<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 14, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE GILLETTE COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 3420 04-1366970
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification Number)
organization)
PRUDENTIAL TOWER BUILDING
BOSTON, MASSACHUSETTS 02199
(617) 421-7000
(Address, of principal executive offices, including zip code)
JILL C. RICHARDSON
SECRETARY
THE GILLETTE COMPANY
PRUDENTIAL TOWER BUILDING
BOSTON, MASSACHUSETTS 02199
(617) 421-7000
(Name and address, including zip code, and telephone
number, including area code, of agent for service)
</TABLE>
------------------------
Please send copies of all communications to:
<TABLE>
<S> <C> <C> <C>
JOSEPH E. MULLANEY, ESQ. MARY E. WEBER, ESQ. ALAN DEAN, ESQ. DAVID J. SORKIN, ESQ.
THE GILLETTE COMPANY ROPES & GRAY DAVIS POLK & WARDWELL SIMPSON THACHER & BARTLETT
PRUDENTIAL TOWER BUILDING ONE INTERNATIONAL PLACE 450 LEXINGTON AVENUE 425 LEXINGTON AVENUE
BOSTON, MASSACHUSETTS 02199 BOSTON, MASSACHUSETTS 02110 NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10017
(617) 421-7000 (617) 951-7000 (212) 450-4000 (212) 455-2000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effectiveness of the Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
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 under 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: [ ]
------------------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED(1) PER SHARE(2) PER SHARE(2) FEE
- ----------------------------------------------------------------------------------------------------------------------
Common Stock -- $1.00 Par Value
(including Preferred Stock Purchase
Rights)............................... 11,500,000 shares $99.34375 $1,142,453,125 $337,185
======================================================================================================================
</TABLE>
(1) Includes 1,500,000 shares which may be sold pursuant to the Underwriters'
overallotment option.
(2) Estimated solely for the purpose of determining the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933. The maximum
price per share information is based on the average of the high and the low
sale price on January 9, 1998.
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 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION
DATED JANUARY 14, 1998
PROSPECTUS
10,000,000 Shares
[GILLETTE LOGO]
Common Stock
(par value $1.00 per share)
All of the shares of Common Stock (the "Common Stock") of The Gillette Company
(the "Company") offered hereby (the "Offering") are being sold by the Selling
Stockholders (the "Selling Stockholders") identified herein. See "Selling
Stockholders." The Company will not receive any of the proceeds from the sale of
the Common Stock by the Selling Stockholders. The Common Stock is listed on the
New York Stock Exchange (the "NYSE") under the symbol "G". On January 13, 1998,
the last reported sale price of the Common Stock on the NYSE Composite
Transactions Tape was $102.00 per share. See "Price Range of Common Stock and
Dividends."
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.
<TABLE>
<CAPTION>
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PROCEEDS TO
PRICE TO UNDERWRITING SELLING
PUBLIC DISCOUNT(1) STOCKHOLDERS(2)
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<S> <C> <C> <C>
Per Share $ $ $
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Total (3) $ $ $
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</TABLE>
(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(2) The Company will pay certain expenses of the Selling Stockholders in
connection with the Offering.
(3) The Selling Stockholders have granted the Underwriters an option,
exercisable within 30 days after the date of this Prospectus, to purchase up to
an additional 1,500,000 shares of Common Stock, on the same terms as set forth
above, solely to cover overallotments, if any. If such option is exercised in
full, the total Price to Public, Underwriting Discount and Proceeds to Selling
Stockholders will be $ , $ , and $ ,
respectively. See "Underwriting."
The shares of Common Stock offered by this Prospectus are offered by the
Underwriters, subject to prior sale, when, as and if received and accepted by
the Underwriters and subject to approval of certain legal matters by Davis Polk
& Wardwell, counsel for the Underwriters. It is expected that delivery of the
shares of Common Stock offered hereby will be made against payment therefor on
or about , 1998 at the offices of J.P. Morgan Securities Inc., 60
Wall Street, New York, New York.
J.P. MORGAN & CO.
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
, 1998
<PAGE> 3
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, SHARES OF THE COMMON STOCK IN THE OPEN MARKET.
SEE "UNDERWRITING."
No person is authorized in connection with the Offering to give any information
or to make any representation not contained or incorporated by reference in this
Prospectus, and any information or representation not contained or incorporated
herein must not be relied upon as having been authorized by the Company, the
Selling Stockholders or any Underwriter. This Prospectus relates solely to the
Common Stock and it may not be used or relied on in connection with any other
offer or sale of securities of the Company. This Prospectus does not constitute
an offer to sell or a solicitation of any offer to buy by any person in any
jurisdiction in which it is unlawful for such person to make such an offer or
solicitation. Neither the delivery of this Prospectus at any time nor any sale
made hereunder shall under any circumstance imply that the information herein is
correct as of any date subsequent to the date hereof.
No action has been or will be taken by the Company or any Underwriter that would
permit a public offering of the Common Stock or possession or distribution of
this Prospectus in any jurisdiction where action for that purpose is required,
other than in the United States. Persons into whose possession this Prospectus
comes are required by the Company and the Underwriters to inform themselves
about and to observe any restrictions as to the Offering of the Common Stock and
the distribution of this Prospectus.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Available Information.................... 3
Incorporation of Certain Documents by
Reference.............................. 3
The Company.............................. 4
Use of Proceeds.......................... 5
Price Range of Common Stock and
Dividends.............................. 5
Capitalization........................... 6
<CAPTION>
PAGE
<S> <C>
Selected Consolidated Financial Data..... 7
Selling Stockholders..................... 8
Description of Capital Stock............. 9
Underwriting............................. 12
Legal Matters............................ 13
Experts.................................. 13
</TABLE>
2
<PAGE> 4
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"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549 and at its regional offices at
500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and at 7 World
Trade Center, 13th Floor, New York, New York 10048. Copies of such materials can
be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, on payment of prescribed charges. The
Company makes filings of reports, proxy statements and other information
pursuant to the Exchange Act with the Commission electronically, and such
materials may be inspected and copied at the Commission's Web site
(http://www.sec.gov). In addition, such material filed by the Company can be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a registration statement on Form S-3
(the "Registration Statement") under the Securities Act, with respect to the
shares of Common Stock offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which have
been omitted in accordance with the rules and regulations of the Commission, and
the exhibits relating thereto, which have been filed with the Commission. Copies
of the Registration Statement and the exhibits are on file at the offices of the
Commission and may be obtained upon payment of the fees prescribed by the
Commission, or examined without charge at the public reference facilities of the
Commission described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously or simultaneously filed with the Commission
by the Company are incorporated herein by reference and made a part hereof:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1996.
(2) The Company's Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 1997, June 30, 1997 and September 30, 1997.
(3) The Company's Current Report on Form 8-K filed on September 22, 1997.
(4) The description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A/A filed on November 12, 1996.
All documents subsequently filed by the Registrant pursuant to Section 13(a),
Section 13(c), Section 14 and Section 15(d) of the Exchange Act after the date
of this Prospectus prior to the termination of the Offering shall be deemed
incorporated herein by reference from the date of filing of such documents. Any
statement contained in a document 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 that also is 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, upon the written or oral request of such person, a copy of any or
all of the documents that have been incorporated by reference in this
Prospectus, other than exhibits to such documents. Such documents may be
obtained by writing to The Gillette Company, Prudential Tower Building, Boston,
Massachusetts 02199, Attention: Corporate Secretary, or by calling (617)
421-7000.
3
<PAGE> 5
THE COMPANY
The Company's businesses range across several industry segments, including
blades and razors, Duracell products (alkaline batteries for consumer products),
Braun products (electric shavers, small household appliances, hair care
appliances and oral care appliances), toiletries and cosmetics, stationery
products, and Oral-B products (oral care products).
The approximate percentages of consolidated net sales for each of the Company's
business segments are set forth below:
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<TABLE>
<CAPTION>
TOILETRIES
BLADES DURACELL BRAUN & STATIONERY ORAL-B
& RAZORS PRODUCTS PRODUCTS COSMETICS PRODUCTS PRODUCTS
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Nine months ended Sep-
tember 30, 1997 29% 24% 17% 15% 9% 6%
</TABLE>
Founded in 1901, The Gillette Company is the world leader in male grooming
products, including blades and razors and shaving preparations. The Company also
holds the number one position worldwide in selected female grooming products,
such as wet shaving products and hair epilation devices. The Company is the
world's top seller of writing instruments and correction products, toothbrushes
and oral care appliances. Duracell is the world leader in alkaline batteries for
consumer products.
The Company has a wide array of well-established brands including razor and
blade products under the Sensor Excel, Sensor, Atra, Trac II, Custom Plus and
Good News names, Duracell consumer batteries, Braun electric shavers and
appliances, Gillette Series, Right Guard, Soft & Dri and Dry Idea deodorant
antiperspirant brands, White Rain hair care line, Jafra cosmetics, Parker, Paper
Mate, Waterman and Flair writing instruments, Liquid Paper correction products
and Oral-B dental products.
The Company is divided into four operating groups. The North Atlantic Group is
responsible for marketing the Company's razor and blade and toiletries products
in Western Europe and North America. The International Group is responsible for
marketing the Company's razor and blade, battery, toiletries and stationery
products outside Western Europe and North America. The Duracell North Atlantic
Group is responsible for marketing the Company's battery products in Western
Europe and North America. The Diversified Group is responsible for marketing the
Company's Braun, Oral B and Jafra products worldwide and the Company's
stationery products in Western Europe and North America.
For the nine months ended September 30, 1997, the Company's consolidated net
sales, profit from operations and net income were $6.9 billion, $1.56 billion
and $956 million, respectively.
The executive offices of the Company are located at Prudential Tower Building,
Boston, Massachusetts 02199, and the Company's telephone number is (617)
421-7000.
4
<PAGE> 6
USE OF PROCEEDS
The Company will not receive any of the proceeds of the Common Stock offered
hereunder by the Selling Stockholders.
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Common Stock is listed for trading on the New York Stock Exchange under the
symbol "G". The Common Stock is also listed on the Boston, Midwest and Pacific
stock exchanges in the United States. The following table sets forth the high
and low sale prices of the Common Stock as reported on the NYSE Composite
Transactions Tape, and the dividends paid on the Common Stock, for the periods
indicated:
<TABLE>
<CAPTION>
-----------------------------------------
DIVIDENDS
PRICE RANGE PAID PER
HIGH LOW SHARE(1)
---------- ---------- ----------
<S> <C> <C> <C>
YEARS ENDED DECEMBER 31,
1996:
First Quarter $ 57 7/8 $50 $ 0.150
Second Quarter 62 1/2 48 1/4 0.180
Third Quarter 72 1/4 55 1/4 0.180
Fourth Quarter 77 3/4 68 0.180
1997:
First Quarter 86 1/8 72 0.180
Second Quarter 99 5/8 72 1/4 0.215
Third Quarter 106 3/8 77 7/8 0.215
Fourth Quarter 102 5/16 83 7/8 0.215
1998:
First Quarter (through January , 1998)
</TABLE>
(1) In addition to the Company dividends shown in the table, pre-merger
dividends paid by Duracell International Inc. ("Duracell") in 1996 were $0.29
for each quarter.
