<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 8, 1995
REGISTRATION NO. 33-
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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)
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DELAWARE 3541 31-1062125
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL CLASSIFICATION IDENTIFICATION NO.)
INCORPORATION CODE NUMBER)
OR ORGANIZATION)
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 AGENT FOR SERVICE)
---------------
COPIES TO:
JAMES M. EDWARDS JOHN R. SAGAN
CRAVATH, SWAINE & MOORE MAYER, BROWN & PLATT
825 EIGHTH AVENUE 190 SOUTH LASALLE STREET
NEW YORK, NEW YORK 10019 CHICAGO, ILLINOIS 60603
(212) 474-1000 (312) 782-0600
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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. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
7 7/8% Notes Due 2000................... $100,000,000 $1,000(1) $100,000,000(1) $34,483
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee.
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 Registration
Statement and Outside Front
Cover Page of Prospectus.... Facing Page of the Registration Statement;
Cross Reference Sheet; Outside Front Cover
Page of Prospectus
2. Inside Front and Outside
Back Cover Pages of Prospec-
tus......................... Available Information; Incorporation of
Certain Documents by Reference; Outside
Back Cover Page of Prospectus
3. Risk Factors, Ratio of Earn-
ings to Fixed Charges and
Other Information........... Prospectus Summary; Risk Factors; Ratio of
Earnings to Fixed Charges; Selected
Historical Financial Data; Selected
Historical Segment Information; Selected
Historical Geographic Information; The
Exchange Offer; Business; Description of
the New Notes; Certain Federal Income Tax
Considerations
4. Terms of the Transaction.... Prospectus Summary; 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................. Legal Matters; Experts
9. Disclosure of Commission Po-
sition on Indemnification
for Securities Act Liabili-
ties........................ (Not Applicable)
10. Information with Respect to
S-3 Registrants............. Available Information; Incorporation of
Certain Documents by Reference; Prospectus
Summary; Selected Historical Financial
Data; Selected Historical Segment
Information; Selected Historical Geographic
Information; Management's Discussion and
Analysis of Financial Condition and Results
of Operations; Business
11. Incorporation of Certain In-
formation by Reference...... Incorporation of Certain Documents by
Reference
12. Information with Respect to
S-2 or S-3 Registrants...... (Not Applicable)
13. Incorporation of Certain In-
formation by Reference...... (Not Applicable)
14. Information with Respect to
Registrants Other Than S-3
or S-2 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-3 or
S-2 Companies............... (Not Applicable)
18. Information if Proxies, Con-
sents or Authorizations are
to be Solicited............. (Not Applicable)
19. Information if Proxies, Con-
sents or Authorizations are
not to be Solicited or in an
Exchange Offer.............. Available Information; Incorporation of
Certain Documents by Reference; Prospectus
Summary; The Exchange Offer
</TABLE>
<PAGE>
SUBJECT TO COMPLETION (DATED JUNE 8, 1995)
PROSPECTUS
CINCINNATI
MILACRON
Offer to Exchange its 7 7/8% Notes Due 2000,
which have been registered under the Securities Act of 1933, as amended,
for any and all of its outstanding 7 7/8% Notes Due 2000
The Exchange Offer will expire at 5:00 p.m., New York City time, on ,
1995, 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 7 7/8% Notes due 2000 (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 7
7/8% Notes due 2000 (the "Old Notes"), of which $100,000,000 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 (the "Expiration Date"), which will be ,
1995, unless the Exchange Offer is extended. Tenders of Old Notes may be
withdrawn at any time prior to 5:00 P.M., New York City time, on , 1995.
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. Old Notes may
be tendered only in integral multiples of $1,000. The Company has agreed to pay
the expenses of the Exchange Offer. See "The Exchange Offer".
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 (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 therefore will not bear legends restricting the transfer thereof. See
"Description of the New Notes".
The New Notes will bear interest at the rate of 7 7/8% per annum from the
most recent date to which interest has been paid on the Old Notes or, if no
interest has been paid on the Old Notes, from May 17, 1995. Interest on the New
Notes is payable semi-annually on May 15 and November 15 of each year,
commencing November 15, 1995. Holders of Old Notes whose Old Notes are accepted
for exchange will not receive any payment in respect of accrued and unpaid
interest on such Old Notes. See "The Exchange Offer".
Prior to this Exchange Offer, there has been no public market for the Old
Notes or New Notes. If such a market were to develop, the New Notes could trade
at prices that may be higher or lower than their principal amount. The Company
does not intend to apply for listing or quotation of the New Notes on any
securities exchange or stock market. Therefore, there can be no assurance as to
the liquidity of any trading market for the New Notes or that an active public
market for the New Notes will develop.
CS First Boston Corporation, BT Securities Corporation and J.P. Morgan
Securities Inc. (the "Initial Purchasers") have agreed that one or more of them
will act as market-makers for the New Notes. However, the Initial Purchasers
are not obligated to so act and they may discontinue any such market-making at
any time without notice.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY HOLDERS OF
OLD NOTES WHO TENDER THEIR OLD NOTES IN THE EXCHANGE OFFER, SEE "RISK FACTORS"
ON PAGE 11 OF THIS PROSPECTUS.
-----------
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 , 1995.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state.
<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 "SEC"). Such reports, proxy statements
and other information concerning the Company can be inspected and copied at the
public reference facilities maintained by the SEC at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as at the
following regional offices of the SEC: 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 SEC'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 10005.
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 SEC. 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 December
31, 1994 (the "Company's 1994 Form 10-K"), the Company's Quarterly Report on
Form 10-Q for the quarter ended March 25, 1995 (the "Company's 1995 Form 10-Q")
and the Company's Current Report on Form 8-K dated February 1, 1995 (as amended
by the Company's Form 8-K/A relating thereto filed April 14, 1995), the
Company's Current Report on Form 8-K dated May 17, 1995 and the Company's
Current Report on Form 8-K filed on June [ ], 1995 (such Current Reports on
Form 8-K, the "Company's 1995 Form 8-Ks"), each of which has been filed
previously with the SEC 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 AT LEAST FIVE BUSINESS DAYS PRIOR TO THE EXPIRATION
DATE.
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 1994 Form 10-K, the Company's 1995 Form 10-Q and the Company's
1995 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 consumable 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 the Company's plastics machinery
products and machine tools are computer-controlled and many include advanced
applications software. The Company has three business segments: plastics
machinery, machine tools and industrial products.
Through strategic acquisitions, accelerated new product development and
consolidation of its U.S. machine tool operations, the Company has made
significant progress since the beginning of 1993 toward achieving a better
balance between its businesses in terms of product, customer and geographic
mix.
The Company currently expects 1995 sales to approach $1.6 billion,
approximately 40% of which is expected to come from the Company's industrial
products segment, making this the Company's largest business segment. The
plastics machinery segment is expected to be the Company's second largest
business segment in 1995. The Company expects the growth in industrial
consumable products and plastics machinery sales to make the Company less
susceptible to the business cycles and historically low margins characteristic
of the machine tool business.
In addition, the Company expects that almost half of its sales for 1995 will
come from sales outside the United States. The Company also expects that its
growing foreign sales, over time, will decrease the Company's dependence upon
the U.S. economy.
STRATEGIC ACQUISITIONS
Early in 1993, the Company acquired GTE Valenite Corporation ("Valenite"),
expanding the Company's industrial products segment. With the acquisition of
Valenite, the Company believes that it is the second largest U.S. and third
largest worldwide producer of carbide metalcutting tool systems.
In 1993, the Company also acquired FM Maschinenbau GmbH ("Ferromatik"), one
of Europe's leading manufacturers of plastics injection molding machines. The
Ferromatik acquisition expanded the Company's plastics processing technology
base and product line and enabled the Company to achieve its objective of
establishing a plastics machinery manufacturing and distribution base in
Germany to serve Europe and other markets.
In February 1995, the Company completed the acquisition of Germany-based
Krupp Widia GmbH ("Widia"). Widia, with 1994 sales of approximately $225
million, is one of the world's leading producers of industrial metalworking
products. Widia also owns a 51% interest in Widia (India) Ltd., an Indian
public company. The Company's acquisition of Widia complemented Valenite's
geographic balance, enhanced the Company's technological base, diversified its
industrial consumable product line and expanded its worldwide sales and
distribution network.
3
<PAGE>
ACCELERATED NEW PRODUCT DEVELOPMENT
In recent years, the Company has undertaken a major program for product
development, process improvement and modernization, known as "Wolfpack". The
objectives of Wolfpack are to design and produce new products at world-
competitive levels of quality, performance, efficiency and cost. 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. Compared to the
products they replace, Wolfpack-developed products typically have achieved a 30
to 50 percent reduction in product development cycles, number of total parts,
manufacturing lead time, installation time and overall cost. Today, most of the
Company's plastics processing machinery lines have been developed through the
Wolfpack approach, and about 90% of the Company's machine tool sales consist of
Wolfpack designs.
MACHINE TOOL CONSOLIDATION
During 1994, the Company completed a major consolidation of its U.S. machine
tool operations that addressed excess manufacturing capacity. Production at the
Company's two machine tool facilities in South Carolina was phased out, and the
facilities were closed. The Company transferred most of the machines and
systems in South Carolina used to manufacture horizontal machining centers and
turning centers to its Cincinnati facilities. Presently, the Company
manufactures all of its machine tool products in Cincinnati, Ohio and
Birmingham, England.
----------------
Cincinnati Milacron's principal executive office is located at 4701 Marburg
Avenue, Cincinnati, Ohio 45209 and its telephone number is (513) 841-8100.
4
<PAGE>
THE EXCHANGE OFFER
Registration Rights
Agreement.................. The Old Notes were sold by the Company on May 17,
1995, 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) providing, among other things, for the
Exchange Offer.
The Exchange Offer.......... New Notes are being offered in exchange for an
equal principal amount of Old Notes. As of the
date hereof, $100,000,000 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 of the
Exchange Offer. See "The Exchange Offer--
Accounting Treatment". 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 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
the 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
5
<PAGE>
exemption from, or in a transaction not subject
to, the Securities Act and applicable state
securities laws. See "Risk Factors--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 , 1995,
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 at the rate of 7
7/8% per annum from the most recent date to which
interest has been paid on the Old Notes or, if no
interest has been paid on the Old Notes, from May
17, 1995. In addition, holders of New Notes will
receive, on the next interest payment date
following the Expiration Date, a payment equal to
the amount of accrued and unpaid Additional
Interest (as defined), if any, on the Old Notes
exchanged for such New Notes. Holders of Old
Notes whose Old Notes are accepted for exchange
will not receive any payment in respect of
accrued and unpaid interest (including Additional
Interest, if any) on such Old Notes. See "The
Exchange Offer--Acceptance of Old Notes for
Exchange; Delivery of New Notes".
Conditions to the Exchange
Offer...................... The Exchange Offer is subject to certain
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
Old Notes.................. Each holder of Old Notes wishing to accept the
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) 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 , 1995. 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 , 1995.
6
<PAGE>
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.. 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. 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 proceeds to the Company from the
Exchange Offer. The net proceeds to the Company
from the sale of the Old Notes were approximately
$98 million. The Company used (or will use) such
proceeds to repay outstanding indebtedness,
including approximately $81 million of
indebtedness under the Company's revolving credit
facility (the "Revolving Credit Facility"). See
"Use of Proceeds" and "Management's Discussion
and Analysis of Financial Condition and Results
of Operations--Liquidity and Sources of Capital".
SUMMARY OF TERMS OF NEW NOTES
The Exchange Offer relates to the exchange of up to $100,000,000 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 material 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 May 10, 1995, between the
Company and CS First Boston Corporation, as
representative of the Initial Purchasers. However, upon
consummation of the Exchange Offer, subject to certain
</TABLE>
7
<PAGE>
<TABLE>
<S> <C>
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 offer or sell their Old Notes,
unless such old Notes are subsequently registered under
the Securities Act (which, subject to certain limited
exceptions, the Company will have no obligation to do),
except pursuant to an exemption from, or in a
transaction not subject to, the Securities Act and
applicable state securities laws. See "Risk Factors--
Consequences of Failure to Exchange".
TERMS OF THE NEW NOTES
Interest Payment Dates........... May 15 and November 15 of each year, commencing
November 15, 1995.
Interest Rate.................... 7 7/8% per annum.
Maturity Date.................... May 15, 2000.
Redemption....................... None.
Sinking Fund..................... None.
Ranking.......................... The New Notes will be unsecured obligations of the
Company and will rank pari passu with other existing
unsecured debt of the Company. At March 25, 1995, after
giving effect to the sale of the Old Notes and the
application of the proceeds thereof, the Company would
have had outstanding approximately $299.4
million of senior indebtedness, including the Old
Notes, and the Company would not have had any
subordinated indebtedness outstanding. Except for
approximately $3.9 million of indebtedness related to
Industrial Development Revenue Bonds and $9.4 million
of indebtedness assumed in connection with the
acquisitions of Ferromatik and Widia, the Company had
no debt secured by properties or equipment at March 25,
1995. Due to the limitations set forth in the terms of
the Company's outstanding indebtedness, the Company
currently has no intention to issue debt that will rank
senior to the New Notes.
Restrictive Covenants............ The indenture governing the New Notes will limit (i)
the issuance of certain secured debt by the Company and
(ii) the entrance into sale and leaseback transactions
by the Company. Both of these restrictions, however,
are subject to a number of qualifications. See
"Description of the New Notes".
</TABLE>
RISK FACTORS
Holders of Old Notes should carefully consider all of the information set
forth in this Prospectus and, in particular, the information set forth under
"Risk Factors" before tendering their Old Notes in the Exchange Offer.
8
<PAGE>
SUMMARY SELECTED HISTORICAL FINANCIAL DATA
<TABLE>
<CAPTION>
FISCAL YEAR(A)
------------------------------------------------
(DOLLARS IN MILLIONS)
1994 1993 1992 1991 1990
-------- -------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Sales.................... $1,197.1 $1,029.4 $789.2 $754.0 $805.2
Manufacturing margins(b). 292.3 238.1 176.6 150.8 172.4
Percent of sales......... 24.4% 23.1% 22.4% 20.0% 21.4%
Operating earnings
(loss)(c)............... $ 64.2 $ (23.8)(d) $ 43.2 $(58.3)(e) $ 6.8(f)
Interest expense......... (17.9) (15.7) (19.1) (19.1) (19.7)
Earnings (loss) from
continuing operations
before extraordinary
items and cumulative
effect of changes in
methods of accounting... 37.7 (45.4)(d) 16.1 (83.1)(e) (13.6)(f)
Net earnings (loss)...... 37.7 (101.9)(d) 21.5 (100.2)(e) (24.3)(f)
BALANCE SHEET DATA (AT
YEAR END)
Working capital.......... $ 151.4 $ 114.3 $191.8 $188.0 $253.6
Total assets............. 787.6 729.6 578.9 598.4 693.0
Total debt............... 226.9 185.2 175.6 162.8 169.4
Shareholders' equity..... 157.8 124.1 134.4 129.0 247.7
OTHER DATA
EBITDA(g)................ $ 92.4 $ 72.2 $ 64.1 $ 40.8 $ 57.1
Ratio of EBITDA to inter-
est expense............. 5.2 4.6 3.4 2.1 2.9
Capital expenditures..... $ 43.0 $ 23.4 $ 17.6 $ 15.5 $ 34.1
Backlog of unfilled or-
ders at year end........ 287.1 246.0 249.6 277.3 268.6
</TABLE>
- --------
Note: See "--Recent Developments", "Selected Historical Financial Data",
"Selected Historical Segment Information", "Selected Historical Geographic
Information" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations".
(a) 1992 includes 53 weeks as compared to 52 weeks included in 1994, 1993, 1991
and 1990.
(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 and 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 charge of $47.1 million (with no current tax effect) for the
consolidation of domestic machine tool manufacturing operations and 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"
("SFAS 109") and S.F.A.S. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" ("SFAS 106"), 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 charge of $75.1 million (with no current tax effect) for plant
closing and the relocation of certain machine tool manufacturing
operations. An additional charge of $14.9 million (with no current tax
effect) 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 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 certain charges which are
discussed below, 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 holders of
Old Notes who tender their Old Notes in the Exchange Offer as an
alternative to net income or as an indicator of the Company's operating
performance. As presented above, EBITDA excludes the following: in 1993, a
charge of $47.1 million (with no current tax effect) for the consolidation
of domestic machine tool manufacturing operations and charges totaling
$22.8 million (with no current tax effect) for the disposition of the
Company's Sano business; in 1991, a charge of $75.1 million (with no
current tax effect) for plant closing and the relocation of certain machine
tool manufacturing operations; and in 1990, a 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.
