<PAGE>
PROSPECTUS SUPPLEMENT
(To Prospectus dated May 31, 1994)
[LOGO]
CRANE CO.
$150,000,000
7 1/4% NOTES DUE 1999
INTEREST PAYABLE JUNE 15 AND DECEMBER 15
ISSUE PRICE: 99.768%
The Notes will mature on June 15, 1999 and are not redeemable prior to maturity.
The Notes will be represented by one or more global securities registered in the
name of a nominee of The Depository Trust Company, as Depositary (the
"Depositary"). Beneficial interests in the Notes will be shown on, and transfers
thereof will be effected only through, records maintained by the Depositary and
its participants. Except as described 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 COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC (1) COMMISSIONS (2) COMPANY (1)(3)
<S> <C> <C> <C>
Per Note 99.768% .625% 99.143%
Total $149,652,000 $937,500 $148,714,500
<FN>
(1) Plus accrued interest, if any, from June 15, 1994.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deduction of expenses payable by the Company estimated at $345,000.
</TABLE>
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 Davis Polk &
Wardwell, counsel for the Underwriters. It is expected that delivery of the
Notes will be made on or about June 15, 1994 through the facilities of the
Depositary, against payment therefor in same-day funds.
J.P. MORGAN SECURITIES INC.
DILLON, READ & CO. INC.
SALOMON BROTHERS INC
June 8, 1994
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus Supplement or the
accompanying Prospectus, and, if given or made, such information or
representations must not be relied upon as having been authorized. This
Prospectus Supplement and the accompanying Prospectus do not constitute an offer
to sell or the solicitation of an offer to buy any securities other than the
Notes or any offer to sell or the solicitation of any offer to buy the Notes in
any circumstances in which such offer or solicitation is unlawful. Neither the
delivery of this Prospectus Supplement or the accompanying Prospectus nor any
sale made hereunder or thereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the Company since
the date hereof or thereof or that the information contained herein or therein
is correct as of any time subsequent to their respective dates.
TABLE OF CONTENTS
------------------------
PROSPECTUS SUPPLEMENT
<TABLE>
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PAGE
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The Company................................................................ S-3
First Quarter Results...................................................... S-6
Capitalization............................................................. S-8
Use of Proceeds............................................................ S-8
Description of Notes....................................................... S-8
Underwriting............................................................... S-10
PROSPECTUS
<CAPTION>
PAGE
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Information by Reference.......................... 2
The Company................................................................ 3
Use of Proceeds............................................................ 3
Ratios of Earnings to Fixed Charges........................................ 3
Description of Debt Securities............................................. 3
Plan of Distribution....................................................... 10
Experts.................................................................... 11
Legal Opinions............................................................. 11
</TABLE>
S-2
<PAGE>
THE COMPANY
BUSINESS DESCRIPTION
Crane Co. (the "Company" or "Crane") is a diversified manufacturer of
engineered industrial products, serving niche markets in aerospace, fluid
handling, automatic merchandising and the construction industry. The Company's
wholesale distribution business serves the building products markets and
industrial customers. Founded in 1855, Crane employs approximately 10,000 people
in North America, Europe and Australia.
The Company's strategy is to maintain a balanced business mix, to focus on
niche businesses with high market share and to avoid capital-intensive and
cyclical businesses.
The Company serves the global valve market through manufacturing facilities
in North America, Europe and Australia. The Company sells a wide variety of
valves and fluid control products for the chemical, processing, power and
general industrial and commercial construction industries. Products include
gate, globe, check, angle, ball and butterfly valves of steel, carbon and
stainless steel, alloy, iron, cast iron and bronze designed for use under
various pressures and temperatures and are marketed under a variety of brand
names, including CRANE, JENKINS, CENTER LINE, FLOWSEAL and PACIFIC. The
Company's operations in the United Kingdom also sell pipe fittings, actuators,
pumps and flow measurement equipment. The North American unit also provides a
full range of valve aftermarket services including parts, repairs and
modifications through eight service centers, and the Company's subsidiary in the
United Kingdom maintains repair and service facilities for valves, pumps,
compressors, heat exchangers and similar equipment.
CRANE PUMPS & SYSTEMS manufactures pumps used in the chemical, power,
hydrocarbon processing and general commercial industries and in municipal
applications. Products include sealless canned motor pumps designed to handle
environmentally hazardous fluids, horizontal and vertical centrifugal pumps,
standard vertical turbine pumps, submersible wastewater pumps, regenerative
turbine, end suction centrifugal pumps, submersible deaerator pumps, split case
pumps and in-line pumps. The pumps are marketed under the CHEMPUMP, DEMING,
BARNES, BURKS, WEINMAN and PROSSER brand names.
