As filed with the Securities and Exchange Commission on August 26, 1998
Registration No. 333-59719
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO.1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ENGELHARD CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 22-1586002
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
101 Wood Avenue
Iselin, New Jersey 08830
(732) 205-5000
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
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Arthur A. Dornbusch, II
Vice President and General Counsel and Secretary
Engelhard Corporation
101 Wood Avenue
Iselin, New Jersey 08830
(732) 205-5000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
James J. Clark, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
(212) 701-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement, as determined
by market conditions and other factors.
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/
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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. / /
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 this registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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SUBJECT TO COMPLETION, DATED AUGUST 26, 1998
$300,000,000
ENGELHARD CORPORATION
Debt Securities
Engelhard Corporation ("Engelhard" or the "Company") may offer, from
time to time, in one or more series, its unsecured senior debt securities (the
"Senior Debt Securities") and its unsecured subordinated debt securities (the
"Subordinated Debt Securities" and, together with the Senior Debt Securities,
the "Debt Securities"). The Debt Securities may be redeemable for, exchangeable
or convertible into shares of Common Stock, par value $1.00 per share ("Common
Stock"), and, to the extent applicable, references herein to the Debt Securities
also include a reference to Common Stock issuable upon any such redemption,
conversion or exchange. The Debt Securities will have a maximum aggregate
offering price of $300,000,000(or the equivalent thereof in one or more foreign
or composite currencies) and will be offered on terms to be determined by market
conditions at the time of sale. The Debt Securities may be offered separately or
together, in separate series, in amounts and at prices and on terms to be set
forth in an accompanying prospectus supplement (a "Prospectus Supplement"). In
addition, the specific terms of the Debt Securities with respect to which this
Prospectus is being delivered, and whether such Debt Securities will be listed
on a national securities exchange, will be set forth in an accompanying
Prospectus Supplement.
The Senior Debt Securities, if issued, will rank equally and ratably
with all other unsecured and unsubordinated indebtedness of the Company, and the
Subordinated Debt Securities, if issued, will be unsecured and subordinated to
all present and future Senior Indebtedness (as defined) of the Company. See
"Description of Securities."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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The Debt Securities may be sold directly, through agents from time to
time or through underwriters and/or dealers. If any agent of the Company or any
underwriter is involved in the sale of the Debt Securities, the name of such
agent or underwriter and any applicable commission or discount will be set forth
in an accompanying Prospectus Supplement. See "Plan of Distribution."
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The date of this Prospectus is August , 1998.
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No dealer, salesman, or any other person has been authorized to give
any information or to make any representations other than those contained or
incorporated by reference in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any underwriter, dealer, or agent. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy Debt Securities
by anyone in any jurisdiction in which the offer or solicitation is not
authorized or in which the person making the offer or solicitation is not
qualified to do so or to any person to whom it is unlawful to make the offer or
solicitation.
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 and other information with the Securities and
Exchange Commission (the "Commission") relating to its business, financial
position, results of operations and other matters. Such reports and other
information can be inspected and copied at the Public Reference Section
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at its Regional Offices located at Citicorp Center,
500 West Madison Street, Chicago, Illinois 60661, and 7 World Trade Center, 15th
Floor, New York, New York 10048. Copies of such material can also be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Common Stock of the Company is
listed on the New York Stock Exchange and such material can also be inspected at
the office of such exchange at 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a registration statement
(the "Registration Statement") under the Securities Act of 1933, as amended,
with respect to the Debt Securities covered by this Prospectus. This Prospectus
does not contain all the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. Reference is made to the Registration Statement and to the
exhibits relating thereto for further information with respect to the Company
and the Debt Securities covered by this Prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference herein its Annual Report
on Form 10-K for the fiscal year ended December 31, 1997 and its Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1998 and June 30, 1998.
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 before the
termination of the offering of the securities offered hereby shall be deemed
incorporated herein by reference, and such documents shall be deemed to be a
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part hereof from the date of filing such documents. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for 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 or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the above documents incorporated herein by reference
(other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents that this Prospectus
incorporates). Written or oral requests should be directed to: Investor
Relations, Engelhard Corporation, 101 Wood Avenue, Iselin N.J. 08830, telephone
number (732) 205-5000.
THE COMPANY
Engelhard develops, manufactures and markets technology-based
performance products and engineered materials for a wide spectrum of industrial
customers, and provides services to precious and base metals customers and
markets energy-related services. The Company operates on a worldwide basis with
corporate and operating headquarters and principal manufacturing facilities and
mineral reserves in the United States with other operations conducted in the
European Community, the Russian Federation, Canada, the Asia-Pacific region and
South America.
The Company's businesses are organized into three segments - Catalysts
and Chemicals, Pigments and Additives, and Engineered Materials and Industrial
Commodities Management.
The Catalysts and Chemicals segment comprises three business groups:
the Environmental Technologies Group, consisting of Automotive Emission Systems,
Heavy Duty Power Systems and Process Emission Systems, serving the automotive,
off-road vehicle, light and heavy duty truck, aircraft, power generation and
process industries; the Petroleum Catalysts Group, serving the petroleum
refining industries; and the Chemical Catalysts Group, serving the chemical,
petrochemical, pharmaceutical and food processing industries. Environmental
technology catalysts are used in applications such as the abatement of carbon
monoxide, oxides of nitrogen and hydrocarbons from gasoline, diesel and
alternate fueled vehicle exhaust gases to meet emission control standards. These
catalysts are also used for the removal of odors, fumes and pollutants generated
by a variety of process industries including but not limited to the painting of
automobiles, appliances and other equipment; printing processes; the manufacture
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of nitric acid and tires, in the curing of polymers; and power generation
sources. The petroleum refining catalyst products consist of a variety of
catalysts and processes used in the petroleum refining industry. The principal
products are zeolitic cracking catalysts which are widely used to provide
economies in petroleum processing. The chemical catalysts products consist of
catalysts and sorbents used in the production of a variety of products or
intermediates, including synthetic fibers, fragrances, antibiotics, vitamins,
polymers, plastics, detergents, fuels and lube oils, solvents, oleochemicals and
edible products.
The Pigments and Additives segment is comprised of performance
products based on kaolin and used as coating and extender pigments for the paper
industry and mineral based performance additives products. The segment's
pearlescent and color specialty pigments and additives businesses serve the
plastics, coatings, paint, ink, cosmetics, packaging, and allied industries in a
variety of applications. The segment also supplies iridescent films used in an
assortment of creative, decorative, packaging and security applications.
Minerals based performance additives products are used principally as extender
pigments for a variety of purposes in the manufacture of plastic, rubber, ink,
ceramic, adhesive products and in paint. The segment also produces a variety of
organic and inorganic color and pearlescent and natural pearl pigments for a
wide range of applications.
