<PAGE> 1
The information in this preliminary prospectus supplement is not complete and
may be changed. A registration statement relating to these securities has been
filed with the Securities and Exchange Commission. We may not sell these
securities until a final prospectus supplement is delivered. This preliminary
prospectus supplement and the accompanying prospectus are not an offer to sell
these securities and are not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JULY 7, 1999
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JULY 7, 1999)
$300,000,000
GREAT LAKES CHEMICAL CORPORATION
% NOTES DUE 2009
[GLCC LOGO]
------------------
The notes will mature on , 2009. Interest on the notes
is payable semiannually on and ,
beginning , 1999. Great Lakes may redeem some or all of the
notes at any time. The redemption price is described under the heading
"Description of Notes -- Redemption" on page S-7 of this prospectus supplement.
There is no sinking fund.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
<TABLE>
<CAPTION>
PER NOTE TOTAL
-------- ----------------------
<S> <C> <C>
Public Offering Price % $
Underwriting Discount % $
Proceeds to Great Lakes (before expenses) % $
</TABLE>
Interest on the notes will accrue from , 1999 to date
of delivery.
------------------
The underwriters are offering the notes subject to various conditions. The
underwriters expect to deliver the notes to purchasers on or about
, 1999.
------------------
SALOMON SMITH BARNEY
BEAR, STEARNS & CO. INC. GOLDMAN, SACHS & CO.
, 1999
<PAGE> 2
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT
MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION PROVIDED BY THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS ACCURATE AS OF ANY DATE
AFTER THE DATE ON THE FRONT OF THIS PROSPECTUS SUPPLEMENT.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Company................................................. S-3
Recent Developments......................................... S-4
Use of Proceeds............................................. S-5
Capitalization.............................................. S-5
Summary Financial Information............................... S-6
Description of Notes........................................ S-7
Underwriting................................................ S-12
Legal Matters............................................... S-13
PROSPECTUS
About This Prospectus....................................... 2
Where You Can Find More Information......................... 3
Great Lakes Chemical Corporation............................ 4
Use of Proceeds............................................. 4
Ratio of Earnings to Fixed Charges.......................... 4
Description of Debt Securities.............................. 5
Description of Debt Warrants................................ 18
Description of Common Stock and Rights...................... 19
Description of Stock Warrants............................... 22
Description of Currency Warrants............................ 23
Plan of Distribution........................................ 25
Legal Matters............................................... 26
Experts..................................................... 26
</TABLE>
Our principal executive offices are located at 500 East 96th Street, Suite
500, Indianapolis, Indiana 46240 and our telephone number is (317) 715-3000.
------------------
DELIVERY OF THE NOTES IS EXPECTED TO BE ON OR ABOUT ,
WHICH WILL BE THE BUSINESS DAY FOLLOWING THE DATE OF PRICING OF THE NOTES. YOU
SHOULD NOTE THAT TRADING OF THE NOTES ON THE DAY OF PRICING AND THE SUCCEEDING
BUSINESS DAYS MAY BE AFFECTED BY THIS DELAYED SETTLEMENT. SEE "UNDERWRITING."
S-2
<PAGE> 3
THE COMPANY
Great Lakes Chemical Corporation is a customer-focused supplier of
innovative specialty chemical solutions. Our broad range of products includes
flame retardants and other polymer additives, water treatment chemicals,
performance and fine chemicals, fire extinguishants and products and services
for oil and gas drilling. We serve customers and markets through a global
network of integrated sales, production, research, technical service and
distribution facilities.
Recently, we took a number of actions to continue the process of focusing
on our core specialty chemicals businesses and positioning these operations to
achieve higher growth and profitability, including:
- appointing a new chief executive officer and senior management team
- realigning our business units to focus more directly on customer needs
- completing the spin-off of our Petroleum Additives business unit (Octel),
as well as disposing of our Eastern European trading operation (Chemol)
and the environmental services business
- initiating a restructuring program that targets a $40 million annual
improvement in operating income
We are organized into four global business units:
Polymer Additives. Our Polymer Additives business unit is a leading
worldwide developer, producer and marketer of brominated, intumescent and
antimony based flame retardants and antioxidants, UV absorbers and light
stabilizers. These products have unique properties that improve the quality
of a variety of end-user products, including computer and business
equipment, consumer appliances, packaging, textile, building and
construction and transportation equipment. We engineer customer solutions
that impart performance enhancing characteristics, such as combustion
resistance and color consistency. Our polymer additives products are the
result of quality-driven manufacturing processes and expert technical
service, which we believe promotes customer satisfaction.
Performance Chemicals. Our Performance Chemicals business unit is a
collection of individual businesses providing a broad range of specialty
and fine chemicals for applications in the following end markets:
electronics, photographic papers and films, data processing, agrochemicals,
pharmaceuticals and food and other consumer products. We believe these
markets offer growth opportunities for our high-margin, value added
products and services. These products and services meet highly specific
requirements -- from creating complex organic molecules to developing and
piloting economical manufacturing processes for pharmaceutical,
agrochemical and industrial chemical applications. Advances in our
manufacturing technologies make Great Lakes Chemical a leading choice for
companies that outsource their complex chemical production needs.
Water Treatment. Our Water Treatment business unit is the world's
leading provider of recreational water care products to consumers. We
market our popular pool and spa products throughout North America, Europe,
South Africa and Australia. Our vertically integrated water treatment
organization sells necessary products and services including sanitizers,
oxidizers, balancers and algaecides for applications in pools, spas, hot
tubs, fountains and other recreational markets such as theme parks. We are
also a premier formulator of bromine-based biocide applications for
industrial water treatment, industrial and municipal wastewater treatment,
pulp and paper and food processing, preservative intermediaries and home
care. Our industrial customers are continuing to recognize the value of our
specialty oxidizing biocides for a number of applications, particularly the
cooling water and pulp and paper segments.
S-3
<PAGE> 4
Energy Services and Products. Our Energy Services and Products
business unit, OSCA, is a leading marketer of bromine-based clear workover
and completion fluids used in the production of oil and natural gas.
Building on our worldwide leadership position in fluids with the addition
of Marine Well Service, OSCA now offers a more comprehensive suite of
completion services, including downhole tools and coiled tubing service. In
addition, OSCA provides other ancillary well completion services, such as
gravel packing, high-pressure fracturing, packing, well stimulation and
coil-tube intervention.
The following table shows net sales and operating income (before special
charges) for our business units for 1998, 1997 and 1996 (in millions):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
OPERATING INCOME
NET SALES (BEFORE SPECIAL CHARGES)
------------------------------ ------------------------
1998 1997 1996 1998 1997 1996
-------- -------- -------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Polymer Additives............. $ 584.2 $ 553.9 $ 536.8 $ 78.9 $ 92.9 $ 97.2
Performance Chemicals......... 314.8 282.7 247.2 70.2 51.1 38.5
Water Treatment............... 378.7 350.1 429.5 54.5 46.3 34.6
Energy Services and
Products.................... 115.7 112.9 95.9 11.0 20.3 19.1
-------- -------- -------- ------ ------ ------
Total of reportable
segments............... 1,393.4 1,299.6 1,309.4 214.6 210.6 189.4
Corporate and other........... 0.9 11.6 42.9 (24.2) (19.0) (5.5)
-------- -------- -------- ------ ------ ------
Total............... $1,394.3 $1,311.2 $1,352.3 $190.4 $191.6 $183.9
======== ======== ======== ====== ====== ======
</TABLE>
Great Lakes Chemical Corporation is a Delaware corporation incorporated in
1933. Our principal executive offices are in Indianapolis, Indiana. We have a
significant presence in foreign markets, principally Western Europe and Asia.
Approximately one third of our assets and sales are outside the United States.
RECENT DEVELOPMENTS
On May 3, 1999, we acquired NSC Technologies ("NSCT") from Monsanto Company
for approximately $125 million in cash. NSCT develops, manufactures and sells
chiral pharmaceutical intermediates and select bulk actives to pharmaceutical
companies. NSCT's core chiral expertise in unnatural amino acids provides a
broad platform from which it develops novel, high value-added intermediates and
bulk actives for anti-viral, cardiovascular and oncology therapeutic drugs. NSCT
is now part of our Performance Chemicals business unit.
On May 5, 1999, we signed a definitive agreement to purchase FMC's Process
Additives Division ("PAD") for $159 million in cash. The pending transaction
will strengthen our Polymer Additives business unit by providing our polymer
customers with a broader range of product offerings from a single supplier. In
addition, this acquisition will more than double the industrial segment of the
Water Treatment business unit. The transaction is subject to normal regulatory
review and customary closing conditions and is expected to be completed by
August 1999. PAD is a world leader in the production of phosphate ester flame
retardants, flame retardant fluids and lubricant additives, as well as a leading
supplier of specialty water treatment chemicals used in industrial applications
and desalinization.
On July 1, 1999, we completed the sale of our furfural and furfural
derivatives business to Penn Specialty Chemicals, Inc. Included in the
transaction are our operations in Memphis, Tennessee, Omaha, Nebraska and
Harlan, Iowa, which collectively employ 225 people. This transaction, along
S-4
<PAGE> 5
with the other transactions mentioned above, furthers our business restructuring
plans to boost productivity and extend our capabilities in the fine chemicals
and polymer additives markets.
On June 15, 1999, we announced that we have been cooperating since the
spring of 1998 with the U.S. Department of Justice and the European Commission
in their respective investigations of the bromine and brominated products
industry. Both investigations were initiated after we self-reported to those
agencies certain business practices that raised questions under antitrust laws.
As a result of our cooperation, Great Lakes and its current directors and
employees have been accepted into the Department of Justice's amnesty program.
As such, we will be exempt from United States federal criminal prosecution and
fines relating to the practices in question if we comply with certain
conditions, including our continued full cooperation with the DOJ's
investigation and policy requiring all reasonable remedial efforts. We believe
we have fully complied with all applicable conditions to date and intend to
continue full compliance. Concurrently, we are seeking favorable treatment under
a program in the European Community that also rewards self-reporting and
cooperation. Participation in these amnesty programs, does not, however, provide
us with immunity from civil liability, including restitution claims. On July 1,
1999, a civil lawsuit was filed against Great Lakes in the U.S. District Court
for the Western District of Arkansas claiming, among other things, that Great
Lakes conspired with others in violation of the antitrust laws regarding the
pricing of bromine and brominated products. The lawsuit purports to be a class
action on behalf of United States purchasers of such products and seeks treble
damages.
USE OF PROCEEDS
We intend to use the net proceeds (after deducting the underwriting
discount and estimated expenses) from the issue and sale of the notes offered
hereby, which we estimate at $ million, to pay off commercial paper and for
other general corporate purposes. On June 30, 1999, we had approximately $554
million of commercial paper outstanding, with a weighted average maturity of
approximately 77 days and bearing a weighted average interest rate of
approximately 4.94% per annum.
CAPITALIZATION
The following table sets forth our consolidated capitalization as of March
31, 1999, and as adjusted to give effect to this offering (after deducting
underwriting discounts and estimated offering expenses) and the anticipated
application of the net proceeds. From time to time, we may issue additional debt
or equity securities. The following information should be read in conjunction
with our consolidated financial statements and related notes incorporated in
this prospectus supplement by reference. See "Where You Can Find More
Information" in the accompanying prospectus.
