<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 7, 1994
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
CINCINNATI MILACRON INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
DELAWARE 3541 31-1062125
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) INDUSTRIAL CLASSIFICATION IDENTIFICATION
CODE NUMBER) NO.)
4701 MARBURG AVENUE
CINCINNATI, OHIO 45209
(513) 841-8100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
WAYNE F. TAYLOR
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
CINCINNATI MILACRON INC.
4701 MARBURG AVENUE
CINCINNATI, OHIO 45209
(513) 841-8100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
COPIES TO:
JAMES M. EDWARDS CRAVATH, SWAINE & JOHN R. SAGAN MAYER, BROWN & PLATT
MOORE 190 SOUTH LASALLE STREET CHICAGO,
825 EIGHTH AVENUE NEW YORK, NEW ILLINOIS 60603 (312) 782-0600
YORK 10019 (212) 474-1000
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
---------------
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
---------------
CALCULATION OF REGISTRATION FEE
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TITLE OF EACH CLASS PROPOSED PROPOSED
OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
8 3/8% Notes Due 2004 $115,000,000 99.301% $114,196,150 $39,656
</TABLE>
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- --------------------------------------------------------------------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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- --------------------------------------------------------------------------------
<PAGE>
CINCINNATI MILACRON INC.
CROSS-REFERENCE SHEET
(PURSUANT TO ITEM 501(B) OF REGULATION S-K SHOWING THE LOCATION IN THE
PROSPECTUS OF THE RESPONSES TO THE ITEMS OF PART I OF FORM S-4)
<TABLE>
<CAPTION>
ITEM
----
<C> <S> <C>
1. Forepart of the Registration
Statement and Outside Front Facing Page; Cross Reference Sheet; Outside
Cover Page of Prospectus.... Front Cover Page of Prospectus
2. Inside Front and Outside
Back Cover Pages of Prospec- Table of Contents; Available Information;
tus......................... Incorporation of Certain Documents by
Reference
3. Risk Factors, Ratio of Earn-
ings to Fixed Charges and Investment Considerations; Ratio of
Other Information........... Earnings to Fixed Charges; Summary Selected
Historical Financial Data; Prospectus
Summary--Summary of Terms of New Notes;
Cover Page; Prospectus Summary--The
Company; Prospectus Summary--The Exchange
Offer; Certain Federal Income Tax
Considerations; Selected Historical
Financial Data
4. Terms of the Transaction.... Prospectus Summary--The Exchange Offer;
Prospectus Summary--Summary of Terms of New
Notes; The Exchange Offer; Description of
the New Notes; Plan of Distribution;
Certain Federal Income Tax Considerations
5. Pro Forma Financial Informa-
tion........................ (Not Applicable)
6. Material Contacts with the
Company Being Acquired...... (Not Applicable)
7. Additional Information Re-
quired for Reoffering by
Persons and Parties Deemed
to be Underwriters.......... (Not Applicable)
8. Interests of Named Experts
and Counsel................. Experts; Legal Matters
9. Disclosure of Commission Po-
sition on Indemnification
for Securities Act Liabili-
ties........................ (Not Applicable)
10. Information with Respect to Incorporation of Certain Documents by
S-3 Registrants............. Reference
11. Incorporation of Certain In- Incorporation of Certain Documents by
formation by Reference...... Reference
12. Information with Respect to
S-2 or S-3 Registrants...... Business; Selected Historical and Pro Forma
Financial Data; Management's Discussion and
Analysis of Financial Condition and Results
of Operations; Consolidated Financial
Statements; Incorporation of Certain
Documents by Reference
13. Incorporation of Certain In- Incorporation of Certain Documents by
formation by Reference...... Reference
14. Information with Respect to
Registrants Other than S-2
or S-3 Registrants.......... (Not Applicable)
15. Information with Respect to
S-3 Companies............... (Not Applicable)
16. Information with Respect to
S-2 or S-3 Companies........ (Not Applicable)
17. Information with Respect to
Companies other than S-2 or
S-3 Companies............... (Not Applicable)
18. Information if Proxies, Con-
sents or Authorization are
to be Solicited............. (Not Applicable)
19. Information if Proxies, Con-
sents or Authorizations are
not to be solicited or in an Prospectus Summary--The Exchange Offer; The
Exchange Offer.............. Exchange Offer--Terms of the Exchange
Offer; Incorporation of Certain Documents
by Reference
</TABLE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
SUBJECT TO COMPLETION, DATED APRIL 7, 1994
PROSPECTUS
CINCINNATI
MILACRON
Offer to Exchange its 8 3/8% Notes Due 2004, which have been registered under
the Securities Act of 1933, as amended, for any and all of its outstanding
8 3/8% Notes Due 2004
The Exchange Offer will expire at 5:00 p.m., New York City time, on ,
1994, unless extended.
--------
Cincinnati Milacron Inc. (the "Company"), hereby offers, upon the terms and
subject to the conditions set forth in this Prospectus and the accompanying
letter of transmittal (the "Letter of Transmittal" and together with this
Prospectus, the "Exchange Offer"), to exchange its 8 3/8% Notes due 2004 (the
"New Notes") which have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), pursuant to a Registration Statement of which
this Prospectus is a part, for an equal principal amount of its outstanding 8
3/8% Notes due 2004 (the "Old Notes"), of which $115,000,000 aggregate
principal amount is outstanding as of the date hereof. The New Notes and the
Old Notes are collectively referred to herein as the "Notes".
The Company will accept for exchange any and all Old Notes that are validly
tendered and not withdrawn on or prior to 5:00 P.M., New York City time, on the
date the Exchange Offer expires, which will be , 1994, unless the
Exchange Offer is extended (the "Expiration Date"). Tenders of Old Notes may be
withdrawn at any time prior to 5:00 P.M., New York City time, on the Expiration
Date. See "The Exchange Offer--Withdrawal of Tenders". The Exchange Offer is
not conditioned upon any minimum principal amount of Old Notes being tendered
for exchange. However, the Exchange Offer is subject to certain customary
conditions which may be waived by the Company. See "The Exchange Offer". Old
Notes may be tendered only in integral multiples of $1,000.
The New Notes will be obligations of the Company evidencing the same debt as
the Old Notes, and will be entitled to the benefits of the same Indenture (as
defined), which governs both the Old Notes and the New Notes. The form and
terms of the New Notes are the same as the form and terms of the Old Notes
except that the New Notes have been registered under the Securities Act and
hence will not bear legends restricting the transfer thereof. See "The Exchange
Offer".
The New Notes will bear interest from March 16, 1994. Holders of Old Notes
whose Old Notes are accepted for exchange will be deemed to have waived the
right to receive any payment in respect of interest on the Old Notes accrued up
until the date of the issuance of the New Notes.
Interest on the New Notes is payable semi-annually on March 15 and September
15 of each year, commencing September 15, 1994, and accruing from March 16,
1994, at the rate of 8 3/8% per annum. See "Description of the New Notes".
Prior to this Exchange Offer, there has been no public market for the Old
Notes or New Notes. If a market for the New Notes should develop, the New Notes
could trade at a discount from their principal amount. The Company does not
intend to list the New Notes on any securities exchange or to seek approval for
quotation through any automated quotation system. There can be no assurance
that an active public market for the New Notes will develop. The Company has
agreed to pay the expenses of the Exchange Offer.
CS First Boston Corporation, BT Securities Corporation and J.P. Morgan
Securities Inc. (the "Initial Purchasers") have agreed, but are not obligated,
to effect offers and sales of the New Notes in market-making transactions at
negotiated prices related to prevailing market prices at the time of sale. The
Initial Purchasers may act as principal or as agent in such transactions.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH THIS OFFERING, SEE "INVESTMENT CONSIDERATIONS".
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------
The date of this Prospectus is , 1994.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, as well
as at the following regional offices of the Commission: Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661, and 13th Floor, 7
World Trade Center, New York, New York 10048. Copies of such material can be
obtained from the Commission's Public Reference Section, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The common
stock of the Company is listed on the New York Stock Exchange, and reports,
proxy statements and other information concerning the Company may be inspected
at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York,
New York 1005.
The Company has filed a registration statement on Form S-4 (herein, together
with all amendments and exhibits, referred to as the "Registration Statement")
under the Securities Act with respect to the New Notes offered hereby. This
Prospectus, which forms a part of the Registration Statement, does not contain
all of the information set forth in the Registration Statement and the exhibits
and schedules thereto, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information with
respect to the Company and the New Notes offered hereby, reference is made to
the Registration Statement. Statements made in this Prospectus as to the
contents of certain documents are not necessarily complete and, in each
instance, reference is made to the copy of the document filed as an exhibit to
the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended January 1,
1994 (the "Company's 1993 Form 10-K"), and the Company's Current Report on Form
8-K dated February 1, 1993 (as amended by the Company's Form 8 relating thereto
dated March 4, 1993, and its Form 8 relating thereto dated April 6, 1993) and
the Company's current Report on Form 8-K dated November 8, 1993 (as amended by
the Company's Form 8-K/A relating thereto dated January 24, 1994), and the
Company's Current Report on Form 8-K dated March 3, 1994 (collectively, the
"Company's 1993 and 1994 Form 8-Ks"), each filed previously with the Commission
pursuant to the Exchange Act, are incorporated by reference into this
Prospectus.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the New Notes shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such reports and documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THE COMPANY WILL PROVIDE A COPY OF ANY OR ALL
DOCUMENTS INCORPORATED BY REFERENCE HEREIN (EXCLUSIVE OF EXHIBITS UNLESS SUCH
EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE THEREIN), WITHOUT CHARGE,
TO EACH PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL
REQUEST TO WAYNE F. TAYLOR, VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY,
CINCINNATI MILACRON INC., 4701 MARBURG AVENUE, CINCINNATI, OHIO 45209
(TELEPHONE (513) 841-8100). TO ENSURE TIMELY DELIVERY ANY REQUEST FOR DOCUMENTS
SHOULD BE MADE FIVE BUSINESS DAYS PRIOR TO THE EXPIRATION DATE (AS DEFINED).
2
<PAGE>
PROSPECTUS SUMMARY
The following information is qualified in its entirety by the detailed
information and financial statements found elsewhere in this Prospectus and in
the Company's 1993 Form 10-K and the Company's 1993 and 1994 Form 8-Ks, each
referred to herein under "Incorporation of Certain Documents by Reference".
THE COMPANY
Cincinnati Milacron Inc. (together with its consolidated subsidiaries, except
where the context otherwise requires, the "Company" or "Cincinnati Milacron")
is one of the world's leading manufacturers of plastics machinery, machine
tools and industrial products for metalworking, as well as related computer
controls and software for factory automation. Incorporated in Delaware in 1983,
the Company is a successor to a business established in 1884.
The Company sells products and provides services to industrial customers
throughout the world. The Company has a long-standing reputation for quality
and technological leadership. Virtually all of its machinery products are
computer-controlled and many include advanced applications software. The
Company has three business segments: plastics machinery, machine tools and
industrial products.
The Company recently completed the acquisition of FM Maschinenbau GmbH, the
plastics injection molding machinery business of Kloeckner-Werke A.G., and
certain related assets and liabilities ("Ferromatik"). With this acquisition,
plastics machinery is now the Company's largest segment. The Company expects
the acquisition to expand its technology base and product line and help it
achieve its objective of establishing a manufacturing and distribution base in
Germany to serve Europe and other markets. In addition, the Company has
initiated a restructuring of Ferromatik that it expects will result in cost
savings. See "Business--The Company's Plastics Machinery Business--Injection
Molding". In early 1993, the Company acquired GTE Valenite Corporation
("Valenite"), which the Company believes is the second largest U.S. and the
third largest worldwide producer of metalcutting systems. The acquisitions of
Valenite and Ferromatik in 1993 helped balance revenues among the Company's
three business segments.
In early 1994 the Company announced (i) a major consolidation of its U.S.
machine tool operations, closing two plants in South Carolina and moving all
production to its main machine tool facilities in Cincinnati, and (ii) the sale
of its unprofitable Sano blown and cast film systems business. See "Recent
Developments".
Cincinnati Milacron's principal executive office is located at 4701 Marburg
Avenue, Cincinnati, Ohio 45209 and its telephone number is (513) 841-8100.
THE EXCHANGE OFFER
Exchange Registration
Rights Agreement........... The Old Notes were sold by the Company on March
16, 1994, to the Initial Purchasers, which placed
the Old Notes with institutional investors. In
connection therewith, the Company executed and
delivered for the benefit of the holders of the
Old Notes the Registration Rights Agreement (as
defined herein) providing, among other things,
for the Exchange Offer.
The Exchange Offer.......... New Notes are being offered in exchange for a
like principal amount of Old Notes. As of the
date hereof, $115,000,000 aggregate principal
amount of Old Notes are outstanding. Since the
New Notes will be recorded in the Company's
accounting records at the same carrying value as
the Old Notes, no gain or loss will be recognized
by the Company upon the consummation
3
<PAGE>
of the Exchange Offer. See "The Exchange Offer--
Accounting Treatment". The Company will issue the
New Notes to holders on or promptly after the
Expiration Date. Holders of the Old Notes do not
have appraisal or dissenter's rights in
connection with the Exchange Offer under the
Delaware General Corporation Law, the state of
incorporation of the Company.
Generally, holders of Old Notes (other than any
holder who is an "affiliate" of the Company
within the meaning of Rule 405 under the
Securities Act) who exchange their Old Notes for
New Notes pursuant to the Exchange Offer may
offer such New Notes for resale, resell such New
Notes, and otherwise transfer such New Notes
without compliance with the registration and
prospectus delivery provisions of the Securities
Act; provided such New Notes are acquired in the
ordinary course of the holder's business and such
holders have no arrangement or understanding with
any person to participate in a distribution of
such New Notes. Each broker-dealer that receives
New Notes for its own account in exchange for Old
Notes, where such Old Notes were acquired by such
broker-dealer as a result of market-making
activities or other trading activities, must
acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. See
"Plan of Distribution". To comply with the
securities laws of certain jurisdictions, it may
be necessary to qualify for sale or register the
New Notes prior to offering or selling such New
Notes. The Company has agreed, pursuant to the
Registration Rights Agreement (as defined herein)
and subject to certain specified limitations
therein, to register or qualify the New Notes for
offer or sale under the securities or blue sky
laws of such jurisdictions as may be necessary to
permit the holders of New Notes to trade the New
Notes without any restrictions or limitations
under the securities laws of the several states
of the United States. If a holder of Old Notes
does not exchange such Old Notes for New Notes
pursuant to an Exchange Offer, such Old Notes
will continue to be subject to the restrictions
on transfer contained in the legend thereon. In
general, the Old Notes may not be offered or
sold, unless registered under the Securities Act,
except pursuant to an exemption from, or in a
transaction not subject to, the Securities Act,
and applicable state securities laws. See
"Investment Considerations--Consequences of
Failure to Exchange" and "Description of the New
Notes--Exchange Offer; Registration Rights".
Expiration Date............. 5:00 p.m., New York City time, on , 1994,
unless the Exchange Offer is extended, in which
case the term "Expiration Date" means the latest
date and time to which the Exchange Offer is
extended.
Accrued Interest on the New
Notes and Old Notes........
The New Notes will bear interest from March 16,
1994. Holders of Old Notes whose Old Notes are
accepted for exchange will be
4
<PAGE>
deemed to have waived the right to receive any
payment in respect of interest on the Old Notes
accrued up to the date of the issuance of the New
Notes.
Conditions to the Exchange The Exchange Offer is subject to certain
Offer...................... customary conditions, which may be waived by the
Company. See "The Exchange Offer--Conditions".
Except for the requirements of applicable Federal
and state securities laws, there are no Federal
or state regulatory requirements or approvals to
be complied with or obtained by the Company in
connection with the Exchange Offer. No vote of
the Company's security holders is required to
effect the Exchange Offer, and no such vote (or
proxy therefor) is being sought hereby.
Procedures for Tendering Each holder of Old Notes wishing to accept the
Old Notes.................. Exchange Offer must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, in
accordance with the instructions contained herein
and therein, and mail or otherwise deliver such
Letter of Transmittal, or such facsimile,
together with the Old Notes to be exchanged and
any other required documentation to the Exchange
Agent (as defined herein) at the address set
forth herein and therein. See "The Exchange
Offer--Procedures for Tendering".
Withdrawal Rights........... Tenders may be withdrawn at any time prior to
5:00 p.m., New York City time, on the Expiration
Date. To withdraw a tender of Old Notes, a
written or facsimile transmission notice of
withdrawal must be received by the Exchange Agent
at its address set forth below under "Exchange
Agent" prior to 5:00 p.m., New York City time, on
the Expiration Date.
Acceptance of Old Notes and
Delivery of New Notes...... Subject to certain conditions, the Company will
accept for exchange any and all Old Notes which
are properly tendered in the Exchange Offer prior
to 5:00 p.m., New York City time, on the
Expiration Date. The New Notes issued pursuant to
the Exchange Offer will be delivered promptly
following the Expiration Date. See "The Exchange
Offer--Terms of the Exchange Offer".
Certain Tax Considerations.. For a discussion of certain federal income tax
consequences of the exchange of the Old Notes,
see "Certain Federal Income Tax Considerations".
Exchange Agent.............. BankAmerica National Trust Company is serving as
exchange agent (the "Exchange Agent") in
connection with the Exchange Offer.
Use of Proceeds............. There will be no cash proceeds to the Company
from the exchange pursuant to the Exchange Offer.
The proceeds to the Company from the sale of the
Old Notes were approximately $112,183,650. The
Company is in the process of using such proceeds
to repay short-term debt and redeem the Company's
outstanding 8 3/8% Notes Due 1997. See "Use of
Proceeds".
5
<PAGE>
SUMMARY OF TERMS OF NEW NOTES
The Exchange Offer relates to the exchange of up to $115,000,000 aggregate
principal amount of Old Notes for up to an equal aggregate principal amount of
New Notes. The New Notes will be obligations of the Company evidencing the same
indebtedness as the Old Notes, and will be entitled to the benefits of the same
Indenture. The form and terms of the New Notes are the same as the form and
terms of the Old Notes except that the New Notes have been registered under the
Securities Act and therefore will not bear legends restricting the transfer
thereof. See "Description of the New Notes".
COMPARISON WITH OLD NOTES
<TABLE>
<S> <C>
Freely Transferable.............. Generally, the New Notes will be freely transferable
under the Securities Act by holders who are not
affiliates of the Company. The New Notes otherwise will
be substantially identical in all respects (including
interest rate and maturity) to the Old Notes. See "The
Exchange Offer--Terms of the Exchange Offer".
Registration Rights.............. The holders of Old Notes currently are entitled to
certain registration rights pursuant to an Exchange
Registration Rights Agreement (the "Registration Rights
Agreement"), dated as of March 9, 1994, between the
Company and CS First Boston Corporation, as
representative of the Initial Purchasers. However, upon
consummation of the Exchange Offer, subject to certain
exceptions, holders of Old Notes who do not exchange
their Old Notes for New Notes in the Exchange Offer
will no longer be entitled to registration rights and
will not be able to reoffer, resell or otherwise
dispose of their Old Notes, unless they are
subsequently registered under the Securities Act
(which, subject to certain exceptions, the Company will
have no obligation to do) or unless an exemption from
the registration requirements of the Securities Act is
available. See "Investment Considerations--Consequences
of Failure to Exchange".
TERMS OF THE NOTES
Interest Payment Dates........... March 15 and September 15 of each year, commencing
September 15, 1994.
Interest Rate.................... 8 3/8% per annum.
Maturity Date.................... March 15, 2004.
Redemption....................... None.
Sinking Fund..................... None.
</TABLE>
INVESTMENT CONSIDERATIONS
Prospective purchasers of the New Notes should carefully consider all of the
information set forth in this Prospectus and, in particular, the information
set forth under "Investment Considerations" before making an investment in the
New Notes.
6
<PAGE>
SUMMARY SELECTED HISTORICAL FINANCIAL DATA
<TABLE>
<CAPTION>
FISCAL YEAR(a)
-------------------------------------------------
(DOLLARS IN MILLIONS)
1993 1992 1991 1990 1989
-------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Sales................... $1,029.4 $789.2 $754.0 $805.2 $789.3
Manufacturing
margins(b)............. 238.1 176.6 150.8 172.4 178.2
Percent of sales........ 23.1% 22.4% 20.0% 21.4% 22.6%
Operating earnings
(loss)(c).............. $ (23.8)(d) $ 43.2 $(58.3)(e) $ 6.8(f) $ 56.8
Interest expense........ (15.7) (19.1) (19.1) (19.7) (22.5)
Earnings (loss) from
continuing operations
before extraordinary
items and cumulative
effect of changes in
methods of accounting.. (45.4)(d) 16.1 (83.1)(e) (13.6)(f) 21.8
Net earnings (loss)..... (101.9)(d) 21.5 (100.2)(e) (24.3)(f) 17.4
BALANCE SHEET DATA (AT
YEAR END)
Working capital......... $ 114.3 $191.8 $188.0 $253.6 $259.0
Total assets............ 729.6 578.9 598.4 693.0 686.1
Total debt.............. 185.2 175.6 162.8 169.4 195.5
Shareholders' equity.... 124.1 134.4 129.0 247.7 226.6
OTHER DATA
EBITDA(g)............... $ 72.2 $ 64.1 $ 40.8 $ 57.1 $ 79.7
Ratio of EBITDA to in-
terest expense......... 4.6 3.4 2.1 2.9 3.5
Capital expenditures.... $ 23.4 $ 17.6 $ 15.5 $ 34.1 $ 33.6
Backlog of unfilled or-
ders at year end....... 246.0 249.6 277.3 268.6 315.0
</TABLE>
- --------
Note: See "Recent Developments", "Selected Historical Financial Data" and
"Selected Historical Segment Information". See also "Management's
Discussion and Analysis of Financial Condition and Results of Operations".
(a) 1992 includes 53 weeks as compared to 52 weeks included in 1993, 1991, 1990
and 1989.
(b) Represents gross profit, which is sales less cost of products sold.
(c) Represents earnings (loss) from continuing operations before extraordinary
items and cumulative effect of changes in methods of accounting before net
interest expense and taxes.
(d) Earnings (loss) from continuing operations before extraordinary items and
cumulative effect of changes in methods of accounting for fiscal year 1993
includes a nonrecurring charge of $47.1 million (with no current tax
effect) for the consolidation of domestic machine tool manufacturing
operations and nonrecurring charges totaling $22.8 million (with no current
tax effect) for the disposition of the Company's Sano business. Additional
charges totaling $52.1 million related to the adoption of S.F.A.S. 109,
"Accounting for Income Taxes" and S.F.A.S. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions", as well as an extraordinary
loss of $4.4 million related to the early extinguishment of debt are
included in the net loss for 1993.
(e) Earnings (loss) from continuing operations before extraordinary items and
cumulative effect of changes in methods of accounting for fiscal year 1991
includes a nonrecurring charge of $75.1 million for plant closing and the
relocation of certain machine tool manufacturing operations. An additional
charge of $14.9 million related to the revaluation for sale of LK Tool is
included in net earnings for fiscal year 1991.
(f) Earnings (loss) from continuing operations before extraordinary items and
cumulative effect of changes in methods of accounting for fiscal year 1990
includes a nonrecurring charge of $26.6 million ($24.9 million after tax)
for product discontinuance and the reorganization of grinding machine and
certain other machine tool manufacturing operations.
(g) Represents operating earnings (loss), excluding nonrecurring charges,
before depreciation and amortization. EBITDA is presented because it is a
widely accepted financial indicator of a company's ability to service and
incur debt. EBITDA should not be considered by an investor as an
alternative to net income or as an indicator of the Company's operating
performance.
7
<PAGE>
THE COMPANY
Cincinnati Milacron is one of the world's leading manufacturers of plastics
machinery, machine tools and industrial products for metalworking, as well as
related computer controls and software for factory automation.
The Company sells products and provides services to industrial customers
throughout the world. The Company has a long-standing reputation for quality
and technological leadership. Virtually all of its plastics machinery products
and machine tools are computer-controlled and many include advanced
applications software. Incorporated in Delaware in 1983, the Company is a
successor to a business established in 1884.
In recent years, the Company has undertaken a major program, called
"Wolfpack", for product development, process improvement and modernization. The
objectives of Wolfpack are to design and produce new products at world-
competitive levels of quality, performance, efficiency and cost. The key
principles of the Wolfpack philosophy are teamwork, a "market-driven" approach,
"simultaneous engineering", reduction and standardization of parts, design for
manufacturability and integrated, just-in-time manufacturing. Wolfpack teams
develop marketable products faster than conventional teams with improved
quality, features and cost and quality performance ratios. Compared to the
products they replace, Wolfpack-products typically have achieved a 30 to 50
percent reduction in each of the following areas: product development cycles,
number of total parts, manufacturing lead time, installation time and overall
cost. In 1993, Wolfpack designed products accounted for substantially all of
the Company's plastics machinery sales and approximately one-half of the
Company's machinery portion of its machine tool segment sales.
Early in 1993, the Company acquired GTE Valenite Corporation ("Valenite"),
which the Company believes is the second largest U.S. and third largest
worldwide producer of metalcutting systems. The acquisition of Valenite was
part of the Company's strategic objective to expand its industrial products
segment and thereby balance revenues among its three business segments of
plastics machinery, machine tools and industrial products. Later in 1993, the
Company acquired Ferromatik, a German manufacturer of plastic injection molding
machines. The Company expects the acquisition to expand its plastics processing
technology and product line offering and help the Company achieve its objective
of establishing a plastics machinery manufacturing and distribution base in
Germany to serve Europe and other markets. With this acquisition, plastics
machinery is now the Company's largest segment.
On February 10, 1994, the Company announced a major consolidation of its U.S.
machine tool operations to Cincinnati and recorded in the fourth quarter of
1993 a $47.1 million nonrecurring charge to cover the costs of the plan.
Production at the Company's two machine tool facilities in South Carolina will
be phased out and the plants closed by year-end 1994. The Company will transfer
most of the modern machines and systems in South Carolina now used to
manufacture horizontal machining centers and turning centers to its Cincinnati
facilities. The incremental cash required in 1994, before considering any
proceeds from the disposition of assets, will be approximately $18 million. The
consolidation, once fully implemented, is expected to result in annual cost
savings of approximately $16 million. The consolidation addresses excess
manufacturing capacity created by two factors: the Company's successful
Wolfpack program, which has significantly reduced the hours and floorspace
required to manufacture and assemble machine tool products; and the unusually
steep recession in the aerospace industry, which has dramatically lowered
demand for the Company's advanced machine tool systems.
On February 4, 1994, the Company sold its Sano blown and cast film systems
business which incurred an operating loss of approximately $26.3 million in
1993, which included charges totaling $22.8 million for the disposition of this
subsidiary.
Cincinnati Milacron's principal executive office is located at 4701 Marburg
Avenue, Cincinnati, Ohio 45209 and its telephone number is (513) 841-8100.
8
<PAGE>
BUSINESS SEGMENT INFORMATION
Plastics Machinery. The Company is the largest U.S. producer of plastics
machinery. In 1993, the Company's plastics machinery segment sales were $357
million, of which approximately 70% were to customers in the U.S.
The Company believes it offers more varieties of machinery to process
plastics than any other U.S. company and that its electronic controls and
software enhancements are key selling features.
The Company's plastics machinery segment consists of three major businesses:
injection molding machines, extrusion systems and blow molding systems. Sales
of injection molding machines constitute over one-half of the sales of the
Company's plastics machinery segment.
Injection molding, the most common plastics processing technology, is used to
make a wide variety of parts and products ranging from housewares and consumer
goods to medical supplies and industrial components. As part of its Wolfpack
program, the Company has introduced a broad line of Vista injection molding
machines. In addition, the Company manufactures a variety of extrusion and blow
molding systems, which are used to produce construction materials, containers,
industrial parts and toys. The Company also sells specialty equipment
consisting of small electric injection molding machines, and auxiliary
equipment, such as chillers, feeders and heaters, all of which are manufactured
by others to the Company's specifications. In addition, the Company offers
contract services for rebuilding and retrofitting many types of plastics
processing equipment with new Cincinnati Milacron electronic controls and
software. In February 1994, the Company sold its Sano blown and cast film
systems business which had 1993 sales of approximately $10 million.
On November 8, 1993, the Company acquired Ferromatik, one of Europe's leading
producers of injection molding machines. Ferromatik is recognized for its high-
end technology including multi-color machines, multi-component systems and
other specialty applications. The Company expects the Ferromatik acquisition to
expand its technology base and product line and help it achieve its objective
of establishing a manufacturing and distribution base in Germany to serve
Europe and other markets. The acquisition included the Ferromatik lines of
hydraulic and electric injection molding machines and a modern manufacturing
facility in Malterdingen, Germany, as well as Ferromatik's worldwide marketing,
sales and service network. The Company believes Ferromatik provides a
complementary fit with its existing injection molding machine business. The
purchase price, including assumed debt of approximately $6 million, was
approximately $56 million. The amount of the purchase price paid was based upon
estimates of the amount of assets and liabilities of Ferromatik, and is subject
to adjustment as set forth in the purchase agreement. The Company financed the
purchase by drawing upon its revolving credit facility of $130 million and the
Company's existing European lines of credit.
During Ferromatik's fiscal years ended September 30, 1993, and 1992, its
manufacturing operations were restructured to improve efficiency and reduce
personnel levels. In September 1993, Ferromatik and its Works Council agreed to
a Social Plan that permits further personnel reductions based upon sales volume
and certain other factors. The Company and Ferromatik have identified
additional restructuring actions that are intended to increase Ferromatik's
profitability in the future. See "Business--Plastics Machinery Business".
Machine Tools. The Company is a leading U.S. producer of machine tools. A
machine tool is a power-driven machine, not hand-held, that is used to cut,
form or shape metal. Machine tools are typically installed as capital equipment
in metalworking industries. In 1993, the Company's machine tool segment sales
were $355 million, of which approximately 75% were to customers in the U.S. The
Company's machine tool segment is comprised of three focused businesses:
standard machine tool products, advanced machine tool systems and electronic
systems.
Standard machine tool products include horizontal and vertical machining
centers and turning centers that are used by a wide variety of industries
engaged in basic metalworking operations, including machine shops. These
standard machines are often incorporated into automated flexible manufacturing
cells, which
9
<PAGE>
are machine tools linked together using computers, software and materials-
handling equipment to automate and integrate all necessary functions, allowing
for lightly-manned or unattended operation.
Advanced machine tool systems consist of products for many markets, including
large, multi-axis metalcutting and composites processing systems for the
aerospace industry; large, multi-axis machines for manufacturers of farm,
construction, off-road and power generation equipment and for the die and mold
industry; applied production turning centers and centerless grinding machines
primarily for the automotive industry and for bearing manufacturers.
The Company's electronic systems business designs and manufactures computer
controls and develops proprietary software for the Company's machine tools,
automated flexible manufacturing cells and plastics machinery.
Due to reductions in aircraft sales by aircraft manufacturers throughout the
world, as well as reductions in new model development by aircraft
manufacturers, demand for machine tools by the aerospace industry has fallen
significantly in the past two years. In response to this and other factors, the
Company has announced a major consolidation of its U.S. machine tool
operations. See "Recent Developments".
Industrial Products. The Company is a leading producer of three basic types
of industrial products: metalworking fluids, precision grinding wheels, and,
through the acquisition of Valenite, metalcutting tools. Most of the Company's
industrial products are consumable, which means they are depleted during the
process for which they are used, offering the Company a continuous opportunity
to sell replacement products to its customers. In 1993, sales of the Company's
industrial products segment, including Valenite's sales for 11 months, were
$317 million, of which approximately 70% were to customers in the U.S.
The Company produces metalworking fluids used as lubricants and coolants in a
wide variety of metalcutting and metalforming operations. The Company is a
full-line supplier, offering water-based fluids (synthetics), water-based oil-
bearing fluids (semi-synthetics) and oil-based fluids.
The Company designs and manufacturers a wide variety of precision abrasive
grinding wheels, including resin-bonded, vitrified, diamond and synthetic
types. In the manufacture of its grinding wheels, the Company believes its
proprietary formulae and modern production equipment and techniques provide
competitive advantages in terms of product quality, lower production costs and
faster deliveries.
On February 1, 1993, the Company completed the acquisition of Valenite for
approximately $69 million in cash (of which approximately $3 million was
subsequently repaid to the Company as a post-closing purchase price adjustment)
and $11 million of assumed debt. In 1993, Valenite's sales were $209 million,
of which approximately 65% were to customers in the U.S. The Company believes
Valenite is the second largest producer of metalcutting tool systems in the
U.S. and the third largest worldwide. Valenite has strong positions in carbide
die and wear products for metalforming and in products requiring the wear and
corrosion resistant properties of tungsten carbide. Products currently offered
include a full line of indexable inserts for metalcutting made from tungsten
and other carbides, cermet, ceramic, cubic boron nitride and polycrystalline
diamond materials; a full range of standard special steel insert holders used
in machine tools; as well as a range of related products, including special
dedicated tooling, extruded carbide products, carbide die and wear-resistant
parts, and electronic gauging systems for quality control of the metal-removal
process. Approximately 80% of Valenite's sales in 1993 were cutting tool
inserts and related insert holders.
In connection with the Valenite acquisition, the Company initiated a major
restructuring program, developed with Valenite's management, designed to
improve Valenite's profitability by lowering working capital requirements,
reducing overall expenses, increasing the level of plant modernization and
improving capacity utilization. This restructuring program includes the
consolidation of production through the closing of eleven production
facilities, the downsizing of two production facilities and net employee
reductions in excess of 500 and is expected to be completed in 1994. The
restructuring was originally expected to yield annual cost savings of $15.6
million and is now expected to yield annual savings of up to 20% more than the
original estimate.
10
<PAGE>
RECENT DEVELOPMENTS
On February 10, 1994, the Company announced a major consolidation of its U.S.
machine tool operations. The Company will close its plants in Fountain Inn and
Greenwood, South Carolina, and move production of standard horizontal machining
centers and turning centers to its machine tool facilities in Cincinnati, which
produces advanced machine tools and systems for the automotive, aerospace and
other industries.
The plan calls for phasing out production at the two South Carolina plants,
closing them and moving their modern machines and systems to Cincinnati by the
end of the year, as well as consolidating machine tool service and spare parts
operations in Cincinnati. A nonrecurring charge of $47.1 million was recorded
in the fourth quarter of 1993 to cover the costs involved. Overall, the
consolidation will reduce the machine tool segment's employment by a net 235,
or 12%, and floorspace by almost 400,000 square feet, or 25%. The incremental
cash required in 1994, before considering any proceeds from the disposition of
assets, will be approximately $18 million. The consolidation, once fully
implemented, is expected to result in annual cost savings of approximately $16
million.
The consolidation addresses excess manufacturing capacity created by two
factors: the Company's successful Wolfpack program, which has significantly
reduced the hours and floorspace required to manufacture and assemble machine
tool products; and the unusually steep recession in the aerospace industry,
which has dramatically lowered demand for the Company's advanced machine tool
systems.
As part of the consolidation plan, the Company will move highly advanced
machine tools and flexible manufacturing cells from South Carolina to its
Cincinnati facilities. The Cincinnati facilities, with their heavy crane
capacity, reinforced floors and wide and high bay areas, have the flexibility
to adapt to the manufacture of a wide range of products, from small turning
centers to huge 100-yard-long aerospace profilers.
On February 4, 1994, the Company sold its Sano blown and cast film systems
business which incurred an operating loss of approximately $26.3 million in
1993, which loss included charges totaling $22.8 million for the disposition of
this subsidiary.
11
<PAGE>
INVESTMENT CONSIDERATIONS
Prospective purchasers of the New Notes should carefully consider the
following investment considerations, as well as other information set forth in
this Prospectus, before making an investment in the New Notes.
LACK OF PUBLIC MARKET FOR THE NEW NOTES; RESTRICTIONS ON RESALE
The New Notes are new securities for which there currently is no public
market. Although the Initial Purchasers have informed the Company that they
currently intend to make a market in the New Notes they are not obligated to do
so and any such market making may be discontinued at any time without notice.
Accordingly, there can be no assurance as to the development or liquidity of
any market for the New Notes. The Old Notes are eligible for trading in the
Private Offerings, Resales and Trading through Automatic Linkages (PORTAL)
Market. The Company does not intend to apply for listing of the New Notes on
any securities exchange or for quotation through any automated quotation
system.
Historically, the market for noninvestment grade debt has been subject to
disruptions that have caused volatility in the prices of such securities. There
can be no assurance that the market for the New Notes will not be subject to
similar disruptions. Any such disruptions may have an adverse effect on holders
of the New Notes.
LEVERAGE
The Company's ratio of total debt to total capitalization as of January 1,
1994 was 60%. This degree of leverage may make it more difficult to incur
further indebtedness.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Old Notes who do not exchange their Old Notes for New Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Old Notes as set forth in the legend thereon as a
consequence of the issuance of the Old Notes pursuant to exemptions from, or in
transactions not subject to, the registration requirements of the Securities
Act and applicable state securities laws. In general, the Old Notes may not be
offered or sold, unless registered under the Securities Act, except pursuant to
an exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. The Company does not currently anticipate
that it will register the Old Notes under the Securities Act. Based on
interpretations by the staff of the Commission, New Notes issued pursuant to
the Exchange Offer in exchange for Old Notes may be offered for resale, resold
or otherwise transferred by holders thereof (other than any such holder which
is an "affiliate" of the issuer within the meaning of Rule 405 under the
Securities Act) without compliance with the registration and prospectus
delivery provisions of the Securities Act provided that such New Notes are
acquired in the ordinary course of such holders' business and such holders have
no arrangement with any person to participate in the distribution of such New
Notes. Each broker-dealer that receives New Notes for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. The Letter of Transmittal states
that by so acknowledging and by delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from time
to time, may be used by a broker-dealer in connection with resales of New Notes
received in exchange for Old Notes where such Old Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that, for a period of 180 days after the
Expiration Date, it will make this Prospectus available to any broker-dealer
for use in connection with any such resale. See "Plan of Distribution".
However, to comply with the securities laws of certain jurisdictions, if
applicable, the New Notes may not be offered or sold unless they have been
registered or qualified for sale in such jurisdictions or an exemption from
registration or qualification is available and is complied with. To the extent
that Old Notes are tendered and accepted in the Exchange Offer, the trading
market for untendered and tendered but unaccepted Old Notes could be adversely
affected.
12
<PAGE>
USE OF PROCEEDS
The Company will not receive any cash proceeds from the Exchange Offer. The
proceeds to the Company from the sale of the Old Notes were approximately
$112,183,650. The Company is in the process of using such proceeds to (i) repay
short-term debt (some of which was incurred to fund the acquisition of
Ferromatik), including approximately $33 million of debt outstanding under the
Company's revolving credit facility (which debt matures at various times, not
later than July 20, 1995, and has a floating interest rate currently at
approximately 4.5% per annum) and approximately $17 million in the aggregate of
overseas bank debt (which debt matures at various times within 60 days, with
varying interest rates, depending on the currency, averaging approximately 7.2%
per annum), and (ii) redeem the Company's $60 million outstanding 8 3/8% Notes
Due 1997.
13
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company at January
1, 1994, and as adjusted to give effect to the offering of the Old Notes and
the application of the proceeds of the offering of the Old Notes as described
under "Use of Proceeds".
<TABLE>
<CAPTION>
AS ADJUSTED FOR
THE OFFERING OF
ACTUAL THE OLD NOTES
------ ---------------
(DOLLARS IN MILLIONS,
EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C>
Amounts payable to banks............................... $ 74.2 $ 24.2
Long-term debt and lease obligations:
8 3/8%Notes due 2004................................. -- 115.0
8 3/8% Notes due 1997................................ 60.0 --
12% Sinking Fund Debentures due 2010................. 10.8 10.8
Industrial Development Revenue Bonds due 2008........ 10.0 10.0
Revolving credit facility............................ 10.0 10.0
Other long-term debt and capital lease obligations... 20.2 20.2
------ ------
Total long-term debt and capital lease obligations. 111.0 166.0
Shareholders' Equity:
4% Cumulative Preferred Shares--authorized, issued
and outstanding 60,000 shares, $100 par value per
share, redeemable at $105 a share................... 6.0 6.0
Common Shares--authorized 50,000,000 shares,
33,531,723 shares outstanding, $1.00 par value per
share(a)............................................ 33.5 33.5
Capital in excess of par value....................... 251.3 251.3
Accumulated deficit.................................. (151.2) (151.2)
Cumulative foreign currency translation adjustments.. (15.5) (15.5)
------ ------
Total shareholders' equity......................... 124.1 124.1
------ ------
Total capitalization............................... $309.3 $314.3
====== ======
</TABLE>
- --------
Note: The information set forth in the table and accompanying notes should be
read in conjunction with the audited consolidated financial statements
of the Company and related notes and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included
elsewhere in this Prospectus and the audited consolidated financial
statements of Valenite and Ferromatik and related notes thereto
incorporated into this Prospectus by reference to the Company's 1993 and
1994 Form 8-Ks. The table does not reflect the Company's sales of
interests in certain accounts receivable to third parties. As of January
1, 1994, the amount of the accounts receivable sold was $61 million.