9
<PAGE>
RECENT DEVELOPMENTS
On January 27, 1995, the Company sold its American Mine Tool business for $15
million, resulting in a pretax gain in the first quarter of 1995 of $5 million
($4 million after tax).
On February 1, 1995, the Company completed its acquisition of Widia for
approximately $80 million in cash. Widia, with 1994 sales of approximately $225
million, is one of the world's leading producers of industrial metalworking
products. Widia's production and distribution networks in Europe and India are
expected to complement Valenite's strength in North America, Japan and other
Asian markets. The acquisition was financed principally with German marks
available under the Revolving Credit Facility. The Company intends to take
certain actions to integrate Valenite and Widia to improve future
profitability, which will result in incremental costs and expenses in 1995,
including a restructuring charge which is expected to be approximately $10
million.
On May 5, 1995, the Company reported results for the quarter ended March 25,
1995 on the Company's 1995 Form 10-Q. The Company reported sales and net
earnings for the first quarter of 1995 of $331.4 million and $13.0 million,
respectively. Cash and cash equivalents on hand decreased by $6.6 million to
$14.9 million over the period from December 31, 1994 to March 25, 1995. New
orders for the first quarter of 1995 of $369 million increased by $103 million,
or 38%, over the first quarter of 1994. Further financial data and Management's
Discussion and Analysis of Financial Condition and Results of Operations for
the first quarter of 1995 are contained in the Company's 1995 Form 10-Q, which
is incorporated herein by reference. See "Available Information" and
"Incorporation of Certain Documents by Reference". Following is a comparison of
certain summary financial data at, and for the quarters ended, March 25, 1995
and March 26, 1994:
<TABLE>
<CAPTION>
QUARTER ENDED
---------------------
(DOLLARS IN
MILLIONS)
MARCH 25, MARCH 26,
1995 1994
--------- ---------
<S> <C> <C>
SUMMARY OF OPERATIONS
Sales..................................................... $ 331.4 $245.5
Manufacturing margins(a).................................. 81.2 58.9
Percent of sales.......................................... 24.5% 24.0%
Operating earnings(b)..................................... $ 21.2(c) $ 9.8
Interest expense.......................................... (5.1) (3.6)
Net earnings.............................................. 13.0(c) 5.0
BALANCE SHEET DATA (AT QUARTER END)
Working capital........................................... $ 215.9 $152.4
Total assets.............................................. 1,021.0 726.0
Total debt................................................ 297.4 189.9
Shareholders' equity...................................... 182.4 128.9
OTHER DATA
EBITDA(d)................................................. $ 23.5 $ 16.1
Ratio of EBITDA to interest expense....................... 4.6 4.5
Capital expenditures...................................... $ 8.9 $ 5.5
Backlog of unfilled orders at quarter end................. 409.2 267.0
</TABLE>
- --------
(a) Represents gross profit, which is sales less cost of products sold.
(b) Represents earnings before net interest expense and taxes.
(c) Includes a pretax gain of $5.0 million ($4.0 million after tax) on the sale
of the Company's American Mine Tool business.
(d) Represents operating earnings before depreciation and amortization. In
1995, excludes the gain on the sale of the Company's American Mine Tool
business.
10
<PAGE>
RISK FACTORS
Holders of Old Notes should carefully consider the following risk factors, as
well as other information set forth in this Prospectus, before tendering their
Old Notes in the Exchange Offer. The risk factors set forth below (other than
"Consequences of Failure to Exchange") are generally applicable to the Old
Notes as well as the New Notes.
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 SEC, 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.
LACK OF PUBLIC MARKET FOR THE NEW NOTES
The New Notes are being offered to the holders of the Old Notes. The Old
Notes were issued in May 1995 to a small number of institutional investors and
are eligible for trading in the Private Offerings, Resales and Trading through
Automatic Linkages (PORTAL) Market, the National Association of Securities
Dealers' screen-based, automated market for trading of securities eligible for
resale under Rule 144A of the Securities Act. There is no existing trading
market for the New Notes, and there can be no assurance regarding the future
development of such a market for the New Notes or the ability of holders of the
New Notes to sell their New Notes or the price at which such holders may be
able to sell their New Notes. If such a market were to develop, the New Notes
could trade at prices that may be higher or lower than their principal amount
depending on many factors, including prevailing interest rates, the Company's
operating results and the market for similar securities.
The Initial Purchasers have agreed that one or more of them will act as
market-makers for the New Notes. However, the Initial Purchasers are not
obligated to so act and they may discontinue any such market-making at any time
without notice. There can be no assurance as to the liquidity of any trading
market for the New Notes or that an active public market for the New Notes will
develop. The Company does not intend to apply for listing or quotation of the
New Notes on any securities exchange or stock market.
11
<PAGE>
Historically, the market for noninvestment grade debt has been subject to
disruptions that have caused substantial 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
After giving effect to the sale of the Old Notes and the application of the
proceeds thereof, the Company's total indebtedness would have been
approximately $299.4 million at March 25, 1995, and the Company's ratio of
total long-term debt to total capitalization at such date would have been .61
to 1.0. This degree of leverage will have important consequences to holders of
the New Notes, including the following: (i) the ability of the Company to
obtain additional financing for working capital, capital expenditures, debt
service requirements or other purposes may be impaired; (ii) a substantial
portion of the Company's cash flow from operations will be required to be
dedicated to the payment of the Company's interest expense; (iii) the Company
may be more highly leveraged than companies with which it competes, which may
place it at a competitive disadvantage; (iv) indebtedness under the Revolving
Credit Facility bears interest at floating rates, which will cause the Company
to be vulnerable to increases in interest rates; and (v) the Company may be
more vulnerable in the event of a downturn in its businesses. Also, the Company
has sold interests in certain accounts receivable to third parties. At March
25, 1995, the amount of the accounts receivable sold was $75 million. See
"Capitalization", "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Description of the New Notes".
The Company entered into an agreement dated as of May 31, 1995, with the
lenders under the Revolving Credit Facility to extend the term of the Revolving
Credit Facility from July 20, 1996 to June 1, 1998. In connection with such
extension, beginning in January 1996, certain required financial ratio levels
imposed on the Company gradually will become more stringent. The Company
believes that it will be able to continue throughout the extended term of the
Revolving Credit Facility to comply with the covenants of the Revolving Credit
Facility, including all required ratio levels. In addition, at the Company's
request, the amount of credit available under the Revolving Credit Facility was
reduced to $150 million in order to reduce commitment fees payable by the
Company thereunder. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Sources of Capital".
RESTRICTIONS IMPOSED BY TERMS OF THE COMPANY'S INDEBTEDNESS
The terms and conditions of the existing indebtedness of the Company and the
Indenture impose restrictions that affect, among other things, the ability of
the Company and its subsidiaries to (i) incur certain secured indebtedness;
(ii) create liens on assets; (iii) sell or otherwise transfer certain assets;
(iv) engage in mergers or consolidations; and (v) pay dividends. The Company is
also required by the terms of the Revolving Credit Facility to comply with
certain specified financial ratios and tests, including a minimum ratio of
EBITDA to the sum of interest expense plus dividends. The Company's ability to
comply with the foregoing provisions may be affected by events beyond its
control. The Company's failure to comply with any of these covenants and
restrictions could result in a default under its existing indebtedness. In the
event of any default, depending on the actions taken by the holders of such
indebtedness, the Company could be prohibited from making any payments of
principal or interest on the New Notes for a period of time. In addition, in
certain cases, such holders could elect to declare all amounts borrowed under
their respective debt instruments, together with accrued interest, to be due
and payable. If the Company were unable to repay such amounts, the holders of
the New Notes may not be entitled to receive any payment until such declaration
was rescinded or such debt was discharged or paid in full. If the indebtedness
were to be accelerated, there could be no assurance that the assets of the
Company would be sufficient to repay borrowings, including the New Notes, in
full.
12
<PAGE>
RECENT LOSSES
The Company had losses before income taxes, extraordinary items and
cumulative effect of changes in methods of accounting and before net interest
expense of $58.3 million and $23.8 million in fiscal years 1991 and 1993,
respectively, and net losses of $24.3 million, $100.2 million and $101.9
million in fiscal years 1990, 1991 and 1993, respectively. While the Company in
fiscal year 1994 and in the first quarter of 1995 had earnings before income
taxes, extraordinary items and cumulative effect of changes in methods of
accounting and before net interest expense of $64.2 million and $21.2 million,
respectively, and net earnings of $37.7 million and $13.0 million,
respectively, there can be no assurance that the Company will continue to
operate profitably in the future. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations".
USE OF PROCEEDS
There will be no proceeds to the Company from the Exchange Offer. The net
proceeds to the Company from the sale of the Old Notes were approximately $98
million. The Company used (or will use) such proceeds to repay outstanding
indebtedness (which matures at various times, not later than July 20, 1996),
including approximately $81 million of indebtedness under the Revolving Credit
Facility. The Company will be able to reborrow amounts repaid under the
Revolving Credit Facility for general corporate purposes, including to finance
any future acquisitions. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Sources of Capital". The
indebtedness repaid with the net proceeds from the sale of the Old Notes bore
interest at an average annual interest rate of approximately 6.9%, as
calculated at April 28, 1995. Pending its application, approximately $22
million of the net proceeds from the sale of the Old Notes has been invested in
short-term investments.
13
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company at March 25,
1995, and as adjusted to give effect to the sale of the Old Notes and the
application of the proceeds thereof as described under "Use of Proceeds".
<TABLE>
<CAPTION>
AS ADJUSTED FOR
THE SALE OF THE
ACTUAL OLD NOTES
------ ---------------
(DOLLARS IN MILLIONS,
EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C>
Amounts payable to banks............................. $ 47.8(a) $ 3.9
Long-term debt and lease obligations:
7 7/8% Notes due 2000.............................. -- 100.0
8 3/8% Notes due 2004.............................. 115.0 115.0
12% Sinking Fund Debentures due 2010............... 10.8 10.8
Industrial Development Revenue Bonds due 2008...... 10.0 10.0(b)
Revolving Credit Facility.......................... 99.1 45.0(b)
Other long-term debt and capital lease obligations. 14.7 14.7
------ ------
Total long-term debt and capital lease obliga-
tions........................................... 249.6 295.5
Shareholders' equity:
4% Cumulative Preferred Shares--60,000 shares
authorized, issued and outstanding, $100 par value
per share, redeemable at $105 a share............. 6.0 6.0
Common Shares--50,000,000 shares authorized,
33,796,447 shares outstanding, $1.00 par value per
share(c).......................................... 33.8 33.8
Capital in excess of par value..................... 256.1 256.1
Accumulated deficit................................ (115.9) (115.9)
Cumulative foreign currency translation adjust-
ments............................................. 2.4 2.4
------ ------
Total shareholders' equity....................... 182.4 182.4
------ ------
Total capitalization............................. $479.8 $481.8
====== ======
</TABLE>
- --------
Note: The information set forth in this table 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 Widia and
related notes thereto incorporated into this Prospectus by reference to
the Company's 1995 Form 8-Ks. The table does not reflect the Company's
sales of interests in certain accounts receivable to third parties. At
March 25, 1995, the amount of the accounts receivable sold was $75
million.
(a) Amounts payable to banks includes $25 million of indebtedness under the
Revolving Credit Facility classified as short-term.
(b) On April 13, 1995, the Company repaid in full its Industrial Development
Revenue Bonds due 2008 with the proceeds of borrowings under the Revolving
Credit Facility. At May 26, 1995, borrowings outstanding under the
Revolving Credit Facility totaled $89 million.
(c) At March 25, 1995, stock options for 2,507,832 shares were outstanding. The
Company's 1994 Long-Term Incentive Plan provides for the granting of up to
2,000,000 additional shares in the form of stock options, restricted stock
and performance awards, of which 866,950 remained available for granting at
March 25, 1995.
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
-----------------------------------------------------------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
3.0 --(a) 2.2 --(b) --(c)
</TABLE>
- --------
(a) A deficiency of $37.2 million in fiscal year 1993 resulted from a charge of
$47.1 million for the consolidation of domestic machine tool manufacturing
operations and charges totaling $22.8 million for the disposition of the
Company's Sano business.
(b) A deficiency of $73.8 million in fiscal year 1991 resulted from a charge of
$75.1 million for plant closing and the relocation of certain machine tool
manufacturing operations.
(c) A deficiency of $9.0 million in fiscal year 1990 resulted from a charge of
$26.6 million for product discontinuance and the reorganization of grinding
machine and certain other machine tool manufacturing operations.
The ratio of earnings to fixed charges for the quarter ended March 25, 1995
was 2.7, as compared to 2.2 for the quarter ended March 26, 1994.
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 to the table. 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)
1994 1993 1992 1991 1990
-------- -------- ------ ------- ------
<S> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS
Sales.................... $1,197.1 $1,029.4 $789.2 $ 754.0 $805.2
Cost of products sold.... 904.8 791.3 612.6 603.2 632.8
-------- -------- ------ ------- ------
Manufacturing margins.. 292.3 238.1 176.6 150.8 172.4
Other costs and expenses
Selling and administra-
tive.................. 222.2 191.3 133.6 132.2 136.0
Consolidation charge... -- 47.1(b) -- -- --
Disposition of subsidi-
ary................... -- 22.8(b) -- -- --
Closing and relocation
charge................ -- -- -- 75.1(c) --
Special charge......... -- -- -- -- 26.6(d)
Other--net............. 5.9 .7 (.2) 1.8 3.0
-------- -------- ------ ------- ------
Total other costs and
expenses............ 228.1 261.9 133.4 209.1 165.6
-------- -------- ------ ------- ------
Operating earnings
(loss).................. 64.2 (23.8) 43.2 (58.3) 6.8
Interest
Interest income ....... 2.6 2.3 2.9 4.0 5.1
Interest expense....... (17.9) (15.7) (19.1) (19.1) (19.7)
-------- -------- ------ ------- ------
Interest--net........ (15.3) (13.4) (16.2) (15.1) (14.6)
-------- -------- ------ ------- ------
Earnings (loss) from
continuing operations
before income taxes,
extraordinary items and
cumulative effect of
changes in methods of
accounting.............. 48.9 (37.2) 27.0 (73.4) (7.8)
Provision for income tax-
es...................... 11.2 8.2 10.9 9.7 5.8
-------- -------- ------ ------- ------
Earnings (loss) from
continuing operations
before extraordinary
items and cumulative
effect of changes in
methods of accounting... 37.7 (45.4)(b) 16.1 (83.1)(c) (13.6)(d)
Discontinued operations
net of income taxes..... -- -- -- (17.1)(e) (10.7)(f)
Extraordinary items
Tax benefit from loss
carryforward.......... -- -- 5.4 -- --
Loss from early extin-
guishment of debt..... -- (4.4)(b) -- -- --
Cumulative effect of
changes in methods of
accounting.............. -- (52.1)(b) -- -- --
-------- -------- ------ ------- ------
Net earnings (loss)...... $ 37.7 $ (101.9) $ 21.5 $(100.2) $(24.3)
======== ======== ====== ======= ======
Earnings (loss) per com-
mon share
Earnings (loss) from
continuing operations
before extraordinary
items and cumulative
effect of changes in
methods of accounting. $ 1.10 $ (1.41) $ .58 $ (3.04) $ (.54)
Discontinued operations
net of income taxes... -- -- -- (.63) (.41)
Extraordinary items
Tax benefit from loss
carryforward........ -- -- .19 -- --
Loss from early
extinguishment of
debt................ -- (.14) -- -- --
Cumulative effect of
changes in methods of
accounting............ -- (1.61) -- -- --
-------- -------- ------ ------- ------
Net earnings (loss).... $ 1.10 $ (3.16) $ .77 $ (3.67) $ (.95)
======== ======== ====== ======= ======
</TABLE>
- --------
(continued on next page)
16
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA--(CONTINUED)
<TABLE>
<CAPTION>
FISCAL YEAR(A)
--------------------------------------
(DOLLARS IN MILLIONS)
1994 1993 1992 1991 1990
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (AT
YEAR END)
Working capital......... $151.4 $114.3 $191.8 $188.0 $253.6
Property, plant and
equipment--net......... 198.8 184.0 121.1 129.7 159.2
Total assets............ 787.6 729.6 578.9 598.4 693.0
Long-term debt and lease
obligations............ 143.0 107.6 154.4 155.9 157.3
Total debt.............. 226.9 185.2 175.6 162.8 169.4
Shareholders' equity.... 157.8 124.1 134.4 129.0 247.7
OTHER DATA
Total debt to total cap-
ital ratio............. 59% 60% 57% 56% 41%
EBITDA(g)............... $ 92.4 $ 72.2 $ 64.1 $ 40.8 $ 57.1
Ratio of EBITDA to in-
terest expense......... 5.2 4.6 3.4 2.1 2.9
Dividends paid to common
shareholders........... $ 12.2 $ 11.6 $ 10.0 $ 17.3 $ 18.6
Capital expenditures.... 43.0 23.4 17.6 15.5 34.1
Backlog of unfilled or-
ders at year end....... 287.1 246.0 249.6 277.3 268.6
</TABLE>
- --------
Note: See "Prospectus Summary--Recent Developments", "Selected Historical
Segment Information", "Selected Historical Geographic Information" and
"Management's Discussion and Analysis of Financial Condition and Results
of Operations".
