As filed with the Securities and Exchange Commission on March 1, 1996.
Registration No. 33-
____________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EATON CORPORATION
(Exact Name of Registrant as Specified in its Charter)
OHIO 34-0196300
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
Eaton Center
1111 Superior Avenue
Cleveland, Ohio 44114-2584
(216) 523-5000
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
E. R. Franklin, Secretary
Eaton Center
1111 Superior Avenue
Cleveland, Ohio 44114-2584
(216) 523-4103
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)
Approximate date of commencement of proposed sale to the public:
From time to time after 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. /X/
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 statement 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. / /
<PAGE>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Amount Aggregate Aggregate Amount of
Title of Shares to be Price Offering Registration
to be Registered Registered Per Unit (1) Price (1) Fee(1)
Common Shares, 1,271 $58.50 $74,353.50 $100.00
$.50 par value
per share
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457, based on the average of the high and low
prices reported for Eaton Common Shares on the New York Stock
Exchange, on February 27, 1996.
____________________________________________________________________________
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933, as amended,
or until the Registration Statement shall become effective on such date
as the Commission, acting pursuant to such Section 8(a), may determine.
<PAGE>
SUBJECT TO COMPLETION: MARCH 1, 1996
PROSPECTUS
EATON CORPORATION
1,271 Common Shares
This Prospectus relates to 1,271 Common Shares, $.50 par value per share
(the "Shares"), of Eaton Corporation, an Ohio corporation ("Eaton" or
the "Company"), which are owned by certain participants (the "Selling
Shareholders") in the Incentive Compensation Deferral Plan adopted by the
shareholders of the Company at its annual meeting on April 26, 1995 (the
"Plan"). See "The Selling Shareholders." The Shares may be offered
for sale from time to time by the Selling Shareholders in open market
ordinary brokerage transactions on the New York Stock Exchange, the Chicago
Stock Exchange, the Pacific Stock Exchange or the London Stock Exchange at
market prices prevailing at the time of sale, or in private transactions at
negotiated prices. Whether or not any such sales will be made, and the timing
and amount of any sale, is within the sole discretion of the Selling
Shareholders. The Company will not receive any of the proceeds from the sale
of the Shares. See "Plan of Distribution."
The Shares have been acquired by the Selling Shareholders from the
Company pursuant to the Plan.
Eaton Common Shares are listed on the New York Stock Exchange. On
February 27, 1996 the average of the high and low prices of Eaton Common
Shares on the New York Stock Exchange was $58.50.
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. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is ________________, 1996
<PAGE>
No person is authorized to give any information or to make any
representations, other than those contained or incorporated by reference
in this Prospectus in connection with the offering contemplated hereby,
and, if given or made, such information or representations must not be
relied upon as having been authorized by the Company or the Selling
Shareholders. This Prospectus does not constitute an offer to sell or
a solicitation of an offer to buy any of the securities offered hereby
to any person to whom it is unlawful to make such offer or solicitation.
Neither the delivery of this Prospectus nor any sale 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 its date.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy material and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
material and other information concerning the Company and the Registration
Statement (as defined herein) can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549-1004, and at the
following Regional Offices of the Commission: Midwest Regional Office, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and Northeast
Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549-1004, at prescribed rates. Such reports, proxy material and other
information concerning the Company and the Registration Statement can also
be inspected at the offices of the New York Stock Exchange, 20 Broad Street,
New York, New York 10005, the Chicago Stock Exchange, 440 South LaSalle Street,
Chicago, Illinois 60605 and the Pacific Stock Exchange, 301 Pine Street, San
Francisco, California 94104.
This Prospectus constitutes part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company with the Commission under the Securities
Act of 1933, as amended (the "Securities Act"). As permitted by the rules
and regulations of the Commission, this Prospectus omits certain information
contained in the Registration Statement. Statements contained in this
Prospectus or in any document incorporated by reference in this Prospectus are
summaries that are not necessarily complete and, in each instance, reference
is made to the copy of such document as filed. Each such statement is
qualified in its entirety by such reference. The Registration Statement,
including exhibits and schedules thereto, and documents or information
incorporated by reference may be inspected without charge at the offices of
the Commission, and copies of such materials may be obtained therefrom at
prescribed rates.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-1396) are hereby incorporated by reference into this Prospectus:
1. Annual Report on Form 10-K for the year ended December 31, 1994.
2. Definitive proxy statement dated March 17, 1995, concerning the
Company's Annual Meeting of Shareholders held on April 26, 1995.
3. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995,
June 30, 1995 and September 30, 1995.
4. Form 11-K Annual Report dated June 23, 1995, relating to the Eaton
Corporation Share Purchase and Investment Plan, for the year ended
December 30, 1994.
5. Form 11-K Annual Report dated June 23, 1995, relating to the Eaton
Corporation Savings Plan for Certain Cutler-Hammer Represented
Employees, for the year ended December 31, 1994.
6. Form 11-K Annual Report dated October 10, 1995, relating to the
Lectron Products, Inc. Retirement Savings Plan, for the year ended
December 31, 1994.
7. Current Report on Form 8-K dated June 28, 1995 relating to the Rights
Agreement dated as of June 28, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Shares shall be deemed to be incorporated
by reference in this Prospectus and to be a part of this Prospectus from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for all purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified and superseded, to constitute a part of this Prospectus.
The Company undertakes to provide without charge to each person to whom
a copy of this Prospectus is delivered, upon the written or oral request of
such person, a copy of any or all of the documents incorporated herein by
reference (not including the exhibits to such documents, unless such exhibits
are specifically incorporated by reference in such documents).
Requests for such copies should be directed to Eaton Corporation,
Shareholder Relations, Eaton Center, 1111 Superior Avenue, Cleveland, Ohio
44114-2584 (telephone (216) 523-4350).
THE COMPANY
The Company is a global manufacturer of highly engineered products which
serve vehicle, industrial, construction, commercial and aerospace markets.
Principal products include truck transmissions and axles, engine components,
hydraulic products, electrical power distribution and control equipment, ion
implanters and a wide variety of controls.
The Company's principal executive office is located at Eaton Center,
1111 Superior Avenue, Cleveland, Ohio 44114-2584 and its telephone number is
(216) 523-5000. As used in this Prospectus, the term "Company" means Eaton
Corporation and its consolidated subsidiaries, unless the context otherwise
requires.
EARNINGS REPORT
On January 22, 1996, the Company announced record sales, earnings and
earnings per share for the fourth quarter and the full year of 1995. Net
income for the full year reached $399 million, or $5.13 per share, on sales of
$6.8 billion. These results compare with 1994 net income of $333 million,
or $4.40 per share, on sales of $6.1 billion.
Net income for the fourth quarter of 1995 reached $90 million, or $1.16
per share, on sales of $1.7 billion. Comparable results for the fourth quarter
of 1994 were $89 million, or $1.15 per share, on sales of $1.6 billion.
THE SELLING SHAREHOLDERS
On April 26, 1995, the Company's shareholders approved the Plan, which
enables participants to defer receipt of awards earned under incentive
compensation plans ("Incentive Compensation Plan(s)") as Short-Term
Compensation, Variable Term Compensation or Retirement Compensation as
defined under the Plan.
Retirement Compensation is that portion of incentive compensation
deferred for payment at retirement, at one year following retirement, or in
periodic installments commencing after retirement. Between fifty percent and
one hundred percent, as elected by the participant, of the amount allocated to
Retirement Compensation is credited to Common Share Retirement Compensation,
and the balance is credited to Interest Rate Retirement Compensation.
Common Share Retirement Compensation is converted into a number of share
units based upon the average of the mean prices for Eaton Common Shares for
the twenty trading days of the New York Stock Exchange during which Eaton
Common Shares were traded immediately following the end of the incentive
period in which the incentive compensation to be deferred was earned. On
each Eaton Common Share dividend payment date, dividend equivalents equal to
the actual Eaton Common Share dividends paid are credited to the share units
in the participant's account, and are in turn converted into share units
utilizing the mean Eaton Common Share price on the dividend payment date.
The maximum, cumulative number of share units that may be allocated to all
participants is two million.
Upon payment of Common Share Retirement Compensation in Eaton Common
Shares, the share units standing to the participant's credit shall be
converted to the same number of Eaton Common Shares for distribution to the
participant.