(a) In addition, at January 1, 1994, stock options for 1,717,075 shares were
outstanding. The 1994 Long-Term Incentive Plan was approved by the Company's
Board of Directors on February 10, 1994, and, subject to shareholder
approval, will provide for the granting of up to 2,000,000 additional shares
in the form of stock options, restricted stock and performance awards. The
prior plan expired on December 31, 1993, and additional shares may no longer
be granted thereunder.
14
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the Company is set forth below
for the periods indicated.
<TABLE>
<CAPTION>
FISCAL YEAR
------------------------------------------------------------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
-- (a) 2.2 -- (b) -- (c) 2.6
</TABLE>
- --------
(a) The deficiency of $37.2 million in fiscal year 1993 results from a
nonrecurring charge of $47.1 million for the consolidation of domestic
machine tool manufacturing operations and nonrecurring charges totaling
$22.8 million for the disposition of the Company's Sano business.
(b) The deficiency of $73.8 million in fiscal year 1991 results from a
nonrecurring charge of $75.1 million for plant closing and relocation of
certain machine tool manufacturing operations.
(c) The deficiency of $9.0 million in fiscal year 1990 results from a
nonrecurring charge of $26.6 million for product discontinuance and the
reorganization of grinding machine and certain other machine tool
manufacturing operations.
For purposes of computing the ratio of earnings to fixed charges, earnings
were calculated by adding earnings (loss) from continuing operations before
income taxes, extraordinary items and cumulative effect of changes in methods
of accounting, interest expense, interest capitalized, amortization of debt
discount, and the portion of rents representative of an interest factor. Fixed
charges consist of interest expense, interest capitalized and the portion of
the rents representative of an interest factor. For periods in which earnings
before fixed charges were insufficient to cover fixed charges, the amount of
coverage deficiency (in millions), instead of the ratio, is disclosed in the
footnotes. Earnings as defined includes significant non-cash charges for
depreciation and amortization.
15
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA
<TABLE>
<CAPTION>
FISCAL YEAR(A)
----------------------------------------------------------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE
AMOUNTS)
1993 1992 1991 1990 1989
-------- ------ ------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS
Sales............................ $1,029.4 $789.2 $ 754.0 $805.2 $789.3
Cost of products sold............ 791.3 612.6 603.2 632.8 611.1
-------- ------ ------- ------ ------
Manufacturing margins.......... 238.1 176.6 150.8 172.4 178.2
Other costs and expenses
Selling and administrative..... 191.3 133.6 132.2 136.0 123.2
Consolidation charge........... 47.1 (b) -- -- -- --
Disposition of subsidiary...... 22.8 (b) -- -- -- --
Closing and relocation charge.. -- -- 75.1(c) -- --
Special charge................. -- -- -- 26.6(d) --
Other--net..................... .7 (.2) 1.8 3.0 (1.8)
-------- ------ ------- ------ ------
Total other costs and
expenses.................... 261.9 133.4 209.1 165.6 121.4
-------- ------ ------- ------ ------
Operating earnings (loss)........ (23.8) 43.2 (58.3) 6.8 56.8
Interest
Interest income ............... 2.3 2.9 4.0 5.1 5.6
Interest expense............... (15.7) (19.1) (19.1) (19.7) (22.5)
-------- ------ ------- ------ ------
Interest--net................ (13.4) (16.2) (15.1) (14.6) (16.9)
-------- ------ ------- ------ ------
Earnings (loss) from continuing
operations before income taxes,
extraordinary items and
cumulative effect of changes in
methods of accounting........... (37.2) 27.0 (73.4) (7.8) 39.9
Provision for income taxes....... 8.2 10.9 9.7 5.8 18.1
-------- ------ ------- ------ ------
Earnings (loss) from continuing
operations before extraordinary
items and cumulative effect of
changes in methods of
accounting...................... (45.4)(b) 16.1 (83.1)(c) (13.6)(d) 21.8
Discontinued operations net of
income taxes.................... -- -- (17.1)(e) (10.7)(f) (10.1)(g)
Extraordinary items
Tax benefit from loss
carryforward.................. -- 5.4 -- -- 5.7
Loss from early extinguishment
of debt....................... (4.4)(b) -- -- -- --
Cumulative effect of changes in
methods of accounting........... (52.1)(b) -- -- -- --
-------- ------ ------- ------ ------
Net earnings (loss).............. $ (101.9) $ 21.5 $(100.2) $(24.3) $ 17.4
======== ====== ======= ====== ======
Earnings (loss) per common share
Earnings (loss) from continuing
operations before extraordinary
items and cumulative effect of
changes in methods of
accounting.................... $ (1.41) $ .58 $ (3.04) $ (.54) $ .88
Discontinued operations net of
income taxes.................. -- -- (.63) (.41) (.41)
Extraordinary items
Tax benefit from loss
carryforward................ -- .19 -- -- .23
Loss from early
extinguishment of debt...... (.14) -- -- -- --
Cumulative effect of changes in
methods of accounting......... (1.61) -- -- -- --
-------- ------ ------- ------ ------
Net earnings (loss)............ $ (3.16) $ .77 $ (3.67) $ (.95) $ .70
======== ====== ======= ====== ======
</TABLE>
- --------
(continued on next page)
16
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA--(CONTINUED)
<TABLE>
<CAPTION>
FISCAL YEAR(A)
--------------------------------------
(DOLLARS IN MILLIONS)
1993 1992 1991 1990 1989
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (AT YEAR-END)
Working capital.................... $114.3 $191.8 $188.0 $253.6 $259.0
Property, plant and equipment--net. 184.0 121.1 129.7 159.2 146.4
Total assets....................... 729.6 578.9 598.4 693.0 686.1
Long-term debt and lease obliga-
tions............................. 107.6 154.4 155.9 157.3 165.8
Total debt......................... 185.2 175.6 162.8 169.4 195.5
Shareholders' equity............... 124.1 134.4 129.0 247.7 226.6
OTHER DATA
Total debt to total capital ratio.. 60% 57% 56% 41% 46%
EBITDA(h).......................... $ 72.2 $ 64.1 $ 40.8 $ 57.1 $ 79.7
Ratio of EBITDA to interest ex-
pense............................. 4.6 3.4 2.1 2.9 3.5
Dividends paid to common share-
holders........................... $ 11.6 $ 10.0 $ 17.3 $ 18.6 $ 17.5
Capital expenditures............... 23.4 17.6 15.5 34.1 33.6
Backlog of unfilled orders at year-
end............................... 246.0 249.6 277.3 268.6 315.0
</TABLE>
- --------
(a) 1992 includes 53 weeks as compared to 52 weeks included in 1993, 1991,
1990 and 1989.
(b) Earnings (loss) from continuing operations before extraordinary items and
cumulative effect of changes in methods of accounting for fiscal year 1993
includes a nonrecurring charge of $47.1 million (with no current tax
effect) for the consolidation of domestic machine tool manufacturing
operations and nonrecurring charges totaling $22.8 million (with no
current tax effect), for the disposition of the Company's Sano business.
Additional charges totaling $52.1 million related to the adoption of
S.F.A.S. 109, "Accounting for Income Taxes" and S.F.A.S. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions", as well as an
extraordinary loss of $4.4 million related to the early extinguishment of
debt are included in the net loss for 1993.
(c) Earnings (loss) from continuing operations before extraordinary items and
cumulative effect of changes in methods of accounting for fiscal year 1991
includes a nonrecurring charge of $75.1 million (with no current tax
effect) for plant closing and the relocation of certain machine tool
manufacturing operations.
(d) Earnings (loss) from continuing operations before extraordinary items and
cumulative effect of changes in methods of accounting for fiscal year 1990
includes a nonrecurring charge of $26.6 million ($24.9 million after tax)
for product discontinuance and the reorganization of grinding machine and
certain other machine tool manufacturing operations.
(e) Includes a charge of $14.9 million (with no current tax effect) related to
the revaluation for sale of LK Tool.
(f) Includes a provision for loss on the sale of the discontinued industrial
robot business of $1.7 million (with no current tax effect) as well as a
nonrecurring charge related to LK Tool of $6.2 million (with no current
tax effect).
(g) Includes a loss on the sale of the discontinued laser machine operations
of $4.5 million.
(h) Represents operating earnings, excluding nonrecurring charges, before
depreciation and amortization. EBITDA is presented because it is a widely
accepted financial indicator of a company's ability to service and incur
debt. EBITDA should not be considered by an investor as an alternative to
net income or as an indicator of the Company's operating performance.
17
<PAGE>
SELECTED HISTORICAL SEGMENT INFORMATION
<TABLE>
<CAPTION>
FISCAL YEAR(A)
----------------------------------------
(DOLLARS IN MILLIONS)
1993 1992 1991 1990 1989
-------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Sales
Plastics machinery............ $ 357.2 $301.4 $267.6 $272.8 $287.1
Machine tools................. 355.0 379.7 383.7 433.7 403.1
Industrial products (b)....... 317.2 108.1 102.7 98.7 99.1(c)
-------- ------ ------ ------ ------
Total sales................. $1,029.4 $789.2 $754.0 $805.2 $789.3
======== ====== ====== ====== ======
Backlog of unfilled orders at
year-end
Plastics machinery............ $ 85.5 $ 56.1 $ 53.3 $ 48.7 $ 50.6
Machine tools................. 123.9 188.8 219.7 216.1 260.7
Industrial products (b)....... 36.6 4.7 4.3 3.8 3.7
-------- ------ ------ ------ ------
Total backlog............... $ 246.0 $249.6 $277.3 $268.6 $315.0
======== ====== ====== ====== ======
Operating earnings (loss)
Plastics machinery............ $ 26.6 $ 22.8 $ 14.6 $ 17.4 $ 33.7
Machine tools................. 3.9 8.9 (6.6) 6.2 11.6
Industrial products (b)....... 27.1 17.7 18.3 19.2 20.6(d)
Consolidation charge, closing
and relocation charge and
special charge (e)........... (47.1) -- (75.1) (26.6) --
Disposition of subsidiary
(f).......................... (22.8) -- -- -- --
Unallocated corporate
expenses (g)................. (11.5) (6.2) (9.5) (9.4) (9.1)
-------- ------ ------ ------ ------
Operating earnings (loss)..... (23.8) 43.2 (58.3) 6.8 56.8
Interest--net................. (13.4) (16.2) (15.1) (14.6) (16.9)
-------- ------ ------ ------ ------
Earnings (loss) from
continuing operations before
income taxes, extraordinary
items and cumulative effect
of changes in methods of
accounting................... $ (37.2) $ 27.0 $(73.4) $ (7.8) $ 39.9
======== ====== ====== ====== ======
Capital expenditures
Plastics machinery............ $ 4.2 $ 6.2 $ 6.5 $ 14.4 $ 14.8
Machine tools................. 8.8 7.1 7.5 15.3 16.5
Industrial products (b)....... 10.4 4.3 1.5 4.4 2.3
-------- ------ ------ ------ ------
Total capital expenditures.. $ 23.4 $ 17.6 $ 15.5 $ 34.1 $ 33.6
======== ====== ====== ====== ======
Identifiable assets
Plastics machinery............ $ 289.0 $219.9 $202.9 $202.1 $177.9
Machine tools................. 243.1 282.8 310.9 360.1 395.0
Industrial products (b)....... 174.4 56.8 63.7 82.1 68.7
Unallocated corporate assets
(h).......................... 23.1 19.4 20.9 48.7 44.5
-------- ------ ------ ------ ------
Total assets................ $ 729.6 $578.9 $598.4 $693.0 $686.1
======== ====== ====== ====== ======
</TABLE>
- --------
(a) 1992 includes 53 weeks as compared to 52 weeks included in 1993, 1991, 1990
and 1989.
(b) The 1993 increases in the industrial products segment are largely
attributable to the inclusion of Valenite as of February 1, 1993.
(c) Includes sales of $8.1 million from semiconductor materials operations
which were sold in early 1989.
(d) Includes gain of $3.4 million from the sale of semiconductor materials
operations in 1989.
(e) These charges relate to the machine tool segment.
(f) This charge relates to the disposition of Sano, which was included in the
Company's plastics machinery segment.
(g) Includes corporate research and development and certain administrative
expenses. The 1993 amount includes amortization of financing costs and costs
related to the sale of receivables totaling $3.0 million.
(h) Includes cash and cash equivalents and the assets of the Company's
insurance and utility subsidiaries.
18
<PAGE>
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER
General
In connection with the sale of the Old Notes pursuant to a Purchase Agreement
dated as of March 9, 1994, between the Company and CS First Boston Corporation,
as representative of the Initial Purchasers, the Initial Purchasers and their
assignees became entitled to the benefits of the Registration Rights Agreement.
Under the Registration Rights Agreement, the Company is obligated to (i) file
the Registration Statement of which this Prospectus is a part for a registered
exchange offer with respect to an issue of new notes identical in all material
respects to the Old Notes within 30 days after March 16, 1994, the date the Old
Notes were issued (the "Issue Date"), and (ii) use its best efforts to cause
the Registration Statement to become effective within 120 days after the Issue
Date. The Exchange Offer being made hereby if commenced and consummated within
such applicable time periods will satisfy those requirements under the
Registration Rights Agreement. See "Description of the New Notes--Exchange
Offer; Registration Rights".
Upon the terms and subject to the conditions set forth in this Prospectus and
in the Letter of Transmittal (which together constitute the Exchange Offer),
the Company will accept for exchange all Old Notes properly tendered and not
withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date. The
Company will issue New Notes in exchange for an equal principal amount of
outstanding Old Notes accepted in the Exchange Offer.
As of , 1994, $115,000,000 aggregate principal amount of Old Notes was
outstanding. This Prospectus, together with the Letter of Transmittal, is being
sent to all registered holders as of , 1994. The Company's obligation to
accept Old Notes for exchange pursuant to the Exchange Offer is subject to
certain conditions as set forth herein under "--Conditions".
The Company shall be deemed to have accepted validly tendered Old Notes when,
as and if the Company has given oral or written notice thereof to the Exchange
Agent. The Exchange Agent will act as agent for the tendering holders of Old
Notes for the purposes of receiving the New Notes from the Company and
delivering New Notes to such holders.
In the event the Exchange Offer is consummated, subject to certain
exceptions, the Company will not be required to register the Old Notes. In such
event, holders of Old Notes seeking liquidity in their investment would have to
rely on exemptions to registration requirements under the United States
securities laws. See "Investment Considerations--Consequences of Failure to
Exchange".
Expiration Date; Extensions; Amendments
The term "Expiration Date" shall mean , 1994, unless the Company, in its
sole discretion, extends the Exchange Offer, in which case the term "Expiration
Date" shall mean the latest date to which the Exchange Offer is extended.
In order to extend the Expiration Date, the Company will notify the Exchange
Agent of any extension by oral or written notice and will mail to the record
holders of Old Notes an announcement thereof, each prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date. Such announcement may state that the Company is extending the Exchange
Offer for a specified period of time.
The Company reserves the right (i) to delay accepting any Old Notes, to
extend the Exchange Offer or to terminate the Exchange Offer and not accept Old
Notes not previously accepted if any of the conditions set forth herein under
"--Conditions" shall have occurred and shall not have been waived by Company,
by giving oral or written notice of such delay, extension or termination to the
Exchange Agent, or (ii) to amend the terms of the Exchange Offer in any manner
deemed by it to be advantageous to the holders of the Old Notes. Any such delay
in acceptance, extension, termination or amendment will be followed as promptly
as practicable by oral or written notice thereof. If the Exchange Offer is
amended in a manner determined by
19
<PAGE>
the Company to constitute a material change, the Company will promptly disclose
such amendment in a manner reasonably calculated to inform the holders of the
Old Notes of such amendment and the Company will extend the Exchange Offer for
a period of five to 10 business days, depending upon the significance of the
amendment and the manner of disclosure to holders of the Old Notes, if the
Exchange Offer would otherwise expire during such five to 10 business day
period.
Without limiting the manner in which the Company may choose to make public
announcement of any delay, extension, amendment or termination of the Exchange
Offer, the Company shall have no obligation to publish, advertise, or otherwise
communicate any such public announcement, other than by making a timely release
to the Dow Jones News Service.
No vote of the Company's security holders is required under applicable law to
effect the Exchange Offer and no such vote (or proxy therefor) is being sought
hereby.
Holders of Old Notes do not have any appraisal or dissenters' rights in
connection with the Exchange Offer under the Delaware General Corporation Law,
the state in which the Company is incorporated.
INTEREST ON THE NEW NOTES
The New Notes will bear interest from March 16, 1994. Holders of Old Notes
whose Old Notes are accepted for exchange will be deemed to have waived the
right to receive any payment in respect of interest on the Old Notes accrued up
until the date of the issuance of the New Notes.
Interest on the New Notes is payable semi-annually on March 15 and September
15 of each year, accruing from March 16, 1994, at the rate of 8 3/8% per annum.
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, a holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with any other
required documents, to the Exchange Agent prior to 5:00 p.m., New York City
time, on the Expiration Date. In addition, either (i) certificates for such Old
Notes must be received by the Exchange Agent along with the Letter of
Transmittal, or (ii) a timely confirmation of a book-entry transfer (a "Book-
Entry Confirmation") of such Old Notes, if such procedure is available, into
the Exchange Agent's account at The Depository Trust Company (the "Book-Entry
Transfer Facility") pursuant to the procedure for book-entry transfer described
below, must be received by the Exchange Agent prior to the Expiration Date, or
(iii) the holder must comply with the guaranteed delivery procedures described
below. THE METHOD OF DELIVERY OF OLD NOTES, LETTERS OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF SUCH
DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED,
WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTERS OF TRANSMITTAL OR OLD NOTES
SHOULD BE SENT TO THE COMPANY. To be tendered effectively, the Old Notes,
Letter of Transmittal and all other required documents must be received by the
Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date.
Delivery of all documents must be made to the Exchange Agent at its address set
forth below. Holders may also request their respective brokers, dealers,
commercial banks, trust companies or nominees to effect such tender for such
holders.
The tender by a holder of Old Notes will constitute an agreement between such
holder and the Company in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal.
Only a holder of Old Notes may tender such Old Notes in the Exchange Offer.
The term "holder" with respect to the Exchange Offer means any person in whose
name Old Notes are registered on the books of the Company or any other person
who has obtained a properly completed bond power from the registered holder.
20
<PAGE>
Any beneficial owner whose Old Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to
tender should contact such registered holder promptly and instruct such
registered holder to tender on his behalf. If such beneficial owner wishes to
tender on his own behalf, such beneficial owner must, prior to completing and
executing the Letter of Transmittal and delivering his Old Notes, either make
appropriate arrangements to register ownership of the Old Notes in such owner's
name or obtain a properly completed bond power from the registered holder. The
transfer of registered ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by any member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.
or a commercial bank or trust company having an office or correspondent in the
United States (an "Eligible Institution") unless the Old Notes tendered
pursuant thereto are tendered (i) by a registered holder who has not completed
the box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. In the event that signatures on a Letter of Transmittal
or a notice of withdrawal, as the case may be, are required to be guaranteed,
such guarantee must be by an Eligible Institution.
If the Letter of Transmittal is signed by a person other than the registered
holder of any Old Notes listed therein, such Old Notes must be endorsed or
accompanied by bond powers and a proxy which authorizes such person to tender
the Old Notes on behalf of the registered holder, in each case as the name of
the registered holder or holders appears on the Old Notes.
If the Letter of Transmittal or any Old Notes bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
person should so indicate when signing, and unless waived by the Company,
evidence satisfactory to the Company of their authority to so act must be
submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), and withdrawal of the tendered Old Notes will be determined by the
Company in its sole discretion, which determination will be final and binding.
The Company reserves the absolute right to reject any and all Old Notes not
properly tendered or any Old Notes which, if accepted by the Company, would, in
the opinion of counsel for the Company, be unlawful. The Company also reserves
the right to waive any irregularities or conditions of tender as to particular
Old Notes. The Company's interpretation of the terms and conditions of the
Exchange Offer (including the instructions in the Letter of Transmittal) will
be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Old Notes must be cured within
such time as the Company shall determine. Neither the Company, the Exchange
Agent nor any other person shall be under any duty to give notification of
defects or irregularities with respect to tenders of Old Notes, nor shall any
of them incur any liability for failure to give such notification. Tenders of
Old Notes will not be deemed to have been made until such irregularities have
been cured or waived. Any Old Notes received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned without cost to such holder by the Exchange
Agent to the tendering holders of Old Notes, unless otherwise provided in the
Letter of Transmittal, as soon as practicable following the Expiration Date.
In addition, the Company reserves the right in its sole discretion to (i)
purchase or make offers for any Old Notes that remain outstanding subsequent to
the Expiration Date or, as set forth under "--Conditions", to terminate the
Exchange Offer in accordance with the terms of the Registration Rights
Agreement and (ii) to the extent permitted by applicable law, purchase Old
Notes in the open market, in privately negotiated transactions or otherwise.
The terms of any such purchases or offers could differ from the terms of the
Exchange Offer.
21
<PAGE>
By tendering, each holder will represent to the Company that, among other
things, the New Notes acquired pursuant to the Exchange Offer are being
obtained in the ordinary course of such holder's business, that such holder has
no arrangement or understanding with any person to participate in the
distribution of such New Notes and that such holder is not an "affiliate," as
defined under Rule 405 of the Securities Act, of the Company or, if such holder
is an affiliate of the Company, that such holder will comply with the
prospectus delivery requirements of the Securities Act. Each broker or dealer
that receives New Notes for its own account in exchange for Old Notes, where
such Old Notes were acquired by such broker or dealer as a result of market-
making activities, or other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of such New Notes. See "Plan
of Distribution".
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
the Company will accept, promptly after the Expiration Date, all Old Notes
properly tendered and will issue the New Notes promptly after acceptance of the
Old Notes. See "--Conditions" below. For purposes of the Exchange Offer, the
Company shall be deemed to have accepted properly tendered Old Notes for
exchange when, as and if the Company has given oral or written notice thereof
to the Exchange Agent.
For each Old Note accepted for exchange, the holder of such Old Note will
receive a New Note having a principal amount equal to that of the surrendered
Old Note. If by July 14, 1994, neither the Exchange Offer is consummated nor a
shelf registration statement (the "Shelf Registration Statement") is declared
effective, interest will accrue on the Old Notes from and including July 15,
1994, until but excluding the earlier of the date of the consummation of the
Exchange Offer and the effective date of the Shelf Registration Statement, at a
rate of 8 7/8% per annum. Holders of Old Notes accepted for exchange will be
deemed to have waived the right to receive any other payments or accrued
interest on such Old Notes.
In all cases, issuance of New Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of certificates for such Old Notes or a timely Book-Entry
Confirmation of such Old Notes into the Exchange Agent's account at the Book-
Entry Transfer Facility, a properly completed and duly executed Letter of
Transmittal and all other required documents. If any tendered Old Notes are not
accepted for any reason set forth in the terms and conditions of the Exchange
Offer or if Old Notes are submitted for a greater principal amount than the
holder desires to exchange, such unaccepted or nonexchanged Old Notes will be
returned without expense to the tendering holder thereof (or, in the case of
Old Notes tendered by book-entry transfer procedures described below, such
nonexchanged Old Notes will be credited to an account maintained with such
Book-Entry Transfer Facility) as promptly as practicable after the expiration
or termination of the Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Old Notes at the Book-Entry Transfer Facility for purposes of the
Exchange Offer within two business days after the date of this Prospectus. Any
financial institution that is a participant in the Book-Entry Transfer
Facility's systems may book-entry deliver Old Notes by causing the Book-Entry
Transfer Facility to transfer such Old Notes into the Exchange Agent's account
at the Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedures for transfer. However, although delivery of Old Notes may
be effected through book-entry transfer at the Book-Entry Transfer Facility,
the Letter of Transmittal or facsimile thereof with any required signature
guarantees and any other required documents must, in any case, be transmitted
to and received by the Exchange Agent at one of the addresses set forth below
under "Exchange Agent" on or prior to the Expiration Date or the guaranteed
delivery procedures described below must be complied with.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of the Old Notes desires to tender such Old Notes and
the Old Notes are not immediately available, or time will not permit such
holder's Old Notes or other required documents to reach the Exchange Agent
before the Expiration Date, or the procedure for book-entry transfer cannot be
22
<PAGE>
completed on a timely basis, a tender may be effected if (i) the tender is made
through an Eligible Institution, (ii) prior to the Expiration Date, the
Exchange Agent received from such Eligible Institution a properly completed and
duly executed Letter of Transmittal (or a facsimile thereof) and Notice of
Guaranteed Delivery, substantially in the form provided by the Company (by
facsimile transmission, mail or hand delivery), setting forth the name and
address of the holder of Old Notes and the amount of Old Notes tendered,
stating that the tender is being made thereby and guaranteeing that within five
New York Stock Exchange ("NYSE") trading days after the date of execution of
the Notice of Guaranteed Delivery, the certificates for all physically tendered
Old Notes, in proper form for transfer, or a Book-Entry Confirmation, as the
case may be, and any other documents required by the Letter of Transmittal will
be deposited by the Eligible Institution with the Exchange Agent and (iii) the
certificates for all physically tendered Old Notes, in proper form for
transfer, or a Book-Entry Confirmation, as the case may be, and all other
documents required by the Letter of Transmittal are received by the Exchange
Agent within five NYSE trading days after the date of execution of the Notice
of Guaranteed Delivery.
WITHDRAWAL OF TENDERS
Tenders of Old Notes may be withdrawn at any time prior to the Expiration
Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent at one of the addresses set forth below under
"Exchange Agent". Any such notice of withdrawal must specify the name of the
person having tendered the Old Notes to be withdrawn, identify the Old Notes to
be withdrawn (including the principal amount of such Old Notes), and (where
certificates for Old Notes have been transmitted) specify the name in which
such Old Notes are registered, if different from that of the withdrawing
holder. If certificates for Old Notes have been delivered or otherwise
identified to the Exchange Agent, then, prior to the release of such
certificates the withdrawing holder must also submit the serial numbers of the
particular certificates to be withdrawn and a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution unless such holder is an
Eligible Institution. If Old Notes have been tendered pursuant to the procedure
for book-entry transfer described above, any notice of withdrawal must specify
the name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Old Notes and otherwise comply with the procedures
of such facility. All questions as to the validity, form and eligibility
(including time of receipt) of such notices will be determined by the Company,
whose determination shall be final and binding on all parties. Any Old Notes so
withdrawn will be deemed not to have been validly tendered for exchange for
purposes of the Exchange Offer. Any Old Notes which have been tendered for
exchange but which are not exchanged for any reason will be returned to the
holder thereof without cost to such holder (or, in the case of Old Notes
tendered by book-entry transfer into the Exchange Agent's account at the Book-
Entry Transfer Facility pursuant to the book-entry transfer
procedures described above, such Old Notes will be credited to an account
maintained with such Book-Entry Transfer Facility for the Old Notes) as soon as
practicable after withdrawal, rejection of tender or termination of the
Exchange Offer. Properly withdrawn Old Notes may be retendered by following one
of the procedures described under "--Procedures for Tendering" above at any
time on or prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company will not be
required to accept for exchange, or exchange New Notes for, any Old Notes and
may terminate or amend the Exchange Offer as provided herein before the
acceptance of such Old Notes, if because of any change in law, or applicable
interpretations thereof by the Commission, the Company determines that it is
not permitted to effect the Exchange Offer, and the Company has no obligation
to, and will not knowingly, accept tenders of Old Notes from affiliates of the
Company (within the meaning of Rule 405 under the Securities Act) or from any
other holder or holders who are not eligible to participate in the Exchange
Offer under applicable law or interpretations thereof by the Commission, or if
the New Notes to be received by such holder or holders of Old Notes in the
Exchange Offer, upon receipt, will not be tradeable by such holder without
restriction under the Securities Act and the Exchange Act and without material
restrictions under the blue sky or securities laws of substantially all of the
states.
23
<PAGE>
EXCHANGE AGENT
BankAmerica National Trust Company has been appointed as Exchange Agent for
the Exchange Offer. Questions and requests for assistance and requests for
additional copies of this Prospectus or of the Letter of Transmittal should be
directed to the Exchange Agent addressed as follows:
By Mail: By Hand/Overnight Delivery:
BankAmerica National Trust Company BankAmerica National Trust Company
Corporate Trust Operations Corporate Trust Operations
P.O. Box 464, Bowling Green Station One World Trade Center
New York, New York 10274-0464 18th Floor
New York, New York 10048
Facsimile Transmission: (212) 390-3116
Confirm by Telephone: (212) 390-3042
FEES AND EXPENSES
The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by the Company. The principal solicitation for tenders pursuant to the
Exchange Offer is being made by mail; however, additional solicitations may be
made by telegraph, telephone or in person by officers and regular employees of
the Company.
The Company will not make any payments to brokers, dealers or other persons
soliciting acceptances of the Exchange Offer. The Company, however, will pay
the Exchange Agent reasonable and customary fees for its services and will
reimburse the Exchange Agent for its reasonable out-of-pocket expenses in
connection therewith. The Company may also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of the Prospectus and related documents
to the beneficial owners of the Old Notes, and in handling or forwarding
tenders for exchange.
The expenses to be incurred in connection with the Exchange Offer will be
paid by the Company, and are estimated in the aggregate to be $150,000,
including fees and expenses of the Exchange Agent and Trustee and accounting,
legal, printing and related fees and expenses.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Old Notes pursuant to the Exchange Offer. If, however, certificates
representing New Notes or Old Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be registered or issued
in the name of, any person other than the registered holder of the Old Notes
tendered, or if tendered Old Notes are registered in the name of any person
other than the person signing the Letter of Transmittal, or if a transfer tax
is imposed for any reason other than the exchange of Old Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed on
the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.
ACCOUNTING TREATMENT
The New Notes will be recorded in the Company's accounting records at the
same carrying value as the Old Notes, which is the principal amount of such
Notes, as reflected in the Company's accounting records on the date of the
exchange. Accordingly, no gain or loss for accounting purposes will be
recognized upon the consummation of the Exchange Offer. The expenses of the
Exchange Offer will be amortized by the Company over the term of the New Notes
in accordance with generally accepted accounting principles.
24
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company operates in three principal business segments: plastics
machinery, machine tools and industrial products. See "Selected Historical
Segment Data" for financial information for each of these segments.
1993 Compared to 1992
Sales
Sales in 1993 were $1,029 million, which represented a $240 million increase
over 1992. This increase was primarily attributable to the $209 million
increase in sales of industrial products which resulted from the acquisition of
Valenite in February 1993. The plastics machinery sales increase totaled $56
million, or 19%, which resulted primarily from increased domestic sales of
injection molding machines and the acquisition of Ferromatik in November 1993.
Machine tool sales declined by $25 million, or 7%, due to the decline in sales
of advanced machine tools for the aerospace market.
Sales of all segments to foreign markets totaled $298 million, compared to
$243 million in 1992. Export shipments increased by $7 million due to the
acquisition of Valenite which more than offset reductions in exports of
injection molding machines and advanced machine tools to Europe.
New Orders and Backlog
New orders for 1993 were $970 million, which represented a $208 million
increase over 1992. The increase was caused by a $60 million, or 20%,
improvement in plastics machinery orders and by orders totaling $209 million
for Valenite. Machine tool orders declined by $61 million, or 17%. This decline
was caused principally by (i) a large order (over $25 million) that was
received in the third quarter of 1992 that was not repeated in 1993, (ii)
reduced demand from customers in the aerospace industry and (iii) the
discontinuation of certain less profitable product lines. Export orders
approximated $100 million in 1993 and 1992; in 1993, export orders for
industrial products increased due to the Valenite acquisition while export
orders for plastics machinery and machine tools declined.
At January 1, 1994, the backlog of unfilled orders was $246 million, down
from $250 million a year ago, reflecting reduced orders for aerospace equipment
which was partially offset by the acquisitions of Valenite and Ferromatik and
the increased backlog of orders for other plastics machinery products.
Margins, Costs and Expenses
Manufacturing margins increased from 22.4% in 1992 to 23.1% in 1993. Margins
for plastics machinery continued to be held back due to competitive pricing
pressures in the U.S. and Europe. Margins for machine tools declined primarily
due to the severe reduction in shipments of advanced machine tools to aerospace
customers that resulted in significant excess capacity costs late in 1993.
Margins for industrial products, excluding Valenite, declined in 1993 due in
part to reduced volume of European cutting fluids. The Valenite acquisition
contributed to the overall increase in manufacturing margins in 1993.
Selling and administrative expense for 1993 increased over 1992 due to
increased sales. Excluding the effects of the Valenite acquisition, selling
expense remained constant at approximately 14% of sales. Administrative expense
increased primarily due to the Valenite acquisition.
Interest expense, net of interest income, for 1993 decreased by $2.8 million
compared with 1992. This reduction resulted primarily from the redemption of
$60 million of the Company's 12% Sinking Fund Debentures due 2010.
25
<PAGE>
Consolidation Charge
A nonrecurring charge of $47.1 million was recorded in 1993 for the
consolidation of U.S. machine tool manufacturing into facilities in Cincinnati.
Production at the Company's two machine tool facilities in Fountain Inn and
Greenwood, South Carolina are being phased out and the plants are expected to
be closed by year-end 1994. The consolidation will reduce the machine tool
group's employment by a net 235 people. The charge includes amounts for
severance, relocation of production and the sale of the two South Carolina
facilities.
The consolidation addresses excess manufacturing capacity created by two
factors: the Company's successful Wolfpack program, which has significantly
reduced the hours and floorspace required to manufacture and assemble machine
tool products; and the unusually steep recession in the aerospace industry,
which has dramatically lowered demand for the Company's advanced machine tool
systems.
The consolidation is expected to result in an incremental cash requirement
for 1994, before considering any proceeds from the disposition of assets, of
approximately $18 million which will be funded by operations and bank
borrowings. The consolidation, once fully implemented, is expected to result in
annual cost savings of approximately $16 million.
Disposition of Subsidiary
A nonrecurring charge of $22.8 million was recorded in 1993 to revalue the
Company's Sano subsidiary in anticipation of its sale. The decision to sell
Sano was due in part to continuing operating losses. In addition, the Sano
business does not serve a major global market with good long-term growth and
profit potential and as a result, does not meet the Company's criteria for a
core business. The business was sold in February 1994 and the transaction is
not expected to affect the Company's 1994 financial results.
Income Taxes and Extraordinary Tax Benefit
The provision for income taxes in 1993 consists of domestic state and local
taxes and certain foreign taxes. Current tax benefits were not offset against
the domestic loss that was caused by the nonrecurring charges described above,
in accordance with new income tax accounting rules adopted in 1993. In
addition, current tax benefits could not be recognized for losses in certain
foreign jurisdictions. At the end of 1993, for U.S. Federal tax reporting
purposes, the Company has a U.S. net operating loss carryforward of
approximately $19 million which expires in 2008.
The provision for income taxes in 1992 of approximately 40% includes the
Federal statutory rate as well as the effect of state and local and foreign
income taxes.
The extraordinary tax benefit in 1992 resulted from the utilization of a
portion of the Company's net operating loss carryforward.
Earnings
For 1993, before extraordinary items and cumulative effect of changes in
methods of accounting, the Company reported a loss of $45.4 million, or $1.41
per share, compared with a profit of $16.1 million, or $.58 per share, for
1992. The reduction in earnings from 1992 to 1993 was caused by the
nonrecurring charges described above that totaled $69.9 million.
The net loss for 1993 includes the effect of an extraordinary charge of $4.4
million, or $.14 per share, related to the early extinguishment of $60 million
of 12% Sinking Fund Debentures due 2010.
The net loss for 1993 also includes the effect of adopting two new accounting
standards resulting in charges to earnings totaling $52.1 million, or $1.61 per
share. The first new standard, SFAS No. 109, significantly changes existing
methods of accounting for income taxes and resulted in a charge of $4.2
million, or $.13 per share. The second standard, SFAS No. 106, requires that
certain postretirement benefits, such as
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<PAGE>
health care, be accounted for on the accrual method. The adoption of this
standard resulted in a charge of $47.9 million, or $1.48 per share, to record
the accrued liability for retiree health care benefits. Because of limitations
on the recognition of deferred tax assets under SFAS No. 109, no income tax
benefit could be recorded in connection with the adoption of SFAS No. 106.
Except for the cumulative effect, the new rules regarding postretirement
medical benefits did not significantly affect the Company's earnings for 1993,
while the new rules regarding income taxes precluded the recognition of tax
benefits with respect to domestic and certain foreign operating losses.
As discussed above, the Company recorded an extraordinary tax benefit from
the utilization of loss carryforwards of $5.4 million, or $.19 per share, for
1992.
After the nonrecurring charges, extraordinary items and cumulative effect of
changes in methods of accounting, the Company had a net loss of $101.9 million,
or $3.16 per share, for 1993, compared with net earnings of $21.5 million, or
$.77 per share, for 1992. The reduction in net earnings from 1992 to 1993 was
caused by the nonrecurring charges, the extraordinary item and the cumulative
effect of changes in methods of accounting that totaled $126.4 million.
1992 Compared to 1991
Sales
Sales in 1992 were $789 million, which represented a 5% increase from $754
million in 1991. The increase was caused by a 13% increase in plastics
machinery sales and a 5% increase in sales of industrial products. The plastics
machinery increase was due in large part to increased sales of injection
molding machines in the U.S. and Europe. Increased sales of industrial products
resulted from higher sales of grinding wheels in the U.S. and cutting fluids in
Europe. Sales of machine tools declined approximately 1%. The decrease is
attributable to the phase-out of certain less profitable turning center and
grinding machine product lines, which were formerly manufactured at the
Company's plants in Wilmington, Ohio, and Worcester, Massachusetts,
respectively, which have been closed. The cost to close these plants, along
with the cost to relocate certain product lines to more modern facilities, was
included in the $75 million closing and relocation charge recorded in the third
quarter of 1991.
Sales of all segments to foreign markets totaled $243 million in 1992
compared to $236 million in 1991. Export shipments increased by $13 million,
but sales by the Company's European subsidiaries to non-U.S. markets declined
by $6 million due to the continuing recession in the European capital goods
market.
New Orders and Backlog
New orders in 1992 were $762 million compared to $770 million in 1991. Orders
for machine tools declined by $46 million due to reductions in orders for
advanced machine tool systems from the aerospace industry due to difficulties
in the commercial airline industry. Such aerospace orders remained soft in
1993. Orders for plastics machinery increased by 12%, largely due to increased
orders for injection molding machines. Industrial products orders improved by
5%.
The backlog of unfilled orders decreased from $277 million in 1991 to $250
million in 1992 due to an unusually high level of aerospace sales in the 1992
fourth quarter, which were not replaced with new orders.
Margins, Costs and Expenses
The Company's manufacturing margin in 1992 was 22.4% compared to 20.0% in
1991. Margins improved for all business segments compared to 1991. Most
significantly, plastics machinery margins improved due to higher volume while
machine tool margins improved due to the aforementioned plant closings and
phase-out of less profitable product lines. Machine tool margins were held back
in 1992 due to continued price discounting in several soft metalworking markets
and by cost overruns on certain large aerospace systems.
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<PAGE>
Selling and administrative expense increased from $132 million in 1991 to
$134 million in 1992. The increase resulted from increased selling expenses
associated with the higher sales volume. Selling expense approximated 14% of
sales in both years. Administrative expense declined due to cost containment
initiatives.
Income Taxes and Extraordinary Tax Benefit
The Company's effective tax rate of 40% in 1992 exceeded the Federal
statutory rate due principally to domestic state and local income taxes and the
effect of foreign operating losses for which tax benefits are not currently
available. The provision for income taxes in 1991 consisted of domestic state
and local and foreign income taxes, as well as a $4 million tax on a planned
withdrawal of surplus assets from the Company's British pension fund that was
completed in 1992. Because the Company entered 1991 with a U.S. net operating
loss carryforward, domestic Federal income tax benefits could not be recognized
with respect to the losses incurred in that year.
The extraordinary tax benefit recognized in 1992 results from the utilization
of a portion of the Company's U.S. net operating loss carryforward for
financial reporting purposes that arose principally from the 1991 closing and
relocation charge.
Earnings
In 1992, the Company earned $16.1 million, or $.58 per share, from continuing
operations before extraordinary item, compared with a loss of $83.1 million, or
$3.04 per share, in 1991. The 1991 figures were adversely affected by a $75.1
million closing and relocation charge and the $4.0 million tax provision for
the anticipated withdrawal from the Company's British pension plan.