<TABLE>
<CAPTION>
MARCH 31, 1999
(UNAUDITED)
------------------------------------
ACTUAL ADJUSTMENTS AS ADJUSTED
-------- ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Notes payable......................................... $ 1.9
Commercial paper...................................... 462.2
Industrial development bonds.......................... 12.3
Other................................................. 22.8
Notes offered hereby.................................. --
-------- -- --------
Total debt....................................... 499.2
-------- -- --------
Stockholders' equity.................................. 1,066.4
-------- -- --------
Total capitalization........................... $1,565.6
======== == ========
</TABLE>
S-5
<PAGE> 6
SUMMARY FINANCIAL INFORMATION
This table shows summary financial information for each of the past five
fiscal years and for the first quarters of this fiscal year and last fiscal
year. The information for the full fiscal years is derived from our audited
financial statements. The information for the interim periods is derived from
our unaudited financial statements. This table should be read in conjunction
with our consolidated financial statements and related notes incorporated by
reference in this prospectus supplement. See "Where You Can Find More
Information" in the accompanying prospectus.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
------------------- ----------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Net sales....................... $ 334.2 $ 334.7 $1,394.3 $1,311.2 $1,352.3 $1,291.6 $1,097.1
Selling, administrative and
research expenses............. 51.5 46.0 192.4 182.1 199.4 195.9 171.9
Operating income before special
charges....................... 46.3 47.3 190.4 191.6 183.9 198.3 151.6
Special charges................. -- 15.5 116.5 49.8 -- -- --
Operating income................ 46.3 31.8 73.9 141.8 183.9 198.3 151.6
Interest expense................ 5.6 7.8 24.8 28.4 18.5 13.5 8.8
Income from continuing
operations before income
taxes......................... 47.0 27.5 66.2 117.2 184.0 200.2 169.7
Income taxes.................... 16.0 10.3 9.8 45.4 63.4 68.0 44.0
-------- -------- -------- -------- -------- -------- --------
Net income from continuing
operations.................... 31.0 17.2 56.4 71.8 120.6 132.2 125.7
Net income (loss) from
discontinued operations....... -- 25.5 32.6 (14.9) 129.7 163.4 153.0
-------- -------- -------- -------- -------- -------- --------
Total net income....... $ 31.0 $ 42.7 $ 89.0 $ 56.9 $ 250.3 $ 295.6 $ 278.7
======== ======== ======== ======== ======== ======== ========
OTHER FINANCIAL DATA (CONTINUING
OPERATIONS)
EBIT(a)......................... $ 52.6 $ 50.8 $ 207.5 $ 195.4 $ 202.5 $ 213.7 $ 178.5
EBIT margin(b).................. 15.7% 15.2% 14.9% 14.9% 15.0% 16.5% 16.3%
EBITDA(c)....................... $ 73.1 $ 70.6 $ 291.0 $ 269.1 $ 267.8 $ 276.0 $ 233.9
EBITDA margin(d)................ 21.9% 21.1% 20.9% 20.5% 19.8% 21.4% 21.3%
Capital expenditures............ $ 28.7 $ 33.7 $ 160.6 $ 133.0 $ 168.7 $ 182.9 $ 86.0
Depreciation and amortization... 20.5 19.8 83.5 73.7 65.3 62.3 55.4
Research expense................ 9.0 9.8 42.3 41.8 43.1 41.3 39.4
Ratio of earnings to fixed
charges....................... 6.2x 3.5x 2.6x 3.9x 6.8x 8.4x 11.3x
Ratio of EBITDA to interest
expense....................... 13.1x 9.1x 11.7x 9.5x 14.5x 20.4x 26.6x
BALANCE SHEET DATA
Total assets.................... $1,963.7 2,316.2 2,004.6 2,270.4 2,352.7 2,179.9 1,810.8
Total debt...................... 499.2 586.7 519.9 568.1 502.5 351.6 137.4
Stockholders' equity............ 1,066.4 1,339.3 1,054.3 1,307.4 1,486.9 1,416.2 1,310.9
</TABLE>
- -------------------------
(a) EBIT represents income from continuing operations before special charges,
interest expense and income tax expense.
(b) EBIT margin is EBIT as a percentage of net sales.
(c) EBITDA represents income from continuing operations before special charges,
interest expense, income tax expense, depreciation and amortization. We
have included information concerning EBITDA because we believe it is used
by certain investors as one measure of a company's historical ability to
fund operations and meet its financial obligations. EBITDA is not intended
to represent cash flow from operations as defined by generally accepted
accounting principles and should not be used as an alternative to operating
income or income from continuing operations as an indicator of our
operating performance or cash flow as a measure of liquidity. In addition,
our definition of EBITDA may not be comparable to that reported by other
companies.
(d) EBITDA margin is EBITDA as a percentage of net sales.
S-6
<PAGE> 7
DESCRIPTION OF NOTES
We have summarized provisions of the notes below. This summary supplements
and replaces (if inconsistent with) the description of the general terms and
provisions of debt securities under the caption "Description of Debt Securities"
in the accompanying prospectus.
GENERAL
The notes will be issued under an indenture dated as of , 1999
between us and First National Bank of Chicago, as trustee.
The notes will mature in 2009 and will bear interest at % per annum.
Interest on the notes will accrue from , 1999. We:
- will pay interest semiannually on and of
each year, commencing , 1999,
- will pay interest to the person in whose name a note is registered at the
close of business on the or preceding the interest
payment date,
- will compute interest on the basis of a 360-day year consisting of twelve
30-day months,
- will make payments on the notes at the offices of the trustee, and
- may make payments by wire transfer for notes held in book-entry form or
by check mailed to the address of the person entitled to the payment as
it appears in the note register.
We will issue the notes only in fully registered form, without coupons, in
denominations of $1,000 and any integral multiple thereof. The notes will not be
subject to any sinking fund, and are subject to redemption at our option.
REDEMPTION
The notes will be redeemable at our option, in whole or in part, at any
time and from time to time, at a redemption price equal to the greater of:
- 100% of the principal amount of the notes to be redeemed or
- the sum of the present values of the Remaining Scheduled Payments on the
notes being redeemed, discounted to the redemption date on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus basis points.
In each case, we will pay accrued interest to the date of redemption.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker that would be used, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the notes.
"Comparable Treasury Price" means:
- the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) as of
the third business day preceding the redemption date, as set forth in the
daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities," or
- If that release (or any successor release) is not published or does not
contain such prices on that business day, (a) the average of the
Reference Treasury Dealer Quotations for the
S-7
<PAGE> 8
redemption date, after excluding the highest and lowest of such Reference
Treasury Dealer Quotations, or (b) if the trustee obtains fewer than four
such Reference Treasury Dealer Quotations, the average of all quotations
obtained.
"Independent Investment Banker" means one of the Reference Treasury Dealers
that we appoint.
"Reference Treasury Dealer" means each of Salomon Smith Barney Inc. (and
its successors) and four other nationally recognized investment banking firms
that are primary U.S. Government securities dealers specified from time to time
by us. If, however, any of them shall cease to be a primary U.S. Government
securities dealer, we will substitute another nationally recognized investment
banking firm that is such a dealer.
"Remaining Scheduled Payments" means the remaining scheduled payments of
the principal of and interest on each note to be redeemed that would be due
after the related redemption date but for such redemption. If the redemption
date is not an interest payment date with respect to the note being redeemed,
the amount of the next succeeding scheduled interest payment on the note will be
reduced by the amount of interest accrued thereon to that redemption date.
"Treasury Rate" means the rate per annum equal to the semiannual equivalent
yield to maturity (computed as of the second business day immediately preceding
the redemption date) of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for the redemption date.
We will mail notice of a redemption not less than 30 days nor more than 60
days before the redemption date to holders of notes to be redeemed.
If we are redeeming less than all the notes, the trustee will select the
particular notes to be redeemed by lot or by another method the trustee deems
fair and appropriate. Unless we default in payment of the redemption price, on
and after the redemption date, interest will cease to accrue on the notes or
portions thereof called for redemption.
Except as described above, the notes will not be redeemable by us prior to
maturity and will not be entitled to the benefit of any sinking fund.
RANKING
The notes will be our senior unsecured obligations and will rank equally in
right of payment with all of our other senior unsecured and unsubordinated
indebtedness.
We currently conduct a substantial portion of our operations through our
subsidiaries, and our subsidiaries generate a substantial portion of our
operating income and cash flow. As a result, distributions or advances from our
subsidiaries are a major source of funds necessary to meet our debt service
obligations. Contractual provisions or laws, as well as our subsidiaries'
financial condition and operating requirements, may limit our ability to obtain
cash from our subsidiaries that we require to pay our debt service obligations,
including payments on the notes. The notes will be structurally subordinated to
all obligations of our subsidiaries, including claims of trade payables. This
means that holders of the notes will have a junior position to the claims of
creditors of our subsidiaries on their assets and earnings. The notes will also
be effectively subordinated to any secured debt we may incur, to the extent of
the value of the assets securing that debt. The indenture does not limit the
amount of debt our subsidiaries can incur, and it restricts our ability to incur
secured debt, subject to the limitations described under "Descriptions of Debt
Securities -- Certain Covenants" in the accompanying prospectus.
S-8
<PAGE> 9
NOTICES
We will mail notices and communications to the holder's address shown on
the register of the notes.
PAYING AGENTS AND TRANSFER AGENTS
The trustee will be the paying agent and transfer agent for the notes.
THE TRUSTEE
First National Bank of Chicago is the trustee under the indenture. The
trustee and its affiliates also perform certain commercial banking services for
us for which they receive customary fees.
BOOK-ENTRY DELIVERY AND SETTLEMENT
We will issue the notes in the form of one or more permanent global notes
in definitive, fully registered, book-entry form. The global notes will be
deposited with or on behalf of The Depository Trust Company ("DTC") and
registered in the name of Cede & Co., as nominee of DTC, or will remain in the
custody of the trustee in accordance with the FAST Balance Certificate Agreement
between DTC and the trustee.
DTC has advised us as follows:
- DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code
and a "clearing agency" registered under Section 17A of the Securities
Exchange Act of 1934
- DTC holds securities that its participants deposit with DTC and
facilitates the settlement among participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in participants' accounts, thereby
eliminating the need for physical movement of securities certificates
- Direct participants include securities brokers and dealers, trust
companies, clearing corporations and other organizations
- DTC is owned by a number of its direct participants and by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc.
- Access to the DTC system is also available to others such as securities
brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a direct participant, either
directly or indirectly
- The rules applicable to DTC and its participants are on file with the SEC
We have provided the following descriptions of the operations and
procedures of DTC solely as a matter of convenience. These operations and
procedures are solely within the control of DTC and are subject to change by
them from time to time. Neither we, the underwriters nor the trustee take any
responsibility for these operations or procedures, and you are urged to contact
DTC or its participants directly to discuss these matters.
S-9
<PAGE> 10
We expect that under procedures established by DTC:
- upon deposit of the global notes with DTC or its custodian, DTC will
credit on its internal system the accounts of direct participants
designed by the underwriters with portions of the principal amounts of
the global notes
- ownership of the notes will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by DTC or its
nominee, with respect to interests of direct participants, and the
records of direct and indirect participants, with respect to interests of
persons other than participants
The laws of some jurisdictions require that purchasers of securities take
physical delivery of those securities in definitive form. Accordingly, the
ability to transfer interests in the notes represented by a global note to those
persons may be limited. In addition, because DTC can act only on behalf of its
participants, who in turn act on behalf of persons who hold interests through
participants, the ability of a person having an interest in notes represented by
a global note to pledge or transfer those interests to persons or entities that
do not participate in DTC's system, or otherwise to take actions in respect of
such interest, may be affected by the lack of a physical definitive security in
respect of such interest.
So long as DTC or its nominee is the registered owner of a global note, DTC
or that nominee will be considered the sole owner or holder of the notes
represented by that global note for all purposes under the indenture and under
the notes. Except as provided below, owners of beneficial interests in a global
note will not be entitled to have notes represented by that global note
registered in their names, will not receive or be entitled to receive physical
delivery of certificated notes and will not be considered the owners or holders
thereof under the indenture or under the notes for any purpose, including with
respect to the giving of any direction, instruction or approval to the trustee.
Accordingly, each holder owning a beneficial interest in a global note must rely
on the procedures of DTC and, if that holder is not a direct or indirect
participant, on the procedures of the participant through which that holder owns
its interest, to exercise any rights of a holder of notes under the indenture or
the global note.