(a) 1992 includes 53 weeks as compared to 52 weeks included in 1994, 1993, 1991
and 1990.
(b) Earnings (loss) from continuing operations before extraordinary items and
cumulative effect of changes in methods of accounting for fiscal year 1993
includes a charge of $47.1 million (with no current tax effect) for the
consolidation of domestic machine tool manufacturing operations and 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 SFAS 109 and SFAS 106, 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 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 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
charge related to LK Tool of $6.2 million (with no current tax effect).
(g) Represents operating earnings (loss), excluding certain charges which are
discussed below, 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 holders of
Old Notes who tender their Old Notes in the Exchange Offer as an
alternative to net income or as an indicator of the Company's operating
performance. As presented above, EBITDA excludes the following: in 1993, a
charge of $47.1 million (with no current tax effect) for the consolidation
of domestic machine tool manufacturing operations and charges totaling
$22.8 million (with no current tax effect) for the disposition of the
Company's Sano business; in 1991, a charge of $75.1 million (with no
current tax effect) for plant closing and the relocation of certain machine
tool manufacturing operations; and in 1990, a 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.
17
<PAGE>
SELECTED HISTORICAL SEGMENT INFORMATION
<TABLE>
<CAPTION>
FISCAL YEAR(A)
------------------------------------------
(DOLLARS IN MILLIONS)
1994 1993 1992 1991 1990
-------- -------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Sales
Plastics machinery(b)............. $ 503.8 $ 357.2 $301.4 $267.6 $272.8
Machine tools..................... 338.5 355.0 379.7 383.7 433.7
Industrial products(c)............ 354.8 317.2 108.1 102.7 98.7
-------- -------- ------ ------ ------
Total sales..................... $1,197.1 $1,029.4 $789.2 $754.0 $805.2
======== ======== ====== ====== ======
Backlog of unfilled orders at year
end
Plastics machinery(b)............. $ 122.3 $ 85.5 $ 56.1 $ 53.3 $ 48.7
Machine tools..................... 117.4 123.9 188.8 219.7 216.1
Industrial products(c)............ 47.4 36.6 4.7 4.3 3.8
-------- -------- ------ ------ ------
Total backlog................... $ 287.1 $ 246.0 $249.6 $277.3 $268.6
======== ======== ====== ====== ======
Operating earnings (loss)(d)
Plastics machinery(b)(e).......... $ 45.9 $ 29.2 $ 25.7 $ 16.6 $ 20.4
Machine tools..................... 6.8 7.9 14.3 (3.1) 13.7
Industrial products(c)............ 36.3 29.0 18.7 19.0 19.8
Consolidation charge, closing and
relocation charge and special
charge(f)........................ -- (47.1) -- (75.1) (26.6)
Disposition of subsidiary(g)...... -- (22.8) -- -- --
Unallocated corporate
expenses(h)...................... (24.8) (20.0) (15.5) (15.7) (20.5)
-------- -------- ------ ------ ------
Operating earnings (loss)......... 64.2 (23.8) 43.2 (58.3) 6.8
Interest--net..................... (15.3) (13.4) (16.2) (15.1) (14.6)
-------- -------- ------ ------ ------
Earnings (loss) from continuing
operations before income taxes,
extraordinary items and
cumulative effect of changes in
methods of accounting............ $ 48.9 $ (37.2) $ 27.0 $(73.4) $ (7.8)
======== ======== ====== ====== ======
Capital expenditures
Plastics machinery(b)............. $ 13.8 $ 4.2 $ 6.2 $ 6.5 $ 14.4
Machine tools..................... 11.6 8.8 7.1 7.5 15.3
Industrial products(c)............ 17.6 10.4 4.3 1.5 4.4
-------- -------- ------ ------ ------
Total capital expenditures...... $ 43.0 $ 23.4 $ 17.6 $ 15.5 $ 34.1
======== ======== ====== ====== ======
Identifiable assets
Plastics machinery(b)............. $ 295.0 $ 289.0 $219.9 $202.9 $202.1
Machine tools..................... 270.8 243.1 282.8 310.9 360.1
Industrial products(c)............ 195.0 174.4 56.8 63.7 82.1
Unallocated corporate assets(i)... 26.8 23.1 19.4 20.9 48.7
-------- -------- ------ ------ ------
Total assets.................... $ 787.6 $ 729.6 $578.9 $598.4 $693.0
======== ======== ====== ====== ======
</TABLE>
- --------
(a) 1992 includes 53 weeks as compared to 52 weeks included in 1994, 1993, 1991
and 1990.
(b) The increases in the plastics machinery segment are partially attributable
to the inclusion of Ferromatik as of November 8, 1993.
(c) The increases in the industrial products segment are largely attributable
to the inclusion of Valenite as of February 1, 1993.
(d) In 1995, the Company's method of allocating corporate costs to its business
segments was refined to exclude costs for certain services not directly
assignable to the operations of the segments. This change results in
additional costs being retained as unallocated corporate expenses. Amounts
for 1994, 1993, 1992, 1991 and 1990 have been restated to conform to the
Company's 1995 presentation. See the Company's 1995 Form 10-Q, which is
incorporated herein by reference.
(e) 1993 includes a $2.5 million gain on the sale of surplus land.
(f) These charges relate to the machine tool segment.
(g) This charge relates to the plastics machinery segment.
(h) Includes financing costs related to the sale of accounts receivable and
corporate expenses.
(i) Includes cash and cash equivalents and the assets of the Company's
insurance and utility subsidiaries.
18
<PAGE>
SELECTED HISTORICAL GEOGRAPHIC INFORMATION
<TABLE>
<CAPTION>
FISCAL YEAR(A)
--------------------------------------------------
(DOLLARS IN MILLIONS)
1994 1993 1992 1991 1990
-------- -------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Sales
U.S. operations........ $ 873.9 $ 831.9 $654.1 $613.0 $638.3
Foreign operations..... 323.2 197.5 135.1 141.0 166.9
-------- -------- ------ ------ ------
Total sales.......... $1,197.1 $1,029.4 $789.2 $754.0 $805.2
======== ======== ====== ====== ======
Operating earnings
(loss)(b)
U.S. operations........ $ 67.9(c) $ 58.1 $ 57.2 $ 29.5 $ 42.4
Foreign operations..... 21.1(c) 8.0 1.5 3.0 11.5
Consolidation charge,
closing and
relocation charge and
special charge........ -- (47.1)(d) -- (75.1)(d) (26.6)(e)
Disposition of
subsidiary............ -- (22.8)(d) -- -- --
Unallocated corporate
expenses.............. (24.8) (20.0) (15.5) (15.7) (20.5)
-------- -------- ------ ------ ------
Operating earnings
(loss).............. $ 64.2 $ (23.8) $ 43.2 $(58.3) $ 6.8
======== ======== ====== ====== ======
</TABLE>
- --------
Note: Sales of U.S. operations include export sales of $142.0 million in 1994,
$118.7 million in 1993, $111.7 million in 1992, $98.6 million in 1991 and
$82.4 million in 1990. Total sales of the Company's U.S. and foreign
operations to unaffiliated customers outside the U.S. were $417.6 million,
$298.4 million, $242.6 million, $236.0 million and $232.0 million in 1994,
1993, 1992, 1991 and 1990, respectively.
(a) 1992 includes 53 weeks as compared to 52 weeks in 1994, 1993, 1991 and
1990.
(b) In 1995, the Company's method of allocating corporate costs to its U.S.
operations was refined to exclude costs for certain services not directly
assignable to U.S. operations. This change results in additional costs
being retained as unallocated corporate expenses. Amounts for 1994, 1993,
1992, 1991 and 1990 have been restated to conform to the Company's 1995
presentation.
(c) These amounts have been restated to exclude the effects of the forgiveness
of certain intercompany obligations.
(d) These charges relate to U.S. operations.
(e) The 1990 special charge includes $12.2 million for U.S. operations and
$14.4 million for foreign operations.
19
<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.
1994 Compared to 1993
Sales
Sales in 1994 were $1,197 million, which represented a $168 million, or 16%,
increase over 1993. The sales increase was primarily attributable to: (i) a
$147 million, or 41%, increase in plastics machinery sales, which included an
approximately $80 million increase in sales resulting from the acquisition of
Ferromatik in late 1993, with the rest of the plastics machinery increase
coming from injection molding machines, and (ii) a $38 million increase in
industrial products sales, of which about half resulted from the inclusion of
Valenite's sales for twelve months in 1994 versus eleven months in 1993.
Machine tool sales declined by $17 million, or 5%, primarily due to a decline
in demand from the aerospace market.
Sales of all segments to non-U.S. markets increased in 1994 by $119 million,
or 40%, primarily due to the effect of the Ferromatik acquisition. Export
shipments increased by $23 million, or 20%, primarily due to increases in
exports of injection molding machines.
New Orders and Backlog
New orders for 1994 were $1,238 million, which represented a $268 million, or
28%, increase over 1993. Orders for plastics machinery increased $174 million,
or 48%. Approximately $100 million of the increase resulted from the
acquisition of Ferromatik late in 1993. Other contributing factors included
higher demand for U.S.-built injection molding machines and a single $17
million European order. Machine tool new orders increased $47 million, or 16%,
due to a greater demand for Wolfpack-designed products, primarily vertical
machining centers. Orders for industrial products increased $48 million, or
15%, due primarily to both the timing of the Valenite acquisition and
strengthening demand in the U.S.
Export orders approximated $124 million in 1994 compared to $100 million in
1993. The increase in export orders was primarily attributable to the plastics
machinery segment.
At December 31, 1994, the backlog of unfilled orders was $287 million
compared with $246 million at year end 1993. The increase in backlog was
primarily attributable to greater demand for Ferromatik plastics machinery and
vertical machining centers.
Margins, Costs and Expenses
Manufacturing margins increased to 24.4% in 1994 from 23.1% in 1993. Margins
for all three segments improved. Plastics machinery benefited from increased
volume and more stable pricing; machine tools reduced its costs due to the
consolidation (see "--Consolidation Charge"); and industrial products achieved
benefits from increased U.S. sales of grinding wheels, metalworking fluids and
cutting tools.
Selling and administrative expense as a percent of sales was 19% in both 1994
and 1993. Administrative expense was unchanged, but selling costs as a percent
of sales increased due to the mix of products sold and costs related to two
international trade shows in 1994.
Other costs and expenses--net increased by $5.2 million due to: (i) a $2.8
million increase in financing fees, principally attributed to the sale of
receivables, and (ii) the inclusion in 1993 of a $2.5 million gain on the sale
of surplus land.
20
<PAGE>
Interest expense, net of interest income, was $15.3 million in 1994 compared
to $13.4 million in 1993. The increase was due to higher borrowing levels as
well as higher interest rates.
Income Taxes
The consolidated effective tax rate in 1994 is less than the U.S. Federal
rate due primarily to (i) an operating loss in the U.S. for tax reporting
purposes related principally to the machine tool consolidation and (ii)
utilization of net operating loss carryforwards in certain non-U.S.
jurisdictions. At the end of 1994, for U.S. Federal tax reporting purposes, the
Company had net operating loss carryforwards of approximately $41 million,
which expire in 2008 and 2009.
Current tax benefits were not offset against the U.S. loss in 1993 in
accordance with the income tax accounting rules that became effective January
3, 1993. In addition, current tax benefits could not be recognized for losses
in certain non-U.S. jurisdictions.
Consolidation Charge
In December 1993, management adopted a plan to reduce machine tool
manufacturing capacity by consolidating U.S. machine tool manufacturing into
facilities in Cincinnati and accordingly recorded a charge of $47.1 million in
the fourth quarter of 1993. Production at the Company's two machine tool
facilities in Fountain Inn and Greenwood, South Carolina, was phased out during
1994, and the facilities were closed in the fourth quarter of 1994.
The consolidation plan included a provision for the phase-out of production
in South Carolina offset by a simultaneous ramp-up of production in Cincinnati
to minimize the effect of the consolidation on 1994 sales. However, two
important factors necessitated adjustments to the original plan. First, the
favorable job market in South Carolina resulted in an unexpectedly high early
attrition rate affecting both production employees and certain other employees
who were key to the execution of the production phase-out plan. The early
attrition was particularly acute in parts manufacturing and resulted in an
earlier than expected loss of capability in this area, slowing the phase-out of
production in South Carolina and hampering the ramp-up of production in
Cincinnati. To offset some of the lost capability, the Company had to
temporarily utilize more costly subcontract sources. Second, market demand for
machine tool products, including products previously manufactured in South
Carolina, was strong in 1994. This temporarily strained key suppliers, causing
part shortages and further slowing the ramp-up of production in Cincinnati.
These production delays and inefficiencies during the consolidation process
contributed to lower than expected operating earnings in the machine tools
segment and resulted in an estimated $20 million to $30 million reduction in
1994 sales of products previously manufactured in South Carolina.
Completion of the consolidation was originally expected to result in a net
employee reduction of 235 in U.S. machine tool operations. However, increased
customer demand for machine tool products, including the products being
transferred from South Carolina, has caused this target to be reduced to 150.
As a result of the larger than expected number of voluntary terminations and
transfers to Cincinnati, the cost for severance and other fringe benefits was
approximately $6 million less than originally anticipated. Simultaneously, the
delay in the phase-out of production in South Carolina resulted in additional
operating losses of approximately $2 million through the closure date of the
two plants. The net $4 million reduction in the cost of the consolidation was
utilized to absorb incremental costs arising from the Company"s 1990 and 1991
machine tool restructurings, including lower estimated net proceeds from the
sale of the Heald facility, the closure of certain overseas sales offices and
the restructuring of domestic machine tool operations.
The consolidation, once fully implemented, was originally expected to result
in annual cost savings of approximately $16 million. Approximately $12 million
of the $16 million in anticipated savings related to the planned net employee
reduction of 235 people. As a result of the lower than expected reduction, the
actual annual cost savings are now expected to be $4 million less than
originally anticipated. However, higher margins associated with increased sales
should offset this reduction.
21
<PAGE>
Earnings
Earnings before extraordinary items and cumulative effect of changes in
methods of accounting improved to $37.7 million, or $1.10 per share, in 1994
compared to a loss of $45.4 million, or $1.41 per share, in 1993. The 1993 loss
was caused by the $47.1 million consolidation charge described above and a
$22.8 million charge for the disposition of the Company's Sano subsidiary, as
described below.
The net loss for 1993 included the effect of an extraordinary charge of $4.4
million, or $.14 per share, related to the early extinguishment of $60 million
of the Company's 12% Sinking Fund Debentures due 2010.
The net loss for 1993 also included the effect of adopting SFAS 109 and SFAS
106, effective January 3, 1993, resulting in charges to earnings totaling $52.1
million, or $1.61 per share. Except for the cumulative effect, the new rules
regarding postretirement medical benefits did not significantly affect the
Company's earnings in 1994 or 1993, while the new rules regarding income taxes
had the effect of reducing the Company's effective tax rate in 1994 and 1993.
Net earnings were $37.7 million, or $1.10 per share, in 1994, compared to a
net loss of $101.9 million, or $3.16 per share, in 1993. The 1993 net loss was
caused by the aforementioned charges, the extraordinary item and the cumulative
effect of changes in methods of accounting that totaled $126.4 million.
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%; $15 million of the increase resulted from the Ferromatik
acquisition, but the largest factor in the increase resulted from higher
domestic sales of injection molding machines. 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 increased in 1993 by $55 million to
$298 million due to the effect of the acquisitions. 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) received in the
third quarter of 1992 and not repeated in 1993, (ii) reduced demand from
customers in the aerospace industry resulting in a sales decline of about $18
million and (iii) the discontinuation of certain less profitable product lines
resulting in a sales decline of about $12 million.
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
22
<PAGE>
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 1.8 percentage points to the
overall increase in manufacturing margins in 1993.
Selling and administrative expense for 1993 increased over 1992 due to higher
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.