In 1991, the Company announced its intention to sell LK Tool, its coordinate
measurement and inspection machine business, due in part to continuing
operating losses. The losses from discontinued operations of $17.1 million, or
$.63 per share, for 1991, included a $14.9 million nonrecurring charge to
revalue for sale the Company's investment in LK Tool. The subsidiary was sold
in 1993.
Net earnings were $21.5 million, or $.77 per share, in 1992, compared with a
$100.2 million net loss, or $3.67 per share, in 1991. The 1991 losses were
caused principally by the aforementioned nonrecurring charges totalling $94.0
million.
LIQUIDITY AND SOURCES OF CAPITAL
At January 1, 1994, the Company had cash and cash equivalents of $19 million,
an increase of $4 million during the year. In 1993, operating activities
provided $22 million of cash. During 1993, the Company sold interests in
certain accounts receivable resulting in cash proceeds of approximately $61
million. At year-end 1992 the Company had sold $13 million of domestic accounts
receivable under a separate agreement that was terminated early in 1993. The
net cash proceeds from these transactions of $48 million are included in cash
provided by operating activities.
Approximately $50 million of the $61 million proceeds in 1993 resulted from
the sale of accounts receivable under a three year receivables purchase
agreement with an independent issuer of receivables-backed commercial paper,
pursuant to which the Company agreed to sell on an ongoing basis an undivided
percentage ownership interest in designated pools of accounts receivable. The
remaining $11 million of such proceeds resulted from the sale of an undivided
percentage ownership interest in certain accounts receivable originated by
Valenite in a separate transaction that was incorporated into the three year
receivables agreement referred to above.
Expenditures for new property, plant and equipment for 1993 were $23.4
million, as compared to $17.6 million for 1992. Capital expenditures for 1994
are expected to be approximately $40 million. Proceeds from
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<PAGE>
the disposal of property, plant and equipment for 1993 were $22.2 million,
compared to $11.1 million in 1992, and included amounts related to the sale of
surplus assets (including surplus land in 1993) and the sale and operating
leaseback of certain manufacturing equipment.
During 1993, the Company issued 5.175 million shares of common stock,
resulting in net proceeds of $101 million, which were used principally to
redeem $60 million of 12% debentures (plus a cash call premium of $4.7 million)
and to repay borrowings under revolving lines of credit and other bank debt.
In the fourth quarter of 1993, the Company acquired Ferromatik for
approximately $56 million, which was financed by assuming $6 million of debt
and utilizing $50 million of borrowings under bank lines of credit.
In addition, in 1993 the Company recorded several large noncash items: a
$47.1 million consolidation charge, a $22.8 million charge for disposition of a
subsidiary and a $52.1 million charge for cumulative effects of changes in
methods of accounting. As a result of these and other factors, including
financing for the acquisitions, in 1993, the Company's working capital
decreased by $78 million, the current ratio declined to 1.3 and the ratio of
total debt to total capital increased to 60%.
At January 1, 1994, the Company had approximately $138 million of committed
lines of credit with various U.S. and foreign banks. Additional borrowing
capacity available under committed lines of credit totaled approximately $40
million at January 1, 1994.
SUBSEQUENT EVENT
On March 16, 1994, the Company completed a private financing involving the
placement of $115 million of the Old Notes. The Company is in the process of
using the proceeds to repay short-term debt and redeem the Company's $60
million outstanding 8 3/8% Notes due 1997.
BUSINESS
GENERAL
Cincinnati Milacron is one of the world's leading manufacturers of plastics
machinery, machine tools and industrial products for metalworking, as well as
related computer controls and software for factory automation. The Company
sells products and provides services to industrial customers throughout the
world and has a long-standing reputation for quality and technological
leadership. Virtually all of the Company's plastics machinery products and
machine tools are computer-controlled and many include advanced applications
software. The acquisitions of Valenite and Ferromatik in 1993 helped balance
revenues among the Company's three business segments with plastics machinery
becoming the Company's largest segment.
STRATEGY AND PRODUCT DEVELOPMENT
The Company's objectives are: to develop and produce machines and systems for
world markets that incorporate leading-edge technology and offer its customers
competitive advantages; to increase its manufacturing efficiencies to meet
international competition; and to improve its responsiveness to changing world
markets by decentralizing responsibility for manufacturing, marketing and
product development.
In 1993, the Company made progress in the achievement of its overall
objectives. The Company's strategic acquisitions of Valenite and Ferromatik
enhanced its technological base, diversified its product line and expanded its
worldwide sales and distribution network. In addition, by balancing revenues
among its three business segments, the Company believes that it is in a better
position to take advantage of opportunities in each market even while demand in
a single segment may be weak.
In recent years, the Company also has undertaken a major program for product
development, process improvement and modernization. This program is named
"Wolfpack" because of its emphasis on teamwork and fierce competitiveness. The
objectives of Wolfpack are to design and produce new products at world-
competitive levels of quality, performance, efficiency and cost. Wolfpack teams
consist of members not only from design engineering but also from sales,
marketing, manufacturing, engineering, quality control, purchasing and
assembly, and often include suppliers and customers.
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<PAGE>
In addition to teamwork, other key principles of the Wolfpack philosophy are:
a "market-driven" approach, "simultaneous engineering", reduction and
standardization of parts, design for manufacturability and integrated, just-in-
time manufacturing. Wolfpack teams develop marketable products faster than
conventional teams with improved quality, features and cost and quality
performance ratios. Compared to the products they replace, Wolfpack-developed
products typically have achieved a 30 to 50 percent reduction in each of the
following areas: product development cycles, number of total parts,
manufacturing lead time, installation time and overall cost.
In 1985, the Company began applying Wolfpack principles to the development of
its Vista line of plastics injection molding machines, and the line has since
become the market leader in the United States. Today, most of the Company's
plastics processing machinery lines have been developed through the Wolfpack
approach. In 1989, the Company formally adopted the Wolfpack approach to
product development and introduced its first Wolfpack machine tool, the Sabre
vertical machining center, which was well received. Subsequently, several other
Sabre machines were added to the family, all of which have met with good market
acceptance. In 1992, key Wolfpack machine tool introductions included the Maxim
line of horizontal machining centers and the Avenger turning center series,
again with encouraging customer reaction. Late in 1993, the Company introduced
the Arrow and Lancer lines of vertical machining centers which have resulted in
encouraging sales levels. Additional Wolfpack-developed machine tool
introductions are planned for 1994.
In many cases, Wolfpack designs represent new products for new applications
or markets. In other cases, they replace older product lines and the Company
coordinates the phase-out of the older lines with the phase-in of the Wolfpack-
developed product lines. This approach is designed to minimize inventory
obsolescence while providing an opportunity for increased revenue as the new
products achieve market acceptance. From 1991 through 1993, the Wolfpack
program resulted in 27 new product introductions.
The Company also conducts an ongoing research and product development effort
for all product lines, designed to create new products to maintain or enhance
its competitive market positions. During the last three years, the Company has
maintained its expenditures for research and development at an average of
approximately 4% of sales.
In 1993, the Company initiated Total Quality Leadership ("TQL"), a Company-
wide commitment to promote higher levels of teamwork, innovation and employee
empowerment. TQL is a people-oriented philosophy that seeks commitment from all
employees, representatives and suppliers to focus on total customer
satisfaction. TQL is a long-term strategy intended to promote continuous
process and quality improvement.
The Company continually explores acquisition, divestiture and consolidation
opportunities when it believes such actions could expand markets, enhance
product synergies or improve earnings potential for the long-term. In addition
to the Valenite and Ferromatik acquisitions, in the past three years the
Company has sold certain businesses and consolidated certain manufacturing
operations. In early 1994, the Company announced a major consolidation of its
U.S. machine tool operations. See "Recent Developments".
For purposes of financial reporting, the Company divides its business into
three segments: plastics machinery, machine tools and industrial products.
PLASTICS MACHINERY BUSINESS
The Company is the largest U.S. producer of plastics machinery. In 1993, the
Company's plastics machinery segment sales were $357 million, of which
approximately 70% were to customers in the U.S. The Company believes it offers
more varieties of machinery to process plastic than any other U.S. company.
The Company produces equipment for most of the major plastics processing
technologies, including a full range of injection molding machines and systems
for extrusion and blow molding. In February 1994, the Company sold Sano. The
Company also sells a line of imported electric injection molding machines and a
number of types of auxiliary equipment, which are manufactured by others to the
Company's specifications.
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The Company designs and builds its own electronic controls and develops the
necessary software for virtually all of its plastics machinery lines. The
Company believes that its advanced controls and software for plastics
manufacturing equipment are key selling features that have helped increase its
market share.
Plastics Machinery Industry
The market for plastics machinery has grown steadily over the past four
decades, as plastics have continued to replace traditional materials such as
metal, wood, glass and paper in an increasing number of manufactured products,
particularly in the transportation, construction, packaging and medical
industries. Advancements in both the development of materials, which make
plastic products more functional, and the capabilities of plastics processing
equipment have been major contributors to the steady growth in the plastics
machinery market. In addition, consumer demand for safer, more convenient and
recyclable products has increased the general demand for plastic products. Like
other capital goods markets, the plastics machinery market is subject to
economic cycles, but to a lesser degree than the machine tool market. In
particular, the market for injection molding machines is driven by the consumer
economy and the automotive industry. Beginning in 1989, the plastic machinery
industry began to experience a slowdown in orders from these sectors and the
slowdown continued through 1991 and into the first half of 1992. Plastics
machinery orders improved in the second half of 1992 and continued to be strong
through 1993.
Custom molders, which produce a wide variety of components for many
industries, are the single largest group of plastics machinery buyers. Other
customer categories include the automotive industry, the packaging industry,
the construction industry, manufacturers of housewares and appliances and
producers of medical supplies. Among the factors that affect the plastics
machinery market are the health of the consumer economy, residential and
commercial construction and automotive production. Because of intense
competition from international plastics machinery producers, currency exchange
rates also have a significant impact. Fluctuations in oil and natural gas
supplies and prices may affect the businesses of the customers for plastics
machinery and, in turn, the market for this equipment.
Environmental concerns about plastics may have the potential to slow the
growth of the plastics machinery market. However, some plastics raw materials
suppliers, machinery makers and processors are developing biodegradable
products and methods of recycling to address environmental issues. The Company
believes that environmental concerns have not had any discernible negative
effect on the market to date. Nevertheless, the Company, through its membership
in The Society of Plastics Industry (an industry trade association), is
participating in a joint initiative with "The Partnership for Plastics
Progress", which has brought together leading companies within the plastics
industry to address the role of plastics in the environment.
The Company's Plastics Machinery Business
The Company's plastics machinery segment consists of three major businesses:
injection molding machines, extrusion systems and blow molding systems. In
1993, sales of injection molding machines constituted over one-half of the
sales of the Company's plastics machinery segment.
Injection Molding. The Company is the largest U.S. producer of injection
molding machines. Injection molding is the most common and versatile method of
processing plastic. The Company manufactures many types of injection molding
machines, all of which were developed using Wolfpack principles. Product
standardization (which facilitates part commonality), the modernization of the
Company's manufacturing facilities and methods as well as increased volumes
have enabled the Company to achieve significant economies of scale for the
production of injection molding machines. The Company believes these factors
have enabled it to become the lowest cost U.S. producer of these machines.
Additionally, the Company believes its success in injection molding machines
has been due in large part to the development and marketing of its Vista line,
which the Company continues to expand. In 1991, the Company entered the market
for very small hydraulic injection molding machines with its Wolfpack-developed
Sentry Line, which
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has been well received in the marketplace. In 1992 and 1993, the Company
introduced two new Vista models known as the Revenge and the Patriot.
Additionally, in 1993 the Company began shipping the largest hydraulic
injection molding machine it has ever built, the Wolfpack-designed VL4000,
which is used for large interior and exterior automotive parts.
Sales of injection molding machines began to weaken in May 1989 and remained
depressed through 1991. Sales remained soft in the first half of 1992, but
became particularly strong in the second half of 1992 and through 1993. As a
result, the Company's injection molding machine business had a record sales-
year in 1992, and the Company surpassed that record in 1993.
On November 8, 1993, the Company acquired Ferromatik, one of Europe's leading
producers of injection molding machines. Ferromatik is recognized for its high-
end technology including multi-color machines, multi-component systems and
other specialty applications. The Company expects the Ferromatik acquisition to
expand its technology base and product line and help it achieve its objective
of establishing a manufacturing and distribution base in Germany to serve
Europe and other markets. The acquisition included the Ferromatik lines of
hydraulic and electric injection molding machines and a modern manufacturing
facility in Malterdingen, Germany, as well as Ferromatik's worldwide marketing,
sales and service network. The Company believes Ferromatik provides a
complementary fit with its existing injection molding machine business. The
purchase price, including assumed debt of approximately $6 million, was
approximately $56 million. The amount of the purchase price paid was based upon
estimates of the amount of assets and liabilities of Ferromatik, and is subject
to adjustment as set forth in the purchase agreement. The Company financed the
purchase by drawing upon its revolving credit facility of $130 million and the
Company's existing European lines of credit.
The Company has commenced a restructuring of Ferromatik intended to (1)
derive benefits of synergies between Ferromatik and other Company operations
and (2) improve Ferromatik operations through implementation of manufacturing
techniques and methods currently being used in the Company's U.S. plastics
machinery operations. The Company believes that restructuring opportunities are
available in both marketing and manufacturing.
The Company intends to conduct its plastics machinery European marketing
activities through Ferromatik's existing network and thus to eliminate expenses
previously incurred by the Company's European marketing operation in Offenbach,
Germany. The Company will sell several of its successful plastics machinery
lines to European customers through Ferromatik's sales and distribution
network.
To improve manufacturing efficiency, in addition to the head count reductions
made at Ferromatik prior to the acquisition, the Company intends to further
reduce head count in 1994. The Company believes such personnel reductions will
not adversely affect current production capacity at Ferromatik. The Company
intends to implement numerous advanced manufacturing technologies in the
Malterdingen facility, including cellular manufacturing, which have been
successful in the Company's main U.S. facility for injection molding machine
production in Ohio.
Extrusion Systems. Extrusion systems business consists of systems comprised
of multiple units which are tooled to make a specific product in quantity. Such
systems take longer to manufacture than do injection molding machines.
Extrusion systems include twin-screw extruders and single-screw extruders. The
Company believes it has a strong competitive position in each of these lines.
Twin-screw extruders are used to produce continuous-flow products such as pipe,
residential siding, sheet lines and window frames, hence the business is
closely tied to housing market cycles. Single-screw extruders are used in a
variety of applications and systems such as blow molding, blown-film and cast-
film systems, pipe and profiles. In February 1994, the Company sold its Sano
blown and cast film systems business. The Company recorded nonrecurring charges
totaling $22.8 million in 1993 on the disposition of this subsidiary. See
"Recent Developments".
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Blow Molding Systems. The Company's blow molding systems business consists of
reheat and extrusion blow molding systems. Reheat blow molding systems are used
to produce strong, lightweight containers that resist oxygen migration to hold
perishable liquids, such as soft drinks, toiletries, and household products.
Extrusion blow molding systems are used to make a wide variety of products
ranging from bottles, jars, vials and other containers, to industrial parts and
toys. In 1991, the Company introduced a Wolfpack-developed line of accumulator-
head blow molding machines, known as Eclipse. Additionally, in 1993, the
Company expanded its Eclipse line by introducing three models of large
extrusion and blow molding machines.
Specialty Equipment. The Company sells a variety of specialty equipment used
in the processing of plastics products including peripheral auxiliary equipment
such as material management systems, heat exchangers and product handling
systems which are manufactured by third parties to the Company's
specifications. The Company also rebuilds and retrofits many types of plastics
processing equipment sold by the Company or others, refitting them with new
Company-produced controls and software.
Production Facilities
For the plastics machinery segment, the Company maintains the following
production facilities:
<TABLE>
<CAPTION>
FACILITY PRODUCTS
- -------- --------
<S> <C>
Batavia, Ohio Injection and blow molding machines.
Cincinnati, Ohio Extrusion systems.
Malterdingen, Germany Injection molding machines.
Mt. Orab, Ohio Plastics machinery parts.
Vienna, Austria Extrusion systems.
</TABLE>
Sales, Marketing and Customer Service
The Company maintains a large direct sales force in the United States for its
plastics machinery segment, which it supplements with independent agents.
Internationally, the Company uses both a direct sales force and independent
agents. In the U.S., the plastics machinery business uses the Company's
regional technical centers in Allentown, Pennsylvania; Arlington, Texas;
Charlotte, North Carolina; Chicago, Illinois; Detroit, Michigan; and Los
Angeles, California to demonstrate and market its products, and provide
customer support and training. Through its Austrian subsidiary and Ferromatik,
the Company has an extensive sales, marketing, service and distribution system
throughout Europe.
Competition
The markets for plastics machinery in the United States and worldwide are
highly competitive and are made up of a number of U.S., European and Asian
competitors. The Company believes it has a significant share of the U.S. market
for the type of products it produces. The Company's competitors vary in size
and resources; some are larger than the Company, many are smaller, and only a
few compete in more than one product category. Principal competitive factors in
the plastics machinery industry are: product features, technology, quality,
performance, reliability, speed of delivery, price and customer service. The
Wolfpack program is designed to enhance the Company's competitive position with
respect to each of these competitive factors.
MACHINE TOOL BUSINESS
The Company is a leading U.S. producer of machine tools. A machine tool is a
power-driven machine, not hand-held, that is used to cut, form or shape metal.
Machine tools are typically installed as capital equipment in metalworking
industries. In 1993, the Company's machine tool segment sales were $355
million, of which approximately 75% were to customers in the U.S.
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Machine Tool Industry
The primary customers for machine tools are the automotive and aerospace
industries; machine shops; producers of farm, construction, off-road and power
generation equipment; manufacturers of bearings; the die and mold industry; and
a variety of other metalworking manufacturers. The machine tool industry has
historically been cyclical with relatively long lead times between orders and
shipments. Machine tool sales are affected by capital spending levels, interest
rates, tax and depreciation policies, international competition, currency
exchange rates and general economic conditions.
U.S. machine tool producers benefitted to a degree in the late 1980s when the
U.S. manufacturing sector continued efforts to improve productivity and quality
and to lower costs in order to compete in world markets. At that time, the
dollar also weakened relative to other currencies. A growing market then
developed for automated flexible manufacturing cells, which are machine tools
linked together using computers, software and materials-handling equipment to
automate and integrate all manufacturing functions, allowing for lightly-manned
or unattended operation. In 1989, however, the U.S. market softened, primarily
as a result of cutbacks in capital spending by the automotive industry. This
softness in automotive industry capital spending continued through 1991 and
1992. Also in 1992, machine tool orders in the aerospace industry declined due
primarily to difficulties in the commercial airline industry. In 1993, U.S.
automotive capital spending began to pick up for certain types of machine
tools--mostly transfer line and fixed station equipment, which the Company does
not manufacture. Demand for machine tools from the aerospace industry, however,
continued to worsen. Since early 1991 the machine tool markets in Europe and
Japan have been severely depressed.
The Company's Machine Tool Business
The Company's machine tool segment is comprised of three focused businesses:
standard machine tool products, advanced machine tool systems and electronic
systems. The Company's standard machine tool products business manufactures
horizontal machining centers, vertical machining centers and turning centers
for a variety of industries engaged in basic metalworking operations, including
machine shops. The products of the Company's advanced machine tool systems
business include large, multi-axis metalcutting and composites processing
systems for the aerospace industry; large, multi-axis machines for
manufacturers of farm, construction, off-road and power generation equipment
and for the die and mold industry; applied production turning centers and
centerless grinding machines for the automotive industry and for bearings
manufacturers; and automated flexible manufacturing cells for the metalworking
industry. The Company's electronic systems business designs and manufactures
computer controls and develops proprietary software for the Company's machine
tools, plastics machinery and automated flexible manufacturing cells.
Standard Machine Tool Products
Horizontal and Vertical Machining Centers. The Company designs, builds and
sells general-purpose CNC horizontal and vertical machining centers for basic
metalworking operations to a number of industries. These machines produce
prismatic or box-like parts and are capable of performing a variety of
operations such as milling, drilling, boring, tapping, reaming and routing.
Since 1991, the Company has introduced a number of new Wolfpack machines,
including four models of the Sabre line of vertical machining centers and, in
1992, the Maxim series of horizontal machining centers, and in 1993 the Arrow
and Lancer lines of vertical machining centers.
Turning Centers. Standard turning centers are designed for ease of use by a
broad variety of customers that do not require custom-designed features. As
part of its ongoing Wolfpack program, the Company has introduced a variety of
new turning centers, including the Talon entry-level series in 1991, and the
more sophisticated Avenger series in 1992. In 1993 the Company expanded its
Avenger series which now includes eight models.
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Automated Flexible Manufacturing Cells. Automated flexible manufacturing
cells consist of one or more processing machines (usually standard machine
tools), ancillary equipment for parts and tools handling and computer hardware
and software to automate and integrate all necessary functions, allowing for
lightly-manned or unattended operation. These systems are used widely
throughout the metalworking industry and generally feature a number of
computer-driven functions, such as work and tool scheduling and quality
control. Automated flexible manufacturing cells are a major focus of a number
of U.S. companies seeking to update plant and equipment to enhance their
productivity and international competitiveness. The Company believes that its
Wolfpack-developed cell control hardware and software have enabled it to obtain
a leadership position in the U.S. automated flexible manufacturing cells
market.
Advanced Machine Tool Systems
Metalcutting and Composites Processing Systems for Aerospace. The Company
believes it is one of the world's leading producers of large five-axis
machining centers and profilers used to machine intricately contoured surfaces,
often out of aluminum, titanium and other high-strength alloys, for the
aerospace industry. The Company is also a world leader in the development of
new machines and systems to automate the manufacture of components made of
advanced composite materials, such as carbon or graphite fibers in combination
with epoxy. These systems are used by the aerospace industry to manufacture jet
engine parts and structural components, primarily for commercial aircraft.
Large Machine Tools. The Company makes large, often highly customized,
metalcutting machines and systems for the manufacturers of heavy machinery such
as farm and construction implements and machinery, off-road vehicles and power
generation equipment. The Company's large machine tools business also includes
the product lines acquired by the Company from The Pratt & Whitney Company,
Inc. early in 1991. These product lines, which include die sinkers, blade mills
and heavy-duty bridge mills, expand and supplement the Company's offering of
products to jet engine and power generation equipment makers and to the die and
mold industry.
Applied Production Turning Centers and Centerless Grinding Machines. The
Company also specializes in manufacturing applied production turning centers
and centerless grinding machines designed to meet exacting specifications for
the automotive industry. Turning centers, also called CNC lathes, shape
cylindrical parts, which are rotated at high speed against a stationary tool.
The Company's applied production turning centers are used by the automotive
industry in a number of applications, including aluminum-alloy wheel turning.
Grinding machines are used to bring a part surface to a more precise definition
or finish. There are many different kinds of grinding processes. In 1991, the
Company announced its intention to focus on centerless grinding machines, which
grind external diameters of cylindrical parts primarily for the automotive
industry and for bearings manufacturers. The Company has a long-standing
leadership position in the domestic centerless grinding machine business. In
1993, this business experienced an increase in new orders from the automotive
industry.
Electronic Systems
The Company designs and manufactures computer controls and develops
proprietary software for its machine tools, plastics machinery and automated
flexible manufacturing cells. Computer controls and software are often
important selling features for individual machines, and the controls and
software enable machines to be linked together to form automated cells and
manufacturing systems. Most of the controls for the Company's machine tools and
plastics machinery are manufactured by the Company, providing significant
product differentiation from competing products. The Company's electronic
systems business also offers a variety of retrofitting services to automate or
upgrade existing machine tools, including those manufactured by other
companies. During 1992, the Company upgraded two of its major families of
computer numerical controls, the Acramatic 950 and the Acramatic 850SX, with
enhanced software and programming capabilities.
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<PAGE>
Production Facilities
For the machine tool segment, the Company maintains the following principal
production facilities:
<TABLE>
<CAPTION>
FACILITY PRODUCTS
- -------- --------
<S> <C>
Birmingham, England Standard vertical machining centers.
Cincinnati, Ohio Standard machine tool products and advanced
machine tool systems.
Fountain Inn, South Carolina Standard horizontal machining centers and
standard turning centers.
Greenwood, South Carolina Standard turning centers.
Electronic controls and industrial
South Lebanon, Ohio software.
</TABLE>
The Company recently announced plans to close its two South Carolina plants
and to consolidate its U.S. machine tool operations at its main machine tool
facilities in Cincinnati. See "Recent Developments".
Sales, Marketing and Customer Service
The Company markets machine tools in North America through a comprehensive
network of independent distributors assisted by the Company's direct sales
force. The expanded use of distributors is a significant aspect of the
Company's strategy aimed at placing more sales representatives in the field to
reach additional markets. Through these distributors, the Company currently has
approximately 300 salespeople representing its machine tools in North America,
which is approximately three times more salespeople than it had four years ago.
The Company has begun emphasizing distribution in Europe by upgrading its
distributor network. A strong distribution network is one of the cornerstones
in the Company's plan to improve its position in the global market for standard
machine tools.
The Company believes that extensive applications work, field service
engineering and customer support are important for all its products, especially
for grinding machines, aerospace and special machines and automated flexible
manufacturing cells. In addition to its marketing and service headquarters in
Cincinnati, the Company maintains regional technical centers in Allentown,
Pennsylvania; Chicago, Illinois; Detroit, Michigan; Los Angeles, California;
and Toronto, Ontario; as well as in Birmingham, England; and Offenbach,
Germany. These facilities provide customers with demonstrations, engineering
services and training for most major product lines.
Competition
The worldwide machine tool industry is made up of a number of competitors,
none of which has a dominant market share despite the considerable
consolidation that has occurred in the industry over the past decade. The
markets for the Company's machine tool segment products are highly competitive
in the United States and internationally, with strong competition from U.S.,
European and Asian companies in all markets. The Company's competitors vary in
size and resources; some are larger than the Company, many are smaller, and
only a few compete in more than one product category.
Principal competitive factors for products in the machine tool business are
product features (including controls and software), quality, performance,
reliability, technology, speed of delivery, price and customer service. The
Wolfpack program is designed to enhance the Company's competitive position with
respect to each of these competitive factors. In certain aerospace and grinding
machine lines, the Company has significant market positions and relatively few
competitors. However, in the case of standard machine tool products and
automated flexible manufacturing cells, there are many competitors and no one
company has market dominance.
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<PAGE>
INDUSTRIAL PRODUCTS BUSINESS
The Company's Industrial Products Business
The Company is a leading producer of three basic types of industrial
products: metalcutting tools, metalworking fluids and precision grinding
wheels. In 1993, sales of the Company's industrial products segment, including
Valenite's sales for 11 months, were $317 million, of which approximately 70%
were to customers in the U.S. Most of the Company's industrial products are
consumable, which means they are depleted during the process for which they are
used, offering the Company a continuous opportunity to sell replacement
products to its customers. The Company believes that its industrial products
business complements its plastics machinery and machine tool businesses, as the
industrial products business requires relatively small investment in equipment
and working capital and is exposed to less pronounced business cycles.
Valenite
In 1993, Valenite's sales were $209 million, of which approximately 65% were
to customers in the U.S. The Company believes Valenite is the second largest
producer of metalcutting tool systems in the U.S. and the third largest
worldwide. Valenite manufactures over 20,000 products, including an extensive
line of cutting tool inserts in a wide variety of materials and geometries for
turning, boring, milling and drilling; standard and special steel insert
holders; and monitoring, gauging and control devices. Valenite has strong
market positions in carbide die and wear products for metalforming and in
products requiring the wear and corrosion resistant properties of tungsten
carbide.
Metalworking Fluids
Metalworking fluids are used as lubricants and coolants in a wide variety of
metalcutting and metalforming operations. Major customers are producers of
precision metal components for many industries, including manufacturers of
automotive power trains, aerospace engines and bearings as well as general
metalworking shops. The Company is a full-line supplier, offering water-based
fluids (synthetics), water-based oil-bearing fluids (semi-synthetics) and oil-
based fluids. Over the last three years, the Company expanded its lines of
soluble oils, base oils and synthetic fluids. In 1993 the Company developed a
brand of fluid called Valcool designed specifically to work with Valenite
metalcutting tools that is being marketed through Valenite's distribution
channels.
Grinding Wheels
Grinding wheels are used by manufacturers in the metalworking industry. Major
customers are producers of precision metal components for many industries,
including manufacturers of automotive power trains, aerospace engines and
bearings as well as general metalworking machine shops. The Company designs and
manufactures a wide variety of precision abrasive grinding wheels, including
resin-bonded, vitrified, diamond and synthetic types. Recently, the Company
introduced two Wolfpack-developed products: CMSA II, a second generation line
of ceramic abrasive grinding wheels, and VIDA, a new line of diamond wheels for
nonferrous metals.
The Company believes, based on tests in its own laboratories and in customer
plants, that the Company's proprietary formulae and modern production equipment
and techniques for the manufacture of precision grinding wheels give it
advantages in terms of product quality, lower production costs and faster
deliveries. The Company achieves lower production costs, in part, by finishing
its wheels on computer numerically controlled machines designed and built by
the Company's machine tool business.
37
<PAGE>
Production Facilities
For its industrial products segment, the Company maintains the following
principal production facilities:
<TABLE>
<CAPTION>
FACILITY PRODUCTS
- -------- --------
<S> <C>
Andrezieux, France Carbide inserts.
Carlisle, Pennsylvania Precision grinding wheels.
Cincinnati, Ohio Metalworking fluids and precision grinding
wheels.
Detroit, Michigan (metro area) Carbide inserts, special steel products and
gauging systems, ceramic inserts, and
cermet inserts.
Gainesville, Texas Turning tools, milling cutters and boring
bars.
Nogales, Mexico Precision grinding wheels.
Sinsheim, Germany Special steel tooling products.
Tokyo, Japan Carbide inserts and steel tools.
Vlaardingen, The Netherlands Metalworking fluids.
West Branch, Michigan Power production, die and wear.
Westminster and Seneca, South Car- Carbide and diamond inserts.
olina
</TABLE>
Sales, Marketing and Customer Service
The Company sells its fluids and wheels primarily through a growing network
of independent industrial distributors, as well as through a direct sales
force. The Company's metalworking fluids and grinding wheels businesses offer
customer demonstrations, service, training, and applications engineering at
most of the Company's regional technical centers in the U.S. and Europe. See
"Machine Tool Business--Sales, Marketing and Customer Service" for a
description of the regional technical centers. Valenite maintains its own
worldwide, direct sales and service force of some 350 technically trained
engineers of whom 200 are located in the United States. The direct sales and
service force is complemented by selected independent industrial distributors.
Competition
The Company's main global competitors in its metalworking fluids business are
large petrochemical companies and smaller companies specializing in similar
fluids. There are a small number of large competitors in the U.S. grinding
wheel market, one of which is significantly larger than the Company. The
Company has limited sales of grinding wheels outside the U.S.
The Company believes that Valenite has the second largest metalcutting tool
systems business in the U.S. In international markets Valenite faces
competition from several competitors, two of which have larger market shares.
DESCRIPTION OF THE NEW NOTES
The Old Notes were issued and the New Notes are to be issued under an
Indenture dated as of July 1, 1985, between the Company and BankAmerica
National Trust Company (formerly BankAmerica Trust Company of New York), as
Trustee (the "Trustee"), as supplemented and amended from time to time (the
"Indenture"). Upon the issuance of the New Notes, or the effectiveness of a
registration statement with respect to the Old Notes, the Indenture will be
subject to and governed by the Trust Indenture Act of 1939, as amended. The
following summaries of certain provisions of the Indenture do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all of the provisions of the Indenture, including the definitions therein
of certain terms, a copy of which is filed (or incorporated by reference) as an
exhibit to the registration statement of which this Prospectus is a part.
Whenever particular provisions of or terms defined in the Indenture are
referred to, such provisions and defined terms are incorporated by reference as
part of the statement made.
38
<PAGE>
GENERAL
The New Notes will be issued solely in exchange for an equal principal amount
of outstanding Old Notes pursuant to the Exchange Offer. The terms of the New
Notes will be substantially identical to the Old Notes, except that the New
Notes have been registered under the Securities Act and, therefore, will not
bear legends restricting their transfer. All references in this Section to the
Notes shall be deemed to be references to the Old Notes and/or the New Notes,
whichever are outstanding.
The Notes, which mature on March 15, 2004, will be limited to $115,000,000 in
aggregate principal amount and will constitute a separate series for purposes
of the Indenture. The Notes are not redeemable prior to maturity and will not
be subject to redemption pursuant to a sinking fund or otherwise.
The Notes will bear interest from March 16, 1994, at the rate per annum set
forth on the cover page of this Offering Memorandum, payable semiannually on
March 15 and September 15 of each year to the holders of record at the close of
business on the next preceding March 1 or September 1, respectively. Interest
will be computed on the basis of a 360-day year of twelve 30-day months. If by
July 14, 1994, neither the Exchange Offer is consummated nor the Shelf
Registration Statement is declared effective, interest will accrue on the Notes
from and including July 15, 1994, until but excluding the earlier of the date
of the consummation of the Exchange Offer and the effective date of the Shelf
Registration Statement, at a rate of 8 7/8% per annum.
The Indenture provides for the issuance from time to time of additional
series of indebtedness without limit. ((S)(S) 2.01 and 4.03 of the Indenture)
As of the date of this Prospectus, $10.8 million of 12% Sinking Fund
Debentures due 2010 are outstanding under the Indenture. The aggregate of the
securities outstanding under the Indenture at any time is herein referred to as
the "Outstanding Debt Securities".
There are no covenants or provisions contained in the Indenture that may
afford the holders of the Notes protection in the event of a highly leveraged
transaction involving the Company.
BOOK-ENTRY, DELIVERY AND FORM
The Notes will be in the form of a Global Note and will be deposited with, or
on behalf of, the Depository Trust Company (the "Depository") in New York, New
York and registered in the name of the Depository or its nominee. Except as set
forth below, the Global Note may be transferred, in whole and not in part, only
to the Depository or another nominee of the Depository. Investors may hold
their beneficial interests in the Global Note directly through the Depository
if they are participants in such system or indirectly through organizations
which are participants in such system.
The Depository has advised the Company as follows: The Depository is a
limited-purpose trust company organized under the laws of the State of New
York, 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 (the "Securities Exchange Act"). The Depository was created to hold
securities of institutions that have accounts with the Depository
("participants") and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic book-
entry changes in accounts of the participants, thereby eliminating the need for
physical movement of securities certificates. The Depository's participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations, some of whom (and/or their
representatives) own the Depository. Access to the Depository's book-entry
system is also available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. The Depository agrees with and
represents to its participants that it will administer its book-entry system in
accordance with its rules and by-laws and requirements of law.
39
<PAGE>
The Depository will credit, on its book-entry registration and transfer
system, the respective principal amounts of the Notes represented by the Global
Note to the accounts of participants. Ownership of beneficial interests in the
Notes will be limited to participants or persons that may hold interests
through participants. Ownership of beneficial interests in the Notes will be
shown on, and the transfer of those ownership interests will be effected only
through, records maintained by the Depository (with respect to participants'
interests) and such participants (with respect to the owners of beneficial
interests in the Notes other than participants). The laws of some jurisdictions
may require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limits and laws may impair the ability
to transfer or pledge beneficial interests in the Notes.
So long as the Depository, or its nominee, is the registered holder and owner
of the Global Note, the Depository or such nominee, as the case may be, will be
considered the sole owner and holder of the related Notes for all purposes of
such Notes. Except as set forth below, owners of beneficial interests in the
Notes will not be entitled to have the Notes represented by the Global Note
registered in their names, will not receive or be entitled to receive physical
delivery of certificated Notes in definitive form, except as provided below,
and will not be considered to be the owners or holders of any Notes under the
Global Note. Accordingly, each person owning a beneficial interest in the
Global Note must rely on the procedures of the Depository and, if such person
is not a participant, on the procedures of the participant through which such
person owns its interests, to exercise any right of a holder of Notes under the
Global Note. The Company understands that under existing industry practice, in
the event an owner of a beneficial interest in the Global Note desires to take
any action that the Depository, as the holder of the Global Note, is entitled
to take, the Depository would authorize the participants to take such action,
and that the participants would authorize beneficial owners owning through such
participants to take such action or would otherwise act upon the instructions
of beneficial owners owning through them.
Payment of principal of and interest on Notes represented by the Global Note
registered in the name of and held by the Depository or its nominee will be
made to the Depository or its nominee, as the case may be, as the registered
owner and holder of the Global Notes.
The Company expects that the Depository or its nominee, upon receipt of any
payment of principal or interest in respect of the Global Note, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Note as
shown on the records of the Depository or its nominee. The Company also expects
that payments by participants to owners of beneficial interests in such Global
Note held through such participants 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", and will
be the responsibility of such participants. The Company will not have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in the Global Note
for any Note or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests or for any other aspect of the
relationship between the Depository and its participants or the relationship
between such participants and the owners of beneficial interests in the Global
Note owning through such participants.
Unless and until it is exchanged in whole or in part for certificated Notes
in definitive form, the Global Note may not be transferred except as a whole by
the Depository to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository.
The Notes represented by the Global Note are exchangeable for certificated
Notes in definitive form of like tenor as such Notes in denominations of U.S.
$1,000 and integral multiples thereof if (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for the Global
Note or if at any time the Depository ceases to be a clearing agency registered
under the Securities Exchange Act, (ii) the Company in its discretion at any
time determines not to have all of the Notes represented by the Global Note or
(iii) a default entitling the holders of the Notes to accelerate the maturity
thereof has occurred and is continuing. Any Note that is exchangeable pursuant
to the preceding sentence is exchangeable for certificated
40
<PAGE>
Notes issuable in authorized denominations and registered in such names as the
Depository shall direct. Subject to the foregoing, the Global Note is not
exchangeable, except for a Global Note or Global Notes of the same aggregate
denominations to be registered in the name of the Depository or its nominee.
Although the Depository has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Note among participants of the
Depository, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. Neither the
Trustee nor the Company will have any responsibility for the performance by the
Depository or its respective participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
EXCHANGE OFFER; REGISTRATION RIGHTS
In connection with the initial issuance and sale of the Old Notes, the
Initial Purchasers and their assignees became entitled to the benefits of the
Registration Rights Agreement. The Company is obligated pursuant to the
Registration Rights Agreement, for the benefit of the holders of the Old Notes,
at its cost, (i) to file the Registration Statement of which this Prospectus is
a part with the Commission with respect to a registered offer to exchange the
Old Notes for the New Notes, which will have the terms substantially identical
in all material respects to the Old Notes (except that the New Notes will not
contain terms with respect to transfer restrictions), on or before April 15,
1994, and (ii) to use its best efforts to cause the Registration Statement to
be declared effective under the Securities Act on or before July 14, 1994. The
Company will keep the Exchange Offer open for not less than 60 days (or longer
if required by applicable law) after the date notice of the Exchange Offer is
mailed to the holders of the Old Notes. For each Old Note surrendered to the
Company pursuant to the Exchange Offer, the holder of such Old Note will
receive a New Note having a principal amount equal to that of the surrendered
Old Note. Interest on each New Note will accrue from the last interest payment
date on which interest was paid on the Old Note surrendered in exchange thereof
or, if no interest has been paid on such Old Note, from the date of its
original issue. Under existing Commission interpretations, the New Notes would
be freely transferable by holders other than affiliates of the Company after
the Exchange Offer without further registration under the Securities Act if the
holder of the New Notes represents that it is acquiring the New Notes in the
ordinary course of its business, that it has no arrangement or understanding
with any person to participate in the distribution of the New Notes and that it
is not an affiliate of the Company, as such terms are interpreted by the
Commission; provided that broker-dealers ("Participating Broker-Dealers")
receiving New Notes in the Exchange Offer will have a prospectus delivery
requirement with respect to resales of such New Notes. The Commission has taken
the position that Participating Broker-Dealers may fulfill their prospectus
delivery requirements with respect to New Notes (other than a resale of an
unsold allotment from the original sale of the Old Notes) with the prospectus
contained in the Registration Statement. Under the Registration Rights
Agreement, the Company is required to allow Participating Broker-Dealers and
other persons, if any, with similar prospectus delivery requirements to use the
prospectus contained in the Registration Statement in connection with the
resale of such New Notes.
Holders of Old Notes (other than certain specified holders) who wish to
exchange such Old Notes for New Notes in the Exchange Offer will be required to
represent that any New Notes to be received by it will be acquired in the
ordinary course of its business and that at the time of the commencement of the
Exchange Offer it has no arrangement or understanding with any person to
participate in the distribution (within the meaning of the Securities Act) of
the New Notes and that it is not an affiliate of the Company.
