<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
File Number 33-51284
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED FEBRUARY 12, 1993.
$50,000,000
Ferro Corporation
8% Debentures Due June 15, 2025
Interest payable June 15 and December 15
------------------
The Debentures may not be redeemed prior to June 15, 2005. On and after that
date, the Debentures may be redeemed at the option of the Company, in whole
or in part, at prices beginning at 103.31% of their principal amount
and declining thereafter to 100% of their principal amount on and
after June 15, 2015, together with, in all cases, accrued
interest to the Redemption Date.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
Underwriting Proceeds to
Price to Discounts and Company
Public (1) Commissions (1)(2)
------------- ------------- -------------
<S> <C> <C> <C>
Per Debenture................................ 98.611% .875% 97.736%
Total........................................ $49,305,500 $437,500 $48,868,000
</TABLE>
(1) Plus accrued interest, if any, from June 20, 1995.
(2) Before deduction of expenses payable by the Company estimated at $100,000.
------------------
The Debentures are offered by the Underwriter when, as and if issued by the
Company, delivered to and accepted by the Underwriter and subject to its right
to reject orders in whole or in part. It is expected that the Debentures will be
ready for delivery on or about June 20, 1995.
CS First Boston
The date of this Prospectus Supplement is June 14, 1995.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES
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.
DESCRIPTION OF DEBENTURES
The following description of the particular terms of the Debentures offered
hereby (referred to herein as the "Debentures" and 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. The Debentures offered hereby will be limited to $50,000,000
aggregate principal amount and are to be issued under an Indenture, dated as of
May 1, 1993 (the "Indenture"), between the Company and Society National Bank, as
trustee (the "Trustee"). The basic terms of the Indenture are more fully
described in the accompanying Prospectus. The Debentures will be issued only in
fully registered form in denominations of $1,000 and integral multiples thereof.
The Debentures will bear interest at the rate of 8% per annum from June 20,
1995. Interest will be payable semi-annually on each June 15 and December 15
(the "Interest Payment Dates"), commencing December 15, 1995, to the persons in
whose names the Debentures are registered at the close of business on the May 31
or November 30 (the "Record Dates"), as the case may be, next preceding the
respective Interest Payment Date. Interest will be calculated on the basis of a
360-day year of twelve 30-day months and will be payable at the corporate trust
office or agency of the Trustee in New York, New York or Cleveland, Ohio;
provided, that at the option of the Company interest payments may be made by
checks mailed to the registered holders of the Debentures.
The Debentures will mature on June 15, 2025 (the "Maturity Date"). The
Debentures will not be entitled to the benefit of any sinking fund. The
Debentures may not be redeemed prior to June 15, 2005. On and after that date,
the Debentures may be redeemed at the option of the Company, in whole or in
part, upon at least 30 and not more than 60 days' notice, at the following
redemption prices (expressed as percentages of the principal amount to be
redeemed), together with, in all cases, accrued interest to the Redemption Date:
If redeemed during the twelve-month period beginning June 15,
<TABLE>
<CAPTION>
YEAR PERCENTAGE YEAR PERCENTAGE
- ---- ---------- ---- ----------
<S> <C> <C> <C>
2005 103.31% 2015 100.00%
2006 102.97 2016 100.00
2007 102.64 2017 100.00
2008 102.31 2018 100.00
2009 101.98 2019 100.00
2010 101.65 2020 100.00
2011 101.32 2021 100.00
2012 100.99 2022 100.00
2013 100.66 2023 100.00
2014 100.33 2024 100.00
</TABLE>
The principal of the Debentures will be payable on the Maturity Date at the
corporate trust office or agency of the Trustee in New York, New York or
Cleveland, Ohio.
Any interest or principal payment required to be made on a day that is not
a Business Day (as defined below) need not be made on such day, but may be made
on the next succeeding Business Day with the same force and effect as if made on
such day, and no additional interest shall accrue as a result of such delayed
payment. "Business Day" means any day, other than a Saturday or a Sunday, that
is not a day on which banking institutions in New York, New York and Cleveland,
Ohio are authorized or obligated by law or executive order to close.
S-2
<PAGE> 3
SELECTED FINANCIAL DATA
The following table sets forth selected consolidated financial information
of the Company. This information should be read in conjunction with the
consolidated financial statements and notes thereto of the Company incorporated
by reference into the Prospectus.
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT RATIOS)
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
1994 1993(1) 1992 1991(1) 1990(1)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net sales..................... $1,194,247 $1,065,748 $1,097,793 $1,056,940 $1,124,833
Net income.................... 47,394 36,955 58,828 4,817 19,419
Total assets.................. 801,376 767,894 696,545 671,925 685,663
Long-term liabilities......... 77,611 79,349 53,210 55,658 58,047
Shareholders' equity.......... 366,744 358,797 344,973 305,287 305,602
Ratio of earnings to fixed
charges..................... 6.74 5.21 9.99 2.51 3.27
</TABLE>
Notes to Selected Financial Data
(1) Included in 1993 is the cumulative effect of accounting changes (accounting
for postretirement benefits other than pensions and accounting for income
taxes) of $20.6 million, which on an after-tax basis is $0.70 per common
share. Also included in 1993 is a pretax restructuring charge of $3.0
million which on an after-tax basis is $1.8 million, or $0.06 per common
share. Included in 1991 is a pretax restructuring charge of $45.3 million
which on an after-tax basis is $31.7 million. A litigation charge of $12.0
million is included in 1990 which on an after-tax basis is $7.9 million.