COCHRANE ENVIRONMENTAL SYSTEMS designs and markets water and wastewater
treatment equipment for almost every major industry. COCHRANE'S products include
deaerators, demineralizers, hot and cold process softeners, dealkalizers,
filters, multiport relief valves, condensate drainage systems and clarifiers.
These products have applications for boiler feed, industrial processes and
wastewater treatment and recovery and are sold principally to public utilities
and authorities and major industrial plants.
CRANE CONTROLS, a new unit originating from the recent acquisition of MARK
CONTROLS CORPORATION, designs, manufactures and markets industrial and
commercial products that control flows and processes in various industries
including the petroleum, chemical, construction, food and beverage and power
generation industries. CRANE CONTROLS' operations consist of the following four
businesses:
AZONIX carries a full line of high-precision products for data acquisition
and control for a wide range of industries and ruggedized operator interfaces
for harsh and hazardous locations.
BARKSDALE produces a line of components which meets, and often exceeds, the
requirements of today's process industries including: solid state and
electromechanical pressure and vacuum switches; pressure transducers;
temperature switches; and directional control valves for a full spectrum of
applications.
DYNALCO CONTROLS offers rotational speed sensors and shutdown devices,
monitoring instruments, speed, ignition and air to fuel controllers, integrated
control systems, and full automation panels. DYNALCO'S rugged products are used
worldwide by industries in a variety of applications, including power
generation, oil and gas pipelines and production, agriculture and mining,
construction, petrochemical and marine.
POWERS PROCESS CONTROLS designs, manufactures and markets
microprocessor-based process controllers and instrumentation, pneumatic actuated
control valves, self-contained temperature regulators, domestic water mixing and
point of use thermal shock protection shower valves for industrial applications
and institutional plumbing installations.
The above products are sold directly to end users and engineering contractors
through the Company's own sales forces and cooperatively with sales
representatives, stocking specialists and industrial distributors.
S-3
<PAGE>
HYDRO-AIRE designs, manufactures and sells anti-skid and automatic brake
control systems, fuel and hydraulic pumps and other aerospace components for the
commercial, military and general aircraft industries as original equipment. In
addition, this unit designs and manufactures similar systems for the retrofit of
aircraft with improved systems and manufactures replacement parts for systems
installed as original equipment by the aircraft manufacturer. All of these
products are largely proprietary to HYDRO-AIRE and, to some extent, are custom
designed to the requirements and specifications of the aircraft manufacturer or
program contractor. The retrofit systems and replacement parts are sold directly
to airlines, governments and aircraft maintenance and overhaul companies.
LEAR ROMEC designs, manufacturers and sells pumps and fluid handling systems
for the military and commercial aerospace industries. LEAR ROMEC has a leading
share of the non-captive market for turbine engine lube and scavenge oil pumps.
Also, it is the leading supplier of fuel boost and transfer pumps for commuter
and business aircraft.
ELDEC designs, manufactures and markets custom electronic and
electromechanical products and systems for applications that are technically and
environmentally demanding. This unit serves both the commercial and military
aerospace markets. Its major customers are airframe and aircraft engine
manufacturers and electronic systems manufacturers. ELDEC'S product lines
include sensing systems that monitor the status of aircraft landing gear, doors
and flight surfaces; low voltage and high voltage power supplies for avionic and
defense electronic systems; monitor and control devices for aircraft engines,
including flowmeters and engine diagnostic systems; and battery chargers,
transformer-rectifiers and other devices that regulate DC power on aircraft.
FERGUSON designs and manufactures, in the United States and through FERGUSON
MACHINE S.A. in Europe, precision index and transfer systems for use on and with
machines which perform automatic forming, assembly, metal cutting, testing and
inspection operations. Products include index drives and tables, mechanical
parts handlers, inline transfer machines, rotary tables, press feeds and custom
cams. These products are sold through Company and independent sales
representatives and distributors.
KEMLITE manufactures fiberglass-reinforced plastic panels for use
principally by the transportation industry in refrigeration and dry van truck
trailers and recreational vehicles. KEMLITE products are also sold to the
commercial construction industry for food processing, fast food restaurant and
supermarket applications and to institutions where fire rated materials with low
smoke generation and minimum toxicity are required. KEMLITE sells its products
directly to truck trailer and, under its FILON trademark, to recreational
vehicle manufacturers and uses distributors to serve its commercial construction
market.