The Engineered Materials and Industrial Commodities Management segment
includes the Engineered Materials Group, serving a broad spectrum of industries
and the Industrial Commodities Management Group, which is responsible for
precious and base metals sourcing and dealing, for managing the precious and
base metals requirements of the Company, and for power marketing. The products
of the Engineered Materials Group consist of performance products primarily
employing metal-based materials such as temperature-sensing devices, precious
metals coating and electroplating materials, conductive pastes and powders and
brazing alloys. The Industrial Commodities Management Group is responsible for
procuring precious and base metals to meet the requirements of the Company's
operations and its customers. The Industrial Commodities Management Group also
engages in precious and base metals dealing operations with industrial
consumers, dealers, central banks, miners and refiners. It also participates in
refining of precious metals and marketing of energy-related services.
Engelhard was formed under the laws of Delaware in 1938. The Company's
address is 101 Wood Avenue, Iselin, New Jersey 08830, and its telephone number
is (732) 205-5000. Unless otherwise indicated or the context otherwise requires,
all references to "Engelhard" or the "Company" herein shall be deemed to refer
to Engelhard Corporation and its consolidated subsidiaries.
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USE OF PROCEEDS
Except as otherwise described in the accompanying Prospectus
Supplement, the net proceeds from the sale of the Debt Securities will be used
by the Company for general corporate purposes, which may include the reduction
of outstanding indebtedness, working capital increases, capital expenditures and
acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges
for the Company for the periods indicated. In the calculation of the Company's
ratio of earnings to fixed charges, "earnings" consist of income from continuing
operations before income taxes and fixed charges (excluding capitalized
interest) and "fixed charges" consist of interest expense, including the
interest portion of rental obligations deemed representative of the interest
factor.
<TABLE>
<CAPTION>
Six Months ended Year Ended December 31,
---------------- ------------------------
June 30, 1998 1997 1996 1995 1994 1993
---------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
5.28 3.36(a) 5.35 6.09 6.86 (b)
</TABLE>
(a) Earnings in 1997 were negatively impacted by special and other charges of
$149.6 million for a variety of events. Without such charges, the ratio of
earnings to fixed charges would have been 5.94.
(b) Earnings in 1993 were insufficient to cover fixed charges by $5.6 million.
Earnings in 1993 were negatively impacted by a special charge of $148
million for the realignment and consolidation of businesses and
environmental matters. Without such charge, the ratio of earnings to fixed
charges would have been 8.83.
DESCRIPTION OF SECURITIES
Senior Debt Securities may be issued from time to time in one or more
series under an indenture (the "Senior Indenture"), between the Company and The
Chase Manhattan Bank, N.A. (the "Senior Trustee"). The Senior Indenture has been
filed as an exhibit to the Registration Statement of which this Prospectus is a
part. Subordinated Debt Securities may be issued from time to time in one or
more series under an indenture (the "Subordinated Indenture") between the
Company and a trustee to be identified in the applicable Prospectus Supplement
(the "Subordinated Trustee"). The Subordinated Indenture has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part. The
Senior Indenture and the Subordinated Indenture are sometimes referred to
collectively as the "Indentures," and the Senior Trustee and the Subordinated
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Trustee are sometimes referred to collectively as the "Trustees." The statements
under this caption are brief summaries of certain provisions contained in the
Indentures, do not purport to be complete and are qualified in their entirety by
reference to the Indentures, including the definitions therein of certain terms,
copies of which are included or incorporated by reference as exhibits to the
Registration Statement of which this Prospectus is a part. Capitalized terms
used herein and not defined shall have the meanings assigned to them in the
relevant Indenture. The particular terms of the Debt Securities and any
variations from such general provisions applicable to any series of Debt
Securities will be set forth in the Prospectus Supplement with respect to such
series.
General
Each Indenture provides for the issuance of Debt Securities in one or
more series with the same or various maturities at par or at a discount. Any
Debt Securities bearing no interest or interest at a rate which at the time of
issuance is below market rates will be sold at a discount (which may be
substantial) from their stated principal amount. Federal income tax consequences
and other special considerations applicable to any such discounted Debt
Securities ("Discounted Securities") will be described in the Prospectus
Supplement relating thereto. Neither Indenture limits the amount of Debt
Securities that can be issued thereunder. Reference is made to the Prospectus
Supplement for the following terms, if applicable, of the Debt Securities
offered thereby: (1) the designation, aggregate principal amount, currency or
composite currency and denominations; (2) the price at which such Debt
Securities will be issued; (3) any index, formula or other method used for
determining amounts of principal or interest payable on the Debt Securities; (4)
the maturity date and other dates, if any, on which principal will be payable;
(5) the interest rate or rates (which may be fixed or variable), if any, and the
date or dates from which interest will accrue and on which interest will be
payable, and the record dates for the payment of interest; (6) the manner of
paying principal or interest; (7) the place or places where principal and
interest will be payable; (8) the terms of any mandatory or optional redemption
by the Company; (9) the terms of any repayment at the option of holders; (10)
whether such Debt Securities are to be issuable as registered Debt Securities,
bearer Debt Securities, or both, and whether and upon what terms registered Debt
Securities may be exchanged for bearer Debt Securities and vice versa; (11)
whether such Debt Securities are to be represented in whole or in part by a Debt
Security in global form and, if so, the identity of the depositary
("Depositary") for any global Debt Security; (12) any tax indemnity provisions;
(13) if the Debt Securities provide that payments of principal or interest may
be made in a currency other than that in which Debt Securities are denominated,
the manner for determining such payments; (14) the portion of principal payable
upon acceleration of a Discounted Security; (15) whether and upon what terms
Debt Securities may be defeased; (16) any events of default or restrictive
covenants in addition to or in lieu of those set forth in the applicable
Indenture; (17) provisions for electronic issuance of Debt Securities or for
Debt Securities in uncertificated form; (18) the terms, if any, upon which the
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Debt Securities will be convertible into or exchangeable for Common Stock of the
Company; and (19) any additional provisions or other terms not inconsistent with
the provisions of the applicable Indenture, including any terms that may be
required or advisable under United States or other applicable laws or
regulations or advisable in connection with the marketing of the Debt
Securities.