The Board of Directors has declared a quarterly dividend of $0.215 per share
payable to holders of record on February 2, 1998. Purchasers of the Common Stock
offered hereby will not receive this dividend.
Future dividends will be determined by the Company's Board of Directors in light
of the earnings and financial condition of the Company and its subsidiaries and
other factors.
The last reported sale price of the Common Stock on the New York Stock Exchange
as of a recent date is set forth on the cover page of this Prospectus.
5
<PAGE> 7
CAPITALIZATION
The following table sets forth the capitalization of the Company and its
consolidated subsidiaries at September 30, 1997 as adjusted to give effect to
the sale of $300 million aggregate principal amount of notes by the Company in
November, 1997 and the use of the net proceeds of $299 million to reduce
short-term debt.
<TABLE>
<CAPTION>
------------------
AS OF
SEPTEMBER 30, 1997
AS ADJUSTED
------------------
<S> <C>
Dollars in millions
Loans Payable $ 421
Current Portion of Long-Term Debt 11
Long-Term Debt 1,782
Minority Interest 37
Contingent Redemption Value of Common Stock Put Options 43
Stockholders' Equity
8.0% Cumulative Series C ESOP Conv. Preferred, without par value
Issued: 155,306 shares 93
Unearned ESOP Compensation (21)
Common Stock, par value $1.00 per share
Authorized: 1,160,000,000 shares
Issued: 675,658,859 shares 676
Additional paid-in capital 1,233
Earnings reinvested in the business 4,867
Cumulative foreign currency translation adjustments (683)
Treasury stock, at cost: 115,581,641 shares (1,084)
---------
Total Stockholders' Equity 5,081
---------
Total Capitalization $ 7,375
=========
</TABLE>
6
<PAGE> 8
SELECTED CONSOLIDATED FINANCIAL DATA
The income statement and balance sheet data presented below for the nine months
ended September 30, 1997 and 1996 and as of September 30, 1997 and 1996,
respectively, were derived from the unaudited consolidated financial statements
of the Company incorporated herein by reference. The income statement and
balance sheet data presented below for each of the years in the three-year
period ended December 31, 1996 and as of December 31, 1996 and 1995,
respectively, were derived from the audited consolidated financial statements
and notes thereto incorporated herein by reference. The balance sheet data as of
December 31, 1994 was derived from the audited consolidated financial statements
and notes thereto of the Company for the year ended December 31, 1994 not
incorporated by reference herein. The Selected Consolidated Financial Data
should be read in conjunction with the audited consolidated financial statements
and notes thereto and the unaudited interim period consolidated financial
statements and notes thereto of the Company incorporated by reference herein.
The results for the nine month periods ended September 30, 1997 and September
30, 1996 are not necessarily indicative of the results for the entire year.
<TABLE>
<CAPTION>
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Millions of dollars, except share NINE MONTHS ENDED
data SEPTEMBER 30, YEAR ENDED DECEMBER 31,
and Percent of Net Sales 1997 1996 1996 1995 1994
----------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net Sales $6,902 $6,697 $9,698 $8,834 $7,935
Cost of Sales 2,614 2,501 3,682 3,324 2,918
Gross Profit 4,288 4,196 6,016 5,510 5,017
Selling, General and Administrative
Expenses 2,729 2,804 3,967 3,711 3,402
Profit from Operations 1,559 1,392 2,049(1) 1,799 1,615
Income before Income Taxes 1,488 1,315 1,938(1) 1,700 1,458
Net Income $ 956 $ 833 $1,232(1) $1,069 $ 919
Percent of Net Sales 13.9% 12.4% 12.7% 12.1% 11.6%
PER SHARE DATA:
Net Income per Common Share $ 1.71 $ 1.50 $ 2.22(1) $ 1.94 $ 1.67
Common Stock Dividends Declared(2) 0.43 0.36 0.72 0.60 0.50
</TABLE>
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<TABLE>
<CAPTION>
Millions of dollars, except share AT SEPTEMBER 30, AT DECEMBER 31,
data 1997 1996 1996 1995 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working Capital (3) $ 2,860 $2,529 $ 2,490 $2,159 $1,867
Net Property, Plant and Equipment 2,790 2,302 2,566 2,053 1,750
Total Assets 10,522 9,454 10,435 8,940 7,767
Total Debt 2,213 1,903 2,162 1,710 1,514
Total Stockholders' Equity 5,081 4,475 4,491 3,900 3,253
OTHER DATA:
Capital Expenditures $ 609 $ 521 $ 830 $ 593 $ 498
Weighted Average Shares Outstanding 558 553 554 550 548
</TABLE>
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(1) The information for the year ended December 31, 1996 is before costs related
to the Duracell merger, which reduced both Profit from Operations and Income
before Income Taxes by $413 million, and Net Income and Net Income per Common
Share by $283 million and $ .51 respectively.
(2) In addition to the Company dividends shown in the table, pre merger
dividends declared by Duracell were $ .87 for the nine months ended September
30, 1996 and $1.16, $1.04 and $.88 for the years ended December 31, 1996, 1995
and 1994, respectively.
(3) Working Capital equals current assets minus current liabilities (excluding
Loans Payable and Current Portion of Long-Term Debt).
7
<PAGE> 9
SELLING STOCKHOLDERS
The Selling Stockholders acquired the shares of Common Stock offered hereby from
the Company pursuant to an Agreement and Plan of Merger by and among the
Company, Alaska Acquisition Corp. and Duracell, pursuant to which Duracell
became a wholly-owned subsidiary of the Company.
Henry R. Kravis, a director of the Company, is a general partner of KKR
Associates, the sole general partner of each of the Selling Stockholders.
The following table sets forth certain information regarding ownership of the
Company's Common Stock by the Selling Stockholders at December 31, 1997.
<TABLE>
<CAPTION>
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SHARES OF COMMON
STOCK BENEFICIALLY NUMBER OF SHARES SHARES OF COMMON STOCK
OWNED PRIOR TO OF COMMON STOCK TO BE BENEFICIALLY OWNED
OFFERING OFFERED HEREBY(1) AFTER OFFERING
SELLING STOCKHOLDER NUMBER PERCENT NUMBER PERCENT NUMBER PERCENT
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
KKR Partners II, L.P. 817,927 0.146% 220,143 0.039% 597,784 0.107%
DI Associates, L.P. 36,336,472 6.483% 9,779,857 1.745% 26,556,615 4.738%
</TABLE>
- ---------------
(1) Assumes no exercise of the Underwriters' overallotment option. If the
overallotment option were exercised in full, KKR Partners II, L.P. would offer
253,164 shares of Common Stock and DI Associates, L.P. would offer 11,246,836
shares of Common Stock.
8
<PAGE> 10
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 1,160,000,000 shares of
Common Stock, $1.00 par value, and 5,000,000 shares of preferred stock, without
par value.
COMMON STOCK
Subject to the preferences of any outstanding preferred stock, the holders of
Common Stock are entitled to receive dividends when and as declared by the Board
of Directors and paid by the Company. The holders of Common Stock are entitled
to one vote per share and to share ratably, after provision for payment of
creditors and for any payments to which the holders of any outstanding preferred
stock may be entitled, in the assets of the Company in the event of any
liquidation, dissolution or winding-up of the Company. There is no cumulative
voting. Other than the preferred stock purchase rights referred to below,
holders of Common Stock have no preemptive or other subscription rights, and
there are no conversion, redemption or sinking fund provisions applicable
thereto. The Board of Directors is authorized to issue from time to time all of
the authorized and unissued shares of Common Stock.
BankBoston, N.A. is the registrar and transfer agent of the shares of the
Company's Common Stock.
At December 31, 1997, 560,469,356 shares of Common Stock were outstanding and
held of record by 53,680 holders.
PREFERRED STOCK
The Board of Directors is authorized to fix the terms of one or more series of
the class of preferred stock and to issue from time to time any or all of the
authorized and unissued shares of preferred stock. Issues of preferred stock may
limit or qualify the rights of holders of the Common Stock.
Series C ESOP Convertible Preferred Stock
At December 31, 1997, 154,156 shares of Series C ESOP Convertible Preferred
Stock, no par value per share ("ESOP Preferred Stock"), were issued and
outstanding. All of the issued and outstanding ESOP Preferred Stock is held by
the Company's Employee Stock Ownership Plan. The holders of the ESOP Preferred
Stock are entitled to receive cash dividends in the amount of 8% or $48.23 per
share per annum. Such dividends accrue whether or not declared and cumulate if
not paid when accrued. If full cumulative dividends on the ESOP Preferred Stock
have not been declared and paid or set apart for payment when due, the Company
may not pay dividends on any other class of stock ranking junior to the ESOP
Preferred Stock, including the Common Stock. Upon any liquidation, dissolution
or winding up of the Company, holders of ESOP Preferred Stock are entitled to
receive liquidating distributions in the amount of $602.875 per share, plus an
amount equal to all accumulated and unpaid dividends.
As of December 31, 1997 each share of ESOP Preferred Stock was convertible into
40 shares of Common Stock at $15.071875 per share, subject to adjustment for
stock dividends, stock splits and the like. In any matter submitted to a vote of
the holders of the Common Stock of the Company each share of ESOP Preferred
Stock is entitled to a number of votes equal to the number of shares of Common
Stock into which such share could be converted (whether or not then convertible)
on the record date for determining the stockholders entitled to vote.
The ESOP Preferred Stock is redeemable upon the occurrence of certain changes in
control or other events, at the option of the Company or the holder, depending
on the event, at varying prices not less than $602.875 per share plus
accumulated and unpaid dividends.
Preferred Stock Purchase Rights
Pursuant to a Renewed Rights Agreement dated as of December 14, 1995, effective
as of December 9, 1996, between the Company and the First National Bank of
Boston, as Rights Agent (the "Rights Agreement"), a right is
9
<PAGE> 11
attached to each outstanding share of Common Stock and each share of ESOP
Preferred Stock is entitled to 40 rights (all of such rights being referred to
collectively by the "Rights").