In the event that applicable interpretations of the staff of the Commission
do not permit the Company to effect the Exchange Offer, or if for any other
reason the Exchange Offer is not consummated within 180 days of the date of the
Registration Rights Agreement, or if the Initial Purchasers so request with
respect to Old Notes not eligible to be exchanged for New Notes in the Exchange
Offer or if any holder of Old Notes is not eligible to participate in the
Exchange Offer or does not receive freely tradeable New Notes in the
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<PAGE>
Exchange Offer, the Company will, at its cost, (a) as promptly as practicable,
file a Shelf Registration Statement covering resales of the Old Notes or the
New Notes, as the case may be, (b) use its best efforts to cause the Shelf
Registration Statement to be declared effective under the Securities Act and
(c) keep the Shelf Registration Statement effective until three years after its
effective date. The Company will, in the event a Shelf Registration Statement
is filed, among other things, provide to each holder for whom such Shelf
Registration Statement was filed copies of the prospectus which is a part of
the Shelf Registration Statement, notify each such holder when the Shelf
Registration Statement has become effective and take certain other actions as
are required to permit unrestricted resales of the Old Notes or the New Notes,
as the case may be. A holder selling such Old Notes or New Notes pursuant to
the Shelf Registration Statement generally would be required to be named as a
selling security holder in the related prospectus and to deliver a prospectus
to purchasers, will be subject to certain of the civil liability provisions
under the Securities Act in connection with such sales and will be bound by the
provisions of the Registration Agreement which are applicable to such a holder
(including certain indemnification obligations).
If by April 15, 1994, neither the Registration Statement nor the Shelf
Registration Statement has been filed with the Commission, interest will accrue
on the Notes from and including April 16, 1994, until but excluding the earlier
of the date the Registration Statement or the Shelf Registration Statement is
filed and July 15, 1994, at a rate of 8 7/8% per annum. If by July 14, 1994,
neither the Exchange Offer is consummated nor the Shelf Registration Statement
is declared effective, interest will accrue on the Notes from and including
July 15, 1994, until but excluding the earlier of the date of the consummation
of the Exchange Offer and the effective date of the Shelf Registration
Statement, at a rate of 8 7/8% per annum. At all other times, the Notes will
bear interest at the rate of 8 3/8% per annum.
The summary herein of certain provisions of the Registration Rights Agreement
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy of which is filed as an exhibit to the Registration Statement
of which this Prospectus is a part.
COVENANTS
Limitations on Secured Funded Debt. The Company will not, nor will it permit
any Restricted Subsidiary to, incur, issue, assume, guarantee or create any
Secured Funded Debt, without effectively providing that the Outstanding Notes
shall be secured equally and ratably with (or prior to) such Secured Funded
Debt, unless, after giving effect thereto, the sum of the aggregate amount of
all outstanding Secured Funded Debt of the Company and its Restricted
Subsidiaries together with all Attributable Debt in respect of sale and
leaseback transactions relating to a Principal Property (with the exception of
Attributable Debt which is excluded pursuant to clauses (1) to (6) inclusive
described under "Restrictions Upon Sales with Leasebacks" below), would not
exceed 10% of Consolidated Net Tangible Assets of the Company and its
Restricted Subsidiaries; provided, however, that this restriction will not
apply to, and there shall be excluded from Secured Funded Debt in any
computation under such restriction, Funded Debt secured by: (1) Liens on
property of any corporation existing at the time such corporation becomes a
Subsidiary; (2) Liens on property existing at or incurred within 180 days of
the time of acquisition thereof (including, without limitation, acquisition
through merger or consolidation); (3) Liens on property subsequently acquired
(or constructed) by the Company or any Restricted Subsidiary and created prior
to, at the time of, or within 270 days after such acquisition (or the
completion of such construction or commencement of commercial operation of such
property, whichever is later) to secure or provide for the payment of all or
any part of the purchase price (or the construction price) thereof; (4) Liens
in favor of the Company or any Restricted Subsidiary; (5) Liens in favor of the
United States of America, State thereof or the District of Columbia, or any
agency, department or other instrumentality thereof, to secure partial,
progress, advance or other payments pursuant to any contract or provisions of
any statute; (6) Liens securing the performance of any contract or undertaking
not directly or indirectly in connection with the borrowing of money, the
obtaining of advances or credit or the securing of Funded Debt, if made and
continuing in the ordinary course of business; (7) Liens incurred (no matter
when created) in connection with the Company's or a Restricted
42
<PAGE>
Subsidiary's engaging in leveraged or single-investor lease transactions,
provided that the instrument creating or evidencing any borrowings secured by
such Lien shall provide that such borrowings are payable solely out of the
income and proceeds of the property subject to such Lien and are not a general
obligation of the Company or such Restricted Subsidiary; (8) Liens incurred to
finance construction, alteration or repair of any Principal Property and
improvements thereto prior to or within 270 days after completion of such
construction, alteration or repair; (9) Liens (A) held by banks to secure
amounts due to such banks in the ordinary course of business, (B) under
workers' compensation, unemployment insurance or similar laws, (C) on deposits
to secure public or statutory obligations of the Company or a Restricted
Subsidiary or deposits of cash or obligations of the United States of America
to secure surety and appeal bonds to which the Company or a Restricted
Subsidiary is a party, or pledges or deposits for similar purposes, (D) arising
by operation of law such as mechanics' liens, materialmen's liens or other
similar liens, or out of judgments or awards against the Company or a
Restricted Subsidiary during a stay of execution pending an appeal, (E) for
taxes not yet due or being contested in good faith by the Company or a
Restricted Subsidiary, and (F) on the use of real properties which are not
material and minor encumbrances and easements; (10) Liens incurred or assumed
in connection with the issuance of revenue bonds the interest on which is
exempt from Federal income taxation pursuant to Section 103(b) of the Internal
Revenue Code of 1954, as amended; or (11) any extension, renewal, refunding or
replacement of the foregoing. (Section 7.05 of the Indenture)
"Attributable Debt" means as to any particular lease under which either the
Company or any Restricted Subsidiary is at any time liable as lessee and at any
date as of which the amount thereof is to be determined, the total net
obligations of the lessee for rental payments during the remaining term of the
lease (including any period for which such lease has been extended or may, at
the option of the lessor, be extended) discounted from the respective due dates
thereof to such date at a rate per annum equivalent to the greater of (a) the
weighted average Yield to Maturity (as defined in the Indenture) of the
Outstanding Debt Securities, such average being weighted by the principal
amount of the Outstanding Debt Securities of each series or, in the case of
Original Issue Discount Securities (as defined in the Indenture), such amount
to be the principal amount of such outstanding Original Issue Discount
Securities that would be due and payable as of the date of such determination
upon a declaration of acceleration of the maturity thereof pursuant to the
Indenture and (b) the interest rate inherent in such lease (as determined in
good faith by the Company), both to be compounded semi-annually. (Section 1.01
of the Indenture)
"Consolidated Net Tangible Assets" means, at any date, the total assets
appearing on the most recent consolidated balance sheet of the Company and its
Restricted Subsidiaries as at the end of a fiscal quarter of the Company,
prepared in accordance with generally accepted accounting principles, less (a)
all current liabilities (due within one year) as shown on such balance sheet,
(b) applicable reserves, (c) investments in and advances to Unrestricted
Subsidiaries or to entities while they were Unrestricted Subsidiaries but which
are not Subsidiaries at the time of such balance sheet or other entities
accounted for on the equity method of accounting, and (d) Intangible Assets and
liabilities relating thereto. "Intangible Assets" means the value (net of any
applicable reserves), as shown on or reflected in such balance sheet, of: (i)
all trade names, trademarks, licenses, patents, copyrights, service marks,
goodwill and other like intangibles; (ii) organizational and development costs;
(iii) deferred charges (other than prepaid items such as insurance, taxes,
interest, commissions, rents and similar items and tangible assets being
amortized); and (iv) unamortized debt discount and expense, less unamortized
premium. (Section 1.01 of the Indenture)
"Funded Debt" means any indebtedness maturing more than 12 months after the
time of computation thereof, guarantees of Funded Debt or of dividends of
others (except guarantees in connection with the sale or discount of accounts
receivable, trade acceptances and other paper arising in the ordinary course of
business), and in the case of any Restricted Subsidiary all preferred stock of
such Restricted Subsidiary, and all Capital Lease Obligations (as defined in
the Indenture). (Section 1.01 of the Indenture)
"Principal Property" means any manufacturing plant located in the United
States of America and owned and operated by the Company or any Restricted
Subsidiary, and any manufacturing equipment (as defined in the Indenture) owned
by the Company or any Restricted Subsidiary in such manufacturing plant.
(Section 1.01 of the Indenture)
43
<PAGE>
"Restricted Subsidiary" means each Subsidiary other than Unrestricted
Subsidiaries. (Section 1.01 of the Indenture)
"Secured Funded Debt" means Funded Debt which is secured by any pledge of, or
mortgage, security interest or other lien on any Principal Property of the
Company or a Restricted Subsidiary. "Liens" means such pledges, mortgages,
security interests and other liens. (Section 1.01 of the Indenture)
"Subsidiary" means any corporation at least a majority of the outstanding
voting stock of which is owned directly or indirectly by the Company or by one
or more Subsidiaries of the Company, or by the Company and one or more
Subsidiaries. (Section 1.01 of the Indenture)
"Unrestricted Subsidiary" means Cincinnati Milacron Commercial Corp.,
Amertool Services, Inc., Cincinnati Milacron Assurance Ltd., The Factory Power
Company, Subsidiaries of the foregoing, and other Subsidiaries designated as
Unrestricted Subsidiaries from time to time by the Board of Directors of the
Company. (Section 1.01 of the Indenture)
Restrictions Upon Sales with Leasebacks. The Company is not permitted, and
may not permit a Restricted Subsidiary, to sell any Principal Property owned by
the Company or a Restricted Subsidiary with the intention that the Company or
any Restricted Subsidiary leaseback such Principal Property, unless, after
giving effect thereto, the aggregate amount of all Attributable Debt with
respect to all such sale and leaseback transactions plus all Secured Funded
Debt (with the exception of Funded Debt which is excluded pursuant to clauses
(1) to (11) inclusive described under "Limitations on Secured Funded Debt"
above) would not exceed 10% of Consolidated Net Tangible Assets. This covenant
shall not apply to, and there shall be excluded from Attributable Debt in any
computation under such restriction or under "Limitations on Secured Funded
Debt" above, Attributable Debt with respect to, any sale and leaseback
transaction if: (1) the lease in such sale and leaseback transaction is for a
period, including renewals, of not more than three years, (2) the Company or a
Restricted Subsidiary is permitted to create Funded Debt secured by a Lien
pursuant to clauses (1) to (11) inclusive described under "Limitations on
Secured Funded Debt" above on the Principal Property to be leased, in an amount
equal to the Attributable Debt with respect to such sale and leaseback
transaction, without equally and ratably securing the Outstanding Debt
Securities, (3) the sale and leaseback transaction is entered into in respect
of a Principal Property within 270 days of the acquisition thereof or the
completion of construction and commencement of operation thereof, whichever is
later, (4) the Company or a Restricted Subsidiary within 270 days after such
sale applies to the retirement of its Secured Funded Debt an amount equal to
the greater of (a) the net proceeds of the sale of the Principal Property
leased pursuant to such sale and leaseback transaction or (b) the fair market
value of the Principal Property so leased; provided, that the amount to be
applied to such retirement shall be reduced by the aggregate principal amount
of other Secured Funded Debt voluntarily retired within 270 days after such
sale; (5) the Company or a Restricted Subsidiary applies the net proceeds of
the sale to investment in another Principal Property within 270 days prior or
subsequent to such sale; provided, that this exception shall apply only if such
proceeds invested in such other Principal Property shall not exceed the total
acquisition, alteration, repair and construction cost of the Company or any
Restricted Subsidiary in such other Principal Property less amounts secured by
any purchase money or construction mortgage on such other Principal Property;
and (6) the sale and leaseback transaction is entered into between the Company
and a Restricted Subsidiary or between Restricted Subsidiaries. (Section 7.06 of
the Indenture)
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that if an Event of Default with respect to any series
of Outstanding Debt Securities shall have happened and be continuing, either
the Trustee or the holders of not less than 25% in aggregate principal amount
of the Applicable Debt Securities then outstanding under the Indenture may
declare the principal of all the Applicable Debt Securities and the accrued
interest thereon, if any, to be due and payable immediately (an
"Acceleration"). The term "Applicable Debt Securities" shall mean a series of
Outstanding Debt Securities with respect to which an Event of Default shall
have occurred and be continuing;
44
<PAGE>
provided, however, that in no event shall the term "Applicable Debt Securities"
include more than one series of Outstanding Debt Securities except with respect
to an Event of Default described under clause (4) or (5) below; provided
further, however, that for purposes of clause (3) below, any covenant or
agreement on the part of the Company contained in the Indenture which is not
limited to a series of Outstanding Debt Securities shall be in respect of all
series of Outstanding Debt Securities, unless otherwise specifically provided
with respect to a particular series of Outstanding Debt Securities in the
supplement indenture under which such series of Outstanding Debt Securities is
issued. (Section 9.01 of the Indenture)
Events of Default in respect of, the Notes are defined in the Indenture as
being: (1) default for 30 days in payment of any interest installment on the
Notes when due; (2) default in payment of principal of or premium, if any, on
the Notes when due either at their stated maturity, upon any redemption, by an
Acceleration or otherwise; (3) default for 60 days after notice to the Company
by the Trustee or to the Company and the Trustee by holders of not less then
25% in aggregate principal amount of the Notes at the time outstanding in the
performance of any covenant or agreement in the Indenture with respect to the
Notes; (4) failure to make any mandatory sinking, purchase or analogous fund
payment as and when due and payable with respect to the Notes; (5) certain
events of bankruptcy, insolvency and reorganization with respect to the
Company; and (6) acceleration of any Indebtedness (as defined in the Indenture)
in an aggregate principal amount exceeding $2,000,000 of the Company or a
Restricted Subsidiary under the terms of the instrument under which such
Indebtedness is issued or secured, if such acceleration is not annulled, or
such Indebtedness is not discharged, or a sum sufficient to discharge in full
such Indebtedness is not deposited in trust, within 30 days after written
notice specifying the related default to the Company by the Trustee or to the
Company and the Trustee by holders of not less than 25% in aggregate principal
amount of the outstanding Notes. (Section 9.01 of the Indenture)
The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default with respect to the Notes, give to the holders of the
Notes notice of all uncured and unwaived defaults known to it; provided that,
except in the case of default in the payment of principal of, premium, if any,
or interest on any of the Notes, the Trustee will be protected in withholding
such notice if it in good faith determines that the withholding of such notice
is in the interest of the holders of the Notes. The term "default" for the
purpose of this provision only means the happening of any of the Events of
Default with respect to the Notes, except that any grace period and/or notice
requirement of such Event of Default is eliminated. (Section 9.08 of the
Indenture)
Before proceeding to exercise any right or power under the Indenture at the
request, order or direction of any holders of the Notes, the Trustee is
entitled to be indemnified by such holders subject to the duty of the Trustee
during an Event of Default to act with the required standard of care. (Section
10.02 of the Indenture)
The Indenture provides that the holders of not less than 50% in aggregate
principal amount of the Notes at the time outstanding may direct the time,
method and place of conducting proceedings for remedies available to the
Trustee, or exercising any trust or power conferred on the Trustee in respect
of the Notes, subject to provisions for indemnification and certain other
rights of the Trustee. (Sections 9.07 and 10.02 of the Indenture)
The Indenture includes a covenant that the Company will file annually with
the Trustee a certificate of no default, or specifying any default that exists.
(Section 7.07 of the Indenture)
In certain cases, the holders of not less than 50% in aggregate principal
amount of the Applicable Debt Securities then outstanding may on behalf of the
holders of all such Applicable Debt Securities annul an Acceleration and its
consequences. Prior to an Acceleration with respect to any series of
Outstanding Debt Securities, the holders of not less then 50% in aggregate
principal amount of such Outstanding Debt Securities may on behalf of the
holders of all such Outstanding Debt Securities waive any past default or Event
of Default with respect to such series of Outstanding Debt Securities and its
consequences, except, among other things, a default in the payment of the
principal of, premium, if any, or interest on such Outstanding Debt Securities.
(Sections 9.01 and 9.07 of the Indenture)
45
<PAGE>
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and Trustee, with
the consent of the holders of not less than 66 2/3% in aggregate principal
amount of each series of Outstanding Debt Securities to be affected, to execute
supplemental indentures adding any provisions to or changing or eliminating any
of the provisions of the Indenture or any supplemental indenture or modifying
the rights of the holders of such series of Outstanding Debt Securities to be
affected, except that no such supplemental indenture may (i) among other
things, extend the fixed maturity of any Outstanding Debt Securities, or reduce
the principal amount thereof, or reduce the rate or extend the time of payment
of interest thereon, or reduce any premium payable upon the redemption thereof,
or change the place or medium of payment of the principal amount thereof, or
any premium or interest thereon, or impair certain rights of holders of the
Outstanding Debt Securities to institute suit for payment, without the consent
of all the holders of the Outstanding Debt Securities so affected, or (ii)
reduce the aforesaid percentage of any series of Outstanding Debt Securities,
the consent of the holders of which is required for any such supplemental
indenture, without the consent of all the holders of such series of Outstanding
Debt Securities. (Section 13.02 of the Indenture)
CONSOLIDATION, MERGER OR SALE OF ASSETS OF THE COMPANY
The Company shall not consolidate with or merge into any other corporation or
sell its assets substantially as an entirety, unless (1) either the Company
will be the continuing corporation or the successor corporation, as a result of
such consolidation, merger or sale of the Company's assets, is organized in the
United States of America, and expressly assumes the due and punctual payment of
the principal of, premium, if any, and interest on all the Outstanding Debt
Securities and the performance of every covenant of the Indenture on the part
of the Company to be performed and (2) immediately after giving effect to such
transaction, no Event of Default, and no event which, after notice or lapse of
time, or both, would become an Event of Default, shall have happened and be
continuing. Upon any such consolidation, merger or sale, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such sale is made shall succeed to, and be substituted for, the
Company under the Indenture. (Sections 14.01 and 14.02 of the Indenture)
DEFEASANCE
If at any time the Company shall deposit with the Trustee (1) funds
sufficient to pay, or (2) such amount of direct obligations of the United
States of America as will or will together with the income thereon without
consideration of any reinvestment thereof be sufficient to pay all sums due for
principal of, premium, if any, and interest on the Notes, as they shall become
due from time to time, and provided that certain Events of Default shall not
have occurred and be continuing, the Indenture shall cease to be of further
effect with respect to the Notes, except as to (i) rights of registration of
transfer, substitution and exchange of the Notes, (ii) rights of holders to
receive payments from the Company of principal of, premium, if any, and
interest on the Notes as they shall become due from time to time and other
rights, duties and obligations of holders as beneficiaries with respect to the
funds or obligations so deposited with Trustee and (iii) the rights,
obligations and immunities of the Trustee under the Indenture; provided, that
the Company shall have furnished to the Trustee an opinion of counsel to the
effect that the holders of the Notes will not recognize income, gain or loss
for United States Federal income tax purposes as a result of such deposit and
defeasance and will be subject to United States Federal income tax on the same
amount, and in the same manner and at the same times, as would have been the
case if such deposit and defeasance had not occurred. (Sections 18.01 and 18.02
of the Indenture)
CONCERNING THE TRUSTEE
The Company may from time to time maintain lines of credit, and have other
customary banking relationships, with affiliates of BankAmerica National Trust
Company (formerly BankAmerica Trust Company of New York), the Trustee under the
Indenture.
46
<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired as a result of market-making activities or other
trading activities. The Company has agreed that, for a period of 180 days after
the Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale.
The Company will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Notes. Any broker-dealer
that resells New Notes that were received by it for its own account pursuant to
the Exchange Offer and any broker or dealer that participates in a distribution
of such New Notes may be deemed to be an "underwriter" within the meaning of
the Securities Act and any profit on any such resale of New Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date the Company will promptly
send additional copies of this Prospectus and any amendment or supplement to
this Prospectus to any broker-dealer that requests such documents in the Letter
of Transmittal. The Company has agreed to pay all expenses incident to the
Exchange Offer other than commissions or concessions of any brokers or dealers
and will indemnify the Initial Purchasers and any broker-dealer who delivered a
Prospectus in connection with any resale of the New Notes against certain
liabilities, including liabilities under the Securities Act.
47
<PAGE>
CERTAIN FEDERAL
INCOME TAX CONSIDERATIONS
The following discussion is a summary of certain United States federal income
tax consequences expected to apply to the exchange of Old Notes for New Notes
under currently applicable law. The summary is based on laws, regulations,
rulings and decisions now in effect, all of which are subject to change. The
discussion does not cover all aspects of federal taxation that may be relevant
to, or the actual tax effect that any of the matters described herein will have
on particular holders, and does not address state, local, foreign or other tax
laws. Certain holders (including insurance companies, tax-exempt organizations,
financial institutions, broker-dealers, taxpayers subject to the alternative
minimum tax and foreign persons) may be subject to special rules not discussed
below. EACH HOLDER SHOULD CONSULT WITH ITS OWN TAX ADVISOR IN DETERMINING THE
FEDERAL, STATE, LOCAL AND ANY OTHER TAX CONSEQUENCES TO THE PARTICULAR HOLDER
OF THE EXCHANGE OF OLD NOTES FOR NEW NOTES.
The exchange of New Notes for Old Notes should not be a sale or exchange or
otherwise a taxable event for federal income tax purposes. Accordingly, the New
Notes should have the same issue price as the Old Notes, and a holder should
have the same adjusted basis and holding period in the New Notes as it had in
the Old Notes immediately before the exchange.
HOLDERS OF THE OLD NOTES ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING
THE PARTICULAR TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING AND DISPOSING OF
THE OLD NOTES AND THE NEW NOTES, INCLUDING THE APPLICATION OF FEDERAL, STATE,
LOCAL AND FOREIGN TAX LAWS AND POSSIBLE FUTURE CHANGES IN SUCH FEDERAL TAX
LAWS.
LEGAL MATTERS
Certain legal matters regarding the New Notes will be passed on for the
Company by Cravath, Swaine & Moore, New York, New York.
EXPERTS
The consolidated financial statements of the Company at January 1, 1994, and
January 2, 1993, and for each of the three years in the period ended January 1,
1994, appearing in this Prospectus and Registration Statement have been audited
by Ernst & Young, independent auditors, as set forth in their reports thereon
appearing elsewhere herein and in the Registration Statement, and are included
in reliance upon such reports given upon the authority of such firm as experts
in accounting and auditing. The consolidated financial statements of Valenite
incorporated by reference in this Prospectus have been audited by Arthur
Andersen & Co., independent auditors, for the periods indicated in their report
thereon which is included in the Company's Current Report on Form 8-K dated
February 1, 1993 (as amended by the Company's Form 8 relating thereto dated
March 4, 1993, and its Form 8 relating thereto dated April 6, 1993). The
consolidated financial statements of Ferromatik incorporated by reference in
this Prospectus have been audited by BDO Binder GmbH, independent auditors, for
the periods indicated in their report thereon which is included in the
Company's Current Report on Form 8-K dated November 8, 1993 (as amended by the
Company's Form 8-K/A relating thereto dated January 24, 1994). The financial
statements audited by Arthur Andersen & Co. and BDO Binder GmbH have been
incorporated herein by reference in reliance on their respective reports given
on their authority as experts in accounting and auditing.
48
<PAGE>
CINCINNATI MILACRON INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
----------------
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
Consolidated Statement of Earnings for the fiscal years ended the
Saturday closest to December 31 in fiscal years 1993, 1992 and 1991... F-2
Consolidated Balance Sheet as of the Saturday closest to December 31 in
fiscal years 1993 and 1992............................................ F-3
Consolidated Statement of Changes in Shareholders' Equity for the
fiscal years ended the Saturday closest to December 31 in fiscal years
1993, 1992 and 1991................................................... F-4
Consolidated Statement of Cash Flows for the fiscal years ended the
Saturday closest to December 31 in fiscal years 1993, 1992 and 1991... F-5
Notes to Consolidated Financial Statements............................. F-6
Report of Independent Auditors......................................... F-15
</TABLE>
F-1
<PAGE>
CONSOLIDATED STATEMENT OF EARNINGS
CINCINNATI MILACRON INC. AND SUBSIDIARIES
Fiscal year ends on Saturday closest to December 31.
<TABLE>
<CAPTION>
(In millions, except per-share amounts) 1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Sales $1,029.4 $789.2 $754.0
Cost of products sold 791.3 612.6 603.2
-------- ------- ------
Manufacturing margins 238.1 176.6 150.8
Other costs and expenses
Selling and administrative 191.3 133.6 132.2
Consolidation charge 47.1 - -
Disposition of subsidiary 22.8 - -
Closing and relocation charge - - 75.1
Other - net .7 (.2) 1.8
-------- ------- ------
Total other costs and expenses 261.9 133.4 209.1
-------- ------- ------
Operating earnings (loss) (23.8) 43.2 (58.3)
Interest
Income 2.3 2.9 4.0
Expense (15.7) (19.1) (19.1)
-------- ------- ------
Interest - net (13.4) (16.2) (15.1)
-------- ------- ------
Earnings (loss) from continuing operations
before income taxes, extraordinary items
and cumulative effect of changes in
methods of accounting (37.2) 27.0 (73.4)
Provision for income taxes 8.2 10.9 9.7
-------- ------- ------
Earnings (loss) from continuing operations
before extraordinary items and cumulative
effect of changes in methods of accounting (45.4) 16.1 (83.1)
Extraordinary items
Loss on early extinguishment of debt (4.4) - -
Tax benefit from loss carryforward - 5.4 -
Cumulative effect of changes in methods
of accounting (52.1) - -
Discontinued operations net of income taxes - - (17.1)
-------- ------- -------
Net earnings (loss) $ (101.9) $ 21.5 $(100.2)
======== ======= =======
Earnings (loss) per common share
Earnings (loss) from continuing operations
before extraordinary items and cumulative
effect of changes in methods of accounting $(1.41) $.58 $(3.04)
Extraordinary items
Loss on early extinguishment of debt (.14) - -
Tax benefit from loss carryforward - .19 -
Cumulative effect of changes in methods of
accounting (1.61) - -
Discontinued operations net of income taxes - - (.63)
-------- ------- -------
Net earnings (loss) $ (3.16) $ .77 $(3.67)
======== ======= =======
</TABLE>
See notes to consolidated financial statements.
F-2
<PAGE>
CONSOLIDATED BALANCE SHEET
CINCINNATI MILACRON INC. AND SUBSIDIARIES
Fiscal year ends on Saturday closest to December 31.
<TABLE>
<CAPTION>
(In millions) 1993 1992
----- -----
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 18.8 $ 14.9
Notes and accounts receivable less allowances 188.3 177.0
Inventories
Raw materials 21.5 11.8
Work-in-process and finished parts 155.7 161.6
Finished products 70.0 47.4
------ -----
Total inventories 247.2 220.8
Other current assets 29.3 16.2
------ -----
Total current assets 483.6 428.9
Property, plant and equipment - net 184.0 121.1
Other noncurrent assets 62.0 28.9
------ ------
Total assets $729.6 $578.9
====== ======
Liabilities and Shareholders' Equity
Current liabilities
Amounts payable to banks $ 74.2 $ 19.8
Long-term debt and lease obligations due within
one year 3.4 1.4
Trade accounts payable 84.6 75.3
Advance billings and deposits 36.9 41.6
Accrued and other current liabilities 170.2 99.0
------ ------
Total current liabilities 369.3 237.1
Long-term accrued liabilities 128.6 53.0
Long-term debt and lease obligations 107.6 154.4
------ ------
Total liabilities 605.5 444.5
------ ------
Commitments and contingencies - -
Shareholders' equity
4% Cumulative preferred shares 6.0 6.0
Common shares, $1 par value (outstanding:
33.5 in 1993 and 27.5 in 1992) 33.5 27.5
Capital in excess of par value 251.3 143.3
Accumulated deficit (151.2) (37.5)
Cumulative foreign currency translation adjustments (15.5) (4.9)
------ ------
Total shareholders' equity 124.1 134.4
------ ------
Total liabilities and shareholders' equity $729.6 $578.9
====== ======
</TABLE>
See notes to consolidated financial statements.
F-3
<PAGE>
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
CINCINNATI MILACRON INC. AND SUBSIDIARIES
Fiscal year ends on Saturday closest to December 31.
<TABLE>
<CAPTION>
Cumulative
4% Reinvested Foreign
Cumulative Common Capital in Earnings Currency Total
Preferred Shares, Excess of (Accumulated Translation Shareholders'
(In millions, except Shares $1 Par Value Par Value Deficit) Adjustments Equity
share amounts)
---------- ---------- --------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at year-end 1990 $6.0 $27.3 $139.4 $ 68.9 $ 6.1 $247.7
Stock options exercised
and restricted stock
awarded for 68,357
common shares .1 .9 1.0
Net loss for the year (100.2) (100.2)
Cash dividends
Preferred shares
($4.00 per share) (.2) (.2)
Common shares
($.63 per share) (17.3) (17.3)
Foreign currency
translation adjustments (2.0) (2.0)
---- ----- ------ -------- -------- ------
Balance at year-end 1991 6.0 27.4 140.3 (48.8) 4.1 129.0
Stock options exercised
and restricted stock
awarded for 91,628
common shares .1 2.4 2.5
Sale of 42,640 treasury
shares .6 .6
Net earnings for the year 21.5 21.5
Cash dividends
Preferred shares
($4.00 per share) (.2) (.2)
Common shares
($.36 per share) (10.0) (10.0)
Foreign currency
translation adjustments (9.0) (9.0)
---- ----- ------ ------- ------ ------
Balance at year-end 1992 6.0 27.5 143.3 (37.5) (4.9) 134.4
Issuance of 5,175,000
common shares in
public offering 5.2 95.4 100.6
Stock options exercised
and restricted stock
awarded for 854,918
common shares .8 12.8 13.6
Net purchase of 3,967
treasury shares (.2) (.2)
Net loss for the year (101.9) (101.9)
Cash dividends
Preferred shares
($4.00 per share) (.2) (.2)
Common shares
($.36 per share) (11.6) (11.6)
Foreign currency
translation adjustments (10.6) (10.6)
---- ----- ------ ------- ------ ------
Balance at year-end 1993 $6.0 $33.5 $251.3 $(151.2) $(15.5) $124.1
==== ===== ====== ======= ====== ======
</TABLE>
See notes to consolidated financial statements.
F-4
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
CINCINNATI MILACRON INC. AND SUBSIDIARIES
Fiscal year ends on Saturday closest to December 31.
<TABLE>
<CAPTION>
(In millions) 1993 1992 1991
<S> <C> <C> <C>
---- ---- ----
Increase (Decrease) in Cash and Cash Equivalents
Operating Activities Cash Flows
Net earnings (loss) $(101.9) $ 21.5 $(100.2)
Extraordinary loss on early extinguishment
of debt 4.4 - -
Cumulative effect of changes in methods of
accounting 52.1 - -
Other operating activities providing (using)
cash
Depreciation 26.1 20.9 24.0
Consolidation charge 47.1 - -
Disposition of subsidiary 22.8 - -
Closing and relocation charge (including
$14.9 applicable to discontinued
operations) - - 90.0
Deferred income taxes 1.5 1.5 3.3
Working capital changes
Notes and accounts receivable 31.6 13.0 2.4
Inventories 24.2 (16.5) 5.9
Other current assets 5.1 1.3 (.6)
Trade accounts payable (8.3) 9.6 (4.3)
Other current liabilities (61.5) (29.5) (18.9)
Increase in other noncurrent assets (2.1) (3.3) (.1)
Decrease in long-term accrued liabilities (10.1) (11.0) (1.1)
Other - net (8.8) (9.7) 3.6
------- ------- -------
Net cash provided (used) by operating
activities 22.2 (2.2) 4.0
------- ------- -------
Investing Activities Cash Flows
Capital expenditures (23.4) (17.6) (15.5)
Net disposals of property, plant and equipment 22.2 11.1 10.5
Acquisitions (112.5) - (9.0)
Divestitures 5.0 - 3.0
------- ------- -------
Net cash used by investing activities (108.7) (6.5) (11.0)
------- ------- -------
Financing Activities Cash Flows
Dividends paid (11.8) (10.2) (17.5)
Repayments of long-term debt and lease
obligations (61.9) (1.4) (1.3)
Increase (decrease) in amounts payable to banks 54.8 15.9 (4.2)
Net issuance of common shares 114.0 3.1 1.0
Redemption premium on early extinguishment
of debt (4.7) - -
------- ------- -------
Net cash provided (used) by financing
activities 90.4 7.4 (22.0)
------- ------- -------
Increase (decrease) in cash and cash equivalents 3.9 (1.3) (29.0)
Cash and cash equivalents at beginning of year 14.9 16.2 45.2
------- ------- -------
Cash and cash equivalents at end of year $18.8 $14.9 $16.2
======= ======= =======
</TABLE>
See notes to consolidated financial statements.
F-5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FISCAL YEAR END
The company's year ends on the Saturday closest to December 31 of each year.
Fiscal year ends are as follows:
1993: January 1, 1994
1992: January 2, 1993
1991: December 28, 1991
CONSOLIDATION
The consolidated financial statements include the accounts of the
company and its subsidiaries. All significant intercompany
transactions are eliminated.
FOREIGN CURRENCY TRANSLATION
Assets and liabilities of the company's foreign operations are
translated into U.S. dollars at period-end exchange rates, and
income and expense accounts are translated at weighted-average
exchange rates for the period. Net exchange gains or losses
resulting from such translation are excluded from net earnings
(loss) and accumulated in a separate component of shareholders'
equity. Gains and losses from foreign currency transactions are
included in other expense - net in the Consolidated Statement of
Earnings. Gains and losses on foreign exchange forward contracts
are recognized as part of the specific transaction hedged.
CASH AND CASH EQUIVALENTS
The company considers all highly liquid investments with a maturity
of three months or less to be cash equivalents.
INVENTORY VALUATION
Inventories are stated at the lower of cost or market. The
principal methods of determining costs are last-in, first-out
(LIFO) for U.S. inventories and average or standard cost, which
approximates first-in, first-out (FIFO), for other inventories.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, including capital leases, are stated
at cost. Equipment leased to customers is accounted for under the
operating lease method. For financial reporting purposes,
depreciation is generally determined on the straight-line method
using estimated useful lives of plant and equipment.
INCOME TAXES
The company provides deferred taxes for cumulative temporary
differences between the financial reporting basis and income tax
basis of its assets and liabilities. Provisions are made for any
additional taxes payable on anticipated distributions from
subsidiaries.
EARNINGS PER SHARE
Earnings per common share are based on the weighted-average number
of common shares and common share equivalents outstanding.
RETIREMENT BENEFIT PLANS
The company maintains various pension plans covering substantially
all employees. Pension benefits are based primarily on length of
service and highest consecutive average five-year compensation. The
company's policy is to fund the plans in accordance with applicable
laws and regulations.
CUMULATIVE EFFECT OF CHANGES IN METHODS OF ACCOUNTING
Effective January 3, 1993, the company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes". This standard requires the use of the liability method,
under which deferred income tax assets and liabilities related to
cumulative differences between an entity's financial reporting and
tax basis balance sheets are recognized using expected future tax
rates. Previously, the company had used the deferred method, under
which deferred income tax assets and liabilities were based on
historical differences between financial reporting income and
taxable income and recognized using historical income tax rates.
Financial results for prior years have not been restated in
connection with the adoption of this standard.
The company's domestic operations also adopted Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions", effective January 3,
1993. This standard requires that the expected cost of
postretirement benefits other than pensions, such as health care
benefits, that are provided to retirees be recognized on the
accrual method during the years that employees render service. The
company provides health care benefits to U.S. retirees and
previously recognized the related cost as the benefits were paid.
The standard does not permit the restatement of the financial
results of prior years. Certain of the company's foreign operations
also provide postretirement health care benefits to their
employees. The company expects to adopt the standard for these
operations in 1995.
The company has recorded the cumulative effect (to January 2,
1993) of adopting these standards as a charge to earnings in the
first quarter of 1993, as follows:
CUMULATIVE EFFECT OF CHANGES IN METHODS OF ACCOUNTING
1993
Charge to
Earnings Per
common
(In millions) share
------------ -------
Income taxes $ (4.2) $ (.13)
Retiree health care benefits
(with no current tax effect) (47.9) (1.48)
------ ------
$(52.1) $(1.61)
====== ======
The new standard for accounting for income taxes imposes
significant limitations on the recognition and valuation of
deferred tax assets related to future tax deductions previously
recognized for financial reporting purposes and to net operating
loss carryforwards. Because of these limitations, and because the
company entered 1993 with a U.S. net operating loss carryforward of
approximately $36 million, no income tax benefit could be
recognized on a net basis for the cumulative effect of adopting the
new accounting rules for postretirement health care benefits.
F-6
<PAGE>
CONSOLIDATION CHARGE
In the fourth quarter of 1993, the company recorded a nonrecurring
charge of $47.1 million (with no current tax effect) for the
consolidation of all U.S. machine tool manufacturing into its
facilities in Cincinnati. Production at the company's two machine
tool facilities in South Carolina, Fountain Inn and Greenwood, will
be phased out during 1994. The consolidation is intended to
eliminate excess capacity that resulted from the introduction of
"Wolfpack" designed products that require less hours and
manufacturing floor space and from reduced demand from customers in
the aerospace industry. The charge includes amounts for severance,
relocation of production, and the sale of the two South Carolina
facilities.
DISPOSITION OF SUBSIDIARY
In November, 1993, the company announced its decision to sell its
Sano business. Accordingly, the company recorded charges in the
third and fourth quarters of 1993 totaling $22.8 million (with no
current tax effect) to adjust its investment in Sano to net
realizable value. The decision to sell Sano was due in part to its
continuing operating losses. In addition, the Sano business does
not serve a major global market with good long-term growth and
profit potential and as a result, does not meet the company's
criteria for a core business. The business was sold in February,
1994 and the completion of the transaction is not expected to
affect the company's 1994 financial results.
CLOSING AND RELOCATION CHARGE
In the third quarter of 1991, the company recorded a nonrecurring
charge aggregating $90.0 million (with no current tax effect) to
address problems in loss operations. Of the total charge, $75.1
million related to the relocation of centerless grinding machine
and turning center manufacturing operations, the sale or other
disposal of the company's remaining grinding machine assets and
product lines, and the closing of the company's turning center
factory in Wilmington, Ohio.
An additional $14.9 million, which is included in discontinued
operations in the Consolidated Statement of Earnings, related to
the revaluation for sale of the company's coordinate measurement
and inspection machine business, LK Tool.
DISCONTINUED OPERATIONS
In 1991, the company announced its intention to sell its coordinate
measurement and inspection machine business, LK Tool, and recorded
a provision for the anticipated loss on the sale of $14.9 million.
During the third quarter of 1993, the company completed the sale of
LK Tool for $5.0 million in cash. The completion of the transaction
did not affect the company's financial results for 1993.
ACQUISITIONS
On February 1, 1993, the company completed the acquisition of GTE
Valenite Corporation (Valenite) for $66 million in cash and $11
million of assumed debt. Valenite is a leading producer of
consumable industrial metalcutting products. The acquisition, which
is being accounted for under the purchase method, was financed
principally through the sale of $50 million of accounts receivable
and borrowings under a then new $85 million committed revolving
credit facility.
On November 8, 1993, the company completed the acquisition of
Ferromatik, the plastics injection molding machine business of
Kloeckner-Werke AG, for DM 82.8 million (approximately $50 million)
in cash and DM 10.6 million (approximately $6 million) in assumed
debt. A portion of the cash purchase price is expected to be
refunded in a post-closing adjustment. The acquisition, which is
being accounted for under the purchase method, was financed
primarily through borrowings under the company's existing lines of
credit, including its committed revolving credit facility, which
was amended to increase the lines of credit available thereunder.
Ferromatik, which is headquartered in Germany, is one of the
world's leading producers of injection molding machines and is
recognized for high-end technology and other specialty
applications.
The aggregate acquisition cost of the company's investments in
Valenite and Ferromatik, including professional fees and other
costs related thereto and after giving effect to the anticipated
refund of a portion of cash paid for Ferromatik, is expected to be
approximately $114.7 million. The following table presents the
allocation of the aggregate acquisition cost to the assets acquired
and liabilities assumed. The amounts included therein with respect
to Ferromatik are preliminary and are subject to revision once
appraisals, actuarial reviews and other studies of fair value are
completed. Goodwill arising from the Valenite acquisition, which is
included in other noncurrent assets in the following table, totaled
$8.7 million. No goodwill is expected to result from the Ferromatik
acquisition.
