<PAGE> 1
Rule 424(b)(2)
Registration Statement No. 33-56043
PROSPECTUS SUPPLEMENT
(To Prospectus Dated April 16, 1998)
$250,000,000
MASCO CORPORATION
6.625% DEBENTURES DUE APRIL 15, 2018
------------------
Interest on the Debentures is payable on April 15 and October 15 of each
year, commencing October 15, 1998.
The Debentures will be represented by a Global Debenture registered in the
name of the nominee of the Depository Trust Company ("DTC"), which will act as
the Depository (the "Depository"). Beneficial interests in the Global Debenture
will be shown on, and transfers thereof will be effected only through, records
maintained by the Depository and, with respect to the beneficial owners'
interests, by the Depository's participants. Except as described herein,
Debentures in definitive form will not be issued. Settlement for the Debentures
will be in same-day funds. See "Description of Debentures -- Book-Entry System."
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
========================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Debenture............................ 99.859% 0.875% 98.984%
- --------------------------------------------------------------------------------------------------------
Total.................................... $249,647,500 $2,187,500 $247,460,000
========================================================================================================
</TABLE>
(1) Plus accrued interest, if any, from April 21, 1998.
(2) The Company has agreed to indemnify the several Underwriters against
certain liabilities under the Securities Act of 1933. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated to be
approximately $70,000.
------------------
The Debentures are offered subject to receipt and acceptance by the
Underwriters, to prior sale and to the Underwriters' right to reject any orders
in whole or in part and to withdraw, cancel or modify the offer without notice.
It is expected that delivery of the Debentures will be made through the
facilities of DTC, on or about April 21, 1998.
------------------
SALOMON SMITH BARNEY MERRILL LYNCH & CO.
The date of this Prospectus Supplement is April 16, 1998.
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBENTURES.
SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THE OFFERING
AND MAY BID FOR, AND PURCHASE, DEBENTURES IN THE OPEN MARKET. FOR A DESCRIPTION
OF THESE ACTIVITIES, SEE "UNDERWRITING".
------------------------
USE OF PROCEEDS
The net proceeds received by the Company from the sale of the Debentures
offered hereby will be used for general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratios of earnings to fixed charges were as follows for the
respective periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
7.5 6.8 5.0 6.7 5.8
</TABLE>
The ratio of earnings to fixed charges has been computed by dividing
earnings before income taxes and extraordinary income and fixed charges by the
fixed charges. This ratio includes the earnings and fixed charges of the Company
and its consolidated subsidiaries and dividends received from, less the equity
in undistributed earnings of 50% or less owned companies; fixed charges consist
of interest, amortization of debt expense and the portion of rentals for real
and personal properties representative of the interest factor.
DESCRIPTION OF DEBENTURES
GENERAL
The Debentures offered hereby will be limited to $250 million aggregate
principal amount and are to be issued under an Indenture (the "Indenture"),
which is more fully described in the accompanying Prospectus.
The Debentures will bear interest from April 21, 1998, payable
semi-annually on each April 15 and October 15, beginning on October 15, 1998, to
the persons in whose names the Debentures are registered at the close of
business on the April 1 or October 1, as the case may be, next preceding such
April 15 or October 15. The Debentures will mature on April 15, 2018 and are not
subject to any sinking fund.
BOOK-ENTRY SYSTEMS
The Debentures will be issued in fully registered form in the name of Cede
& Co., as nominee of DTC. One or more fully registered certificates will be
issued as Global Debentures for the Debentures in the aggregate principal amount
of the Debentures. Such Global Debentures will be deposited with DTC and may not
be transferred except as a whole by DTC to a nominee of DTC or by a nominee of
DTC to DTC or another nominee of DTC or by DTC or any nominee to a successor of
DTC or a nominee of such successor.
So long as DTC, or its nominee, is the registered owner of a Global
Debenture, DTC or such nominee, as the case may be, will be considered the sole
owner or holder of the Debentures represented by such Global Debenture for all
purposes under the Indenture. Except as set forth below, owners of beneficial
interests in a Global Debenture will not be entitled to have the Debentures
represented by such Global Debenture registered in their names, will not receive
or be entitled to receive physical delivery of such Debentures in definitive
form and will not be considered the owners or holders thereof under the
Indenture. Accordingly, each person owning a beneficial interest in a Global
Debenture must rely on the procedures of DTC for such Global Debenture and, if
such person is not a Participant (as defined below), on the procedures of the
Participant through which such person owns its interest, to exercise any rights
of a holder under the Indenture.