Ranking of Debt Securities
The Senior Debt Securities will be unsecured and will rank equally and
ratably with other unsecured and unsubordinated debt of the Company. The
Subordinated Debt Securities will be subordinate in right of payment to all
Senior Indebtedness of the Company. "Senior Indebtedness" of the Company is
defined to mean the principal of (and premium, if any) and interest on (a) any
and all indebtedness and obligations of the Company (including indebtedness of
others guaranteed by the Company), whether or not contingent and whether
outstanding on the date of the Subordinated Indenture or thereafter created,
incurred or assumed, which (i) are for money borrowed; (ii) are evidenced by any
bond, note, debenture or similar instrument; (iii) represent the unpaid balance
on the purchase price of any property, business, or asset of any kind; (iv) are
obligations of the Company as lessee under any and all leases of property,
equipment or other assets required to be capitalized on the balance sheet of the
lessee under generally accepted accounting principles; (v) are reimbursement
obligations of the Company with respect to letters of credit; and (b) any
deferrals, amendments, renewals, extensions, modifications and refundings of any
indebtedness or obligations of the types referred to above; provided that Senior
Indebtedness shall not include (i) Subordinated Debt Securities; (ii) any
indebtedness or obligation of the Company which, by its express terms or the
express terms of the instrument creating or evidencing it, is not superior in
right of payment to the Subordinated Debt Securities; or (iii) any indebtedness
or obligation incurred by the Company in connection with the purchase of assets,
materials or services in the ordinary course of business and which constitutes a
trade payable. The Subordinated Indenture does not contain any limitation on the
amount of Senior Indebtedness which may be hereafter incurred by the Company. In
the event of any default in the payment of the principal of, or interest on, any
Senior Indebtedness in an aggregate principal amount of at least $50,000,000 or
any default permitting the acceleration of Senior Indebtedness in an aggregate
amount of at least $50,000,000 where notice of such default has been given to
the Company, no payment with respect to the principal of or interest on the
Subordinated Debt Securities will be made by the Company unless and until such
default has been cured or waived. Upon any payment or distribution of the
Company's assets to creditors of the Company in a liquidation or dissolution of
the Company, or in a reorganization, bankruptcy, insolvency, receivership or
similar proceeding relating to the Company or its property, whether voluntary or
involuntary, the holders of Senior Indebtedness will first be entitled to
receive payment in full of all amounts due thereon before the holders of the
Subordinated Debt Securities will be entitled to receive any payment upon the
principal of or premium, if any, or interest on the Subordinated Debt
Securities. By reason of such subordination, in the event of insolvency of the
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Company, holders of Senior Indebtedness of the Company may receive more,
ratably, and holders of the Subordinated Debt Securities may receive less,
ratably, than the other creditors of the Company. Such subordination will not
prevent the occurrence of any Event of Default in respect of the Subordinated
Debt Securities.
Covenants
The Senior Indenture contains, among others, the covenants summarized
below, which will be applicable (unless waived or amended) so long as any of the
Senior Debt Securities are outstanding, unless stated otherwise in the
Prospectus Supplement.
Limitations on Liens and Encumbrances. The Company covenants that it
will not nor will it permit any Subsidiary, directly or indirectly, to incur or
create any Lien on any property, assets or stock now owned or hereafter acquired
by the Company or any of its Subsidiaries without equally and ratably securing
all series of Senior Debt Securities then outstanding with the indebtedness
secured by such Lien, other than: (a) Liens for taxes or assessments and similar
charges either (i) not delinquent or (ii) being contested in good faith by
appropriate proceedings and as to which the Company or such Subsidiary, as the
case may be, shall have set aside on its books adequate reserves; (b) Liens
incurred or pledges and deposits made in connection with workmen's compensation,
unemployment insurance, old-age pensions and social security benefits or
securing the performance of bids, tenders, leases, contracts (other than for
obligations incurred in connection with the borrowing of money or the obtaining
of advances or credit), and statutory obligations of like nature, incurred as an
incident to and in the ordinary course of business; (c) materialmen's,
mechanics', repairmen's, employees', operators' or other similar Liens or
charges arising in the ordinary course of business incidental to construction,
maintenance or operation of any property of the Company or any Subsidiary which
have not at the time been filed pursuant to law and any such Liens and charges
incidental to construction, maintenance or operation of any property of the
Company or any Subsidiary, which, although filed, relate to obligations not yet
due or the payment of which is being withheld as provided by law, or to
obligations the validity of which is being contested in good faith by
appropriate proceedings; (d) zoning restrictions, easements, licenses,
reservations, provisions, covenants, conditions, waivers, restrictions on the
use of property or minor irregularities of title (and with respect to leasehold
interests, mortgages, obligations, Liens and other encumbrances incurred,
created, assumed or permitted to exist and arising by, through or under or
asserted by a landlord or owner of the leased property, with or without consent
of the lessee), which will not individually or in the aggregate interfere
materially with the use or operation by the Company or any Subsidiary of the
property affected thereby for the purposes for which such property was acquired
or is held by the Company or any Subsidiary; (e) Liens created by or resulting
from any litigation or proceeding which is being contested in good faith by
appropriate proceedings and as to which levy and execution have been stayed and
continue to be stayed; (f) Liens consisting of repurchase agreements, swaps or
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other obligations entered into in the ordinary course of business relating to
precious metals purchased, borrowed or otherwise held by the Company or any
Subsidiary; (g) Liens incidental to the conduct of its business or the ownership
of its property and assets which were not incurred in connection with the
borrowing of money or the obtaining of advances or credit and which do not in
the aggregate materially detract from the value of the property or assets
subject thereto or materially impair the use thereof in the operation of its
business; (h) Liens on property or assets of a Subsidiary to secure obligations
of such Subsidiary to the Company or another Subsidiary; (i) Liens arising in
connection with letter of credit trade transactions, provided that the Company
or its Subsidiary, as the case may be, discharges within 60 days its obligation
to pay the indebtedness to banks arising from payments made by such banks under
such letters of credit; and (j) other Liens, provided that the aggregate of all
properties and assets of the Company and the Subsidiaries which are subject to
or affected by such Liens and which would properly be classified as assets on a
consolidated balance sheet prepared in accordance with generally accepted
accounting principles as in effect on the date of the Senior Indenture
(including all leases (other than leases of office space and leases of research
and development facilities, if any) that would be required to be reflected as
capital leases pursuant to such principles) does not at any time have a value on
the books of the Company and its Subsidiaries in excess of 25% of the
Consolidated Tangible Net Worth of the Company and its Subsidiaries calculated
for the quarter most recently ended.