Neither we nor the trustee will have any responsibility or liability for
any aspect of the records relating to or payments made on account of notes by
DTC, or for maintaining, supervising or reviewing any records of DTC relating to
the notes.
Payments on the notes represented by the global notes will be made to DTC
or its nominee, as the case may be, as the registered owner thereof. We expect
that DTC or its nominee, upon receipt of any payment on the notes represented by
a global note, will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the global note as
shown in the records of DTC or its nominee. We also expect that payments by
participants to owners of beneficial interests in the global note held through
such participants will be governed by standing instructions and customary
practice as is now the case with securities held for the accounts of customers
registered in the names of nominees for such customers. The participants will be
responsible for those payments.
Payments on the notes represented by the global notes will be made in
immediately available funds. Transfers between participants in DTC will be
effected in accordance with DTC rules and will be settled in immediately
available funds.
S-10
<PAGE> 11
CERTIFICATED NOTES
We will issue certificated notes to each person that DTC identifies as the
beneficial owner of the notes represented by the global notes upon surrender by
DTC of the global notes if:
- DTC notifies us that it is no longer willing or able to act as a
depository for the global notes, and we have not appointed a successor
depository within 90 days of that notice
- an event of default has occurred and is continuing, and DTC requests the
issuance of certificated notes or
- we determine not to have the notes represented by a global note.
Neither we nor the trustee will be liable for any delay by DTC, its nominee
or any direct or indirect participant in identifying the beneficial owners of
the related notes. We and the trustee may conclusively rely on, and will be
protected in relying on, instructions from DTC or its nominee for all purposes,
including with respect to the registration and delivery, and the respective
principal amounts, of the notes to be issued.
S-11
<PAGE> 12
UNDERWRITING
Subject to the terms and conditions stated in the underwriting agreement
dated the date hereof, each underwriter named below has severally agreed to
purchase, and we have agreed to sell to such underwriter, the principal amount
of the notes set forth opposite the name of such underwriter.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
NAME NOTES
- ---- ------------
<S> <C>
Salomon Smith Barney Inc. .................................. $
Bear, Stearns & Co. Inc. ...................................
Goldman, Sachs & Co. .......................................
------------
Total............................................. $300,000,000
============
</TABLE>
The underwriting agreement provides that the obligations of the several
underwriters to purchase the notes included in this offering are subject to
approval of certain legal matters by counsel and to certain other conditions.
The underwriters are obligated to purchase all the notes if they purchase any of
the notes.
The underwriters propose initially to offer the notes to the public at the
public offering price set forth on the cover page of this prospectus supplement
and to offer some of the notes to certain dealers at the public offering price
less a concession not in excess of % of the principal amount of the notes.
The underwriters may allow, and such dealers may reallow, a discount not in
excess of % of the principal amount of the notes on sales to certain other
dealers. After the initial public offering, the public offering price,
concession and discount may be changed by the underwriters.
The notes are a new issue of securities with no established trading market.
We do not presently intend to list the notes on any national securities
exchange. We have been advised by the underwriters that they intend to make a
market in the notes but the underwriters are not obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the notes.
The underwriting discounts and commissions to be paid to the underwriters
by us in connection with this offering will be % per note, for a total of
$ . In addition, we estimate that we will incur other offering expenses of
approximately $ .
The underwriters have performed various financial advisory and investment
banking services for us from time to time, for which they have received or will
receive customary fees. The underwriters may, from time to time, engage in
transactions with and perform services for us in the ordinary course of
business.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments the underwriters may be required to make in respect of any of those
liabilities.
In connection with this offering, Salomon Smith Barney Inc., on behalf of
the underwriters, may over-allot, or engage in syndicate covering transactions,
stabilizing transactions and penalty bids. Over-allotment involves syndicate
sales of notes in excess of the number of notes to be purchased by the
underwriters in the offering, which creates a syndicate short position.
Syndicate covering transactions involve purchases of the notes in the open
market after the distribution has been completed in order to cover syndicate
short positions. Stabilizing transactions consist of certain bids for or
purchases of notes made for the purpose of preventing or retarding a decline in
the market price of the notes while the offering is in progress. Penalty bids
permit the underwriters to reclaim a selling concession from a syndicate member
when Salomon Smith Barney Inc. repurchases notes
S-12
<PAGE> 13
originally sold by that syndicate member in covering syndicate short positions.
These activities may cause the price of the notes to be higher than it would be
in the open market in the absence of such transactions. These transactions, if
commenced, may be discontinued at any time.
LEGAL MATTERS
The validity of the notes will be passed upon for Great Lakes by Kirkland &
Ellis, a partnership including professional corporations, Chicago, Illinois.
Certain legal matters relating to the notes will be passed upon for the
underwriters by Mayer, Brown & Platt, Chicago, Illinois.
S-13
<PAGE> 14
PROSPECTUS
GREAT LAKES CHEMICAL CORPORATION
$750,000,000
DEBT SECURITIES AND DEBT WARRANTS
COMMON STOCK, RIGHTS AND COMMON STOCK WARRANTS
CURRENCY WARRANTS
-------------------------
We will use this prospectus to offer and sell securities from time to
time. These may include:
- - unsecured senior debt securities
- - unsecured subordinated debt securities
- - warrants to purchase debt securities
- - common stock
- - rights issued under our rights plan
- - warrants to purchase common stock
- - warrants to receive the cash value in U.S. dollars of the right to purchase
or sell a foreign currency or currency units
- - units consisting of any combination of these securities
We will provide the specific terms and conditions of these securities in
supplements to this prospectus prepared in connection with each offering. These
terms and conditions may include:
In the case of debt securities:
- - interest rate
- - maturity
- - ranking
- - redemption or repayment prior to maturity
- - additional covenants
In the case of warrants:
- - expiration date
- - exercise price
- - conditions to exercisability
In the case of currency warrants:
- - base foreign currency or currency units
- - formula for determining value
- - conditions to exercisability
In the case of any securities:
- - price
- - size of offering
- - underwriting discounts and commissions
The securities offered will contain other significant terms and conditions.
Please read this prospectus and the applicable prospectus supplement carefully
before you invest.
------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
------------------------
The date of this prospectus is July 7, 1999.
<PAGE> 15
TABLE OF CONTENTS
<TABLE>
<S> <C>
About This Prospectus....................................... 2
Where You Can Find More Information......................... 3
Great Lakes Chemical Corporation............................ 4
Use of Proceeds............................................. 4
Ratio of Earnings to Fixed Charges.......................... 4
Description of Debt Securities.............................. 5
Description of Debt Warrants................................ 18
Description of Common Stock and Rights...................... 19
Description of Stock Warrants............................... 22
Description of Currency Warrants............................ 23
Plan of Distribution........................................ 25
Legal Matters............................................... 26
Experts..................................................... 26
</TABLE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission (the "SEC") using a "shelf" registration
process. Under this shelf process, we may sell:
- - unsecured senior debt securities
- - unsecured subordinated debt securities
- - warrants to purchase debt securities
- - common stock
- - rights issued under our rights plan
- - warrants to purchase common stock
- - warrants to receive the cash value in U.S. dollars of the right to purchase or
sell a foreign currency or currency units
- - units consisting of any combination of these securities
in one or more offerings up to a total dollar amount of $750,000,000. This
prospectus provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and the applicable
prospectus supplement together with the additional information described below
under the heading "Where You Can Find More Information."
The registration statement of which this prospectus constitutes a part
(including the exhibits) contains additional important information about us and
the securities offered under this prospectus. Specifically, the legal documents
that control the terms of any securities offered by this prospectus are filed
with the SEC as exhibits to the registration statement. That registration
statement can be read at the SEC's web site or at the SEC offices mentioned
under the heading "Where You Can Find More Information."
We may sell the securities to or through underwriters or dealers and may
also sell securities directly to other purchasers or through agents. See "Plan
of Distribution." The applicable prospectus supplement contains the names of any
underwriters, dealers or agents involved in the sale of any securities and any
applicable fee, commission or discount arrangements with them.
This prospectus may not be used to consummate sales of any securities
described herein unless accompanied by a prospectus supplement.
2
<PAGE> 16
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file with the
SEC at its public reference facilities at:
- 450 Fifth Street, N.W., Washington, D.C. 20549
- 7 World Trade Center, Suite 1300, New York, New York 10048
- Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511
You can also obtain copies of our filings at prescribed rates by writing to
the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference facilities. Our SEC filings are also available
to the public over the Internet on the SEC's web site at http://www.sec.gov and
at the office of The New York Stock Exchange at 20 Broad Street, New York, New
York 10005. For further information on obtaining copies of our public filings at
the New York Stock Exchange, you should call (212) 656-5060.
We "incorporate by reference" into this prospectus the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus and any information that we file
subsequently with the SEC will automatically update this prospectus. We
incorporate by reference:
- our Annual Report on Form 10-K for the year ended December 31, 1998, as
amended
- our Quarterly Report on Form 10-Q for the period ended March 31, 1999
- our Current Report on Form 8-K filed with the SEC on July 7, 1999
- our proxy statement for our 1998 annual meeting of stockholders as filed
with the SEC on March 29, 1999
- our Registration Statement on Form 8-A filed with the SEC on March 23,
1999 relating to our rights plan
- any filings we make with the SEC under Sections 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934 until we sell all of the
securities offered by this prospectus.
You may request a copy of these filings (other than exhibits, unless that
exhibit is specifically incorporated by reference into that filing) at no cost,
by writing to or telephoning us at the following address and telephone number:
Jeffrey Potrzebowski
Director of Investor Relations
500 East 96th Street, Suite 500
Indianapolis, Indiana 46240
(317) 715-3000
You should rely only on the information incorporated by reference or set
forth in this prospectus or the applicable prospectus supplement. We have not
authorized anyone else to provide you with different information. We may only
use this prospectus to sell securities if it is accompanied by a prospectus
supplement. We are only offering these securities in states where the offer is
permitted. You should not assume that the information in this prospectus or the
applicable prospectus supplement is accurate as of any date other than the dates
on the front of those documents.
3
<PAGE> 17
GREAT LAKES CHEMICAL CORPORATION
Great Lakes Chemical Corporation is a Delaware corporation incorporated in
1933, having its principal executive offices in Indianapolis, Indiana. The
Company's operations focus on the manufacture of performance chemicals, water
treatment chemicals, polymer additive chemicals and energy products and
services.
Our principal executive office is located at 500 East 96th Street, Suite
500, Indianapolis, Indiana 46240 and our telephone number is (317) 715-3000. As
used in this prospectus and the accompanying prospectus supplement, "we," "us,"
"our," "Great Lakes" or the "Company" refers to Great Lakes Chemical Corporation
and its consolidated subsidiaries, unless otherwise indicated by the context.
USE OF PROCEEDS
Unless we specify otherwise in the applicable prospectus supplement, we
will use the net proceeds from the sale of the offered securities for general
corporate purposes, including working capital, the repayment or refinancing of
our indebtedness, future acquisitions and/or capital expenditures. Until we
apply the net proceeds for specific purposes, we may invest such net proceeds in
short-term or marketable securities.
RATIOS OF EARNINGS TO FIXED CHARGES
The following are our unaudited consolidated ratios of earnings to fixed
charges for each of the years in the five-year period ended December 31, 1998
and for the three months ended March 31, 1999:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED DECEMBER 31,
MARCH 31, --------------------------------------------
1999 1998 1997 1996 1995 1994
------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges..... 6.2 2.6 3.9 6.8 8.4 11.3
</TABLE>
4
<PAGE> 18
DESCRIPTION OF DEBT SECURITIES
The following is a general description of the terms of the debt securities
that we may offer from time to time. The particular terms of the debt securities
offered by any prospectus supplement and the extent, if any, to which the
general provisions described below may apply will be described in the applicable
prospectus supplement.
The debt securities may be issued from time to time in one or more series.