ALLOCATION OF ACQUISITION COST
(In millions)
Cash and cash equivalents $ 2.2
Accounts receivable 54.5
Inventories 77.1
Other current assets 15.5
Property, plant and equipment 89.5
Other noncurrent assets 25.1
------
Total assets 263.9
Amounts payable to banks and
long-term debt due
within one year 11.9
Other current liabilities 107.3
Long-term accrued liabilities 25.1
Long-term debt and lease obligations 4.9
------
Total liabilities 149.2
------
Total acquisition cost $114.7
======
As presented above, other current liabilities includes a reserve of
$44.0 million for the restructuring of Valenite for future
profitability. The restructuring plan includes the consolidation of
production through the closing of eleven production facilities, the
downsizing of two production facilities and a net employee
reduction in excess of 500. The total cost of the restructuring is
estimated to be $53.7 million ($25.8 million in cash) and includes
amounts for severance, relocation and losses on the sale of surplus
inventory, machinery and equipment and production facilities. The
restructuring, which began March 2, 1993, will be completed in
1994.
F-7
<PAGE>
Other current liabilities also includes a reserve of $8.7 million
for the restructuring of Ferromatik during 1994. Due to general
economic conditions in Europe, the operations of Ferromatik's
manufacturing plant were restructured during 1993 and 1992 to
improve efficiency and reduce personnel levels. The company and
Ferromatik have identified additional restructuring actions,
including further personnel reductions, that are expected to
improve Ferromatik's profitability in the future. These actions,
which are intended to complement the actions already taken prior to
the acquisition, will be substantially completed during 1994.
Unaudited pro forma sales and earnings information for 1993 and
1992 prepared under the assumption that the acquisitions had been
completed at the beginning of 1992 is as follows:
PRO FORMA INFORMATION
(In millions, except per-share amounts) 1993 1992
---- ----
Sales $1,128.4 $1,187.5
======== ========
Earnings (loss) before extraordinary
items and cumulative effect of changes
in methods of accounting $ (48.2) $ 19.3
Extraordinary items
Loss on early extinguishment of debt (4.4) -
Tax benefit from loss carryforward - 4.0
Cumulative effect of changes
in methods of accounting (52.1) -
-------- --------
Net earnings (loss) $(104.7) $ 23.3
======= ========
Earnings (loss) per common share
Earnings (loss) before extraordinary
items and cumulative effect of
changes in methods of accounting $ (1.50) $ .69
Extraordinary items
Loss on early extinguishment of debt (.14) -
Tax benefit from loss carryforward - .15
Cumulative effect of changes
in methods of accounting (1.61) -
------- --------
Net earnings (loss) $ (3.25) $ .84
======= ========
Based on a comprehensive analysis, the company and Valenite had
originally estimated that the annual improvement in pretax earnings
that would result from the completion of the restructuring plan
would be approximately $15.6 million. The pro forma amounts
presented above include favorable adjustments based on the original
estimate. However, it is expected that the annual savings will
exceed the original estimate on an ongoing basis by as much as 20%.
During its fiscal year ended September 30, 1993, Ferromatik
incurred significant operating losses due principally to general
economic conditions in Europe and its inability to adjust personnel
levels to reduced customer demand. The company and Ferromatik
estimate that the minimum annual pretax earnings improvement that
will result from the restructuring actions taken prior to the
acquisition and those that will occur subsequent thereto will be no
less than $4.2 million. Accordingly, the pro forma amounts
presented above include favorable adjustments based on this
estimate, which is based principally on reductions in personnel
levels that have occurred since the acquisition and that are
expected to occur in 1994. The actual savings from the completion
of the restructuring plan are expected to be higher than $4.2
million.
In 1991, the company completed the acquisition of the assets and
business of SL Abrasives, Inc., a manufacturer of resin-bonded
grinding wheels. This transaction, which has been accounted for
using the purchase method, did not significantly affect the
company's financial position at December 28, 1991, or its results
of operations for the year then ended.
RESEARCH AND DEVELOPMENT
Charges to operations for research and development activities are
summarized below. The amounts include expenses related to the
company's Wolfpack product development and process improvement
program.
RESEARCH AND DEVELOPMENT
(In millions) 1993 1992 1991
---- ---- ----
Research and development $41.9 $34.1 $35.8
Percent of sales 4.1% 4.3% 4.7%
RETIREMENT BENEFIT PLANS
Summarized in the following tables are the company's pension cost
(income) and funded status of its major pension plans.
PENSION COST (INCOME)
(In millions) 1993 1992 1991
---- ---- ----
Service cost (benefits earned
during the period) $ 6.3 $ 6.3 $ 6.4
Interest cost on projected
benefit obligation 31.5 29.0 29.6
Actual return on plan assets (54.8) (24.0) (65.1)
Net amortization and deferral 14.3 (18.7) 26.0
----- ----- -----
Pension cost (income) $(2.7) $(7.4) $(3.1)
===== ===== =====
F-8
<PAGE>
FUNDED STATUS OF PENSION PLANS AT YEAR-END
(In millions) 1993 1992
---- ----
Vested benefit obligation $(340.2) $(263.8)
======= =======
Accumulated benefit obligation $(353.7) $(269.8)
======= =======
Plan assets at fair value,
primarily listed
stocks and debt securities,
including company stock of
$14.0 in 1993 and $10.6 in 1992 $ 396.9 $ 370.8
Projected benefit obligation (416.9) (332.3)
------- -------
Excess (deficiency) of plan assets
in relation to projected benefit
obligation (20.0) 38.5
Unrecognized net (gain) loss 46.8 (6.5)
Unrecognized net transition asset (30.2) (35.8)
------- -------
Accrued pension liability $ (3.4) $ (3.8)
======= =======
At January 1, 1994, the projected benefit obligation of the
company's domestic plan exceeded its assets by $37.9 million, while
the assets of the plan for United Kingdom employees exceeded the
projected benefit obligation by $17.9 million. Because of the
current funded status of the plans, no contributions were required
or made in 1993, 1992 and 1991.
For 1993 and 1992, the assumed discount rates used in determining
the projected benefit obligation were 7 1/2% and 9%, respectively.
The assumed rate of increase in renumeration was
4 1/2% for 1993 and 6% for 1992. The weighted-average expected
long-term rate of return on plan assets used to determine pension
income was 9 1/2% in all years presented.
In addition to pension benefits, the company also provides
varying levels of postretirement health care benefits to most U.S.
employees who retire from active service after having attained age
55 and ten years of service. The plan is contributory in nature.
Prior to 1993, retiree contributions were based on varying
percentages of the average per-contract cost of benefits, with the
company funding any excess over these amounts. However, the plan
was amended in 1992 to freeze the dollar amount of the company's
contributions in future years for employees retiring after 1980
based on specified percentages of the 1993 per-contract cost.
Effective January 3, 1993, the company's domestic operations
adopted Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions". The change did not significantly affect earnings before
extraordinary items and cumulative effect of changes in methods of
accounting for 1993.
The following table presents the components of the company's
liability for future retiree health care benefits.
ACCRUED POSTRETIREMENT HEALTH CARE BENEFITS
(In millions) 1993 1992
---- ----
Accumulated postretirement benefit obligation
Retirees $(42.6) $(40.5)
Fully eligible active participants (7.4) (4.1)
Other active participants (8.1) (4.5)
------ ------
(58.1) (49.1)
Unrecognized net loss 9.8 -
------ ------
(48.3) (49.1)
Unrecognized transition obligation - 47.9
------ ------
$(48.3) $ (1.2)
====== ======
At year-end 1993, $1.4 million of the total liability for
postretirement health care benefits is included in current
liabilities in the Consolidated Balance Sheet.
The retiree health care costs for 1993 were $4.5 million, of
which service cost and interest cost were $.3 million and $4.2
million, respectively.
Prior to 1993, the company recognized the cost of health care
benefits paid to U.S. retirees as incurred. Such costs totaled $5.8
million and $5.1 million in 1992 and 1991, respectively.
The discount rates used in calculating the accumulated
postretirement benefit obligation were 7% for 1993 and 8 1/2% for
1992. For 1994, the assumed rate of increase in health care costs
used to calculate the accumulated postretirement benefit obligation
is 10.6%. This rate is assumed to decrease to varying degrees
annually to 5.0% for years 2005 and thereafter. Because of the
effect of the 1992 plan changes that froze the dollar amount of the
company's contributions for future years, a one percent change in
each year in relation to the above assumptions would not
significantly change the accumulated postretirement benefit
obligation or the total cost of the plan.
Certain foreign operations of the company also provide
postretirement health care benefits to their employees. The company
expects to adopt Statement of Financial Accounting Standards No.
106 for these operations in 1995.
Statement of Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits", was issued in late 1992
and requires that certain benefits provided by an employer to
former or inactive employees be accounted for on the accrual method
beginning no later than 1994. The effect of adopting the new
standard on the company's operating results and financial position
is not material.
INCOME TAXES
Effective January 3, 1993, the company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes". The standard requires the use of the liability method to
recognize deferred income tax assets and liabilities using expected
future tax rates. The tax effects of temporary differences that
give rise to the recorded deferred tax assets and deferred tax
liabilities at year-end 1993 are presented in the following table.
F-9
<PAGE>
COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES
(In millions) 1993
----
Deferred tax assets
Net operating loss and various tax credit
carryforwards $ 40.8
Accrued postretirement health care benefits 16.9
Consolidation, restructuring and other reserves 34.8
Inventories, principally due to obsolescence reserves
and additional costs inventoried for tax purposes
pursuant to the Tax Reform Act of 1986 5.6
Accrued pension costs 5.3
Accrued warranty costs 2.2
Accrued employee benefits other than pensions and
retiree health care benefits 3.2
Accounts receivable, principally due to allowances
for doubtful accounts 1.3
Foreign investments 9.2
Other 13.1
------
Total deferred tax assets 132.4
Less valuation allowance (95.7)
-----
Net deferred tax assets $ 36.7
======
Deferred tax liabilities
Property, plant and equipment, principally due to
differences in depreciation methods $ 26.1
Undistributed earnings of foreign subsidiaries 3.9
Pension assets 2.9
Other 4.2
------
Total deferred tax liabilities $ 37.1
======
Net deferred tax liability $ (.4)
======
Summarized in the following tables are the company's earnings
(loss) from continuing operations before income taxes,
extraordinary items and cumulative effect of changes in methods of
accounting, its provision for income taxes, and a reconcilement of
the U.S. statutory rate to the tax provision rate.
EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES,
EXTRAORDINARY ITEMS AND CUMULATIVE EFFECT OF CHANGES IN METHODS OF
ACCOUNTING
(In millions) 1993 1992 1991
---- ---- ----
United States $(41.5) $28.0 $(73.8)
Foreign 4.3 (1.0) .4
------ ----- ------
$(37.2) $27.0 $(73.4)
====== ===== ======
PROVISION FOR INCOME TAXES
Liability
Method Deferred Method
(In millions) 1993 1992 1991
-------- -------- -----
Current provision
United States $ - $ - $ -
State and local 2.4 1.7 2.3
Foreign 4.3 2.3 4.1
---- ----- ----
6.7 4.0 6.4
---- ----- ----
Deferred provision
United States - .6 .4
Foreign 1.5 .9 2.9
---- ----- ----
1.5 1.5 3.3
---- ----- ----
Provision recognized as
extraordinary benefit - 5.4 -
---- ----- ----
$8.2 $10.9 $9.7
==== ===== ====
In 1991, the current provision for foreign income taxes included
$4.0 million related to a planned withdrawal from the company's
United Kingdom pension fund that was completed in 1992.
COMPONENTS OF THE PROVISION FOR DEFERRED INCOME TAXES
Liability
Method Deferred Method
(In millions) 1993 1992 1991
-------- ---- ----
Tax effects of consolidation,
restructuring and other reserves $ (9.2) $1.2 $3.3
Change in deferred revenue (16.3) - -
Depreciation 1.3 - -
Change in valuation allowance 25.5 - -
Reversal of prior year's deferred
taxes related to operating loss
carryforward - (.2) -
Other .2 .5 -
------ ----- ----
$ 1.5 $1.5 $3.3
====== ==== ====
RECONCILEMENT OF THE U.S. STATUTORY RATE TO THE TAX PROVISION RATE
Liability
Method Deferred Method
(In percent) 1993 1992 1991
--------- ---- ----
U.S. statutory tax rate (35.0)% 34.0% (34.0)%
Increase (decrease) resulting from
Losses without current tax benefits 56.1 5.1 38.2
Effect of operations outside
the U.S. (5.5) (2.7) 5.3
State and local taxes, net of
federal benefit 6.5 4.2 2.1
Other (.1) (.2) 1.6
----- ---- -----
22.0% 40.4% 13.2%
===== ==== =====
F-10
<PAGE>
In 1992, in accordance with accounting rules then in effect, the
company recognized an extraordinary tax benefit of $5.4 million, or
$.19 per share, from the realization of its U.S. net operating loss
carryforward that originated principally from the 1991 closing and
relocation charge and a pretax special charge of $32.8 million
recorded in 1990 for product discontinuance and the reorganization
of grinding machine and certain other machine tool manufacturing
operations.
For U.S. tax reporting purposes, at year-end 1993 the company had
a net operating loss carryforward of approximately $19 million
which expires in 2008.
Undistributed earnings of foreign subsidiaries which are intended
to be indefinitely reinvested aggregated $30 million at the end of
1993.
Income taxes of $16.1 million, $5.0 million and $4.9 million were
paid in 1993, 1992 and 1991, respectively.
RECEIVABLES
The components of notes and accounts receivable less allowances are
shown in the following table.
NOTES AND ACCOUNTS RECEIVABLE LESS ALLOWANCES
(In millions) 1993 1992
---- ----
Notes receivable $ 6.0 $ 8.8
Accounts receivable 190.2 174.1
------ ------
196.2 182.9
Less allowances for doubtful accounts 7.9 5.9
------ ------
$188.3 $177.0
====== ======
Notes receivable include amounts not due within one year of $.7
million and $2.2 million in 1993 and 1992, respectively.
The acquisition of Valenite was financed in part through the sale
of $50.0 million of the company's domestic accounts receivable. The
sale transaction, which resulted in costs of $2.2 million in 1993,
occurred under a three year receivables purchase agreement with an
independent issuer of receivables-backed commercial paper, pursuant
to which the company agreed to sell on an ongoing basis and without
recourse, an undivided percentage ownership interest in designated
pools of accounts receivable. In order to maintain the balance in
the designated pools of accounts receivable sold, the company is
obligated to sell undivided percentage interests in new receivables
as existing receivables are collected. At January 1, 1994, the
undivided interest in the company's gross accounts receivable that
had been sold to the purchaser aggregated $50.0 million. The
company also sold an additional $11.4 million of accounts
receivable in the fourth quarter of 1993 under a separate
receivables purchase agreement. Costs related to both sales are
included in other expense - net in the Consolidated Statement of
Earnings. The proceeds are reported as providing operating cash
flow in the Consolidated Statement of Cash Flows for 1993.
INVENTORIES
Inventories amounting to $134.8 million for 1993 and $156.3 million
for 1992 are stated at LIFO cost. Such inventories if stated at
FIFO cost would be greater by approximately $57.4 million in 1993
and $54.2 million in 1992.
PROPERTY, PLANT AND EQUIPMENT
The components of property, plant and equipment are shown in the
following table.
PROPERTY, PLANT AND EQUIPMENT - NET
(In millions) 1993 1992
---- ----
Land $ 5.7 $ 5.1
Buildings 108.5 108.9
Machinery and equipment 317.1 269.1
------ ------
431.3 383.1
Less accumulated amortization and
allowances for depreciation 247.3 262.0
------ ------
$184.0 $121.1
====== ======
LIABILITIES
The components of accrued and other current liabilities and
long-term accrued liabilities are shown in the following tables.
ACCRUED AND OTHER CURRENT LIABILITIES
(In millions) 1993 1992
---- ----
Accrued salaries, wages and
other compensation $ 21.5 $16.3
Consolidation reserve 38.7 -
Restructuring reserves 17.1 -
Other accrued expenses 92.9 82.7
------ -----
$170.2 $99.0
====== =====
LONG-TERM ACCRUED LIABILITIES
(In millions) 1993 1992
---- ----
Accrued pension and
other compensation $ 24.1 $19.1
Accrued postretirement
health care benefits 46.9 -
Accrued and deferred taxes 30.5 8.0
Other 27.1 25.9
------ -----
$128.6 $53.0
====== =====
F-11
<PAGE>
LONG-TERM DEBT AND LEASE OBLIGATIONS
Long-term debt and lease obligations are shown in the following
table.
LONG-TERM DEBT AND LEASE OBLIGATIONS
(In millions) 1993 1992
----- ----
Long-term debt
8 3/8% Senior Notes due 1997 $ 60.0 $ 60.0
12% Sinking Fund Debentures due 2010 10.8 70.8
Industrial Development Revenue
Bonds due 2008 10.0 10.0
Revolving credit facility 10.0 -
Other 8.8 2.5
------ ------
99.6 143.3
Capital lease obligations
6 3/4% Bonds due 2004 7.6 7.6
6 3/8% Bonds due 1994 - 1997 3.4 4.2
6 1/2% Bonds due 1994 .4 .7
------ ------
11.4 12.5
------ ------
111.0 155.8
------ ------
Current maturities (3.4) (1.4)
------ -------
$107.6 $154.4
====== ======
The carrying amount of the company's long-term debt approximates
fair value, which is determined using discounted cash flow analysis
based on the company's incremental borrowing rate for similar types
of financing arrangements.
The 8 3/8% Senior Notes due 1997 are redeemable at par beginning
in 1994 at the company's option.
The 12% Sinking Fund Debentures due 2010 have annual sinking fund
installments commencing in 1996. The debentures are redeemable at
any time at the company's option subject to possible premiums and
other restrictions.
The Industrial Development Revenue Bonds due 2008 are tax-exempt
variable-rate bonds. The interest rate is established weekly and
averaged 2.4% in 1993. The bonds are supported by a bank letter of
credit, which requires a fee of 1 1/4% per annum on the amount
outstanding.
Certain of the above long-term debt obligations contain various
restrictions and financial covenants relating principally to
additional secured indebtedness.
At January 1, 1994, $10.0 million of borrowings under the
company's revolving credit facility are included in long-term debt
based on the expectation that such amount will remain outstanding
for more than one year.
Interest paid was $19.0 million in 1993, $18.9 million in 1992
and $19.2 million in 1991.
Maturities of long-term debt for the five years after 1993 are:
1994: $ 2.4 million
1995: 2.0 million
1996: 2.0 million
1997: 67.2 million
1998: 5.4 million
The capitalized lease assets are included in property, plant and
equipment. Amortization of leased properties is included in
depreciation and interest on lease obligations is included in
interest expense.
Future minimum payments for principal and interest on capitalized
leases during the next five years and in the aggregate thereafter are:
1994: $ 1.9 million
1995: 1.5 million
1996: 1.5 million
1997: 1.5 million
1998: .5 million
After 1998: 10.7 million
The company also leases certain equipment under operating leases,
some of which include varying renewal and purchase options. Future
minimum rental payments applicable to noncancelable operating
leases during the next five years and in the aggregate thereafter
are:
1994: $14.6 million
1995: 12.0 million
1996: 8.6 million
1997: 5.5 million
1998: 4.2 million
After 1998: 8.6 million
Rent expense was $14.7 million and $9.6 million in 1993 and 1992,
respectively, and was not material in 1991.
LINES OF CREDIT
At the end of 1993, the company had formal and informal lines of
credit with various domestic and foreign banks of $276.1 million,
including a revolving credit facility and other committed lines
totaling $137.5 million. These credit facilities support letters of
credit and leases in addition to providing borrowings under varying
terms. Additional borrowing capacity available under all lines of
credit totaled approximately $40 million at January 1, 1994.
In January, 1993, in connection with the acquisition of Valenite,
the company replaced its previous $55.0 million revolving credit
agreement with a new $85.0 million committed revolving credit
facility. In connection with the acquisition of Ferromatik, the
facility was amended to increase the lines of credit available
thereunder to $130.0 million. The facility allows borrowings
through July, 1995 and requires a facility fee of 1/2% per annum
on the total $130.0 million revolving loan commitment.
The revolving credit facility requires compliance with certain
financial loan covenants related to tangible net worth, interest
and fixed charge coverages and debt leverage. The company has
remained in compliance with these covenants since the inception of
this facility.
SHAREHOLDERS' EQUITY
On April 15, 1993, the company completed the issuance of an
additional 5.175 million common shares through a public offering,
resulting in net proceeds (after deducting issuance costs) of
$100.6 million. The proceeds of the offering were used to redeem
$60.0 million of the company's 12% Sinking Fund Debentures due 2010
and to repay borrowings under revolving lines of credit and other
bank debt. The redemption of the 12% Sinking Fund Debentures due
2010 effective May 17, 1993 resulted in a pretax extraordinary loss
on early extinguishment of debt of $5.2 million ($4.4 million after
tax) in the second quarter. The pretax extraordinary loss included
a cash call premium of $4.7 million and the write-off of deferred
financing fees of $.5 million.
F-12
<PAGE>
SHAREHOLDERS' EQUITY - PREFERRED AND COMMON SHARES
(Dollars in millions, except per-share amounts) 1993 1992
---- ----
4% Cumulative Preferred shares authorized,
issued and outstanding, 60,000 shares at
$100 par value, redeemable at $105 a share $ 6.0 $ 6.0
Common shares, $1 par value authorized
50,000,000 shares, issued and outstanding,
1993: 33,531,723 shares, 1992: 27,505,772 33.5 27.5
The company has authorized ten million serial preference shares
with $1 par value. None of these shares has been issued.
Holders of company common stock have one vote per share until
they have held their shares for at least 36 consecutive months,
after which they are entitled to ten votes per share.
CONTINGENCIES
The Internal Revenue Service has conducted examinations of the
company's federal income tax returns for the years 1981 through
1986 and had proposed various adjustments to increase taxable
income. During 1993, all issues for these years were resolved with
no significant effect on the company's consolidated financial
position or results of operations.
Various lawsuits arising during the normal course of business are
pending against the company and its consolidated subsidiaries. In
the opinion of management, the ultimate liability, if any,
resulting from these matters will have no significant effect on the
company's consolidated financial position or results of operations.
FOREIGN EXCHANGE CONTRACTS
The company enters into foreign exchange contracts to hedge foreign
currency transactions on a continuing basis for periods
commensurate with its known or expected exposures. The purpose of
this practice is to minimize the effect of foreign currency
exchange rate fluctuations on the company's operating results. The
company does not engage in speculation.
At January 1, 1994, the company had outstanding foreign exchange
contracts totaling $45.3 million, which generally mature in periods
of six months or less. These contracts require the company and its
subsidiaries to exchange currencies at the maturity dates at
exchange rates agreed upon at inception.
LONG-TERM INCENTIVE PLANS
The 1991 Long-Term Incentive Plan ("1991 Plan"), which expired
December 31, 1993, permitted the company to grant its common shares
in the form of non-qualified stock options, incentive stock
options, stock appreciation rights (SARs), restricted stock and
performance awards. A summary of amounts issued under the 1991 Plan
and prior plans is presented in the tables. The 1994 Long-Term
Incentive Plan ("1994 Plan") was approved by the company's Board of
Directors on February 10, 1994 and, subject to shareholder
approval, will provide for issuance of the same types of grants as
were permitted by the 1991 Plan with the exception of SARs, which
may no longer be granted.
STOCK OPTIONS, RESTRICTED STOCK AWARDS AND SARS
Price
Shares(a) SARs Range
-------- ---- -----
Outstanding at year-end 1990 1,222,537 530,322 $9 - 29
Activity during 1991 - Granted 837,607 110,750 9 - 13
- Exercised (68,357) - 9 - 10
- Canceled (139,759) (125,310) 13 - 29
--------- --------
Outstanding at year-end 1991 1,852,028 515,762 9 - 29
Activity during 1992 - Granted 462,920 - 15 - 16
- Exercised (91,628) - 9 - 25
- Canceled (148,167) - 9 - 25
- SARs
Canceled 515,762 (515,762) 9 - 28
--------- --------
Outstanding at year-end 1992 2,590,915 - 9 - 29
Activity during 1993 - Granted 118,025 - 17 - 24
- Exercised (854,918) - 9 - 25
- Canceled (136,947) - 13 - 29
--------- ---------
Outstanding at year-end 1993 1,717,075 - $9 - 28
========= =========
EXERCISABLE STOCK OPTIONS AND SARS AT YEAR-END
Stock
Options(a) SARs
---------- -------
1991 955,838 276,286
1992 1,748,565 -
1993 1,474,262 -
(a) Excludes stock options granted in tandem with SARs.
The non-qualified stock options and incentive stock options are
issued at market and, under the terms of the 1991 Plan, may be
granted in tandem with SARs. However, during 1992, all previously
granted SARs were canceled with the consent of the holders. Stock
options become excercisable under varying terms and expire in ten
years. Shares of restricted stock are subject to three-year
restrictions against selling, encumbering or otherwise disposing of
these Shares. Performance awards may be earned based on achievement
of predetermined return-on-capital targets over specified periods.
The maximum number of shares available for grant under the 1991
Plan was 1,650,000, of which 262,100 were available for grant at
year-end 1992. Additional shares may no longer be granted under the
1991 Plan. The maximum number of shares that may be granted under
the 1994 Plan is expected to be 2,000,000.
F-13
<PAGE>
GEOGRAPHIC INFORMATION
The following table summarizes the company's U.S. and foreign
operations which are located principally in Western Europe.
Sales of U.S. operations include export sales of $118.7 million
in 1993, $111.7 million in 1992 and $98.6 million in 1991.
Total sales of the company's U.S. and foreign operations to
unaffiliated customers outside the U.S. were $298.4 million, $242.6
million and $236.0 million, in 1993, 1992 and 1991, respectively.
U.S. AND FOREIGN OPERATIONS
(In millions) 1993 1992 1991
---- ---- ----
U.S. operations
Sales $831.9 $654.1 $613.0
Operating earnings 49.6 47.9 23.3
Consolidation charge and closing
and relocation charge (47.1) - (75.1)
Disposition of subsidiary (22.8) - -
Identifiable assets 420.6 410.8 413.9
Liabilities 469.9 403.3 404.7
Capital expenditures 21.3 13.9 11.8
Depreciation 19.1 16.3 19.3
Foreign operations
Sales 197.5 135.1 141.0
Operating earnings 8.0 1.5 3.0
Identifiable assets 285.9 148.7 163.6
Liabilities 135.6 41.2 64.7
Capital expenditures 2.1 3.7 3.7
Depreciation 7.0 4.6 4.7
SEGMENT INFORMATION
Cincinnati Milacron is one of the world's leading manufacturers of
plastics machinery, machine tools, computer controls and software
for factory automation. In addition, the company is a leading
producer of precision grinding wheels, metalworking fluids and
metalcutting tools.
Financial data for the past three years for the company's
business segments are shown in the following tables.
SALES BY SEGMENT
(In millions) 1993 1992 1991
---- ---- ----
Plastics machinery $357.2 $301.4 $267.6
Machine tools 355.0 379.7 383.7
Industrial products (a) 317.2 108.1 102.7
-------- ------ ------
$1,029.4 $789.2 $754.0
======== ====== ======
OPERATING INFORMATION BY SEGMENT
(In millions) 1993 1992 1991
---- ---- ----
Operating earnings (loss)
Plastics machinery (b) $ 26.6 $22.8 $14.6
Machine tools 3.9 8.9 (6.6)
Industrial products (a) 27.1 17.7 18.3
Consolidation charge and closing
and relocation charge (c) (47.1) - (75.1)
Disposition of subsidiary (d) (22.8) - -
Unallocated corporate expenses (e) (11.5) (6.2) (9.5)
------ ----- -----
Operating earnings (loss) (23.8) 43.2 (58.3)
Interest expense-net (13.4) (16.2) (15.1)
------ ----- -----
Earnings (loss) from continuing
operations before income taxes,
extraordinary items and
cumulative effect of changes in
methods of accounting $(37.2) $27.0 $(73.4)
====== ===== ======
Identifiable assets
Plastics machinery $289.0 $219.9 $202.9
Machine tools 243.1 282.8 310.9
Industrial products (a) 174.4 56.8 63.7
Unallocated corporate assets (f) 23.1 19.4 20.9
------ ------ ------
Total assets $729.6 $578.9 $598.4
====== ====== ======
Capital expenditures
Plastics machinery $ 4.2 $ 6.2 $ 6.5
Machine tools 8.8 7.1 7.5
Industrial products (a) 10.4 4.3 1.5
------ ------ ------
Total capital expenditures $ 23.4 $ 17.6 $ 15.5
====== ====== ======
Depreciation
Plastics machinery $ 6.2 $ 7.7 $ 7.0
Machine tools 9.4 10.6 14.2
Industrial products (a) 10.5 2.6 2.8
------ ------ ------
Total depreciation $ 26.1 $ 20.9 $ 24.0
====== ====== ======
(a) The 1993 increases in the industrial products segment are
largely attributable to the inclusion of Valenite as of
February 1, 1993.
(b) The 1993 amount includes a $2.5 million gain on sale of
surplus land.
(c) These amounts relate to the machine tool segment.
(d) This amount relates to the plastics machinery segment.
(e) Includes corporate research and development and certain
administrative expenses. The 1993 amount includes
amortization of financing costs and costs related to the
sale of receivables totaling $3.0 million.
(f) Includes cash and cash equivalents and the assets of the
company's insurance and utility subsidiaries.
F-14
<PAGE>
Report of Independent Auditors
Board of Directors
Cincinnati Milacron Inc.
We have audited the accompanying Consolidated Balance Sheet of
Cincinnati Milacron Inc. and subsidiaries as of January 1, 1994 and
January 2, 1993, and the related Consolidated Statements of
Earnings, Changes in Shareholders' Equity, and Cash Flows for each
of the three years in the period ended January 1, 1994. These
financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Cincinnati Milacron Inc. and subsidiaries at
January 1, 1994 and January 2, 1993, and the consolidated results
of their operations and their cash flows for each of the three
years in the period ended January 1, 1994, in conformity with
generally accepted accounting principles.
As discussed in the Note to Consolidated Financial Statements,
Cumulative Effect of Changes in Methods of Accounting, in 1993 the
company changed its method of accounting for postretirement
benefits other than pensions and its method of accounting for
income taxes.
/s/ ERNST & YOUNG
-----------------
Cincinnati, Ohio
February 28, 1994
F-15
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CON-
NECTION WITH THE OFFER COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH IN-
FORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SO-
LICITATION OF AN OFFER TO BUY, THE NOTES IN ANY JURISDICTION WHERE, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS, NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIR-
CUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE
DATE HEREOF.
------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
Prospectus Summary........................................................ 3
The Company............................................................... 8
Recent Developments....................................................... 11
Investment Considerations................................................. 12
Use of Proceeds........................................................... 13
Capitalization............................................................ 14
Ratio of Earnings to Fixed Charges........................................ 15
Selected Historical Financial Data........................................ 16
Selected Historical Segment Information................................... 18
The Exchange Offer........................................................ 19
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 25
Business.................................................................. 29
Description of the New Notes.............................................. 38
Plan of Distribution...................................................... 47
Certain Federal Income Tax
Considerations........................................................... 48
Legal Matters............................................................. 48
Experts................................................................... 48
Financial Statements...................................................... F-1
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CINCINNATI
MILACRON
OFFER TO EXCHANGE ITS 8 3/8% NOTES DUE 2004 FOR ANY AND ALL OF ITS OUTSTANDING
8 3/8% NOTES DUE 2004
----------------
PROSPECTUS
----------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of Delaware
empowers a corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonable incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, has no
reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that such person acted in
any of the capacities set forth above, against expenses (including attorneys'
fees) actually and reasonable incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Delaware Court
of Chancery or the court in which such action or suit was brought shall
determine that despite the adjudication of liability such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper.
Section 145 further provides that to the extent a director, officer, employee
or agent of a corporation has been successful in the defense of any action,
suit or proceeding referred to in subsections (a) and (b) or in the defense of
any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith. It also provides that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled, and it empowers a corporation to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or enterprise against any liability asserted against him or
incurred by him in any such capacity or arising out of his status as such,
whether or not the operation would have the power to indemnify him against such
liabilities under Section 145.
Article Eleventh of the Restated Certificate of Incorporation of the Company
provides for the indemnification of all officers and directors of the Company
to the fullest extent authorized by the General Corporation Law of Delaware.
Article Twelfth of the Restated Certificate of Incorporation of the Company
also provides for indemnification of officers and directors against expenses,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with a proceeding, other than (with certain exceptions) a
proceeding that was commenced by such director or officer prior to a change in
control of the Company.
Section 18 of Article III of the By-laws of the Company also provides for
indemnification of officers and directors provided such person acted, in good
faith, in what he reasonably believed to be in or not opposed to the best
interests of the Company or such other corporation or any employee benefit plan
thereof for which he served at the request of the Company, as the case may be,
and, in addition, with respect to any criminal actions or proceedings, had no
reasonable cause to believe his conduct was unlawful, and provided further
that, in the case of a claim, action, suit or proceeding brought by or in the
right of the Company to procure a
II-1
<PAGE>
judgment in its favor, such person has not been adjudged to be liable for
negligence or misconduct in the performance of his duty to the Company.
The Company also has purchased directors' and officers' liability insurance
covering certain liabilities incurred by its officers and directors in
connection with the performance of their duties.
ITEM 21. EXHIBITS.
<TABLE>
<C> <S>
4.1 Indenture dated as of July 1, 1985, between the Company and
BankAmerica Trust Company of New York, as Trustee (incorporated by
reference to the Company's Form S-3 Registration Statement filed June
9, 1986 (File No. 33-06147)).
4.2 Second Supplemental Indenture dated as of March 16, 1994, to the
Indenture dated as of July 1, 1985, between the Company and
BankAmerica National Trust Company (as successor to BankAmerica Trust
Company of New York), as Trustee.
4.3 Form of Note.
4.4 Registration Rights Agreement relating to the Old Notes.
5 Opinion of Cravath, Swaine & Moore.
12 Statement regarding computation of ratios.
23.1 Consent of Ernst & Young.
23.2 Consent of Arthur Andersen & Co.
23.3 Consent of BDO Binder GmbH.
23.4 Consent of Cravath, Swaine & Moore (included in Exhibit 5).
24 Powers of attorney.
25 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
99.4 Form of Letter to Clients.
</TABLE>
ITEM 22. UNDERTAKINGS.
(1) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(2) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrants in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(3) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the Prospectus
pursuant to Items 4, 10(b), 11, or 13 of Form S-4 under the Securities Act,
including information contained in documents filed subsequent to the
effective date of the Registration Statement through the date of responding
to the request within one business day of receipt of such request, and to
send the incorporated documents by first class mail or other equally prompt
means.
II-2
<PAGE>
(4) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THE REGISTRANT HAS DULY
CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CINCINNATI, STATE OF
OHIO ON THIS 7TH DAY OF APRIL 1994.
Cincinnati Milacron Inc., Registrant
/s/ Ronald D. Brown
By__________________________________
RONALD D. BROWN
VICE PRESIDENT, FINANCE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT OR AMENDMENT THERETO HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES WITH CINCINNATI MILACRON INC. AND ON THE
DATES INDICATED.
SIGNATURES TITLE DATE
* Chairman, Chief April 7, 1994
- ------------------------------------- Executive Officer
DANIEL J. MEYER and Director
(Principal
Executive Officer)
/s/ Ronald D. Brown Vice President, April 7, 1994
- ------------------------------------- Finance (Principal
RONALD D. BROWN Financial Officer)
* Controller April 7, 1994
- ------------------------------------- (Principal
ROBERT P. LIENESCH Accounting Officer)
* Director April 7, 1994
- -------------------------------------
DARRYL F. ALLEN
* Director April 7, 1994
- -------------------------------------
NEIL A. ARMSTRONG
* Director April 7, 1994
- -------------------------------------
LYLE EVERINGHAM
* Director April 7, 1994
- -------------------------------------
JAMES A. D. GEIER
* Director April 7, 1994
- -------------------------------------
HARRY A. HAMMERLY
II-3
<PAGE>
SIGNATURES TITLE DATE
* Director April 7, 1994
- -------------------------------------
JAMES E. PERRELLA
* Director April 7, 1994
- -------------------------------------
RAYMOND E. ROSS
* Director April 7, 1994
- -------------------------------------
JOSEPH A. STEGER
* Director April 7, 1994
- -------------------------------------
HARRY C. STONECIPHER
* The undersigned, by signing his name hereto, does hereby sign this
Registration Statement on behalf of each of the above-indicated officers and
directors of Cincinnati Milacron Inc. pursuant to powers of attorney, executed
on behalf of each such officer or director.
/s/ Ronald D. Brown
By: _________________________________
RONALD D. BROWN
ATTORNEY-IN-FACT
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE NO.
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<C> <S> <C>
4.1 Indenture dated as of July 1, 1985, between the Company and
BankAmerica Trust Company of New York, as Trustee
(incorporated by reference to the Company's Form
S-3 Registration Statement filed June 9, 1986 (File No. 33-
06147)).
4.2 Second Supplemental Indenture dated as of March 16, 1994, to
the Indenture dated as of July 1, 1985, between the Company
and BankAmerica National Trust Company (as successor to
BankAmerica Trust Company of New York), as Trustee.
4.3 Form of Note.
4.4 Registration Rights Agreement relating to the Old Notes.
5 Opinion of Cravath, Swaine & Moore.
12 Statement regarding computation of ratios.
23.1 Consent of Ernst & Young.
23.2 Consent of Arthur Andersen & Co.
23.3 Consent of BDO Binder GmbH.
23.4 Consent of Cravath, Swaine & Moore (included in Exhibit 5).
24 Powers of attorney.
25 Form T-1 Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
99.4 Form of Letter to Clients.
</TABLE>
<PAGE>
EXHIBIT 4.2
SECOND SUPPLEMENTAL INDENTURE dated as of March 16, 1994, between
CINCINNATI MILACRON INC., a corporation duly organized and existing under the
laws of the State of Delaware (the "Company"), and BANKAMERICA NATIONAL TRUST
COMPANY (formerly BANKAMERICA TRUST COMPANY OF NEW YORK), a corporation existing
under the laws of the State of New York (the "Trustee"), as trustee under an
Indenture dated as of July 1, 1985, between the Company and the Trustee (the
"Original Indenture") as supplemented by a supplemental indenture (the "First
Supplemental Indenture") dated as of February 26, 1987 (as so supplemented, the
"Indenture").
WHEREAS the Company heretofore has executed and delivered to the
Trustee the Indenture to provide for the issuance of its Debentures (as that
term is defined in the Original Indenture);
WHEREAS the Company heretofore has issued its 12% Sinking Fund
Debentures due July 15, 2010 (the "Debentures Due 2010"), in the aggregate
principal amount of $75,000,000, as provided in the Original Indenture;
WHEREAS the Company heretofore has issued its
8 3/8% Notes Due February 15, 1997 (the "Notes Due 1997"), in the aggregate
principal amount of $60,000,000 as provided in the First Supplemental Indenture;
WHEREAS Section 4.03 and Section 13.01 of the Indenture provide, among
other things, that the Company and the Trustee may enter into indentures
supplemental to the Indenture for, among other things, the purpose of setting
forth the terms of the Debentures of any series in addition to the Debentures
Due 2010;
WHEREAS the Company desires to create a new series of Debentures to be
designated the 8 3/8% Notes Due 2004 (the "Notes Due 2004");
WHEREAS all action on the part of the Company necessary to authorize
the issuance under the Indenture of the Notes Due 2004 in the aggregate
principal amount of $115,000,000 has been taken;
<PAGE>
2
WHEREAS the Notes Due 2004 and the Trustee's certificate of
authentication to be borne by the Notes Due 2004 are to be substantially in the
forms attached hereto as Exhibit A, Exhibit B, Exhibit C and Exhibit D;
WHEREAS all acts and things necessary to make the Notes Due 2004, when
executed by the Company and authenticated and delivered by the Trustee as in
the Indenture provided, the legal, valid and binding obligations of the Company,
and to constitute these presents a valid agreement according to its terms, have
been done and performed, and the execution and delivery of this Second
Supplemental Indenture and the creation and issuance under the Indenture of the
Notes Due 2004 in an aggregate principal amount not to exceed $115,000,000 have
in all respects been duly authorized;
WHEREAS the Company and the Trustee desire to join in the execution
and delivery of this Second Supplemental Indenture in order to supplement and
amend the Indenture, by amending certain provisions thereof, to permit the
Company to require, if it shall so elect, that the Debentures of any series be
issued, in whole or in part, in the form of one or more global Notes;
WHEREAS Section 13.01 of the Indenture provides that a supplemental
indenture may be entered into by the Company and the Trustee, without the
consent of any holder of Debentures, to make provisions with respect to matters
or questions arising under the Indenture which shall not adversely affect the
interests of the holders of Debentures;
WHEREAS the Company has determined that this Second Supplemental
Indenture complies with Section 13.01 of the Indenture and does not require the
consent of any holders of Debentures;
WHEREAS the Company has furnished the Trustee with an Opinion of
Counsel complying with the requirements of Section 4.03 of the Indenture to the
effect that, among other things, execution of this Second Supplemental Indenture
is authorized or permitted by the Indenture, and with an Officer's Certificate
complying with the requirements of Section 4.03 of the Indenture, and has
delivered to the Trustee a certified resolution authorizing the execution and
delivery of this Second Supplemental Indenture, together with such other
documents as may have been required by Section 4.03 of the Indenture.