Excluding these charges, net income would have been $59.3 million for 1993,
$36.5 million for 1991 and $27.3 million for 1991 and the ratio of earnings
to fixed charges would have been 8.36 for 1993, 6.16 for 1991 and 3.91 for
1990.
UNDERWRITING
Under the terms and subject to the conditions in an Underwriting Agreement
dated June 14, 1995 (the "Underwriting Agreement"), CS First Boston Corporation
(the "Underwriter") has agreed to purchase from the Company all of the
Debentures.
The Underwriting Agreement provides that the obligations of the Underwriter
are subject to certain conditions precedent, and that the Underwriter will be
obligated to purchase all of the Debentures if any are purchased.
The Company has been advised by the Underwriter that the Underwriter
proposes to offer the Debentures to the public initially at the offering price
set forth on the cover page of this Prospectus Supplement and to certain dealers
at such price less a concession of 0.5% of the principal amount of the
Debentures; that the Underwriter and such dealers may allow a discount of 0.25%
of such principal amount per Debenture on sales to other dealers. After the
initial public offering, the public offering price and concession and discount
to dealers may be changed by the Underwriter.
The Debentures are a new issue of securities with no established trading
market. The Company has been advised by the Underwriter that it intends to make
a market in the Debentures, but is not obligated to do so and may discontinue
any market making at any time without notice. No assurance can be given as to
the continued existence or liquidity of a trading market for the Debentures.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including civil liabilities under the Securities Act of 1933, as
amended, and to contribute with respect to payments that the Underwriter may be
required to make in respect thereof.
S-3
<PAGE> 4
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the Debentures in Canada is being made only on a
private placement basis exempt from the requirement that the Company prepare and
file a prospectus with the securities regulatory authorities in each province
where trades of Debentures are effected. Accordingly, any resale of the
Debentures in Canada must be made in accordance with applicable securities laws
which will vary depending on the relevant jurisdiction, and which may require
resales to be made in accordance with available statutory exemptions or pursuant
to a discretionary exemption granted by the applicable Canadian securities
regulatory authority. Purchasers are advised to seek legal advice prior to any
resale of the Debentures.
REPRESENTATIONS OF PURCHASERS
Each purchaser of Debentures in Canada who receives a purchase confirmation
will be deemed to represent to the Company and the dealer from whom such
purchase confirmation is received that (i) such purchaser is entitled under
applicable provincial securities laws to purchase such Debentures without the
benefit of a prospectus qualified under such securities laws, (ii) where
required by law, that such purchaser is purchasing as principal and not as
agent, and (iii) such purchaser has reviewed the text above under "Resale
Restrictions".
RIGHTS OF ACTION AND ENFORCEMENT
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available, including
common law rights of action for damages or rescission or rights of action under
the civil liability provisions of the U.S. federal securities laws.
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Ontario purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against such issuer or
persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of Debentures to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
Debentures acquired by such purchaser pursuant to this offering. Such report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #88/5, a copy of which may be obtained from the Company. Only one such
report must be filed in respect of Debentures acquired on the same date and
under the same prospectus exemption.
S-4
<PAGE> 5
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
$100,000,000
Ferro Corporation
Debt Securities
------------------
Ferro Corporation (the "Company") may offer from time to time in one or more
series its debt securities (the "Debt Securities") at an aggregate initial
offering price not to exceed $100,000,000 (or the equivalent in
foreign denominated currency or currency units). The Company will
offer Debt Securities to the public on terms
determined at the time of sale.
The accompanying Prospectus Supplement sets forth the specific title, aggregate
principal amount, designated currency (or currency unit), purchase price,
maturity, interest rate (or manner of calculation thereof), time of
payment of interest (if any), listing (if any) on a securities
exchange and any other specific terms of the Debt Securities and the
name of and compensation to each dealer, underwriter, or agent
(if any) involved in the sale of the Debt Securities, and the
other terms and manner of the sale and
distribution of such Securities.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------
Debt Securities may be offered to or through dealers, underwriters, or
agents designated from time to time (which may include The First Boston
Corporation or Lazard Freres & Co. or a group represented by such firms), as set
forth in the Prospectus Supplement, and Debt Securities may be offered to other
purchasers directly or through agents. The net proceeds to the Company from the
sale of Debt Securities is set forth in the Prospectus Supplement. See "Plan of
Distribution" for possible indemnification arrangements for dealers,
underwriters, and agents.