S-2
<PAGE> 3
DTC has advised the Company and the Underwriters as follows:
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" under 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 pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also 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, banks, trust companies, clearing
corporations, and certain 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 ("Indirect Participants"). The rules
applicable to DTC and its Participants are on file with the Securities and
Exchange Commission.
Purchases of Debentures under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Debentures
on DTC's records. The ownership of interest of each actual purchaser of
Debentures ("Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participant's records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected
to receive written confirmations providing details of the transaction, as
well as periodic statements of their holdings, from the Direct and Indirect
Participant through which the Beneficial Owner entered into the
transaction. Transfers of ownership interests in the Debentures are to be
accomplished by entries made on the books of Participants acting on behalf
of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in the Debentures, except in the
event that use of the book-entry system for the Debentures is discontinued.
To facilitate subsequent transfers, all Debentures deposited by
Participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co. The deposit of Debentures with DTC and their
registration in the name of Cede & Co. effect no change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the
Debentures; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Debentures are credited, which may or
may not be the Beneficial Owners. The Participants will remain responsible
for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Global Debentures. Under its usual procedures DTC mails an Omnibus Proxy to
Issuer as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts the Debentures are credited on the record date (identified
in the listing attached to the Omnibus Proxy).
Principal and interest payments on the Global Debentures will be made
to DTC. The Company expects that DTC, upon receipt of any payment of
principal or interest in respect of a Global Debenture, will credit
immediately Participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of such
Global Debenture as shown on DTC's records. The Company also expects that
payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held
for the accounts of customers in bearer form or registered in "street
name", and will be the responsibility of such Participant and not of DTC,
the Company or the Trustee, subject to any statutory or regulatory
requirements as may be in effect from time to time.
S-3
<PAGE> 4
DTC may discontinue providing its service as securities depositary
with respect to the Debentures at any time by giving reasonable notice to
the Company or the Trustee. In addition, the Company may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor securities depositary). Under such circumstances, if a successor
securities depositary is not obtained, Debenture certificates in fully
registered form are required to be printed and delivered to Beneficial
Owners of the Global Debentures representing such Debentures.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable
(including DTC), but the Company takes no responsibility for the accuracy
thereof.
Neither the Company, the Trustee nor the Underwriters will have any
responsibility or obligation to Participants, or the persons for whom they act
as nominees, with respect to the accuracy of the records of DTC, its nominee or
any Participant with respect to any ownership interest in the Debentures or
payments to, or the providing of notice to Participants or Beneficial Owners.
The Debentures will trade in DTC's Same-Day Funds Settlement System and
secondary market trading activity in the Debentures will, therefore, settle in
immediately available funds. All applicable payments of principal and interest
on the Debentures issued as Global Notes will be made by the Company in
immediately available funds.
For other terms of the Debentures, see "Description of Securities" in the
accompanying Prospectus.
DEFEASANCE
The Debentures will be subject to defeasance and discharge and to
defeasance of certain obligations as set forth in the Indenture, see
"Description of Securities -- Defeasance" in the Prospectus.
S-4
<PAGE> 5
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company has agreed to sell to each of the Underwriters named
below, and each of the Underwriters has severally agreed to purchase, the
principal amount of Debentures set forth opposite its name.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
UNDERWRITER OF NOTES
----------- ---------
<S> <C>
Salomon Brothers Inc ....................................... $125,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... 125,000,000
------------
Total................................................ $250,000,000
============
</TABLE>
The Company has been advised by the Underwriters that they propose to offer
part of the Debentures purchased by them, directly to the public at the public
offering price set forth on the cover page of this Prospectus Supplement, and
may offer part of the Debentures to certain dealers at such price less a
concession not in excess of 0.500% of the principal amount of the Debentures.
The Underwriters may allow and such dealers may reallow a concession not in
excess of 0.250% of the principal amount of the Debentures to certain other
dealers. After the initial public offering, the public offering price and other
selling terms may be changed by the Underwriters. The nature of the
Underwriters' obligation is such that they must purchase all of the Debentures
offered hereby if any of such Debentures are purchased.
Each of the Underwriters has in the past provided, and may in the future
provide, investment banking services to the Company and certain related
companies.
The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933.