Limitations on Sale and Leaseback Transactions. The Company covenants
that it will not, and will not permit any Significant Subsidiary to, directly or
indirectly, sell or transfer (other than to the Company or a Significant
Subsidiary) any Principal Property with the intention that the Company or any
Significant Subsidiary take back a lease thereof which (i) has a term of more
than three years or (ii) is renewable at the option of the Company or such
Significant Subsidiary for an aggregate period or periods of more than three
years from the date of commencement thereof unless (a) the Company promptly
gives notice thereof to the Senior Trustee, and either (b) the Principal
Property owned by the Company or a Significant Subsidiary immediately prior to
such sale could have been subjected to a Lien to secure indebtedness without
being required to equally and ratably secure Senior Debt Securities pursuant to
the limitations described under "Limitations on Liens and Encumbrances" or (c)
the net proceeds of such sale are applied within 270 days either before or after
the effective date of any such transaction (i) to the retirement of indebtedness
of the Company or any Subsidiary (other than securities of any series at the
time outstanding) or (ii) to the redemption of Senior Debt Securities of any
series at the time outstanding, if permissible under the Indenture and the terms
of Securities of such series, at a redemption price equal to the principal
amount thereof plus the then applicable premium, if any, together with accrued
interest, if any, or (iii) to the purchase of property, securities or other
assets having a value at least equal to the net proceeds of such sale, or (d)
the Company shall deliver to the Senior Trustee for cancellation Senior Debt
Securities of any series at the time outstanding in an aggregate principal
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amount at least equal to the net proceeds of such sale (less any amounts applied
in accordance with clause (c)).
Certain Definitions. The term "Consolidated Tangible Net Worth" means
the excess of (i) the consolidated net book value of the assets of the Company
and its Subsidiaries (other than patents, patent rights, trademarks, trade
names, franchises, copyrights, licenses, permits, goodwill and other intangible
assets classified as such in accordance with generally accepted accounting
principles as in effect on the date of the Senior Indenture) after all
appropriate deductions in accordance with generally accepted accounting
principles as in effect on the date of the Senior Indenture (including, without
limitation, reserves for doubtful receivables, obsolescence, depreciation and
amortization) plus the amount, if any, by which the market value of precious
metals inventories and investments exceeds the carrying value of those metals on
the consolidated books of account of the Company over (ii) the consolidated
liabilities (including tax and other proper accruals but excluding the
accumulated postretirement benefit obligation resulting from the application of
the provisions of FAS No. 106 "Employers' Accounting for Postretirement Benefits
Other Than Pensions") of the Company and its Subsidiaries, in each case computed
and consolidated in accordance with generally accepted accounting principles as
in effect on the date of the Senior Indenture. The term "Lien" means any
mortgage, pledge, security interest, encumbrance, lien or charge of any kind
whatsoever (including any conditional sale or other title retention agreement,
any lease in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction), but
in no event shall "Lien" include any defeasance pursuant to Article 8 of the
Senior Indenture. The term "Principal Property" means, with certain exceptions,
any manufacturing plant or warehouse owned at the date hereof or hereafter
acquired by the Company or any Significant Subsidiary which is located within
the United States and the gross book value of which (before deduction of any
applicable depreciation reserves) is in excess of 5% of the Company's
Consolidated Tangible Net Worth. The term "Significant Subsidiary" shall have
the meaning assigned to such term in Regulation S-X promulgated under the
Securities Act of 1933, as amended. The term "Subsidiary" means any corporation,
association or other business entity, a majority (by number of votes) of the
voting stock or control of which is at the time owned or controlled by the
Company or another Subsidiary of the Company.
Global Securities
The Debt Securities of a series may be issued in whole or in part in
the form of one or more global securities ("Global Securities") that will be
deposited with, or on behalf of, the Depositary identified in the Prospectus
Supplement relating to such series. Global Securities will be issued in
registered form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for Debt Securities in permanent form, a Global
Security may not be transferred except as a whole by the Depositary for such
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Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor of such Depositary or a nominee of
such successor.
The specific terms of the depositary arrangement with respect to Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will apply
to all depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of institutions that have accounts with such Depositary
("Participants"). The accounts to be credited shall be designated by the
underwriters of such Debt Securities, by certain agents of the Company or by the
Company, if such Debt Securities are offered and sold directly by the Company.
Ownership of beneficial interests in a Global Security will be limited to
Participants or persons that may hold interests through Participants. Ownership
of beneficial interests in such Global Security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the Depositary with respect to Participants' beneficial interests. The laws of
some states require that certain purchasers of securities take physical delivery
of such securities in definitive form. Such ownership limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is
the holder of such Global Security, such Depositary or such nominee, as the case
may be, will be considered the sole owner or holder of the Debt Securities
represented by such Global Security for all purposes under the Indenture
governing such Debt Securities. Except as set forth below, owners of beneficial
interests in a Global Security will not be entitled to have Debt Securities of
the series represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of Debt Securities of
such series in definitive form and will not be considered the owners or holders
thereof under the Indenture governing such Debt Securities.
Principal, premium, if any, and interest payments on Debt Securities
registered in the name of or held by a Depositary or its nominee will be made to
the Depositary or its nominee, as the case may be, as the registered holder of
the Global Security representing such Debt Securities. The Company expects that
the Depositary for Debt Securities of a series, upon receipt of any payment of
principal, premium, if any, or interest in respect of a Global Security, will
immediately credit Participants' accounts with payments in amounts proportionate
to their respective beneficial interest in the principal amount of such Global
Security as shown on the records of such Depositary. The Company also expects
that payments by Participants to owners of beneficial interests in such Global
Security held through such Participants will be governed by standing
<PAGE>
-11-
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such Participants. None of the Company, the
Trustee for such Debt Securities or any paying agent or any registrar for such
Debt Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership interest
in a Global Security for such Debt Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
If a Depositary for Debt Securities of a series is at any time
unwilling or unable to continue as a Depositary and a successor Depositary is
not appointed by the Company within 90 days, the Company will issue Debt
Securities of such series in definitive form in exchange for the Global Security
or Debt Securities representing the Debt Securities of such series represented
by one or more Global Securities.
Interest and Foreign Currency
Principal, premium, if any, and interest will be payable, and the Debt
Securities will be transferable, in the manner described in the Prospectus
Supplement relating to such Debt Securities. If the principal of, or premium, if
any, or any interest on, any of the Debt Securities is payable in any foreign or
composite currency, the restrictions, elections, tax consequences, specific
terms and other information with respect to such Debt Securities and such
foreign or composite currency will be specified in the applicable Prospectus
Supplement.
Consolidation, Merger, Sale or Conveyance
The Indentures provide that the Company may not consolidate with or
merge into any other person or transfer all or substantially all of its assets
to any person, unless (i) the person is organized under the laws of the United
States or a State thereof, (ii) the person assumes by supplemental indenture all
obligations of the Company under the applicable Indenture and the Debt
Securities and any coupons issued under such Indenture; (iii) immediately after
giving effect to such transaction, no Event of Default, and no event which,
after notice or passage of time would become an Event of Default, exists; and
(iv) if, as a result of any such transaction, any property or assets of the
Company would become subject to a mortgage, pledge, lien, security interest or
other encumbrance which would not be permitted by the Senior Indenture, then the
Company or such person, as the case may be, secures the Senior Debt Securities
equally and ratably with or prior to all obligations secured by such Lien. The
successor shall be substituted for the Company and thereafter all obligations of
the Company under the applicable Indenture and the Debt Securities issued under
such Indenture shall terminate.
