SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
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W.W. GRAINGER, INC.
(Exact name of registrant as specified in its charter)
ILLINOIS 36-1150280
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
455 Knightsbridge Parkway
Lincolnshire, Illinois 60069-3620
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of exchange on which each class is to be
to be so registered registered
Preferred Share Purchase Rights New York Stock Exchange, Inc.
Chicago Stock Exchange Incorporated
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
The Exhibit Index appears on page 5 in the sequential numbering system.
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Item 1. Description of Securities to be Registered.
On April 28, 1999, the Board of Directors of W.W. Grainger, Inc., an Illinois
corporation (the "Company"), declared a dividend of one preferred share purchase
right (a "Right") for each outstanding share of common stock, par value $.50 per
share (the "Common Shares"), of the Company. The dividend is payable on May 15,
1999 to shareholders of record on May 10, 1999 (the "Record Date").
Except as described below, each Right entitles the registered holder to purchase
from the Company one one-hundredth of a share of Series A-1999 Junior
Participating Preferred Stock, par value $5.00 per share (a "Preferred Share"),
of the Company at an exercise price of $250 per one one-hundredth of a Preferred
Share (the "Purchase Price"), subject to adjustment. The terms of the Rights are
set forth in the Rights Agreement dated as of April 28, 1999 (the "Rights
Agreement") between the Company and BankBoston, N.A., as rights agent (the
"Rights Agent").
Until the earlier to occur of (i) 10 days following a public announcement that a
person or group of affiliated or associated persons (an "Acquiring Person") has
acquired beneficial ownership of 15% or more of the outstanding Common Shares
(the date of such announcement being called the "Shares Acquisition Date") or
(ii) 10 business days (or such later date as may be determined by action of the
Board of Directors prior to such time as any person becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a tender
offer or exchange offer, the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of such outstanding
Common Shares (the earlier of such dates being called the "Distribution Date"),
the Rights will be evidenced, with respect to any of the Common Share
certificates outstanding as of the Record Date, by such Common Share certificate
with a copy of this Summary of Rights attached thereto.
The descendants of W.W. Grainger, the descendants of E.O. Slavik, certain
relatives of such descendants, certain charitable organizations and certain
entities controlled by or for the benefit of such persons are not Acquiring
Persons or affiliated or associated persons for any purposes under the Rights
Agreement.
The Rights Agreement provides that, until the Distribution Date (or the earlier
redemption or expiration of the Rights), the Rights will be transferred with and
only with the Common Shares. Until the Distribution Date (or the earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date will contain a notation incorporating the Rights Agreement
by reference. Until the Distribution Date (or earlier redemption or expiration
of the Rights), the surrender for transfer of any certificates for Common
Shares, outstanding as of the Record Date, even without such notation or a copy
of this Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date. Such separate Right Certificates alone will evidence the
Rights.
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The Rights are not exercisable until the Distribution Date. The Rights will
expire on May 15, 2009 (the "Final Expiration Date") unless the Rights are
earlier redeemed by the Company, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredth of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be redeemable.
Each Preferred Share will be entitled to a minimum preferential quarterly
dividend payment of $1.00 per share, but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each Preferred
Share will have 100 votes, voting together with the Common Shares. Finally, in
the event of any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to receive 100 times
the amount received per Common Share. These rights are protected by customary
anti-dilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and voting
rights, the value of the one one-hundredth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
If the Company is acquired in a merger or other business combination transaction
or 50% or more of its consolidated assets or earning power are sold, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction will have a market value of two times the
exercise price of the Right. If (i) any person becomes an Acquiring Person or
(ii) during such time as there is an Acquiring Person, there shall be a
reclassification of securities or a recapitalization or reorganization of the
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Company or other transaction or series of transactions involving the Company
which has the effect of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities of the Company or any
of its subsidiaries beneficially owned by the Acquiring Person, then each holder
of a Right, other than Rights beneficially owned by the Acquiring Person (which
will thereafter be void), will thereafter have the right to receive upon
exercise that number of Common Shares having a market value of two times the
exercise price of the Right; provided, however, that no Right shall be
exercisable after an event described in this sentence until after the expiration
of the power of the Board of Directors of the Company to redeem the Rights, as
described below.
At any time after any person or group becomes an Acquiring Person and prior to
the acquisition by such person or group of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other
than Rights owned by such person or group which have become void), in whole or
in part, at an exchange ratio of one Common Share, or one one-hundredth of a
Preferred Share (or of a share of a class or series of the Company's preferred
stock having equivalent rights, preferences and privileges), per Right (subject
to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments require an adjustment of at least 1% in such
Purchase Price. No fractional Common Shares or Preferred Shares will be issued
(other than fractions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the election of the Company, be evidenced by
depositary receipts) and in lieu thereof, an adjustment in cash will be made
based on the market price of the Common Shares or Preferred Shares, as the case
may be, on the last trading day prior to the date of exercise.
At any time until 30 days following the Shares Acquisition Date (or such earlier
time as may be determined by the Board of Directors), the Board of Directors of
the Company may redeem the Rights in whole, but not in part, at a price of $.001
per Right (the "Redemption Price"). The redemption of the Rights may be made
effective at such time on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
The terms of the Rights may be amended by the Board of Directors of the Company
without the consent of the holders of the Rights. Such an amendment could, among
other things, lower the threshold for exercisability of the Rights from 15% to
not less than the greater of (i) any percentage greater than the largest
percentage of the outstanding Common Shares then known to the Company to be
beneficially owned by any person or group (other than certain persons or groups
which are excluded from the Rights Agreement's definition of the term "Acquiring
Person") and (ii) 10%, except that from and after such time as any person
becomes an Acquiring Person no such amendment may adversely affect the interests
of the holders of the Rights.
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Until a Right is exercised, the holder thereof, as such, will have no rights as
a shareholder of the Company, including, without limitation, the right to vote
or to receive dividends.
The Rights will have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors.
The foregoing description of the Rights is qualified in its entirety by
reference to the Rights Agreement, which is incorporated herein by reference.
Item 2. Exhibits.
EXHIBIT INDEX
Exhibit No. Exhibit
4 Form of Rights Agreement dated as of April 28, 1999 between
W.W. Grainger, Inc. and BankBoston, N.A., as rights agent,
incorporated by reference to Exhibit 4 to the Company's
Report on Form 8-K dated April 28, 1999.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Registrant has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereto duly authorized.
Date: May 10, 1999 W.W. GRAINGER, INC.
By: /s/ J. D. Fluno
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J. D. Fluno, Vice Chairman