Other costs and expenses--net included a $2.5 million gain on the sale of
land in Austria.
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.
Disposition of Subsidiary
The Company's Sano subsidiary incurred an operating loss of approximately
$26.3 million in 1993, which included charges totaling $22.8 million for the
disposition of the subsidiary. The decision to sell Sano was due in part to
continuing operating losses. In addition, the Sano business did not serve a
major global market with good long-term growth and profit potential and, as a
result, did not meet the Company's criteria for a core business. The business
was sold in February 1994.
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 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.
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 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 the Company's 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 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 106, requires that certain
postretirement benefits, such as 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 109, no income tax benefit could be recorded in connection with the
adoption of SFAS 106. Except for the cumulative effect, the new rules regarding
postretirement
23
<PAGE>
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 charges described above, 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 aforementioned charges, the extraordinary item and
the cumulative effect of changes in methods of accounting that totaled $126.4
million.
LIQUIDITY AND SOURCES OF CAPITAL
At December 31, 1994, the Company had cash and cash equivalents of $22
million, an increase of $3 million during the year. At March 25, 1995, the
Company had cash and cash equivalents of $15 million, a decrease of $7 million
during the quarter. Operating activities provided $8 million of cash in 1994
after deducting incremental cash costs of the consolidation of $14 million, and
$21 million of cash in the first quarter of 1995 after including the net
proceeds from additional sales of accounts receivable of $10 million. Operating
activities provided $22 million in 1993 and used $3 million in the first
quarter of 1994.
Total debt was $297 million at March 25, 1995, an increase of $70 million
over December 31, 1994, caused by the Widia acquisition which was financed
principally with German marks available under the Revolving Credit Facility.
The ratio of total debt to total capital (debt plus equity) was 62% at
March 25, 1995, and 59% at year end 1994. Working capital increased by $65
million in the first quarter of 1995 (including $45 million related to the
acquisition of Widia), and the current ratio improved to 1.5.
Expenditures for new property, plant and equipment in 1994 were $43 million,
including approximately $8 million for the implementation of advanced
manufacturing technologies at Ferromatik and plant modernization at Valenite,
compared to $23 million in 1993. Expenditures for new property, plant and
equipment in the first quarter of 1995 were $9 million, compared to $6 million
in the first quarter of 1994. Proceeds from the disposal of property, plant and
equipment for 1994 were $4 million compared to $22 million in 1993. Proceeds
during 1993 included amounts related to the sale of surplus assets and the sale
and operating leaseback of certain manufacturing equipment. The Company's 1995
capital spending budget is $40 million. In addition, factory equipment valued
at approximately $16 million will be financed through operating leases.
In 1994, the Company completed an offering involving the issuance of $115
million of the Company's 8 3/8% Notes due 2004. The proceeds were used to
redeem at par the Company's outstanding 8 3/8% Senior Notes due 1997 and to
repay short-term debt.
The Company had a number of short-term intercompany loans and advances
denominated in various currencies totaling approximately $40 million and $42
million at December 31, 1994, and March 25, 1995, respectively, that were
subject to foreign exchange risk. The Company also enters into various
transactions in the ordinary course of business for the purchase and sale of
goods and services in various currencies. The Company hedges its exposure to
currency fluctuations related to intercompany loans and advances and the
purchase and sale of goods under firm commitments by entering into foreign
exchange contracts to minimize the effect of foreign currency exchange rate
fluctuations related to significant transactions.
At March 25, 1995, the Company had lines of credit with various U.S. and non-
U.S. banks of approximately $381 million, including the $200 million committed
Revolving Credit Facility. These credit facilities support letters of credit
and leases in addition to providing borrowings under varying terms. The
24
<PAGE>
Revolving Credit Facility imposes restrictions on total indebtedness in
relation to total capital (debt plus tangible net worth, the latter being
approximately equal to shareholders' equity). The Company has remained in
compliance with the restrictions imposed by the Revolving Credit Facility since
the Revolving Credit Facility's inception. Under the provisions of the
Revolving Credit Facility, the Company's additional borrowing capacity totaled
approximately $67 million at March 25, 1995.
The Company entered into an agreement dated as of May 31, 1995, with the
lenders under the Revolving Credit Facility to extend the term of the Revolving
Credit Facility from July 20, 1996 to June 1, 1998. In connection with such
extension, beginning in January 1996, certain required financial ratio levels
imposed on the Company gradually will become more stringent. The Company
believes that it will be able to continue throughout the extended term of the
Revolving Credit Facility to comply with the covenants of the Revolving Credit
Facility, including all required ratio levels. In addition, at the Company's
request, the amount of credit available under the Revolving Credit Facility was
reduced to $150 million in order to reduce commitment fees payable by the
Company thereunder.
On January 27, 1995, the Company sold its American Mine Tool business for $15
million, resulting in a pretax gain of $5 million ($4 million after tax).
On February 1, 1995, the Company completed the acquisition of Widia for
approximately $80 million in cash, financed principally with German marks
available under the Revolving Credit Facility. Widia, with 1994 sales of
approximately $225 million, is one of the world's leading producers of
industrial metalcutting products. The Company intends to take certain actions
to integrate Valenite and Widia to improve future profitability, which will
result in incremental costs and expenses in 1995, including a restructuring
charge which is expected to be approximately $10 million.
On May 17, 1995, the Company completed the offering of $100,000,000 aggregate
principal amount of the Old Notes.
The Company believes that its cash flow from operations and available credit
lines will be sufficient to meet its debt service, capital expenditure and
other operating requirements, including those associated with the acquisition
of Widia.
25
<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 May 10, 1995, 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 May 17, 1995, 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 the date of this Prospectus, $100,000,000 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 , 1995. 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 limited
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 "Risk Factors--Consequences of Failure to Exchange".
Expiration Date; Extensions; Amendments
The term "Expiration Date" shall mean , 1995, 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 the
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
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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 at the rate of 7 7/8% per annum from the
most recent date to which interest has been paid on the Old Notes or, if no
interest has been paid on the Old Notes, from May 17, 1995. In addition,
holders of the New Notes will receive, on the next interest payment date
following the Expiration Date, a payment equal to the amount of accrued and
unpaid Additional Interest, if any, on the Old Notes exchanged for such New
Notes. Holders of Old Notes whose Old Notes are accepted for exchange will not
receive any payment in respect of accrued and unpaid interest (including
Additional Interest, if any) on such Old Notes.
Interest on the New Notes is payable semi-annually on May 15 and November 15
of each year, commencing November 15, 1995.
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, (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.
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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. None of the Company, the Exchange
Agent or 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.
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
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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 September 14, 1995, 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
September 15, 1995, 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 3/8% per annum, representing an
additional 1/2% per annum over the interest rate stated on the face of the Old
Notes (such additional 1/2% per annum being herein called "Additional
Interest"). Holders of Old Notes accepted for exchange will not receive any
payment in respect of accrued and unpaid interest (including Additional
Interest, if any) on such Old Notes. However, holders of New Notes will
receive, on the next interest payment date following the Expiration Date, a
payment equal to the amount of accrued and unpaid Additional Interest, if any,
on the Old Notes exchanged for such New 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
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<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 5:00 p.m, New York
City time on , 1995.
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 to issue New Notes in exchange 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 SEC, 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 SEC,
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.
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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) 390-3039
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, telecopy 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 (as defined) 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 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.
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BUSINESS
GENERAL
Cincinnati Milacron is one of the world's leading manufacturers of plastics
machinery, machine tools and industrial consumable 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 the Company's plastics machinery
products and machine tools are computer-controlled and many include advanced
applications software.
Through strategic acquisitions, accelerated new product development and
consolidation of its U.S. machine tool operations, the Company has made
significant progress since the beginning of 1993 toward achieving a better
balance between its businesses in terms of product, customer and geographic
mix.
The Company currently expects 1995 sales to approach $1.6 billion,
approximately 40% of which is expected to come from the Company's industrial
products segment, making this the Company's largest business segment. The
plastics machinery segment is expected to be the Company's second largest
business segment in 1995. The Company expects the growth in industrial
consumable products and plastics machinery sales to make the Company less
susceptible to the business cycles and historically low margins characteristic
of the machine tool business.
In addition, the Company expects that almost half of its sales for 1995 will
come from sales outside the United States. The Company also expects that its
growing foreign sales, over time, will decrease the Company's dependence upon
the U.S. economy.
Early in 1993, the Company acquired Valenite, expanding the Company's
industrial products segment. See "--Industrial Products Business". In 1993, the
Company also acquired Ferromatik, one of Europe's leading manufacturers of
plastics injection molding machines, expanding the Company's plastics
processing technology base and product line. See "--Plastics Machinery
Business".
The Company's acquisition of Widia, which was completed in February 1995,
complemented Valenite's geographic balance, enhanced the Company's
technological base, diversified its product line and expanded its worldwide
sales and distribution network. Furthermore, by achieving a better balance and
mix between capital goods and industrial products, 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.
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,
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installation time and overall cost. This approach is designed to minimize
inventory obsolescence while providing an opportunity for increased revenue as
the new products achieve market acceptance.
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, and about 90% of the Company's machine tool sales consist of Wolfpack
designs.
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 1994, the Company continued 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, Ferromatik and Widia acquisitions, in the past four years the
Company has sold certain businesses and consolidated certain manufacturing
operations. In 1994, the Company completed a major consolidation of its U.S.
machine tool operations, closing two plants in South Carolina and moving all of
its U.S. production to its main machine tool facilities in Cincinnati.
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 believes it is the largest U.S. producer of plastics machinery.
In 1994, the Company's plastics machinery segment sales were $504 million. The
Company believes it offers more varieties of machinery to process plastic than
any other U.S. company and that its electronic controls and software
enhancements are key selling features.
The Company produces equipment for three major plastics processing
technologies, including a full range of injection molding machines and systems
for extrusion and blow molding. The Company also sells a line of imported
electric injection molding machines and a number of types of auxiliary
equipment, all of which are manufactured by others to the Company's
specifications.
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
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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 plastics 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 have
been strong and rising since the second half of 1992.
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
1994, sales of injection molding machines constituted over two-thirds of the
sales of the Company's plastics machinery segment.
Injection Molding. The Company believes it is the largest U.S. producer of
injection molding machines. Injection molding is the most common and versatile
method of processing plastic, and it is used to make a wide variety of parts
and products ranging from housewares and consumer goods to medical supplies and
industrial components. The Company manufactures many types of injection molding
machines, all of which were developed using Wolfpack principles. Product
standardization (which facilitates part commonality) and 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 has expanded. Sales of injection molding machines
have been at record levels for each of the last three years, in part due to the
acquisition of Ferromatik.
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 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 Ferromatik acquisition expanded the Company's
plastics processing technology base and product line and enabled the Company to
achieve its objective of establishing a plastics machinery manufacturing and
distribution base in Germany to serve Europe and other markets. The Company
believes Ferromatik provides a complementary fit with its previously existing
injection molding machine business.
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The Company has substantially completed 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 this
restructuring has helped and will continue to help it to achieve its cost
reduction goals in both marketing and manufacturing.
The Company conducts its plastics machinery European marketing activities
through Ferromatik's existing network and thus has eliminated expenses
previously incurred by the Company's European marketing operation in Offenbach,
Germany. The Company sells several of its successful plastics machinery lines
to European customers through Ferromatik's sales and distribution network.
Extrusion Systems. Extrusion systems business consists of individual machines
and 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 and wire and cable applications.
Blow Molding Systems. The Company's blow molding systems business consists of
extrusion blow molding systems, which are used to make a wide variety of
products ranging from bottles, jars, vials and other containers, to industrial
parts and toys.
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, all of 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
Cincinnati, Ohio, headquarters, as well as regional offices in Allentown,
Pennsylvania; Charlotte, North Carolina; Chicago, Illinois; Detroit, Michigan;
and Los Angeles, California to market its products and provide customer support
and training. Through its Austrian and Ferromatik subsidiaries, the Company has
an extensive sales, marketing, service and distribution system throughout
Europe.
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<PAGE>
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 1994, the Company's machine tool segment sales were $339
million.
Machine Tool Industry
The primary customers for machine tools are the automotive industry; machine
shops; producers of farm, construction, off-road and power generation
equipment; manufacturers of bearings; the aerospace industry; 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.
The Company's Machine Tool Business
The Company's machine tool segment is comprised of three focused businesses:
standard machine tools, applied machine tool systems and electronic systems.
The Company's standard machine tool 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 applied 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 computer numerically controlled ("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.
Turning Centers. Standard turning centers are designed for ease of use by a
broad variety of customers that do not require custom-designed features.
Applied Machine Tools
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
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contoured surfaces, often out of aluminum and high-strength alloys such as
titanium, 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.
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. Grinding machines are used to bring a
part surface to a more precise dimension 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 1994, this business
experienced very high levels of new orders from the automotive industry.
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.
Electronic Systems
The Company designs and manufactures computer controls and develops
proprietary software for its machine tools and plastics machinery. 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 1994, the Company introduced two major
new families of computer controls, the new CAMAC for plastics machinery and the
Acramatic 2100 for machine tools. Both controls are PC-based and feature an
open architecture platform.
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 applied
machine tool systems.
South Lebanon, Ohio Electronic controls and industrial
software.
</TABLE>
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<PAGE>
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 275 salespeople representing its machine tools in North America,
which is approximately three times more salespeople than it had four years ago.
The Company continues to emphasize 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 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 offices in Allentown, Pennsylvania; Chicago,
Illinois; Detroit, Michigan; and Toronto, Ontario; as well as in Birmingham,
England; and Offenbach, Germany.
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.
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 1994, sales of the Company's industrial products segment were $355
million. 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.
Metalcutting Tools
Metalcutting tools are used in a wide variety of metalcutting operations. The
Company believes that, through its subsidiaries, Valenite and Widia, it is the
second largest producer of carbide metalcutting tool systems in the U.S. and
the third largest worldwide. Valenite manufactures over 33,000 products,
including an extensive line of cutting tool inserts in a wide variety of
materials and geometries for turning, boring, milling and drilling, and
standard and special steel insert holders. Valenite has strong market positions
in
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<PAGE>
carbide die and wear products for metalforming and in products requiring the
wear and corrosion resistant properties of tungsten carbide.
In February 1995, the Company completed the acquisition of Widia, a major
European cutting tool maker with key production facilities in Germany and other
Western European countries. Widia also owns a 51% interest in Widia (India)
Ltd., an Indian public company. Widia's product lines include tungsten carbide
cutting tool inserts and steel insert holders needed for metalcutting
operations, carbide die and wear products used in forming and stamping metal,
and both soft and permanent industrial magnets, used in automotive and other
applications.
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 four 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, cubic boron nitride (CBN), diamond and synthetic
ceramic abrasive types.
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.
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<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.
Bangalore, India* Carbide inserts, steel insert holders,
carbide die and wear products and special
machine tools.
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.
Dreux, France* Carbide inserts.
Essen, Germany* Carbide inserts, magnets and carbide rods.
Gainesville, Texas Turning tools, milling cutters and boring
bars.
Hardenberg, The Netherlands* Carbide die and wear products.
Lichtenau, Germany* Steel insert holders.
Nogales, Mexico Precision grinding wheels.
Patancheru, India* Rock tools.
Sinsheim, Germany Special steel tooling products.
Tokyo, Japan Carbide inserts and steel tools.
Vitoria, Spain* Special braised 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>
- --------
* Widia facilities acquired February 1, 1995.
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 service, training, and applications engineering at most of the
Company's regional offices in the U.S. and Europe. See "Machine Tool Business--
Sales, Marketing and Customer Service" for a description of the regional
offices. 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. Widia maintains a market channel in Europe
and India similar to that of Valenite in the U.S.
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, through its subsidiaries, Valenite and Widia, it
is the second largest producer of metalcutting tool systems in the U.S. and the
third largest worldwide. The Company also believes that Widia is the second
largest tooling company in Europe and that Widia (India) Ltd. is the largest
carbide insert producer in India.
40
<PAGE>
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 governing
the Notes 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.
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 HEREIN 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 May 15, 2000, will be limited to $100,000,000 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 the most recent date to which interest has
been paid or, if no interest has been paid on the Old Notes, from May 17, 1995,
at the rate per annum set forth on the cover page hereof, payable semiannually
on May 15 and November 15 of each year to the holders of record at the close of
business on the next preceding May 1 or November 1, respectively. Interest will
be computed on the basis of a 360-day year of twelve 30-day months. If by
September 14, 1995, neither the Exchange Offer is consummated nor the Shelf
Registration Statement is declared effective, interest will accrue on the Old
Notes from and including September 15, 1995, 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 3/8% per annum, representing
Additional Interest of 1/2% per annum. Holders of New Notes will receive, on
the next interest payment date following the Expiration Date, a payment equal
to the amount of accrued and unpaid Additional Interest, if any, on the Old
Notes exchanged for such New Notes. Holders of Old Notes whose Old Notes are
accepted for exchange will not receive any payment in respect of accrued and
unpaid interest (including Additional Interest, if any) on such Old Notes.