<PAGE>
-12-
Events of Default
The following shall constitute Events of Default with respect to Debt
Securities of any series: (i) default for a period of 30 days in payment of any
interest on the Debt Securities of that series when due; (ii) default in payment
of principal of (or premium, if any, on) the Debt Securities of that series when
due (whether at maturity, upon redemption or otherwise or in the making of any
required sinking fund payment); (iii) default in performance of any other
covenant, condition or agreement in the Debt Securities of that series or in the
applicable Indenture continued for 60 days after written notice as provided in
the Indenture; (iv) a default under any instrument or other evidence of
indebtedness for money borrowed by the Company (including a default with respect
to Debt Securities of any series other than that series) or under any instrument
(including the applicable Indenture) under which there may be issued or by which
there may be evidenced or secured any indebtedness for money borrowed by the
Company, which default shall involve an amount in excess of $50,000,000 and
shall constitute a failure to pay such indebtedness when due and payable after
the expiration of any grace period and shall have resulted in the acceleration
of such indebtedness, if such accelerated indebtedness is not discharged, or
such acceleration is not annulled, within 30 days after written notice as
provided in the Indenture; and (v) certain events of bankruptcy, insolvency or
reorganization.
If an Event of Default with respect to Debt Securities of any series
at the time outstanding shall occur and be continuing, the Trustee or the
holders of at least 25% in principal amount of the outstanding Debt Securities
of that series may declare the principal and accrued interest of all of the Debt
Securities of that series to be due and payable immediately.
Each Indenture provides that the Trustee will, within 90 days after
the occurrence of a default, give to holders of the Debt Securities of the
series with respect to which a default has occurred notice of all uncured
defaults known to it; but, except in the case of a default in the payment of
principal or interest on Debt Securities of that series, the Trustee shall be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interest of the holders.
Each Indenture contains a provision entitling the Trustee, subject to
the duty of the Trustee during a default to act with the required standard of
care, to be indemnified by the holders of Debt Securities of the series with
respect to which a default has occurred before proceeding to exercise any right
or power under such Indenture at the request of such holders. Subject to such
right of indemnification, each Indenture provides that the holders of a majority
in principal amount of the outstanding Debt Securities of a series may direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred upon the Trustee with
respect to such series.
<PAGE>
-13-
The Company will be required to furnish to the Trustee annually a
statement as to the fulfillment by the Company of all of its obligations under
the applicable Indenture.
Modification of Indentures
Unless the resolution establishing the terms of a series otherwise
provides, the applicable Indenture and the Debt Securities of any series may be
amended and any default may be waived as follows: the Debt Securities and the
applicable Indenture may be amended with the consent of holders of a majority in
principal amount of the Debt Securities of all series affected voting as one
class. A default with respect to the Debt Securities of a series may be waived
with the consent of the holders of a majority in principal amount of the Debt
Securities of such series. However, without the consent of each holder affected,
no amendment or waiver may (1) reduce the amount of Debt Securities whose
holders must consent to an amendment or waiver, (2) reduce the interest on or
change the time for payment of interest on any Debt Security, (3) change the
fixed maturity of any Debt Security, (4) reduce the principal of any
non-Discounted Security or reduce the amount of principal of any Discounted
Security that would be due on acceleration thereof, (5) change the currency in
which principal or interest on a Debt Security is payable, (6) waive any default
in payment of interest on or principal of a Debt Security or (7) change certain
provisions of the applicable Indenture regarding waiver of past defaults and
amendments with the consent of holders other than to increase the principal
amount of Debt Securities required to consent. Without the consent of any
holder, the applicable Indenture or the Debt Securities may be amended to cure
any ambiguity, omission, defect or inconsistency; to provide for the assumption
of Company obligations to holders in the event of a merger or consolidation
requiring such assumption; to provide that specific provisions in the applicable
Indenture not apply to a series of Debt Securities not previously issued; to
create a series and establish its terms; to provide for a separate Trustee for
one or more series; or to make any change that does not materially adversely
affect the rights of any holder.
Defeasance
Debt Securities of a series may be defeased in accordance with their
terms and, unless the resolution establishing the terms of the series otherwise
provides, as set forth below. The Company at any time may terminate as to a
series all of its obligations (except for certain obligations with respect to
the defeasance trust, bearer securities, securityholder lists, compensation and
indemnity and replacement of the Trustee and obligations to register the
transfer or exchange of a Debt Security, to replace destroyed, lost or stolen
Debt Securities and to maintain agencies in respect of the Debt Securities) with
respect to the Debt Securities of a series and the applicable Indenture ("legal
defeasance"). The Company at any time may terminate its obligations with respect
to the Debt Securities of a series under the covenants described under
"Covenants" ("covenant defeasance").
<PAGE>
-14-
The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option. If the Company exercises
its legal defeasance option, the Debt Securities of a series may not be
accelerated because of an Event of Default. If the Company exercises its
covenant defeasance option, the Debt Securities of a series may not be
accelerated as a result of noncompliance with the covenants described under
"Covenants."
To exercise either option as to the Debt Securities of a series, the
Company must irrevocably deposit in the trust (the "defeasance trust") with the
applicable Trustee money or U.S. Government Obligations for the payment of
principal, premium, if any, and interest on the Debt Securities of the series to
redemption or maturity and must comply with certain other conditions. In
particular, if the defeasance occurs more than twelve months prior to the
earlier of the maturity or the date fixed for redemption of the series to be
defeased, the Company must obtain an opinion of tax counsel that the defeasance
will not result in recognition for Federal income tax purposes of any gain or
loss to holders of the Debt Securities of the series. "U.S. Government
Obligations" are direct obligations of the United States of America which have
the full faith and credit of the United States of America pledged for payment
and which are not callable at the issuer's option, or certificates representing
an ownership interest in such obligations.
Conversion Rights of Debt Securities
If so indicated in the applicable Prospectus Supplement with respect
to a particular series of Debt Securities, holders of such series of Debt
Securities will be entitled, at any time prior to the date set forth in the
Prospectus Supplement relating to such series, subject to prior redemption, to
convert such Debt Securities or portions thereof (which are $1,000 or integral
multiples thereof) into or for Common Stock of the Company, at the conversion
rate stated in the Prospectus Supplement, subject to adjustment as described
below or in the applicable Prospectus Supplement. The right to convert Debt
Securities called for redemption will terminate at the close of business on the
redemption date, and will be lost if not exercised prior to that time unless the
Company defaults in making the payments due upon redemption.