The Selling Shareholders named below have reached Retirement, as defined
under the Plan, and have acquired the Shares from Common Share Retirement
Compensation under the Plan. Mr. Butler elected to receive his Common Share
Retirement Compensation in fifteen annual installments. Mr. Warburton
received his Common Share Retirement Compensation in one payment. The number
of Shares acquired under the Plan by the Selling Shareholders as of
the date hereof is listed below.
Number of
Name Address Shares
William E. Butler 106 Partridge Lane 281
Hunting Valley, Ohio 44022
Arthur J. Warburton 28391 Verde Lane 990
Bonita Springs, Florida 33923
Mr. Butler retired as Chairman of the Board of the Company on
December 31, 1995. Prior to September 1, 1995, he was also Chief Executive
Officer of the Company, a position he had held since January 1992. Prior to
the offering described herein, Mr. Butler owned 276,348 Eaton Common Shares
including 238,734 Eaton Common Shares which may be acquired within 60 days
after January 31, 1996 upon the exercise of outstanding stock options and
8,483.0603 Eaton Common Shares held under the Eaton Corporation Share Purchase
and Investment Plan as of December 31, 1995. After completion of the
offering of the Shares contemplated hereby, Mr. Butler will own 276,067
Eaton Common Shares, subject to the exercise of stock options and any sale of
Eaton Common Shares not offered hereunder.
Mr. Warburton retired as Vice President-Hydraulics Operations on
August 1, 1995, an appointed position which he held since July 1, 1989. Prior
to the offering described herein, Mr. Warburton owned 27,718 Eaton Common
Shares. After completion of the offering of the Shares contemplated
hereby, Mr. Warburton will own 26,728 Eaton Common Shares, subject to any
sales of Eaton Common Shares not offered hereunder.
USE OF PROCEEDS
The Selling Shareholders will offer the Shares as principal for
their own accounts. The Company will receive none of the proceeds of any
such sale.
DESCRIPTION OF EATON COMMON SHARES
The following is a summary of certain of the provisions concerning Eaton
Common Shares contained in the Company's Amended Articles of Incorporation (the
"Articles") and its Amended Regulations (the "Regulations"), as affected by
debt agreements with certain lenders. Reference is made to such Articles and
Regulations, which are exhibits to the Registration Statement, for a full and
complete statement of such provisions and rights, and the following statements
are qualified in their entirety by such reference.
Authorized Number
The Articles authorize the issuance of up to 300,000,000 Eaton Common
Shares. At the close of business on January 31, 1996, there were 77,618,778
Eaton Common Shares issued and outstanding. The outstanding Eaton Common
Shares are fully paid and non-assessable, and shareholders are not subject to
any liability for calls and assessments. The Company does not have any
current plans to issue any such additional Eaton Common Shares except in
connection with employee benefit plans. The Articles also authorize the
issuance of up to 14,106,394 preferred shares ("Preferred Shares").
Currently, there are no Preferred Shares issued and outstanding.
Dividend Rights
Holders of Eaton Common Shares are entitled to receive such dividends as
may be declared by the Company's Board of Directors, subject to provisions of
law.
Voting Rights
Each Eaton Common Share entitles the holder to one vote, with the right of
cumulative voting in the election of directors, if certain procedural
requirements are met.
Notwithstanding any provision of law requiring the vote of a designated
proportion of the voting power of the Company for any action, the Articles
provide that such action may be taken by the vote of the holders of shares
entitling them to exercise a majority of the voting power of the Company,
except in each case as is otherwise provided in the Articles or Regulations.
The Articles and the Regulations provide for a voting proportion which is
different from that provided by statutory law in order for shareholders to
take action in certain circumstances, including the following:
(1) Two-thirds vote required to fix or change the number of directors.
(2) Two-thirds vote required for removal of directors.
(3) Fifty percent of the outstanding Eaton Common Shares required
to call a special meeting of shareholders.
(4) Two-thirds vote required to amend the Regulations without a
meeting.
(5) Two-thirds vote required to amend the provisions described in
items (1) through (4) above and this provision, unless such
action is recommended by two-thirds of the members of the Board
of Directors.
(6) Two-thirds vote required to approve certain transactions, such
as the sale, exchange, lease, transfer or other disposition by
the Company of all, or substantially all, of its assets or
business, or the consolidation of the Company or its merger into
another corporation, or certain other mergers and majority
share acquisitions.
(7) Two-thirds vote required to amend the provisions described in
item (6), or this provision.