The Company has agreed not to offer or sell or otherwise dispose of for
cash without the consent of the Underwriters any debt securities of the Company
substantially similar to the Debentures until the date following the date on
which the Debentures are delivered to the Underwriters.
The Company does not expect to list the Debentures on any securities
exchange. The Underwriters may from time to time purchase and sell Debentures in
the secondary market, but are not obligated to do so, and there can be no
assurance that there will be a secondary market for the Debentures or liquidity
in the secondary market if one develops.
In order to facilitate the offering of the Debentures, the Underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price of
the Debentures. Specifically, the Underwriters may overallot in connection with
the offering, creating a short position in the Debentures for their own account.
In addition, to cover overallotments or to stabilize the price of Debentures,
the Underwriters may bid for, and purchase, the Debentures in the open market.
Finally, the Underwriters may reclaim selling concessions allowed to an
Underwriter or a dealer for distributing the Debentures in the offering, if the
Underwriters repurchase previously distributed Debentures in transactions to
cover syndicate short positions, in stabilization transactions or otherwise. Any
of these activities may stabilize or maintain the market price of the Debentures
above independent market levels. The Underwriters are not required to engage in
these activities and may end any of these activities at any time.
S-5
<PAGE> 6
PROSPECTUS
MASCO CORPORATION
DEBT SECURITIES
------------------------
Masco Corporation (the "Company") may from time to time offer senior debt
securities consisting of debentures, notes or other unsecured evidences of
indebtedness ("Securities"). The Securities may be offered as separate series in
amounts, at prices and on terms to be determined at the time of sale and to be
set forth in supplements to this Prospectus. The Company may sell Securities to
or through underwriters or dealers, directly to other purchasers or through
agents. See "Plan of Distribution".
The terms of the Securities, including, where applicable, the specific
designation, aggregate principal amount, denominations, maturity, rate (which
may be fixed or variable) and time of payment of interest, if any, terms for
redemption at the option of the Company or the holder, terms for sinking or
purchase fund payments, the public offering price, the names of any underwriters
or agents, the principal amounts to be purchased by underwriters and the
compensation of such underwriters or agents and the other terms in connection
with the offering and sale of the Securities in respect of which this Prospectus
is being delivered, are set forth in the accompanying Prospectus Supplement
("Prospectus Supplement").
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
April 16, 1998
<PAGE> 7
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN AS CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE
OFFERING DESCRIBED HEREIN.
------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following Regional Offices of the Commission: New York Regional
Office, 7 World Trade Center, Suite 1300, New York, New York 10048; and Chicago
Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can also be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. The Commission maintains a web site on the
Internet at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants, including the Company,
that file electronically with the Commission. Reports, proxy statements and
other information filed by the Company can also be inspected at the offices of
the New York Stock Exchange, 20 Broad Street, New York, New York 10005, on which
certain of the Company's securities are listed.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company with the
Commission and are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997; and
(b) The Company's Proxy Statement dated April 25, 1997, in connection
with its Annual Meeting of Stockholders held on May 21, 1997.
All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this Prospectus and
prior to the termination of the offering of the Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statements contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document which also is incorporated by reference
herein) modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed to constitute a part hereof except as so modified
or superseded.
THE COMPANY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING
ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, UPON
THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE
DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED IN THIS
PROSPECTUS BY REFERENCE, OTHER THAN ANY EXHIBITS TO SUCH DOCUMENTS. REQUESTS FOR
SUCH COPIES SHOULD BE DIRECTED TO SAMUEL A. CYPERT, VICE PRESIDENT, INVESTOR
RELATIONS, MASCO CORPORATION, 21001 VAN BORN ROAD, TAYLOR, MICHIGAN 48180
(TELEPHONE (313) 274-7400).
2
<PAGE> 8
THE COMPANY
The Company is engaged principally in the manufacture, sale and
installation of home improvement and building products. Although published
industry statistics are generally not available, the Company believes it is the
largest domestic manufacturer of faucets, kitchen and bath cabinets and plumbing
supplies and that it is a leading domestic producer of a number of other home
improvement and building products.
The Company's executive offices are located at 21001 Van Born Road, Taylor,
Michigan 48180, and the telephone number is (313) 274-7400. Except as the
context otherwise indicates, the terms "Masco" or the "Company" refer to Masco
Corporation and its consolidated subsidiaries.