At December 31, 1997, the Company had 566,635,606 Rights outstanding as follows:
one Right for each share of Common Stock outstanding and a total of 6,166,250
Rights for the outstanding ESOP Preferred Stock. Each Right may be exercised to
purchase one ten-thousandth of a share of Series A Junior Participating
Preferred Stock (the "Series A Stock") for $225. The Rights will only become
exercisable, or separately transferable, on the earlier of the tenth business
day after the Company announces that a person has acquired 15% or more, or the
tenth business day after a tender offer commences that could result in ownership
of more than 15%, of the Company's Common Stock.
If any person acquires 15% or more of the Common Stock (except in an offer for
all of the Common Stock that has been approved by the Board of Directors), or in
the event of certain mergers or other transactions involving a 15% or more
stockholder, each Right not owned by that person or related parties will enable
its holder to purchase, at the Right's exercise price, Common Stock (or a
combination of Common Stock and other assets) having double that value. In the
event of certain merger or asset sale transactions with another party, similar
terms would apply to the purchase of that party's common stock.
The Rights, which have no voting power, expire on December 14, 2005, subject to
extension. Upon approval by the Board of Directors, the Rights may be redeemed
for $.01 each under certain conditions, which may change after any person
becomes a 15% stockholder.
The form of Rights Agreement between the Company and the Rights Agent specifying
the terms of the Rights has been filed with the Securities and Exchange
Commission as an exhibit to the Company's Form 8-K dated December 18, 1995,
incorporated by reference into the Company's Form 8A/A filed on November 12,
1996 and incorporated by reference herein. The foregoing description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement.
Series A Junior Participating Preferred Stock
The Board of Directors has reserved 400,000 shares of Series A Stock for
issuance upon exercise of the Rights, which shares have the following terms.
Each share of Series A Stock will be entitled, subject to the rights of holders
of any other series of preference stock having superior rights, to receive
cumulative quarterly cash dividends payable on the fifteenth day of January,
April, July and October in each year equal to the greater of (a) $20, or (b)
subject to certain anti-dilution adjustments, currently 800 times the aggregate
per share amount of all cash dividends, and 800 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock, declared on the Common Stock
since the immediately preceding quarterly dividend payment date on the Series A
Stock. Accrued but unpaid dividends shall not bear interest.
Holders of shares of Series A Stock shall, subject to certain anti-dilution
adjustments, be entitled to 800 votes currently on all matters submitted to a
vote of the Company's stockholders, voting together with the Common Stock as a
single class, except as otherwise required by law. In the event that, at the
time of any annual meeting of stockholders for the election of directors, the
amount of dividends in arrears upon the Series A Stock shall be equal to six
full quarterly dividends, the holders of shares of Series A Stock, voting
separately as a class, shall have the right to elect two members of the Board of
Directors, which right shall continue until all accrued dividends shall have
been paid. In addition, during such time as dividends on the Series A Stock are
in arrears as set forth above, the terms of the Series A Stock limit the
Company's ability to pay dividends and to redeem or repurchase or otherwise
acquire shares of its stock.
Upon any liquidation (voluntary or otherwise), dissolution or winding up of the
Company, holders of Series A Stock shall be entitled to receive, before any
distribution is made with respect to shares of stock ranking junior to the
Series A Stock, an amount equal to the greater of (a) $200 per share, or (b)
subject to certain anti-dilution adjustments, currently 800 times the aggregate
per share amount to be distributed to holders of the Common Stock.
In the event of any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or other property, then in any such case the
10
<PAGE> 12
shares of Series A Stock shall be similarly exchanged or changed in an amount
per share, subject to certain anti-dilution adjustments, equal as of December
31, 1997 to 800 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged.
The shares of Series A Stock will rank pari passu with (or, if determined by the
Board of Directors, junior and subordinate to) all other series of preferred
stock of the Company with respect to dividends and/or liquidation preference.
The Series A Stock may be issued in fractional shares, and is not subject to
mandatory redemption.
CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE LAW
Under Article 9 of the Certificate of Incorporation of the Company and the
related provisions of Article XIII of the bylaws of the Company, the Board of
Directors of the Company is classified into three classes as nearly equal in
number as possible, with one class being elected each year for a three-year
term. A director may only be removed for cause and only by the majority vote of
the outstanding shares entitled to vote. The affirmative vote of at least 75% of
the votes of the shares entitled to vote is required to amend or repeal Article
9 of the Certificate of Incorporation or Article XIII of the bylaws or to adopt
any provision inconsistent therewith.
The bylaws provide that special meetings of stockholders may be called only by
the Chief Executive Officer or the Board of Directors of the Company. The bylaws
also provide that in general stockholder proposals intended to be presented at a
meeting of stockholders, including proposals for the nomination of directors,
must be received by the Company 60 days in advance of the meeting.
The Company's bylaws contain provisions requiring the Company to indemnify any
director, officer, employee or agent to the fullest extent permitted under
Delaware law. The Company's Certificate of Incorporation provides that a
director of the Company shall not be personally liable to the Company or its
stockholders for monetary damages arising out of the director's breach of that
person's fiduciary duty as a director, except to the extent that Delaware law
does not permit exemption from such liability.
The Board of Directors is expressly authorized to adopt, amend or repeal the
bylaws of the Company, except as provided in the Certificate of Incorporation
and subject to the power of the stockholders to adopt, amend or repeal the
bylaws.
The Company is subject to the provisions of Section 203 of the General
Corporation Law of Delaware. In general, this statute prohibits a publicly-held
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person becomes an interested stockholder, unless the
business combination is approved in a prescribed manner. An "interested
stockholder" is a person who, together with affiliates and associates, owns (or
within the prior three years did own) 15% or more of the corporation's voting
stock.
Certain of the provisions of the bylaws, Certificate of Incorporation and
Delaware law described in "Description of Capital Stock" may have anti-takeover
effects.
11
<PAGE> 13
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated the date of this Prospectus (the "Underwriting Agreement"), the
Underwriters named below have severally agreed to purchase, and the Selling
Stockholders have severally agreed to sell to them, the respective number of
shares of Common Stock set forth opposite their names below. Under the terms and
conditions of the Underwriting Agreement, the Underwriters are obliged to take
and pay for all such shares of Common Stock (other than those covered by the
overallotment option described below), if any are taken. Under certain
circumstances, the commitments of nondefaulting Underwriters may be increased as
set forth in the Underwriting Agreement.
------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES
----------
<S> <C>
UNDERWRITERS
J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
----------
Total 10,000,000
==========
</TABLE>
The Underwriters propose initially to offer the Common Stock directly to the
public at the price set forth on the cover page of this Prospectus and to
certain dealers at such price less a concession not in excess of $ per share.
The Underwriters may allow, and such dealers may reallow, a concession not in
excess of $ per share to certain other dealers. After the initial public
offering of the Common Stock, the public offering price and such concession may
be changed.
Pursuant to the Underwriting Agreement, the Selling Stockholders have severally
granted the Underwriters an option, exercisable for 30 days from the date of
this Prospectus, to purchase up to an additional 1,500,000 shares of Common
Stock on the same terms and conditions as set forth on the cover page hereof.
The Underwriters may exercise such option to purchase solely for the purpose of
covering overallotments, if any, made in connection with the sale of the Common
Stock offered hereby. To the extent such option is exercised, such Underwriter
will have a commitment, subject to certain conditions, to purchase approximately
the same percentage of such additional Common Stock as the number set forth next
to each Underwriter's name in the preceding tables bears to the total number of
shares of Common Stock offered hereby.
In connection with the Offering, the Underwriters may engage in transactions
that stabilize, maintain or otherwise affect the price of the Common Stock.
Specifically, the Underwriters may overallot in connection with the Offering,
creating a syndicate short position. In addition, the Underwriters may bid for,
and purchase, shares of Common Stock in the open market to cover syndicate short
positions or stabilize the price of the Common Stock. Finally, the underwriting
syndicate may reclaim selling concessions allowed for distributing the Common
Stock in the Offering if the syndicate repurchases previously distributed Common
Stock in syndicate covering transactions, in stabilization transactions or
otherwise. Any of these activities may stabilize or maintain the market price of
the Common Stock above independent market levels. The Underwriters are not
required to engage in these activities, and may end any of these activities at
any time.
Each of the Selling Stockholders, with certain limited exceptions, and the
Company have agreed that, without the consent of J.P. Morgan Securities, Inc.
they will not, for a period of 90 days after the date of this Prospectus, (A)
sell, pledge, assign or transfer or dispose of any equity securities of the
Company or any option, right, warrant or contract to purchase any equity
securities of the Company or any securities convertible into or exercisable or
exchangeable for any equity security of the Company or (B) enter into any swap
or other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Stock, whether any such transaction described
in clause (A) or (B) above is to be settled by delivery of Stock or such other
securities, in cash or otherwise, other than, with respect to the Company, (u)
any issuances of Stock, options, phantom stock or other
12
<PAGE> 14
securities or rights pursuant to any employee or director compensation, option,
savings, benefit or other plan of the Company, (v) hedging transactions and
programs in connection with any such plan, (w) any issuances upon exercise,
conversion or exchange of any securities or obligations outstanding on the date
of the Underwriting Agreement, (x) any issuances of equity securities as
consideration for an acquisition, (y) any purchases of stock or uses of put
options or other derivative securities pursuant to the previously announced
stock repurchase program, and (z) any issuances of Stock, and securities or
agreements with respect to, in the aggregate not greater than 1,000,000 shares
of Stock.
The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act.
From time to time in the ordinary course of their respective businesses, certain
of the Underwriters and their affiliates have engaged in and may in the future
engage in commercial and/or investment banking transactions with the Company,
its affiliates and the Selling Stockholders.
LEGAL MATTERS
The validity of the Common Stock being offered hereby will be passed upon for
the Company by Joseph E. Mullaney, Esq., Vice Chairman of the Board of the
Company. As of January 9, 1998, Mr. Mullaney beneficially owned approximately
310,674 shares of Common Stock, including options to purchase 200,000 shares of
Common Stock and 736 shares of Common Stock through his interest in the
Company's Employee Stock Ownership Plan. Certain legal matters will be passed
upon for the Underwriters by Davis Polk & Wardwell, New York, New York.
EXPERTS
The consolidated financial statements and schedule of the Company appearing in
its annual report on Form 10-K for the year ended December 31, 1996, have been
audited by KPMG Peat Marwick LLP, independent auditors, as set forth in their
reports included therein and incorporated herein by reference. Such consolidated
financial statements and schedule are incorporated herein by reference in
reliance upon such reports given upon authority of such firm as experts in
accounting and auditing.