The First Boston Corporation Lazard Freres & Co.
- --------------------------------------------------------------------------------
The date of this Prospectus is February 12, 1993.
<PAGE> 6
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND ANY
ACCOMPANYING PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFERING DESCRIBED
HEREIN AND THEREIN, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR BY ANY UNDERWRITER, DEALER OR AGENT. NEITHER THIS PROSPECTUS NOR ANY
PROSPECTUS SUPPLEMENT SHALL CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OFFERED HEREUNDER IN ANY JURISDICTION TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION OR SALE IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER IMPLIES THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY AT ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THE
INFORMATION 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 statements and other information with the
Securities and Exchange Commission (the "Commission").
All such reports, proxy statements and other information, including the
documents incorporated by reference herein, can be inspected and copied at
prescribed rates at the public reference facilities maintained by the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549; and at the Commission's
regional offices at 75 Park Place, New York, New York 10007 and 230 South
Dearborn Street, Chicago, Illinois 60604. Copies of such material can also be
obtained from the Public Reference Section of the Commission, Washington, D.C.
25549, at prescribed rates. Such material may also be inspected and copied at
the offices of the New York Stock Exchange, on which the common shares of the
Company are listed.
The Company has filed a registration statement on Form S-3 (herein,
together with all amendments and exhibits, referred to as the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the securities offered hereby. This Prospectus does not contain
all of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is made to the Registration
Statement and the exhibits filed as a part thereof. Statements contained herein
concerning any document filed as an exhibit are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement. Each such statement is qualified in its
entirety by such reference.
2
<PAGE> 7
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company (Commission File No. 1-584)
with the Securities and Exchange Commission are incorporated herein by reference
and made a part hereof:
(a) Annual Report on Form 10-K, for the fiscal year ended December 31,
1991.
(b) Quarterly reports on Form 10-Q for the quarters ended March 31,
1992, June 30, 1992 and September 30, 1992.
(c) Form 8, as filed on February 12, 1993, amending the Company's
Annual Report on Form 10-K, for the fiscal year ended December 31, 1991.
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 Debt Securities hereby shall be deemed to be
incorporated herein by reference in this Prospectus and to be a part hereof from
the date of filing such documents, to the extent not superseded by documents
subsequently filed.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, upon written or oral request of such person,
a copy of any or all of the documents which have been incorporated herein by
reference, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference to such documents). Requests for such
copies should be directed to the Office of the Treasurer, Ferro Corporation,
1000 Lakeside Avenue, Cleveland, Ohio 44114-1183 (216) 641-8580.
3
<PAGE> 8
THE COMPANY
The Company produces specialty materials through the application of organic
and inorganic chemistry for sale to various industries throughout the world. It
operates principal manufacturing facilities on all six major continents. The
Company produces a variety of specialty coatings, colors, ceramics, plastics and
related products and services. The Company's most important product is frit,
which is produced for use in porcelain enamels and ceramic glazes.
Most of the products produced by the Company are classified as specialty
materials, rather than commodities, because they are formulated or designed to
perform a specific and important function in the manufacturing processes of the
Company's customers or in their end products. These specialty materials are not
sold in the high volume normally associated with commodity businesses.
The Company's specialty materials require a high degree of technical
service on an individual customer basis. The value of these specialty materials
stems not just from their raw material composition, but from the result and
performance they achieve in actual use.
Ferro Corporation was incorporated in Ohio in 1919. Its address is 1000
Lakeside Avenue, Cleveland, Ohio 44114-1183 and its telephone number is (216)
641-8580.
RECENT DEVELOPMENTS
The Company reported sales in the fourth quarter of 1992 of $261.2 million,
which were somewhat lower than the $265.2 million of sales in the fourth quarter
of the prior year. However, sales from continuing businesses were 3% greater in
the fourth quarter of 1992 than in the comparable period of 1991. Sales in the
1992 fourth quarter were negatively impacted by a strengthening U.S. dollar,
slowdown of the European economies and the absence of sales associated with
businesses that were sold or otherwise discontinued.
Net income for the fourth quarter of 1992 was $16.4 million, or $0.53 per
common share (primary), compared with $12.3 million, or $0.40 per common share
in the 1991 fourth quarter. The improved profitability resulted primarily from
improved margins through reduction of cost of sales.
USE OF PROCEEDS
Except as otherwise described in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Debt Securities for
general corporate purposes, including if not used for other purposes prior
thereto, the redemption in 1995 of its outstanding 11 3/4% Debentures due 2000
in the principal amount of $50 million. Funds not required immediately for such
purposes may be invested temporarily in short-term marketable securities.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------------------
1992 1991 1990 1989 1988 1987
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Historical ratio of earnings
to fixed charges.......... 9.99 2.51(a) 3.27(a) 5.02 5.82 5.07
</TABLE>
- ---------------
(a) Included in 1991 is a pretax restructuring charge of $45.3 million. A pretax
litigation charge of $12.0 million is included in 1990. Excluding these
charges, the ratio for 1991 would have been 6.16 and for 1990 would have
been 3.91.