COR TEC is the leading domestic manufacturer of fiberglass-reinforced
laminated panels. The primary market for these panels is the truck and truck
trailer segment of the transportation industry. COR TEC markets its products
directly to the truck and truck trailer manufacturers.
RESISTOFLEX is engaged in the design, manufacture and sale of plastic-lined
steel pipe, fittings, valves, bellows and hose used primarily by the
pharmaceutical, chemical processing, pulp and paper, petroleum distribution and
waste management industries, and of high-pressure fittings and hose for the
aerospace industry. RESISTOFLEX sells its products primarily through industrial
distributors who provide stocking and fabrication services to industrial users
in the United States.
CRANE CANADA INC. manufactures ceramic, acrylic and steel plumbing fixtures
and distributes related building products. The unit commands a large share of
the Canadian market for these products.
POLYFLON manufactures radio frequency and microwave components, substrates,
capacitors and antennas for commercial and aerospace uses, and resonating
structures for the medical industry.
NATIONAL VENDORS is the largest domestic manufacturer of full line vending
machines for the automatic merchandising industry. Products include machines
which dispense snacks, refrigerated and frozen foods, hot and cold beverages and
postal commodities. These products are marketed in North America directly to
vending machine operators. In Europe, products are marketed through wholly-owned
subsidiaries with operations located in the United Kingdom, Germany and France.
S-4
<PAGE>
NATIONAL REJECTORS, GMBH designs and manufactures electronic coin validators
and handling systems for vending operations throughout Europe. These devices are
sold directly to the vending, amusement, soft-drink and ticket issuing
industries.
CRANE DEFENSE SYSTEMS is engaged in the development and manufacture of
specialized handling systems, elevators, ground support equipment, cranes and
associated electronics. These products are sold directly to the government and
to defense contractors and represented less than 2% of 1993 sales.
HUTTIG SASH & DOOR COMPANY ("HUTTIG") distributes millwork products,
including doors, windows, moldings and related building products. HUTTIG
assembles certain of these products to customer specification prior to
distribution. Its principal customers are building material dealers and building
contractors that service the new construction and remodeling markets. Wholesale
operations are conducted nationally through 47 branch warehouses throughout the
United States, in both major and medium-sized cities. HUTTIG'S sales are made on
both a direct shipment and out-of-warehouse basis entirely through its own sales
force.
HUTTIG maintains a saw mill in Missoula, Montana and manufacturing
facilities in Missoula and Prineville, Oregon, where it produces certain of the
above products and other finished lumber, the bulk of which is sold directly to
third parties, some of whom compete with HUTTIG branches. In addition, HUTTIG
manufactures wood windows in Rock Hill, South Carolina.
VALVE SYSTEMS AND CONTROLS is a value-added industrial distributor providing
power operated valves and flow control systems to the petroleum, chemical, power
and general processing industries. It services its customers through facilities
in Texas, Louisiana, Oklahoma and California.
Canadian wholesale operations are conducted through the CRANE CANADA SUPPLY
division of CRANE CANADA, INC. This division, a distributor of plumbing
supplies, valves and piping, maintains 37 branches throughout Canada and is the
largest single distributor for Crane manufactured products. This division also
distributes products which are both complementary to and partly competitive with
CRANE CANADA'S own manufactured products.
The Company's lines of business are conducted under actively competitive
conditions in each of the geographic and product areas they serve. Because of
the diversity of the classes of products manufactured and sold, they do not
compete with the same companies in all geographic or product areas. Accordingly,
it is not possible to estimate the precise number of competitors or to identify
the principal methods of competition. Although reliable statistics are not
available, the Company's management believes that the Company and its
subsidiaries are important manufacturers or suppliers in a number of the market
niches and geographic areas it serves.
The Company's products have primary application in the industrial,
construction, aerospace, automated merchandising, transportation and fluid
handling industries. As such, they are dependent upon numerous unpredictable
factors, including changes in market demand, general economic conditions,
residential and commercial building starts, capital spending, energy exploration
and energy allocations during times of scarcity. Because these products are also
sold in a wide variety of markets and applications, the Company's management
does not believe it can reliably quantify or predict the possible effects upon
its business resulting from such changes.
Seasonality is a considerable factor for HUTTIG and the Canadian operations.