To convert a Debt Security, a holder must (i) complete and manually
sign the conversion notice (the "Conversion Notice") on the back of the Debt
Security (or complete and manually sign a facsimile thereof) and deliver such
notice to the Conversion Agent or any other office or agency maintained for such
purpose, (ii) surrender the Debt Security to the Conversion Agent or at such
other office or agency by physical delivery, (iii) if required, furnish
appropriate endorsements and transfer documents, and (iv) if required, pay all
transfer or similar taxes. The date by which such notice shall have been
<PAGE>
-15-
received and the Debt Security shall have been so surrendered to the Conversion
Agent is the Conversion Date. Such Conversion Notice shall be irrevocable and
may not be withdrawn by a holder for any reason.
Unless otherwise provided in the applicable Prospectus Supplement, the
conversion rate is subject to adjustment upon the occurrence of certain events,
including the issuance of Common Stock as a dividend or distribution on the
Common Stock; subdivisions, combinations and certain reclassifications of Common
Stock; the issuance to all holders of Common Stock of shares or certain rights
or warrants to subscribe for shares of Common Stock at less than the then
current market price per share; and the distribution to all holders of Common
Stock of any assets (other than cash dividends paid out of retained earnings) or
debt securities or any rights or warrants to purchase assets or debt securities.
The Company may also increase the conversion rate at any time, temporarily or
otherwise, by any amount so long as the conversion rate does not cause Common
Stock to be issued at less than its par value.
No adjustment in the conversion rate will be required unless such
adjustment would require a change of at least 1% of the conversion rate then in
effect; provided, however, that any adjustment that would otherwise be required
to be made shall be carried forward and taken into account in any subsequent
adjustment.
If any Debt Security is converted between the record date for the
payment of interest and the next succeeding interest payment date, such Debt
Security must be accompanied by funds equal to the interest payable on such next
succeeding interest payment date on the principal amount so converted (unless
such Debt Security shall have been called for redemption during such period, in
which case no such payment shall be required), and the interest on the principal
amount of the Debt Security being converted will be paid on such next succeeding
interest payment date to the registered holder of such Debt Security on the
immediately preceding record date. A Debt Security converted on an interest
payment date need not be accompanied by any payment, and the interest on the
principal amount of the Debt Security being converted will be paid on such
interest payment date to the registered holder of such Debt Security on the
immediately preceding record date, except as otherwise provided above. Subject
to the aforesaid right of the registered holder to receive interest, no payment
or adjustment will be made on conversion for interest accrued on the converted
Debt Security or for dividends on the Common Stock issued on conversion.
Governing Law
The Indentures and the Debt Securities will be governed by, and
construed in accordance with, the laws of the State of New York.
<PAGE>
-16-
DESCRIPTION OF CAPITAL STOCK
General
The Company is authorized to issue 350,000,000 shares of Common Stock,
par value $1.00 per share, and 5,000,000 shares of Preferred Stock, without par
value. All outstanding shares of Common Stock are fully paid and non-assessable.
As of July 10, 1998, there were 144,507,161 shares of Common Stock outstanding.
Common Stock
Subject to the rights of the holders of Preferred Stock, the holders
of the Common Stock of the Company are entitled to receive dividends from funds
legally available therefor when, as and if declared by the Board of Directors,
and are entitled upon liquidation to share ratably in all assets of the Company
after satisfaction in full of the prior rights of creditors of the Company and
holders of any Preferred Stock.
The holders of the Common Stock are entitled to one vote for each
share held on all matters as to which shareholders are entitled to vote. The
holders of the Common Stock do not have cumulative voting rights, any
preferential or preemptive right with respect to any securities of the Company,
or any conversion rights. The Common Stock is not subject to redemption. The
outstanding shares of Common Stock are fully paid and non-assessable.
The Common Stock is listed on the following stock exchanges: New York,
Chicago (options), London, Zurich, Basel and Geneva. The transfer agent for the
Common Stock is ChaseMellon Shareholder Services, L.L.C.
Preferred Stock
The Company is authorized to issue 5,000,000 shares of Preferred Stock
which may be issued from time to time in one or more series with such rights,
preferences and limitations as are determined by the Company's Board of
Directors. Satisfaction of any dividend preferences of outstanding Preferred
Stock would reduce the amount of funds available for the payment of dividends on
Common Stock. Also, holders of Preferred Stock would normally be entitled to
receive a preference payment before any payment is made to holders of Common
Stock in the event of any liquidation, dissolution or winding-up of the Company.
As of the date of this Prospectus, no shares of Preferred Stock are issued or
outstanding.
<PAGE>
-17-
Supermajority Voting Requirements
and Classified Board of Directors
The Company's Restated Certificate of Incorporation provides that, in
order to approve a merger or consolidation with or into, or a sale or other
transfer of all or a portion of the assets of the Company other than in the
ordinary course of business to, or the issuance or transfer of voting securities
of the Company as part of an exchange or acquisition of the securities or assets
(including cash) of, any entity which is the beneficial owner of 5% or more of
the outstanding shares of the Company entitled to vote in the election of
Directors, the affirmative vote of not less than 80% of the outstanding shares
of Common Stock (including at least 50% of the outstanding shares of Common
Stock held by stockholders other than such 5% beneficial owner) is required. The
foregoing provision would not be applicable if the proposed transaction was
approved by a majority of the Board of Directors of the Company who had been
duly elected and acting as members of the Board prior to the time such 5%
beneficial owner became the beneficial owner of 5% or more of the outstanding
shares of Common Stock.
The Company's Restated Certificate of Incorporation also provides for
a classified Board of Directors divided into three classes. All classes shall be
as nearly equal in number as possible and no class shall include less than two
Directors, with one class of Directors to be elected each year for a three-year
term.
Neither provision described in the foregoing paragraphs can be amended
without the affirmative vote of the holders of at least 80% of the outstanding
shares of Common Stock (including at least 50% of the outstanding shares of
Common Stock held by stockholders other than a 5% beneficial owner).
The Company believes that the classified Board and such 80% voting
requirements are desirable to assure continuity in Board membership and in
policy formulated by the Board. Such provisions will serve to moderate the pace
of any change in control of the Company by extending the time required to elect
a majority of the Directors and will better enable the Board to protect the
interests of shareholders in the event that any person or corporation should
attempt to obtain control of the Company.
It is recognized, however, that the effect of such provisions is to
make it more difficult to change Directors even should this be desired by a
majority of the Company's stockholders, and may be to render more difficult or
to discourage a merger, tender offer or proxy contest or the assumption of
control by a holder of a large block of Company securities.