For the purposes of computing these ratios, "earnings" consist of income
before income taxes and fixed charges (as reported in the Company's consolidated
statement of income). "Fixed charges" consist of interest (including both
amounts expensed and amounts capitalized) and the interest portion of rental
expense.
4
<PAGE> 9
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture (the "Indenture"),
between the Company and Society National Bank, as Trustee (the "Trustee"), a
copy of which is filed as an exhibit to the Registration Statement. The
following summaries of certain provisions of the Indenture do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indenture, including the definitions therein of
certain terms. Wherever particular Sections or defined terms of the Indenture
are referred to, such Sections or defined terms are incorporated herein by
reference.
The following sets forth certain general terms and provisions of the Debt
Securities offered hereby. The particular terms of the Debt Securities offered
by any Prospectus Supplement (the "Offered Debt Securities") will be described
in the Prospectus Supplement relating to such Offered Debt Securities (the
"Applicable Prospectus Supplement").
GENERAL
The Debt Securities offered hereby will be limited to $100 million (or the
equivalent thereof in foreign denominated currencies or composite currencies)
aggregate principal amount, although the Indenture does not limit the amount of
Debt Securities that may be issued thereunder and provides that Debt Securities
may be issued thereunder from time to time in one or more series as from time to
time authorized by the Company. The Debt Securities will be unsecured and
unsubordinated obligations of the Company and will rank equally and ratably with
other unsecured and unsubordinated obligations of the Company.
Unless otherwise indicated in the Applicable Prospectus Supplement,
principal of, premium, if any, and interest, if any, on the Debt Securities will
be payable, and the transfer of Debt Securities will be registrable, at the
office or agency to be maintained by the Company in Cleveland, Ohio and at any
other office or agency maintained by the Company for such purpose. (Sections
301, 305 and 1002) The Debt Securities will be issued only in fully registered
form without coupons and, unless otherwise indicated in the Applicable
Prospectus Supplement, in denominations of $1,000 or integral multiples thereof.
(Section 302) No service charge will be made for any registration of transfer or
exchange of the Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith. (Section 305)
The Applicable Prospectus Supplement will describe the following terms of
the Offered Debt Securities: (1) the title of the Offered Debt Securities; (2)
any limit on the aggregate principal amount of the Offered Debt Securities; (3)
the price or prices (generally expressed as a percentage of the aggregate
principal amount thereof) at which the Offered Debt Securities will be issued;
(4) the Person to whom any interest on the Offered Debt Securities shall be
payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest; (5) the date or dates on which the principal of
the Offered Debt Securities is payable; (6) the rate or rates at which the
Offered Debt Securities shall bear interest, if any, the date or dates from
which any such interest shall accrue, the Interest Payment Dates on which any
such interest shall be payable and the Regular Record Date for the interest
payable on any Interest Payment Date; (7) the place or places where the
principal of and any premium and interest on the Offered Debt Securities shall
be payable; (8) the period or periods within which, the price or prices at which
and the terms and conditions upon which the Offered Debt Securities may be
redeemed, in whole or in part, at the option of the Company; (9) the obligation,
if any, of the Company to redeem or purchase the Offered Debt Securities
pursuant to any sinking fund or analogous provisions or at the option of a
Holder thereof and the period or periods within which, the price or prices at
which and the terms and conditions upon which the Offered Debt Securities shall
be redeemed or purchased, in whole or in part, pursuant to such obligation; (10)
if other than denominations of $1,000 and any integral multiple thereof, the
denominations in which the Offered Debt Securities shall be issuable; (11) the
currency, currencies or currency units in which payment of the principal of and
any premium and interest on any Offered Debt Securities shall be payable if
other than the currency of the United States of America; (12) if the amount of
payments of principal of or any premium or interest on any Offered Debt
Securities may be determined with reference to an index or formula, the manner
in which such amounts shall be determined; (13) if the principal of or any
premium or interest on any Offered Debt Securities is to be payable, at the
election of the Company or a Holder thereof, in one or more currencies or
currency units other than that or those in which the Securities are stated to be
payable, the currency, currencies or currency units in which
5
<PAGE> 10
payment of the principal of and any premium and interest on the Offered Debt
Securities as to which such election is made shall be payable, and the periods
within which and the terms and conditions upon which such election is to be
made; (14) if other than the principal amount thereof, the portion of the
principal amount of the Offered Debt Securities which shall be payable upon
declaration of acceleration of the Maturity thereof; (15) the applicability of
the provisions described under "Defeasance and Covenant Defeasance"; (16) if the
Offered Debt Securities will be issuable only in the form of a Book-Entry
Security as described under "Book-Entry Debt Securities," the Depository or its
nominee with respect to the Offered Debt Securities and the circumstances under
which the Book-Entry Security may be registered for transfer or exchange or
authenticated and delivered in the name of a Person other than the Depository or
its nominee; and (17) any other terms of the Offered Debt Securities. (Section
301)
The Debt Securities may be issued as Original Issue Discount Debt
Securities to be offered and sold at a substantial discount below their stated
principal amount. Federal income tax consequences and other special
considerations applicable to any such Original Issue Discount Debt Securities
will be described in the Applicable Prospectus Supplement. "Original Issue
Discount Debt Securities" means any Debt Security which provides for an amount
less than the principal amount thereof to be due and payable upon the
declaration of acceleration of the Maturity thereof upon the occurrence of an
Event of Default and the continuation thereof. (Section 101) In addition, under
regulations proposed under the Internal Revenue Code (the "Proposed
Regulations"), it is possible that Debt Securities that (i) are issued between a
Regular Record Date and the related Interest Payment Date or (ii) have interest
reset dates that would cause any accrual period to be longer than all other
accrual periods, would be subject to the original issue discount rules of the
Internal Revenue Code and the Proposed Regulations, whether or not such Debt
Securities are Original Issue Discount Debt Securities.