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)
In addition to the Old Notes, as of the date of this Prospectus, $10.8
million of 12% Sinking Fund Debentures due 2010 and $115.0 million of 8 3/8%
Notes due 2004 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.
RANKING
The New Notes will be unsecured obligations of the Company and will rank pari
passu with other existing unsecured debt of the Company. At March 25, 1995,
after giving effect to the sale of the Old Notes
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<PAGE>
and the application of the proceeds thereof, the Company would have had
outstanding approximately $299.4 million of senior indebtedness, including the
Old Notes, and the Company would not have had any subordinated indebtedness
outstanding. Except for approximately $3.9 million of indebtedness related to
Industrial Development Revenue Bonds and $9.4 million of indebtedness assumed
in connection with the acquisitions of Ferromatik and Widia, the Company had no
debt secured by properties or equipment at March 25, 1995.
BOOK-ENTRY, DELIVERY AND FORM
Except as set forth in the next paragraph, the New Notes will be issued in
the form of a global note (the "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.
Notes that were (i) transferred to institutional "accredited investors" who
are not "qualified institutional buyers" (as such terms are defined under the
Securities Act (the "Non-Global Purchasers")) or (ii) issued as described below
under "--Certificated Notes", may be issued in the form of registered
definitive certificates (the "Certificated Notes"). Upon the transfer to a
qualified institutional buyer of Certificated Notes initially issued to a Non-
Global Purchaser, such Certificated Notes may, unless the Global Note has
previously been exchanged for Certificated Notes, be exchanged for an interest
in the Global Note.
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 " 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 (which may include the Initial
Purchasers), 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.
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
Global Note 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 Global Note 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
Global Note.
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. Owners of beneficial interests in the Global Note will not be
entitled to have the Notes represented by such Global Note registered in their
names 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
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<PAGE>
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 Note.
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 the 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.
CERTIFICATED NOTES
In addition to transfers to Non-Global Purchasers as described above, 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
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 Notes issuable in
authorized denominations and registered in such names as the Depository shall
direct.
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 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 terms
of 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 SEC with respect to a registered offer to
exchange the Old Notes for the New Notes, which will have terms substantially
43
<PAGE>
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
June 16, 1995, and (ii) to use its best efforts to cause the Registration
Statement to be declared effective under the Securities Act on or before
September 14, 1995. The Company has agreed to keep the Exchange Offer open for
not less than 30 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. The
Company is entitled to close the Exchange Offer 30 days after the commencement
thereof, provided that it has accepted all Old Notes theretofore validly
tendered in accordance with the terms of the Exchange Offer. 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 at the rate of 7
7/8% per annum from the most recent date to which interest has been paid on the
Old Note or, if no interest has been paid on the Old Note, from May 17, 1995.
In addition, holders of New Notes will receive, on the next interest payment
date following the Expiration Date, a payment equal to the amount of accrued
and unpaid Additional Interest, if any, on the Old Notes exchanged for such New
Notes.
Under existing SEC 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 SEC; 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 SEC 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 SEC 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 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 will 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 Rights Agreement which are applicable to such a
holder (including certain indemnification obligations).
The Registration Rights Agreement provides that if by June 16, 1995, neither
the Registration Statement nor the Shelf Registration Statement has been filed
with the SEC, interest will accrue on the Old Notes from
44
<PAGE>
and including June 17, 1995, until but excluding the earlier of the date the
Registration Statement or the Shelf Registration Statement is filed and
September 15, 1995, at a rate of 8 3/8% per annum, representing Additional
Interest of 1/2% per annum. If by September 14, 1995, neither the Exchange
Offer is consummated nor the Shelf Registration Statement is declared
effective, interest will accrue on the Old Notes from and including September
15, 1995, 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 3/8% per annum, representing Additional Interest of 1/2% per
annum. At all other times, the Old Notes will bear interest at the rate of 7
7/8% 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 Debt
Securities 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 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
45
<PAGE>
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. ((S)
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. ((S) 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. ((S) 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). ((S) 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. ((S)
1.01 of the Indenture)
"Restricted Subsidiary" means each Subsidiary other than Unrestricted
Subsidiaries. ((S) 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. ((S) 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. ((S) 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. ((S) 1.01 of the Indenture)
46
<PAGE>
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. ((S) 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; 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. ((S) 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
47
<PAGE>
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. ((S) 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. ((S) 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. ((S)
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. ((S)(S) 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.
((S) 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.
((S)(S) 9.01 and 9.07 of the Indenture)
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. ((S) 13.02 of the Indenture)
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<PAGE>
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. ((S)(S) 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. ((S)(S) 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, the Trustee under the Indenture.
49
<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.
CERTAIN FEDERAL
INCOME TAX CONSIDERATIONS
The following discussion is a summary of the material 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 OF THE OLD NOTES 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.
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<PAGE>
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 December 31, 1994,
and January 1, 1994, and for each of the three years in the period ended
December 31, 1994, appearing in this Prospectus and Registration Statement have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon appearing elsewhere herein and in the Registration Statement,
and are included in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing. The combined financial statements
of Widia incorporated by reference in this Prospectus and Registration
Statement have been audited by Coopers & Lybrand 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 February 1, 1995 (as amended by the
Company's Form 8-K/A relating thereto filed April 14, 1995). The financial
statements audited by Coopers & Lybrand GmbH have been incorporated herein by
reference in reliance on such firm's report given upon the authority of such
firm as experts in accounting and auditing.
51
<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 Sat-
urday closest to December 31 in fiscal years 1994, 1993 and 1992...... F-2
Consolidated Balance Sheet as of the Saturday closest to December 31 in
fiscal years 1994 and
1993.................................................................. F-3
Consolidated Statement of Changes in Shareholders' Equity for the fis-
cal years ended the Saturday closest to December 31 in fiscal years
1994, 1993 and 1992................................................... F-4
Consolidated Statement of Cash Flows for the fiscal years ended the
Saturday closest to
December 31 in fiscal years 1994, 1993 and 1992....................... F-5
Notes to Consolidated Financial Statements............................. F-6
Report of Independent Auditors......................................... F-16
</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) 1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Sales................................................ $1,197.1 $1,029.4 $ 789.2
Cost of products sold................................ 904.8 791.3 612.6
-------- -------- -------
Manufacturing margins.............................. 292.3 238.1 176.6
Other costs and expenses
Selling and administrative......................... 222.2 191.3 133.6
Consolidation charge............................... - 47.1 -
Disposition of subsidiary.......................... - 22.8 -
Other - net........................................ 5.9 .7 (.2)
-------- -------- -------
Total other costs and expenses................... 228.1 261.9 133.4
-------- -------- -------
Operating earnings (loss)............................ 64.2 (23.8) 43.2
Interest
Income............................................. 2.6 2.3 2.9
Expense............................................ (17.9) (15.7) (19.1)
-------- -------- -------
Interest - net................................... (15.3) (13.4) (16.2)
-------- -------- -------
EARNINGS (LOSS) BEFORE INCOME
TAXES, EXTRAORDINARY ITEMS AND
CUMULATIVE EFFECT OF CHANGES IN
METHODS OF ACCOUNTING.............................. 48.9 (37.2) 27.0
Provision for income taxes........................... 11.2 8.2 10.9
-------- -------- -------
EARNINGS (LOSS) BEFORE EXTRAORDINARY
ITEMS AND CUMULATIVE EFFECT OF
CHANGES IN METHODS OF ACCOUNTING................... 37.7 (45.4) 16.1
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) -
-------- -------- -------
NET EARNINGS (LOSS).................................. $ 37.7 $ (101.9) $ 21.5
======== ======== =======
EARNINGS (LOSS) PER COMMON SHARE
Earnings (loss) from continuing
operations before extraordinary items
and cumulative effect of changes in
methods of accounting............................ $ 1.10 $ (1.41) $ .58
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) -
-------- -------- -------
NET EARNINGS (LOSS)................................ $ 1.10 $ (3.16) $ .77
======== ======== =======
</TABLE>
See notes to consolidated financial statements.
F-2
<PAGE>
CONSOLIDATED BALANCE SHEET
CINCINNATI MILCRON INC. AND SUBSIDIARIES
Fiscal year ends on Saturday closest to December 31.
<TABLE>
<CAPTION>
(In millions) 1994 1993
-------- -------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents.................................. $ 21.5 $ 18.8
Notes and accounts receivable
less allowances.......................................... 188.0 188.3
Inventories
Raw materials............................................ 25.4 21.5
Work-in-process and finished parts....................... 162.8 155.7
Finished products........................................ 79.0 70.0
-------- -------
Total inventories...................................... 267.2 247.2
Other current assets....................................... 38.0 29.3
-------- -------
Total current assets..................................... 514.7 483.6
Property, plant and equipment - net.......................... 198.8 184.0
Other noncurrent assets...................................... 74.1 62.0
-------- -------
TOTAL ASSETS................................................. $ 787.6 $ 729.6
======== =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Amounts payable to banks................................... $ 62.8 $ 74.2
Long-term debt and lease obligations
due within one year...................................... 21.1 3.4
Trade accounts payable..................................... 99.2 84.6
Advance billings and deposits.............................. 39.6 36.9
Accrued and other current liabilities...................... 140.6 170.2
-------- -------
Total current liabilities................................ 363.3 369.3
Long-term accrued liabilities................................ 123.5 128.6
Long-term debt and lease obligations......................... 143.0 107.6
-------- -------
TOTAL LIABILITIES.......................................... 629.8 605.5
-------- -------
Commitments and contingencies................................ - -
Shareholders' equity
4% Cumulative Preferred shares............................. 6.0 6.0
Common shares, $1 par value (outstanding:
33.7 in 1994 and 33.5 in 1993)........................... 33.7 33.5
Capital in excess of par value............................. 255.5 251.3
Accumulated deficit........................................ (125.9) (151.2)
Cumulative foreign currency translation
adjustments.............................................. (11.5) (15.5)
-------- -------
TOTAL SHAREHOLDERS' EQUITY............................. 157.8 124.1
-------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY................... $ 787.6 $ 729.6
======== =======
</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% Foreign
Cumulative Common Capital in Currency Total
Preferred Shares, Excess of Accumulated Translation Shareholders'
(In millions, except share amounts) Shares $1 Par Value Par Value Deficit Adjustments Equity
---------- ------------ ---------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
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
Stock options exercised and restricted stock
awarded for 203,404 common shares............ .2 4.1 4.3
Sale of 6,998 treasury shares.................. .1 .1
Net earnings for the year...................... 37.7 37.7
Cash dividends
Preferred shares ($4.00 per share)........... (.2) (.2)
Common shares ($.36 per share)............... (12.2) (12.2)
Foreign currency translation adjustments....... 4.0 4.0
---- ----- ------ ------- ------ ------
BALANCE AT YEAR-END 1994....................... $6.0 $33.7 $255.5 $(125.9) $(11.5) $157.8
==== ===== ====== ======= ====== ======
</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) 1994 1993 1992
------- -------- -------
<S> <C> <C> <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
OPERATING ACTIVITIES CASH FLOWS
Net earnings (loss)........................... $ 37.7 $(101.9) $ 21.5
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.............................. 28.2 26.1 20.9
Consolidation charge...................... - 47.1 -
Disposition of subsidiary................. - 22.8 -
Deferred income taxes..................... .5 1.5 1.5
Working capital changes
Notes and accounts receivable........... 4.8 31.6 13.0
Inventories............................. (19.8) 24.2 (16.5)
Other current assets.................... (.4) 5.1 1.3
Trade accounts payable.................. 13.3 (8.3) 9.6
Other current liabilities............... (42.5) (61.5) (29.5)
Increase in other noncurrent assets....... (3.2) (2.1) (3.3)
Decrease in long-term accrued liabilities. (6.2) (10.1) (11.0)
Other - net............................... (4.4) (8.8) (9.7)
------ ------- ------
Net cash provided (used) by operating
activities............................ 8.0 22.2 (2.2)
------ ------- ------
INVESTING ACTIVITIES CASH FLOWS
Capital expenditures.......................... (43.0) (23.4) (17.6)
Net disposals of property, plant and
equipment................................... 4.3 22.2 11.1
Acquisitions.................................. (1.9) (112.5) -
Divestitures.................................. 3.2 5.0 -
------ ------- ------
Net cash used by investing activities....... (37.4) (108.7) (6.5)
------ ------- ------
FINANCING ACTIVITIES CASH FLOWS
Dividends paid................................ (12.4) (11.8) (10.2)
Issuance of long-term debt.................... 115.4 - -
Repayments of long-term debt and lease
obligations................................. (62.8) (61.9) (1.4)
Increase (decrease) in amounts payable
to banks.................................... (12.5) 54.8 15.9
Net issuance of common shares................. 4.4 114.0 3.1
Redemption premium on early extinguishment
of debt..................................... - (4.7) -
------ ------- ------
Net cash provided by financing activities... 32.1 90.4 7.4
------ ------- ------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.. 2.7 3.9 (1.3)
Cash and cash equivalents at beginning of year.... 18.8 14.9 16.2
------ ------- ------
CASH AND CASH EQUIVALENTS AT END OF YEAR.......... $ 21.5 $ 18.8 $ 14.9
====== ======= ======
</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:
1994: December 31, 1994
1993: January 1, 1994
1992: January 2, 1993
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 costs and
expenses - 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, including provisions for
obsolescence commensurate with known or estimated exposures. The principal
methods of determining costs are last-in, first-out (LIFO) for most 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.
Property, plant and equipment currently idle and held for sale or identified for
sale in the future are valued at the lower of historical cost less accumulated
depreciation, or estimated net realizable value. Carrying costs through the
expected disposal dates of such assets are accrued at the time expected losses
are recognized or, in the case of assets to be sold at a gain, charged to
expense as incurred.
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 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 fiscal year 1992 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.
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:
<TABLE>
<CAPTION>
Cumulative Effect of Changes in Methods of Accounting
1993
----------------------
Charge to Per Common
(In millions, except per share amounts) Earnings Share
--------- ----------
<S> <C> <C>
Income taxes.............................. $ (4.2) $ (.13)
Retiree health care benefits
(with no current tax effect)............. (47.9) (1.48)
------ ------
$(52.1) $(1.61)
====== ======
</TABLE>
F-6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
CONSOLIDATION CHARGE
In December, 1993, management adopted a plan to reduce machine tool
manufacturing capacity by consolidating U.S. machine tool manufacturing into
facilities in Cincinnati and accordingly, recorded a charge of $47.1 million
(with no current tax effect). Production at the company's two machine tool
facilities in Fountain Inn and Greenwood, South Carolina was phased out during
1994 and the plants were closed by year-end. The consolidation addressed excess
manufacturing capacity created by two factors: the company's successful Wolfpack
program, which 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 plan included a
provision for the phase out of production in South Carolina offset by a
simultaneous ramp up of production in Cincinnati in order to minimize the effect
of the consolidation on 1994 sales.
Major components of the charge are reflected in the following table.
<TABLE>
<CAPTION>
Consolidation Charge
(In millions) 1993
-----
<S> <C>
Severance and other fringe benefits............... $ 9.1
Costs to relocate key employees
and production................................... 10.0
Write-downs of inventory of discontinued
products......................................... 6.1
Loss on disposal of plant and equipment........... 4.9
Accrual for operating losses through plant
closing dates.................................... 13.6
Other............................................. 3.4
-----
$47.1
=====
</TABLE>
Reserves related to additional cash costs to be incurred principally in the
first quarter of 1995 totaled approximately $2.6 million at year-end 1994.
Completion of the consolidation was originally expected to result in a net
employee reduction of 235 in U.S. machine tool operations. However, increased
customer demand for machine tool products, including the products being
transferred from South Carolina, has caused this target to be reduced to 150. In
addition, the favorable job market in South Carolina resulted in an unexpectedly
high early attrition rate at the facilities to be closed. As a result of these
factors, the cost for severance and other fringe benefits was approximately $6
million less than the original estimate reflected above. Simultaneously, a
higher than expected number of voluntary terminations slowed the phase out of
production in South Carolina and as a result, operating losses through the
closure date of the two plants were approximately $2 million higher than
originally expected. The net $4 million reduction in the cost of the
consolidation was utilized to absorb incremental costs arising from the 1990 and
1991 machine tool restructurings, including lower estimated net proceeds from
the sale of the Heald facility, the closure of certain overseas sales offices
and the restructuring of domestic machine tool operations.