If the debt securities are "Senior Debt Securities," they will be issued under
an Indenture (the "Senior Indenture"), between us and First National Bank of
Chicago, as Trustee (the "Senior Trustee"). A copy of the Senior Indenture is
filed as an exhibit to the registration statement of which this prospectus is a
part. If the debt securities are "Subordinated Debt Securities," they will be
issued under an Indenture (the "Subordinated Indenture"), between us and a
trustee to be named prior to the offering of any Subordinated Debt Securities
(the "Subordinated Trustee"). A copy of the form of Subordinated Indenture is
filed as an exhibit to the registration statement of which this prospectus is a
part. The Senior Trustee and the Subordinated Trustee are referred to herein
individually as the "Trustee" and collectively as the "Trustees," and the Senior
Indenture and the Subordinated Indenture are referred to herein individually as
an "Indenture" and, collectively, as the "Indentures." You should read these
documents carefully to fully understand the terms of the debt securities. As
used in this "Description of Debt Securities," the "we," us," "our," "Great
Lakes" or the "Company" refers to Great Lakes Chemical Corporation, and not to
any of its subsidiaries, unless explicitly indicated by the context.
Because the following is only a summary of certain provisions of the debt
securities and the Indentures, it does not contain all information that you may
find useful. For further information about the debt securities and the
Indentures, you should read the Indentures. The Indentures are substantially
identical, except for certain of our covenants and provisions relating to
subordination. Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Indentures.
GENERAL
The Indentures do not limit the amount of debt securities that we can
issue. The Indentures provide that we can issue debt securities from time to
time, in one or more series, up to the aggregate amount which our board of
directors may authorize. The Indentures do not limit the amount of other
Indebtedness or securities, other than certain secured Indebtedness as described
below, which we may issue. All Senior Debt Securities will be unsecured and will
rank equally with all our other unsecured and unsubordinated indebtedness. All
Subordinated Debt Securities will be unsecured and will be subordinated in right
of payment to our Senior Indebtedness (which term includes the Senior Debt
Securities) as described below under "Provisions Applicable Solely to
Subordinated Debt Securities -- Subordination." A substantial portion of our
operations are conducted through our Subsidiaries. Creditors of our Subsidiaries
are entitled to a claim on the assets of those Subsidiaries. Consequently, in
the event of a liquidation or reorganization of any Subsidiary, creditors of
that Subsidiary are likely to be paid in full before any distribution is made to
us or you, except to the extent that we are recognized as a creditor of such
Subsidiary. If we are recognized as a creditor, our claims would still be
effectively subordinated to any security interests in the assets of such
Subsidiary and any Indebtedness of such Subsidiary senior to that held by us.
The debt securities will be obligations exclusively of the Company. Since
our operations are partially conducted through subsidiaries, primarily overseas,
our cash flow and therefore our ability to service debt, including the debt
securities offered by this prospectus, are partially dependent upon the earnings
of our subsidiaries and the distribution of those earnings to, or upon loans or
other payments of funds by those subsidiaries to, us. The subsidiaries are
separate and distinct legal entities and have no obligation to pay any amounts
due pursuant to the debt securities or to make any funds available
5
<PAGE> 19
to us to repay its obligations, whether by dividends, loans or other payments.
In addition, the payment of dividends and the making of loans and advances us by
our subsidiaries may be subject to statutory or contractual restrictions, are
contingent upon the earnings of those subsidiaries and are subject to various
business considerations.
Any right to receive assets of any of our subsidiaries upon their
liquidation or reorganization and therefore your right to participate in those
assets will be effectively subordinated to the claims of that subsidiary's
creditors, including trade creditors.
TERMS
We will prepare a prospectus supplement for each series of debt securities
that we issue. Each prospectus supplement will set forth the applicable terms of
the debt securities to which it relates, which may include the following:
(1) the title of the securities;
(2) any limit on the amount of the securities;
(3) the percentage of principal amount at which such securities may be
offered;
(4) the maturity;
(5) the interest rate or rates;
(6) the date from which interest will accrue;
(7) the interest payment dates;
(8) the record dates for determination of the holders to whom interest
is payable;
(9) any terms for redemption or for sinking fund payments;
(10) the currency or currencies or units in which the securities are
issuable and payable;
(11) any conversion features;
(12) whether the offered securities will be represented by one or more
global securities, and if so, the method of transferring beneficial
interests;
(13) whether and under what circumstances we will pay Additional
Amounts; and
(14) any other terms or conditions not inconsistent with the
Indentures.
Unless otherwise provided in the prospectus supplement relating to any
offered debt securities, principal, interest and Additional Amounts, if any,
will be payable, and the debt securities will be transferable or, if applicable,
convertible, at the office or agency maintained by us for such purposes;
provided that payment of interest on registered debt securities may be made by
check mailed to the persons entitled thereto at the addresses of such persons
appearing on the security register. In the case of registered debt securities,
interest on such debt securities will be payable on any interest payment date to
the persons in whose name the debt securities are registered at the close of
business on the record date with respect to such interest payment date.
Unless otherwise specified in the applicable prospectus supplement, debt
securities will be issued only in fully registered form without coupons in
denominations of $1,000 and any integral multiple thereof. The debt securities
may be represented by one or more global securities registered in the name of a
depository or its nominee and, if so represented, interests in such global
security will be shown on, and transfers thereof will be effected only through,
records maintained by the designated depository and its participants as
described below. Where debt securities of any series are issued in bearer form,
the special restrictions and considerations, including special offering
restrictions and
6
<PAGE> 20
special Federal income tax considerations, applicable to any such debt
securities and to payment on and transfer and exchange of such debt securities
will be described in the applicable prospectus supplement.
We may issue some of the debt securities as discounted debt securities
(bearing no interest or bearing interest at a rate which at the time of issuance
is below market rates) to be sold at a substantial discount below their stated
principal amount ("Original Issue Discount Securities"). Federal income tax
consequences and other special considerations applicable to any such Original
Issue Discount Securities will be described in the applicable prospectus
supplement.
If the purchase price of any debt securities is payable in one or more
foreign currencies or currency units or if any debt securities are denominated
in one or more foreign currencies or currency units or if the principal of or
interest, if any, on any debt securities is payable in one or more foreign
currencies or currency units, the restrictions, elections, certain Federal
income tax considerations, specific terms and other information with respect to
such issue of debt securities and such foreign currency or currency units will
be set forth in the applicable prospectus supplement.
Debt securities may be presented for exchange, and registered debt
securities may be presented for transfer, in the manner, at the places or
subject to the restrictions set forth in the applicable Indenture, the debt
securities and the applicable prospectus supplement. Debt securities in bearer
form and the coupons, if any, attached thereto will be transferable by delivery.
No service charge will be made for any transfer or exchange of debt securities,
but we may require payment of a sum sufficient to cover any tax or other
governmental change payable in connection therewith.
The Indentures require us to file with the Trustees, on an annual basis, a
certificate as to compliance with specified covenants contained in the
Indentures.
We will comply with Section 14(e) under the Securities Exchange Act of
1934, and any other tender offer rules which may then be applicable, in
connection with any obligation of ours to purchase offered debt securities at
the option of the holders thereof. Any such obligation applicable to a series of
debt securities will be described in the applicable prospectus supplement.
Unless otherwise described in a prospectus supplement relating to any
offered debt securities, other than as described below under "-- Limitation on
Liens," the Indentures do not contain any provisions that would limit our
ability to incur indebtedness or that would afford holders of debt securities
protection in the event of a sudden and significant decline in our credit
quality or a takeover, recapitalization or highly leveraged or similar
transaction in which we are involved. Accordingly, we could in the future enter
into transactions that could increase the amount of indebtedness outstanding or
otherwise affect our capital structure or credit rating. You should refer to the
applicable prospectus supplement relating to any debt securities for information
with respect to any deletions from, modifications of or additions to the Events
of Default described below or our covenants contained in the Indentures,
including any addition of a covenant or other provision providing event risk or
similar protection.
GLOBAL SECURITIES
We may issue debt securities as "global securities" that will be deposited
with a depository identified in the applicable prospectus supplement. The
depository may also act through a nominee. Global securities may be issued in
fully registered or bearer form and may be issued in either temporary or
permanent form. The specific terms of the depository arrangements for a series
of debt securities will be described in the applicable prospectus supplement. We
anticipate that the following provisions will generally apply to depository
arrangements.
Upon the issuance of a global security and the deposit of such global
security with or on behalf of the depository of such global security, the
depository will credit on its book-entry registration and
7
<PAGE> 21
transfer system the principal amounts of the individual debt securities
represented by such global security to the accounts of persons that have
accounts with such depository ("Participants"). The accounts to be credited will
be designated by the underwriters or agents of such debt securities or, if such
debt securities are offered and sold directly by us, by us. Ownership of
beneficial interests in a global security will be limited to Participants or
persons that may hold interests through Participants. Ownership of beneficial
interests in such global security will be shown on, and the transfer of those
ownership interests will be effected only through, records maintained by the
depository (with respect to interests of Participants) and records of
Participants (with respect to interests of persons who hold through
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to own, pledge or transfer
beneficial interest in a global security.
So long as the depository is the registered owner of a global security, the
depository will be considered the sole owner or holder of the debt securities
represented by such global security for all purposes under the applicable
Indenture. Except as provided below or in the applicable prospectus supplement,
owners of beneficial interests in a global security will not be entitled to have
any of the individual debt securities registered in their names, will not
receive or be entitled to receive physical delivery of any such debt securities
in definitive form and will not be considered the owners or holders thereof
under the applicable Indenture.
Payments of principal of and any interest (and premium, if any) on
individual debt securities represented by a global security will be made to the
depository as the registered owner of such global security. The depository will
have sole responsibility and liability with respect to passing such payments
along to beneficial holders and for maintaining, supervising or reviewing
records relating to beneficial ownership of the debt securities.
We understand that under existing industry practices, if we request any
action of holders or an owner of a beneficial interest in a global security
desires to give notice to take any action a holder is entitled to give or take
under the applicable Indenture, the depositary would authorize the Participants
to give such notice or take such action, and Participants would authorize
beneficial owners owning through such Participants to give such notice or take
such action or would otherwise act upon the instructions of beneficial owners
owning through them.
We expect that the depository, upon receipt of any payment in respect of a
global security, will immediately credit Participants' accounts for their pro
rata share of such payments. We also expect that payments by Participants to
beneficial owners will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of customers
in bearer form or registered in "street name." Such payments will be the
responsibility of such Participants.
If the depository is at any time unwilling, unable or ineligible to
continue as depository and a successor depository is not appointed by us within
90 days, we will issue individual debt securities to Participants in exchange
for the global security. In addition, we may, at any time and in our sole
discretion, subject to any limitations described in the applicable prospectus
supplement, redeem the global securities and issue individual debt securities to
Participants in exchange for such global security.
Principal of and any premium and interest on a global security will be
payable in a manner described in the applicable prospectus supplement.
CERTAIN COVENANTS
LIMITATION ON LIENS
The Senior Indenture provides that we will not, and will not permit any of
our Restricted Subsidiaries to, create, incur or otherwise cause or suffer to
exist or become effective any Liens of
8
<PAGE> 22
any kind upon any Principal Property or any shares of stock or indebtedness of
any Restricted Subsidiary now owned or hereafter acquired, unless all payments
due under the Senior Indenture and the Senior Debt Securities are secured on an
equal basis with the obligation so secured until such time as such obligation is
no longer secured by a Lien. Permitted Liens are excepted from this limitation.
See also "-- Exempted Indebtedness" below.
The Subordinated Indenture provides that we will not, and will not permit
any of our Restricted Subsidiaries to, create, incur, or otherwise cause or
suffer to exist or become effective any Liens of any kind upon any Principal
Property or any shares of stock or indebtedness of any Restricted Subsidiary
(whether such Principal Property, shares of stock or indebtedness are now owned
or hereafter acquired) that secures any Indebtedness that is equal in right of
payment with the Subordinated Debt Securities unless all payments due under the
Subordinated Indenture and the Subordinated Debt Securities are secured on an
equal basis with the obligation so secured until such time as such obligation is
no longer secured by a Lien. Permitted Liens are excepted from this limitation.