USE OF PROCEEDS
The Company expects to apply substantially all of the net proceeds from
sales of Securities by the Company to its general funds to be used for general
corporate purposes, including working capital, repayment of debt and
expenditures for development of activities in which it is now engaged or
investment in and development of activities in which it is not currently
engaged. In this regard, the Company maintains an active acquisition effort and
is frequently engaged in discussions with respect to acquisition opportunities.
Proceeds from sales of Securities by the Company could be applied directly or
indirectly to such acquisitions. Funds not required immediately for any of the
foregoing purposes may be invested in marketable securities. The Company intends
to use the proceeds from the offering described in the Prospectus Supplement as
set forth in the Prospectus Supplement under the caption "Use of Proceeds".
DESCRIPTION OF SECURITIES
The Securities offered hereby will be issued under an Indenture dated as of
December 1, 1982 between the Company and The First National Bank of Chicago (as
successor to Morgan Guaranty Trust Company of New York), as Trustee, as amended
by a Supplemental Indenture dated as of July 26, 1994 (the Indenture as amended
by the Supplemental Indenture is hereinafter referred to as the "Indenture").
The following statements are subject to the detailed provisions of the
Indenture, a copy of which is filed as an exhibit to the registration statement
covering the Securities. Whenever references are made to particular provisions
of the Indenture, such provisions are incorporated by reference as part of the
statements made and such statements are qualified in their entirety by such
references. Certain defined terms are capitalized. References in italics are to
the Indenture.
GENERAL
The Indenture does not limit the amount of Securities which may be issued
thereunder. The Prospectus Supplement sets forth the following terms, where
applicable, of the Securities in respect of which this Prospectus is delivered:
(1) the designation of such Securities; (2) the aggregate principal amount of
such Securities; (3) the date or dates on which the principal of and premium, if
any, on such Securities are payable; (4) the rate or rates at which such
Securities shall bear interest, if any, or the method by which such interest may
be determined, the date or dates from which such interest shall accrue, the
interest payment dates on which such interest shall be payable and the record
dates for the determination of holders to whom interest is payable; (5) the
place or places where the principal of, and premium, if any, and any interest on
such Securities shall be payable; (6) the price or prices at which, the period
or periods within which and the terms and conditions upon which such Securities
may be redeemed, in whole or in part, at the option of the Company, or at the
option of a holder of such Securities or mandatorily pursuant to any sinking,
purchase or other analogous fund; (7) the right, if any, of the Company to
discharge or limit the Indenture with respect to such Securities prior to
maturity; (8) if other than the principal amount thereof, the portion of the
principal amount of such Securities which shall be payable upon declaration of
acceleration of the maturity thereof or which shall be provable in bankruptcy;
and (9) such other terms of such Securities as are not inconsistent with the
provisions of the Indenture. (Section 2.03) Principal, premium, if any, and
interest, if any, will be payable and the Securities offered hereby will be
transferable, at the corporate trust office of the Trustee in New York, New
York, provided that payment of interest, if any, may be made at the option of
the Company by check
3
<PAGE> 9
mailed to the address of the person entitled thereto as it appears on the
registry books of the Company. (Sections 3.01 and 3.02)
The Securities offered hereby will be issued only in fully registered form
without coupons and, unless otherwise specified in the Prospectus Supplement, in
denominations of $1,000 and any multiple thereof. No service charge will be made
for any transfer or exchange of the Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. (Sections 2.05 and 2.07)
Some of the Securities may be issued as discounted Securities (bearing no
interest or 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.
Federal income tax consequences and other special considerations applicable to
any such discounted Securities are described in the Prospectus Supplement with
respect to any such Securities.
Except as may be set forth in the Prospectus Supplement, the Indenture does
not contain any covenants or provisions which afford holders of Securities
protection in the event of a highly leveraged transaction.