ACQUISITION STRATEGY AND RECENT DEVELOPMENTS
Acquisitions and business combinations have been, and are expected to be, an
important part of the Company's strategy for growth and its ability to service
customer needs. In the future, the Company will continue to review potential
acquisition candidates with market and technology positions that provide
meaningful opportunities in the markets in which it already has a presence, and
may possibly dispose of operations, when consistent with its overall goals and
strategies.
During the last five years, the Company has made a number of acquisitions
both domestically and internationally. During the first four months of 1994, the
Company completed three acquisitions at a total cost of approximately $240
million.
S-5
<PAGE>
On May 17, 1994, the Company, through its wholly-owned subsidiary HUTTIG
SASH & DOOR COMPANY, acquired a molding and millwork manufacturing operation in
Prineville, Oregon.
On April 28, 1994, the Company purchased MARK CONTROLS CORPORATION, a
designer and manufacturer of automatic and manually-operated valves, specialized
electronic and mechanical instruments and controls, regulators and pneumatic and
electronic controllers for commercial and industrial customers.
On March 18, 1994, the Company acquired ELDEC CORPORATION whose products are
used worldwide on nearly every aircraft model and include: proximity switches
and sensing systems; power conversion equipment; fuel flow measurement systems;
data acquisition, monitoring and control equipment; flat panel displays; and
integrated modular systems.
For the year ended December 31, 1993, these three acquired entities had
aggregate net sales of approximately $299.7 million.
In 1993, the Company completed five acquisitions at a total cost of
approximately $110 million. In December, the Company acquired BURKS PUMPS, INC.,
which has manufacturing facilities in Piqua, Ohio and Decatur, Illinois and
provides engineered pumps for an array of specialized commercial, industrial and
municipal fluid handling applications. Their products are marketed under the
BARNES, BURKS, WEINMAN, CROWN and PROSSER brand names. Also included was a line
of tank cleaning equipment sold under the SELLERS brand name for the industrial
clean-in-place market. This acquisition substantially increased the Company's
involvement in niche markets in the pump industry. BURKS PUMPS has become the
cornerstone of the Company's CRANE PUMPS & SYSTEMS unit. For the year ended
December 31, 1993, Burks Pumps had net sales of approximately $55.5 million.
In October 1993, the Company acquired FILON, a manufacturer of
fiberglass-reinforced plastic (FRP) panels. FILON was integrated with KEMLITE
which produces FRP panels for the transportation, building products and
recreational vehicle markets. For the year ended December 31, 1993, FILON had
net sales of approximately $34.7 million.
During April and May 1993, the operating assets of RONDEL'S INC. and
WHITTIER-RUHLE MILLWORK COMPANY were purchased for the Company's HUTTIG SASH &
DOOR subsidiary. Both acquired companies are value-added wholesale distributors
of high quality building products and enhance HUTTIG'S nationwide distribution
network.
In addition, during 1993, CRANE LTD. purchased PERFLOW INSTRUMENTS LTD., a
manufacturer of equipment for the measurement and control of fluid and gas
flows.
In 1992, certain assets of JENKINS CANADA, INC., a manufacturer of bronze
and iron valves, were acquired as an addition to the Company's North America
valve business. In 1990, the Company acquired LEAR ROMEC, a manufacturer of
lubrication and fuel pumps for the aerospace industry.
In 1993, the Company sold its precision ordnance business,
UNIDYNAMICS/PHOENIX, and in 1990, the Company sold SEA-PAC SALES CO., a
distributor of floor covering products, and its MCAVITY division, a Canadian
manufacturer of waterwork valves and hydrants.
CREDIT AGREEMENT
In connection with the recent acquisitions, the Company entered into a $200
million three-year credit agreement with five banks participating at levels
ranging from $25 to $50 million. Amounts outstanding under this facility bear
interest under various loan options at Prime Rate, CD Base Rate or LIBOR, plus
appropriate interest margins ranging from 0% to 0.5625%.
FIRST QUARTER RESULTS
The Company's unaudited results for the quarterly period ended March 31,
1994 were $331.7 million in net sales, compared with $312.3 million for the
quarter ended March 31, 1993, reflecting the inclusion of the FILON and BURKS
acquisitions, plus increased quarterly sales at HUTTIG, which together more than
offset sales declines at HYDRO-AIRE and NATIONAL VENDORS. Operating income was
$14.8 million for the first quarter of 1994, compared with $17.0 million for the
same period of 1993. Contributing to this unfavorable comparison
S-6
<PAGE>
was the change in production schedules at the major airframe manufacturers
impacting HYDRO-AIRE, the absence of a post office vendor contract this year at
NATIONAL VENDORS and adverse commodity millwork prices and bad weather affecting
HUTTIG.