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in the form of one or more
Book-Entry Securities that will be deposited with a Depository or its nominee
identified in the Applicable Prospectus Supplement. In such a case, one or more
Book-Entry Securities will be issued in a denomination or aggregate
denominations equal to the portion of the aggregate principal amount of
Outstanding Debt Securities of the series to be represented by such Book-Entry
Security or Securities. Unless and until it is exchanged in whole or in part for
Debt Securities in definitive registered form, a Book-Entry security may not be
registered for transfer or exchange except as a whole by the Depository for such
Book-Entry Security to a nominee of such Depository and except in the
circumstances described in the Applicable Prospectus Supplement. (Sections 204
and 305)
The specific terms of the depository arrangement with respect to any
portion of a series of Debt Securities to be represented by a Book-Entry
Security will be described in the Applicable Prospectus Supplement.
CERTAIN COVENANTS OF THE COMPANY
Subsidiaries. The term "Subsidiary" will be defined as a corporation more
than 50% of the outstanding voting Stock of which is owned directly or
indirectly by the Company and/or one or more Subsidiaries. The term "Domestic
Subsidiary" will be defined as a Subsidiary substantially all the fixed assets
of which are located, or substantially all the business of which is carried on,
within the United States, or which owns or leases any Principal Domestic
Manufacturing Property, but such term excludes any Subsidiary the principal
business of which is the financing or ownership of the operations of the Company
or its Subsidiaries outside the United States (but such Subsidiary is excluded
only so long as it neither owns nor leases any Principal Domestic Manufacturing
Property). (Section 101)
Restrictions on Secured Debt and Limitations on Liens. If the Company or
any Domestic Subsidiary shall incur, issue, assume or guarantee any debt secured
by a Mortgage on any Principal Domestic Manufacturing Property of the Company or
any Domestic Subsidiary or on any shares of stock or Debt of any Domestic
Subsidiary, the Company will secure, or cause such Domestic Subsidiary to
secure, the Outstanding Debt Securities, and any other Debt of the Company or
such Domestic Subsidiary which may be then outstanding and entitled to the
benefit of a covenant similar in effect to this covenant, equally and ratably
with (or prior to) such secured Debt, unless after giving effect thereto the
aggregate amount of all such secured Debt together with all Attributable Debt of
the Company and its Domestic Subsidiaries in respect of sale and leaseback
transactions involving Principal Domestic Manufacturing Properties would not
exceed 10% of the
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<PAGE> 11
Consolidated Net Tangible Assets of the Company and its consolidated
Subsidiaries. For the purpose of providing such equal and ratable security, the
principal amount of Outstanding Debt Securities of any series of Original Issue
Discount Securities shall be such portion of the principal amount as specified
in the terms of that series that would be payable upon acceleration of the
Maturity thereof at the time of such determination. This restriction will not
apply to, and there shall be excluded in computing secured Debt for the purpose
of such restriction, Debt secured by (a) Mortgages on property of, or on any
shares of stock or Debt of, any corporation existing at the time such
corporation becomes a Domestic Subsidiary, (b) Mortgages in favor of the Company
or a Domestic Subsidiary, (c) Mortgages in favor of governmental bodies of the
United States or any State or Puerto Rico or any other country or any political
subdivision thereof to secure partial, progress or advance payments pursuant to
any contract or statute, (d) Mortgages on property, shares of stock or Debt,
purchase money Mortgages and construction Mortgages existing at or incurred
within 120 days of the time of acquisition thereof (including acquisition
through merger or consolidation), (e) Mortgages securing obligations issued by a
State, territory or possession of the United States, any political subdivision
of any of the foregoing, or the District of Columbia, or any instrumentality of
the foregoing to finance the acquisition or construction of property, and on
which the interest is not includable in gross income of the Holder under the
Internal Revenue Code, and (f) certain extensions, renewals or replacements of
Mortgages referred to in the foregoing clauses (a) through (e) inclusive.