LIMITATION ON LIENS
The Company covenants that, so long as any of the Securities remains
outstanding, it will not, nor will it permit any Consolidated Subsidiary to,
issue, assume or guarantee any debt for money borrowed or any Funded Debt
(herein referred to as "Debt") if such Debt is secured by a mortgage (as defined
in the Indenture) upon any Principal Property or upon any shares of stock or
indebtedness of any Consolidated Subsidiary which owns or leases any Principal
Property (whether such Principal Property, shares of stock or indebtedness are
owned on December 1, 1982 or are thereafter acquired) without in any such case
effectively providing that the Securities shall be secured equally and ratably
with such Debt, except that the foregoing restrictions shall not apply to (i)
mortgages on property, shares of stock or indebtedness of any corporation
existing at the time such corporation becomes a Consolidated Subsidiary; (ii)
mortgages on property existing at the time of acquisition thereof, or to secure
Debt incurred for the purpose of financing all or any part of the purchase price
of such property, or to secure any Debt incurred prior to or within 120 days
after the later of the acquisition, completion of construction or improvement or
the commencement of commercial operation of such property, which Debt is
incurred for the purpose of financing all or any part of the purchase price
thereof or construction or improvements thereon; (iii) mortgages securing Debt
owing by any Consolidated Subsidiary to the Company or another Consolidated
Subsidiary; (iv) mortgages on property of a corporation existing at the time
such corporation is merged or consolidated with the Company or a Consolidated
Subsidiary or at the time of a sale, lease or other disposition of the
properties of a corporation or firm as an entirety or substantially as an
entirety to the Company or a Consolidated Subsidiary, provided that no such
mortgage shall extend to any other Principal Property of the Company or any
Consolidated Subsidiary or any shares of capital stock or any indebtedness of
any Consolidated Subsidiary which owns or leases a Principal Property; (v)
mortgages on property of the Company or a Consolidated Subsidiary in favor of
the United States of America, any State thereof, or any other country, or any
political subdivision of any thereof, to secure payments pursuant to any
contract or statute (including Debt of the pollution control or industrial
revenue bond type) or to secure any indebtedness incurred for the purpose of
financing all or any part of the purchase price or the cost of construction of
the property subject to such mortgages; or (vi) certain extensions, renewals or
replacements (or successive extensions, renewals or replacements), in whole or
in part, of mortgages existing at the date of the Indenture or any mortgage
referred to in the foregoing clauses (i) through (v), inclusive. (Section
3.05(a))
Notwithstanding the above, the Company and one or more Consolidated
Subsidiaries may, without securing the Securities, issue, assume or guarantee
secured Debt which would otherwise be subject to the foregoing restrictions,
provided that after giving effect thereto the total of the aggregate amount of
such Debt then outstanding (not including secured Debt permitted under the
foregoing exceptions) and the aggregate amount of Attributable Debt in respect
of sale and lease-back arrangements at such time does not exceed 5% of
Consolidated Net Tangible Assets, determined as of a date not more than 90 days
prior thereto. (Section 3.05(b))
4
<PAGE> 10
LIMITATION ON SALES AND LEASEBACKS
The Company covenants that it will not, and will not permit any
Consolidated Subsidiary to, enter into any sale and leaseback arrangement,
except for a lease for a term of not more than three years, involving any
Principal Property unless (i) the Company or such Consolidated Subsidiary would
be entitled to issue, assume or guarantee Debt secured by a mortgage on the
property involved in such arrangement at least equal in amount to what would
constitute Attributable Debt in respect of such arrangement without equally and
ratably securing the Securities or (ii) the Company or a Consolidated Subsidiary
within 120 days of the effective date of any such arrangement applies an amount
equal to the greater of the net proceeds of the sale of the Principal Property
so leased or the fair market value of such Principal Property to the retirement,
other than any mandatory retirement or by way of payment at maturity, of Funded
Debt of the Company or any Consolidated Subsidiary, other than Funded Debt owned
by the Company or any Consolidated Subsidiary and other than Funded Debt which
is subordinated in payment of principal or interest to the Securities, or, in
lieu of such retirement, delivers Securities to the Trustee for cancellation.