The sales and earnings from the Company's recent acquisitions of ELDEC, MARK
CONTROLS and the Prineville, Oregon molding and millwork operations are not
included in the Company's first quarter results. The acquisitions were all
unique opportunities to strengthen the Company's presence in certain niche
markets and are expected to make immediate contributions to the Company's
operating results.
S-7
<PAGE>
CAPITALIZATION
The following table sets forth the historical consolidated capitalization of
the Company at March 31, 1994 and on a pro forma basis giving effect to the
incurrence of $75,000,000 in additional indebtedness under the Company's 3-year
Credit Agreement and an additional $66,550,000 in short-term debt in connection
with the acquisitions of MARK CONTROLS CORPORATION and the molding and millwork
manufacturing operations in Prineville, Oregon and as adjusted for the issuance
of the Notes offered hereby and the application of the gross proceeds therefrom
without giving effect to expenses of the offering.
<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS)
----------------------------
AT MARCH 31, PRO FORMA AND
1994 AS ADJUSTED
------------ --------------
(UNAUDITED)
<S> <C> <C>
SHORT-TERM DEBT (Including Current Maturities of Long-Term Debt)................... $ 51,509 $ 26,809
------------ --------------
------------ --------------
LONG-TERM DEBT (Excluding Current Maturities):
8.50% Senior Notes due 2004...................................................... $ 99,168 $ 99,168
3-year Credit Agreement.......................................................... 100,000 116,250
Other Long-Term Debt............................................................. 45,596 45,596
Notes offered hereby............................................................. -- 150,000
------------ --------------
TOTAL LONG-TERM DEBT............................................................... $ 244,764 $ 411,014
------------ --------------
SHAREHOLDERS' EQUITY:
Preferred Shares................................................................. $ 0 0
Common Shares.................................................................... 29,911 29,911
Capital Surplus.................................................................. 10,871 10,871
Currency Translation Adjustment.................................................. (13,947) (13,947)
Retained Earnings................................................................ 265,704 265,704
------------ --------------
TOTAL SHAREHOLDERS' EQUITY......................................................... $ 292,539 $ 292,539
------------ --------------
TOTAL LONG-TERM DEBT AND SHAREHOLDERS' EQUITY...................................... $ 537,303 $ 703,553
------------ --------------
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</TABLE>
USE OF PROCEEDS
Approximately $58,750,000 of the net proceeds from the sale of the Notes
will be used to reduce the Company's borrowings under its 3-year Credit
Agreement and the balance will be used to repay outstanding short-term debt. The
borrowings to be repaid were incurred in connection with the acquisitions of
Mark Controls Corporation and the molding and millwork manufacturing operations
in Prineville, Oregon. Borrowings under the 3-year Credit Agreement bear
interest at floating rates based on Prime Rate, the CD Base Rate or LIBOR. The
short-term debt to be repaid matures within one to 42 days and as of June 8,
1994 bears interest at a weighted average rate of 4.59% per annum.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby (referred to in the accompanying Prospectus as the "Debt Securities")
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Debt Securities set forth in the
Prospectus, to which description reference is hereby made.
GENERAL
The Notes are to be issued under an indenture dated as of April 1, 1991 (the
"Senior Indenture"), between the Company and The Bank of New York, as trustee
(the "Trustee"), which Senior Indenture is more fully described under the
heading "Description of Debt Securities" in the accompanying Prospectus.
The Notes offered hereby will be limited to $150,000,000 in aggregate
principal amount and will mature on June 15, 1999. The Notes will bear interest
from June 15, 1994, at the rate per annum set forth on the
S-8
<PAGE>
cover page of this Prospectus Supplement, payable semi-annually on June 15 and
December 15 of each year, commencing December 15, 1994 to the persons in whose
names the Notes are registered at the close of business on June 1 and December
1, as the case may be, next preceding such June 15 and December 15.
The Notes will not be redeemable prior to maturity and will not be entitled
to the benefit of any sinking fund.
BOOK-ENTRY SYSTEM
The Notes will be issued in the form of one or more registered global
securities and will be deposited with, or on behalf of, the Depositary, and
registered in the name of the Depositary's nominee.
