by the Securities and Exchange Commission
(the "Commission") under the provisions of the Securities
Act of 1933, as amended (the "Act"), for the registration under
the Act of certain debt securities issued by Blount, Inc. and
guaranteed by Blount International, Inc., the same being
authorized by the respective Boards of Directors of said
Companies at a meeting on November 10, 1997, and any and all
amendments thereto and to file the same, with all exhibits
thereto and other documents (including Prospectuses and
Prospectus Supplements) in connection therewith, with the
Commission, granting unto such attorneys-in-fact and agents and
each of them full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as
they might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney as of the 17th day of December, 1997.
/s/ W. HOUSTON BLOUNT
-------------------------------
W. Houston Blount, Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN OF THESE PRESENTS, that the undersigned
director of each of Blount International, Inc. and Blount, Inc.
whose signature appears below constitutes and appoints Richard
H. Irving, III and L. Daniel Morris, Jr., and each of them, his
or her true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution for him or her and in
his or her name, place and stead, in any and all capacities, to
sign a Registration Statement on Form S-3, or any other
applicable form prescribed by the Securities and Exchange Commission
(the "Commission") under the provisions of the Securities
Act of 1933, as amended (the "Act"), for the registration under
the Act of certain debt securities issued by Blount, Inc. and
guaranteed by Blount International, Inc., the same being
authorized by the respective Boards of Directors of said
Companies at a meeting on November 10, 1997, and any and all
amendments thereto and to file the same, with all exhibits
thereto and other documents (including Prospectuses and
Prospectus Supplements) in connection therewith, with the
Commission, granting unto such attorneys-in-fact and agents and
each of them full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as
they might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney as of the 11th day of December, 1997.
/s/ R. EUGENE CARTLEDGE
---------------------------------
R. Eugene Cartledge, Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN OF THESE PRESENTS, that the undersigned
director of each of Blount International, Inc. and Blount, Inc.
whose signature appears below constitutes and appoints Richard
H. Irving, III and L. Daniel Morris, Jr., and each of them, his
or her true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution for him or her and in
his or her name, place and stead, in any and all capacities, to
sign a Registration Statement on Form S-3, or any other
applicable form prescribed by the Securities and Exchange Commission
(the "Commission") under the provisions of the Securities
Act of 1933, as amended (the "Act"), for the registration under
the Act of certain debt securities issued by Blount, Inc. and
guaranteed by Blount International, Inc., the same being
authorized by the respective Boards of Directors of said
Companies at a meeting on November 10, 1997, and any and all
amendments thereto and to file the same, with all exhibits
thereto and other documents (including Prospectuses and
Prospectus Supplements) in connection therewith, with the
Commission, granting unto such attorneys-in-fact and agents and
each of them full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as
they might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney as of the 12th day of December, 1997.
/s/ H. CORBIN DAY
---------------------------
H. Corbin Day, Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN OF THESE PRESENTS, that the undersigned
director of each of Blount International, Inc. and Blount, Inc.
whose signature appears below constitutes and appoints Richard
H. Irving, III and L. Daniel Morris, Jr., and each of them, his
or her true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution for him or her and in
his or her name, place and stead, in any and all capacities, to
sign a Registration Statement on Form S-3, or any other
applicable form prescribed by the Securities and Exchange Commission
(the "Commission") under the provisions of the Securities
Act of 1933, as amended (the "Act"), for the registration under
the Act of certain debt securities issued by Blount, Inc. and
guaranteed by Blount International, Inc., the same being
authorized by the respective Boards of Directors of said
Companies at a meeting on November 10, 1997, and any and all
amendments thereto and to file the same, with all exhibits
thereto and other documents (including Prospectuses and
Prospectus Supplements) in connection therewith, with the
Commission, granting unto such attorneys-in-fact and agents and
each of them full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as
they might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney as of the 11th day of December, 1997.
/s/ HERBERT J. DICKSON
--------------------------------
Herbert J. Dickson, Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN OF THESE PRESENTS, that the undersigned
director of each of Blount International, Inc. and Blount, Inc.
whose signature appears below constitutes and appoints Richard
H. Irving, III and L. Daniel Morris, Jr., and each of them, his
or her true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution for him or her and in
his or her name, place and stead, in any and all capacities, to
sign a Registration Statement on Form S-3, or any other
applicable form prescribed by the Securities and Exchange Commission
(the "Commission") under the provisions of the Securities
Act of 1933, as amended (the "Act"), for the registration under
the Act of certain debt securities issued by Blount, Inc. and
guaranteed by Blount International, Inc., the same being
authorized by the respective Boards of Directors of said
Companies at a meeting on November 10, 1997, and any and all
amendments thereto and to file the same, with all exhibits
thereto and other documents (including Prospectuses and
Prospectus Supplements) in connection therewith, with the
Commission, granting unto such attorneys-in-fact and agents and
each of them full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as
they might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney as of the 11th day of December, 1997.
/s/ MARY D. NELSON
------------------------------
Mary D. Nelson, Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN OF THESE PRESENTS, that the undersigned
director of each of Blount International, Inc. and Blount, Inc.
whose signature appears below constitutes and appoints Richard
H. Irving, III and L. Daniel Morris, Jr., and each of them, his
or her true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution for him or her and in
his or her name, place and stead, in any and all capacities, to
sign a Registration Statement on Form S-3, or any other
applicable form prescribed by the Securities and Exchange Commission
(the "Commission") under the provisions of the Securities
Act of 1933, as amended (the "Act"), for the registration under
the Act of certain debt securities issued by Blount, Inc. and
guaranteed by Blount International, Inc., the same being
authorized by the respective Boards of Directors of said
Companies at a meeting on November 10, 1997, and any and all
amendments thereto and to file the same, with all exhibits
thereto and other documents (including Prospectuses and
Prospectus Supplements) in connection therewith, with the
Commission, granting unto such attorneys-in-fact and agents and
each of them full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as
they might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney as of the 11th day of December, 1997.
/s/ ARTHUR P. RONAN
-----------------------------
Arthur P. Ronan, Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN OF THESE PRESENTS, that the undersigned
director of each of Blount International, Inc. and Blount, Inc.
whose signature appears below constitutes and appoints Richard
H. Irving, III and L. Daniel Morris, Jr., and each of them, his
or her true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution for him or her and in
his or her name, place and stead, in any and all capacities, to
sign a Registration Statement on Form S-3, or any other
applicable form prescribed by the Securities and Exchange Commission
(the "Commission") under the provisions of the Securities
Act of 1933, as amended (the "Act"), for the registration under
the Act of certain debt securities issued by Blount, Inc. and
guaranteed by Blount International, Inc., the same being
authorized by the respective Boards of Directors of said
Companies at a meeting on November 10, 1997, and any and all
amendments thereto and to file the same, with all exhibits
thereto and other documents (including Prospectuses and
Prospectus Supplements) in connection therewith, with the
Commission, granting unto such attorneys-in-fact and agents and
each of them full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as
they might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney as of the 12th day of December, 1997.
/s/ HALEY BARBOUR
---------------------------
Haley Barbour, Director