13
<PAGE> 15
[GILLETTE CORPORATE LOGO]
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF DISTRIBUTION
<TABLE>
<S> <C>
SEC registration fee $337,185
Blue Sky Fees and Expenses* 10,000
Legal fees and expenses* 125,000
Printing Expenses* 50,000
Accounting fees and expenses* 100,000
Miscellaneous* 100,000
--------
Total Expenses $722,185
========
</TABLE>
- ---------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law, as amended (the "DGCL")
provides that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal or investigative (other than an
action by or in the right of the corporation) by reason of the fact that he or
she is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorney's fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him or her in
connection with such action, suit or proceeding if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Section 145 further provides that a corporation similarly may indemnify any such
person serving in any such capacity who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor, against expenses
(including attorney's fees) actually and reasonably incurred in connection with
the defense or settlement of such action or suit if he or she acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Delaware Court of Chancery or such other court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
Section 102(b)(7) of the DGCL permits a corporation to include in its
certificate of incorporation a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such provision
shall not eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL (relating to
unlawful payment of dividends and unlawful stock purchase and redemption) or
(iv) for any transaction from which the director derived an improper personal
benefit.
The Registrant's bylaws provide that the Registrant shall indemnify current or
former directors, officers, employees or agents of the Registrant, in connection
with proceedings brought against such persons by reason of their position with
the Registrant to the fullest extent permitted by Delaware law. The Registrant's
Certificate of Incorporation, as amended, provides that a director of the
Registrant shall not be liable to the Registrant or its stockholders for
monetary damages for breach of fiduciary duty as a director, except as is not
permitted under the DGCL.
The Registrant has obtained insurance policies that insure its directors and
officers against certain liabilities.
II-1
<PAGE> 17
The proposed form of the Underwriting Agreement provides for indemnification of
the directors and officers of the Registrant by the Underwriters against certain
liabilities. The Selling Stockholders have also agreed to indemnify the
directors and officers of the Registrant against certain liabilities.
For the undertaking with respect to indemnification, see Item 17 herein.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
TITLE OF EXHIBIT
-----------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement
4.1 Renewed Rights Agreement dated as of December 14, 1995 between The Gillette Company
and The First National Bank of Boston, filed as Exhibit 4 to The Gillette Company
Current Report on Form 8-K, dated December 18, 1995, Commission File No. 1-922,
incorporated by reference herein
5.1 Opinion of Joseph E. Mullaney, Esq., Vice Chairman of the Board of Directors
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Joseph E. Mullaney, Esq., Vice Chairman of the Board of Directors (to be
included in the opinion filed as Exhibit 5.1)
24.1 Power of Attorney
</TABLE>
ITEM 17. UNDERTAKINGS
(a) 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 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(b) The undersigned Registrant hereby undertakes that:
1. For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
2. For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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 provisions set forth in Item 15 above, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification (other than by policies of insurance)
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-2
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boston, State of Massachusetts, on the 14th day
of January, 1998.
THE GILLETTE COMPANY
By: /s/ CHARLES W. CRAMB
---------------------------------------
Name: Charles W. Cramb
Title: Senior Vice President --
Finance, Chief Financial
Officer and Principal
Accounting Officer
Pursuant to the requirement of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------- ---------------------------------------- -----------------
<C> <S> <C>
* Chairman of the Board, Chief Executive January 14, 1998
- ------------------------------------- Officer and Director
Alfred M. Zeien
* President, Chief Operating Officer and January 14, 1998
- ------------------------------------- Director
Michael C. Hawley
* Vice Chairman of the Board of Directors January 14, 1998
- ------------------------------------- and Director
Joseph E. Mullaney
* Senior Vice President -- Finance (Chief January 14, 1998
- ------------------------------------- Financial Officer and Principal
Charles W. Cramb Accounting Officer)
* Director January 14, 1998
- -------------------------------------
Warren E. Buffett
* Director January 14, 1998
- -------------------------------------
Wilbur H. Gantz
* Director January 14, 1998
- -------------------------------------
Michael B. Gifford
* Director January 14, 1998
- -------------------------------------
Carol R. Goldberg
* Director January 14, 1998
- -------------------------------------
Herbert H. Jacobi
* Director January 14, 1998
- -------------------------------------
Henry R. Kravis
</TABLE>
II-3
<PAGE> 19
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------- ---------------------------------------- -----------------
<C> <S> <C>
* Director January 14, 1998
- -------------------------------------
Richard R. Pivirotto
* Director January 14, 1998
- -------------------------------------
Juan M. Steta
* Director January 14, 1998
- -------------------------------------
Alexander B. Trowbridge
</TABLE>
*By: /s/ CHARLES W. CRAMB
--------------------------------
Charles W. Cramb, for himself
and as attorney-in-fact
II-4
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER TITLE OF EXHIBIT PAGE
- ------ ----------------------------------------------------------------------------- -----
<C> <S> <C>
1.1 Form of Underwriting Agreement
4.1 Renewed Rights Agreement dated as of December 14, 1995 between The Gillette
Company and The First National Bank of Boston, filed as Exhibit 4 to The
Gillette Company Current Report on Form 8-K, dated December 18, 1995,
Commission File No. 1-922, incorporated by reference herein
5.1 Opinion of Joseph E. Mullaney, Esq., Vice Chairman of the Board of Directors
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Joseph E. Mullaney, Esq., Vice Chairman of the Board of Directors
(to be included in the opinion filed as Exhibit 5.1)
24.1 Power of Attorney
</TABLE>
<PAGE> 1
THE GILLETTE COMPANY
10,000,000 SHARES OF COMMON STOCK, $1.00 PAR VALUE
Underwriting Agreement
_______________, 1998
J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
Certain stockholders named in Schedule II hereto (the "SELLING
STOCKHOLDERS") of The Gillette Company, a Delaware corporation (the "COMPANY"),
propose to sell to the several Underwriters listed in Schedule I hereto (the
"UNDERWRITERS"), an aggregate of 10,000,000 shares of Common Stock, par value
$1.00 per share, of the Company (the "UNDERWRITTEN SHARES") and, for the sole
purpose of covering over-allotments in connection with the sale of the
Underwritten Shares, at the option of the Underwriters, up to an additional
1,500,000 shares of Common Stock of the Company (the "OPTION SHARES"). The
Underwritten Shares and the Option Shares are herein referred to as the
"SHARES". The outstanding shares of Common Stock of the Company are herein
referred to as the "STOCK". The Stock, including the Shares, has attached
thereto rights (the "RIGHTS") to purchase one ten-thousandth of a share of
Series A Junior Participating Preferred Stock for $.225 per share exercisable
only upon the occurrence of certain events. The Rights have been issued pursuant
to a Rights Agreement (the "RIGHTS AGREEMENT") dated as of December 14, 1995
between the Company and The First National Bank of Boston, as Rights Agent.
The Company has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "SECURITIES ACT"), a registration
<PAGE> 2
statement, including a prospectus, relating to the Shares and the attached
Rights. The registration statement as amended at the time when it shall become
effective including information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act, is referred to in this Agreement as the "REGISTRATION
STATEMENT", and the prospectus in the form first used to confirm sales of Shares
is referred to in this Agreement as the "PROSPECTUS". If the Company has filed
an abbreviated registration statement to register additional shares of Stock
pursuant to Rule 462(b) and under the Securities Act (the "Rule 462 Registration
Statement"), then any reference to the term "Registration Statement" shall be
deemed to include such Rule 462 Registration Statement. Any reference in this
Agreement to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act, as
of the effective date of the Registration Statement or the date of such
preliminary prospectus or the Prospectus, as the case may be, and any reference
to "amend", "amendment" or "supplement" with respect to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to refer
to and include any documents filed after such date under the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "EXCHANGE ACT") that are deemed to be
incorporated by reference therein.
The Company and each of the Selling Stockholders hereby agrees with the
Underwriters as follows:
1. Each of the Selling Stockholders agrees, severally and not jointly, to
sell the Underwritten Shares to the several Underwriters as hereinafter
provided, and each Underwriter, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees to purchase, severally and not jointly, from each of the Selling
Stockholders at a purchase price per share of $____ (the "Purchase Price) the
number of Underwritten Shares (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying the aggregate number of
Underwritten Shares to be sold by each of the Selling Stockholders as set forth
opposite their respective names in Schedule II hereto by a fraction, the
numerator of which is the aggregate number of Underwritten Shares to be
purchased by such Underwriter as set forth opposite the name of such Underwriter
in Schedule I hereto and the denominator of which is the aggregate number of
Underwritten Shares to be purchased by all the Underwriters from all the Selling
Stockholders hereunder.
In addition, each of the Selling Stockholders agrees to, severally and not
jointly, sell the Option Shares to the several Underwriters as hereinafter
provided, and each Underwriter on the basis of the representations and
warranties herein
2
<PAGE> 3
contained, but subject to the conditions hereinafter stated, shall have the
option to purchase, severally and not jointly, from each of the Selling
Stockholders at the Purchase Price that portion of the number of Option Shares
set forth opposite such Selling Stockholder's name in Schedule II hereto as to
which such election shall have been exercised (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying the number of Option
Shares set forth opposite such Selling Stockholder's name in Schedule II by a
fraction, the numerator of which is the product of (i) the aggregate number of
Underwritten Shares to be purchased by such Underwriter as set forth opposite
the name of such Underwriter in Schedule I hereto and (ii) the total number of
Option Shares to be purchased by the Underwriters and the denominator of which
is the product of (i) the number of Underwritten Shares to be purchased by all
the Underwriters from all the Selling Stockholders hereunder and (ii) the total
number of Option Shares set forth in Schedule II. Any such election to purchase
Option Shares shall be made in proportion to the number of Option Shares to be
sold by each Selling Stockholder.
The Underwriters may exercise the option to purchase the Option Shares at
any time (but not more than once) on or before the thirtieth day following the
date of this Agreement, by written notice from the Representatives to the
Selling Stockholders. Such notice shall set forth the aggregate number of Option
Shares as to which the option is being exercised and the date and time when the
Option Shares are to be delivered and paid for which may be the same date and
time as the Closing Date (as hereinafter defined) but shall not be earlier than
the Closing Date nor later than the tenth full Business Day (as hereinafter
defined) after the date of such notice (unless such time and date are postponed
in accordance with the provisions of Section 9 hereof). Any such notice shall be
given at least two Business Days prior to the date and time of delivery
specified therein.