The aforementioned 80% voting requirement for approval of specified
transactions with 5% beneficial owners, absent Board approval, provides the
Board and minority stockholders with a veto power over such transactions. Such
<PAGE>
-18-
provision would be beneficial to Company management when confronted with a
hostile tender offer and may deter such offers, thus depriving a stockholder of
the opportunity to dispose of his or her shares to a hostile tender offeror at a
price substantially in excess of market value. The deterrence of such offers
also has the effect of supporting existing management in its present position.
Directors' Liability
The Company's Restated Certificate of Incorporation, as amended,
provides that, to the fullest extent permitted by the Delaware General
Corporation Law ("DGCL"), no Director of the Company will be liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty as
a Director, except for liability (i) for any breach of the Director's duty of
loyalty to the Company or its shareholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) in respect of certain unlawful dividend payments or stock redemptions
or repurchases, or (iv) for any transaction from which the Director derived an
improper personal benefit. The effect of such provisions in the Restated
Certificate of Incorporation will be to eliminate the rights of the Company and
its stockholders (including through stockholders' derivative suits on behalf of
the Company) to recover monetary damages against a Director for breach of
fiduciary duty as a Director (including breaches resulting from negligent or
grossly negligent behavior) except in the situations described in clauses (i)
through (iv) above.
The By-Laws of the Company, as amended, provide that that each person
who was or is made a party or is threatened to be made a party to or is involved
in any actual or threatened action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such person is or
was a director or officer of the Company or is or was serving at the request of
the Company as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or agent
or in any other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the DGCL. This right to indemnification shall also include
the right to be paid by the Company the expenses incurred in connection with any
such proceeding in advance of its final disposition to the fullest extent
authorized by the DGCL. This right to indemnification shall be a contract right.
The Company may, by action of the Company Board, provide indemnification to such
of the employees and agents of the Company to such extent and to such effect as
the Company Board determines to be appropriate and authorized by the DGCL.
<PAGE>
-19-
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities (i) through underwriters or
dealers; (ii) through agents; (iii) directly to purchasers; or (iv) through a
combination of any such methods of sale. Any such underwriter, dealer or agent
may be deemed to be an underwriter within the meaning of the Securities Act of
1933, as amended. The Prospectus Supplement relating to any offering of Debt
Securities will set forth their offering terms, including the name or names of
any underwriters, the purchase price of the Debt Securities and the proceeds to
the Company from such sale, any underwriting discounts, commissions and other
items constituting underwriters' compensation, any initial public offering
price, and any underwriting discounts, commissions and other items allowed or
reallowed or paid to dealers and any securities exchanges on which the Debt
Securities may be listed.
If underwriters are used in the sale, the Debt Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, at fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, or at prices
related to such prevailing market prices, or at negotiated prices. The Debt
Securities may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by one or more of
such firms. Unless otherwise set forth in the Prospectus Supplement, the
obligations of the underwriters to purchase the Debt Securities will be subject
to certain conditions precedent and the underwriters will be obligated to
purchase all the offered Debt Securities, if any are purchased. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
Debt Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent 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 will be
set forth, in the accompanying Prospectus Supplement. Unless otherwise indicated
in the Prospectus Supplement, any such agent will be acting on a reasonable
efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will
authorize underwriters, dealers or agents to solicit offers by certain specified
institutions to purchase Debt Securities from the Company at the public offering
price set forth in the accompanying Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject to any conditions set forth in the
accompanying Prospectus Supplement and such Prospectus Supplement will set forth
the commission payable for solicitation of such contracts. The underwriters and
other persons soliciting such contracts will have no responsibility for the
validity or performance of any such contracts.
<PAGE>
-20-
Underwriters, dealers and agents may be entitled, under agreements
entered into with the Company, to indemnification by the Company against certain
civil liabilities, including liabilities under the Securities Act of 1933, as
amended, or to contribution by the Company to payments they may be required to
make in respect thereof.
Certain of the underwriters, agents or dealers and their associates
may be customers of, or engage in transactions with and perform services for,
the Company in the ordinary course of business.
LEGAL MATTERS
Certain legal matters in connection with the Debt Securities will be
passed upon for the Company by Cahill Gordon & Reindel (a partnership including
a professional corporation), New York, New York.
EXPERTS
The consolidated balance sheets as of December 31, 1997 and 1996 and
the consolidated statements of earnings, shareholders' equity and cash flows for
each of the three years in the period ended December 31, 1997, incorporated by
reference in this Prospectus and elsewhere in the Registration Statement, have
been incorporated herein in reliance on the report of Pricewaterhouse Coopers
L.L.P., independent accountants, given on the authority of that firm as experts
in accounting and auditing.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission
Registration Fee .................................... $88,500
Cost of Printing....................................... 50,000
Rating Agency Fees..................................... 110,000
Independent Auditors' Services and
Expenses............................................. 25,000
Legal Services and Expenses (including
Blue Sky fees and expenses).......................... 40,000
Trustees' Fees and Expenses............................ 10,000
Miscellaneous.......................................... 5,000
--------
Total........................ $328,500
========
Other than the Securities and Exchange Commission Registration Fee,
all amounts set forth above are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides for
indemnification of directors and officers against any legal liability (other
than liability arising from derivative suits) if the officer or director acted
in good faith and in a manner that he or she reasonably believed to be in or not
opposed to the best interests of the corporation. In criminal actions, the
officer or director must also have no reasonable cause to believe that his or
her conduct was unlawful. A corporation may indemnify an officer or director in
a derivative suit if the officer or director acted in good faith and in a manner
that he or she reasonably believed to be in or not opposed to the best interests
of the corporation unless the officer or director is found liable to the
corporation. However, if the Court of Chancery or the court in which the officer
or director was found liable determines that the officer or director is fairly
and reasonably entitled to indemnity, then the Court of Chancery or such other
court may permit indemnity for such officer or director to the extent it deems
proper.
The Registrant's Certificate of Incorporation provides that a director
of the Registrant shall not be personally liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability for (i) any breach of the director's duty of loyalty to the
Registrant or its stockholders, (ii) acts or omissions not in good faith or that
II-1
<PAGE>
involve intentional misconduct or a knowing violation of law, (iii) payment of
an improper dividend or for an improper repurchase or redemption of the stock of
the Corporation in violation of Section 174 of the Delaware General Corporation
Law or (iv) transactions in which the director derives any improper personal
benefit. The Registrant's By-Laws provide for the indemnification of each
officer and director of the Company to the fullest extent permitted by the
Delaware General Corporation Law.
Item 16. EXHIBITS.
1.1 -- Form of Underwriting Agreement (incorporated by
reference to Registration Statement No. 333-04389
filed with the Securities and Exchange Commission
on May 23, 1996).
1.2 -- Form of Distribution Agreement (incorporated by
reference to Registration Statement No. 33-58507
filed with the Securities and Exchange Commission
on April 10, 1995).