See also "-- Exempted Indebtedness" below.
LIMITATIONS ON SALE AND LEASEBACK TRANSACTIONS
The Indentures provide that neither we nor any Restricted Subsidiary will
enter into any sale and leaseback transaction with third parties with respect to
any Principal Property (except for temporary leases of a term, including
renewals, not exceeding five years) unless either (a) we or such Restricted
Subsidiary would be entitled, under the provisions of the Indentures, to incur
Indebtedness secured by a Lien on such property to be leased without equally and
ratably securing the debt securities, or (b) we, within 180 days after the
effective date of such transaction, apply to the voluntary retirement of our
Funded Debt an amount equal to the value of such transaction, defined as the
greater of the net proceeds of the sale of the property leased in such
transaction or the fair value, as determined by the Board of Directors, of the
leased property at the time such transaction was entered into. The Indentures
define "Funded Debt" as indebtedness (including the debt securities) maturing by
the terms thereof more than one year after the original creation thereof. See
also "-- Exempted Indebtedness" below.
EXEMPTED INDEBTEDNESS
Notwithstanding the foregoing limitations on Liens and sale and leaseback
transactions, we (and our Restricted Subsidiaries) may issue, assume, suffer to
exist or guarantee Indebtedness secured by a Lien without securing the debt
securities, or may enter into sale and leaseback transactions without retiring
Funded Debt, or enter into a combination of such transactions, if the sum of the
principal amount of all such Indebtedness and the aggregate value of all such
sale and leaseback transactions does not at any such time exceed 10% of our and
our Subsidiaries' consolidated total assets as shown in the latest audited
consolidated balance sheet contained in the latest annual report to our
stockholders.
CONVERSION
The Indentures contain certain provisions regarding the conversion of debt
securities into common stock (or cash in lieu thereof). The specific terms
applicable to a series of convertible debt securities, including the initial
conversion price or conversion rate, any adjustments to such conversion price or
conversion rate and the conversion period, and the conditions upon which such
conversion will be effected will be set forth in the applicable prospectus
supplement.
9
<PAGE> 23
EVENTS OF DEFAULT
The following are Events of Default under the Indentures with respect to
any debt securities of any series:
(i) failure to pay any installment of interest on or any Additional
Amounts with respect to any debt security, continued for 30 days;
(ii) failure to pay principal of (or premium, if any on) any debt
security, either at maturity, upon any redemption or otherwise;
(iii) failure by us to perform or observe certain other covenants,
conditions or agreements contained in debt securities or in the applicable
Indenture, continued for a period of 90 days after due notice is given as
provided in the applicable Indenture; or
(iv) certain events of bankruptcy, insolvency or reorganization.
Additional Events of Default may be added for the benefit of holders of
debt securities of a series. The Indentures provide that the Trustee shall
notify the holders of debt securities of each series of any continuing default
known to the Trustee which has occurred with respect to that series within 90
days after the occurrence thereof. The Indentures provide that, notwithstanding
the foregoing, except in the case of default in the payment of the principal of,
interest on or any Additional Amounts payable in respect of any of the debt
securities of such series, the Trustee may withhold such notice if the Trustee
in good faith determines that the withholding of such notice is in the interests
of the holders of debt securities of such series.
If an Event of Default of the type described in clause (iv) above has
happened and is continuing, then the principal of (or, with respect to a series
of Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of such series), accrued and unpaid interest on,
and any Additional Amounts payable in respect of the debt securities will become
immediately due and payable. If one or more Events of Default of the type
described in clauses (i) through (iii) with respect to any series of debt
securities at the time outstanding has happened and is continuing, then either
(x) the Trustee or (y) the holders of not less than 25% of the principal amount
of that series of the debt securities then outstanding may declare the principal
(or, with respect to a series of Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of such
series), accrued and unpaid interest on and any Additional Amounts payable in
respect of the debt securities of that series due and payable immediately. This
provision is subject to the condition that if, after any declaration of
acceleration and before Stated Maturity of the principal with respect to the
debt securities of such series, all arrears of interest and any Additional
Amounts and the expenses of the Trustee, its agents or attorneys shall be paid
by us or for our accounts, and all Defaults (other than the payment of principal
that has been declared due and payable) have been cured to the satisfaction of
the Trustee, then the Trustee shall, upon the written request of the holders of
a majority in principal amount of the debt securities of the applicable series,
waive such Default and rescind or annul the declaration of acceleration;
provided that no such waiver, rescission or annulment shall extend to or affect
any subsequent Default or impair any right consequent thereon.
No holder of any debt security of any series will have the right to pursue
a remedy under the applicable Indenture or the debt securities, unless (1) such
holder gives the Trustee notice of a continuing Default with respect to the debt
securities of that series, (2) the holders of at least a majority in principal
amount of the debt securities of the applicable series make a request to the
Trustee to pursue the remedy, (3) such holder or holders offered the Trustee
security or indemnity satisfactory to the Trustee against any loss, liability or
expense and (4) the Trustee does not comply with the request within 30 days
after the receipt of the request and the offer of security or indemnity.
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However, nothing contained in the Indentures shall affect or impair the right of
any holder of debt securities to institute suit to enforce payment of the
principal of, interest on and any Additional Amounts payable in respect of such
holder's debt securities on or after the due dates expressed in such debt
securities.
We will be required to furnish to the Trustee a statement, detailing any
Defaults of which we are aware, within five days after the occurrence of any
such Default.
REPORTS
The Indentures provide that we will file with the Trustee copies of the
annual reports and other information, documents and reports which we are
required to file with the SEC under the Securities Exchange Act of 1934. If we
are not required to file such reports and other information, the Indentures
provide that we shall file with the Trustee and cause to be mailed to the
holders of debt securities (i) annual reports containing the information
required to be contained in an Annual Report on Form 10-K, (ii) quarterly
reports containing the information required to be contained in a Quarterly
Report on Form 10-Q and (iii) promptly after the occurrence of an event required
to be therein reported, such other reports containing information required to be
contained in a Current Report on Form 8-K. We shall also comply with the
requirements of Section 314(a) of the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act").
SUCCESSOR COMPANY
The Indentures provide that we will not consolidate or merge with or into,
or sell, lease, convey or otherwise dispose of all or substantially all of our
assets or assign any of our obligations under the debt securities or applicable
Indenture, unless (i) the entity formed by or surviving any such consolidation
or merger (if other than us), or to which such sale, lease, conveyance or other
disposition or assignment shall have been made (the "Surviving Entity"), is a
corporation organized and existing under the laws of the United States, any
state thereof, or the District of Columbia; (ii) the Surviving Entity assumes,
by a supplemental Indenture in a form satisfactory to the Trustee, all of our
obligations under the debt securities and the applicable Indenture; and (iii)
immediately after giving effect to such transaction, no Default or Event of
Default has occurred and is continuing. With respect to the sale of assets, the
phrase "all or substantially all" as used in the Indentures varies according to
the facts and circumstances of the subject transaction, has no clearly
established meaning under New York law (which governs the Indentures) and is
subject to judicial interpretation. Accordingly, in certain circumstances there
may be a degree of uncertainty in ascertaining whether a particular transaction
would involve a disposition of "all or substantially all" of the assets of a
person, and therefore it may be unclear as to whether a disposition of assets
comes within the terms of this provision.
DISCHARGE
Each Indenture provides that it will cease to be of further effect (except
that certain obligations will survive) with respect to a series of debt
securities when all outstanding debt securities of such series authenticated and
issued have been delivered (other than destroyed, lost or stolen debt securities
that have been replaced or paid) to the Trustee for cancellation and we have
paid all sums payable under such Indenture.
MODIFICATION OF THE INDENTURES
Each Indenture contains provisions permitting us and the Trustee, with the
consent of the holders of not less than a majority in aggregate principal amount
of the debt securities of each series at the time outstanding under such
Indenture, to enter into supplemental indentures to amend any of
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the provisions of each Indenture or any supplemental indenture with respect to
the debt securities of such series; provided that, unless consented to by each
holder of debt securities of such series, no such supplemental indenture may:
(a) reduce the amount of debt securities whose holders must consent to
an amendment or a waiver;
(b) reduce the rate of or change the time for payment of interest or
Additional Amounts, including default interest on any debt security;
(c) reduce the principal of or change the Stated Maturity of any debt
security or alter the provisions with respect to redemption;
(d) make any debt security payable in money other than that stated in
the debt security;
(e) make any change in the types of amendment that need the approval
of every affected holder of debt securities;
(f) with respect to the Senior Indenture, affect the ranking of the
Senior Debt Securities; or
(g) waive a Default in the payment of principal of, any Additional
Amounts payable in respect of or interest on, or with respect to, any debt
security.
We and the Trustee may enter into supplemental indentures which amend the
applicable Indenture and the debt securities with respect to a particular series
without the consent of any holder of debt securities of such series in order to:
(a) cure any ambiguity, omission, defect or inconsistency;
(b) comply with such Indenture concerning the substitution of
successor corporations pursuant to a merger or consolidation;
(c) comply with any requirements of the SEC in connection with the
qualification of such Indenture under the Trust Indenture Act;
(d) provide for uncertificated securities;
(e) make any change that does not materially adversely affect the
legal rights of any holder of debt securities under the applicable
Indenture as then in effect;
(f) secure the debt securities and make intercreditor arrangements
with respect to any such debt securities (unless prohibited by such
Indenture);
(g) provide for a replacement Trustee;
(h) add to our covenants and agreements for the benefit of all the
holders of all of the debt securities with respect to a series and
surrender any right or power reserved for us in such Indenture; or
(i) add to, change or eliminate any of the provisions of the Indenture
in respect of one or more series of debt securities, so long as any such
addition, change or elimination (i) does not (A) apply to any debt security
of any series created prior to the execution of such supplemental indenture
and entitled to the benefit of such provision or (B) modify the rights of
the holder of any such debt security with respect to such provision or (ii)
becomes effective only when there are no debt securities outstanding under
the Indenture.
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DEFEASANCE AND COVENANT DEFEASANCE
Each Indenture provides that we may elect either:
(a) to terminate (and be deemed to have satisfied) all our obligations
with respect to such debt securities (except for the obligations to
register transfers or exchanges of such debt securities, to replace
mutilated, destroyed, lost or stolen debt securities, to maintain an office
or agency in respect of the debt securities, to compensate and indemnify
the Trustee and to punctually pay or cause to be paid the principal of,
interest on and any Additional Amounts payable in respect of all debt
securities of such series when due) ("defeasance"); or
(b) to be released from our obligations with respect to certain
covenants, including those described above under "Certain
Covenants -- Limitation on Liens" and "-- Limitations on Sale and Leaseback
Transactions" ("covenant defeasance").
In either case, we may be discharged from our obligations only if we deposit
with the Trustee, in trust for such purpose, money and/or U.S. Government
Obligations (as defined in the Indentures) which through the payment of
principal and interest in accordance with their terms will provide money, in an
amount sufficient (in the opinion of a nationally recognized firm of independent
public accountants) to pay the principal of, interest on and any Additional
Amounts payable in respect of the outstanding debt securities of such series,
and any mandatory sinking fund or analogous payments thereon, on the scheduled
due dates therefor. Such a trust may be established only if, among other things,
we have delivered to the Trustee an opinion of counsel (as specified in such
Indenture) with regard to certain matters, including an opinion to the effect
that the holders of such debt securities will not recognize income, gain or loss
for Federal income tax purposes as a result of such deposit and discharge and
will be subject to Federal income on the same amounts and in the same manner and
at the same times as would have been the case if such deposit and defeasance or
covenant defeasance, as the case may be, had not occurred. The applicable
prospectus supplement with respect to the debt securities of any series may
further describe these or other provisions, if any, permitting defeasance or
covenant defeasance.