<PAGE>
3
NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE
W I T N E S S E T H:
- - - - - - - - - -
That in order to (i) amend the Indenture so as to permit the Company
to require, if it shall so elect, that the Debentures of any series be issued,
in whole or in part, in the form of one or more global Notes and (ii) declare
the terms and conditions upon which the Notes Due 2004 are to be authenticated,
issued and delivered, and in consideration of the premises, of the purchase and
acceptance of the Notes Due 2004 by the holders thereof and of the sum of one
dollar duly paid to it by the Trustee at the execution of these presents, the
receipt of which is hereby acknowledged, the Company covenants and agrees with
the Trustee, for the equal and proportionate benefit of the respective holders
from time to time of the Notes Due 2004, as follows and of all holders of
Debentures:
ARTICLE I
Amendments to the Indenture
---------------------------
SECTION 1.01. Section 1.01 of the Indenture is amended to add new
definitions thereto, in the appropriate alphabetical sequence, as follows:
"Accredited Investor" shall have the meaning set forth in subparagraph
-------------------
(A)(1), (A)(2), (A)(3) or (A)(7) of Rule 501 under the Securities Act.
"Cedel" shall mean Cedel S.A.
-----
"Depository" shall mean, unless otherwise specified by the Company,
----------
pursuant to Section 2.02 with respect to Debentures of any series
issuable or issued as a global Note, The Depository Trust Company, New
York, New York, or any successor thereto registered under the
Securities Exchange Act of 1934, as amended, or other applicable
statute or regulation.
<PAGE>
4
"Euroclear" shall mean Morgan Guaranty Trust Company of New York,
---------
Brussels office, as operator of the Euroclear System.
"global Note" shall mean with respect to any series of Debentures
-----------
issued hereunder, a Debenture which is executed by the Company and
authenticated and delivered by the Trustee to the Depository or
pursuant to the Depository's instruction, all in accordance with this
Indenture and the indenture supplemental hereto creating such series,
which shall be registered in the name of the Depository or its nominee
and which shall represent, and shall be denominated in an amount equal
to the aggregate principal amount of, all of the Outstanding
Debentures of such series or any portion thereof, in either case
having the same terms, including, without limitation, the same issue
date, date or dates on which principal is due and interest rate or
method of determining interest.
"Qualified Institutional Buyer" shall have the meaning set forth in
-----------------------------
Rule 144A.
"Regulation S" shall mean Regulation S under the Securities Act and
------------
any successor regulation thereto.
"Rule 144" shall mean Rule 144 under the Securities Act.
--------
"Rule 144A" shall mean Rule 144A under the Securities Act.
---------
"Securities Act" shall mean the U.S. Securities Act of 1933, as
--------------
amended.
SECTION 1.02. Section 2.02 of the Indenture is amended to (i)
redesignate paragraph (p) as paragraph (q) and (ii) add new paragraph (p) as
follows:
"(p) provisions, if any, for the issuance of Debentures of the
particular series in whole or in part in the form of a global Note or
Notes; for the terms and conditions, if any, upon which such global Note or
Notes may be exchanged in whole or in part for other
<PAGE>
5
individual Definitive Debentures; and provisions for the Depository for
such global Note or Notes; and"
SECTION 1.03. Section 2.03 of the Indenture is amended to add the
words "or forms" after the word "form" in the first sentence of such Section
2.03.
SECTION 1.04. The first sentence of Section 2.05 of the Indenture
is amended to read as follows:
"Subject to Section 2.09, Debentures may be exchanged for an equal
aggregate principal amount of Debentures of the same series and date of
maturity or dates of maturity, if of serial maturity, of other authorized
denominations."
SECTION 1.05. The fourth sentence of the second paragraph of Section
2.05 of the Indenture is amended to read as follows:
"Subject to Section 2.09, upon due presentment for registration of
transfer of any Debenture at such office or agency, the Company shall
execute and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Debenture or Debentures of the same series
and date of maturity or dates of maturity, if of serial maturity, for an
equal aggregate principal amount."
SECTION 1.06. The following paragraphs are added at the end of
Section 2.05 of the Indenture:
"None of the Company, the Trustee, any Paying Agent or the Securities
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a global Note or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests or for any other
aspect of the relationship between the Depository and its participants or
the relationship between such participants and the owners of beneficial
interests in the global Notes owning through such participants.
Notwithstanding any provision to the contrary herein, so long as a
global Note remains Outstanding and is held by or on behalf of the
Depository,
<PAGE>
6
transfers of a global Note, in whole or in part, shall be made only in
accordance with this Section 2.05.
(a) Except as provided in clauses (b) through (f) of this Section
2.05, transfers of a global Note shall be limited to transfers of such
global Note in whole, but not in part, to nominees of the Depository or to
a successor of the Depository or such successor's nominee.
(b) U.S. Global Note to Temporary S Global Note. If a holder of a
--------------------------------------------
beneficial interest in the U.S. Global Note deposited with the Depository
wishes at any time to exchange its interest in such U.S. Global Note for an
interest in the Temporary Global Note, or to transfer its interest in such
U.S. Global Note to a person who wishes to take delivery thereof in the
form of an interest in such Temporary Global Note, such holder may, subject
to the rules and procedures of the Depository and to the requirements set
forth in the following sentence, exchange or cause the exchange or transfer
or cause the transfer of such interest for an equivalent beneficial
interest in such Temporary Global Note. Upon receipt by the Trustee, as
transfer agent, at its office in the City of New York of (1) instructions
given in accordance with the Depository's procedures from an agent member
directing the Trustee to credit or cause to be credited a beneficial
interest in the Temporary Global Note in an amount equal to the beneficial
interest in the U.S. Global Note to be exchanged or transferred, (2) a
written order given in accordance with the Depository's procedures
containing information regarding the Euroclear or Cedel account to be
credited with such increase and the name of such account, and (3) a
certificate substantially in the form of Exhibit E hereto given by the
holder of such beneficial interest stating that the exchange or transfer of
such interest has been made in compliance with the transfer restrictions
applicable to the Debentures and pursuant to and in accordance with
Regulation S, the Trustee, as transfer agent, shall instruct the
Depository, its nominee, or the custodian for the Depository, as the case
may be, to reduce or reflect on its records a reduction of the U.S. Global
Note by the aggregate principal amount of the beneficial interest in such
U.S. Global Note to be so exchanged or transferred and the Trustee, as
transfer agent, shall instruct the
<PAGE>
7
Depository, its nominee, or the custodian for the Depository, as the case
may be, concurrently with such reduction, to increase or reflect on its
records an increase of the principal amount of such Temporary Global Note
by the aggregate principal amount of the beneficial interest in such U.S.
Global Note to be so exchanged or transferred, and to credit or cause to be
credited to the account of the person specified in such instructions (who
shall be the agent member of Euroclear or Cedel, or both, as the case may
be) a beneficial interest in such Temporary Global Note equal to the
reduction in the principal amount of such U.S. Global Note.
(c) U.S. Global Note to Regulation S Global Note. If a holder of a
---------------------------------------------
beneficial interest in the U.S. Global Note deposited with the Depository
wishes at any time to exchange its interest in such U.S. Global Note for an
interest in the Regulation S Global Note, or to transfer its interest in
such Regulation S Global Note to a person who wishes to take delivery
thereof in the form of an interest in such Regulation S Global Note, such
holder may, subject to the rules and procedures of the Depository and to
the requirements set forth in the following sentence, exchange or cause the
exchange or transfer or cause the transfer of such interest for an
equivalent beneficial interest in such Regulation S Global Note. Upon
receipt by the Trustee, as transfer agent, at its office in the City of New
York of (1) instructions given in accordance with the Depository's
procedures from an agent member directing the Trustee to credit or cause to
be credited a beneficial interest in the Regulation S Global Note in an
amount equal to the beneficial interest in the U.S. Global Note to be
exchanged or transferred, (2) a written order given in accordance with the
Depository's procedures containing information regarding the participant
account of the Depository and, in the case of a transfer pursuant to and in
accordance with Regulation S, the Euroclear or Cedel account to be credited
with such increase and (3) a certificate substantially in the form of
Exhibit F hereto given by the holder of such beneficial interest stating
that the exchange or transfer of such interest has been made in compliance
with the transfer restrictions applicable to the global Notes and (A)
pursuant to and in accordance with Regulation S or (B) that the global Note
being exchanged or transferred is not a "restricted security"
<PAGE>
8
as defined in Rule 144, the Trustee, as transfer agent, shall instruct the
Depository, its nominee, or the custodian for the Depository, as the case
may be, to reduce or reflect on its records a reduction of the U.S. Global
Note by the aggregate principal amount of the beneficial interest in such
U.S. Global Note to be so exchanged or transferred and the Trustee, as
transfer agent, shall instruct the Depository, its nominee, or the
custodian for the Depository, as the case may be, concurrently with such
reduction, to increase or reflect on its records an increase of the
principal amount of such Regulation S Global Note by the aggregate
principal amount of the beneficial interest in such U.S. Global Note to be
so exchanged or transferred, and to credit or cause to be credited to the
account of the person specified in such instructions a beneficial interest
in such Regulation S Global Note equal to the reduction in the principal
amount of such U.S. Global Note.
(d) Temporary or Regulation S Global Note to U.S. Global Note. If a
----------------------------------------------------------
holder of a beneficial interest in the Temporary Global Note or the
Regulation S Global Note which is deposited with the Depository wishes at
any time to exchange its interest for an interest in the U.S. Global Note,
or to transfer its interest in such Temporary Global Note or Regulation S
Global Note to a person who wishes to take delivery thereof in the form of
an interest in such U.S. Global Note, such holder may, subject to the rules
and procedures of Euroclear or Cedel and the Depository, as the case may
be, and to the requirements set forth in the following sentence, exchange
or cause the exchange or transfer or cause the transfer of such interest
for an equivalent beneficial interest in such U.S. Global Note. Upon
receipt by the Trustee, as transfer agent, at its office in the City of New
York of (1) instructions from Euroclear or Cedel or the Depository, as the
case may be, directing the Trustee, as transfer agent, to credit or cause
to be credited a beneficial interest in the U.S. Global Note equal to the
beneficial interest in the Regulation S Global Note or the Temporary Global
Note to be exchanged or transferred, such instructions to contain
information regarding the agent member's account with the Depository to be
credited with such increase, and (2) with respect to an exchange or
transfer of an interest in the Temporary Global Note (but not the
Regulation S Global Note) for an interest
<PAGE>
9
in the U.S. Global Note, a certificate substantially in the form of Exhibit
G hereto given by the holder of such beneficial interest and stating that
the person transferring such interest in such Temporary Global Note
reasonably believes that the person acquiring such interest in such U.S.
Global Note reasonably believes that the person acquiring such interest in
such U.S. Global Note is a Qualified Institutional Buyer and is obtaining
such beneficial interest in a transaction meeting the requirements of Rule
144A, the Trustee, as transfer agent, shall instruct the Depository, its
nominee, or the custodian for the Depository, as the case may be, to reduce
or reflect on its records a reduction of the Temporary Global Note or such
Regulation S Global Note, as the case may be, by the aggregate principal
amount of the beneficial interest in such Temporary Global Note or such
Regulation S Global Note to be exchanged or transferred, and the Trustee,
as transfer agent, shall instruct the Depository, its nominee, or the
custodian for the Depository, as the case may be, concurrently with such
reduction, to increase or reflect on its records an increase of the
principal amount of such U.S. Global Note by the aggregate principal amount
of the beneficial interest in such Regulation S Global Note or such
Temporary Global Note, as the case may be, to be so exchanged or
transferred, and to credit or cause to be credited to the account of the
person specified in such instructions a beneficial interest in such U.S.
Global Note equal to the reduction in the principal amount of such
Regulation S Global Note or such Temporary Global Note, as the case may be.
(e) Temporary Global Note to Regulation S Global Note. Interests in
--------------------------------------------------
a Temporary Global Note as to which the Trustee has received from Euroclear
or Cedel, as the case may be, a certificate substantially in the form of
Exhibit H hereto to the effect that Euroclear or Cedel, as applicable, has
received a certificate substantially in the form of Exhibit I hereto from
the holder of a beneficial interest in such Temporary Global Note, will be
exchanged, on and after the Restricted Period, for interests in the
Regulation S Global Note. The Trustee shall effect such exchange by
delivering to the Depository for credit to the respective accounts of the
holders of Debentures, a duly executed and authenticated Regulation S
Global Note, representing the principal amount of interests in
<PAGE>
10
the Temporary Global Note initially exchanged for interests in the
Regulation S Global Note. The delivery to the Trustee by Euroclear or
Cedel of the certificate or certificates referred to above may be relied
upon by the Company and the Trustee as conclusive evidence that the
certificate or certificates referred to therein has or have been delivered
to Euroclear or Cedel pursuant to the terms of this Indenture and the
Temporary Global Note. Upon any exchange of interests in a Temporary
Global Note for interests in a Regulation S Global Note, the Trustee shall
endorse the Temporary Global Note to reflect the reduction in the principal
amount represented thereby by the amount so exchanged and shall endorse the
Regulation S Global Note to reflect the corresponding increase in the
amount represented thereby. Until so exchanged in full and except as
provided therein, the Temporary Global Note, and the Notes evidenced
thereby, shall in all respects be entitled to the same benefits under this
Indenture as the Regulation S Global Note and U.S. Global Note
authenticated and delivered hereunder.
(f) Other Exchanges. In the event that a global Note is exchanged
----------------
for Definitive Debentures pursuant to Section 2.09(c), such global Notes
and Definitive Debentures may be exchanged or transferred for one another
only in accordance with such procedures as are substantially consistent
with the provisions of clauses (b) through (e) above (including the
certification requirements intended to ensure that such exchanges or
transfers comply with Rule 144, Rule 144A or Regulation S, as the case may
be) and as may be from time to time adopted by the Company and the Trustee.
(g) If Definitive Debentures are issued upon the transfer, exchange
or replacement of Definitive Debentures not bearing the legends required
for the global Notes or the form of Definitive Debenture attached as
Exhibit D hereto, as the case may be (collectively, the "Legend"), the
--------- ------
Debentures so issued shall not bear the Legend. If Definitive Debentures
are issued upon the transfer, exchange or replacement of Definitive
Debentures bearing the Legend, or if a request is made to remove the Legend
on a Definitive Debenture, the Definitive Debentures so issued shall bear
the Legend, or the Legend shall not be removed, as the case may be, unless
there is delivered to the
<PAGE>
11
Company and the Trustee such satisfactory evidence, which may include an
opinion of counsel, as may be reasonably required by the Company that
neither the Legend nor the restrictions on transfer set forth therein are
required to ensure that transfers thereof comply with the provisions of
Rule 144A, Rule 144 or Regulation S under the Securities Act or that such
Debentures are not "restricted securities" within the meaning of Rule 144.
Upon provision of such satisfactory evidence, the Trustee, at the written
direction of the Company, shall authenticate and deliver a registered
Debenture that does not bear the Legend."
SECTION 1.07. Article II of the Indenture is amended to add a new
Section 2.09, which reads in its entirety as follows:
Section 2.09. Securities Issuable in the Form of a Global Note. (a)
-------------------------------------------------
Global Notes. If the Company shall establish pursuant to Section 2.02 that the
- -------------
Debentures of a particular series are to be issued in whole or in part in the
form of one or more global Notes, then the Company shall execute and the Trustee
shall, in accordance with Section 4.03, authenticate and deliver, such global
Note or Notes, which shall represent, and shall be denominated in an amount
equal to the aggregate principal amount of, the aggregate principal amount of
the Debentures to be represented by such global Notes.
(i) U.S. Global Note. Debentures initially offered and sold in
-----------------
reliance on Rule 144A to Qualified Institutional Buyers and Accredited Investors
shall be issued in the form of a permanent global Note in definitive fully
registered form without interest coupons, substantially in the form of Exhibit A
---------
hereto (the "U.S. Global Note"). The U.S. Global Note shall be deposited on
----------------
behalf of the purchaser of the Debentures represented thereby with the custodian
for the Depository, and registered in the name of a nominee of the Depository,
duly executed by the Company and authenticated by the Trustee as provided
herein. The aggregate principal amount of the U.S. Global Note may from time to
time be increased or decreased by adjustments made on the records of the
custodian for the Depository or the Depository or its nominee, as the case may
be, as hereinafter provided.
<PAGE>
12
(ii) Temporary Global Note; Regulation S Global Note. Debentures
------------------------------------------------
initially offered and sold in reliance on Regulation S shall be issued in the
form of a temporary global Note in definitive fully registered form without
interest coupons, substantially in the form of Exhibit B hereto (the "Temporary
--------- ---------
Global Note"). The Temporary Global Note shall be deposited on behalf of the
- -----------
purchasers of the Debentures represented thereby with the custodian for the
Depository, and registered in the name of a nominee of the Depository, duly
executed by the Company and authenticated by the Trustee as provided herein, for
credit to their respective accounts (or to such other accounts as they may
direct) at Euroclear or Cedel. After the expiration of the "40-day restricted
period" (within the meaning of Rule 903(c)(3) of Regulation S) (the "Restricted
----------
Period"), the Temporary Global Note will be exchanged for a permanent global
- ------
Note, substantially in the form of Exhibit C hereto (the "Regulation S Global
--------- -------------------
Note"), in accordance with the provisions of this Indenture. Until the
- ----
expiration of the Restricted Period, interests in the Temporary Global Note may
only be held by agent members of Euroclear and Cedel. During the Restricted
Period, interests in the Temporary Global Note may be exchanged for interests in
the U.S. Global Note in accordance with the provisions of this Indenture. The
aggregate principal amount of the Temporary Global Note and the Regulation S
Global Note may from time to time be increased or decreased by adjustments made
on the records of the custodian for the Depository or the Depository or its
nominee, as the case may be, as hereinafter provided.
(b) Book-Entry Provisions. (i) The Company shall execute and the
----------------------
Trustee shall, in accordance with Section 4.03, authenticate and deliver, such
global Note or Notes, which (A) shall represent, and shall be denominated in an
amount equal to the aggregate principal amount of, the Outstanding Debentures of
such series to be represented by such global Note or Notes, (B) shall be
registered in the name of the Depository for such global Note or Notes or its
nominee, (C) shall be delivered by the Trustee to the Depository or pursuant to
the Depository's instruction and (D) shall bear a legend substantially to the
following effect:
"UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (THE 'DEPOSITORY') TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
<PAGE>
13
GLOBAL NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. ('CEDE') OR SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY (AND ANY PAYMENT HEREON IS MADE TO CEDE OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE, HAS AN INTEREST
HEREIN."
Members of, or participants in, the Depository shall have no rights
under this Indenture with respect to any global Note held on their behalf by the
Depository or its nominee. The Depository or its nominee may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of such global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee, or any agent
of the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its agent members, the operation of customary practices
governing the exercise of the rights of a holder of any Debenture.
(ii) Offshore Book-Entry Provisions. This Section 2.09(b)(ii) shall
-------------------------------
apply only to the global Note deposited on behalf of the purchasers of the
Debentures represented thereby with the custodian for the Depository for credit
to their respective accounts (or to such other accounts as they may direct) at
Euroclear or Cedel insofar as interests in such global Note are held by the
agent members of Euroclear or Cedel.
The provisions of the "Operating Procedures of the Euroclear System"
and the "Terms and Conditions Governing Use of Euroclear" and the "Management
Regulations" and "Instructions to Participants" of Cedel, respectively, shall be
applicable to any such global Note insofar as interests in such global Note are
held by the agent members of Euroclear or Cedel. Account holders or
participants in Euroclear and Cedel shall have no rights under this Indenture
with respect to such global Note, and the Depository or its nominee may be
treated by the Company, the Trustee, and any agent of the Company or the Trustee
as the owner of such global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee, or any
agent of the Company or the
<PAGE>
14
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its agent members, the operation of customary practices governing the
exercise of the rights of a holder of any Note.
(c) Definitive Debentures. (i) If at any time the Depository for a
----------------------
global Note notifies the Company that it is unwilling or unable to continue as
Depository for such global Note or if at any time the Depository for the
Debentures for such series shall no longer be eligible or in good standing under
the Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation, the Company shall appoint a successor Depository with respect to
such global Note. If a successor Depository for such global Note is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such ineligibility or an Event of Default has occurred and
is continuing, the Company will execute, and the Trustee upon receipt of an
order of the Company for the authentication and delivery of individual
Debentures of such series in exchange of such global Note, will authenticate and
deliver individual Debentures of such series of like tenor and terms in
definitive form substantially in the form of Exhibit D hereto (the "Definitive
---------
Debentures") in an aggregate principal amount equal to the principal amount of
the global Note in exchange for such global Note.
(ii) The Company may at any time in its sole discretion determine
that the Debentures of any series issued or issuable in the form of one or more
global Notes shall no longer be represented by such global Note or Notes. In
such event the Company will execute, and the Trustee, upon receipt of an order
of the Company for the authentication and delivery of individual Definitive
Debentures of such series in exchange in whole or in part for such global Note,
will authenticate and deliver individual Definitive Debentures in an aggregate
principal amount equal to the principal amount of such global Note or Notes
representing such series in exchange for such global Note or Notes.
(iii) If specified by the Company pursuant to Section 2.02 with
respect to Debentures issued or issuable in the form of a global Note, the
Depository for such global Note may surrender such global Note in exchange in
whole or in part for individual Definitive Debentures on such terms as are
acceptable to the Company and such Depository.
<PAGE>
15
Thereupon the Company shall execute, and the Trustee shall authenticate and
deliver, without service charge, (1) to each person specified by such Depository
a new Debenture or Debentures of the same series of like tenor and terms and of
any authorized denomination as requested by such person in aggregate principal
amount equal to and in exchange for such person's beneficial interest in the
global Note; and (2) to such Depository a new global Note of like tenor and
terms and in an authorized denomination equal to the difference, if any, between
the principal amount of the surrendered global Note and the aggregate principal
amount of Debentures delivered to holders thereof.
(iv) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee will authenticate and
deliver individual Definitive Debentures in authorized denominations for
Debentures of the same series or any integral multiple thereof. Upon the
exchange of a global Note for individual Definitive Debentures, such global Note
shall be cancelled by the Trustee. Definitive Debentures issued in exchange for
a global Note pursuant to this Section shall be registered in such names and in
such authorized denominations as the Depository for such global Note, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Debentures to the persons
in whose names such Debentures are so registered.
(v) Notwithstanding the foregoing, interests in the Temporary Global
Note may not be exchanged for individual Definitive Debentures.
ARTICLE II
The 8 3/8% Notes Due 2004
-------------------------
SECTION 2.01. Specific Title and Terms. The Debentures shall be
-------------------------
known and designated as the "8 3/8% Notes Due 2004" of the Company (the "Notes
Due 2004").
The aggregate principal amount of the Notes Due 2004 which may be
authenticated and delivered under the Indenture is limited to $115,000,000,
except for Notes Due 2004 authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Notes Due 2004 as provided
in the Indenture. The stated maturity
<PAGE>
16
of the Notes Due 2004 shall be March 15, 2004, and they shall bear interest as
set forth below, at the rate per annum set forth in the preceding paragraph,
until the principal thereof becomes due and payable, and at such rate on any
overdue principal and (to the extent that the payment of such interest shall be
legally enforceable) on any overdue instalment of interest. The interest rate
may also be subject to increase pursuant to the terms of the Exchange
Registration Rights Agreement dated as of March 9, 1994 between the Company and
CS First Boston Corporation.
Each Note Due 2004 shall be dated the date of its authentication and,
except as otherwise provided in this Section, shall bear interest, payable
semiannually on March 15 and September 15 of each year, from the March 15 or
September 15, as the case may be, next preceding the date of such Note Due 2004
to which interest on the Notes Due 2004 has been paid, unless no interest has
been paid on the Notes Due 2004, in which case from the date on which such Note
Due 2004 was originally issued, until payment of the principal amount of such
Note Due 2004 has been made or duly provided for; provided, however, that the
-------- -------
first such date on which any such interest shall be paid shall be September 15,
1994; provided, further, that, if the Company shall default in the payment of
-------- -------
the interest due on such interest payment date, then all such Notes Due 2004
shall bear interest from the March 15 or September 15, as the case may be, next
preceding such interest payment date to which interest has been paid or duly
provided for, unless no interest has been paid on the Notes Due 2004, in which
case from the date on which the Notes Due 2004 are originally issued.
The regular record date for the payment of the interest payable and
punctually paid or duly provided for on any interest payment date shall be the
close of business on the March 1 or September 1 (whether or not a business
day), as the case may be, next preceding such interest payment date.
Interest shall be calculated on the basis of a 360-day year of twelve
30-day months. The Notes Due 2004 are exchangeable but not redeemable.
The person in whose name any Note Due 2004 is registered at the
regular record date with respect to an interest payment date shall be entitled
to receive the interest payable on such interest payment date notwithstanding
the cancellation of such Note Due 2004, upon any
<PAGE>
17
registration of transfer or exchange thereof subsequent to such regular record
date and prior to such interest payment date; provided, however, that if and to
-------- -------
the extent the Company shall default in the payment of the interest due on any
interest payment date, such defaulted interest shall be paid to the person in
whose name such Note Due 2004 is registered at the close of business on a
special record date for the payment of such defaulted interest established by
notice to the registered holders of such Notes Due 2004 not less than 15 days
preceding such special record date.
The principal of and interest on the Notes Due 2004 shall be payable
at the office or agency of the Company in the Borough of Manhattan, The City and
State of New York; provided, however, that interest may be paid, at the option
-------- -------
of the Company, by check mailed to the person entitled thereto at his address
last appearing on the register of the Company.
SECTION 2.02. Denominations. In accordance with Section 2.09 of the
--------------
Indenture, the Notes Due 2004 shall be issuable in the form of one or more
global Notes registered in the name of the Depository or its nominee.
ARTICLE III
Miscellaneous
-------------
SECTION 3.01. Execution of Supplemental Indenture. This Second
------------------------------------
Supplemental Indenture is executed and shall be construed as an indenture
supplemental to the Indenture, and, as provided in the Indenture, this Second
Supplemental Indenture forms a part thereof. Except as herein expressly
otherwise defined, the use of the terms and expressions herein is in accordance
with the definitions, uses and constructions contained in the Indenture.
SECTION 3.02. Responsibility for Recitals, Etc. The recitals herein
---------------------------------
and in the Notes Due 2004 (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representations as to the validity or sufficiency of this Second Supplemental
Indenture or of the Notes Due 2004. The Trustee shall not be accountable for
the use by the Company of the Notes Due 2004 or the proceeds thereof.
<PAGE>
18
SECTION 3.03. Provisions Binding on Company Successors. All the
-----------------------------------------
covenants, stipulations, promises and agreements contained in this Second
Supplemental Indenture made by the Company shall bind its successors and assigns
whether so expressed or not.
SECTION 3.04. New York Contract. This Second Supplemental Indenture
------------------
and each Note Due 2004 shall be deemed to be a contract made under the laws of
the State of New York and for all purposes shall be construed in accordance
with the laws of said State.
SECTION 3.05. Execution in Counterparts. This Second Supplemental
--------------------------
Indenture may be executed in any number of counterparts, each of which shall be
an original, but such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, Cincinnati Milacron Inc. has caused this Second
Supplemental Indenture to be signed and acknowledged by its Chairman of the
Board of Directors, its President, one of its Vice Presidents or its Treasurer
and its corporate seal to be affixed hereunto, and the same to be attested by
its Secretary or one of its Assistant Secretaries, and BankAmerica National
Trust Company, as Trustee, has caused this Second Supplemental Indenture to be
signed and acknowledged by one of its Vice Presidents or Corporate Trust
officers, has caused its corporate seal to be affixed hereunto, and the same to
be attested by one of its
<PAGE>
19
Assistant Secretaries, all as of the day and year first written above.
CINCINNATI MILACRON INC.,
(Seal) By /s/ Ronald D. Brown
----------------------
Name: Ronald D. Brown
Title: Vice President-Finance
Attest:
By: /s/ Wayne F. Taylor
--------------------
Name: Wayne F. Taylor
Title: Vice President, General Counsel
and Secretary
BANKAMERICA NATIONAL TRUST COMPANY,
(Seal)
By
----------------------
Name:
Title:
Attest:
By:
--------------------
Name:
Title:
<PAGE>
20
Assistant Secretaries, all as of the day and year first written above.
CINCINNATI MILACRON INC.,
(Seal) By
----------------------
Name:
Title:
Attest:
By:
--------------------
Name:
Title:
BANKAMERICA NATIONAL TRUST COMPANY,
(Seal)
By /s/ Mary Fonti
----------------------
Name: Mary Fonti
Title: Trust Officer
Attest:
By: /s/ Kerry A. Monaghan
----------------------
Name: Kerry A. Monaghan
Title: Assistant Trust Officer
<PAGE>
21
STATE OF Ohio )
) ss.:
CITY OF Hamilton )
On the 15 day of March, 1994, before me personally came
---
Ronald D. Brown to me known, who, being by me duly sworn, did depose and say
- ---------------
that he is Vice President-Finance of Cincinnati Milacron Inc., one of the
----------------------
corporations described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to said instrument
is said corporate seal; that it was so affixed by the authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
(Seal) /s/ Gloria E. Lucas
--------------------------------
Notary Public
Gloria E. Lucas
Notary Public, State of Ohio
My Commission Expires Apr. 4, 1995
STATE OF )
) ss.:
COUNTY OF )
On the day of March, 1994, before me personally came
----
to me known, who, being by me duly sworn, did depose and say
- ---------------
that he or she is a of BankAmerica National Trust
--------------------------
Company, one of the corporations described in and which executed the above
instrument; that he or she knows the corporate seal of said corporation; that
the seal affixed to said instrument is said corporate seal; that it was so
affixed by the authority of the Board of Directors of said corporation; and that
he or she signed his or her name thereto by like authority.
(Seal)
-----------------------------------
Notary Public
<PAGE>
22
STATE OF )
) ss.:
CITY OF )
On the day of March, 1994, before me personally came
---------
to me known, who, being by me duly sworn, did depose and say
- ---------------
that he is of Cincinnati Milacron Inc., one of the
----------------
corporations described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to said instrument
is said corporate seal; that it was so affixed by the authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
(Seal)
--------------------------------
Notary Public
STATE OF New York )
) ss.:
COUNTY OF New York )
On the 16th day of March, 1994, before me personally came
-----
Mary Fonti to me known, who, being by me duly sworn, did depose and say
- ----------
that he or she is a Trust Officer of BankAmerica National Trust
-------------
Company, one of the corporations described in and which executed the above
instrument; that he or she knows the corporate seal of said corporation; that
the seal affixed to said instrument is said corporate seal; that it was so
affixed by the authority of the Board of Directors of said corporation; and that
he or she signed his or her name thereto by like authority.
(Seal) /s/ Robert Lau
___________________________________
Notary Public
Robert Lau
Notary Public, State of New York
No. 41-4853782
Qualified in Queens County
Commission Expires May 5, 1994
<PAGE>
EXHIBIT 4.3
GLOBAL EXCHANGE NOTE
UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITORY") TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. ("CEDE") OR SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT
HEREON IS MADE TO CEDE OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE, HAS AN INTEREST HEREIN.
<PAGE>
$115,000,000
CINCINNATI MILACRON INC.
8 3/8% NOTES DUE 2004
GLOBAL EXCHANGE NOTE
CUSIP NO.: PRINCIPAL AMOUNT
REPRESENTED
$115,000,000
CINCINNATI MILACRON INC., a corporation duly organized and existing under
the laws of the State of Delaware (the "Company", which term includes any
-------
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to CEDE & Co., as the nominee of The Depository
Trust Company (the "Depository"), or registered assigns, the principal sum of
----------
ONE HUNDRED AND FIFTEEN MILLION DOLLARS ($115,000,000) on March 15, 2004 (the
"Stated Maturity"), and to pay interest thereon semiannually in arrears on each
---------------
March 15 and September 15 (each, an "Interest Payment Date"), beginning
---------------------
September 15, 1994, and at maturity, from the later of March 16, 1994, or the
most recent Interest Payment Date to which interest has been paid or duly
provided for, at the rate of 8 3/8% per annum, until the principal hereof
becomes due and payable, and at such rate on any overdue principal and on any
overdue installments of interest (to the extent that the payment of such
interest shall be legally enforceable).
This Global Exchange Note is the duly authorized issue of securities of the
Company (the "Debentures"), issued or to be issued in one or more series under
----------
the Indenture dated as of July 1, 1985 between the Company and BankAmerica
National Trust Company (formerly BankAmerica Trust Company of New York), as
supplemented by the First Supplemental Indenture dated as of February 26, 1987
and the Second Supplemental Indenture dated as of March 16, 1994
(the "Indenture"), to which Indenture reference is hereby made for a
---------
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and each of the holders of the Debentures
and of the terms upon which the Debentures are, and are to be, authenticated and
delivered and transferred. All terms used in this Global Exchange Note which are
not defined herein shall have the meanings assigned to them in the Indenture.
The interest payable hereunder, and punctually paid or duly provided for,
on any Interest Payment Date will be paid to the Person in whose name this
Global Exchange Note is registered at
-2-
<PAGE>
the close of business on the fifteenth day immediately preceding such Interest
Payment Date, or at 5:00 p.m., New York City time, on such fifteenth day, if
such fifteenth day is not a Business Day (the "Regular Record Date"). "Business
-------------------
Day" with respect to the Debentures means any day that is not a Saturday, a
Sunday or a day on which banking institutions or trust companies in the City of
New York are authorized or obligated by the law or executive order to close.
Any such interest not so punctually paid or duly provided for shall forthwith
cease to be payable to the registered holder on such Regular Record Date by
virtue of such Person having been such holder, and may either be paid to the
Person in whose name this Global Exchange Note is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice of which having been given to each holder of
Debentures of this series not less than 15 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Debentures of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture.
Payment of the principal of and interest on this Global Exchange Note will
be made by the Company to the Trustee, and if such payments are made by the
Company, the Trustee in turn will make such payments to the Depository.
Interest on the Notes will be computed on the basis of a 360-day year of
twelve 30-day months. Each payment of interest in respect of an Interest Payment
Date will include interest accrued through the day before such Interest Payment
Date. If an Interest Payment Date falls on a day that is not a Business Day, the
interest payment to be made on such Interest Payment Date will be made on the
next succeeding Business Day with the same force and effect as if made on such
Interest Payment Date, and no additional interest will accrue as a result of
such delayed payment.
The Notes are not subject to redemption prior to Stated Maturity.
If an Event of Default with respect to the Debentures of this series shall
have occurred and be continuing, the principal of all the Debentures of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the holders of the Debentures of each series to be
affected under the
-3-
<PAGE>
Indenture at any time by the Company and the Trustee with the consent of the
holders of not less than 66 2/3% in aggregate principal amount of the Debentures
at the time Outstanding of each series to be affected. The Indenture also
contains provisions permitting the holders of not less than 50% in aggregate
principal amount of the Debentures of any series at the time Outstanding, on
behalf of the holders of all the Debentures of such series, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the holders of this Global Exchange Note shall be conclusive and binding
upon such holders and upon all future holders of interests in this Global
Exchange Note and of any Global Exchange Note issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Global Exchange Note.
Holders of Debentures may not enforce their rights pursuant to the Indenture
or the Debentures except as provided in the Indenture. No reference herein to
the Indenture and no provision of this Global Exchange Note or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of (and premium, if any) and interest on
this Global Exchange Note at the times, place and rate, and in the coin or
currency, herein prescribed.
Under certain conditions set forth in the Indenture, interests in this Global
Exchange Note are exchangeable in whole or in part for duly executed and issued
Definitive Debentures.
The statements set forth in the legend, if any, set forth hereon are an
integral part of the terms of this Global Exchange Note and by the acceptance
hereof each holder of this Global Exchange Note agrees to be subject to and
bound by the terms and provisions set forth in such legend.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and integral multiples thereof.
No service charge shall be made for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Prior to due presentment of this Global Exchange Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Global Exchange Note is registered as
the owner hereof for all purposes, whether or not this Global Exchange Note
shall be
-4-
<PAGE>
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
Unless the certificate of authenticiation hereon has been duly executed by the
Trustee by manual signature, this Global Exchange Note shall not be entitled to
any benefit under the Indenture or be valued or obligatory for any purposes.
-5-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: , 1994
--------
CINCINNATI MILACRON INC.,
by
-----------------------
Name:
Title:
Corporate Seal
Attest:
by
----------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the global Notes issued
under the within-mentioned Indenture.
BANKAMERICA NATIONAL TRUST COMPANY, as Trustee
by
-----------------------
Authorized Signatory
-6-
<PAGE>
CERTIFICATE OF TRANSFER
To transfer or assign this Note, fill in the form below:
I or we transfer and assign this Note to
________________________________________________________________________
(Insert assignee's tax I.D. number)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Print or Type assignee's name, address and zip code)
and irrevocably appoint __________________________ agent to transfer this Note
on the books of the Company. The agent may substitute another to act for him.
Date:_________________ Your signature:_____________________________
-7-
<PAGE>
EXHIBIT 4.4
CINCINNATI MILACRON INC.
$115,000,000 Principal Amount of 8 3/8% Notes Due 2004
EXCHANGE REGISTRATION RIGHTS AGREEMENT
--------------------------------------
March 9, 1994
CS First Boston Corporation
As Representative of the Several Initial Purchasers
Park Avenue Plaza
New York, New York 10055
Ladies and Gentlemen:
Cincinnati Milacron Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to CS First Boston Corporation, BT Securities Corporation and
J.P. Morgan Securities Inc. (collectively, the "Initial Purchasers"), upon the
terms set forth in a purchase agreement of even date herewith (the "Purchase
Agreement"), $115,000,000 principal amount of its 8 3/8% Notes due 2004 (the
"Notes"). The Notes will be issued pursuant to an indenture, dated as of July
1, 1985, between the Company and BankAmerica Trust Company of New York, as
trustee (the "Trustee"), as such indenture was supplemented by a first
supplemental indenture, dated February 26, 1987, and a second supplemental
indenture, dated March 16, 1994 (as so supplemented, the "Indenture"). As an
inducement to the Initial Purchasers, the Company agrees with the Initial
Purchasers, for the benefit of the holders of the Notes (including, without
limitation, the Initial Purchasers, herein referred to as the "Holders"), as
follows:
1. Registered Exchange Offer. The Company shall prepare and, not later
-------------------------
than 30 days after the date of original issue of the Notes, file with the
Securities and Exchange Commission (the "Commission") a registration statement
(the "Exchange Offer Registration Statement") on an appropriate form under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to a
proposed offer (the "Registered Exchange Offer") to the Holders of the Notes to
issue and deliver to such Holders, in exchange for the Notes, a like principal
amount of debt securities of the Company identical in all material respects to
the Notes, except for the transfer restrictions relating to
<PAGE>
the Notes (the "Exchange Notes"). The Company shall use its best efforts to
cause such Exchange Offer Registration Statement to become effective under the
Securities Act within 120 days after the date of original issue of the Notes.
Following the declaration of the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder of the Notes electing to exchange the Notes for Exchange
Notes and (assuming that such Holder is not an affiliate of the Company within
the meaning of the Securities Act, acquires the Exchange Notes in the ordinary
course of such Holder's business and has no arrangements with any person to
participate in the distribution of the Exchange Notes) to trade such Exchange
Notes from and after their receipt without any limitations or restrictions under
the Securities Act and the securities laws of the several states of the United
States. In connection with such Registered Exchange Offer, the Company shall
take such further action, including, without limitation, appropriate filings
under state securities laws, as may be necessary to realize the foregoing
objective subject to the proviso of Section 3(h).
The Company shall include within the prospectus contained in the Exchange
Offer Registration Statement a section entitled "Plan of Distribution,"
reasonably acceptable to the Initial Purchasers, which shall contain a summary
statement of the positions taken or policies made by the staff of the Commission
with respect to the potential "underwriter" status of any broker-dealer that is
the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) of Exchange Notes received by such
broker-dealer in the Registered Exchange Offer (a "Participating Broker-
Dealer"), whether such positions or policies have been publicly disseminated by
the staff of the Commission or such positions or policies, in the reasonable
judgment of the Initial Purchasers based upon advice of counsel (which may be
in-house counsel), represent the prevailing views of the staff of the
Commission. Such "Plan of Distribution" section shall also allow the use of the
prospectus by all persons subject to the prospectus delivery requirements of the
Securities Act, including Participating Broker-Dealers, and include a statement
describing the means by which Participating Broker-Dealers may resell the
Exchange Notes.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the prospectus
contained therein, in order to permit such prospectus to be lawfully delivered
by all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Notes; provided that
-2-
<PAGE>
such period shall not exceed 180 days (or such longer period if extended
pursuant to Section 3(j) below).