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 did not
serve a major global market with good long-term growth and profit potential and
as a result, did not meet the company's criteria for a core business. In
February, 1994, the company completed the sale of Sano resulting in initial cash
proceeds of $2.0 million. The remainder of the gross sales price of
approximately $7 million is being received through the collection of trade
receivables and in varying installments through 1999.
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 was accounted for under the purchase method, was financed
principally through the sale of $50 million of accounts receivable and
borrowings under the company's 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 74.8
million (approximately $44 million) in cash and DM 10.6 million (approximately
$6 million) in assumed debt. The acquisition, which was 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.
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 specialty applications.
The aggregate acquisition cost of the company's investments in Valenite and
Ferromatik, including professional fees and other costs related thereto, was
approximately $115.5 million. The following table presents the allocation of the
aggregate acquisition cost to the assets acquired and liabilities assumed.
Goodwill arising from the Valenite and Ferromatik acquisitions, which is
included in other noncurrent assets in the following table, totaled $15.6
million.
F-7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Allocation of Acquisition Cost
(In millions) 1993
------
<S> <C>
Cash and cash equivalents........................ $ 1.1
Accounts receivable.............................. 54.6
Inventories...................................... 74.2
Other current assets............................. 19.5
Property, plant and equipment.................... 91.1
Other noncurrent assets.......................... 28.6
------
Total assets.................................... 269.1
------
Amounts payable to banks and
long-term debt due within one year.............. 13.1
Other current liabilities........................ 103.7
Long-term accrued liabilities.................... 31.6
Long-term debt and lease obligations............. 5.2
------
Total liabilities............................... 153.6
------
Total acquisition cost........................... $115.5
======
</TABLE>
As presented above, other current liabilities includes a reserve of $44.0
million for the restructuring of Valenite for future profitability. The
restructuring plan included 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,
to the extent reflected in the allocation of acquisition cost, was $53.7 million
($25.8 million in cash) and included amounts for severance, relocation and
losses on the sale of surplus inventory, machinery and equipment and production
facilities. Additional costs in 1993 and 1994 related to the overall
restructuring plan that were not reserved for in the allocation of acquisition
cost totaled $11.4 million, of which $7.9 million was recorded as capital
expenditures with the remaining $3.5 million being charged to expense as
incurred. The restructuring, which began March 2, 1993, was completed in 1994.
Other current liabilities also includes a reserve of $6.5 million for the
restructuring of Ferromatik during 1994. Capital expenditures related to the
overall restructuring plan, which are not reserved in the allocation of
acquisition cost, totaled $.3 million in 1994 but will be more significant in
1995. 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
identified additional restructuring actions, including further personnel
reductions, that are intended to improve Ferromatik's profitability in the
future. These actions, which complement the actions already taken prior to the
acquisition, were substantially completed during 1994 except for the capital
expenditures to be made in 1995.
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 those years is as follows:
<TABLE>
<CAPTION>
Pro Forma Information
(In millions, except per-share amounts) 1993 1992
------- --------
<S> <C> <C>
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
======= ========
</TABLE>
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.
<TABLE>
<CAPTION>
Research and Development
(In millions) 1994 1993 1992
----- ----- -----
<S> <C> <C> <C>
Research and development.... $46.8 $41.9 $34.1
===== ===== =====
</TABLE>
RETIREMENT BENEFIT PLANS
Summarized in the following tables are the company's pension cost (income)
and funded status of its major pension plans.
<TABLE>
<CAPTION>
Pension Cost (Income)
(In millions) 1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
Service cost (benefits earned
during the period).......................... $ 7.6 $ 6.3 $ 6.3
Interest cost on projected
benefit obligation.......................... 32.2 31.5 29.0
Actual loss (return) on plan assets.......... 4.8 (54.8) (24.0)
Net amortization and deferral................ (47.0) 14.3 (18.7)
------ ------ ------
Pension cost (income)........................ $ (2.4) $ (2.7) $ (7.4)
====== ====== ======
</TABLE>
F-8
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Funded Status of Pension Plans at Year-End
(In millions) 1994 1993
------- -------
<S> <C> <C>
Vested benefit obligation............................. $(316.6) $(340.2)
======= =======
Accumulated benefit obligation........................ $(331.9) $(353.7)
======= =======
Plan assets at fair value, primarily listed
stocks and debt securities, including
company stock of $14.9 in 1994
and $14.0 in 1993.................................... $ 366.1 $ 396.9
Projected benefit obligation.......................... (383.7) (416.9)
------- -------
Deficiency of plan assets in relation
to projected benefit obligation...................... (17.6) (20.0)
Unrecognized net (gain ) loss......................... 41.6 46.8
Unrecognized net transition asset..................... (24.8) (30.2)
------- -------
Accrued pension liability............................. $ (.8) $ (3.4)
======= =======
</TABLE>
At December 31, 1994, the projected benefit obligation of the company's U.S.
plan exceeded its assets by $28.9 million, while the assets of the plan for
United Kingdom employees exceeded the projected benefit obligation by $11.3
million. A contribution of $.1 million was made to the U.S. plan in 1994.
Because of the funded status of the two plans, no other contributions were
required or made in the three year period ended December 31, 1994.
For 1994 and 1993, the assumed discount rates used in determining the projected
benefit obligation were 9% and 7 1/2%, respectively. The assumed rate of
increase in remuneration was 5% for 1994 and 4 1/2% for 1993. 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.
<TABLE>
<CAPTION>
Accrued Postretirement Health Care Benefits
(In millions) 1994 1993
------- -------
<S> <C> <C>
Accumulated postretirement benefit obligation
Retirees...................................... $(35.2) $(42.6)
Fully eligible active participants............ (5.4) (7.4)
Other active participants..................... (7.5) (8.1)
------ ------
(48.1) (58.1)
Unrecognized net loss.......................... 2.6 9.8
------ ------
$(45.5) $(48.3)
====== ======
</TABLE>
At year-end 1994, $1.5 million of the total liability for postretirement health
care benefits is included in current liabilities in the Consolidated Balance
Sheet.
Retiree health care costs for 1994 were $4.8 million, consisting of service cost
of $.5 million, interest of $4.0 million and amortization of $.3 million. In
1993, retiree health care costs were $4.5 million, including service cost and
interest of $.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 in 1992.
The discount rates used in calculating the accumulated postretirement benefit
obligation were 8 1/2% for 1994 and 7% for 1993. For 1995, the assumed rate of
increase in health care costs used to calculate the accumulated postretirement
benefit obligation is 10%. This rate is assumed to decrease to varying degrees
annually to 6% 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.
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 1994 and 1993 are presented in the following table.
F-9
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Components of Deferred Tax Assets and Liabilities
(In millions) 1994 1993
------- -------
<S> <C> <C>
Deferred tax assets
Net operating loss and various tax
credit carryforwards.......................... $ 56.8 $ 40.8
Accrued postretirement health care benefits..... 15.4 16.9
Inventories, principally due to obsolescence
reserves and additional costs inventoried
for tax purposes.............................. 7.1 5.6
Accrued employee benefits other than
pensions and retiree health care benefits..... 5.2 3.2
Accrued pension costs........................... 4.6 5.3
Accrued warranty costs.......................... 3.2 2.2
Accounts receivable, principally due to
allowances for doubtful accounts.............. 1.8 1.3
Consolidation, restructuring and
other reserves................................ 2.0 34.8
Foreign investments............................. 1.4 9.2
Other........................................... 15.8 13.1
------ ------
Total deferred tax assets..................... 113.3 132.4
Less valuation allowance...................... (85.7) (95.7)
------ ------
Net deferred tax assets..................... 27.6 36.7
------ ------
Deferred tax liabilities
Property, plant and equipment, principally
due to differences in depreciation methods.... 18.5 26.1
Undistributed earnings of foreign subsidiaries.. - 3.9
Pension assets.................................. 3.5 2.9
Other........................................... 7.6 4.2
------ ------
Total deferred tax liabilities................ 29.6 37.1
------ ------
Net deferred tax liability........................ $ (2.0) $ (.4)
====== ======
</TABLE>
Summarized in the following tables are the company's earnings (loss) 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.
<TABLE>
<CAPTION>
Earnings (Loss) Before Income Taxes, Extraordinary Items and
Cumulative Effect of Changes in Methods of Accounting
(In millions) 1994 1993 1992
------- -------- --------
<S> <C> <C> <C>
United States............... $32.7 $(41.5) $28.0
Foreign..................... 16.2 4.3 (1.0)
----- ------ -----
$48.9 $(37.2) $27.0
===== ====== =====
</TABLE>
<TABLE>
<CAPTION>
Provision for Income Taxes
Deferred
Liability Method Method
---------------- --------
(In millions) 1994 1993 1992
----- ------ -----
<S> <C> <C> <C>
Current provision
United States................ $ 4.1 $ - $ -
State and local.............. 3.4 2.4 1.7
Foreign...................... 3.2 4.3 2.3
----- ---- -----
10.7 6.7 4.0
----- ---- -----
Deferred provision
United States................ - - .6
Foreign...................... .5 1.5 .9
----- ---- -----
.5 1.5 1.5
----- ---- -----
Provision recognized as
extraordinary benefit........ - - 5.4
----- ---- -----
$11.2 $8.2 $10.9
===== ==== =====
</TABLE>
<TABLE>
<CAPTION>
Components of the Provision for Deferred Income Taxes
Deferred
Liability Method Method
-------------------- --------
(In millions) 1994 1993 1992
--------- -------- --------
<S> <C> <C> <C>
Tax effects of consolidation,
restructuring and other reserves $ 32.8 $ (9.2) $ 1.2
Change in deferred revenue (.2) (16.3) -
Depreciation (7.6) 1.3 -
Change in valuation allowance (10.0) 25.5 -
Change in deferred taxes related to
operating loss carryforward (16.0) (1.3) -
Other 1.5 1.5 .3
----- ------ -----
$ .5 $ 1.5 $ 1.5
===== ====== =====
</TABLE>
<TABLE>
<CAPTION>
Reconcilement of the U.S. Statutory Rate to the Tax Provision Rate
Deferred
Liability Method Method
---------------- --------
1994 1993 1992
-------- ------ --------
<S> <C> <C> <C>
U.S. statutory tax rate.................. 35.0% (35.0)% 34.0%
Increase (decrease) resulting from
Losses without current tax benefits.... 5.6 56.1 5.1
Tax benefits from net reversal of
U.S. temporary differences............. (15.1) - -
Effect of operations outside the U.S... (9.5) (5.5) (2.7)
State and local taxes, net of federal
benefit.............................. 7.0 6.5 4.2
Other.................................. (.1) (.1) (.2)
----- ----- ----
22.9% 22.0% 40.4%
===== ===== ====
</TABLE>
F-10
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 a closing and relocation charge of $75.1 million recorded in
1991 and a special charge of $32.8 million for product discontinuance and the
reorganization of grinding machine and certain other machine tool manufacturing
operations recorded in 1990.
For U.S. tax reporting purposes, at year-end 1994, the company had net operating
loss carryforwards of approximately $41 million which expire in 2008 and 2009.
Undistributed earnings of foreign subsidiaries which are intended to be
indefinitely reinvested aggregated $42 million at the end of 1994.
Income taxes of $10.4 million, $16.1 million and $5.0 million were paid in 1994,
1993 and 1992, respectively.
RECEIVABLES
The components of notes and accounts receivable less allowances are shown
in the following table.
<TABLE>
<CAPTION>
Notes and Accounts Receivable Less Allowances
(In millions) 1994 1993
------ ------
<S> <C> <C>
Notes receivable....................... $ 12.9 $ 6.0
Accounts receivable.................... 183.8 190.2
------ ------
196.7 196.2
Less allowances for doubtful accounts.. 8.7 7.9
------ ------
$188.0 $188.3
====== ======
</TABLE>
The acquisition of Valenite was financed in part through the sale of $50.0
million of the company's U.S. accounts receivable. The sale transaction 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. On March 18, 1994, the receivables purchase agreement
was amended and restated to provide for the sale of up to $65.0 million of
interests in accounts receivable through January, 1996, the termination date of
the agreement. At December 31, 1994, and January 1, 1994, the undivided interest
in the company's gross accounts receivable that had been sold to the purchaser
aggregated $65.0 million and $50.0 million, respectively. 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 costs and expenses - net in the Consolidated Statement of
Earnings. The proceeds are reported as providing operating cash flow in the
Consolidated Statement of Cash Flows.
INVENTORIES
Inventories amounting to $136.1 million for 1994 and $134.8 million for 1993 are
stated at LIFO cost. Such inventories if stated at FIFO cost would be greater by
approximately $59.5 million in 1994 and $57.4 million in 1993.
As presented in the Consolidated Balance Sheet, inventories are net of reserves
for obsolescence of $38.6 million and $33.8 million in 1994 and 1993,
respectively.
PROPERTY, PLANT AND EQUIPMENT
The components of property, plant and equipment are shown in the following
table.
<TABLE>
<CAPTION>
Property, Plant and Equipment - Net
(In millions) 1994 1993
------ ------
<S> <C> <C>
Land.............................................. $ 8.1 $ 8.4
Buildings......................................... 139.4 138.3
Machinery and equipment........................... 301.8 284.6
------ ------
449.3 431.3
Less accumulated amortization and
allowances for depreciation..................... 250.5 247.3
------ ------
$198.8 $184.0
====== ======
</TABLE>
OTHER ASSETS
At December 31, 1994, other current assets includes $10.3 million related to
assets held for sale, including the net book value of Valenite's American Mine
Tool business, which was sold in January, 1995, and certain idle production
facilities which are expected to be sold in 1995.
At December 31, 1994, the $5.9 million carrying value of the two South Carolina
facilities that were closed in connection with the machine tool consolidation is
included in other noncurrent assets. At January 1, 1994, property, plant and
equipment - net included $7.2 million related to these facilities which were
still in use at that time.
LIABILITIES
The components of accrued and other current liabilities and long-term accrued
liabilities are shown in the following tables.
<TABLE>
<CAPTION>
Accrued and Other Current Liabilities
(In millions) 1994 1993
------ ------
<S> <C> <C>
Accrued salaries, wages and
other compensation............................... $ 29.9 $ 21.5
Consolidation reserve.............................. 2.6 38.7
Restructuring reserves............................. 3.1 17.1
Accrued and deferred income taxes.................. 21.5 23.6
Other accrued expenses............................. 83.5 69.3
------ ------
$140.6 $170.2
====== ======
</TABLE>
F-11
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Long-Term Accrued Liabilities
(In millions) 1994 1993
------ ------
<S> <C> <C>
Accrued pension and other compensation........... $ 27.3 $ 24.1
Accrued postretirement health care benefits...... 44.0 46.9
Accrued and deferred income taxes................ 25.8 30.5
Other............................................ 26.4 27.1
------ ------
$123.5 $128.6
====== ======
</TABLE>
LONG-TERM DEBT AND LEASE OBLIGATIONS
Long-term debt and lease obligations are shown in the following table.
<TABLE>
<CAPTION>
Long-Term Debt and Lease Obligations
(In millions) 1994 1993
------- -------
<S> <C> <C>
Long-term debt
8 3/8% Notes due 2004................. $115.0 $ -
8 3/8% Senior 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................................. 8.1 8.8
------ ------
153.9 99.6
------ ------
Capital lease obligations
6 3/4% Bonds due 2004................. 7.6 7.6
6 3/8% Bonds due 1995 - 1997.......... 2.6 3.4
6 1/2% Bonds due 1994................. - .4
------ ------
10.2 11.4
------ ------
164.1 111.0
Current maturities..................... (21.1) (3.4)
------ ------
$143.0 $107.6
====== ======
</TABLE>
Except for the 8 3/8% Notes due 2004, 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 fair value of the 8 3/8% Notes due 2004 is
$104.4 million, which is based on recent trade prices through registered
securities brokers.
In 1994, the company completed a public offering involving the issuance of
$115.0 million of 8 3/8% Notes due 2004. The proceeds were used to redeem at par
the company's outstanding 8 3/8% Senior Notes due 1997 and to repay short-term
debt.
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 2.9% in 1994. 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 December 31, 1994 and 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.
At December 31, 1994, current maturities includes the Industrial Development
Revenue Bonds due 2008 and the 6 3/4% Bonds due 2004, both of which are expected
to become payable within one year due to the closure of the company's two
machine tool facilities in South Carolina.
Interest paid was $17.1 million in 1994, $19.0 million in 1993 and $18.9 million
in 1992.