4.1 -- Form of Senior Indenture (including form of Senior
Debt Security) (incorporated by reference to
Registration Statement No. 333-04389 filed with the
Securities and Exchange Commission on May 23, 1996).
4.2 -- Form of Subordinated Indenture (including form of
Subordinated Debt Security) (incorporated by
reference to Registration Statement No. 333-04389
filed with the Securities and Exchange Commission
on May 23, 1996).
4.3 -- Certificate of Incorporation (incorporated by
reference to Form 10, as amended on Form 8-K filed
with the Securities and Exchange Commission on
May 19, 1981).
II-2
<PAGE>
4.4 -- By-laws of the Company as amended September 17,
1981 (incorporated by reference to Form 10-Q for
the quarter ended September 30, 1981).
4.5 -- Certificate of Amendment to the Restated
Certificate of Incorporation of the Company
(incorporated by reference to Form 10-K for the
year ended December 31, 1987).
4.6 -- Article XVII of the Registrant's By-laws as amended
on May 2, 1988 (incorporated by reference to Form
8-K filed with the Securities and Exchange
Commission on May 21, 1988).
4.7 -- Certificate of Amendment to the Restated
Certificate of Incorporation of the Company
(incorporated by reference to Form 10-Q for the
quarter ended March 31, 1993).
4.8 -- Certificate of Amendment to the Restated
Certificate of Incorporation of the Company, filed
with the State of Delaware, Office of the Secretary
of State on May 2, 1996 (incorporated by reference
to Form 10-Q filed with the Securities and Exchange
Commission on May 14, 1996).
4.9 -- By-laws of the Company as amended June 12, 1997
(incorporated by reference to Form 10-Q filed with
the Securities and Exchange Commission on August
13, 1997)
5.1 -- Opinion of Cahill Gordon & Reindel.*
12.1 -- Statement of Computation of Ratio of Earnings to
Fixed Charges.
23.1 -- Consent of Coopers & Lybrand L.L.P.*
II-3
<PAGE>
23.2 -- Consent of Cahill Gordon & Reindel (included as
part of Exhibit 5.1).
24.1 -- Power of Attorney.*
25.1 -- Form T-1 Statement of Eligibility and Qualification
of the Senior Trustee under the Trust Indenture Act
of 1939, as amended (incorporated by reference to
Registration Statement No. 333-04389 filed with the
Securities and Exchange Commission on May 23, 1996).
25.2 -- Form T-1 Statement of Eligibility and Qualification
of the Subordinated Trustee under the Trust
Indenture Act of 1939, as amended (to be filed by
amendment when the Subordinated Trustee is
selected).
* Previously filed.
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;
II-4
<PAGE>
provided, however, that the undertakings set forth in clauses (i) and (ii) of
this paragraph shall not apply if the information required to be included in
such post-effective amendment is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in this 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 herein 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 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 of 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.
(d) The undersigned Registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act (the "Act") in
accordance with the rules and regulations prescribed by the Commission under
Section 305(b)(2) of the Act.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, 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
amendment to the Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized in the City of Iselin, State of New
Jersey, on the 26th day of August, 1998.
ENGELHARD CORPORATION
By: /s/ Thomas P. Fitzpatrick
----------------------------------
Thomas P. Fitzpatrick
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
* Chairman, Chief Executive Officer and August 26, 1998
- ------------------------------------
Orin R. Smith Director (Principal Executive Officer)
/s/ Thomas P. Fitzpatrick Senior Vice President and Chief August 26, 1998
- ----------------------------------- Financial Officer (Principal
Thomas P. Fitzpatrick Financial Officer)
/s/ David C. Wajsgras Controller (Principal Accounting August 26, 1998
- ------------------------------------ Officer)
David C. Wajsgras
* Director August 26, 1998
- ------------------------------------
Linda G. Alvarado
* Director August 26, 1998
- ------------------------------------
Marion H. Antonini
II-6
<PAGE>
* Director August 26, 1998
- ------------------------------------
Anthony W. Lea
* Director August 26, 1998
- ------------------------------------
William R. Loomis, Jr.
* Director August 26, 1998
- ------------------------------------
James V. Napier
* Director August 26, 1998
- ------------------------------------
Norma T. Pace
* Director August 26, 1998
- ------------------------------------
Barry W. Perry
* Director August 26, 1998
- ------------------------------------
Reuben F. Richards
* Director August 26, 1998
- ------------------------------------
Henry R. Slack
* Director August 26, 1998
- ------------------------------------
Douglas G. Watson
</TABLE>
*By: /s/ Arthur A. Dornbusch
------------------------------
Arthur A. Dornbusch
Attorney-in-Fact
II-7
<PAGE>
<TABLE>
<CAPTION>
Computation of Ratio of Earnings to Fixed Charges
(Dollars in Thousands)
Six Months Ended Years Ended December 31,
June 30, -----------------------------------------------------
1998 1997 1996 1995 1994 1993
----------- -----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earnings from continuing operations
before provision for income taxes $135,725 $85,812 $209,955 $185,312 $157,306 ($4,709)
Add/(deduct)
Portion of rents representative of 2,300 4,600 3,900 4,700 4,800 4,500
the interest factor
Interest on indebtedness 27,484 52,776 45,009 31,326 21,954 13,696
Equity dividends 1,762 3,803 2,515 3,411 3,800 2,600
Equity in (earnings) losses of (7,473) 47,833 5,008 (695) (632) (3,443)
affiliates --------- -------- -------- -------- -------- --------
Earnings, as adjusted $159,790 $194,824 $266,387 $224,054 $187,228 $12,644
========= ======== ======== ======== ======== =======
Fixed Charges
Portion of rents representative of $2,300 $4,600 $3,900 $4,700 $4,800 $4,500
the interest factor
Interest on indebtedness 27,484 52,776 45,009 31,326 21,954 13,696
Capitalized interest 500 651 875 784 528 --
--------- -------- -------- -------- -------- --------
Fixed charges $30,284 $58,027 $49,784 $36,810 $27,282 $18,196
======== ======= ======= ======= ======= =======
Ratio of Earnings to Fixed Charges 5.28 3.36 5.35 6.09 6.86 -- (b)
========= ======== ======== ======== ======== =======
</TABLE>
(a) Earnings in 1997 were negatively impacted by special and other charges of
$149.6 million for a variety of events. Without such charges, the ratio of
earnings to fixed charges would have been 5.94.
(b) Earnings in 1993 were insufficient to cover fixed charges by $5.6 million.
Earnings in 1993 were negatively impacted by a special charge of $148
million for the realignment and consolidation of businesses and
environmental matters. Without such charge, the ratio of earnings to fixed
charges would have been 8.83.