The Depository Trust Company, as 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 "banking organization" within the meaning of
the New York banking law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of section 17A of the
Exchange Act. The Depositary was created to hold securities of its participants
and to facilitate the clearance and settlement of securities transactions among
its participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. The Depositary's participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations, some of whom (and/or their representatives) own the
Depositary. Access to the Depositary's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies, that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly.
Upon the issuance of a global security in registered form, the Depositary
will credit, on its book-entry registration and transfer system, the respective
principal amounts of the Notes represented by such global security to the
accounts of institutions that have accounts with the Depositary or its nominee.
Ownership of beneficial interests in the global security will be limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests by participants in the global security will be shown on,
and the transfer of that ownership interest will be effected only through,
records maintained by the Depositary or its nominee. Ownership of beneficial
interests in the global security by persons that hold through participants will
be shown on, and the transfer of that ownership interest within such participant
will be effected only through, records maintained by such participant. The laws
of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such laws may impair
the ability to own or to transfer beneficial interests in the Notes as long as
they continue to be issued in the form of a global security.
So long as the Depositary or its nominee is the registered owner of a global
security, it will be considered the sole owner or holder of the Notes
represented by such global security for all purposes under the Senior Indenture.
Except as set forth below, owners of beneficial interests in such global
security will not be entitled to have the Notes represented thereby registered
in their names, will not receive or be entitled to receive physical delivery of
certificates representing the Notes and will not be considered the owners or
holders thereof under the Senior Indenture.
Payment of principal of, and any interest on the Notes represented by a
global security will be made to the Depositary or its nominee, as the registered
owner or the holder of the global security. None of the Company, the Trustee,
any paying agent or registrar for such Notes 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 or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company has been advised by the Depositary that the Depositary will
credit participants' accounts with payments of principal, or interest on the
payment date thereof in amounts proportionate to their respective beneficial
interests in the principal amount of the global security as shown on the records
of the Depositary. The Company expects that payments by participants to owners
of beneficial interests in the global security held through such participants
will be governed by standing instructions and customary practices, as is now the
case with securities held for the accounts of customers registered in "street
name," and will be the responsibility of such participants.
S-9
<PAGE>
A global security may not be transferred except as a whole to a nominee or
successor of the Depositary. If the Depositary is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within ninety days, the Company will issue certificates in
registered form in exchange for the global security or securities representing
the Notes. In addition, the Company may at any time and in its sole discretion
determine not to have the Notes of a series represented by a global security
and, in such event, will issue certificates in definitive form in exchange for
the global security representing such Notes.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made in
immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the Notes
will trade in the Depositary's Same-Day Funds Settlement System until maturity,
and secondary market trading activity in the Notes will therefore be required by
the Depositary to be settled in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the Notes.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated the date hereof, the Underwriters named below have severally agreed to
purchase and the Company has agreed to sell to them, severally, the respective
principal amounts of Notes set forth opposite their names below:
<TABLE>
<CAPTION>
UNDERWRITERS PRINCIPAL AMOUNT
- -------------------------------------------------- ----------------
<S> <C>
J.P. Morgan Securities Inc........................ $ 50,000,000
Dillon, Read & Co. Inc............................ 50,000,000
Salomon Brothers Inc.............................. 50,000,000
----------------
Total......................................... $ 150,000,000
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Notes are subject to the
approval of certain legal matters by their counsel and to certain other
conditions. The Underwriters are obligated to take and pay for all of the Notes
if any are taken.
The Underwriters propose initially to offer the Notes in part directly to
the public at the public offering price set forth on the cover page of this
Prospectus Supplement and in part to certain dealers at a price that represents
a concession not in excess of .375% of the principal amount of the Notes. The
Underwriters may allow, and such dealers may reallow, a concession not in excess
of .250% of the principal amount of the Notes to certain brokers and dealers.
After the initial public offering, the public offering price and such
concessions may be varied 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.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
In the ordinary course of their respective businesses, certain of the
Underwriters and certain of their affiliates have provided and may in the future
provide investment banking services to the Company, and affiliates of J.P.
Morgan Securities Inc. have provided and may in the future provide commercial
banking services to the Company. Morgan Guaranty Trust Company of New York and
J.P. Morgan Delaware are affiliates of J.P. Morgan Securities Inc. and will
receive a portion of the proceeds of the offering to repay approximately $14.7
million aggregate principal amount of outstanding indebtedness of the Company
under its 3-year Credit Agreement. In addition, a portion of the outstanding
short-term debt of the Company to be repaid from the proceeds of the offering
may also be payable to affiliates of J.P. Morgan Securities Inc.
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