If, upon consummation of the Registered Exchange Offer, any Initial
Purchaser holds Notes acquired by it as part of its initial distribution, the
Company upon the request of such Initial Purchaser shall simultaneously with the
delivery of the Exchange Notes pursuant to the Registered Exchange Offer issue
and deliver to such Initial Purchaser, in exchange (the "Private Exchange") for
the Notes held by such Initial Purchaser, a like principal amount of debt
securities of the Company identical in all material respects (including the
existence of restrictions on transfer under the Securities Act and the
securities laws of the several states of the United States) to the Notes (the
"Private Exchange Notes"). The Private Exchange Notes shall bear the same CUSIP
number as the Exchange Notes.
In connection with the Registered Exchange Offer, the Company shall:
(a) mail to each Holder a copy of the prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than 60 days
after the date notice thereof is mailed to the Holders (or longer if required by
applicable law);
(c) utilize the services of a depositary for the Registered Exchange Offer
with an address in the Borough of Manhattan, The City of New York, which may be
the Trustee or an affiliate of the Trustee;
(d) permit Holders to withdraw tendered Notes at any time prior to the
close of business, New York time, on the last business day on which the
Registered Exchange Offer shall remain open; and
(e) otherwise comply in all material respects with all applicable laws.
As soon as practicable after the close of the Registered Exchange Offer or
the Private Exchange, as the case may be, the Company shall:
(i) accept for exchange all the Notes validly tendered and not
withdrawn pursuant to the Registered Exchange Offer and the Private
Exchange; and
-3-
<PAGE>
(ii) deliver to the Trustee for cancellation all the Notes so accepted
for exchange, and cause the Trustee to authenticate and deliver promptly to
each Holder of the Notes, Exchange Notes or Private Exchange Notes, as the
case may be, equal in principal amount to the Notes of such Holder so
accepted for exchange.
The Exchange Notes and the Private Exchange Notes may be issued under
the Indenture (or a supplement thereto) or an indenture substantially similar to
the Indenture, which in any event will provide that the Exchange Notes will not
be subject to the transfer restrictions set forth in the Indenture and that the
Exchange Notes, the Private Exchange Notes and the Notes will vote and consent
together on all matters as one class and that none of the Exchange Notes, the
Private Exchange Notes or the Notes will have the right to vote or consent as a
class separate from one another on any matter.
2. Shelf Registration. If, (i) because of any change in law or in
------------------
currently prevailing interpretations of the staff of the Commission, the Company
is not permitted to effect a Registered Exchange Offer, as contemplated by
Section 1 hereof, (ii) the Registered Exchange Offer is not consummated within
180 days of the date of this Agreement, (iii) any Initial Purchaser so requests
with respect to the Notes (or the Private Exchange Notes) not eligible to be
exchanged for Exchange Notes in the Registered Exchange Offer and held by it
following consummation of the Registered Exchange Offer or (iv) any Holder is
not eligible to participate in the Registered Exchange Offer or, in the case of
any Holder that participates in the Registered Exchange Offer or the Private
Exchange, such Holder does not receive freely tradeable Exchange Notes on the
date of the exchange, the Company shall take the following actions:
(a) The Company shall as promptly as practicable file with the
Commission and thereafter shall use its best efforts to cause to be
declared effective a registration statement (the "Shelf Registration
Statement" and, together with the Exchange Offer Registration Statement, a
"Registration Statement") on an appropriate form under the Securities Act
relating to the offer and sale of the relevant Notes or, if applicable, the
relevant Private Exchange Notes by the Holders thereof from time to time in
accordance with the methods of distribution set forth in the Shelf
Registration Statement and Rule 415 under the Securities Act (hereinafter,
the "Shelf Registration").
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the
prospectus included therein to be lawfully delivered by the Holders of the
relevant Notes or, if
-4-
<PAGE>
applicable, the relevant Private Exchange Notes, for a period of three
years (or for such longer period if extended pursuant to Section 3(j)
below) from the date of its effectiveness or such shorter period that will
terminate when all the Notes or, if applicable, the Private Exchange Notes
covered by the Shelf Registration Statement have been sold pursuant
thereto.
(c) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall cause the Shelf Registration Statement and the
related prospectus and any amendment or supplement thereto, as of the
effective date of the Shelf Registration Statement, amendment or
supplement, (i) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission and (ii) not to contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
3. Registration Procedures. In connection with any Shelf
-----------------------
Registration contemplated by Section 2 hereof and, to the extent applicable, any
Registered Exchange Offer contemplated by Section 1 hereof, the following
provisions shall apply:
(a) The Company shall furnish to each Initial Purchaser, prior to the
filing thereof with the Commission, a copy of the Registration Statement
and each amendment thereof and each supplement, if any, to the prospectus
included therein and shall obtain the consent of the Initial Purchasers to
any such filing, which shall not be unreasonably withheld.
(b) The Company shall give written notice to the Initial Purchasers,
the Holders of the Notes and any Participating Broker-Dealer from whom the
Company has received prior written notice that it will be a Participating
Broker-Dealer in the Registered Exchange Offer:
(i) when the Registration Statement or any amendment thereto
has been filed with the Commission and when the Registration Statement
or any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the prospectus included
therein or for additional information, provided that the contents need
--------
only be disclosed to the Initial Purchasers and one counsel
-5-
<PAGE>
appointed by and on behalf of the Holders of the Notes as described in
Section 4;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of
the Notes or, if applicable, the Private Exchange Notes for sale in
any jurisdiction or the initiation or threatening of any proceeding
for such purpose; and
(v) of the happening of any event that requires the Company to
make changes in the Registration Statement or the prospectus in order
to make the statements therein not misleading (which notice shall be
accompanied by an instruction to suspend the use of the prospectus
until the requisite changes have been made).
(c) The Company shall use its best efforts to prevent the issuance or
obtain the withdrawal of any order suspending the effectiveness of the
Registration Statement at the earliest possible time.
(d) The Company shall furnish to each Holder of the Notes or, if
applicable, the Private Exchange Notes included within the coverage of the
Shelf Registration, without charge, at least one copy of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, and, if the Holder so requests in writing, all
exhibits (including those, if any, incorporated by reference).
(e) The Company shall deliver to each Initial Purchaser and to any
other Holder who so requests, without charge, at least one copy of the
Exchange Offer Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if any Initial
Purchaser or any such Holder requests, all exhibits (including those
incorporated by reference).
(f) The Company shall deliver to each Holder of the Notes or, if
applicable, the Private Exchange Notes included within the coverage of the
Shelf Registration, without charge, as many copies of the prospectus
(including each preliminary prospectus) included in the Shelf Registration
Statement and any amendment or supplement thereto as such
-6-
<PAGE>
person may reasonably request. The Company consents, subject to the
provisions of this Agreement, to the use of the prospectus or any amendment
or supplement thereto by each of the selling Holders of the Notes or, if
applicable, the Private Exchange Notes in connection with the offering and
sale of the Notes or, if applicable, the Private Exchange Notes covered by
the prospectus, or any amendment or supplement thereto, included in the
Shelf Registration Statement.
(g) The Company shall deliver to each Initial Purchaser, any
Participating Broker-Dealer and such other persons required to deliver a
prospectus following the Registered Exchange Offer, without charge, as many
copies of the final prospectus included in the Exchange Offer Registration
Statement and any amendment or supplement thereto as such persons may
reasonably request. The Company consents, subject to the provisions of
this Agreement, to the use of the prospectus or any amendment or supplement
thereto by any Initial Purchaser, if necessary, any Participating Broker-
Dealer and such other persons required to deliver a prospectus following
the Registered Exchange Offer in connection with the offering and sale of
the Exchange Notes covered by the prospectus, or any amendment or
supplement thereto, included in such Exchange Offer Registration Statement.
(h) Prior to any public offering of the Notes or, if applicable, the
Private Exchange Notes, pursuant to the Shelf Registration, the Company
shall register or qualify or cooperate with the Holders of the Notes or, if
applicable, the Private Exchange Notes, included therein and their
respective counsel in connection with the registration or qualification of
the Notes or, if applicable, the Private Exchange Notes, for offer and sale
under the securities or blue sky laws of such states of the United States
as any Holder of the Notes or the Private Exchange Notes reasonably
requests in writing and do any and all other acts or things necessary or
advisable to enable the offer and sale in such jurisdictions of the Notes
or, if applicable, the Private Exchange Notes, covered by the Shelf
Registration; provided that the Company shall not be required to (i)
--------
qualify generally to do business in any jurisdiction where it is not then
so qualified or (ii) take any action which would subject it to general
service of process or to taxation in any jurisdiction where it is not then
so subject.
(i) The Company shall cooperate with the Holders of the Notes or, if
applicable, the Private Exchange Notes to facilitate the timely preparation
and delivery of certificates representing the Notes or, if applicable, the
-7-
<PAGE>
Private Exchange Notes to be sold in the Shelf Registration free of any
restrictive legends and in such denominations and registered in such names
as the Holders may request a reasonable period of time prior to sales of
the Notes or, if applicable, the Private Exchange Notes pursuant to the
Shelf Registration.
(j) Upon the occurrence of any event contemplated by Section 3(b)(v)
above, the Company shall promptly prepare a post-effective amendment to the
Registration Statement or a supplement to the related prospectus or file
any other required document so that, as thereafter delivered to Holders of
the Notes, the Exchange Notes or, if applicable, the Private Exchange
Notes, as the case may be, the prospectus will not contain an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading. If the Company notifies the Initial
Purchasers, the Holders of the Notes and any known Participating Broker-
Dealer in accordance with Section 3(b)(v) above to suspend the use of the
prospectus until the requisite changes to the prospectus have been made,
then the Initial Purchasers, the Holders of the Notes and any such
Participating Broker-Dealers shall suspend use of such prospectus, and the
period of effectiveness of the Shelf Registration Statement provided for in
Section 2(b) above and the Exchange Offer Registration Statement provided
for in Section 1 above shall each be extended by the number of days from
and including the date of the giving of such notice to and including the
date when the Initial Purchasers, the Holders of the Notes and any known
Participating Broker-Dealer shall have received such amended or
supplemented prospectus pursuant to this Section 3(j).
(k) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Notes or
Exchange Notes, as the case may be, and provide the applicable trustee with
printed certificates for the Notes or Exchange Notes, as the case may be,
in a form eligible for deposit with The Depository Trust Company.
(l) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the
Registered Exchange Offer or the Shelf Registration and will make generally
available to its securities holders (or otherwise provide in accordance
with Section 11(a) of the Securities Act) an earnings statement satisfying
the provisions of Section 11(a) of the Securities Act, no later than 45
days after the end of a 12-month
-8-
<PAGE>
period (or 90 days, if such period is a fiscal year) beginning with the
first month of the Company's first fiscal quarter commencing after the
effective date of the Shelf Registration, which statement shall cover such
12-month period.
(m) The Company shall cause the Indenture (or an indenture
substantially identical to the indenture in the case of a Registered
Exchange Offer) to be qualified under the Trust Indenture Act of 1939, as
amended, containing such changes, if any, as shall be necessary for such
qualification.
(n) The Company may require each Holder of the Notes to be sold
pursuant to the Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of the Notes as the
Company may from time to time reasonably require for inclusion in the Shelf
Registration Statement.
(o) The Company shall enter into such customary agreements (including
if requested an underwriting agreement in customary form) and take all such
other action, if any, as any Holder of the Notes shall reasonably request
in order to facilitate the disposition of the Notes pursuant to any Shelf
Registration.
(p) In the case of any Shelf Registration, the Company shall (i) make
reasonably available for inspection by the Holders of the Notes, any
underwriter participating in any disposition pursuant to the Shelf
Registration Statement and any attorney, accountant or other agent retained
by the Holders of the Notes or any such underwriter all relevant financial
and other records, pertinent corporate documents and properties of the
Company and (ii) cause the Company's officers, directors and employees to
supply all relevant information reasonably requested by the Holders of the
Notes or any such underwriter, attorney, accountant or agent in connection
with the Shelf Registration Statement; provided that the foregoing
--------
inspection and information gathering shall be coordinated on behalf of the
Initial Purchasers by you and on behalf of the other parties, by one
counsel designated by and on behalf of such other parties as described in
Section 4.
(q) In the case of the Registered Exchange Offer, the Company shall
(i) make reasonably available for inspection by each Initial Purchaser, any
known Participating Broker-Dealer and any attorney, accountant or other
agent retained by the Initial Purchasers or such Participating Broker-
Dealer all relevant financial and other records, pertinent
-9-
<PAGE>
corporate documents and properties of the Company and (ii) cause the
Company's officers, directors and employees to supply all relevant
information reasonably requested by the Initial Purchasers, such
Participating Broker-Dealer or any such attorney, accountant or agent in
connection with the Exchange Offer Registration Statement; provided that
--------
the foregoing inspection and information gathering shall be coordinated on
behalf of the Initial Purchasers by you and on behalf of the other parties,
by one counsel designated by and on behalf of such other parties as
described in Section 4.
(r) In the case of any Shelf Registration, the Company, if requested
by any Holder of the Notes covered thereby or, if applicable, the Private
Exchange Notes covered thereby, shall cause its counsel to deliver an
opinion relating to the Notes or, if applicable, the Private Exchange Notes
in customary form, cause its officers to execute and deliver all customary
documents and certificates requested by any underwriters of the relevant
Notes or, if applicable, the relevant Private Exchange Notes and cause its
independent public accountants to provide to the selling Holders of the
Notes or, if applicable, the Private Exchange Notes and any underwriter
therefor a comfort letter in customary form.
(s) In the case of the Registered Exchange Offer, if requested by any
Initial Purchaser or any known Participating Broker-Dealer, the Company
shall cause (i) its inside counsel to deliver to such Initial Purchaser or
such Participating Broker-Dealer a signed opinion in the form set forth in
Section 6(c) of the Purchase Agreement with such changes as are customary
in connection with the preparation of a Registration Statement, (ii) its
outside counsel to deliver to such Initial Purchaser or such Participating
Broker-Dealer a signed opinion in the form set forth in Section 6(d) of the
Purchase Agreement with such changes as are customary in connection with
the preparation of a Registration Statement and (iii) its independent
public accountants to deliver to such Initial Purchaser or such
Participating Broker-Dealer a comfort letter, in customary form, meeting
the requirements as to the substance thereof as set forth in Section 6(a)
of the Purchase Agreement, with appropriate date changes.
(t) If a Registered Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Notes by Holders to the Company (or to
such other Person as directed by the Company) in exchange for the Exchange
Notes or the Private Exchange Notes, as the case may be, the Company shall
mark, or caused to be marked, on the Notes so
-10-
<PAGE>
exchanged that such Notes are being cancelled in exchange for the Exchange
Notes or the Private Exchange Notes, as the case may be; in no event shall
the Notes be marked as paid or otherwise satisfied.
(u) The Company shall cooperate with each seller of Notes covered by
any Registration Statement and each underwriter, if any, participating in
the disposition of such Notes and their respective counsel in connection
with any filings required to be made with the National Association of
Securities Dealers, Inc. (the "NASD").
(v) The Company shall use its best efforts to take all other steps
necessary to effect the registration of the Notes covered by a Registration
Statement contemplated hereby.
4. Registration Expenses. The Company shall bear all fees and
---------------------
expenses incurred in connection with the performance of its obligations under
Sections 1 through 3 hereof (including the reasonable fees and expenses of
Mayer, Brown & Platt, counsel for the Initial Purchasers, incurred in connection
with the Registered Exchange Offer), whether or not the Registered Exchange
Offer or a Shelf Registration is filed or becomes effective, and, in the event
of a Shelf Registration, shall bear or reimburse the Holders of the Notes
covered thereby or, if applicable, the Private Exchange Notes covered thereby
for the reasonable fees and disbursements of one firm of counsel designated by
the Holders of a majority in principal amount of the Notes covered thereby and,
if applicable, the Private Exchange Notes covered thereby to act as counsel for
the Holders of the Notes covered thereby, and, if applicable, the Private
Exchange Notes covered thereby in connection therewith.
5. Indemnification. (a) The Company agrees to indemnify and hold
---------------
harmless each Holder of the Notes or, if applicable, the Private Exchange Notes
and each person, if any, who controls such Holder within the meaning of the
Securities Act or the Exchange Act (each Holder and such controlling persons are
referred to collectively as the "Indemnified Parties") from and against any
losses, claims, damages or liabilities, joint or several, or any actions in
respect thereof (including, but not limited to, any losses, claims, damages,
liabilities or actions relating to purchases and sales of the Notes) resulting
from sales made pursuant to a Registration Statement, to which each Indemnified
Party may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement or prospectus or in any
amendment or supplement thereto, or arise out of, or are
-11-
<PAGE>
based upon, the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse, as incurred, the Indemnified Parties for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action in
respect thereof; provided, however, that the Company shall not be liable in any
-------- -------
such case to the extent that such loss, claim, damage or liability arises out of
or is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in a Registration Statement or prospectus or in any
amendment or supplement thereto or in any preliminary prospectus relating to a
Shelf Registration in reliance upon and in conformity with written information
pertaining to such Holder and furnished to the Company by or on behalf of such
Holder specifically for inclusion therein; and provided, further, that this
-------- -------
indemnity agreement will be in addition to any liability which the Company may
otherwise have to such Indemnified Party. The Company shall also indemnify
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution (as described in such
Registration Statement), their officers and directors and each person who
controls such persons (within the meaning of the Securities Act or the Exchange
Act) to the same extent as provided above with respect to the indemnification of
the Holders of the Notes if requested by such Holders.
(b) The Company Agrees to indemnify and hold harmless each Initial
Purchaser, any Participating Broker-Dealer and each person, if any, who controls
such Initial Purchaser or such Participating Broker-Dealer within the meaning of
the Securities Act or the Exchange Act (each Initial Purchaser, any
participating Broker-Dealer and such controlling persons are referred to
collectively as the "Exchange Offer Indemnified Parties") from and against any
losses, claims, damages or liabilities, joint or several, or any actions in
respect thereof (including, but not limited to, any losses, claims, damages,
liabilities or actions relating to purchases and sales of Exchange Notes), to
which each Exchange Offer Indemnified Party may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Exchange Offer Registration Statement or prospectus contained therein or in any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and shall
reimburse, as incurred, the Exchange Offer Indemnified Parties for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss,
-12-
<PAGE>
claim, damage, liability or action in respect thereof; provided, however, that
-------- -------
the Company shall not be liable in any such case to the extent that such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in any Exchange
Offer Registration Statement or prospectus contained therein or in any amendment
or supplement thereto in reliance upon and in conformity with written
information pertaining to such Exchange Offer Indemnified Party and furnished to
the Company by or on behalf of such Initial Purchaser or such Participating
Broker-Dealer specifically for inclusion therein; and provided, further, that
-------- -------
this indemnity agreement will be in addition to any liability which the Company
may otherwise have to such Exchange Offer Indemnified Party.
(c) Each Holder of the Notes or, if applicable, the Private Exchange
Notes, severally and not jointly, will indemnify and hold harmless the Company
and each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act from and against any losses, claims, damages
or liabilities or any actions in respect thereof, to which the Company or any
such controlling person may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in a Registration Statement or prospectus
or in any amendment or supplement thereto or in any preliminary prospectus
relating to a Shelf Registration, or arise out of or are based upon the omission
or alleged omission to state therein a material fact necessary to make the
statements therein not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information pertaining to
such Holder and furnished to the Company by or on behalf of such Holder
specifically for inclusion therein; and, subject to the limitation set forth
immediately preceding this clause, shall reimburse, as incurred, the Company for
any legal or other expenses reasonably incurred by the Company or any such
controlling person in connection with investigating or defending any loss,
claim, damage, liability or action in respect thereof. This indemnity agreement
will be in addition to any liability which such Holder may otherwise have to the
Company or any of its controlling persons.
(d) Promptly after receipt by an indemnified party under this Section
5 of the notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 5,
notify the indemnifying party of the commencement thereof; but
-13-
<PAGE>
the omission so to notify the indemnifying party will not, in any event, relieve
the indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraph (a), (b) or (c) above. In
case any such action is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof the
indemnifying party will not be liable to such indemnified party under this
Section 5 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(e) If the indemnification provided for in this Section 5 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a), (b) or (c) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to in subsection (a), (b) or (c) above (i) in such proportion as is appropriate
to reflect the relative benefits received by the indemnifying party or parties
on the one hand and the indemnified party on the other from the offering of the
Notes or (ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the indemnifying party or parties on the one hand and the indemnified
party on the other in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities (or actions in respect thereof)
as well as any other relevant equitable considerations. The relative fault of
the parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or such Holder or such other indemnified person, as the case may
be, on
-14-
<PAGE>
the other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid
by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (e). Notwithstanding any other
provision of this Section 5(e), the Holders of the Notes or, if applicable, the
Private Exchange Notes shall not be required to contribute any amount in excess
of the amount by which the net proceeds received by such Holders from the sale
of the Notes or, if applicable, the Private Exchange Notes pursuant to a
Registration Statement exceeds the amount of damages which such Holders have
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (e), each person,
if any, who controls such indemnified party within the meaning of the Securities
Act or the Exchange Act shall have the same rights to contribution as such
indemnified party and each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as the Company.
(f) The agreements contained in this Section 5 shall survive the sale
of the Notes, the Exchange Notes or, if applicable, the Private Exchange Notes
pursuant to a Registration Statement and shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any indemnified party.
6. Additional Interest Under Certain Circumstances. (a) Additional
-----------------------------------------------
interest (the "Additional Interest") with respect to the Notes shall be assessed
as follows:
(i) if the Exchange Offer Registration Statement in respect of the
Notes or a Shelf Registration Statement in respect of the Notes is not
filed with the Commission by April 15, 1994, Additional Interest shall be
accrued on the Notes over and above the stated interest from and including
April 16, 1994, until but excluding the earlier of (A) the date the
Exchange Offer Registration Statement in respect of the Notes is filed with
the Commission and (B) July 15, 1994, at a rate of .50% per annum;
(ii) if by July 14, 1994, neither the Registered Exchange Offer is
consummated nor the Shelf Registration Statement in respect of the Notes is
declared effective by
-15-
<PAGE>
the Commission, Additional Interest shall be accrued on the Notes over and
above the stated interest from and including July 15, 1994, until but
excluding the earlier of (A) the date of the consummation of the Registered
Exchange Offer and (B) the effective date of a Shelf Registration Statement
in respect of the Notes, at a rate of .50% per annum;
(iii) Any amounts of Additional Interest due pursuant to clause
(a)(i) or (a)(ii) of Section 6 above will be payable in cash on the same
original interest payment dates of the Notes. The amount of Additional
Interest will be determined by multiplying the applicable Additional
Interest rate by the principal amount of the Notes, multiplied by a
fraction, the numerator of which is the number of days such Additional
Interest rate was applicable during such period (determined on the basis of
a 360-day year comprised of twelve 30-day months), and the denominator of
which is 360.
(b) If the Company effects the Registered Exchange Offer, the Company
will be entitled to close the Registered Exchange Offer 30 days after the
commencement thereof provided that the Company has accepted all the Notes
theretofore validly tendered in accordance with the terms of the Registered
Exchange Offer.
7. Miscellaneous.
-------------
(a) Amendments and Waivers. The provisions of this Agreement may not
----------------------
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Company and the written
consent of the Holders of a majority in principal amount of the Notes affected
by such amendment, modification, supplement, waiver or consents.
(b) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand delivery, first-class mail,
facsimile transmission, or air courier which guarantees overnight delivery:
(1) if to a Holder of the Notes, at the most current address given by
such Holder to the Company in accordance with the provisions of this
Section 7(b), which address initially is, with respect to each Holder, the
address of such Holder to which confirmation of the sale of the Notes to
such Holder was first sent by the Initial Purchasers, with a copy in like
manner to you as follows:
CS First Boston Corporation
227 West Monroe Street
Chicago, Illinois 60606
-16-
<PAGE>
Fax No.: (312) 750-1824
Attention: Steven P. Anderson
with a copy to:
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Fax No.: (312) 701-7711
Attention: John R. Sagan
(2) if to the Initial Purchasers, at the addresses specified in
Section 7(b)(1);
(3) if to the Company, at its address as follows:
Cincinnati Milacron Inc.
4701 Marburg Avenue
Cincinnati, Ohio 45209
Fax No.: (513) 841-8287
Attention: Secretary
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Fax No.: (212) 474-3700
Attention: James M. Edwards
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.
(c) Successors and Assigns. This Agreement shall be binding upon the
----------------------
Company and its successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(e) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
-17-
<PAGE>
(f) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the internal laws of the State of New York.
(g) Severability. If any one or more of the provisions contained
------------
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
-18-
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the several Initial Purchasers and the Company in accordance with its
terms.
Very truly yours,
CINCINNATI MILACRON INC.
By: /s/ Ronald D. Brown
---------------------
Title: Vice President
The foregoing Exchange Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.
CS FIRST BOSTON CORPORATION
By: Steven P. Anderson
------------------
Director
Acting on behalf of itself and
as the Representative of the
several Initial Purchasers
-19-
<PAGE>
EXHIBIT 5
LETTERHEAD OF
CRAVATH, SWAINE & MOORE
April 7, 1994
$115,000,000
Cincinnati Milacron Inc.
8-3/8% Notes due 2004
Dear Sirs:
We have acted as special counsel to Cincinnati Milacron Inc., a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-4 (the "Registration Statement") of the Company, filed on April 7, 1994,
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"). The Registration Statement relates to
$115,000,000 aggregate principal amount of the Company's 8-3/8% Notes Due 2004
(the "New Notes") to be offered in exchange for any and all of the Company's
outstanding 8-3/8% Notes Due 2004 (the "Old Notes").
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments as we have deemed necessary or appropriate for the
purposes of this opinion, including (a) the Certificate of Incorporation and
By-laws of the Company, as amended through the date hereof, (b) certain records
of proceedings of the Board of Directors of the Company, (c) the Registration
Statement, (d) the Indenture dated as of July 1, 1985, as supplemented by the
First Supplemental Indenture date as of February 26, 1987, and the Second
Supplement Indenture dated as of March 16, 1994 (as so supplemented, the
"Indenture"), between the Company and BankAmerica National Trust Company
(formerly BankAmerica Trust Company of New York), as Trustee (the "Trustee").
<PAGE>
2
Based on the foregoing, we are of opinion that the New Notes, when duly
executed by the Company and authenticated by the Trustee in accordance with the
terms of the Indenture and duly issued and delivered by the Company in exchange
for an equal principal amount of Old Notes, will be duly issued and will
constitute valid and binding obligations of the Company entitled to the benefits
of the Indenture.
We are admitted to practice only in the State of New York and, accordingly, we
do not express any opinion as to matters governed by any laws other than the
laws of the State of New York, the General Corporation Law of the State of
Delaware and the Federal laws of the United States of America.
We hereby consent to be named in the Registration Statement, and in the
Prospectus which constitutes a part thereof, as the attorneys who will pass upon
legal matters in connection with the issuance of the New Notes and to the filing
of this opinion as an exhibit to the Registration Statement.
Very truly yours,
Cravath, Swaine, & Moore
Cincinnati Milacron Inc.
4701 Marburg Avenue
Cincinnati, Ohio 45209
4NS
<PAGE>
EXHIBIT 12
CINCINNATI MILACRON INC.
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
------ ----- ------ ----- -----
DOLLARS IN MILLIONS
<S> <C> <C> <C> <C> <C>
Earnings:
Income (loss) before income
taxes........................... $(37.2) $27.0 $(73.4) $(7.8) $39.9
Add fixed charges (see below).... 21.7 22.4 21.9 23.4 24.6
Less capitalized interest
included in fixed charges....... -- -- (.4) (1.2) --
------ ----- ------ ----- -----
Earnings as defined.............. $(15.5) $49.4 $(51.9) $14.4 $64.5
====== ===== ====== ===== =====
Fixed Charges:
Interest expense................. $ 15.7 $19.1 $ 19.1 $19.7 $22.5
Other adjustments(a)............. 6.0 3.3 2.8 3.7 2.1
------ ----- ------ ----- -----
Fixed charges as defined......... $ 21.7 $22.4 $ 21.9 $23.4 $24.6
====== ===== ====== ===== =====
Ratio of earnings to fixed
charges......................... $(37.2)(b) 2.2 $(73.8)(c) $(9.0)(d) 2.6
====== ===== ====== ===== =====
</TABLE>
- --------
(a) Other adjustments represents interest capitalized and a portion of rental
expense representative of an interest factor.
(b) The deficiency of $37.2 million in fiscal year 1993 results from a
nonrecurring charge of $47.1 million for the consolidation of domestic
machine tool manufacturing operations and nonrecurring charges totaling
$22.8 million for the disposition of the Company's Sano business.
(c) The deficiency of $73.8 million in fiscal year 1991 results from a
nonrecurring charge of $75.1 million for plant closing and relocation of
certain machine tool manufacturing operations.
(d) The deficiency of $9.0 million in fiscal year 1990 results from a
nonrecurring charge of $26.6 million for product discontinuance and the
reorganization of grinding machine and certain other machine tool
manufacturing operations.
NOTE:
The ratio of earnings to fixed charges is calculated by dividing fixed charges
into the sum of income before taxes and fixed charges. Fixed charges consist
of interest expense, including capitalized interest and a portion of rental
expense representative of an interest factor.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated February 28, 1994 in the Registration Statement
(Form S-4) and related Prospectus of Cincinnati Milacron Inc. for the
registration of $115,000,000 of 8 3/8% Notes.
ERNST & YOUNG
Cincinnati, Ohio
April 6, 1994
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated February 15, 1993 on the consolidated financial statements of GTE
Valenite Corporation and subsidiaries incorporated by reference in Cincinnati
Milacron Inc.'s registration statement on Form S-4.
Arthur Andersen & Co.
April 6, 1994,
Detroit, Michigan
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
As independent auditors, we hereby consent to the incorporation by reference
in the Prospectus constituting a part of the Registration Statement on Form S-4
of Cincinnati Milacron Inc. for the registration of the $115,000,000 Principal
Amount of 8.375% Notes Due 2004, of our report dated December 10, 1993,
relating to the combined financial statements of the Plastics Machinery
Division of Klockner Ferromatik Desma GmbH. and to all references to our Firm
included in or made a part of the Registration Statement.
BDO Binder GmbH
Wirtschaftsprufungsgesellschaft
Dusseldorf
April 6, 1994
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
-----------------
WHEREAS, Cincinnati Milacron Inc. (the "Corporation") proposed to file with
the Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement to register up to $125,000,000 principal amount of Notes
Due 2004.
NOW THEREFORE, I, in my capacity as a director and/or officer of the
Corporation, hereby appoint Ronald D. Brown, Wayne F. Taylor and Walter S. Wood
and each of them severally, my true and lawful attorney or attorneys with power
to act with or without the other and with full power of substitution and
resubstitution, to execute in my name, place and stead, in my capacity as a
director and/or officer of the Corporation, said Registration Statement and any
amendments thereto and all instruments necessary or incidental in connection
therewith, and to file same with the Securities and Exchange Commission, all as
fully to all intents and purposes as I might or could do in person, and I hereby
ratify and approve the acts of said attorneys and each of them.
IN WITNESS WHEREOF, I have executed this instrument this 22 day of December,
1993.
/s/ Daniel J. Meyer
-------------------
Daniel J. Meyer
Chairman, Chief Executive
Officer and Director
<PAGE>
POWER OF ATTORNEY
-----------------
WHEREAS, Cincinnati Milacron Inc. (the "Corporation") proposed to file with
the Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement to register up to $125,000,000 principal amount of Notes
Due 2004.
NOW THEREFORE, I, in my capacity as a director and/or officer of the
Corporation, hereby appoint Ronald D. Brown, Wayne F. Taylor and Walter S. Wood
and each of them severally, my true and lawful attorney or attorneys with power
to act with or without the other and with full power of substitution and
resubstitution, to execute in my name, place and stead, in my capacity as a
director and/or officer of the Corporation, said Registration Statement and any
amendments thereto and all instruments necessary or incidental in connection
therewith, and to file same with the Securities and Exchange Commission, all as
fully to all intents and purposes as I might or could do in person, and I hereby
ratify and approve the acts of said attorneys and each of them.
IN WITNESS WHEREOF, I have executed this instrument this 23 day of December,
1993.
/s/ Raymond E. Ross
-------------------
Raymond E. Ross
President, Chief Operating
Officer and Director
<PAGE>
POWER OF ATTORNEY
-----------------
WHEREAS, Cincinnati Milacron Inc. (the "Corporation") proposed to file with
the Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement to register up to $125,000,000 principal amount of Notes
Due 2004.
NOW THEREFORE, I, in my capacity as a director and/or officer of the
Corporation, hereby appoint Ronald D. Brown, Wayne F. Taylor and Walter S. Wood
and each of them severally, my true and lawful attorney or attorneys with power
to act with or without the other and with full power of substitution and
resubstitution, to execute in my name, place and stead, in my capacity as a
director and/or officer of the Corporation, said Registration Statement and any
amendments thereto and all instruments necessary or incidental in connection
therewith, and to file same with the Securities and Exchange Commission, all as
fully to all intents and purposes as I might or could do in person, and I hereby
ratify and approve the acts of said attorneys and each of them.
IN WITNESS WHEREOF, I have executed this instrument this 23 day of December,
1993.
/s/ Darryl F. Allen
-------------------
Darryl F. Allen
Director
<PAGE>
POWER OF ATTORNEY
-----------------
WHEREAS, Cincinnati Milacron Inc. (the "Corporation") proposed to file with
the Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement to register up to $125,000,000 principal amount of Notes
Due 2004.
NOW THEREFORE, I, in my capacity as a director and/or officer of the
Corporation, hereby appoint Ronald D. Brown, Wayne F. Taylor and Walter S. Wood
and each of them severally, my true and lawful attorney or attorneys with power
to act with or without the other and with full power of substitution and
resubstitution, to execute in my name, place and stead, in my capacity as a
director and/or officer of the Corporation, said Registration Statement and any
amendments thereto and all instruments necessary or incidental in connection
therewith, and to file same with the Securities and Exchange Commission, all as
fully to all intents and purposes as I might or could do in person, and I hereby
ratify and approve the acts of said attorneys and each of them.
IN WITNESS WHEREOF, I have executed this instrument this 24 day of December,
1993.
/s/ Neil A. Armstrong
---------------------
Neil A. Armstrong
Director
<PAGE>
POWER OF ATTORNEY
-----------------
WHEREAS, Cincinnati Milacron Inc. (the "Corporation") proposed to file with
the Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement to register up to $125,000,000 principal amount of Notes
Due 2004.
NOW THEREFORE, I, in my capacity as a director and/or officer of the
Corporation, hereby appoint Ronald D. Brown, Wayne F. Taylor and Walter S. Wood
and each of them severally, my true and lawful attorney or attorneys with power
to act with or without the other and with full power of substitution and
resubstitution, to execute in my name, place and stead, in my capacity as a
director and/or officer of the Corporation, said Registration Statement and any
amendments thereto and all instruments necessary or incidental in connection
therewith, and to file same with the Securities and Exchange Commission, all as
fully to all intents and purposes as I might or could do in person, and I hereby
ratify and approve the acts of said attorneys and each of them.
IN WITNESS WHEREOF, I have executed this instrument this 23 day of December,
1993.
/s/ Lyle Everingham
---------------------
Lyle Everingham
Director
<PAGE>
POWER OF ATTORNEY
-----------------
WHEREAS, Cincinnati Milacron Inc. (the "Corporation") proposed to file with
the Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement to register up to $125,000,000 principal amount of Notes
Due 2004.
NOW THEREFORE, I, in my capacity as a director and/or officer of the
Corporation, hereby appoint Ronald D. Brown, Wayne F. Taylor and Walter S. Wood
and each of them severally, my true and lawful attorney or attorneys with power
to act with or without the other and with full power of substitution and
resubstitution, to execute in my name, place and stead, in my capacity as a
director and/or officer of the Corporation, said Registration Statement and any
amendments thereto and all instruments necessary or incidental in connection
therewith, and to file same with the Securities and Exchange Commission, all as
fully to all intents and purposes as I might or could do in person, and I hereby
ratify and approve the acts of said attorneys and each of them.
IN WITNESS WHEREOF, I have executed this instrument this 23 day of December,
1993.
/s/ James A. D. Geier
----------------------
James A. D. Geier
Director
<PAGE>
POWER OF ATTORNEY
-----------------
WHEREAS, Cincinnati Milacron Inc. (the "Corporation") proposed to file with
the Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement to register up to $125,000,000 principal amount of Notes
Due 2004.
NOW THEREFORE, I, in my capacity as a director and/or officer of the
Corporation, hereby appoint Ronald D. Brown, Wayne F. Taylor and Walter S. Wood
and each of them severally, my true and lawful attorney or attorneys with power
to act with or without the other and with full power of substitution and
resubstitution, to execute in my name, place and stead, in my capacity as a
director and/or officer of the Corporation, said Registration Statement and any
amendments thereto and all instruments necessary or incidental in connection
therewith, and to file same with the Securities and Exchange Commission, all as
fully to all intents and purposes as I might or could do in person, and I hereby
ratify and approve the acts of said attorneys and each of them.
IN WITNESS WHEREOF, I have executed this instrument this 24 day of December,
1993.
/s/ Harry A. Hammerly
---------------------
Harry A. Hammerly
Director
<PAGE>
POWER OF ATTORNEY
-----------------
WHEREAS, Cincinnati Milacron Inc. (the "Corporation") proposed to file with
the Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement to register up to $125,000,000 principal amount of Notes
Due 2004.
NOW THEREFORE, I, in my capacity as a director and/or officer of the
Corporation, hereby appoint Ronald D. Brown, Wayne F. Taylor and Walter S. Wood
and each of them severally, my true and lawful attorney or attorneys with power
to act with or without the other and with full power of substitution and
resubstitution, to execute in my name, place and stead, in my capacity as a
director and/or officer of the Corporation, said Registration Statement and any
amendments thereto and all instruments necessary or incidental in connection
therewith, and to file same with the Securities and Exchange Commission, all as
fully to all intents and purposes as I might or could do in person, and I hereby
ratify and approve the acts of said attorneys and each of them.
IN WITNESS WHEREOF, I have executed this instrument this 22 day of December,
1993.
/s/ Robert P. Lienesch
----------------------
Robert P. Lienesch
Controller
<PAGE>
POWER OF ATTORNEY
-----------------
WHEREAS, Cincinnati Milacron Inc. (the "Corporation") proposed to file with
the Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement to register up to $125,000,000 principal amount of Notes
Due 2004.
NOW THEREFORE, I, in my capacity as a director and/or officer of the
Corporation, hereby appoint Ronald D. Brown, Wayne F. Taylor and Walter S. Wood
and each of them severally, my true and lawful attorney or attorneys with power
to act with or without the other and with full power of substitution and
resubstitution, to execute in my name, place and stead, in my capacity as a
director and/or officer of the Corporation, said Registration Statement and any
amendments thereto and all instruments necessary or incidental in connection
therewith, and to file same with the Securities and Exchange Commission, all as
fully to all intents and purposes as I might or could do in person, and I hereby
ratify and approve the acts of said attorneys and each of them.
IN WITNESS WHEREOF, I have executed this instrument this 23 day of December,
1993.
/s/ James E. Perella
--------------------
James E. Perella
Director
<PAGE>
POWER OF ATTORNEY
-----------------
WHEREAS, Cincinnati Milacron Inc. (the "Corporation") proposed to file with
the Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement to register up to $125,000,000 principal amount of Notes
Due 2004.
NOW THEREFORE, I, in my capacity as a director and/or officer of the
Corporation, hereby appoint Ronald D. Brown, Wayne F. Taylor and Walter S. Wood
and each of them severally, my true and lawful attorney or attorneys with power
to act with or without the other and with full power of substitution and
resubstitution, to execute in my name, place and stead, in my capacity as a
director and/or officer of the Corporation, said Registration Statement and any
amendments thereto and all instruments necessary or incidental in connection
therewith, and to file same with the Securities and Exchange Commission, all as
fully to all intents and purposes as I might or could do in person, and I hereby
ratify and approve the acts of said attorneys and each of them.
IN WITNESS WHEREOF, I have executed this instrument this 23 day of December,
1993.
/s/ Joseph A. Steger
--------------------
Joseph A. Steger
Director
<PAGE>
POWER OF ATTORNEY
-----------------
WHEREAS, Cincinnati Milacron Inc. (the "Corporation") proposed to file with
the Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement to register up to $125,000,000 principal amount of Notes
Due 2004.