(Section 3.06)
CONSOLIDATION, MERGER OR SALE OF ASSETS
The Company covenants that it will not consolidate or merge with or into
any other corporation and will not sell or convey its property as an entirety,
or substantially as an entirety, to another corporation if, as a result thereof,
any Principal Property would become subject to a mortgage, unless either (i)
such mortgage could be created pursuant to Section 3.05 without equally and
ratably securing the Securities or (ii) the Securities shall be secured prior to
the Debt secured by such mortgage. (Section 10.03)
CERTAIN DEFINITIONS
"Attributable Debt" in respect of a sale and leaseback arrangement is
defined in the Indenture to mean, at the time of determination, the lesser of
(i) the fair value of the property subject to such arrangement (as determined by
the Board of Directors of the Company) or (ii) the present value (discounted at
the rate per annum equal to the interest borne by fixed rate Securities or the
yield to maturity at the time of issuance of any Original Issue Discount
Securities determined on a weighted average basis) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such arrangement (including any period for which such lease has been extended
or may, at the option of the lessor, be extended) or until the earliest date on
which the lessee may terminate such lease upon payment of a penalty (in which
case the rental payment shall include such penalty), after excluding all amounts
required to be paid on account of maintenance and repairs, insurance, taxes,
assessments, water and utility rates and similar charges; provided, however,
that there shall not be deemed to be any Attributable Debt in respect of a sale
and leaseback arrangement if (a) such arrangement does not involve a Principal
Property, (b) the Company or a Consolidated Subsidiary would be entitled
pursuant to the provisions of Section 3.05 (a) of the Indenture to issue, assume
or guarantee Debt secured by a mortgage upon the property involved in such
arrangement without equally and ratably securing the Securities, or (c) the
greater of the net proceeds of such arrangement or the fair market value of the
property so leased has been applied to the retirement, other than any mandatory
retirement or by way of payment at maturity, of Funded Debt of the Company or
any Consolidated Subsidiary, other than Funded Debt owned by the Company or any
Consolidated Subsidiary and other than Funded Debt which is subordinated in
payment of principal or interest to the Securities. (Section 1.01)
"Consolidated Net Tangible Assets" is defined as the aggregate amount of
assets (less applicable reserves) of the Company and its Consolidated
Subsidiaries after deducting therefrom (a) all current liabilities (excluding
any such liabilities deemed to be Funded Debt), (b) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles and (c) all investments in any Subsidiary other than a Consolidated
Subsidiary, in all cases computed in accordance with generally accepted
accounting principles and which under generally accepted accounting principles
would appear on a consolidated balance sheet of the Company and its Consolidated
Subsidiaries. (Section 1.01)
"Funded Debt" is defined to mean indebtedness maturing more than 12 months
from the date of the determination thereof or having a maturity of less than 12
months but renewable or extendible at the option of the borrower beyond 12
months from the date of such determination (i) for money borrowed or (ii)
incurred in connection with the acquisition of property (to the extent that
indebtedness in connection with acquisitions
5
<PAGE> 11
is represented by any notes, bonds, debentures or similar evidences of
indebtedness), for which the Company or any Consolidated Subsidiary is directly
or contingently liable or which is secured by property of the Company or a
Consolidated Subsidiary. (Section 1.01)
"Original Issue Discount Security" is defined to mean any Security which
provides for an amount
less than the principal amount thereof to be due and payable upon a declaration
of the maturity thereof. (Section 1.01)
"Principal Property" is defined to mean any manufacturing plant, research
or engineering facility located within the United States of America or Puerto
Rico owned or leased by the Company or any Consolidated Subsidiary unless, in
the opinion of the Board of Directors of the Company, such plant or facility is
not of material importance to the total business conducted by the Company and
its Consolidated Subsidiaries as an entirety. (Section 1.01)
"Subsidiary" is defined to mean any corporation of which at least a
majority of the outstanding stock having voting power under ordinary
circumstances to elect a majority of the board of directors of said corporation
shall at the time be owned by the Company, or by the Company and one or more
Subsidiaries, or by one or more Subsidiaries. "Consolidated Subsidiary" is
defined to mean each Subsidiary other than any Subsidiary the accounts of which
(i) are not required by generally accepted accounting principles to be
consolidated with those of the Company for financial reporting purposes, (ii)
were not consolidated with those of the Company in the Company's then most
recent annual report to stockholders and (iii) are not intended by the Company
to be consolidated with those of the Company in its next annual report to
stockholders; provided, however, that the term "Consolidated Subsidiary" shall
not include (a) any Subsidiary which is principally engaged in (i) owning,
leasing, dealing in or developing real property, or (ii) purchasing or financing
accounts receivable, making loans, extending credit or other activities of a
character conducted by a finance company or (b) any Subsidiary, substantially
all of the business, properties or assets of which were acquired after December
1, 1982 (by way of merger, consolidation, purchase or otherwise), unless the
Board of Directors thereafter designates such Subsidiary a Consolidated
Subsidiary for the purposes of the Indenture. (Section 1.01)
DEFEASANCE
If permitted by the terms of any series of Securities, the Company may
terminate certain of its obligations under the Indenture with respect to such
series, including its obligations to comply with the restrictive covenants
described herein, on the terms and subject to the conditions contained in the
Indenture, by depositing in trust with the Trustee money or obligations of the
United States sufficient to pay the principal of, premium, if any, and interest
on the Securities of such series to maturity. (Section 11.01) The Prospectus
Supplement sets forth the defeasance rights, if any, of the Company provided by
the terms of the Securities in respect of which this Prospectus is delivered.