The requirement of a two-thirds vote in certain circumstances may have
the effect of delaying, deferring, or preventing a change in control of the
Company.
Rights Plan
On June 28, 1995, the Board of Directors of the Company declared a
dividend of one preferred share purchase right (a "Right") for each outstanding
Eaton Common Share. The dividend was paid on July 12, 1995 (the "Record Date")
to the shareholders of record on that date. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between
the Company and Society National Bank, as Rights Agent (the "Rights Agent").
The Rights are designed to protect the Company from unfair takeovers.
Each Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Series C Preferred Shares, without par value
(the "Series C Preferred Shares"), of the Company at a price of $250 per one
one-hundredth of a Series C Preferred Share (the "Purchase Price"), subject to
adjustment.
If the Company is acquired in a merger or other business combination
or 50% or more of its consolidated assets or earning power are sold after a
person or group has become an Acquiring Person (as defined below), each holder
of a Right will thereafter have the right to receive, upon exercise, that
number of shares of common stock of the acquiring company which then will have
a market value of two times the exercise price of the Right.
If any person or group of affiliated or associated persons becomes an
Acquiring Person, 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 Eaton Common Shares having
a market value of two times the exercise price of the Right.
Until the Distribution Date (as defined below), the Rights will be
evidenced, with respect to any of the Eaton Common Share certificates
outstanding as of the Record Date, by such Eaton Common Share certificate
with a copy of a Summary of Rights attached thereto. Until the Distribution
Date (or earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Eaton Common Shares, and transfer of those
certificates will also constitute transfer of those Rights.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Eaton Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
The "Distribution Date" is the earlier of:
(i) 10 days following a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person")
have acquired beneficial ownership of 20% or more of the
outstanding Eaton Common Shares; or
(ii) 10 business days (or such later date as may be determined
by action of the Board of Directors before any person or group
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 20% or more of the outstanding
Eaton Common Shares.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on July 12, 2005 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, as described below.
The Purchase Price, and the number of Series C Preferred Shares or
other securities or property issuable upon exercise of the Rights, are subject
to adjustment from time to time to prevent dilution, in the event of:
(i) a stock dividend on, or a subdivision, combination or
reclassification of, the Series C Preferred Shares,
(ii) the grant to holders of the Series C Preferred Shares of
certain rights to subscribe for or purchase Series C Preferred Shares
at a price, or securities convertible into Series C Preferred Shares
with a conversion price, less than the then-current market price of
the Series C Preferred Shares, or
(iii) the distribution to holders of the Series C 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 is also subject to adjustment upon
certain occurrences prior to the Distribution Date.
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 Series C Preferred Shares will be issued
(other than fractions which are integral multiples of one one-hundredth of a
Series C 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 Series C Preferred Shares on
the last trading day prior to the date of exercise.
Series C Preferred Shares purchasable upon exercise of the Rights
will not be redeemable. Each Series C Preferred Share will be entitled to a
minimum preferential quarterly dividend payment of $1 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 Series C
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 Eaton Common Share. Each Series C Preferred
Share will have 1 vote, voting together with the Eaton Common Shares.
Finally, in the event of any merger, consolidation or other transaction in
which Eaton Common Shares are exchanged, each Series C Preferred Share will be
entitled to receive 100 times the amount received per Eaton Common Share.
The dividend and liquidation rights and rights upon a merger, consolidation
or other transaction are protected by customary antidilution provisions.
The value of the one one-hundredth interest in a Series C Preferred
Share purchasable upon exercise of each Right should, because of the nature of
the Series C Preferred Shares' dividend and liquidation rights, approximate
the value of one Eaton Common Share.
At any time after any person or group becomes an Acquiring Person, and
prior to the acquisition by that person or group of 50% or more of the
outstanding Eaton Common Shares, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by the Acquiring Person, which
will have become void), in whole or in part, at an exchange ratio of one Eaton
Common Share, or one one-hundredth of a Series C Preferred Share (or of a share
of a class or series of the Company's preferred shares having equivalent
rights, preferences and privileges), per Right (subject to adjustment).
At any time prior to any person or group becoming an Acquiring Person,
the Board of Directors of the Company may redeem all the Rights at a price of
$.01 per Right (the "Redemption Price"). The redemption 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. Immediately upon any redemption, the
right to exercise the Rights will terminate and the only right of the holders
of Rights will be to receive the Redemption Price.