NOW THEREFORE, I, in my capacity as a director and/or officer of the
Corporation, hereby appoint Ronald D. Brown, Wayne F. Taylor and Walter S. Wood
and each of them severally, my true and lawful attorney or attorneys with power
to act with or without the other and with full power of substitution and
resubstitution, to execute in my name, place and stead, in my capacity as a
director and/or officer of the Corporation, said Registration Statement and any
amendments thereto and all instruments necessary or incidental in connection
therewith, and to file same with the Securities and Exchange Commission, all as
fully to all intents and purposes as I might or could do in person, and I hereby
ratify and approve the acts of said attorneys and each of them.
IN WITNESS WHEREOF, I have executed this instrument this 23 day of December,
1993.
/s/ Harry C. Stonecipher
------------------------
Harry C. Stonecipher
Director
<PAGE>
POWER OF ATTORNEY
-----------------
WHEREAS, Cincinnati Milacron Inc. (the "Corporation") proposed to file with
the Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement to register up to $125,000,000 principal amount of Notes
Due 2004.
NOW THEREFORE, I, in my capacity as a director and/or officer of the
Corporation, hereby appoint Ronald D. Brown, Wayne F. Taylor and Walter S. Wood
and each of them severally, my true and lawful attorney or attorneys with power
to act with or without the other and with full power of substitution and
resubstitution, to execute in my name, place and stead, in my capacity as a
director and/or officer of the Corporation, said Registration Statement and any
amendments thereto and all instruments necessary or incidental in connection
therewith, and to file same with the Securities and Exchange Commission, all as
fully to all intents and purposes as I might or could do in person, and I hereby
ratify and approve the acts of said attorneys and each of them.
IN WITNESS WHEREOF, I have executed this instrument this 23 day of December,
1993.
/s/ Ronald D. Brown
-------------------
Ronald D. Brown
Vice President-Finance
<PAGE>
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b) (2)_____
BANKAMERICA NATIONAL TRUST COMPANY
(Exact name of trustee as specified in its charter)
95-3804037
(I.R.S. Employer Identification No.)
One World Trade Center, New York, New York 10048-1191
(Address of principal executive offices) (Zip Code)
General Counsel
BankAmerica National Trust Company
335 Madison Avenue, 7th Floor
New York, NY 10017
(212) 503-8297
(Name, address and telephone number of agent for services)
____________________
Cincinnati Milacron, Inc.
(Exact name of obligor as specified in its charter)
Delaware 31-1062125
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4701 Marburg Avenue
Cincinnati, Ohio 45209
(Address of principal executive offices) (Zip Code)
____________________
Debt Securities
(Title of the indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Comptroller of the Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of The Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
Yes
Item 2. Affiliations with Obligor and Underwriters.
If the obligor or any underwriter for the obligor is
an affiliate of the trustee, describe each such affiliation.
Neither the obligor nor any underwriter for the
obligor is an affiliate of the trustee. (See Note on Page 5)
Item 3. Voting securities of the Trustee.
Not Applicable.
Item 4. Trusteeships under Other Indentures.
Not Applicable.
Item 5. Interlocking Directorates and Similar Relationships
with the Obligor or Underwriters.
Not Applicable.
Item 6. Voting Securities of the Trustee Owned by the Obligor
or its Officials.
Not Applicable.
Item 7. Voting Securities of the Trustee Owned by
Underwriters or their Officials.
Not Applicable.
Item 8. Securities of the Obligor Owned or Held by the Trustee.
Not Applicable.
<PAGE>
Item 9. Securities of Underwriters Owned or Held by the
Trustee.
Not Applicable.
Item 10. Ownership or Holdings by the Trustee of Voting Securities
of Certain Affiliates or Security Holders of the Obligor.
Not Applicable.
Item 11. Ownership or Holdings by the Trustee of any Securities of
a Person Owning 50 Percent or More of the Voting Securities
of the Obligor.
Not Applicable.
Item 12. Indebtedness of the Obligor to the Trustee.
Not Applicable.
Item 13. Defaults by the Obligor.
Not Applicable.
Item 14. Affiliations with the Underwriters.
Not Applicable.
Item 15. Foreign Trustee.
Not Applicable.
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this
statement of eligibility and qualification.
Exhibit 1 A copy of the Articles of Association
of the Trustee; incorporated herein by
reference to Exhibit 1 filed with Form
T-1 Statement, Registration No. 33-34670
Exhibit 2 A copy of the Certificate of Authority
to Commence Business of the Trustee,
incorporated herein by reference to
Exhibit 2 filed with Form T-1 Statement,
Registration No. 2-97868
Exhibit 3 Not applicable, included in Exhibit 1;
Exhibit 4 A copy of the existing by-laws of the
Trustee; incorporated herein by
reference to Exhibit 4 filed with T-1
statement, Registration No. 33-34670
Exhibit 5 Not Applicable.
Exhibit 6 Consents of BankAmerica National Trust
Company formerly Security Pacific National
Trust Company (New York) required by Section 321(b)
of the Trust Indenture Act of 1939; incorporated
herein by reference to Exhibit 6, filed with Form
T-1 Statement, Registration No. 2-97868.
Exhibit 7 A copy of the latest report of the Trustee
published pursuant to the law or the requirements
of its supervising or examining authority.
Exhibit 8 Not applicable.
Exhibit 9 Not applicable.
____________________
<PAGE>
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base responsive answers to Item 2 the answer to
said Item is based on incomplete information.
Item 2 may be considered correct unless amended by an amendment to
this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture
Act of 1939 the Trustee, BankAmerica National Trust Company,
a national banking association organized and existing
under the laws of the United States of America, has duly caused
this statement of eligibility and qualification to be signed on
its behalf by the undersigned, thereunto duly authorized, all in
The City of New York and State of New York, on the 28th day of March, 1994.
BANKAMERICA NATIONAL TRUST COMPANY
By Mary Fonti
Trust Officer
<PAGE>
BANKAMERICA NATIONAL TRUST COMPANY Exhibit 7 to Form T-1
One World Trade Center, 18th Floor
New York City, NY 10048-1191
FDIC Certificate Number 24430
Consolidated Report of Condition for
Insured Commercial Banks for January 26, 1994
All schedules are to be reported in thousands of dollars. Unless
otherwise indicated, report the amount outstanding as of the last
business day of the quarter.
SCHEDULE RC - BALANCE SHEET
Dollar Amounts in Thousands Bil Mil Thou
___________________________________________________________________
Assets
1. Cash and balances due from depository
institutions (from Schedule RC-A):
a. Noninterest-bearing balances and
currency and coin [1]............................393,442
b. Interest-bearing balances [2].................... 22,585
2. Securities (from Schedule RC-B)........................6,005
3. Federal funds sold and securities
purchases under agreements to resell:
a. Federal funds sold...............................
b. Securities purchased under
agreements to resell................................-0-
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned
income (from Schedule RC-C).............348,713
b. LESS: Allowance for loan and
lease losses................................900
c. LESS: Allocated transfer risk
reserve................................
d. Loans and leases, net of
unearned income, allowance,
and reserve (item 4.a minus
4.b and 4.c)....................................347,813
5. Assets held in trading accounts (from
Schedule RC-D)........................................
6. Premises and fixed assets (including
capitalized leases)................................... 1,328
7. Other real estate owned...............................
8. Investments in unconsolidated subsidiaries and
associated companies..................................
9. Customer's liability to this bank on
acceptances outstanding...............................
10. Intangible assets (from Schedule RC-M)................ 19,029
11. Other assets (from Schedule RC-F)..................... 29,667
-------
12. Total assets (sum of items 1 through 11)..............819,869
_______________
[1] Includes cash items in process of collection and unposted debits.
[2] Includes time certificates of deposit not held in trading accounts.
<PAGE>
SCHEDULE RC-CONTINUED
Dollar Amounts in Thousands Bil Mil Thou
_________________________________________________________________
Liabilities
13. Deposits:
a. In domestic offices (sum of totals of columns
A and C from Schedule RC-E).........................380,620
(1) Noninterest-bearing [1].........................380,620
(2) Interest-bearing.....................
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................
(1) Noninterest-bearing...........................
(2) Interest-bearing..............................
14. Federal funds purchased and securities
sold under agreements to repurchase:
a. Federal funds purchased.............................270,000
b. Securities sold under agreements to repurchase.........-0-
15. Demand notes issued to the U.S. Treasury.............
16. Other borrowed money.....................................4,239
17. Mortgage indebtedness and obligations
under capitalized leases.............................
18. Bank's liability on acceptances executed
and outstanding......................................
19. Notes and debentures subordinated to deposits........
20. Other liabilities (from Schedule RC-G)............... 27,501
21. Total liabilities (sum of items 13 through 20).........682,360
22. Limited-life preferred stock.........................
EQUITY CAPITAL
23. Perpetual preferred stock............................
24. Common Stock......................................... 500
25. Surplus............................................... 130,645
26. Undivided profits and capital reserves................. 6,364
27. Cumulative foreign currency translation adjustments..
28. Total equity capital (sum of items 23 through 27).... 137,509
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21,22 and 28)........ 819,869
_______________
1] Includes total demand deposits and noninterest-bearing time and
savings deposits.
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
CINCINNATI
MILACRON INC.
OFFER FOR ALL OUTSTANDING
8 3/8% NOTES DUE 2004
IN EXCHANGE FOR
8 3/8% NOTES DUE 2004
PURSUANT TO THE PROSPECTUS, DATED , 1994.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON
, 1994, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE
WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
By Mail: Facsimile Transmission Number: By Hand/Overnight
Delivery:
BankAmerica National (212) 390-3116
Trust Company BankAmerica National Trust
Corporate Trust Company
Operations (For Eligible Institutions Only)
Confirm by Telephone: Corporate Trust Operations
P.O. Box 464, Bowling (212) 390-3042 One World Trade Center
Green Station 18th Floor
New York, New York New York, New York 10048
10274-0464
For Information Call: (212) 390-3025
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL
NOT CONSTITUTE A VALID DELIVERY.
The undersigned acknowledges that he or she has received and reviewed the
Prospectus, dated , 1994 (the "Prospectus"), of Cincinnati Milacron Inc.,
a Delaware corporation (the "Company"), and this Letter of Transmittal (the
"Letter"), which together constitute the Company's offer (the "Exchange Offer")
to exchange an aggregate principal amount at maturity of up to $115,000,000 of
8 3/8% Notes Due 2004 (the "New Notes") of the Company for a like principal
amount at maturity of the issued and outstanding 8 3/8% Notes Due 2004 (the
"Old Notes") of the Company from the holders thereof.
For each Old Note accepted for exchange, the Holder of such Old Note will
receive a New Note having a principal amount at maturity equal to that of the
surrendered Old Note. Interest on the New Notes will accrue from the last
interest payment date on which interest was paid on the Old Notes surrendered
in exchange therefor or, if no interest has been paid on the Old Notes, from
the date of original issue of the Old Notes. If by July 14, 1994, neither the
Exchange Offer has been consummated nor a shelf registration statement with
respect to the Old Notes has been declared effective, interest will accrue on
each Old Note, from and including July 16, 1994, until but excluding the
earlier of the date of consummation of the Exchange Offer and the effective
date of a shelf registration statement at a rate of 8 7/8% per annum. Holders
of Old Notes accepted for exchange will be deemed to have waived the right to
receive any other payments or accrued interest on the Old Notes. The Company
reserves the right, at any time or from time to time, to extend the Exchange
Offer at its discretion, in which event the term "Expiration Date" shall mean
the latest time and date to which the Exchange Offer is extended. The Company
shall notify the holders of the Old Notes of any extension by means of a press
release or other public announcement prior to 9:00 A.M., New York City time, on
the next business day after the previously scheduled Expiration Date.
This Letter is to be completed by a holder of Old Notes either if
certificates are to be forwarded herewith or if a tender of certificates for
Old Notes, if available, is to be made by book-entry transfer to the account
maintained by the Exchange Agent at The Depository Trust Company (the "Book-
Entry Transfer Facility") pursuant to the procedures set forth in "The Exchange
Offer" section of the Prospectus. Holders of Old Notes whose certificates are
not immediately available, or who are unable to deliver their certificates or
confirmation of the book-entry tender of their Old Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility (a "Book-Entry
Confirmation") and all other documents required by this Letter to the Exchange
Agent on or prior to the Expiration Date, must tender their Old Notes according
to the guaranteed delivery procedures set forth in "The Exchange Offer--
Guaranteed Delivery Procedures" section of the Prospectus. See Instruction 1.
Delivery of documents to the Book-Entry Transfer Facility does not constitute
delivery to the Exchange Agent.
The undersigned has completed the appropriate boxes below and signed this
Letter to indicate the action the undersigned desires to take with respect to
the Exchange Offer.
<PAGE>
List below the Old Notes to which this Letter relates. If the space provided
below is inadequate, the certificate numbers and principal amount at maturity
of Old Notes should be listed on a separate signed schedule affixed hereto.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES 1 2 3
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
AGGREGATE
PRINCIPAL PRINCIPAL
NAME(S) AND ADDRESS(ES) AMOUNT AT AMOUNT AT
OF REGISTERED HOLDER(S) CERTIFICATE MATURITY OF MATURITY
(PLEASE FILL IN, IF BLANK) NUMBER(S)* OLD NOTE(S) TENDERED**
- -------------------------------------------------------------------------------
------------- ------------- ------------
------------- ------------- ------------
------------- ------------- ------------
TOTAL
- -------------------------------------------------------------------------------
</TABLE>
*Need not be completed if Old Notes are being tendered by book-entry
transfer.
**Unless otherwise indicated in this column, a holder will be deemed to have
tendered ALL of the Old Notes represented by the Old Notes indicated in
column 2. See Instruction 2. Old Notes tendered hereby must be in
denominations of principal amount at maturity of $1,000 and any integral
multiple thereof. See Instruction 1.
[_]
CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution _______________________________________________
Account Number ____________ Transaction Code Number ___________
[_]
CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s) _____________________________________________
Window Ticket Number (if any) _______________________________________________
Date of Execution of Notice of Guaranteed Delivery __________________________
Name of Institution which guaranteed delivery _______________________________
IF DELIVERED BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING:
Account Number ___________ Transaction Code Number ___________
[_]
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name: _________________________________________________________________________
Address:_______________________________________________________________________
_______________________________________________________________________________
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the aggregate principal amount at
maturity of Old Notes indicated above. Subject to, and effective upon, the
acceptance for exchange of the Old Notes tendered hereby, the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Company all
right, title and interest in and to such Old Notes as are being tendered
hereby.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Old Notes
tendered hereby and that the Company will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances
and not subject to any adverse claim when the same are accepted by the
Company. The undersigned hereby further represents that any New Notes acquired
in exchange for Old Notes tendered hereby will have been acquired in the
ordinary course of business of the person receiving such New Notes, whether or
not such person is the undersigned, that neither the holder of such Old Notes
nor any such other person has an arrangement or understanding with any person
to participate in the distribution of such New Notes and that neither the
holder of such Old Notes nor any such other person is an "affiliate", as
defined in Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act"), of the Company.
<PAGE>
The undersigned also acknowledges that this Exchange Offer is being made in
reliance on an interpretation by the staff of the Securities and Exchange
Commission (the "SEC") that the New Notes issued in exchange for the Old Notes
pursuant to the Exchange Offer may be offered for resale, resold and otherwise
transferred by holders thereof (other than any such holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New Notes are acquired in
the ordinary course of such holders' business and such holders have no
arrangement with any person to participate in the distribution of such New
Notes. If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a distribution of
New Notes. If the undersigned is a broker-dealer that will receive New Notes
for its own account in exchange for Old Notes, it represents that the Old
Notes to be exchanged for the New Notes were acquired by it as a result of
market-making activities or other trading activities and acknowledges that it
will deliver a prospectus in connection with any resale of such New Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to complete the
sale, assignment and transfer of the Old Notes tendered hereby. All authority
conferred or agreed to be conferred in this Letter and every obligation of the
undersigned hereunder shall be binding upon the successors, assigns, heirs,
executors, administrators, trustees in bankruptcy and legal representatives of
the undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. This tender may be withdrawn only in accordance
with the procedures set forth in "The Exchange Offer--Withdrawal of Tenders"
section of the Prospectus.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the New Notes (and, if applicable,
substitute certificates representing Old Notes for any Old Notes not
exchanged) in the name of the undersigned or, in the case of a book-entry
delivery of Old Notes, please credit the account indicated above maintained at
the Book-Entry Transfer Facility. Similarly, unless otherwise indicated under
the box entitled "Special Delivery Instructions" below, please send the New
Notes (and, if applicable, substitute certificates representing Old Notes for
any Old Notes not exchanged) to the undersigned at the address shown above in
the box entitled "Description of Old Notes".
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD NOTES"
ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OLD NOTES
AS SET FORTH IN SUCH BOX ABOVE.
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4) (SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if cer- To be completed ONLY if cer-
tificates for Old Notes not tificates for Old Notes not
exchanged and/or New Notes exchanged and/or New Notes
are to be issued in the name are to be sent to someone
of and sent to someone other other than the person or per-
than the person or persons sons whose signature(s) ap-
whose signature(s) appear(s) pear(s) on this Letter above
on this Letter above, or if or to such person or persons
Old Notes delivered by book- at an address other than
entry transfer which are not shown in the box entitled
accepted for exchange are to "Description of Old Notes" on
be returned by credit to an this Letter above.
account maintained at the
Book-Entry Transfer Facility
other than the account indi-
cated above.
Mail: New Notes and/or Old Notes
to:
Name(s):......................
(PLEASE TYPE OR PRINT)
Issue: New Notes and/or Old ..............................
Notes to: (PLEASE TYPE OR PRINT)
Address ......................
Name(s) ...................... ..............................
(PLEASE TYPE OR PRINT) (INCLUDING ZIP CODE)
..............................
(PLEASE TYPE OR PRINT)
Address ......................
..............................
(INCLUDING ZIP CODE)
(COMPLETE SUBSTITUTE FORM W-9)
[_] Credit unexchanged Old
Notes delivered by book-
entry transfer to the Book-
Entry Transfer Facility
account set forth below.
______________________________
(Book-Entry Transfer Facility
Account Number, if
applicable)
IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE
CERTIFICATES FOR OLD NOTES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER
REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE
RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME,
ON THE EXPIRATION DATE.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE
COMPLETING ANY BOX ABOVE.
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9 ON REVERSE SIDE)
Dated: ................................... , 1994
x ............................ ...... , 1994
x ............................ ...... , 1994
SIGNATURE(S) OF OWNER DATE
Area Code and Telephone Number ..........
If a holder is tendering any Old Notes, this
Letter must be signed by the registered holder(s) as
the name(s) appear(s) on the certificate(s) for the
Old Notes or by any person(s) authorized to become
registered holder(s) by endorsements and documents
transmitted herewith. If signature is by a trustee,
executor, administrator, guardian, officer or other
person acting in a fiduciary or representative
capacity, please set forth full title. See
Instruction 3.
Name(s):...................................
...........................................
(PLEASE TYPE OR PRINT)
Capacity:..................................
Address:...................................
...........................................
(INCLUDING ZIP CODE)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 3)
Signature(s) Guaranteed by
an Eligible Institution: ..................
(AUTHORIZED SIGNATURE)
...........................................
(TITLE)
...........................................
(NAME AND FIRM)
Dated: ............................. , 1994
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER FOR THE 8 3/8%
NOTES DUE 2004 IN EXCHANGE FOR THE 8 3/8% NOTES DUE 2004 OF CINCINNATI MILACRON
INC.
1. DELIVERY OF THIS LETTER AND NOTES; GUARANTEED DELIVERY PROCEDURES.
This letter is to be completed by noteholders either if certificates are to
be forwarded herewith or if tenders are to be made pursuant to the procedures
for delivery by book-entry transfer set forth in "The Exchange Offer--Book-
Entry Transfer" section of the Prospectus. Certificates for all physically
tendered Old Notes, or Book-Entry Confirmation, as the case may be, as well as
a properly completed and duly executed Letter (or manually signed facsimile
hereof) and any other documents required by this Letter, must be received by
the Exchange Agent at the address set forth herein on or prior to the
Expiration Date, or the tendering holder must comply with the guaranteed
delivery procedures set forth below. Old Notes tendered hereby must be in
denominations of principal amount of maturity of $1,000 and any integral
multiple thereof.
Noteholders whose certificates for Old Notes are not immediately available or
who cannot deliver their certificates and all other required documents to the
Exchange Agent on or prior to the Expiration Date, or who cannot complete the
procedure for book-entry transfer on a timely basis, may tender their Old Notes
pursuant to the guaranteed delivery procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures" section of the Prospectus. Pursuant to
such procedures, (i) such tender must be made through an Eligible Institution,
(ii) prior to the Expiration Date, the Exchange Agent must receive from such
Eligible Institution a properly completed and duly executed Letter (or a
facsimile thereof) and Notice of Guaranteed Delivery, substantially in the form
provided by the Company (by facsimile transmission, mail or hand delivery),
setting forth the name and address of the holder of Old Notes and the amount of
Old Notes tendered, stating that the tender is being made thereby and
guaranteeing that within five New York Stock Exchange ("NYSE") trading days
after the date of execution of the Notice of Guaranteed Delivery, the
certificates for all physically tendered Old Notes, or a Book-Entry
Confirmation, as the case may be, and any other documents required by the
Letter will be deposited by the Eligible Institution with the Exchange Agent,
and (iii) the certificates for all physically tendered Old Notes, in proper
form for transfer, or Book-Entry Confirmation, as the case may be, and all
other documents required by this Letter, are received by the Exchange Agent
within five NYSE trading days after the date of execution of the Notice of
Guaranteed Delivery.
The method of delivery of this Letter, the Old Notes and all other required
documents is at the election and risk of the tendering holders, but the
delivery will be deemed made only when actually received or confirmed by the
Exchange Agent. If Old Notes are sent by mail, it is suggested that the mailing
be made sufficiently in advance of the Expiration Date to permit delivery to
the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration
Date.
See "The Exchange Offer" section of the Prospectus.
2. PARTIAL TENDERS (NOT APPLICABLE TO NOTEHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER).
If less than all of the Old Notes evidenced by a submitted certificate are to
be tendered, the tendering holder(s) should fill in the aggregate principal
amount at maturity of Old Notes to be tendered in the box above entitled
"Description of Old Notes--Principal Amount At Maturity Tendered". A reissued
certificate representing the balance of nontendered Old Notes will be sent to
such tendering holder, unless otherwise provided in the appropriate box on this
Letter, promptly after the Expiration Date. ALL OF THE OLD NOTES DELIVERED TO
THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE
INDICATED.
3. SIGNATURES ON THIS LETTER; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF
SIGNATURES.
If this Letter is signed by the registered holder of the Old Notes tendered
hereby, the signature must correspond exactly with the name as written on the
face of the certificates without any change whatsoever.
If any tendered Old Notes are owned of record by two or more joint owners,
all such owners must sign this Letter.
If any tendered Old Notes are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate copies of this Letter as there are different registrations of
certificates.
When this Letter is signed by the registered holder or holders of the Old
Notes specified herein and tendered hereby, no endorsements of certificates or
separate bond powers are required. If, however, the New Notes are to be issued,
or any untendered Old Notes are to be reissued, to a person other than the
registered holder, then endorsements of any certificates transmitted hereby or
separate bond powers are required. Signatures on such certificate(s) must be
guaranteed by an Eligible Institution.
If this Letter is signed by a person other than the registered holder or
holders of any certificate(s) specified herein, such certificate(s) must be
endorsed or accompanied by appropriate bond powers, in either case signed
exactly as the name or names of the registered holder or holders appear(s) on
the certificate(s) and signatures on such certificate(s) must be guaranteed by
an Eligible Institution.
If this Letter or any certificates or bond powers are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by the Company,
proper evidence satisfactory to the Company of their authority to so act must
be submitted.
ENDORSEMENTS ON CERTIFICATES FOR OLD NOTES OR SIGNATURES ON BOND POWERS
REQUIRED BY THIS INSTRUCTION 3 MUST BE GUARANTEED BY A FIRM WHICH IS A MEMBER
OF A REGISTERED NATIONAL SECURITIES EXCHANGE OR A MEMBER OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC. OR BY A COMMERCIAL BANK OR TRUST
COMPANY HAVING AN OFFICE OR CORRESPONDENT IN THE UNITED STATES (AN "ELIGIBLE
INSTITUTION").
SIGNATURES ON THIS LETTER NEED NOT BE GUARANTEED BY AN ELIGIBLE INSTITUTION,
PROVIDED THE OLD NOTES ARE TENDERED: (I) BY A REGISTERED HOLDER OF OLD NOTES
(WHICH TERM, FOR PURPOSES OF THE EXCHANGE OFFER, INCLUDES ANY PARTICIPANT IN
THE BOOK-ENTRY TRANSFER FACILITY SYSTEM WHOSE NAME APPEARS ON A SECURITY
POSITION LISTING AS THE HOLDER OF SUCH OLD NOTES) TENDERED WHO HAS NOT
COMPLETED THE BOX ENTITLED "SPECIAL ISSUANCE INSTRUCTIONS" OR "SPECIAL DELIVERY
INSTRUCTIONS" ON THIS LETTER, OR (II) FOR THE ACCOUNT OF AN ELIGIBLE
INSTITUTION.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Old Notes should indicate in the applicable box the name
and address to which New Notes issued pursuant to the Exchange Offer and/or
substitute certificates evidencing Old Notes not exchanged are to be issued or
sent, if different from the
<PAGE>
name or address of the person signing this Letter. In the case of issuance in
a different name, the employer identification or social security number of the
person named must also be indicated. Noteholders tendering Old Notes by book-
entry transfer may request that Old Notes not exchanged be credited to such
account maintained at the Book-Entry Transfer Facility as such noteholder may
designate hereon. If no such instructions are given, such Old Notes not
exchanged will be returned to the name or address of the person signing this
Letter.
5. TAX IDENTIFICATION NUMBER.
Federal income tax law generally requires that a tendering holder whose Old
Notes are accepted for exchange must provide the Company (as payor) with such
holder's correct Taxpayer Identification Number ("TIN") on Substitute Form W-9
below, which, in the case of a tendering holder who is an individual, is his
or her social security number. If the Company is not provided with the current
TIN or an adequate basis for an exemption, such tendering holder may be
subject to a $50 penalty imposed by the Internal Revenue Service. In addition,
delivery to such tendering holder of New Notes may be subject to backup
withholding in an amount equal to 31% of all reportable payments made after
the exchange. If withholding results in an overpayment of taxes, a refund may
be obtained.
Exempt holders of Old Notes (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. See the enclosed Guidelines of Certification of
Taxpayer Identification Number on Substitute Form W-9 (the "W-9 Guidelines")
for additional instructions.
To prevent backup withholding, each tendering holder of Old Notes must
provide its correct TIN by completing the "Substitute Form W-9" set forth
below, certifying that the TIN provided is correct (or that such holder is
awaiting a TIN) and that (i) the holder is exempt from backup withholding, or
(ii) the holder has not been notified by the Internal Revenue Service that
such holder is subject to a backup withholding as a result of a failure to
report all interest or dividends or (iii) the Internal Revenue Service has
notified the holder that such holder is no longer subject to backup
withholding. If the tendering holder of Old Notes is a nonresident alien or
foreign entity not subject to backup withholding, such holder must give the
Company a completed Form W-8, Certificate of Foreign Status. These forms may
be obtained from the Exchange Agent. If the Old Notes are in more than one
name or are not in the name of the actual owner, such holder should consult
the W-9 Guidelines for information on which TIN to report. If such holder does
not have a TIN, such holder should consult the W-9 Guidelines for instructions
on applying for a TIN, check the box in Part 2 of the Substitute Form W-9 and
write "applied for" in lieu of its TIN. Note: checking this box and writing
"applied for" on the form means that such holder has already applied for a TIN
or that such holder intends to apply for one in the near future. If such
holder does not provide its TIN to the Company within 60 days, backup
withholding will begin and continue until such holder furnishes its TIN to the
Company.
6. TRANSFER TAXES.
The Company will pay all transfer taxes, if any, applicable to the transfer
of Old Notes to it or its order pursuant to the Exchange Offer. If however,
New Notes and/or substitute Old Notes not exchanged are to be delivered to, or
are to be registered or issued in the name of, any person other than the
registered holder of the Old Notes tendered hereby, or if tendered Old Notes
are registered in the name of any person other than the person signing this
Letter, or if a transfer tax is imposed for any reason other than the transfer
of Old Notes to the Company or its order pursuant to the Exchange Offer, the
amount of any such transfer taxes (whether imposed on the registered holder or
any other persons) will be payable by the tendering holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted
herewith, the amount of such transfer taxes will be billed directly to such
tendering holder.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE OLD NOTES SPECIFIED IN THIS LETTER.
7. WAIVER OF CONDITIONS.
The Company reserves the absolute right to waive satisfaction of any or all
conditions enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Old Notes, by execution of this Letter,
shall waive any right to receive notice of the acceptance of their Old Notes
for exchange.
Neither the Company, the Exchange Agent nor any other person is obligated to
give notice of any defect or irregularity with respect to any tender of Old
Notes nor shall any of them incur any liability for failure to give any such
notice.
9. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES.
Any holder whose Old Notes have been mutilated, lost, stolen or destroyed
should contact the Exchange Agent at the address indicated above for further
instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering, as well as requests for
additional copies of the Prospectus and this Letter, may be directed to the
Exchange Agent, at the address and telephone number indicated above.
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 5)
PAYOR'S NAME: CINCINNATI MILACRON INC.
SUBSTITUTE PART 1--PLEASE PROVIDE TIN:
YOUR TIN IN THE BOX AT -----------------------
FORM W-9 RIGHT AND CERTIFY BY SIGN- SOCIAL SECURITY NUMBER
DEPARTMENT OF ING AND DATING BELOW. OR EMPLOYER
THE TREASURY IDENTIFICATION NUMBER
INTERNAL
REVENUE
SERVICE
------------------------------------------------------------
PART 2--TIN APPLIED FOR [_]
------------------------------------------------------------
CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY
PAYOR'S THAT:
REQUEST FOR
TAXPAYER
IDENTIFICATION (1) the number shown on this form is my correct Taxpayer
NUMBER ("TIN") Identification Number (or I am waiting for a number
AND to be issued to me).
CERTIFICATION
(2) I am not subject to backup withholding either be-
cause: (a) I am exempt from backup withholding, or
(b) I have not been notified by the Internal Revenue
Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report all
interest or dividends, or (c) the IRS has notified
me that I am no longer subject to backup withhold-
ing, and
(3) any other information provided on this form is true
and correct.
SIGNATURE ......................... DATE ................
- --------------------------------------------------------------------------------
You must cross out item (2) of the above certification if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting of interest or dividends on your tax return and you have not
been notified by the IRS that you are no longer subject to backup
withholding.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF
SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administrative Office or
(b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of the exchange, 31 percent of all reportable payments made to me
thereafter will be withheld until I provide a number.
-------------------------------------------------- -----------------------
SIGNATURE DATE
<PAGE>
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY FOR
CINCINNATI MILACRON INC.
This form or one substantially equivalent hereto must be used to accept the
Exchange Offer of Cincinnati Milacron Inc. (the "Company") made pursuant to the
Prospectus, dated , 1994 (the "Prospectus"), if certificates for Old
Notes of the Company are not immediately available or if the procedure for
book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Company prior to 5:00 P.M., New York
City time, on the Expiration Date of the Exchange Offer. Such form may be
delivered or transmitted by facsimile transmission, mail or hand delivery to
BankAmerica National Trust Company (the "Exchange Agent") as set forth below.
In addition, in order to utilize the guaranteed delivery procedure to tender
Old Notes pursuant to the Exchange Offer, a completed, signed and dated Letter
of Transmittal (or facsimile thereof) must also be received by the Exchange
Agent prior to 5:00 P.M., New York City time, on the Expiration Date.
Capitalized terms not defined herein are defined in the Prospectus.
BANKAMERICA NATIONAL TRUST COMPANY, EXCHANGE AGENT
<TABLE>
<CAPTION>
By Mail: Facsimile Transmission Number: By Hand/Overnight
<S> <C> <C>
BankAmerica National (212) 390-3116 Delivery:
Trust Company BankAmerica National
Corporate Trust (For Eligible Institutions Only) Trust Company
Operations Confirm by Telephone: Corporate Trust
P.O. Box 464 Bowling (212) 390-3042 Operations
Green Station One World Trade Center
New York, New York 18th Floor
10274-0464 New York, New York 10048
For Information Call:
(212) 390-3025
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL
NOT CONSTITUTE A VALID DELIVERY.
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Company the principal amount at maturity of Old Notes set forth below, pursuant
to the guaranteed delivery procedure described in "The Exchange Offer --
Guaranteed Delivery Procedures" section of the Prospectus.
Principal Amount At Maturity of Old Notes Tendered:
If Old Notes will be delivered by
$ ____________________________________ book-entry transfer to The Depository
Trust Company, provide account
number.
Certificate Nos. (if available):
______________________________________
Total Principal Amount At Maturity Represented by Old Notes Certificate(s):
$ ____________________________________ Account Number _______________________
<PAGE>
- --------------------------------------------------------------------------------
ALL AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL SURVIVE THE
DEATH OR INCAPACITY OF THE UNDERSIGNED AND EVERY OBLIGATION OF THE UNDERSIGNED
HEREUNDER SHALL BE BINDING UPON THE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS
AND ASSIGNS OF THE UNDERSIGNED.
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
X ___________________________ --------
X ___________________________ --------
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number: _______________________
Must be signed by the holder(s) of Old Notes as their name(s) appear(s) on
certificates for Old Notes or on a security position listing, or by person(s)
authorized to become registered holder(s) by endorsement and documents
transmitted with this Notice of Guaranteed Delivery. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer or other
person acting in a fiduciary or representative capacity, such person must set
forth his or her full title below.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s): --------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
Capacity: --------------------------------------------------------------------
Address(es):
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
GUARANTEE
The undersigned, a member of a registered national securities exchange, or a
member of the National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the United States,
hereby guarantees that the certificates representing the principal amount at
maturity of Old Notes tendered hereby in proper form for transfer, or timely
confirmation of the book-entry transfer of such Old Notes into the Exchange
Agent's account at The Depository Trust Company pursuant to the procedures set
forth in "The Exchange Offer -- Guaranteed Delivery Procedures" section of the
Prospectus, together with a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) with any required
signature guarantee and any other documents required by the Letter of
Transmittal, will be received by the Exchange Agent at the address set forth
above, no later than five New York Stock Exchange trading days after the date
of execution hereof.
_____________________________________ _____________________________________
Name of Firm Authorized Signature
_____________________________________ _____________________________________
Address Title
_____________________________________ Name: _______________________________
Zip Code (Please Type or Print)
Area Code and Tel. No. ______________ Dated: ______________________________
NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. CERTIFICATES FOR
OLD NOTES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
EXHIBIT 99.3
CINCINNATI MILACRON INC.
OFFER FOR ALL OUTSTANDING
8 3/8% NOTES DUE 2004
IN EXCHANGE FOR
8 3/8% NOTES DUE 2004
TO:BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
Cincinnati Milacron Inc. (the "Company") is offering, upon and subject to the
terms and conditions set forth in the Prospectus, dated , 1994 (the
"Prospectus"), and the enclosed Letter of Transmittal (the "Letter of
Transmittal"), to exchange (the "Exchange Offer") its 8 3/8% Notes Due 2004 for
its outstanding 8 3/8% Notes Due 2004 (the "Old Notes"). The Exchange Offer is
being made in order to satisfy certain obligations of the Company contained in
the Exchange Registration Rights Agreement dated as of March 9, 1994, between
the Company and the other signatory thereto.
We are requesting that you contact your clients for whom you hold Old Notes
regarding the Exchange Offer. For your information and for forwarding to your
clients for whom you hold Old Notes registered in your name or in the name of
your nominee, or who hold Old Notes registered in their own names, we are
enclosing the following documents:
1. Prospectus dated , 1994;
2. The Letter of Transmittal for your use and for the information of your
clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer if
certificates for Old Notes are not immediately available or time will not
permit all required documents to reach the Exchange Agent prior to the
Expiration Date (as defined below) or if the procedure for book-entry transfer
cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose account you
hold Old Notes registered in your name or the name of your nominee, with space
provided for obtaining such clients' instructions with regard to the Exchange
Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelopes addressed to BankAmerica National Trust Company, the
Exchange Agent for the Old Notes.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1994, UNLESS EXTENDED BY THE COMPANY (THE
"EXPIRATION DATE"). THE OLD NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY
BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE.
To participate in the Exchange Offer, a duly executed and properly completed
Letter of Transmittal ( or facsimile thereof), with any required signature
guarantees and any other required documents, should be sent to the Exchange
Agent and certificates representing the Old Notes should be delivered to the
Exchange Agent, all in accordance with the instructions set forth in the Letter
of Transmittal and the Prospectus.
If holders of Old Notes wish to tender, but it is impracticable for them to
forward their certificates for Old Notes prior to the expiration of the
Exchange Offer or to comply with the book-entry transfer procedures on a timely
basis, a tender may be effected by following the guaranteed delivery procedures
described in the Prospectus under "The Exchange Offer--Guaranteed Delivery
Procedures".
The Company will, upon request, reimburse brokers, dealers, commercial banks
and trust companies for reasonable and necessary costs and expenses incurred by
them in forwarding the Prospectus and the related documents to the beneficial
owners of Old Notes held by them as nominee or in a fiduciary capacity. The
<PAGE>
Company will pay or cause to be paid all stock transfer taxes applicable to the
exchange of Old Notes pursuant to the Exchange Offer, except as set forth in
Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or requests
for additional copies of the enclosed materials, should be directed to the
Exchange Agent for the Old Notes, at its address and telephone number set forth
on the front of the Letter of Transmittal.
Very truly yours,
Cincinnati Milacron Inc.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER
OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY
MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
<PAGE>
EXHIBIT 99.4
CINCINNATI MILACRON INC.
OFFER FOR ALL OUTSTANDING
8 3/8% NOTES DUE 2004
IN EXCHANGE FOR
8 3/8% NOTES DUE 2004
TO OUR CLIENTS:
Enclosed for your consideration is a Prospectus, dated , 1994 (the
"Prospectus"), and the related Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of Cincinnati
Milacron Inc. (the "Company") to exchange its 8 3/8% Notes Due 2004 (the "New
Notes") for its outstanding 8 3/8% Notes Due 2004 (the "Old Notes"), upon the
terms and subject to the conditions described in the Prospectus. The Exchange
Offer is being made in order to satisfy certain obligations of the Company
contained in the Exchange Registration Rights Agreement dated as of March 9,
1994, between the Company and the other signatory thereto.
This material is being forwarded to you as the beneficial owner of the Old
Notes carried by us in your account but not registered in your name. A TENDER
OF SUCH OLD NOTES MAY ONLY BE MADE BY US AS THE HOLDER OF RECORD AND PURSUANT
TO YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf the Old Notes held by us for your account, pursuant to the terms
and conditions set forth in the enclosed Prospectus and Letter of Transmittal.
Your instructions should be forwarded to us as promptly as possible in order
to permit us to tender the Old Notes on your behalf in accordance with the
provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m.,
New York City time, on , 1994, unless extended by the Company. Any
Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any time
before the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Old Notes.
2. The Exchange Offer is subject to certain conditions set forth in the
Prospectus in the section captioned "The Exchange Offer--Conditions".
3. Any transfer taxes incident to the transfer of Old Notes from the holder
to the Company will be paid by the Company, except as otherwise provided in the
Instructions in the Letter of Transmittal.
4. The Exchange Offer expires at 5:00 p.m., New York City time, on
, 1994, unless extended by the Company.
If you wish to have us tender your Old Notes, please so instruct us by
completing, executing and returning to us the instruction form on the back of
this letter. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATION ONLY
AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER OLD NOTES.
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by Cincinnati
Milacron Inc. with respect to its Old Notes.
This will instruct you to tender the Old Notes held by you for the account of
the undersigned, upon and subject to the terms and conditions set forth in the
Prospectus and the related Letter of Transmittal.
Please tender the Old Notes held by you for my account as indicated below:
AGGREGATE PRINCIPAL AMOUNT AT
MATURITY OF OLD NOTES
-------------------------------------
_____________________________________
8 3/8% Notes Due 2004 . . . . . . . .
[_]Please do not tender any Old Notes
held by you for my account.
Dated: _______________________ , 1994 _____________________________________
_____________________________________
Signature(s)
_____________________________________
_____________________________________
_____________________________________
Please print name(s) here
_____________________________________
_____________________________________
Address(es)
_____________________________________
Area Code and Telephone Number
_____________________________________
Tax Identification or Social
Security No(s).
None of the Old Notes held by us for your account will be tendered unless we
receive written instructions from you to do so. Unless a specific contrary
instruction is given in the space provided, your signature(s) hereon shall
constitute an instruction to us to tender all the Old Notes held by us for your
account.