2. The Company and the Selling Stockholders understand that the
Underwriters intend (i) to make a public offering of the Shares as soon after
(A) the Registration Statement has become effective and (B) the parties hereto
have executed and delivered this Agreement, as in the judgment of the
Representatives is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
3. Payment for the Shares shall be made by wire transfer in immediately
available funds to the account specified by the Selling Stockholders, to you in
the case of the Underwritten Shares, on ___________, 1998, or at such other time
on the same or such other date, not later than the fifth Business Day
thereafter, as you and the Selling Stockholders may agree upon in writing or, in
the case of the Option Shares, on the date and time specified by you in the
written notice of the Underwriters' election to purchase such Option Shares. The
time and date of such payment for the Underwritten Shares are referred to herein
as the "CLOSING DATE" and the time and date for such payment for the Option
Shares, if
3
<PAGE> 4
other than the Closing Date, are herein referred to as the "ADDITIONAL CLOSING
DATE". As used herein, the term "BUSINESS DAY" means any day other than a day on
which banks are permitted or required to be closed in New York City.
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
you for the respective accounts of the several Underwriters of the Shares to be
purchased on such date registered in such names and in such denominations as you
shall request in writing not later than two full Business Days prior to the
Closing Date or the Additional Closing Date, as the case may be, with any
transfer taxes payable in connection with the transfer to the Underwriters of
the Shares duly paid by the Selling Stockholders. The certificates for the
Shares will be made available for inspection and packaging by you at the office
of J.P. Morgan Securities Inc. not later than 1:00 P.M., New York City time, on
the Business Day prior to the Closing Date or the Additional Closing Date, as
the case may be.
4. (a) The Company represents and warrants to each Underwriter and the
Selling Stockholders that:
(i) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of the Company,
threatened by the Commission; and the Registration Statement and
Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) comply, or will
comply, as the case may be, in all material respects with the
Securities Act and do not and will not, as of the applicable effective
date as to the Registration Statement and any amendment thereto and as
of the date of the Prospectus and any amendment or supplement thereto,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented, if applicable, at the Closing Date or Additional Closing
Date, as the case may be, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading; except that the foregoing representations
and warranties shall not apply to statements or omissions in the
Registration Statement and any amendment thereto or the Prospectus and
any amendment or supplement thereto made in reliance upon and in
conformity with information relating to (x) any Underwriter furnished
to the Company in writing by such Underwriter through you expressly
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<PAGE> 5
for use therein and (y) contained the letter dated __, 1998 from the
Selling Stockholder to the Company (the "Selling Stockholder
Information");
(ii) the documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Exchange Act, and none of such documents when they became
effective or were filed with the Commission contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange
Act, and will not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(iii) except as noted therein, the consolidated financial
statements, and the related notes thereto, incorporated by reference
in the Registration Statement and the Prospectus present fairly in all
material respects the consolidated financial position of the Company
and its consolidated subsidiaries as of the dates indicated and the
results of their operations and changes in their consolidated cash
flows for the periods specified; and said financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis, and the supporting schedules
incorporated by reference in the Registration Statement present fairly
in all material respects the information required to be stated
therein; [and the pro forma financial information, and the related
notes thereto, incorporated by reference in the Registration Statement
and the Prospectus has been prepared in accordance with the applicable
requirements of the Securities Act and the Exchange Act, as
applicable;
(iv) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has not been
any material change in the capital stock of the Company or long-term
debt of the Company and its consolidated subsidiaries taken as a
whole or any material adverse change,
5
<PAGE> 6
or any known development involving the reasonable likelihood of a
prospective material adverse change, in the business, operations or
financial condition, of the Company and its consolidated subsidiaries,
taken as a whole, otherwise, in each case, than as set forth or
contemplated in the Prospectus; and except as set forth or
contemplated in the Prospectus neither the Company nor any of the
consolidated subsidiaries listed on Appendix A hereto (the
"SIGNIFICANT SUBSIDIARIES") has entered into any transaction or
agreement (whether or not in the ordinary course of business) material
to the Company and its consolidated subsidiaries taken as a whole;
(v) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would not
have a material adverse effect on the Company and its consolidated
subsidiaries, taken as a whole;
(vi) each of the Company's Significant Subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws
of its jurisdiction of incorporation, with power and authority
(corporate and other) to own its properties and conduct its business
as described in the Prospectus, and each of the Company's Significant
Subsidiaries that is incorporated under the laws of the United States
or any state or other political subdivision thereof (a "SIGNIFICANT U.
S. SUBSIDIARY") has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would not
have a material adverse effect on the Company and its subsidiaries
taken as a whole; and, except as set forth in Exhibit 22 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1996, all the outstanding shares of capital stock of each Significant
Subsidiary of the Company have been duly authorized and validly
issued, are fully-paid and non-assessable, and (except, in the case of
foreign subsidiaries, for directors' qualifying shares) are owned by
the
6
<PAGE> 7
Company, directly or indirectly, free and clear of all liens,
encumbrances, security interests and claims;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) the Company has an authorized capitalization as set forth
in the Prospectus as of the dates provided therein and such authorized
capital stock conforms as to legal matters to the description thereof
set forth in the Prospectus, and all of the outstanding shares of
capital stock of the Company (including the Shares) have been duly
authorized and validly issued, are fully-paid and non-assessable and
are not subject to any pre-emptive or similar rights; and, except as
described in or expressly contemplated by the Prospectus, there are no
outstanding rights (including, without limitation, pre-emptive
rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any shares of capital stock or other equity
interest in the Company or any of its subsidiaries, or any contract,
commitment, agreement, understanding or arrangement of any kind
relating to the issuance of any capital stock of the Company or any
such subsidiary, any such convertible or exchangeable securities or
any such rights, warrants or options;
(ix) the Rights Agreement has been duly authorized, executed and
delivered by the Company; the Rights have been duly authorized and
validly issued by the Company; and the Series A Junior Participating
Preferred Stock has been duly authorized by the Company and validly
reserved for issuance upon the exercise of the Rights and, when issued
in accordance with the terms of the Rights Agreement, will be validly
issued, fully paid and non-assessable;
(x) neither the Company nor any of its Significant Subsidiaries
is, or with the giving of notice or lapse of time or both would be, in
violation of or in default under, its Certificate of Incorporation or
By-Laws or any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which the
Company or any of its Significant Subsidiaries is a party or by which
it or any of them or any of their respective properties is bound,
except for violations and defaults which individually and in the
aggregate are not material to the Company and its consolidated
subsidiaries taken as a whole; the performance by the Company of its
obligations under this Agreement and the
7
<PAGE> 8
consummation of the transactions contemplated herein will not conflict
with or result in a breach of any of the terms or provisions of, or
constitute a default under, any material indenture, mortgage, deed of
trust, loan agreement or other material agreement or instrument to
which the Company or any of its Significant Subsidiaries is a party or
by which the Company or any of its Significant Subsidiaries is bound
or to which any of the property or assets of the Company or any of its
Significant Subsidiaries is subject, nor will any such action result
in any violation of the provisions of the Certificate of Incorporation
or the By-Laws of the Company or any applicable law or statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company, its Significant Subsidiaries or
any of their respective properties; and no consent, approval,
authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated by this
Agreement, except such consents, approvals, authorizations, orders,
registrations or qualifications as have been obtained under the
Securities Act and as may be required under state securities or Blue
Sky Laws in connection with the purchase and distribution of the
Shares by the Underwriters;
(xi) other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or any of
its Significant Subsidiaries is or may be a party or to which any
property of the Company or any of its Significant Subsidiaries is or
may be the subject which, if determined adversely to the Company or
any of its Significant Subsidiaries, could individually or in the
aggregate reasonably be expected to have a material adverse effect on
the business, operations, or financial condition of the Company and
its consolidated subsidiaries, taken as a whole, and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others; and
there are no contracts or other documents that are required to be
described in the Registration Statement or Prospectus or to be filed
as exhibits to the Registration Statement that are not described or
filed as required;
(xii) no person has the right to require the Company to register
any securities for offering and sale under the Securities Act by
reason of the filing of the Registration Statement with the
8
<PAGE> 9
Commission or the sale of the Shares by the Selling Stockholders
pursuant hereto; and
(xiii) the Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the stock.
(b) Each of the Selling Stockholders severally represents and warrants
to, and agrees with, each of the Underwriters and the Company that:
(i) all consents, approvals, authorizations and orders necessary
for the execution and delivery by such Selling Stockholder of this
Agreement and for the sale and delivery of the Shares to be sold by
such Selling Stockholder hereunder, have been obtained; and such
Selling Stockholder has full right, power and authority to enter into
this Agreement and to sell, assign, transfer and deliver the Shares to
be sold by such Selling Stockholder hereunder; this Agreement has been
duly authorized, executed and delivered by such Selling Stockholder;
(ii) the sale of the Shares to be sold by such Selling
Stockholder hereunder and the compliance by such Selling Stockholder
with all of the provisions of this Agreement and the consummation of
the transactions herein contemplated will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, any statute, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which
such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of such
Selling Stockholder is subject, nor will such action result in any
violation of the Partnership Agreement of such Selling Stockholder or
any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over such Selling
Stockholder or the property of such Selling Stockholder;
(iii) such Selling Stockholder has good and valid title to the
Shares to be sold at the Closing Date or Additional Closing Date, as
the case may be, by such Selling Stockholder hereunder, free and clear
of all liens, encumbrances, equities or adverse claims other than
those related to this Agreement; such Selling Stockholder will have,
immediately prior to the Closing Date or
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<PAGE> 10
Additional Closing Date, as the case may be, good and valid title to
the Shares to be sold at the Closing Date or Additional Closing Date,
as the case may be, by such Selling Stockholder, free and clear of all
liens, encumbrances, equities or adverse claims other than those
related to this Agreement; and, upon delivery of the certificates
representing such Shares and payment therefor pursuant hereto, good
and valid title to such Shares, free and clear of all liens,
encumbrances, equities or adverse claims, will pass to the several
Underwriters;
(iv) such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares; and
(v) the Selling Stockholder Information does not and will not, as
of the applicable effective date of the Registration Statement and any
amendment thereto, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Selling Stockholder Information included in the Prospectus, as amended
or supplemented, if applicable, furnished to the Company in writing by
such Selling Stockholder expressly for use therein at the Closing Date
or Additional Closing Date, as the case may be, will not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Each of the Selling Stockholders specifically agrees that the obligations
of such Selling Stockholder hereunder shall not be terminated by operation of
law, whether by dissolution of its partnership, or by the occurrence of any
other event. If any such partnership should be dissolved, or if any other such
event should occur, before the delivery of the Shares by it hereunder,
certificates representing such Shares shall be delivered by or on behalf of such
Selling Stockholder in accordance with the terms and conditions of this
Agreement.