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, including an
amendment to lower the 20% threshold described above to not less than the
greater of (i) the sum of .001% and the largest percentage of the outstanding
Eaton Common Shares then known to the Company to be beneficially owned by any
person or group of affiliated or associated persons and (ii) 10%, except that
after any person or group becomes an Acquiring Person no such amendment may
adversely affect the interests of the holders of the Rights.
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 foregoing description of the Rights Agreement does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, which is an exhibit to the Registration Statement.
Liquidation Rights
In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company, after the payment or provision for payment of
the debts and other liabilities of the Company and the preferential amounts to
which holders of the Company's Preferred Shares are entitled (if any such
Preferred Shares are then outstanding), the holders of the Eaton Common
Shares are entitled to share pro rata in the assets of the Company remaining
for distribution to shareholders.
Miscellaneous Rights, Listing and Transfer Agent
The Eaton Common Shares have no pre-emptive or conversion rights and
there are no redemption or sinking fund provisions applicable thereto.
The outstanding Eaton Common Shares are listed on the New York,
Chicago, Pacific and London Stock Exchanges.
KeyCorp Shareholder Services, Inc., headquartered in Cleveland, Ohio,
is the transfer agent and registrar for the Eaton Common Shares.
Classification of Board of Directors
The Board of Directors of the Company is divided into three
approximately equal classes, having staggered terms of office of three years
each. The effect of a classified Board of Directors, where cumulative voting
is in effect, is to require the votes of more shares to elect one or more
members of the Board of Directors than would be required if the Board of
Directors were not classified. Additionally, the effect of a classified Board
of Directors may be to make it more difficult to acquire control of the Company.
Certain Ohio Statutes
Various laws may affect the legal or practical ability of shareholders
to dispose of shares of the Company. Such laws include the Ohio statutory
provisions described below.
Chapter 1704 of the Ohio Revised Code prohibits an interested
shareholder (defined as a beneficial owner, directly or indirectly, of ten
percent (10%) or more of the voting power of any issuing public Ohio
corporation) or any affiliate or associate of an interested shareholder (as
defined in Section 1704.01 of the Ohio Revised Code) from engaging in
certain transactions with the corporation during the three-year period after
the interested shareholder's share acquisition date. The prohibited
transactions include mergers, consolidations, majority share acquisitions,
certain asset sales, loans, certain sales of shares, dissolution, and
certain reclassifications, recapitalizations, or other transactions that
would increase the proportion of shares held by the interested shareholder.
After expiration of the three-year period, the corporation may participate in
such a transaction with an interested shareholder only if, among other
things, (i) the transaction receives the approval of the holders of
two-thirds of all the voting shares and the approval of the holders of a
majority of the disinterested voting shares (shares not held by the interested
shareholder) or (ii) the transaction meets certain criteria designed to ensure
that the remaining shareholders receive fair consideration for their shares.
The prohibitions do not apply if, before the interested shareholder becomes
an interested shareholder, the board of directors of the corporation
approves either the interested shareholder's acquisition of shares or the
otherwise prohibited transaction. The restrictions also do not apply if a
person inadvertently becomes an interested shareholder or was an interested
shareholder prior to the adoption of the statute on April 11, 1990, unless,
subject to certain exceptions, the interested shareholder increases his,
her or its proportionate share interest on or after April 11, 1990.
Pursuant to Ohio Revised Code Section 1707.043, a public corporation
formed in Ohio may recover profits that a shareholder makes from the sale of
the corporation's securities within eighteen (18) months after making a
proposal to acquire control or publicly disclosing the possibility of a
proposal to acquire control. The corporation may not, however, recover
from a person who proves in a court of competent jurisdiction either (i)
that his, her or its sole purpose in making the proposal was to succeed in
acquiring control of the corporation and there were reasonable grounds to
believe that such person would acquire control of the corporation or (ii) such
person's purpose was not to increase any profit or decrease any loss in the
stock and the proposal did not have a material effect on the market price
or trading volume of the stock. Also, before the corporation may obtain any
recovery, the aggregate amount of the profit realized by such person must
exceed $250,000. Any shareholder may bring an action on behalf of the
corporation if a corporation fails or refuses to bring an action to recover
these profits within sixty (60) days of a written request. The party
bringing such an action may recover his, her or its attorneys' fees if the
court having jurisdiction over such action orders recovery of any profits.