(Section 1008) The Indenture will not restrict the incurrence of unsecured Debt
by the Company or its Subsidiaries.
"Principal Domestic Manufacturing Property" will be defined to include any
facility (together with the land on which it is erected and fixtures comprising
a part thereof) used primarily for manufacturing, processing or warehousing of
the Company's products and located in the United States, owned or leased by the
Company or a Subsidiary and having a gross book value in excess of 1% of
Consolidated Net Tangible Assets, other than any such facility or portion
thereof (i) which is financed by certain governmental obligations the interest
on which is excludable from gross income of the holder thereof pursuant to the
provisions of Section 103(a) of the Internal Revenue Code or Section 745 of
Title 48 of the United States code or (ii) which in the opinion of the Board of
Directors of the Company is not of material importance to the total business
conducted by the Company and its Subsidiaries as an entirety. "Consolidated Net
Tangible Assets" will be defined as the aggregate amount of all assets (after
deducting intangible assets and the amount of all current liabilities) of the
Company and its consolidated Subsidiaries. "Mortgage" will be defined as any
mortgage, pledge, lien, security interest, conditional sale or other title
retention agreement or similar encumbrance. "Attributable Debt" will be defined
to mean the total net amount of rent (discounted at the rate of 1% per annum
over the weighted average Yield to Maturity of the Outstanding Debt Securities
compounded semi-annually) required to be paid during the remaining term of any
lease. (Section 101)
Restrictions on Sale and Leaseback Transactions. Neither the Company nor
any Domestic Subsidiary may, after the effective date of the Indenture, enter
into any sale and leaseback transaction involving any Principal Domestic
Manufacturing Property which has been or is to be sold or transferred, more than
120 days after the acquisition thereof or the completion of construction and
commencement of full operations thereof, unless (a) the Company or such Domestic
Subsidiary could create Debt secured by a Mortgage on such property as described
under "Restrictions on Secured Debt and Limitations on Liens" in an amount equal
to the Attributable Debt with respect to the sale and leaseback transaction
without equally and ratably securing the Outstanding Debt Securities or (b) the
Company, within 120 days, applies to the retirement of its Funded Debt which is
pari passu (as defined in the Indenture) with the Outstanding Securities an
amount equal to the greater of (i) the net proceeds of the sale of the Principal
Domestic Manufacturing Property leased pursuant to such arrangement or (ii) the
fair market value of the Principal Domestic Manufacturing Property so leased
(subject to credits for certain voluntary retirements of Funded Debt). (Section
1009) "Funded Debt" will be defined as indebtedness for money borrowed having a
maturity at or being renewable or extendible to a date more than 12 months from
the date of determination. (Section 101) This restriction will not apply to any
sale and leaseback transaction (a) between the Company and a Domestic
Subsidiary, between Domestic Subsidiaries, or between a Domestic Subsidiary and
a Foreign Subsidiary, or (b) involving the taking back of a lease for a period
of three years or less. (Section 1009)
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default under
the Indenture with respect to Securities of any series: (a) failure to pay any
interest on any Debt Security of that series when due, continued
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for 30 days; (b) failure to pay principal of or any premium on any Debt Security
of that series when due; (c) failure to deposit any sinking fund payment, when
due, in respect of any Debt Security of that series; (d) failure to perform, or
breach of any covenant or warranty of the Company in the Indenture (other than a
covenant included in the Indenture solely for the benefit of a series of Debt
Securities thereunder other than that series) continued for 90 days after
written notice as provided in the Indenture; (e) or default under indebtedness
for money borrowed in an aggregate principal amount exceeding $10,000,000 under
an instrument to which the Company or any Domestic Subsidiary is a party as an
obligor or by which either is bound, which default shall have resulted in such
indebtedness becoming due and payable prior to the date on which it would
otherwise be due and payable, without such default being cured or such
indebtedness having been discharged within ten days after written notice as
provided in the Indenture; (f) certain events in bankruptcy, insolvency or
reorganization of the Company; or (g) any other Event of Default provided with
respect to Debt Securities of that series. (Section 501)
If any Event of Default with respect to the Debt Securities of any series
at the time Outstanding occurs and is continuing, either the Trustee or the
Holders of at least 25 percent in aggregate principal amount of the Outstanding
Debt Securities of that series may declare the principal amount (or, if the Debt
Securities of that series are Original Issue Discount Debt Securities, such
portion of the principal amount as may be specified in the terms thereof) of all
the Debt Securities of that series to be due and payable immediately. At any
time after a declaration of acceleration with respect to Debt Securities of any
series has been made, but before a judgment or decree based on acceleration has
been obtained, the Holders of a majority in aggregate principal amount of
Outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration. (Section 502)
Reference is made to the Applicable Prospectus Supplement relating to any
series of Offered Debt Securities that are Original Issue Discount Debt
Securities for the particular provisions relating to acceleration of the Stated
Maturity of a portion of the principal amount of such series of Original Issue
Discount Debt Securities upon the occurrence of an Event of Default and the
continuation thereof.