CONCERNING THE TRUSTEE
The First National Bank of Chicago is the Trustee under the Senior
Indenture. Prior to the issuance of any Subordinated Debt Securities under the
Subordinated Indenture, we will engage a qualified trustee to serve as Trustee
under the Subordinated Indenture. Such Trustee will be an "eligible trustee"
under the Trust Indenture Act.
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES
SUBORDINATION
The Subordinated Debt Securities will be subordinate and junior in right of
payment, to the extent set forth in the Subordinated Indenture, to all our
Senior Indebtedness (as defined below). If we should default in the payment of
any principal of, interest on or any Additional Amounts payable in respect of
any Senior Indebtedness when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise, then,
upon written notice of such default to us by the holders of such Senior
Indebtedness or any Trustee therefor and subject to certain rights of ours to
dispute such default and subject to proper notification of the Trustee, unless
and until such default has been cured or waived or has ceased to exist, no
direct or indirect payment (in cash, property, securities, by set-off or
otherwise) will be made or agreed to be made for principal of, interest on or
any Additional Amounts payable in respect of the Subordinated Debt Securities,
or in respect of any redemption, retirement, purchase or other acquisition of
the Subordinated Debt Securities other than those made in our capital stock (or
cash in lieu of fractional shares thereof)
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under any conversion right of the Subordinated Debt Securities or otherwise made
in our capital stock.
The term "Senior Indebtedness" is defined to mean our Indebtedness
(including the Senior Debt Securities) outstanding at any time except:
(a) any Indebtedness as to which, by the terms of the instrument
creating or evidencing the same, it is provided that such Indebtedness is
not senior in right of payment to the Subordinated Debt Securities;
(b) the Subordinated Debt Securities;
(c) any Indebtedness of ours to a wholly owned Subsidiary of ours;
(d) interest accruing after the filing of a petition initiating
certain events of bankruptcy or insolvency unless such interest is an
allowed claim enforceable against us in a proceeding under federal or state
bankruptcy laws; and
(e) trade payables.
If (i) without our consent a court shall enter an order for relief with
respect to us under the United States federal bankruptcy laws or a judgment,
order or decree adjudging us as bankrupt or insolvent, or enter an order for
relief for reorganization, arrangement, adjustment or composition of or in
respect of us under the United States federal or state bankruptcy or insolvency
laws or (ii) we shall institute proceedings for the entry of an order for relief
with respect to us under the United States federal bankruptcy laws or for an
adjudication of insolvency, or shall consent to the institution of bankruptcy or
insolvency proceedings against us, or shall file a petition seeking, or seek or
consent to reorganization, arrangement, composition or similar relief under any
applicable law, or shall consent to the filing of such petition or to the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator or similar official in respect of us or of substantially all of our
property, or we shall make a general assignment for the benefit of creditors,
then all Senior Indebtedness (including any interest thereon accruing after the
commencement of any such proceedings and any Additional Amounts payable in
respect thereof) will first be paid in full before any payment or distribution,
whether in cash, securities or other property, is made on account of the
principal of, interest on or any Additional Amounts payable in respect of the
Subordinated Debt Securities. In such event, any payment or distribution on
account of the principal of, interest on or any Additional Amounts payable in
respect of Subordinated Debt Securities, whether in cash, securities or other
property (other than our securities or securities of any other corporation
provided for by a plan or reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in the subordination provisions
with respect to the Subordinated Debt Securities, to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or readjustment), which would otherwise
(but for the subordination provisions) be payable or deliverable in respect of
the Subordinated Debt Securities, will be paid or delivered directly to the
holders of Senior Indebtedness in accordance with the priorities then existing
among such holders until all Senior Indebtedness (including any interest thereon
accruing after the commencement of any such proceedings and any Additional
Amounts payable in respect thereof) has been paid in full. In the event of any
such proceeding, after payment in full of all sums owing with respect to Senior
Indebtedness, the holders of Subordinated Debt Securities, together with the
holders of any obligations of ours ranking on a parity with the Subordinated
Debt Securities, will be entitled to be repaid from our remaining assets the
amounts at that time due and owing on account of unpaid principal of, interest
on and any Additional Amounts payable in respect of the Subordinated Debt
Securities and such other obligations before any payment or other distribution,
whether in cash, property or otherwise, shall be made on account of any of our
capital stock or obligations ranking junior to the Subordinated Debt Securities
and such other obligations.
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If any payment or distribution on account of the principal of, interest on
or any Additional Amounts payable in respect of the Subordinated Debt Securities
of any character, whether in cash, securities or other property (other than our
securities or securities of any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the
Subordinated Debt Securities, to the payment of all Senior Indebtedness then
outstanding and to any securities issued in respect thereof under any such plan
or reorganization or readjustment), shall be received by the Trustee or any
holder of any Subordinated Debt Securities in contravention of any of the terms
of the Subordinated Indenture and before all the Senior Indebtedness shall have
been paid in full, such payment or distribution or security will be received in
trust for the benefit of, and will be paid over or delivered and transferred to,
the holders of the Senior Indebtedness then outstanding in accordance with the
priorities then existing among such holders for application to the payment of
all Senior Indebtedness remaining unpaid to the extent necessary to pay all such
Senior Indebtedness remaining unpaid in full.
By reason of such subordination, in the event of our insolvency, holders of
Senior Indebtedness may receive more, ratably, than holders of the Subordinated
Debt Securities. In addition, other creditors of ours who are not holders of
Subordinated Debt Securities or holders of Senior Indebtedness may recover less,
ratably, than holders of Senior Indebtedness and may recover more, ratably, than
holders of Subordinated Debt Securities. Such subordination will not prevent the
occurrence of an Event of Default or limit the right of acceleration in respect
of the Subordinated Debt Securities.
CERTAIN DEFINITIONS
The following are certain key definitions used in this section. These and
other definitions are contained in the Indentures. You should read the
applicable Indenture to understand these sections fully.
"Additional Amounts" shall mean any additional amounts which are required
by a debt security, under circumstances specified therein, to be paid by us in
respect of certain taxes imposed on certain holders of such debt securities, or
as otherwise specified in the terms of such debt security, and which are owing
to such holders.
"Affiliate" shall mean, with respect to any Person, another Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such first Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise.
"Capitalized Lease Obligation" shall mean an obligation that is required to
be classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with generally accepted accounting principles, and the
amount of Indebtedness represented by such obligation shall be the capitalized
amount of such obligation determined in accordance with such principles; and the
Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty.
"Consolidated Net Worth" shall mean the excess of (i) assets over (ii)
liabilities of Great Lakes and its consolidated Subsidiaries and Minority
Interests, as determined from time to time in accordance with generally accepted
accounting principles.
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"Default" shall mean any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Indebtedness" shall mean, with respect to any Person, at any date, any of
the following, without duplication: (i) any liability, contingent or otherwise,
of such Person (A) for borrowed money (whether or not the recourse of the lender
is to the whole of the assets of such Person or only to a portion thereof), (B)
evidenced by a note, bond, debenture or similar instrument or (C) for the
payment of money relating to a Capitalized Lease Obligation or other obligation
(whether issued or assumed) relating to the deferred purchase price of property;
(ii) all conditional sale obligations and all obligations under any title
retention agreement (even if the rights and remedies of the seller under such
agreement in the event of default are limited to repossession or sale of such
property), but excluding trade accounts payable arising in the ordinary course
of business; (iii) all obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction other than
entered into in the ordinary course of business; (iv) all indebtedness of others
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on any asset or property
(including, without limitation, leasehold interests and any other tangible or
intangible property) of such Person, whether or not such indebtedness is assumed
by such Person or is not otherwise such Person's legal liability; provided, that
if the obligations so secured have not been assumed in full by such Person or
are otherwise not such Person's legal liability in full, the amount of such
indebtedness for the purposes of this definition shall be limited to the lesser
of the amount of such indebtedness secured by such Lien or the fair market value
of the assets of the property securing such Lien; (v) all indebtedness of others
(including all interest and dividends on any indebtedness or preferred stock of
any other Person for the payment of which is) guaranteed, directly or
indirectly, by such Person or that is otherwise its legal liability or which
such Person has agreed to purchase or repurchase or in respect of which such
Person has agreed contingently to supply or advance funds; and (vi) obligations
in respect of Currency Agreements and Interest Swap Obligations.
"Issue Date" shall mean the first date on which a debt security is
authenticated by the Trustee under an Indenture.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien, charge or adverse claim affecting title or resulting in an encumbrance
against real or personal property or a security interest of any kind (including,
without limitation, any conditional sale or other title retention agreement or
lease in the nature thereof or any filing or agreement to file a financing
statement as debtor under the Uniform Commercial Code or any similar statute
other than to reflect ownership by a third party or property leased to us or any
of our Subsidiaries under a lease that is not in the nature of a conditional
sale or title retention agreement).
"Minority Interest" is defined as any shares of stock of any class of a
Subsidiary that are not owned by us or a Subsidiary of ours.
"Permitted Liens" shall mean, with respect to any Person: (i) Liens
existing on the Issue Date; (ii) Liens on property or assets of, or any shares
of stock of or secured debt of, any corporation existing at the time such
corporation becomes a Restricted Subsidiary of ours or at the time such
corporation is merged into the Company or any of its Restricted Subsidiaries;
(iii) Liens in favor us or any of our Restricted Subsidiaries; (iv) Liens in
favor of governmental bodies to secure progress or advance payments; (v) Liens
securing industrial revenue or pollution control bonds; (vi) Liens on Property
to secure Indebtedness incurred for the purpose of (a) financing all or any part
of the purchase price of such Property incurred prior to, at the time of, or
within 180 days after, the acquisition of such Property or (b) financing all or
any part of the cost of construction, improvement, development or expansion of
any such Property incurred prior to, at the time of, or within 180 days after,
such construction, improvement, development or expansion of such Property; (vii)
statutory
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liens or landlords', carriers', warehouseman's, mechanics', suppliers',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business and with respect to amounts not yet delinquent or being contested in
good faith by appropriate proceedings, if a reserve or other appropriate
provisions, if any, as shall be required in conformity with generally accepted
accounting principles has been made therefor; (viii) Liens on current assets of
Restricted Subsidiaries securing Indebtedness of such Restricted Subsidiaries;
and (ix) any extensions, substitutions, replacements or renewals in whole or in
part of a Lien (an "existing Lien") enumerated in clauses (i) through (viii)
above; provided that the Lien may not extend beyond (A) the Property or
Indebtedness subject to the existing Lien and (B) improvements and construction
on such Property and the Indebtedness secured by the Lien may not exceed the
Indebtedness secured at the time by the existing Lien.
"Person" shall mean any individual, corporation, partnership, limited
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or any other entity.
"Principal Property" shall mean any manufacturing plant or warehouse owned
or leased by us or any Subsidiary, the gross book value of which exceeds one
percent of Consolidated Net Worth, other than manufacturing plants and
warehouses which the Board of Directors by resolution declares, together with
all other plants and warehouses previously so declared, are not of material
importance to the total business conducted by us and our Restricted Subsidiaries
as an entirety.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent consolidated balance sheet of such Person and its Subsidiaries under
generally accepted accounting principles.
"Restricted Subsidiary" shall mean any of our Subsidiaries that is not an
Unrestricted Subsidiary.
"Stated Maturity," when used with respect to any security or any
installment of interest thereon, shall mean the date specified in such security
as the fixed date on which the principal of such security or such installment of
interest is due and payable.
"Subsidiary" of any Person shall mean (i) any Person of which more than 50%
of the total voting power of shares of capital stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more of the Restricted Subsidiaries of that
Person or a combination thereof, and (ii) any partnership, joint venture or
other Person in which such Person or one or more of the Restricted Subsidiaries
of that Person or a combination thereof has the power to control by contract or
otherwise the board of directors or equivalent governing body or otherwise
controls such entity.