The Company is also subject to Ohio's Control Share Acquisition Act
(Ohio Revised Code Section 1701.831). The Control Share Acquisition Act
provides that, with certain exceptions, a person may acquire beneficial
ownership of shares in certain ranges (one-fifth or more but less than
one-third, one-third or more but less than a majority, or a majority or
more) of the voting power of the outstanding shares of an Ohio corporation
meeting certain criteria, which the Company meets, only if such person has
submitted an "acquiring person statement" and the proposed acquisition has
been approved by the vote of a majority of the shares of the corporation
represented at a special meeting called for such purpose and by a majority
of such shares of the corporation excluding "interested shares," as defined
in Section 1701.01 of the Ohio Revised Code.
PLAN OF DISTRIBUTION
The purpose of this Prospectus is to permit the Selling Shareholders
to offer for sale or to sell the Shares at such time and at such prices as
they, in their sole discretion, choose. The Company will not receive any
proceeds from these sales.
The distribution, if any, of Shares by the Selling Shareholders may
be effected from time to time in one or more transactions (which may include
block transactions) on the open market in ordinary brokerage transactions on
the New York Stock Exchange, the Chicago Stock Exchange, the Pacific Stock
Exchange, or the London Stock Exchange (on each of which the Eaton Common
Shares are listed), in privately negotiated transactions, or in a combination
of such methods of sale, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at prices otherwise
negotiated. The Selling Shareholders may effect such transactions by selling
Shares to or through broker-dealers, and such broker-dealers may receive
compensation in the form of underwriting discounts, concessions or
commissions from the Selling Shareholders and/or the purchasers of Shares for
whom such broker-dealers may act as agent. The Selling Shareholders and any
broker-dealers that participate in the distribution of the Shares, as well as
any purchasers of such Shares, may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act and any commission received by
them and any profit on the resale of Shares sold by them may be deemed to be
underwriting discounts and commissions.
One or more supplemental prospectuses will be filed pursuant to Rule
424 under the Securities Act to describe any material arrangement for the
resale of the Shares, if and when such arrangements are entered into by the
Selling Shareholders and any broker-dealers that participate in the
distribution of the Shares.
To the extent necessary to comply with certain state securities laws,
if applicable, the Selling Shareholders have advised the Company that the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In addition, in certain states the Shares may not be
offered for sale or sold unless the Shares have been registered or qualified
for sale in such states or an exemption from registration or qualification is
available and complied with.
LEGAL MATTERS
The validity of the Shares will be passed upon for the Company by
G. L. Gherlein, Executive Vice President and General Counsel of the Company.
Mr. Gherlein is paid a salary by the Company and participates in various
employee benefit plans offered to officers of the Company generally.
EXPERTS
The consolidated financial statements of the Company and its
subsidiaries appearing in the Company's Annual Report on Form 10-K for the
year ended December 31, 1994, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The Company will bear the entire cost of the estimated expenses, as
set forth in the following table, in connection with the distribution of the
securities covered by this Registration Statement.
SEC registration fee . . . . . . . . . . . . . . $ 100.00
Accounting fees and expenses . . . . . . . . . . 5,000.00
Miscellaneous . . . . . . . . . . . . . . . . . . 1,000.00
________
Total . . . . . . . . . . . . . . . . . . . . $6,100.00
========
The Company shall be responsible for the payment of any additional
expenses in connection with this Registration Statement other than (a)
underwriting discounts and commissions and (b) transfer taxes incurred by the
Selling Shareholders or their agent, including fees and expenses of counsel
for the Selling Shareholders.
Item 15. Indemnification of Directors and Officers
Paragraph (E) of Section 1701.13 of the Ohio Revised Code grants each
corporation organized under the laws of the State of Ohio, such as the Company,
power to indemnify its directors, officers and other specified persons.
Provisions relating to indemnification of directors and officers of the
Company and other specified persons have been adopted pursuant to the Ohio
law and are contained in Article IV, Section 2 of the Company's Amended
Regulations. Under the Amended Regulations, the Company shall indemnify any
director, officer or other specified person against expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement, actually and
reasonably incurred by him by reason of the fact that he is or was such
director, officer or other specified person, to the full extent permitted by
applicable law. The foregoing statement is subject to, and only part of,
the detailed provisions of the Ohio Revised Code and the Company's Amended
Regulations referred to herein.