5. (a) The Company covenants and agrees with each of the several
Underwriters as follows:
(i) to use its reasonable efforts to cause the Registration
Statement to become effective at the earliest possible time and, if
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<PAGE> 11
required, to file the final Prospectus with the Commission within the
time periods specified by Rule 424(b) and Rule 430A under the
Securities Act and to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with
the offering or sale of the Shares; and to furnish copies of the
Prospectus to the Underwriters in New York City prior to 10:00 a.m.,
New York City time, on the Business Day next succeeding the date of
this Agreement in such quantities as the Representatives may
reasonably request;
(ii) to deliver, at the expense of the Company, to you five
copies of the Registration Statement (as originally filed) and each
amendment thereto, in each case including one signed copy and all
exhibits and documents incorporated by reference therein and, during
the period mentioned in Section 5(a)(v) below, to each of the
Underwriters as many copies of the Prospectus (including all
amendments and supplements thereto) and documents incorporated by
reference therein as you may reasonably request;
(iii) during the period mentioned in Section 5(a)(v) below,
before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the time the
Registration Statement becomes effective, to furnish to you a copy of
the proposed amendment or supplement for review and not to file any
such proposed amendment or supplement to which the Representatives
reasonably object;
(iv) during the period mentioned in Section 5(a)(v)below, to
advise you promptly, and to confirm such advice in writing (A) when
the Registration Statement has become effective, (B) when any
amendment to the Registration Statement has been filed or becomes
effective, (C) when any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you with copies thereof, (D)
of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for any
additional information, (E) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus or the initiation or threatening of any
proceeding for that purpose, and (F) of the receipt by the Company of
any
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<PAGE> 12
notification with respect to any suspension of the qualification of
the Shares for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and to use its best
efforts to prevent the issuance of any such stop order, or of any
order preventing or suspending the use of any preliminary prospectus
or the Prospectus, or of any order suspending any such qualification
of the Shares, or notification of any such order thereof and, if
issued, to obtain as soon as possible the withdrawal thereof;
(v) if, during such period of time after the first date of the
public offering of the Shares as in the opinion of counsel for the
Underwriters a prospectus relating to the Shares is required by law to
be delivered in connection with sales by the Underwriters or any
dealer, any event shall occur as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements
therein, in light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with law, forthwith to
prepare and furnish, at the expense of the Company, to the
Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Shares may have been sold by you on
behalf of the Underwriters and to any other dealers upon request, such
amendments or supplements to the Prospectus as may be necessary so
that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus will
comply with law provided that the preparation and furnishing of any
such amendment or supplement shall be at the expense of the
Underwriters if such amendment or supplement is required more than __
days after the first date of public offering of the Shares;
(vi) to use reasonable efforts to qualify the Shares for offer
and sale under the securities or Blue Sky laws of such jurisdictions
as you shall reasonably request and to continue such qualification in
effect so long as reasonably required for distribution of the Shares;
provided that the Company shall not be required to file a general
consent to service of process in any jurisdiction;
(vii) to make generally available to its security holders and to
you as soon as practicable an earnings statement covering a period of
at least twelve months beginning with the first fiscal quarter of the
Company occurring after the effective date of the
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<PAGE> 13
Registration Statement, which shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 of the Commission promulgated
thereunder;
(viii) for a period of ten years after the date hereof, to
furnish to you copies of all reports or other communications
(financial or other) furnished to holders of the Shares, and copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange;
(ix) for a period of 90 days after the date of the initial public
offering of the Shares not to (A) sell, pledge, assign or transfer or
dispose of any equity securities of the Company or any option, right,
warrant or contract to purchase any equity securities of the Company
or any securities convertible into or exercisable or exchangeable for
any equity security of the Company or (B) enter into any swap or
other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Stock, whether any such
transaction described in clause (A) or (B) above is to be settled by
delivery of Stock or such other securities, in cash or otherwise
without the prior written consent of J.P. Morgan Securities Inc.,
other than (u) any issuances of Stock, options, phantom stock or
other securities or rights pursuant to any employee or director
compensation, option, savings, benefit or other plan of the Company,
(v) hedging transactions and programs in connection with any such
plan, (w) any issuances upon exercise, conversion or exchange of any
securities or obligations outstanding on the date of this Agreement,
(x) any issuances of equity securities as consideration for an
acquisition, (y) and purchases of stock or uses of put options or
other derivative securities pursuant to the previously announced
stock repurchase program, and (z) any issuances of Stock, and
securities or agreements with respect to, in the aggregate not
greater than 1,000,000 shares of Stock;
(x) to pay or cause to be paid all costs and expenses incident to
the performance of its obligations hereunder, including without
limiting the generality of the foregoing, all costs and expenses (A)
incident to the preparation, reregistration, execution and delivery of
the Shares (other than transfer taxes), (B) incident to the
preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and supplements
thereto), (C) incurred in connection with the
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<PAGE> 14
registration or qualification of the Shares under the laws of such
jurisdictions as you may designate (including reasonable fees of
counsel for the Underwriters and its disbursements), (D) related to
the filing with, and clearance of the offering by, the National
Association of Securities Dealers, Inc., (E) in connection with the
printing (including word processing and duplication costs) and
delivery of this Agreement, the Preliminary and Supplemental Blue Sky
Memoranda and the furnishing to the Underwriters and dealers of copies
of the Registration Statement and the Prospectus, including mailing
and shipping, as herein provided, (F) any expenses incurred by the
Company in connection with a "road show" presentation to potential
investors, (G) the cost of preparing stock certificates and (H) the
cost and charges of any transfer agent and any registrar.
(b) Each of the Selling Stockholders covenants and agrees with each of
the several Underwriters as follows:
(i) for a period of 90 days after the date of the initial public
offering of the Shares not to (A) sell, pledge, assign or transfer or
dispose of any equity security of the Company or any option, right,
warrant or contract to purchase any equity security of the Company or
any securities convertible into or exercisable or exchangeable for any
equity security of the Company or (B) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Stock, whether any such transaction
described in clause (A) or (B) above is to be settled by delivery of
Stock or such other securities, in cash or otherwise or (C) make any
written demand for the registration of any shares of Stock or any
security convertible into or exercisable or exchangeable for Stock
without the prior written consent of J.P. Morgan Securities Inc. or
announce an intention to do so, in each case other than (x) the Shares
to be sold by such Selling Stockholder hereunder (y) distribution of
Stock by the Selling Stockholders to their respective partners and (z)
donations of Stock to charitable organizations provided that, in the
case of clauses )y) and (z) the recipient of such Stock agrees to be
bound by the foregoing lock-up; and
(ii) to pay or cause to be paid all taxes, if any, on the
transfer and sale of the Shares being sold by such Selling
Stockholder.
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<PAGE> 15
6. The several obligations of the Underwriters hereunder to purchase the
Shares on the Closing Date or the Additional Closing Date, as the case may be,
are subject to the performance by the Company and each of the Selling
Stockholders of their respective obligations hereunder and to the following
additional conditions:
(a) the Registration Statement shall have become effective (or if
a post-effective amendment is required to be filed under the
Securities Act, such post-effective amendment shall have become
effective) not later than 5:00 P.M., New York City time, on the date
hereof; and no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission; the Prospectus shall have been filed
with the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations under
the Securities Act and in accordance with Section 5(a)(i) hereof; and
all requests for additional information shall have been complied with
to your satisfaction;
(b) the respective representations and warranties of the Company
and the Selling Stockholders contained herein are true and correct on
and as of the Closing Date or the Additional Closing Date, as the case
may be, as if made on and as of the Closing Date or the Additional
Closing Date, as the case may be, and each of the Company and the
Selling Stockholders shall have complied with all agreements and all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date or the Additional Closing Date, as the case
may be;
(c) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date or the Additional Closing Date, as the
case may be, there shall not have occurred any downgrading, nor shall
any notice have been given of (i) any downgrading, (ii) any intended
or potential downgrading or (iii) any review or possible change that
does not indicate an improvement, in the rating accorded any
securities of or guaranteed by the Company by any "nationally
recognized statistical rating organization", as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act;
(d) since the respective dates as of which information is given
in the Prospectus there shall not have been any material change in the
capital stock of the Company or long-term debt of the Company and its
consolidated subsidiaries taken as a whole or any material adverse
change, or any known development involving the reasonable likelihood
of
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<PAGE> 16
a prospective material adverse change, in the business, operations or
financial condition of the Company and its consolidated subsidiaries,
taken as a whole, otherwise, in each case, than as set forth or
contemplated in the Prospectus, the effect of which in your reasonable
judgment makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares on the Closing Date or
the Additional Closing Date, as the case may be, on the terms and in
the manner contemplated in the Prospectus;
(e) you shall have received on and as of the Closing Date or the
Additional Closing Date, as the case may be, (i) a certificate of an
executive officer of the Company satisfactory to you to the effect set
forth in Sections 6(a), 6(b) and 6(c) (with respect to the respective
representations, warranties, agreements and conditions of the Company)
and to the further effect that there has not occurred any material
adverse change, or any known development involving the reasonable
likelihood of a prospective material adverse change, in the business,
operations or financial condition, of the Company and its consolidated
subsidiaries, taken as a whole, from that set forth or contemplated in
the Prospectus and (ii) a certificate of the Selling Stockholders,
satisfactory to you to the effect set forth in Section 6(b) (with
respect to the respective representations, warranties, agreements and
conditions of the Selling Stockholders);
(f) Joseph E. Mullaney, Vice Chairman of the Board of Directors
of the Company, shall have furnished to you his written opinion, dated
the Closing Date or the Additional Closing Date, as the case may be,
in form and substance satisfactory to you, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with corporate power and authority
to own its properties and conduct its business as described in
the Prospectus as then amended or supplemented;
(ii) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be so
qualified or in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole;
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<PAGE> 17
(iii) each of the Company's Significant U.S. Subsidiaries
has been duly incorporated and is validly existing as a
corporation under the laws of its jurisdiction of incorporation
with corporate power and authority to own its properties and
conduct its business as described in the Prospectus and has been
duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification, other than
where the failure to be so qualified and in good standing would
not have a material adverse effect on the Company and its
consolidated subsidiaries taken as a whole; and except as set
forth in Exhibit 22 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1996, all of the outstanding
shares of capital stock of each Significant U.S. Subsidiary have
been duly and validly authorized and issued, are fully paid and
non-assessable, and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims;
(iv) other than as set forth or contemplated in the
Prospectus, there are no legal or governmental proceedings
pending or, to the best of such counsel's knowledge, threatened
to which the Company or any of its Significant U.S. Subsidiaries
is or may be a party or to which any property of the Company or
its Significant U.S. Subsidiaries is or may be the subject which,
if determined adversely to the Company or such Significant U.S.