"Unrestricted Subsidiary" means (i) any of our Subsidiaries that at the
time of determination shall be designated an Unrestricted Subsidiary by the our
Board of Directors in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any of our
Subsidiaries (including any newly-acquired or newly-formed Subsidiary) to be an
Unrestricted Subsidiary unless such Subsidiary owns any capital stock of, or
owns or holds any property of, ours or any of our other Subsidiaries that is not
a Subsidiary of the Subsidiary so designated; provided, however, that the
Subsidiary to be so designated has total assets of $5,000 or less.
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DESCRIPTION OF DEBT WARRANTS
We may issue, together with other securities or separately, warrants for
the purchase of debt securities ("Debt Warrants"). The Debt Warrants are to be
issued under Debt Warrant Agreements (each a "Debt Warrant Agreement") to be
entered into between us and a bank or trust company, as Debt Warrant Agent (the
"Debt Warrant Agent"), all as set forth in the applicable prospectus supplement.
The Debt Warrant Agent will act solely as our agent in connection with the Debt
Warrants of such series and will not assume any obligations or relationship of
agency or trust for or with any holders or beneficial owners of Debt Warrants. A
copy of the form of Debt Warrant Agreement, including the form of warrant
certificates representing the Debt Warrants (the "Debt Warrant Certificates"),
reflecting the alternative provisions to be included in the Debt Warrant
Agreements that will be entered into with respect to particular offerings of
Debt Warrants, will be filed in an amendment to the registration statement of
which this prospectus is a part or filed in a Current Report on Form 8-K and
incorporated by reference in the registration statement of which this prospectus
is a part. Because the following is only a summary of the Debt Warrant
Agreements and the Debt Warrant Certificates, it does not contain all of the
information that you may find useful. For further information about the Debt
Warrant Agreements and the Debt Warrant Certificates, you should read the Debt
Warrant Agreements and the Debt Warrant Certificates.
GENERAL
You should look in the accompanying prospectus supplement for the following
terms of the offered Debt Warrants:
(a) the designation, aggregate principal amount and terms of the debt
securities purchasable upon exercise of such Debt Warrants and the
procedures and conditions relating to the exercise of such Debt Warrants;
(b) the specific designation and terms of any related debt securities
with which such Debt Warrants are issued and the number of such Debt
Warrants issued with each such debt security;
(c) the date, if any, on and after which such Debt Warrants and the
related debt securities will be separately transferable;
(d) the principal amount of debt securities purchasable upon exercise
of each debt warrant and the price at which such principal amount of debt
securities may be purchased upon such exercise;
(e) the date on which the right to exercise such Debt Warrants shall
commence and the date on which such right shall expire (the "Expiration
Date");
(f) if the debt securities purchasable upon exercise of such Debt
Warrants are original issue discount debt securities, a discussion of
Federal income tax considerations applicable thereto; and
(g) whether the Debt Warrants represented by the Debt Warrant
Certificates will be issued in registered or bearer form, and, if
registered, where they may be transferred and registered.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Debt Warrant Agent or any other office
indicated in the prospectus supplement. Prior to the exercise of their Debt
Warrants, holders of Debt Warrants will not have any of the rights of holders of
the debt securities purchasable upon such exercise and will not be entitled to
payments of principal of and premium or interest, if any, on the debt securities
purchasable upon such exercise.
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EXERCISE OF DEBT WARRANTS
Each Debt Warrant will entitle the holder to purchase for cash such
principal amount of debt securities at such exercise price as shall in each case
be set forth in, or to be determinable as set forth in the applicable prospectus
supplement. Debt Warrants may be exercised at any time up to the close of
business on the Expiration Date set forth in the applicable prospectus
supplement. After the close of business on the Expiration Date, unexercised Debt
Warrants will become void.
Debt Warrants may be exercised as set forth in the applicable prospectus
supplement relating to such Debt Warrants. Upon receipt of payment and the Debt
Warrant Certificate properly completed and duly executed at the corporate trust
office of the Debt Warrant Agent or any other office indicated in the applicable
prospectus supplement, we will, as soon as practicable, forward the debt
securities purchasable upon such exercise. If less than all of the Debt Warrants
represented by such Debt Warrant Certificate are exercised, a new Debt Warrant
Certificate will be issued for the remaining amount of Debt Warrants.
DESCRIPTION OF COMMON STOCK AND RIGHTS
We may issue, separately or together with or upon conversion of or exchange
for other securities common stock, $1.00 par value ("Common Stock"), and
associated stock purchase rights ("Rights"), all as set forth in the applicable
prospectus supplement. The following summaries do not purport to be complete and
are subject to, and are qualified in their entirety by reference to, the
following documents:
(i) our Certificate of Incorporation (the "Certificate");
(ii) our By-Laws (the "By-Laws"); and
(iii) our Rights Plan, dated February 15, 1999, as may subsequently be
amended (the "Rights Agreement"), between us and Harris Trust Company of
New York, as Rights Agent, pursuant to which the Rights are issued.
A copy of each of the Certificate, By-Laws and the Rights Agreement are
incorporated by reference as exhibits. See "Where You Can Find More
Information."
COMMON STOCK
The authorized capital stock of the Company consists of 200,000,000 shares
of Common Stock.
Dividend Rights. Each share of Common Stock ranks equally with every other
share of Common Stock with respect to dividends and distributions. Dividends may
be declared by the Board of Directors and paid by the Company at such times as
the Board of Directors may determine, under the provisions of the Delaware
General Corporation Act.
Voting Rights. Each holder of Common Stock is entitled to one vote per
share of such stock held by him of record. Holders of Common Stock do not have
cumulative voting rights. Holders of Common Stock are entitled to vote on all
matters requiring shareholder approval under the Delaware General Corporation
Act and the Certificate and By-Laws, and to elect the members of the Board of
Directors. Directors are divided into three classes, each of which has, as
nearly as possible, the same number of directors. At each annual meeting of the
shareholders, the directors elected to succeed those whose terms have then
expired are designated as being of the same class as the directors they succeed
and (subject to removal) hold office for a three-year term expiring at the third
succeeding annual meeting of the shareholders.
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Liquidation Rights. On liquidation, holders of Common Stock are entitled to
receive all assets which remain after satisfaction of all of our liabilities and
obligations. Each share of Common Stock ranks equally with every other share of
Common Stock with respect to liquidating distributions.
Preemptive and Other Rights and Obligations. Holders of Common Stock are
not entitled to preemptive rights, conversion rights or redemption rights and
have no liability for further calls or assessments by or on behalf of the
Company.
RIGHTS PLAN
On February 15, 1999, our Board of Directors declared a dividend
distribution of one Right for each outstanding share of Common Stock to
stockholders of record at the close of business on April 1, 1999 (the "Record
Date") and has authorized the issuance of one Right for each share of Common
Stock issued between the Record Date and the Distribution Date. Each Right
entitles the registered holder to purchase one share of Common Stock from us at
a purchase price of $170.00, subject to adjustment in certain circumstances. The
description and terms of the Rights are set forth in the Rights Agreement.
Initially, the Rights will be attached to the certificates representing
outstanding shares of Common Stock, and no separate Rights Certificates
evidencing the Rights will be distributed. Until such time as separate Rights
Certificates are issued, the Rights will be transferable only in connection with
the transfer of the underlying shares of Common Stock. The Rights will separate
from the Common Stock and a Distribution Date will occur upon the earliest to
occur of (i) ten (10) days following a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the outstanding shares of Common Stock
(the date of such announcement being the "Stock Acquisition Date"), (ii) ten
(10) business days following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially owning 15% or more of
the outstanding shares of Common Stock or (iii) the tenth business day after the
Board of Directors determines that a person or group who has acquired 10% or
more of the Common Stock of the Company intends to cause the Company to
repurchase such shares or to pressure the Company to take action that is not in
the best interests of the Company or is reasonably likely to cause a material
adverse impact on the Company (an "Adverse Person"). Until the Distribution
Date, the surrender for transfer of any certificate for Common Stock will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on February 15, 2009, unless earlier redeemed by the
Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, such separate Rights
Certificates alone will represent the Rights. All shares of Common Stock issued
prior to the Distribution Date will be issued with Rights. Shares of Common
Stock issued after the Distribution Date will be issued with Rights if such
shares are issued pursuant to the exercise of stock options or under an employee
benefit plan, granted or awarded as of the Distribution Date, or upon the
exercise, conversion or exchange of securities issued after adoption of the
Rights Agreement. However, no additional rights will be issued if such issuance
would create a significant risk of a material adverse tax consequence to the
Company or if some other appropriate adjustment has been made in lieu of the
issuance. Except as otherwise determined by the Board of Directors, no other
shares of Common Stock issued after the Distribution Date will be issued with
Rights.
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<PAGE> 34
In the event that (i) a Person becomes the beneficial owner of more than
15% of the then outstanding shares of Common Stock (except pursuant to an offer
for all outstanding shares of Common Stock at a price and on terms which a
majority of the independent directors of the Company determines to be fair to,
and otherwise in the best interests of, the stockholders) or (ii) Board of
Directors determines that a person who has acquired 10% or more of the Common
Stock of the Company is an Adverse Person, at any time following the
Distribution Date, each holder of a Right will thereafter have the right to
receive, upon exercise, a number of shares of Common Stock having a value equal
to twice the Right's Purchase Price. Notwithstanding any of the foregoing,
following the occurrence of any of the events specified in this paragraph, all
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person or Adverse Person
will be null and void. However, Rights are not exercisable following the
occurrence of any of the events set forth above until such time as the Rights
are no longer redeemable by the Company as set forth below.
In the event that following the Stock Acquisition Date, (i) the Company is
acquired in a merger or consolidation in which the Company is not the surviving
corporation (other than a merger described in the preceding paragraph or a
merger that follows a tender offer determined to be fair to the stockholders of
the Company, as described in the preceding paragraph), (ii) in connection with a
merger in which the Company is the surviving corporation and in which all or
part of the Common Stock is exchanged for other securities, cash or property, or
(iii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right shall thereafter have the right to receive,
upon exercise of the Right, common stock of the acquiring company having a value
equal to two times the Exercise Price of the Right. The Exercise Price is the
Purchase Price multiplied by the number of shares of Common Stock issuable upon
exercise of a Right prior to the events described in this paragraph (initially,
one). The events set forth in this paragraph and in the preceding paragraph are
collectively referred to as the "Triggering Events."
The Purchase Price payable, and the number of shares of Common Stock
issuable, upon exercise of the Rights are subject to adjustment from time to
time (i) to prevent dilution in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common Stock, (ii) if
holders of the Common Stock are granted certain rights or warrants to subscribe
for Common Stock or securities convertible into Common Stock at less than the
current market price of the Common Stock, or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares of Common Stock will be issued upon exercise of the
Rights and, in lieu thereof, a cash payment will be made based on the market
price of the Common Stock on the last trading date prior to the date of
exercise.
As long as no Adverse Person has been identified by the Board of Directors,
at any time until the earlier of (i) the close of business on February 15, 2009
and (ii) fifteen days following the Stock Acquisition Date, the Company may
redeem the Rights in whole, but not in part, at a price of $.01 per Right,
payable, at the election of the Company, in cash or shares of Common Stock.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of an acquiring company.
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<PAGE> 35
Any of the provisions of the Rights Agreement may be amended by the Board
of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board to cure any ambiguity, defect or inconsistency, to make changes which do
not adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the SEC as an Exhibit to
a Registration Statement of the Company on Form 8-A. A copy of the Rights
Agreement is available free of charge from the Company upon written request
therefor. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
DESCRIPTION OF STOCK WARRANTS
We may issue, together with other securities or separately, stock warrants
for the purchase of Common Stock ("Stock Warrants"). The Stock Warrants are to
be issued under stock warrant agreements (each a "Stock Warrant Agreement") to
be entered into between us and a bank or trust company, as stock warrant agent
(the "Stock Warrant Agent"), all as set forth in the applicable prospectus
supplement. The Stock Warrant Agent will act solely as our agent in connection
with the Stock Warrants of such series and will not assume any obligations or
relationship of agency or trust for or with any holders or beneficial owners of
Stock Warrants. Copies of the forms of Stock Warrant Agreements and the forms of
warrant certificates (the "Stock Warrant Certificates") will be filed in an
amendment to the registration statement of which this prospectus is a part or
filed in a Current Report on Form 8-K and incorporated by reference in the
registration statement of which this prospectus is a part. The following
description of certain provisions of the forms of Stock Warrant Agreements and
Stock Warrant Certificates does not purport to be complete and is subject to,
and are qualified in their entirety by reference to, all the provisions of the
Stock Warrant Agreements and the Stock Warrant Certificates to be filed in an
amendment to the registration statement of which this prospectus is a part or
filed in a Current Report on Form 8-K and incorporated by reference in the
registration statement of which this prospectus is a part.