The Company has entered into Indemnification Agreements with all of
its officers and directors. The Agreements provide that the Company shall
indemnify such directors or officers to the full extent permitted by law
against expenses actually and reasonably incurred by them in connection with
any claim filed against them by reason of anything done or not done by them
in such capacity. The Agreements also require the Company to maintain
director and officer insurance which is no less favorable to the director and
officer than the insurance in effect on the date of the Agreements, and to
establish and maintain an escrow account of up to $10 million to fund the
Company's obligations under the Agreements, except that the Company is
required to fund the escrow only upon the occurrence of a change in control
of the Company, as defined under the Agreements.
The Company also maintains insurance coverage for the benefit of
directors and officers with respect to many types of claims that may be made
against them, some of which claims may be in addition to those described in
Section 2 of Article IV of the Amended Regulations.
Item 16. Exhibits
See Exhibit Index.
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in
the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and
the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Cleveland, State of Ohio, on
March 1, 1996.
EATON CORPORATION
By: /s/ G. L. Gherlein
G. L. Gherlein
Executive Vice President
and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
*
Stephen R. Hardis Chairman and Chief
Executive Officer; Principal
Executive Officer; Director March 1, 1996
*
Alexander M. Cutler President and Chief
Operating Officer; Director March 1, 1996
*
Adrian T. Dillon Vice President--Chief
Financial and Planning
Officer; Principal
Financial Officer March 1, 1996
*
Ronald L. Leach Vice President--Accounting;
Principal Accounting Officer March 1, 1996
*
Neil A. Armstrong Director March 1, 1996
*
Phyllis B. Davis Director March 1, 1996
*
Ernie Green Director March 1, 1996
*
Charles E. Hugel Director March 1, 1996
*
John R. Miller Director March 1, 1996
*
Furman C. Moseley Director March 1, 1996
*
Victor A. Pelson Director March 1, 1996
*
A. William Reynolds Director March 1, 1996
*
Gary L. Tooker Director March 1, 1996
*By: /s/ Jane W. Griswold
Jane W. Griswold
Attorney-in-Fact for the
officers and directors signing
in the capacities indicated
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
4(a) Amended Articles of Incorporation, adopted on April 27, 1994 and filed
as Exhibit 3(i) to the Registrant's Current Report on Form 8-K dated
May 19, 1994, File No. 1-1396, and incorporated herein by reference.
4(b) Amended Regulations, adopted on April 27, 1988 and filed as Exhibit 3 to
the Registrant's Annual Report on Form 10-K for the year ended December
31, 1994, File No. 1-1396, and incorporated herein by reference.
4(c) Instruments defining rights of security holders, including indentures
(pursuant to Regulation S-K Item 601(b)(4), the Company agrees to
furnish to the Commission, upon request, a copy of the instruments
defining the rights of holders of long-term debt of the Company and its
subsidiaries).
4(d) Rights Agreement dated as of June 28, 1995 and filed as Exhibit 1 to the
Registrant's Current Report on Form 8-K dated June 28, 1995, File No.
1-1396, and incorporated herein by reference.
5 Opinion of G. L. Gherlein, Executive Vice President and General
Counsel, as to the validity of the Common Shares registered.
23(a) Consent of Ernst & Young LLP.
23(b) Consent of G. L. Gherlein, Executive Vice President and General Counsel,
contained in his opinion filed as Exhibit 5 to this Registration
Statement
24 Power of Attorney.
<PAGE>
EXHIBIT 5
March 1, 1996
Eaton Corporation
Eaton Center
Cleveland, Ohio 44114
Re: Eaton Corporation Form S-3 Registration Statement--1,271 Common Shares
Ladies and Gentlemen:
Eaton Corporation ("Eaton") is filing with the Securities and Exchange
Commission a Registration Statement on Form S-3 (the "Registration Statement")
for the registration, under the Securities Act of 1933, as amended, of 1,271
Eaton common shares with a par value of $.50 each ("Common Shares") owned by
certain Eaton shareholders.