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. (Section 603) Subject to such
provisions for the indemnification of the Trustee and to certain other
conditions, the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Debt Securities of that series. (Section 512)
No Holder of any series of Debt Securities will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless such Holder shall have previously given to the Trustee written notice of
a continuing Event of Default and unless the Holders of at least 25 percent in
principal amount of the Outstanding Debt Securities of that series shall have
made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of that series a direction inconsistent with such request and
shall have failed to institute such proceeding within 60 days. (Section 507)
However, such limitations do not apply to a suit instituted by a Holder of a
Debt Security for enforcement of payment of the principal of and premium, if
any, or interest, if any, on such Debt Security on or after the respective due
dates expressed in such Debt Security. (Section 508)
The Company is required to furnish to the Trustee annually a statement as
to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. (Section 1004)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than the majority in
aggregate principal amount of the Outstanding Debt Securities of each series
issued under the Indenture and affected by the modification or amendments;
provided, however, that no such modification or amendment may, without the
consent of the Holders of all Debt Securities affected thereby, (i) change the
Stated Maturity of the principal of, or any installment of
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principal of or interest on, any Debt Security; (ii) reduce the principal amount
of, or the premium, if any, or interest on, any Debt Security (including in the
case of an Original Issue Discount Debt Security the amount payable upon
acceleration of the maturity thereof); (iii) change the place or currency of
payment of principal of, premium, if any, or interest on any Debt Security; (iv)
impair the right to institute suit for the enforcement of any payment on any
Debt Security on or after the Stated Maturity thereof (or in the case of
redemption, on or after the Redemption Date); or (v) reduce the percentage in
principal amount of Outstanding Debt Securities of any series, the consent of
whose Holders is required for modification or amendment of the Indenture or for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults. (Section 902)
The Holders of at least a majority in aggregate principal amount of the
Outstanding Debt Securities of any series may, on behalf of all Holders of that
series, waive compliance by the Company with certain restrictive provisions of
the Indenture. (Section 1010) The Holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities of any series may,
on behalf of all Holders of that series, waive any past default under the
Indenture, except a default in the payment of principal, premium or interest and
in respect of a covenant or provision of the Indenture that cannot be modified
or amended without the consent of the Holder of each Outstanding Debt Security
of such series affected thereby. (Section 513)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into any other Person or
transfer or lease its assets substantially as an entirety to any Person and may
not permit any Person to merge into or consolidate with the Company or transfer
or lease its assets substantially as an entirety to the Company, unless (i) any
successor or purchaser is a corporation, partnership, or trust organized under
the laws of the United States of America, any State or the District of Columbia,
and any such successor or purchaser expressly assumes the Company's obligations
on the Debt Securities under a supplemental Indenture, (ii) immediately after
giving effect to the transaction no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default, shall have
occurred and be continuing, (iii) if properties or assets of the Company become
subject to a Mortgage not permitted by the Indenture, the Company or such
successor Person, as the case may be, takes such steps as shall be necessary
effectively to secure the Securities equally and ratably with (or prior to) all
indebtedness secured thereby, and (iv) the Company has delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel stating compliance with these
provisions. (Section 801)
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides, unless otherwise indicated in the Applicable
Prospectus Supplement with respect to the Offered Debt Securities, that the
Company, at the Company's option, (a) will be discharged from any and all
obligations in respect of the Debt Securities of any series (except for certain
obligations to register the transfer of or exchange of Debt Securities of such
series, replace stolen, lost or mutilated Debt Securities of such series,
maintain paying agencies and hold moneys for payment in trust) or (b) need not
comply with certain restrictive covenants of the Indenture, including those
described under "Certain Covenants of the Company," and the occurrence of an
event described in clause (d) under "Events of Default" shall no longer be an
Event of Default, in each case, if the Company deposits, in trust, with the
Trustee money or U.S. Government Obligations, which through the payment of
interest thereon and principal thereof in accordance with their terms will
provide money, in an amount sufficient to pay all the principal of (and premium,
if any) and interest on the Debt Securities of such series on the dates such
payments are due (which may include one or more redemption dates designated by
the Company) in accordance with the terms of the Debt Securities of such series.
Such a trust may only be established if, among other things, (i) no Event of
Default or event which with the giving of notice or lapse of time, or both,
would become an Event of Default under the Indenture shall have occurred and be
continuing on the date of such deposit, (ii) such deposit will not cause the
Trustee to have any conflicting interest with respect to other securities of the
Company, and (iii) the Company shall have delivered an Opinion of Counsel to the
effect that the Holders will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit or defeasance and will be
subject to Federal income tax in the same manner as if such defeasance had not
occurred. In the event the Company omits to comply with its remaining
obligations under the Indenture after a defeasance of the Indenture with respect
to the Debt Securities of any series as described under clause (b) above and the
Debt Securities of such series are declared due and payable because of the
occurrence of any Event of Default, the amount of
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money and U.S. Government Obligations on deposit with the Trustee may be
insufficient to pay amounts due on the Debt Securities of such series at the
time of the acceleration resulting from such Event of Default. However, the
Company will remain liable in respect of such amounts. (Article Thirteen)
CONCERNING THE TRUSTEE
Society National Bank is Trustee under the Indenture. The Trustee performs
services for the Company in the ordinary course of business.