GENERAL
If we offer warrants for the purchase of Common Stock, the applicable
prospectus supplement will describe their terms, which may include the
following:
(i) the offering price of such Stock Warrants, if any;
(ii) the procedures and conditions relating to the exercise of such
Stock Warrants;
(iii) the number of shares of Common Stock purchasable upon exercise
of each stock warrant and the initial price at which such shares may be
purchased upon exercise;
(iv) the date on which the right to exercise such Stock Warrants shall
commence and the date on which such right shall expire (the "Expiration
Date");
(v) a discussion of Federal income tax considerations applicable to
the exercise of Stock Warrants;
(vi) call provisions of such Stock Warrants, if any; and
(vii) any other terms of the Stock Warrants.
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<PAGE> 36
The shares of Common Stock issuable upon the exercise of the Stock Warrants
will, when issued in accordance with the Stock Warrant Agreement, be fully paid
and nonassessable.
Prior to the exercise of their Stock Warrants, holders of Stock Warrants
will not have any of the rights of holders of the Common Stock purchasable upon
such exercise, and will not be entitled to any dividend payments on the Common
Stock purchasable upon such exercise.
EXERCISE OF WARRANTS
Each Stock Warrant will entitle the holder to purchase for cash such number
of shares of Common Stock at such exercise price as shall in each case be set
forth in, or be determinable as set forth in, the applicable prospectus
supplement. Unless otherwise specified in the applicable prospectus supplement,
Stock Warrants may be exercised at any time up to the close of business on the
Expiration Date set forth in the applicable prospectus supplement. After the
close of business on the Expiration Date, unexercised Stock Warrants will become
void.
Stock Warrants may be exercised as set forth in the applicable prospectus
supplement. Upon receipt of payment and the Stock Warrant Certificates properly
completed and duly executed at the corporate trust office of the Stock Warrant
Agent or any other office indicated in the prospectus supplement, we will, as
soon as practicable, forward a certificate representing the number of shares of
Common Stock purchasable upon such exercise. If less than all of the Stock
Warrants represented by such Stock Warrant Certificate are exercised, a new
Stock Warrant Certificate will be issued for the remaining amount of Stock
Warrants.
ANTI-DILUTION PROVISIONS
Unless otherwise specified in the applicable prospectus supplement, the
exercise price payable and the number of shares purchasable upon the exercise of
each stock warrant will be subject to adjustment in certain events, including:
(i) the issuance of a stock dividend to holders of Common Stock or a
combination, subdivision or reclassification of Common Stock;
(ii) the issuance of rights, warrants or options to all holders of
Common Stock entitling the holders thereof to purchase Common Stock for an
aggregate consideration per share less than the current market price per
share of the Common Stock; or
(iii) any distribution by us to the holders of our Common Stock of
evidences of our indebtedness or of assets (excluding cash dividends or
distributions payable out of capital surplus and dividends and
distributions referred to in (i) above).
No fractional shares will be issued upon exercise of Stock Warrants, but we will
pay the cash value of any fractional shares otherwise issuable.
DESCRIPTION OF CURRENCY WARRANTS
We may issue, together with debt securities or Debt Warrants or separately,
currency warrants which either: (i) entitle the holders thereof to receive from
us the Cash Settlement Value in U.S. dollars of the right to sell a specified
amount of a specified foreign currency or currency units for a specified amount
of U.S. dollars (each, a "Currency Put Warrant") or (ii) entitle the holders
thereof to receive from us the Cash Settlement Value in U.S. dollars of the
right to purchase a specified amount of a specified foreign currency or currency
units for a specified amount of U.S. dollars (each, a "Currency Call Warrant").
The spot exchange rate of the applicable Base Currency, upon exercise, as
compared to the U.S. dollar, will determine whether the currency warrants have a
Cash Settlement Value on any given day prior to their expiration.
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<PAGE> 37
The currency warrants are to be issued under a currency warrant agreement
(each a "Currency Warrant Agreement") to be entered into between us and a bank
or trust company, as agent (the "Currency Warrant Agent"), all as set forth in
the applicable prospectus supplement. The Currency Warrant Agent will act solely
as our agent in connection with the currency warrants of such series and will
not assume any obligations or relationship of agency or trust for or with any
warrant holders. Copies of the forms of Currency Warrant Agreements and the
forms of global warrant certificates representing the Currency Put Warrants and
the Currency Call Warrants (the "Currency Warrant Certificates"), reflecting the
provisions to be included in the Currency Warrant Agreement that will be entered
into with respect to particular offerings of Currency Warrants, will be filed in
an amendment to the registration statement of which this prospectus is a part or
filed in a Current Report on Form 8-K and incorporated by reference in the
registration statement of which this prospectus is a part are filed as exhibits
in the applicable registration statement of which this prospectus is a part. The
following description of certain provisions of the forms of Currency Warrant
Agreements and the Currency Warrant Certificates does not purport to be complete
and is subject to all the provisions of the Currency Warrant Agreements and the
Currency Warrant Certificates, respectively, to be filed in an amendment to the
registration statement of which this prospectus is a part or to be filed on a
Current Report on Form 8-K and incorporated by reference in the registration
statement of which this prospectus is a part, including the definitions therein
of certain capitalized terms not defined herein.
GENERAL
If we offer currency warrants, the applicable prospectus supplement will
describe their terms, which may include the following:
(i) whether such currency warrants will be Currency Put Warrants,
Currency Call Warrants, or both;
(ii) the formula for determining the Cash Settlement Value, if any, of
each currency warrant;
(iii) the procedures and conditions relating to the exercise of such
currency warrants;
(iv) the circumstances which will cause the currency warrants to be
deemed to be automatically exercised;
(v) any minimum number of currency warrants which must be exercised at
any one time, other than upon automatic exercise; and
(vi) the date on which the right to exercise such currency warrants
will commence and the date on which such right will expire (the "Expiration
Date").
BOOK-ENTRY PROCEDURES AND SETTLEMENT
Except as may otherwise be provided in the applicable prospectus
supplement, the currency warrants will be issued in the form of global Currency
Warrant Certificates, registered in the name of a depositary or its nominee.
Holders will not be entitled to receive definitive certificates representing
currency warrants. A holder's ownership of a currency warrant will be recorded
on or through the records of the brokerage firm or other entity that maintains
such holder's account. In turn, the total number of currency warrants held by an
individual brokerage firm for its clients will be maintained on the records of
the depositary in the name of such brokerage firm or its agent. Transfer of
ownership of any currency warrant will be effected only through the selling
holder's brokerage firm.
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EXERCISE OF CURRENCY WARRANTS
Each currency warrant will entitle the holder to receive the Cash
Settlement Value of such currency warrant on the applicable Exercise Date, in
each case as such terms will be defined in the applicable prospectus supplement.
If not exercised prior to 3:00 P.M., New York City time, on the third New York
Business Day preceding the Expiration Date, currency warrants will be deemed
automatically exercised on the Expiration Date.
PLAN OF DISTRIBUTION
The following summary of our plan for distributing the securities offered
under this prospectus will be supplemented by a description of our specific plan
for each offering in the prospectus supplement relating to such offering. Such
description will include, among other things, the terms of the underwriting
arrangements applicable to such offering.
We may sell the securities offered under this prospectus through agents,
through underwriters or dealers or directly to one or more purchasers. The
prospectus supplement with respect to the offered securities will set forth the
terms of the offering of such offered securities, including the name or names of
any underwriters, dealers or agents, the purchase price of such offered
securities and the proceeds to us from such sale, any underwriting discounts and
other items constituting underwriters' compensation, any initial public offering
price and any discounts, commissions or concessions allowed or reallowed or paid
to dealers, and any bidding or auction process. Any initial offering price and
any discounts, concessions or commissions allowed or reallowed or paid to
dealers may be changed from time to time.
If underwriters are used in an offering, the offered securities will be
acquired by the underwriters for their own account. The offered securities may
be sold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The offered securities may be offered to the public either
through underwriting syndicates represented by one or more managing underwriters
or directly by one or more of such firms. The specific managing underwriter or
underwriters, if any, will be set forth in the applicable prospectus supplement
together with the members of the underwriting syndicate, if any. Unless
otherwise set forth in the prospectus supplement, the obligations of the
underwriters to purchase the offered securities will be subject to certain
conditions precedent and the underwriters will be obligated to purchase all such
offered securities if any are purchased.
Offered securities may be sold directly by us or through agents designated
by us from time to time. The prospectus supplement will set forth the name of
any agent involved in the offer or sale of the offered securities in respect of
which the prospectus supplement is delivered and any commissions payable by us
to such agent. Unless otherwise indicated in the prospectus supplement, any such
agent is acting on a best efforts basis for the period of its appointment.
Any underwriters, dealers, or agents participating in the distribution of
the offered securities may be deemed to be underwriters and any discounts or
commissions received by them on the sale or resale of the offered securities may
be deemed to be underwriting discounts and commissions under the Securities Act
of 1933, as amended.
Agents, dealers or underwriters may be entitled, under agreements entered
into with us, to indemnification by us against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, and to contribution
with respect to payments which the agents, dealers or underwriters may be
required to make in respect thereof. Agents, dealers and underwriters may engage
in transactions with or perform services for us in the ordinary course of
business.
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The offered securities, other than the Common Stock, will be a new issue or
issues of securities with no established trading market. Any Common Stock
offered by this prospectus will be listed. Unless otherwise indicated in the
applicable prospectus supplement, we do not currently intend to list any offered
debt securities or warrants on any securities exchange. No assurance can be
given that the underwriters, dealers or agents, if any, involved in the sale of
the offered securities will make a market in such offered securities. Whether or
not any of the offered securities are listed on a national securities exchange
or the underwriters, dealers or agents, if any, involved in the sale of the
offered securities make a market in such offered securities, no assurance can be
given as to the liquidity of the trading market for such offered securities.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the applicable prospectus supplement, we may authorize
underwriters or other persons acting as our agents to solicit offers by certain
institutions to purchase offered securities from us under contracts providing
for payment and delivery on a future date. Institutions with which such
contracts may be made include:
- commercial and savings banks,
- insurance companies,
- pension funds,
- investment companies, and
- educational and charitable institutions and others,
but in all cases will be subject to our approval. The obligations of any
purchaser under any such contract will be subject to the conditions that the
purchase of the offered securities shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is subject
and, if the securities are also being sold to underwriters acting as principals
for their own account, the underwriters shall have purchased such securities not
sold for delayed delivery. The underwriters and such agents will not have any
responsibility in respect of the validity or performance of such contracts.
LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus supplement, certain
legal matters in connection with the securities offered hereby will be passed
upon for us by Kirkland & Ellis (a partnership including professional
corporations), Chicago, Illinois.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K for
the year ended December 31, 1998, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. Our consolidated financial statements and schedule are incorporated
by reference in reliance on Ernst & Young LLP's report, given on their authority
as experts in accounting and auditing.
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$300,000,000
GREAT LAKES CHEMICAL CORPORATION
% NOTES DUE 2009
[GLCC LOGO]
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PROSPECTUS SUPPLEMENT
, 1999
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SALOMON SMITH BARNEY
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
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