EVENTS OF DEFAULT, WAIVER AND NOTICE
As to each series of Securities, an Event of Default is defined in the
Indenture as being: default for 30 days in payment of any interest on the
Securities of that series; default in payment of principal and premium, if any,
on the Securities of that series when due either at maturity, upon redemption,
by declaration or otherwise; default by the Company in the performance of any
other of the covenants in the Indenture (other than a covenant included in the
Indenture solely for the benefit of a series of Securities other than that
series) which shall not have been remedied for a period of 90 days after notice;
and certain events of bankruptcy, insolvency, and reorganization of the Company.
(Section 5.01) The Indenture provides that the Trustee may withhold notice to
the holders of the Securities of any default (except in payment of principal of
or interest or premium on the Securities) if the Trustee considers it in the
interest of the holders of the Securities to do so. (Section 5.08)
The Indenture provides that, (i) if an Event of Default due to the default
in payment of principal, interest or premium, if any, on any series of
Securities or a default with respect to a covenant included in the Indenture
solely for the benefit of such series of Securities shall have occurred and be
continuing, either the Trustee or the holders of 25% in principal amount of the
Securities of such series then outstanding may declare the
6
<PAGE> 12
principal of all Securities of such series (or, if the Securities of such series
are issued as Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) and interest accrued
thereon to be due and payable immediately and (ii) if an Event of Default
resulting from default in the performance of any other of the covenants or
agreements in the Indenture and certain events of bankruptcy, insolvency and
reorganization of the Company shall have occurred and be continuing, either the
Trustee or the holders of 25% in principal amount of all Securities then
outstanding (treated as one class) may declare the principal of all Securities
(or, if any Securities are issued as Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of such
Securities) and interest accrued thereon to be due and payable immediately, but
upon certain conditions such declarations may be annulled and past defaults may
be waived (except a continuing default in payment of principal of or interest or
premium on the Securities) by the holders of a majority in principal amount of
the Securities of such series (or of all series, as the case may be) then
outstanding. (Section 5.01)
The holders of a majority in principal amount of the Securities of any or
all series affected and then outstanding shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee under the Indenture. Notwithstanding the foregoing, the Trustee
shall have the right to decline to follow any such direction if the Trustee is
advised by counsel that the action so directed may not lawfully be taken or if
the Trustee determines that such action would be unjustly prejudicial to the
holders not taking part in such direction or would involve the Trustee in
personal liability. (Section 5.07) The Indenture requires the annual filing by
the Company with the Trustee of a certificate as to the absence of certain
defaults under the Indenture. (Section 3.07)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee to
modify the Indenture or any supplemental indenture without the consent of the
holders of Securities for certain purposes, provided that no such modification
shall adversely affect the interest of the holders of the Securities in any
material respect. (Section 9.01) The Indenture also contains provisions
permitting the Company and the Trustee, with the consent of the holders of not
less than 66 2/3% in principal amount of the Securities at the time outstanding
affected thereby (voting as a class), to modify the Indenture or any
supplemental indenture or the rights of the holders of the Securities; provided
that no such modification shall (i) extend the final maturity of any Security,
or reduce the rate or extend the time of payment of interest thereon, or reduce
the principal amount thereof or any premium thereon, or reduce any amount
payable on redemption thereof, or make the principal of, or any interest or
premium on, the Securities payable in any coin or currency other than that
provided in the Securities, or reduce the amount of the principal of a
discounted Security that would be due and payable upon an acceleration of
maturity thereof or the amount thereof provable in bankruptcy, or impair or
affect the right of any holder of a Security to institute suit for the payment
thereof or the right of repayment, if any, at the option of the holder, without
the consent of the holder of each Security so affected, or (ii) reduce the
aforesaid percentage of Securities the consent of the holders of which is
required for any such modification without the consent of the holders of each
Security affected. (Section 9.02)
SUCCESSOR CORPORATION
Under the terms of the Indenture, the Company may consolidate or merge or
sell all or substantially all of its assets if (a) the Company is the continuing
corporation or if the Company is not the continuing corporation, such continuing
corporation is organized and existing under the laws of the United States of
America or any state thereof or the District of Columbia and assumes by
supplemental indenture the due and punctual payment of the principal of, and the
premium, if any, and interest on the Securities and the due and punctual
performance and observance of all of the covenants and conditions of the
Indenture to be performed by the Company and (b) the Company or such continuing
corporation is not in default in the performance of any such covenant or
condition immediately after such merger, consolidation or sale of assets.