Subsidiaries, could individually or in the aggregate reasonably
be expected to have a material adverse effect on the business,
operations or financial condition of the Company and its
consolidated subsidiaries taken as a whole; to the best of such
counsel's knowledge, no such proceedings are contemplated by
governmental authorities or threatened by others; and such
counsel does not know of any contracts or other documents of a
character required to be described in the Registration Statement
or Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus;
17
<PAGE> 18
(vii) the outstanding shares of capital stock of the Company
(including the Shares) have been duly authorized and are validly
issued, fully paid and non-assessable;
(viii) the statements in the Prospectus under "Description
of Capital Stock", in the Prospectus incorporated by reference
from Item 3 of Part 1 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1996 and in the Registration
Statement in Item 15 [other], insofar as such statements
constitute a summary of the terms of the Stock, legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such terms, legal matters,
documents or proceedings;
(ix) such counsel is of the opinion that the Registration
Statement and the Prospectus and any amendments and supplements
thereto (except for the financial statements and related
schedules therein, as to which such counsel need express no
opinion) complied as to form when filed with the Commission in
all material respects with the requirements of the Securities Act
and believes that (except for the financial statements and
related schedules therein, as to which such counsel need express
no belief) each part of the Registration Statement (including the
documents incorporated by reference therein) and the prospectus
included therein when such part of the Registration Statement
became effective did not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and that the Prospectus, as amended or supplemented,
if applicable, does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(x) neither the Company nor any of its Significant U.S.
Subsidiaries is, or with the giving of notice or lapse of time or
both would be, in violation of or in default under, its
Certificate of Incorporation or By-Laws or any material
indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument known to such counsel to which
the Company or any of its Significant U.S. Subsidiaries is a
party or by which it or any of them or any of their respective
properties is bound, except for violations and defaults which
individually and in the aggregate are not material to the Company
and its consolidated subsidiaries
18
<PAGE> 19
taken as a whole; and the performance by the Company of its
obligations under this Agreement and the consummation of the
transactions contemplated herein will not conflict with or result
in a breach of any of the terms or provisions of, or constitute a
default under, any material indenture, mortgage, deed of trust,
loan agreement or other material agreement or instrument known to
such counsel to which the Company or any of its Significant U.S.
Subsidiaries is a party or by which the Company or any of its
Significant U.S. Subsidiaries is bound or to which any of the
property or assets of the Company or any of its Significant U.S.
Subsidiaries is subject, nor will any such action result in any
violation of the provisions of the Certificate of Incorporation
or the By-Laws of the Company or any applicable law or statute or
any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company, its subsidiaries or
any of their respective properties;
(xi) no consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body is required for the consummation by
the Company of the transactions contemplated by this Agreement,
except such consents, approvals, authorizations, orders,
registrations or qualifications as have been obtained under the
Securities Act and as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of
the Shares by the Underwriters;
(xii) the documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made by
the Company prior to the Closing Date or the Additional Closing
Date, as the case may be (except for the financial statements and
related schedules therein, as to which such counsel need express
no opinion), when they were filed with the Commission, complied
as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission
thereunder; and
(xiii) the Rights Agreement has been duly authorized,
executed and delivered by the Company; the Rights have been duly
authorized and issued by the Company, and the Series A Junior
Participating Preferred Stock has been duly authorized by the
Company and validly reserved for issuance upon the exercise of
the Rights and, when issued upon such exercise in accordance with
19
<PAGE> 20
the terms of the Rights Agreement, will be validly issued, fully
paid and non-assessable.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the
United States and the States of Delaware and Massachusetts, to the
extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (reasonably
satisfactory to Underwriters' counsel) of other counsel reasonably
acceptable to the Underwriters' counsel, familiar with the applicable
laws and (B) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of the Company and
certificates or other written statements of officials of jurisdictions
having custody of documents respecting the corporate existence or good
standing of the Company. The opinion of such counsel for the Company
shall state that the opinion of any such other counsel upon which they
relied is in form satisfactory to such counsel and, in such counsel's
opinion, the Underwriters and they are justified in relying thereon.
With respect to the matters to be covered in Section 6(f)(ix) and
Section 6(f)(xii) above counsel may state his opinion and belief is
based upon his participation in the preparation of the Registration
Statement and the Prospectus and any amendment or supplement thereto
and review and discussion of the contents thereof but is without
independent check or verification except as specified.
The opinion described above shall be rendered to the Underwriters
at the request of the Company and shall so state therein.
(g) Simpson Thacher & Bartlett, counsel for the Selling
Stockholders, shall have furnished to the Representatives their
written opinion, dated the Closing Date, or the Additional Closing
Date, as the case may be, in form and substance satisfactory to the
Representatives, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by or on behalf of each of the Selling Stockholders;
(ii) each Selling Stockholder is the sole record owner of
all of the Underwritten Shares or Option Shares then to be sold
by such Selling Stockholder, each Selling Stockholder has full
partnership power, right and authority to sell the applicable
Shares; upon payment for and delivery of the Shares in accordance
with this Agreement, the Underwriters will acquire all of the
rights of each Selling Stockholder in the applicable Shares; and
(assuming that the Underwriters do not have notice of any adverse
claim to
20
<PAGE> 21
the Shares) the Underwriters will acquire their interest in such
Shares free of any adverse claim (within the meaning of the
Uniform Commercial Code as in effect in the State of New York);
(h) on the date hereof and also on the Closing Date or Additional
Closing Date, as the case may be, KPMG Peat Marwick LLP shall have
furnished to you letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, containing
statements and information of the type customarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in
the Registration Statement and the Prospectus;
(i) the Representatives shall have received on and as of the
Closing Date or Additional Closing Date, as the case may be, an
opinion of Davis Polk & Wardwell, counsel to the Underwriters, with
respect to the Registration Statement, the Prospectus and other
related matters as the Representatives may reasonably request, and
such counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters; and
(j) on or prior to the Closing Date or Additional Closing Date,
as the case may be, the Company and the Selling Stockholders shall
have furnished to the Representatives such further certificates and
documents as the Representatives shall reasonably request.
7. The Company agrees to indemnify and hold harmless each Selling
Stockholder and each Underwriter and each person, if any, who controls any
Selling Stockholder or any Underwriter within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities (including, without limitation,
the legal fees and other expenses incurred in connection with any suit, action
or proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) or any preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein and except in the case of any Selling Stockholder or any person
controlling such Selling Stockholder for the Selling Stockholder Information,
provided that the
21
<PAGE> 22
foregoing indemnity with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter (or to the benefit of any person controlling
such Underwriter) from whom the person asserting any such losses, claims,
damages or liabilities purchased Shares if such untrue statement or omission or
alleged untrue statement or omission made in such preliminary prospectus is
eliminated or remedied in the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) and, if
required by law, a copy of the Prospectus (as so amended or supplemented) shall
not have been furnished to such person at or prior to the written confirmation
of the sale of such Shares to such person.
Each of the Selling Stockholders severally in proportion to the number of
Shares to be sold by such Selling Stockholder hereunder agrees to indemnify and
hold harmless the Company and each Underwriter and each person, if any, who
controls the Company or any Underwriter within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only with
reference to the Selling Stockholder Information in the Registration Statement,
the Prospectus, any amendment or supplement thereto, or any preliminary
prospectus, provided that the foregoing indemnity with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter (or to
the benefit of any person controlling such Underwriter) from whom the person
asserting any such losses, claims, damages or liabilities purchased Shares if
such untrue statement or omission or alleged untrue statement or omission made
in such preliminary prospectus is eliminated or remedied in the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) and, if required by law, a copy of the Prospectus (as so
amended or supplemented) shall not have been furnished to such person at or
prior to the written confirmation of the sale of such Shares to such person.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and each person who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act and each of the
Selling Stockholders to the same extent as the foregoing indemnity from the
Company and the Selling Stockholders to each Underwriter, but only with
reference to information relating to such Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
preliminary prospectus.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to the preceding paragraphs
22
<PAGE> 23
of this Section 7, such person (the "INDEMNIFIED PERSON") shall promptly notify
the person or persons against whom such indemnity may be sought (each an
"INDEMNIFYING PERSON") in writing provided that the failure of an Indemnified
Person to give notice as provided herein shall not relieve the Indemnifying
Person of its obligations under this Section 7, and such Indemnifying Persons,
upon request of the Indemnified Person, shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and
any others the Indemnifying Persons may designate in such proceeding and shall
pay the fees and expenses of such counsel related to such proceeding. In any
such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person and not the Indemnifying Persons unless (i) the
Indemnifying Persons and the Indemnified Person shall have mutually agreed to
the contrary, (ii) the Indemnifying Persons have failed within a reasonable time
to retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both an Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that no
Indemnifying Person shall, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed as they are
incurred. Any such separate firm for the Underwriters and such control persons
of Underwriters shall be designated in writing by J.P. Morgan Securities Inc.
and any such separate firm for the Company, its directors, its officers who sign
the Registration Statement and such control persons of the Company shall be
designated in writing by the Company and any such separate firm for the Selling
Stockholders shall be designated in writing by the Selling Stockholders. No
Indemnifying Person shall be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, each Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment.
If the indemnification provided for in the first four paragraphs of this
Section 7 is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Stockholders on the one hand
and the Underwriters on the other hand from the offering of the Shares or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Selling Stockholders on the one
23
<PAGE> 24
hand and the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Selling Stockholders on the one hand and the Underwriters
on the other hand shall be deemed to be in the same respective proportions as
the net proceeds from the offering (before deducting expenses) received by the
Selling Stockholders and the total underwriting discounts and the commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus bear to the aggregate public offering price of the
Shares. The relative fault of the Company and the Selling Stockholders on the
one hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Selling Stockholders or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Selling Stockholders or the
Underwriters were treated as one entity for such purposes) or by any other
method of allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses incurred by such Indemnified Person in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall an Underwriter be required to contribute any amount
in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 7 are several in proportion to the respective number of Shares set forth
opposite their names in Schedule I hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity, except that the indemnity and contribution agreements
contained in this Section 7 shall supersede the rights and remedies of the
24
<PAGE> 25
Company and the Selling Stockholders under the Registration Rights Agreement
dated as of September 12, 1996 among such parties solely with respect to the
offering of Shares contemplated hereby.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company and the Selling Stockholders
set forth in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Company, its officers or directors or any other person
controlling the Company or the Selling Stockholders and (iii) acceptance of and
payment for any of the Shares.