Item 601 of Regulation S-K requires that an opinion of counsel concerning the
legality of the securities to be registered be filed as an exhibit to a Form
S-3 registration statement. This opinion is provided in satisfaction of that
requirement as it relates to the Registration Statement.
I have examined the following:
A. A copy of Eaton's Amended Articles of Incorporation and Amended
Regulations.
B. The records of the proceedings incorporating Eaton under the laws of the
State of Ohio, records of other proceedings and public officials concerning the
present status of Eaton as a corporation and records of the proceedings of
Eaton's Board of Directors and shareholders concerning authorization and
issuance of Common Shares.
I have examined such other records and documents, and obtained such other
information, as I have deemed advisable in order to render this opinion.
As a result of the foregoing, I am of the opinion that:
(1) Eaton is a corporation validly organized and existing and in good
standing under the laws of the State of Ohio.
(2) Eaton is authorized to issue 300,000,000 Common Shares, of which
77,618,778 Common Shares were issued and outstanding as of January 31, 1996.
When issued, the Common Shares which are the subject of the Registration
Statement will be legally issued, fully paid and non-assessable.
I hereby consent to the use and filing of this opinion in connection with the
Registration Statement.
Very truly yours,
EATON CORPORATION
/s/ Gerald L. Gherlein
Gerald L. Gherlein,
Executive Vice President
and General Counsel
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of Eaton
Corporation for the registration of 1,271 Common Shares and to the incorporation
by reference therein of our reports (a) dated January 27, 1995, with respect to
the consolidated financial statements of Eaton Corporation included in its
Annual Report on Form 10-K for the year ended December 31, 1994; (b) dated
June 12, 1995, with respect to the financial statements and schedules of the
Eaton Corporation Share Purchase and Investment Plan included in the Plan's
Annual Report (Form 11-K) for the year ended December 30, 1994; (c) dated
June 19, 1995, with respect to the financial statements and schedules of the
Eaton Corporation Savings Plan for Certain Cutler-Hammer Represented Employees
included in the Plan's Annual Report (Form 11-K) for the year ended December 31,
1994; and (d) dated August 18, 1995, with respect to the financial statements
and schedules of the Lectron Products, Inc. Retirement Savings Plan included in
the Plan's Annual Report (Form 11-K) for the year ended December 31, 1994,
all filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Cleveland, Ohio
March 1, 1996
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That each person whose name is signed
hereto has made, constituted and appointed, and does hereby make, constitute
and appoint, GERALD L. GHERLEIN, EARL R. FRANKLIN, MARK HENNESSEY, DAVID M.
O'LOUGHLIN OR JANE W. GRISWOLD his or her true and lawful attorney, for him
or her and in his or her name, place and stead to affix, as attorney-in-fact,
his or her signature as director or officer or both, as the case may be, of
Eaton Corporation, an Ohio corporation (the "Corporation"), to any and all
registration statements and amendments filed with the Securities and
Exchange Commission with respect to Common Shares of the Corporation
issuable or issued in connection with the Incentive Compensation Deferral Plan,
giving and granting unto each such attorney-in-fact full power and authority to
do and perform every act and thing whatsoever necessary to be done in the
premises, as fully as he or she might or could do if personally present, hereby
ratifying and confirming all that each such attorney-in-fact shall lawfully do
or cause to be done by virtue hereof.
This Power of Attorney shall not apply to any registration statement or
amendment filed after December 31, 1997.
IN WITNESS WHEREOF, this Power of Attorney has been signed at Cleveland,
Ohio, this 28th day of February, 1996.
____________________________________ ______________________________________
Stephen R. Hardis, Chairman and Alexander M. Cutler, President and Chief
Chief Executive Officer; Principal Operating Officer; Director
Executive Officer; Director
____________________________________ ___________________________________
Adrian T. Dillon, Vice President-- Ronald L. Leach, Vice President--
Chief Financial and Planning Officer; Accounting; Principal Accounting
Principal Financial Officer Officer
____________________________________ _______________________________________
Neil A. Armstrong, Director Phyllis B. Davis, Director
___________________________________ ______________________________________
Ernie Green, Director Charles E. Hugel, Director
____________________________________ _____________________________________
John R. Miller, Director Furman C. Moseley, Director
___________________________________ _____________________________________
Victor A. Pelson, Director A. William Reynolds, Director
___________________________________
Gary L. Tooker, Director
<PAGE>