(Section 10.01)
CONCERNING THE TRUSTEE
The Trustee is depository for funds of, makes loans to and performs other
services for the Company from time to time in the normal course of business.
7
<PAGE> 13
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby in any of four
ways: (i) directly to purchasers, (ii) through agents, (iii) through
underwriters and (iv) through dealers.
Offers to purchase Securities may be solicited directly by the Company or
by agents designated by the Company from time to time. Any such agent, who may
be deemed to be an underwriter as that term is defined in the Securities Act of
1933, involved in the offer or sale of the Securities in respect of which this
Prospectus is delivered is named, and any commissions payable by the Company to
such agent are set forth, in the Prospectus Supplement. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting on a best
efforts basis for the period of its appointment (ordinarily five business days
or less). Agents may be customers of, engage in transactions with or perform
services for the Company in the ordinary course of business.
If an underwriter or underwriters are utilized in the sale, the Company
will execute an underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters and the terms of the transaction
are set forth in the Prospectus Supplement, which will be used by the
underwriters to make resales of the Securities in respect of which this
Prospectus is delivered to the public.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to the
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale.
Agents, underwriters and dealers may be entitled under the relevant
agreements to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act of 1933.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters to solicit offers by certain institutions to purchase
Securities from the Company at the public offering price set forth in the
Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts")
providing for payment and delivery on the date stated in the Prospectus
Supplement. Each Contract will be for an amount not less than, and unless the
Company otherwise agrees the aggregate principal amount of Securities sold
pursuant to Contracts shall be not less nor more than, the respective amounts
stated in the Prospectus Supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and other institutions but shall in all cases be subject to the
approval of the Company. Contracts will not be subject to any conditions except
that the purchase by an institution of the Securities covered by its Contract
shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject. A
commission indicated in the Prospectus Supplement will be paid to underwriters
and agents soliciting purchases of Securities pursuant to Contracts accepted by
the Company.
The place and time of delivery for the Securities in respect of which this
Prospectus is delivered are set forth in the Prospectus Supplement.
LEGAL OPINIONS
The legality of the Securities in respect of which this Prospectus is being
delivered will be passed on for the Company by John R. Leekley, Senior Vice
President and General Counsel of the Company, and for the Underwriters, if any,
by Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017. Mr.
Leekley is a stockholder of the Company and a holder of options to purchase
shares of the Company's Common Stock. Davis Polk & Wardwell performs legal
services from time to time for the Company and certain related companies.
8
<PAGE> 14
EXPERTS
The consolidated financial statements and schedules of Masco Corporation
and consolidated subsidiaries and the consolidated financial statements and
schedules of MascoTech, Inc. appearing in the Company's most recent Annual
Report on Form 10-K have been audited by Coopers & Lybrand L.L.P., independent
accountants, as set forth in their reports appearing therein. The consolidated
financial statements and schedules referred to in this paragraph are
incorporated herein by reference in reliance upon such reports and upon the
authority of such firm as experts in accounting and auditing.
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<PAGE> 15
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NO DEALER, SALESPERSON, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION, OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED
IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL
UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS ARE NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITY IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Use of Proceeds....................... S-2
Ratio of Earnings to Fixed Charges.... S-2
Description of Debentures............. S-2
Underwriting.......................... S-5
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Company........................... 3
Use of Proceeds....................... 3
Description of Securities............. 3
Plan of Distribution.................. 8
Legal Opinions........................ 8
Experts............................... 9
</TABLE>
======================================================
======================================================
$250,000,000
MASCO CORPORATION
6.625% DEBENTURES DUE APRIL 15, 2018
------------
PROSPECTUS SUPPLEMENT
DATED APRIL 16, 1998
------------
SALOMON SMITH BARNEY
MERRILL LYNCH & CO.
======================================================