Under the Indenture, the Trustee is required to transmit annual reports to
all Holders regarding its eligibility and qualifications as Trustee under the
Indenture and certain related matters. (Section 703)
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities being offered hereby through
agents, through underwriters and through dealers, and Debt Securities may be
sold to other purchasers directly or through agents.
The distribution of the Debt Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Offers to purchase Debt Securities may be solicited by agents designated by
the Company from time to time. Any such agent, who may be deemed to be an
underwriter, as that term is defined in the Securities Act, involved in the
offer or sale of the Debt Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by the Company to such
agent set forth, in the Prospectus Supplement. Agents may be entitled under
agreements that may be entered into with the Company to indemnification by the
Company against certain liabilities, including liabilities under the Securities
Act, and such agents or their affiliates may be customers of, extend credit to
or engage in transactions with or perform services for the Company in the
ordinary course of business.
If any underwriters are utilized in the sale, the Company will enter into
an underwriting agreement with such underwriters at the time of sale to them and
the names of the underwriters and the terms of the transaction will be set forth
in the Prospectus Supplement that will be used by the underwriters to make
resales of the Debt Securities in respect of which this Prospectus is delivered
to the public. The underwriters may be entitled under the relevant underwriting
agreement, to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, and such underwriters or their
affiliates may be customers of, extend credit to or engage in transactions with
or perform services for the Company in the ordinary course of business.
If dealers are utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to such dealers for their own account. The dealers may then resell such Debt
Securities to the public at varying prices to be determined by such dealers at
the time of resale. Dealers may be entitled to indemnification by the Company
against certain liabilities, including liabilities under the Securities Act, and
such dealers or their affiliates may be customers of, extend credit to or engage
in transactions with or perform services for the Company in the ordinary course
of business.
The Debt Securities are not proposed to be listed on a securities exchange,
and any underwriters or dealers will not be obligated to make a market in Debt
Securities. The Company cannot predict the activity or liquidity of any trading
in the Debt Securities.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, the Company may authorize
underwriters or other persons acting as its agents to solicit offers by certain
institutions to purchase Debt Securities pursuant to contracts providing for
payment and delivery on a future date. Institutions with which such contracts
may be made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions, and
others, but in all cases such institutions must be approved by the Company. The
obligations of any purchaser under any such contract will not be subject to any
conditions except that (a) the purchase of the Debt Securities shall not at the
time of delivery be prohibited under the
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laws of the jurisdiction to which such purchaser is subject; and (b) if the Debt
Securities are also being sold to underwriters, the Company shall have sold to
such underwriters the Debt Securities not sold for delayed delivery. The
underwriters and such other agents will not have any responsibility in respect
of the validity or performance of such contracts.
VALIDITY OF DEBT SECURITIES
The validity of the Debt Securities to be offered hereby will be passed
upon for the Company by Squire, Sanders & Dempsey, Cleveland, Ohio. Certain
legal matters in connection with the Debt Securities to be offered hereby will
be passed upon for the underwriters, dealers or agents, if any, by Baker &
Hostetler, Cleveland, Ohio, unless otherwise specified in the Prospectus
Supplement. Mr. Campbell, a partner in the firm of Squire, Sanders & Dempsey,
and Secretary and a Director of the Company is the beneficial owner of 11,250
shares of Common Stock of the Company.
EXPERTS
The consolidated financial statements of the Company at December 31, 1991
and 1990 and for each of the three years in the period ended December 31, 1991,
appearing in its Annual Report on Form 10-K, for the fiscal year ended December
31, 1991 and incorporated in this Prospectus by reference, have been audited by
KPMG Peat Marwick, independent public accountants, as indicated in their reports
with respect thereto and incorporated by reference herein. The financial
statements referred to above are included in reliance upon the reports of said
firm and upon the authority of said firm as experts in auditing and accounting.
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Description of Debentures............... S-2
Selected Financial Data................. S-3
Underwriting............................ S-3
Notice to Canadian Residents............ S-4
PROSPECTUS
Available Information................... 2
Incorporation of Certain Information By
Reference............................. 3
The Company............................. 4
Recent Developments..................... 4
Use of Proceeds......................... 4
Ratio of Earnings to Fixed Charges...... 4
Description of Debt Securities.......... 5
Plan of Distribution.................... 10
Delayed Delivery Arrangements........... 10
Validity of Debt Securities............. 11
Experts................................. 11
</TABLE>
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Ferro Corporation
$50,000,000
8% Debentures
Due June 15, 2025
PROSPECTUS SUPPLEMENT
(LOGO) CS FIRST BOSTON
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