8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares) may
be terminated in your absolute discretion, by notice given to the Selling
Stockholders and the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (or, in the case of the Option Shares,
prior to the Additional Closing Date) (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange or the National Association of
Securities Dealers, Inc., (ii) trading of any securities of or guaranteed by the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State or authorities, or
(iv) there shall have occurred any outbreak or escalation of hostilities or any
calamity or crisis in financial markets or elsewhere that, in you reasonable
judgment, is material and adverse and which, in your reasonable judgment, makes
it impracticable to market the Shares being delivered at the Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the manner
contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x) execution
and delivery hereof by the parties hereto and (y) release of notification of the
effectiveness of the Registration Statement (or, if applicable, any
post-effective amendment) by the Commission.
If on the Closing Date or the Additional Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Shares set
forth opposite their respective names in Schedule I bears to the aggregate
number of Underwritten
25
<PAGE> 26
Shares set forth opposite the names of all such non-defaulting Underwriters, or
in such other proportions as you may specify, to purchase the Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided that in no event shall the number of Shares that any
Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant
to this Section 9 by an amount in excess of one-tenth of such number of Shares
without the written consent of such Underwriter. If on the Closing Date or the
Additional Closing Date, as the case may be, any Underwriter or Underwriters
shall fail or refuse to purchase Shares which it or they have agreed to purchase
hereunder on such date, and the aggregate number of Shares with respect to which
such default occurs is more than one-tenth of the aggregate number of Shares to
be purchased on such date, and arrangements satisfactory to you and the Selling
Stockholders for the purchase of such Shares are not made within 36 hours after
such default, this Agreement (or the obligations of the several Underwriters to
purchase the Option Shares, as the case may be) shall terminate without
liability on the part of any non-defaulting Underwriter or the Selling
Stockholder. In any such case either you or the Selling Stockholders shall have
the right to postpone the Closing Date (or, in the case of the Option Shares,
the Additional Closing Date), but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company or the
Selling Stockholders to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason any of the Company or the
Selling Stockholders shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters' obligations cannot be fulfilled,
the Company agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and expenses of its counsel)
reasonably incurred by the Underwriter in connection with this Agreement or the
offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon the
Company, the Selling Stockholders and the Underwriters, any controlling persons
referred to herein and their respective successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person, firm or corporation any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. No purchaser of
26
<PAGE> 27
Shares from any Underwriter shall be deemed to be a successor by reason merely
of such purchase.
12. Any action by the Underwriters hereunder may be taken by you jointly or
by J.P. Morgan Securities Inc. alone on behalf of the Underwriters, and any such
action taken by you jointly or by J.P. Morgan Securities Inc. alone shall be
binding upon the Underwriters. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be given to the Representatives, c/o J.P. Morgan Securities
Inc., 60 Wall Street, New York, New York 10260 (telefax:______); Attention:
Syndicate Department. Notices to the Company shall be given to it at
____________, _____________, ____________, (telefax:________);
Attention:____________. Notices to the Selling Stockholders shall be given to
them at ________________, _______________, _______________, ________________,
(telefax: ___________); Attention: _________________.
13. This Agreement may be signed in counterparts, each of which shall be an
original and all of which together shall constitute one and the same instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PROVISIONS THEREOF.
27
<PAGE> 28
If the foregoing is in accordance with your understanding, please sign and
return four counterparts hereof.
Very truly yours,
THE GILLETTE COMPANY
By:
------------------------------
Name:
Title:
Selling Stockholders
DI ASSOCIATES L.P.
By:
------------------------------
Name:
Title:
KKR PARTNERS II, L.P.
By:
------------------------------
Name:
Title:
28
<PAGE> 29
Accepted:_________, 1998
J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Morgan Stanley & Co. Incorporated
By: J.P. Morgan Securities Inc.
Acting on behalf of itself and the several Underwriters named above..
By:
------------------------------
Title:
29
<PAGE> 30
SCHEDULE I
NUMBER OF SHARES
UNDERWRITER TO BE PURCHASED
----------- ----------------
J.P. Morgan Securities Inc..........................
Credit Suisse First Boston Corporation..............
Goldman, Sachs & Co.................................
Merrill Lynch, Pierce, Fenner
& Smith Incorporated...............................
Morgan Stanley & Co. Incorporated ..................
----------
Total 10,000,000
<PAGE> 31
SCHEDULE II
NUMBER OF NUMBER OF
SELLING STOCKHOLDERS UNDERWRITTEN SHARES OPTION SHARES
- --------------------- ------------------- ------------
DI Associates L.P.
KKR Partners II, L.P.
<PAGE> 32
Exhibit A
, 1998
J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Merrill Lynch, Pierce Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
The undersigned understands that you propose to enter into an Underwriting
Agreement (the "Underwriting Agreement") with The Gillette Company, a Delaware
corporation (the "Company"), providing for the public offering (the "Public
Offering") by the several Underwriters named therein (the "Underwriters"), of up
to 11,500,000 shares (the "Shares") of the Common Stock, $1.00 par value, of the
Company (the "Common Stock").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of J.P. Morgan Securities
Inc., it will not, during the period commencing on the date hereof and ending 90
days after the date of the final prospectus relating to the Public Offering (the
"Prospectus"), (1) offer, pledge, announce the intention to sell, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, warrant or right to purchase or otherwise
transfer or dispose of, directly or indirectly, any Common Stock or any
securities that are convertible into or exercisable or exchangeable for Common
Stock or (2) enter into any swap or other agreement that transfers, in whole or
in part, the economic consequences of ownership of Common Stock, whether any
such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise or (3)
make any demand for or exercise any right with respect to the registration of
any Common Stock or any security convertible into or exercisable for Common
Stock. The foregoing sentence shall not apply to
1
<PAGE> 33
the issuance of Common Stock in connection with the transactions described in
the final prospectus relating to the Public Offering.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
This agreement shall be governed by and construed in accordance with the
laws of the State of New York.
Very truly yours,
------------------------------
Name:
Title:
2
<PAGE> 34
Appendix A
LIST OF SIGNIFICANT SUBSIDIARIES
<PAGE> 35
Appendix B
LIST OF AGREEMENTS
4
<PAGE> 1
EXHIBIT 5.1
[The Gillette Company Letterhead]
January 14, 1998
The Gillette Company
Prudential Tower Building
Boston, Massachusetts 02199
Ladies and Gentlemen:
This opinion is furnished to you in connection with a registration
statement on Form S-3 (the "Registration Statement") of The Gillette Company
(the "Company") filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, covering the offering and sale by certain
holders of 10,000,000 shares (and up to an additional 1,500,000 shares pursuant
to an overallotment option granted to the Underwriters) of common stock of the
Company (the "Common Stock") (including the preferred stock purchase rights
attached thereto).
I am Vice Chairman of the Board and Chief Legal Officer of the Company. In
that capacity, I have acted as counsel for the Company in connection with the
preparation and filing of the Registration Statement. For purposes of this
opinion, I have examined or caused to be examined by counsel retained by or on
staff of the Company, among other things, originals or copies, certified or
otherwise, identified to my satisfaction, of such documents as I have deemed
necessary or appropriate as a basis for the opinions set forth herein.
I am a member of the bar of The Commonwealth of Massachusetts and the State
of Ohio. This opinion is limited to the federal laws of the United States, the
laws of The Commonwealth of Massachusetts and the General Corporation Law of the
State of Delaware.
Based upon the foregoing, I am of the opinion that the shares of Common
Stock have been duly authorized and validly issued and are fully paid and
nonassessable.
I consent to the filing of this opinion with and as a part of said
Registration Statement, including but not limited to as an exhibit thereto, and
the use of my name therein and in the related prospectus under the caption
"Legal Matters".
This opinion is to be used only in connection with the offer and sale of
the Common Stock while the Registration Statement is in effect.
Very truly yours,
/s/ Joseph E. Mullaney, Esq.
Joseph E. Mullaney, Esq.
<PAGE> 1
EXHIBIT 23.1
ACCOUNTANTS' CONSENT
The Board of Directors of The Gillette Company:
We consent to the incorporation herein by reference of our reports dated January
30, 1997 included in The Gillette Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 and to the reference to our firm under the
heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Boston, Massachusetts
January 14, 1998
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Joseph E. Mullaney and Charles W. Cramb,
and each of them, as his or her true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him or her and in his or
her name, place and stead, in any and all capacities, to sign a registration
statement (the "Registration Statement") for the purpose of registering under
the Securities Act of 1933, as amended, shares of Common Stock, $1.00 par value
(including the preferred stock purchase rights attached thereto) of The Gillette
Company, a Delaware corporation (the "Company") to be sold by the holders
thereof pursuant to the Registration Rights Agreement dated as of September 12,
1996 among the Company, D.I. Associates, L.P. and KKR Partners II, L.P. and any
and all amendments (including, without limitation, post-effective amendments) or
supplements to the Registration Statement, and to file the same, with all
exhibits thereto, and any and all other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully as to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, shall do or cause to be done by virtue
hereof.
This instrument has been signed by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY IN WHICH SIGNED DATE
- ------------------------------------------ ------------------------------- ------------------
<C> <S> <C>
/s/ ALFRED M. ZEIEN Chairman of the Board, Chief January 14, 1998
- ------------------------------------------ Executive Officer and Director
ALFRED M. ZEIEN
/s/ MICHAEL C. HAWLEY President, Chief Operating January 14, 1998
- ------------------------------------------ Officer and Director
MICHAEL C. HAWLEY
/s/ JOSEPH E. MULLANEY Vice Chairman of the Board of January 14, 1998
- ------------------------------------------ Directors and Director
JOSEPH E. MULLANEY
/s/ CHARLES W. CRAMB Senior Vice President -- January 14, 1998
- ------------------------------------------ Finance (Chief Financial
CHARLES W. CRAMB Officer and Principal
Accounting Officer)
/s/ WARREN E. BUFFETT Director January 14, 1998
- ------------------------------------------
WARREN E. BUFFETT
/s/ WILBUR H. GANTZ Director January 13, 1998
- ------------------------------------------
WILBUR H. GANTZ
/s/ MICHAEL B. GIFFORD Director January 13, 1998
- ------------------------------------------
MICHAEL B. GIFFORD
/s/ CAROL R. GOLDBERG Director January 13, 1998
- ------------------------------------------
CAROL R. GOLDBERG
/s/ HERBERT H. JACOBI Director January 13, 1998
- ------------------------------------------
HERBERT H. JACOBI
/s/ HENRY R. KRAVIS Director January 14, 1998
- ------------------------------------------
HENRY R. KRAVIS
/s/ RICHARD R. PIVIROTTO Director January 14, 1998
- ------------------------------------------
RICHARD R. PIVIROTTO
/s/ JUAN M. STETA Director January 13, 1998
- ------------------------------------------
JUAN M. STETA
/s/ ALEXANDER B. TROWBRIDGE Director January 13, 1998
- ------------------------------------------
ALEXANDER B. TROWBRIDGE
</TABLE>