Maturities of long-term debt for the five years after 1994 are:
1995: $12.7 million
1996: 6.3 million
1997: 7.2 million
1998: 1.3 million
1999: 1.5 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 are:
1995: $8.9 million
1996: 1.0 million
1997: 1.0 million
After 1997: - 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:
1995: $15.9 million
1996: 12.2 million
1997: 9.1 million
1998: 4.4 million
1999: 3.1 million
After 1999: 7.8 million
Rent expense was $17.4 million, $14.7 million and $9.6 million in 1994, 1993 and
1992, respectively.
LINES OF CREDIT
At year-end 1994, the company had lines of credit with various U.S. and non-U.S.
banks of approximately $366 million, including a $200 million committed
revolving credit facility. These credit facilities support letters of credit and
leases in addition to providing borrowings under varying terms. The revolving
credit facility was amended in December, 1994, to increase the amount of
borrowings available thereunder from $130 million to $200 million, including
borrowings denominated in German marks up to an equivalent of $100 million. The
facility, which allows borrowings through July, 1996, requires a facility fee of
1/2 % per annum on the total $200 million revolving loan commitment and imposes
restrictions on total indebtedness in relation to total capital (debt plus
tangible net worth, the latter being approximately equal to
F-12
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
shareholders' equity). The company has remained in compliance with the
restrictions imposed by the facility since its inception. Under the provisions
of the amended facility, the company's additional borrowing capacity totaled
approximately $113 million at year-end 1994. A portion of this capacity was
utilized to finance the acquisition of Krupp Widia GmbH early in 1995 (see
Subsequent Events).
The weighted average interest rate on short-term borrowings outstanding as of
year-end 1994 and 1993 was 7.3% and 5.5%, respectively.
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 an extraordinary loss on early extinguishment of debt of
$5.2 million ($4.4 million after tax) in the second quarter. The extraordinary
loss included a cash call premium of $4.7 million and the write-off of deferred
financing fees of $.5 million.
<TABLE>
<CAPTION>
Shareholders' Equity - Preferred and Common Shares
(Dollars in millions, except per-share amounts) 1994 1993
----- -----
<S> <C> <C>
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,
1994: 33,742,125 shares, 1993: 33,531,723.... 33.7 33.5
===== =====
</TABLE>
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
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 December 31, 1994, the company had outstanding foreign exchange contracts
totaling $11.9 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 1994 Long-Term Incentive Plan (1994 Plan) permits the company to grant its
common shares in the form of non-qualified stock options, incentive stock
options, restricted stock and performance awards. A summary of amounts issued
under the 1994 Plan and prior plans is presented in the following table.
<TABLE>
<CAPTION>
Stock Options, Restricted Stock Awards and SARs
Price
Shares SARs Range
--------- ------- ------
<S> <C> <C> <C>
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
Activity during 1994- Granted....... 481,547 - 23
- Exercised..... (203,404) - 9-25
- Canceled...... (25,782) - 16-25
--------- -------- ------
Outstanding at year-end 1994.......... 1,969,436 - $ 9-28
========= ======== ======
</TABLE>
<TABLE>
<CAPTION>
Exercisable Stock Options at Year-End
Stock
Options
---------
<S> <C>
1992....................... 1,748,565
1993....................... 1,474,262
1994....................... 1,437,636
</TABLE>
The non-qualified stock options and incentive stock options are issued at market
and, under the terms of a prior plan, could be granted in tandem with SARs.
However, during 1992, all previously granted SARs were canceled with the consent
of the holders. Stock options become exercisable under varying terms and expire
F-13
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 specified annual earnings
objectives.
The maximum number of shares that may be granted under the 1994 Plan is
2,000,000, all of which were available for grant at year-end 1993. At year-end
1994, 1,481,950 shares were available for grant.
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 $142.0 million in 1994, $118.7
million in 1993 and $111.7 million in 1992.
Total sales of the company's U.S. and foreign operations to unaffiliated
customers outside the U.S. were $417.6 million, $298.4 million and $242.6
million, in 1994, 1993 and 1992, respectively.
<TABLE>
<CAPTION>
U.S. and Foreign Operations
(In millions) 1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
U.S. operations
Sales....................... $873.9 $831.9 $654.1
Operating earnings.......... 50.6 49.6 47.9
Consolidation charge........ - (47.1) -
Disposition of subsidiary... - (22.8) -
Identifiable assets......... 471.4 420.6 410.8
Liabilities................. 506.3 469.9 403.3
Capital expenditures........ 33.2 21.3 13.9
Depreciation................ 18.8 19.1 16.3
Foreign operations
Sales....................... 323.2 197.5 135.1
Operating earnings.......... 27.2 8.0 1.5
Identifiable assets......... 289.4 285.9 148.7
Liabilities................. 123.5 135.6 41.2
Capital expenditures........ 9.8 2.1 3.7
Depreciation................ 9.4 7.0 4.6
</TABLE>
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.
<TABLE>
<CAPTION>
Sales by Segment
(In millions) 1994 1993 1992
-------- -------- ------
<S> <C> <C> <C>
Plastics machinery (a)... $ 503.8 $ 357.2 $301.4
Machine tools............ 338.5 355.0 379.7
Industrial products (b).. 354.8 317.2 108.1
-------- -------- ------
$1,197.1 $1,029.4 $789.2
======== ======== ======
</TABLE>
<TABLE>
<CAPTION>
Operating Information by Segment
(In millions) 1994 1993 1992
------- -------- -------
<S> <C> <C> <C>
Operating earnings (loss)
Plastics machinery (a)(c).......... $ 42.5 $ 26.6 $ 22.8
Machine tools...................... 1.0 3.9 8.9
Industrial products (b)............ 34.3 27.1 17.7
Consolidation charge (d)........... - (47.1) -
Disposition of subsidiary(e)....... - (22.8) -
Unallocated corporate expenses(f).. (13.6) (11.5) (6.2)
------ ------ ------
Operating earnings(loss)......... 64.2 (23.8) 43.2
Interest expense-net............... (15.3) (13.4) (16.2)
------ ------ ------
Earnings (loss) before income
taxes, extraordinary items and
cumulative effect of changes
in methods of accounting......... $ 48.9 $(37.2) $ 27.0
====== ====== ======
Identifiable assets
Plastics machinery (a)............. $295.0 $289.0 $219.9
Machine tools...................... 270.8 243.1 282.8
Industrial products (b)........... 195.0 174.4 56.8
Unallocated corporate assets (g)... 26.8 23.1 19.4
------ ------ ------
Total assets................... $787.6 $729.6 $578.9
====== ====== ======
Capital expenditures
Plastics machinery (a)............. $ 13.8 $ 4.2 $ 6.2
Machine tools...................... 11.6 8.8 7.1
Industrial products (b)........... 17.6 10.4 4.3
------ ------ ------
Total capital expenditures..... $ 43.0 $ 23.4 $ 17.6
====== ====== ======
Depreciation
Plastics machinery (a)............. $ 9.2 $ 6.2 $ 7.7
Machine tools...................... 7.2 9.4 10.6
Industrial products (b)........... 11.8 10.5 2.6
------ ------ ------
Total depreciation............. $ 28.2 $ 26.1 $ 20.9
====== ====== ======
</TABLE>
(a) The increases in the plastics machinery segment are partially attributable
to the inclusion of Ferromatik on November 8, 1993.
(b) The increases in the industrial products segment are largely attributable
to the inclusion of Valenite as of February 1, 1993.
(c) The 1993 amount includes a $2.5 million gain on sale of surplus land.
(d) This amount relates to the machine tools segment.
(e) This amount relates to the plastics machinery segment.
(f) Includes corporate research and development and certain administrative
expenses. The 1994 and 1993 amounts include amortization of financing costs
and costs related to the sale of receivables.
(g) Includes cash and cash equivalents and the assets of the company's
insurance and utility subsidiaries.
F-14
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUBSEQUENT EVENTS
On January 27, 1995, the company completed the sale of its American Mine Tool
business resulting in a pretax gain to be recognized in the first quarter of
1995 of approximately $5 million. The sale will not have a significant effect on
reported sales or earnings from normal operations in the future.
On February 1, 1995, the company completed the acquisition of Krupp Widia GmbH
(Widia) for DM 121 million (approximately $78 million) in cash and DM 33 million
(approximately $21 million) in assumed debt. Headquartered in Germany, Widia had
sales of approximately $240 million in 1994 and is one of the world's leading
producers of metalcutting products and industrial magnets. The acquisition,
which will be accounted for under the purchase method, was financed principally
through borrowings under the company's revolving credit agreement. The company
is currently evaluating alternative actions to integrate Valenite and Widia to
improve future profitability which could result in incremental costs and
expenses in 1995.
F-15
<PAGE>
[LETTERHEAD OF ERNST & YOUNG LLP]
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 December 31, 1994 and January 1, 1994, and
the related Consolidated Statements of Earnings, Changes in Shareholders'
Equity, and Cash Flows for each of the three years in the period ended December
31, 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 December 31, 1994 and January 1, 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 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 LLP
ERNST & YOUNG LLP
February 24, 1995
F-16
<PAGE>
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE
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
Risk Factors.............................................................. 11
Use of Proceeds........................................................... 13
Capitalization............................................................ 14
Ratio of Earnings to Fixed Charges........................................ 15
Selected Historical Financial Data........................................ 16
Selected Historical Segment Information................................... 18
Selected Historical Geographic Information................................ 19
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 20
The Exchange Offer........................................................ 26
Business.................................................................. 32
Description of the New Notes.............................................. 41
Plan of Distribution...................................................... 50
Certain Federal Income Tax Considerations................................. 50
Legal Matters............................................................. 51
Experts................................................................... 51
Financial Statements...................................................... F-1
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CINCINNATI
MILACRON
OFFER TO EXCHANGE ITS REGISTERED
7 7/8% NOTES DUE 2000
FOR ANY AND ALL OF ITS OUTSTANDING
7 7/8% NOTES DUE 2000
-----------------
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, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
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, had 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 reasonably 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 but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Delaware Court of Chancery or such other
court shall deem proper.
Section 145 further provides that to the extent a director, officer, employee
or agent of a corporation has been successful on the merits or otherwise in the
defense of any action, suit or proceeding referred to in subsections (a) and
(b) of such Section 145 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, partnership, joint
venture, trust or other 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 corporation would have the power to indemnify him against
such liability under Section 145.
Article Eleventh of the Restated Certificate of Incorporation, as amended, of
the Company provides that, to the fullest extent that the General Corporation
Law of Delaware permits the limitation or elimination of the liability of
directors, no director of the Company shall be liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director.
Section 1 of Article XII of the By-Laws of the Company, as amended, provides
that the Company shall to the fullest extent permitted by applicable law
indemnify any person who is or was a director or officer of the Company and who
is or was involved in any manner (including, without limitation, as a party or
a witness) or is threatened to be made so involved in any threatened, pending
or completed investigation, claim,
II-1
<PAGE>
action, suit or proceeding, whether civil, criminal, administrative or
investigative (including without limitation, any action, suit or proceeding by
or in the right of the Company to procure a judgment in its favor) (a
"Proceeding") by reason of the fact that such person is or was a director,
officer, employee or agent of the Company, or is or was serving at the request
of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise (including,
without limitation, any employee benefit plan) against all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such Proceeding.
Section 2 of Article XII of the By-Laws of the Company, as amended, provides
that the Company may purchase and maintain insurance to protect itself and any
person entitled to indemnification under such Article XII against any expenses,
judgments, fines and amounts paid in settlement as specified in Article XII or
incurred by any such person in connection with any Proceeding referred to in
Article XII, to the fullest extent permitted by applicable law. The Company
also may enter into contracts with any person entitled to indemnification under
Article XII in furtherance of the provisions of such Article and may create a
trust fund, grant a security interest or use other means (including, without
limitation, a letter of credit) to ensure the payment of such amounts as may be
necessary to effect indemnification as provided in Article XII.
The Company 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 (incorporated by reference to the
Company's Form S-4 Registration Statement filed April 7, 1994 (File
No. 33-53009)).
4.3 Third Supplemental Indenture dated as of May 17, 1995, 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.
4.4 Form of Note.
4.5 Registration Rights Agreement relating to the Old Notes.
5 Opinion of Cravath, Swaine & Moore.
8 Tax Opinion of Cravath, Swaine & Moore (included in Exhibit 5).
12 Statement regarding computation of ratios.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Coopers & Lybrand GmbH.
23.3 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>
II-2
<PAGE>
ITEM 22. UNDERTAKINGS.
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.
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 provisions set forth in response to Item 20
above, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
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 Securities Act and will
be governed by the final adjudication of such issue.
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 this 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.
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 this Registration Statement when it became effective.
II-3
<PAGE>
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 8TH DAY OF JUNE, 1995.
CINCINNATI MILACRON INC.,
Registrant
/s/ Ronald D. Brown
By___________________________________
RONALD D. BROWN VICE PRESIDENT,
FINANCE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES INDICATED:
SIGNATURE TITLE DATE
* Chairman of the Board, June 8, 1995
- ------------------------------------ Chief Executive
DANIEL J. MEYER Officer and Director
(Principal Executive
Officer)
/s/ Ronald D. Brown Vice President, Finance June 8, 1995
- ------------------------------------ (Principal Financial
RONALD D. BROWN Officer)
* Controller (Principal June 8, 1995
- ------------------------------------ Accounting Officer)
ROBERT P. LIENESCH
* Director June 8, 1995
- ------------------------------------
DARRYL F. ALLEN
* Director June 8, 1995
- ------------------------------------
NEIL A. ARMSTRONG
* Director June 8, 1995
- ------------------------------------
LYLE EVERINGHAM
II-4
<PAGE>
SIGNATURE TITLE DATE
* Director June 8, 1995
- ------------------------------------
JAMES A.D. GEIER
* Director June 8, 1995
- ------------------------------------
HARRY A. HAMMERLY
* Director June 8, 1995
- ------------------------------------
JAMES E. PERELLA
* Director June 8, 1995
- ------------------------------------
RAYMOND E. ROSS
* Director June 8, 1995
- ------------------------------------
JOSEPH A. STEGER
* Director June 8, 1995
- ------------------------------------
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.
BY /s/ Ronald D. Brown
----------------------------------
RONALD D. BROWN
ATTORNEY-IN-FACT
II-5
<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
(incorporated by reference to the Company's Form S-4
Registration Statement filed April 7, 1994 (File No. 33-
53009)).
4.3 Third Supplemental Indenture dated as of May 17, 1995, 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.
4.4 Form of Note.
4.5 Registration Rights Agreement relating to the Old Notes.
5 Opinion of Cravath, Swaine & Moore.
Tax Opinion of Cravath, Swaine & Moore (included in Exhibit
8 5).
12 Statement regarding computation of ratios.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Coopers & Lybrand GmbH.
23.3 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 4.3
THIRD SUPPLEMENTAL INDENTURE dated as of May 17, 1995,
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 (the "Original Indenture") dated as of
July 1, 1985, between the Company and the Trustee, as
supplemented by a supplemental indenture (the "First Supplemental
Indenture") dated as of February 26, 1987, and a supplemental
indenture (the "Second Supplemental Indenture") dated as of March
16, 1994 (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 1997
(the "Notes Due 1997"), in the aggregate principal amount of $60,000,000, as
provided in the First Supplemental Indenture;
WHEREAS the Company heretofore has issued its 8-3/8% Notes Due 2004
(the "Notes Due 2004"), in the aggregate principal amount of $115,000,000 as
provided in the Second 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;
<PAGE>
2
WHEREAS the Company desires to create a new series of Debentures to be
designated the 7-7/8% Notes Due 2000 (the "Notes Due 2000");
WHEREAS all action on the part of the Company necessary to authorize
the issuance under the Indenture of the Notes Due 2000 in the aggregate
principal amount of $100,000,000 has been taken;
WHEREAS the Notes Due 2000 and the Trustee's certificate of
authentication to be borne by the Notes Due 2000 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 2000, 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 Third Supplemental
Indenture and the creation and issuance under the Indenture of the Notes Due
2000 in an aggregate principal amount not to exceed $100,000,000 have in all
respects been duly authorized;
WHEREAS the Company and the Trustee desire to join in the execution
and delivery of this Third Supplemental Indenture in order to amend certain
provisions of and Exhibits to the Indenture as set forth herein;
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 Third 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 Third Supplemental Indenture
is authorized or permitted by the Indenture, and with an
<PAGE>
3
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 Third Supplemental Indenture, together with
such other documents as may have been required by Section 4.03 of the Indenture.
NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE
W I T N E S S E T H :
That in order to (i) amend certain provisions of and Exhibits to the
Indenture and (ii) declare the terms and conditions upon which the Notes Due
2000 are to be authenticated, issued and delivered, and in consideration of the
premises, of the purchase and acceptance of the Notes Due 2000 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 2000, as
follows and of all holders of Debentures:
ARTICLE I
Amendments to the Indenture
---------------------------
SECTION 1.01. The Indenture is hereby amended to delete existing
Exhibit E, Exhibit F, Exhibit G, Exhibit H and Exhibit I and to add as Exhibits
to the Indenture new Exhibit E, Exhibit F, Exhibit G, Exhibit H, Exhibit I and
Exhibit J attached hereto.
SECTION 1.02. Section 2.05 of the Indenture is amended to (i) in
paragraph (f), change the reference to "clauses (b) through (e)" to "clauses (b)
through (h)" and redesignate such paragraph (f) as paragraph (i), (ii)
redesignate paragraph (g) as paragraph (j) and (iii) add new paragraphs (f), (g)
and (h) as follows:
"(f) Regulation S Global Note or U.S. Global Note to Definitive
----------------------------------------------------------
Debenture. If a holder of a beneficial interest in the Regulation S Global
----------
Note or the U.S.
<PAGE>
4
Global Note deposited with the Depository wishes at any time to transfer
its interest in such Regulation S Global Note or U.S. Global Note to a
person who is required to take delivery thereof in the form of a Definitive
Debenture, such holder may, subject to the rules and procedures of
Euroclear or Cedel or the Depository, as the case may be, and to the
requirements set forth in the following sentence, cause the exchange of
such interest for one or more Definitive Debentures of any authorized
denomination or denominations and of the same aggregate principal amount.
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
authenticate and deliver one or more Definitive Debentures of the same
aggregate principal amount as the beneficial interest in the Regulation S
Global Note or U.S. Global Note to be transferred, such instructions to
contain the name or names of the designated transferee or transferees, the
authorized denomination or denominations of the Definitive Debentures to be
so issued and appropriate delivery instructions, (2) a certificate in the
form of Exhibit J attached hereto given by the person or persons acquiring
the Definitive Debentures being transferred, to the effect set forth
therein, and (3) such other certifications, legal opinions or other
information as the Company may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act, then
Euroclear or Cedel, if applicable, or the Trustee, as transfer agent, as
the case may be, 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 Regulation S Global Note or U.S. Global
Note, as the case may be, by the aggregate principal amount of the
beneficial interest therein to be transferred and the Trustee, as transfer
agent, shall instruct the Depository, concurrently with such reduction, to
debit or cause to be debited from the account of the person making such
transfer the beneficial interest in the Regulation S Global Note or U.S.
Global Note that is being transferred, and concurrently with such reduction
and debit the Company shall execute, and the Trustee shall authenticate and
deliver, one or more Definitive Debentures of the same
<PAGE>
5
aggregate principal amount in accordance with the instructions referred to
above.
(g) Definitive Debenture to Regulation S Global Note or U.S. Global
---------------------------------------------------------------
Note. If a holder of a Definitive Debenture wishes at any time to transfer
-----
such Definitive Debenture to a person who is required to take delivery
thereof in the form of an interest in a Regulation S Global Note or U.S.
Global Note, such holder may, subject to the rules and procedures of
Euroclear or Cedel or the Depository, as the case may be, cause the
transfer of such Definitive Debenture for an equivalent beneficial interest
in the Regulation S Global Note or U.S. Global Note. Upon receipt by the
Trustee, as transfer agent, at its office in the City of New York of (1)
such Definitive Debenture, duly endorsed as provided herein, (2)
instructions from such holder directing the Trustee, as transfer agent, to
credit or cause to be credited a beneficial interest in the Regulation S
Global Note or U.S. Global Note, as the case may be, equal to the principal
amount of the Definitive Debenture to be transferred, such instructions to
contain information regarding the participant account with the Depository
to be credited with such increase and (3) a certificate in the form of
Exhibit F attached hereto (in the event that the transfer is to the
Regulation S Global Note) or in the form of Exhibit G attached hereto (in
the event that the transfer is to the U.S. Global Note), then the Trustee,
as transfer agent, shall cancel or cause to be cancelled such Definitive
Debenture and shall instruct the Depository to increase or cause to be
increased such Regulation S Global Note or U.S. Global Note, as the case
may be, by the aggregate principal amount of the beneficial interest in the
Definitive Debenture to be transferred and to credit or cause to be
credited to the account of the person specified in such instructions a
beneficial interest in the Regulation S Global Note or U.S. Global Note, as
the case may be, equal to the principal amount of the Definitive Debenture
so cancelled.
(h) Definitive Debenture to Definitive Debenture. If a holder of a
---------------------------------------------
Definitive Debenture wishes at any time to transfer such Definitive
Debenture to a person who is required to take delivery thereof in the form
of a Definitive Debenture, such holder may, subject to the
<PAGE>
6
restrictions on transfer set forth herein and in such Definitive Debenture,
cause the transfer of such Definitive Debenture for one or more Definitive
Debentures of any authorized denomination or denominations and of the same
aggregate principal amount. Upon receipt by the Trustee, as transfer
agent, at its office in The City of New York of (1) such Definitive
Debenture, duly endorsed as provided herein, (2) instructions from such
holder directing the Trustee, as transfer agent, to authenticate and
deliver one or more Definitive Debentures of the same aggregate principal
amount as the Definitive Debenture to be transferred, such instructions to
contain the name or names of the designated transferee or transferees, the
authorized denomination or denominations of the Definitive Debentures to be
so issued and appropriate delivery instructions, (3) a certificate in the
form of Exhibit J attached hereto given by the person or persons acquiring
the Definitive Debentures being transferred, to the effect set forth
therein, and (4) such other certifications, legal opinions or other
information as the Company may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act, then
the Trustee, as transfer agent, shall cancel or cause to be cancelled such
Definitive Debenture and concurrently therewith, the Company shall execute,
and the Trustee shall authenticate and deliver, one or more Definitive
Debentures of the same aggregate principal amount in accordance with the
instructions referred to above."
SECTION 1.03. Section 2.09(a)(i) of the Indenture is amended to
delete the words "and Accredited Investors" from the first sentence thereof.
SECTION 1.04. Section 2.09(c) of the Indenture is amended to (i)
redesignate paragraph (i) as paragraph (ii), (ii) redesignate paragraph (ii) as
paragraph (iii), (iii) redesignate paragraph (iii) as paragraph (iv), (iv)
redesignate paragraph (iv) as paragraph (v), (v) redesignate paragraph (v) as
paragraph (vi) and (vi) add a new paragraph (i) as follows:
"(i) Except as otherwise specified in this Section 2.09(c), owners of
beneficial interests in global Notes will not be entitled to receive
physical
<PAGE>
7
delivery of certificated securities. Debentures initially offered and sold
to persons who are not Qualified Institutional Buyers and did not purchase
pursuant to Regulation S, will receive Definitive Debentures in the form of
Exhibit D to the Third Supplemental Indenture; provided, however, that upon
-------- -------
transfer of such Definitive Debenture to a Qualified Institutional Buyer or
in accordance with Regulation S, such Definitive Debenture will, unless the
U.S. Global Note or Regulation S Global Note, as applicable, has previously
been exchanged, be exchanged for an interest in such U.S. Global Note or
Regulation S Global Note, as the case may be, pursuant to the provisions of
Section 2.05 hereof."
ARTICLE II
The 7-7/8% Notes Due 2000
-------------------------
SECTION 2.01. Specific Title and Terms. The Debentures shall be
-------------------------
known and designated as the "7-7/8% Notes Due 2000" of the Company (the "Notes
Due 2000").
The aggregate principal amount of the Notes Due 2000 which may be
authenticated and delivered under the Indenture is limited to $100,000,000,
except for Notes Due 2000 authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Notes Due 2000 as provided
in the Indenture. The stated maturity of the Notes Due 2000 shall be May 15,
2000, 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
installment of interest. The interest rate may also be subject to increase,
upon written notice to the Trustee from the Company, pursuant to the terms of
the Exchange Registration Rights Agreement dated as of May 10, 1995, between the
Company and CS First Boston Corporation.
Each Note Due 2000 shall be dated the date of its authentication and,
except as otherwise provided in this Section, shall bear interest, payable
semiannually on May 15 and November 15 of each year, from the May 15 or November
15, as the case may be, next preceding the date of such Note Due 2000 to which
interest on the Notes Due 2000
<PAGE>
8
has been paid, unless no interest has been paid on the Notes Due 2000, in which
case from the date on which such Note Due 2000 was originally issued, until
payment of the principal amount of such Note Due 2000 has been made or duly
provided for; provided, however, that the first such date on which any such
-------- -------
interest shall be paid shall be November 15, 1995; 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 2000 shall bear interest from the May 15
or November 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 2000, in which case from the date on which the Notes Due
2000 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 May 1 or November 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 2000 are exchangeable but not redeemable.
The person in whose name any Note Due 2000 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 2000, upon any 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
2000 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 2000 not less than 15 days preceding such special
record date.
The principal of and interest on the Notes Due 2000 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.
<PAGE>
9
SECTION 2.02. Denominations. The Notes Due 2000 shall be issuable
--------------
(i) in fully registered form without coupons in the denominations of $1000 or
any multiple thereof or (ii) 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 Third
------------------------------------
Supplemental Indenture is executed and shall be construed as an indenture
supplemental to the Indenture, and, as provided in the Indenture, this Third
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 2000 (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 Third Supplemental
Indenture or of the Notes Due 2000. The Trustee shall not be accountable for
the use by the Company of the Notes Due 2000 or the proceeds thereof.
SECTION 3.03. Provisions Binding on Company Successors. All the
-----------------------------------------
covenants, stipulations, promises and agreements contained in this Third
Supplemental Indenture made by the Company shall bind its successors and assigns
whether so expressed or not.
SECTION 3.04. New York Contract. This Third Supplemental Indenture
------------------
and each Note Due 2000 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.
<PAGE>
10
SECTION 3.05. Execution in Counterparts. This Third 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 Third
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
<PAGE>
11
Secretaries, and BankAmerica National Trust Company, as Trustee, has caused this
Third 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 Assistant
Secretaries, all as of the day and year first written above.
CINCINNATI MILACRON INC.,
by
/s/ Ronald D. Brown
-------------------------
Name: Ronald D. Brown
Title: Vice President-
Finance
[Seal]
Attest:
/s/ Wayne F. Taylor
---------------------
Name: Wayne F. Taylor
Title: Secretary
BANKAMERICA NATIONAL TRUST COMPANY,
by
/s/ Geovanni Barris
--------------------
Name: Geovanni Barris
Title: Assistant Vice
President
[Seal]
Attest:
/s/ John P. McGurn
--------------------
Name: John P. McGurn
Title: Assistant Vice
President
<PAGE>
12
STATE OF Ohio )
) ss.:
CITY OF Hamilton )
On the 15th day of May, 1995, 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
STATE OF New York )
) ss.:
COUNTY OF New York )
On the 16th day of May, 1995, before me personally came Geovanni
---- --------
Barris to me known, who, being by me duly sworn, did depose and say that he or
- ------
she is a Assistant Vice President 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
<PAGE>
EXHIBIT A
---------
[FORM OF U.S. GLOBAL NOTE]
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO THE DEPOSITORY TRUST COMPANY (THE "DEPOSITORY"), NOMINEES OF
THE DEPOSITORY OR A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE, AND TRANSFERS
OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO IN THIS GLOBAL
NOTE.
UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF 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.
A-1
<PAGE>
$100,000,000
CINCINNATI MILACRON INC.
7-7/8% NOTES DUE 2000
U.S. GLOBAL NOTE
CUSIP NO.: 172172 AF5 PRINCIPAL AMOUNT
REPRESENTED
$100,000,000
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 MILLION DOLLARS ($100,000,000) (or such lesser amount as shall be
the outstanding principal amount of this U.S. Global Note shown in Schedule A
----------
hereto) on May 15, 2000 (the "Stated Maturity"), and to pay interest thereon
---------------
semiannually in arrears on each May 15 and November 15 (each, an "Interest
--------
Payment Date"), beginning November 15, 1995, and at maturity, from the later of
- ------------
May 17, 1995, or the most recent Interest Payment Date to which interest has
been paid or duly provided for, at the rate of 7-7/8% 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). The interest rate may
also be subject to increase pursuant to the terms of the Exchange Registration
Rights Agreement dated as of May 10, 1995 between the Company and CS First
Boston Corporation.
This security is the U.S. Global Note issued on the date hereof which
represents 100% of the principal face amount of the Company's 7-7/8% Notes Due
2000 (the "Notes") offered and sold in the United States to Qualified
-----
Institutional Buyers. This U.S. Global Note is one of the duly authorized
issues 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, the Second Supplemental Indenture dated as of March 16,
1994 and the Third Supplemental Indenture dated as of May 17, 1995 (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
A-2
<PAGE>
Debentures are, and are to be, authenticated and delivered and transferred. All
terms used in this U.S. Global 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 U.S.
Global Note is registered at 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 U.S. Global 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 U.S. Global 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 Notes shall have occurred and be
continuing, the principal of all the Debentures
A-3
<PAGE>
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 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 U.S. Global Note shall be conclusive
and binding upon such holders and upon all future holders of interests in this
U.S. Global Note and of any U.S. Global 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 U.S. Global 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 U.S. Global 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 U.S. Global Note at the times, place and rate, and in the coin or currency,
herein prescribed.
Interests in this U.S. Global Note are exchangeable or transferable in
whole or in part for interests in a Temporary Global Note or a Regulation S
Global Note (each as defined in the Indenture), in each case of the same Series,
only if such exchange or transfer complies with the Indenture.
Under certain conditions set forth in the Indenture, interests in this U.S.
Global Note are exchangeable in whole or in part for duly executed and issued
Definitive Debentures in the form of Exhibit D to the Third Supplemental
Indenture.
The statements set forth in the legend, if any, set forth hereon are an
integral part of the terms of this U.S. Global Note and by acceptance hereof
each holder of this U.S. Global Note agrees to be subject to and bound by the
terms and provisions set forth in such legend.
A-4
<PAGE>
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 U.S. Global 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 U.S. Global Note is registered as the
owner hereof for all purposes, whether or not this U.S. Global Note shall be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
Unless the certificate of authentication hereon has been duly executed by
the Trustee by manual signature, this U.S. Global Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purposes.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPH (A)(1), (A)(2), (A)(3), OR (A)(7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR", IN EACH CASE FOR A
A-5
<PAGE>
MINIMUM PURCHASE PRICE OF NOT LESS THAN $500,000, FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
* * * * *
A-6
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: May 17, 1995
CINCINNATI MILACRON INC.,
by_______________________
Name:
Title:
Corporate Seal
Attest:
by_______________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the U.S. Global Notes issued
under the within-mentioned Indenture.
BANKAMERICA NATIONAL TRUST COMPANY, as Trustee
by_______________________
Authorized Signatory
A-7
<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:_________________________
A-8
<PAGE>
SCHEDULE A
----------
SCHEDULE OF EXCHANGES
---------------------
The following exchanges of Notes for Notes represented by this U.S. Global Note
have been made:
<TABLE>
<CAPTION>
Change in
Principal principal Principal
Amount of this amount of this amount of this
U.S. Global U.S. Global U.S. Global Notation made
Note as of May Date exchange Note due to Note following by or on behalf
17, 1995 made exchange such change of the Company
- -------------- ------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
$100,000,000
</TABLE>
A-9
<PAGE>
EXHIBIT B
---------
[FORM OF TEMPORARY GLOBAL NOTE]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE.
THIS NOTE IS A TEMPORARY GLOBAL NOTE, WITHOUT COUPONS, EXCHANGEABLE FOR A
REGULATION S GLOBAL NOTE. THE RIGHTS ATTACHING TO THIS TEMPORARY GLOBAL NOTE,
AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE, ARE AS SPECIFIED IN
THE INDENTURE (AS DEFINED HEREIN).
B-1
<PAGE>
$100,000,000
CINCINNATI MILACRON INC.
NOTES DUE 2000
TEMPORARY GLOBAL NOTE
ISIN NO.: USU 1716 PAB 05 PRINCIPAL AMOUNT
REPRESENTED
$100,000,000
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), 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 MILLION
----------
DOLLARS ($100,000,000) (or such lesser amount as shall be the outstanding
principal amount of this Temporary Global Note shown in Schedule A hereto) on
----------
May 15, 2000 ("Stated Maturity"), and to pay interest thereon semiannually in
---------------
arrears on each May 15 and November 15 (each, an "Interest Payment Date"),
---------------------
beginning November 15, 1995, and at maturity, from May 17, 1995, or the most
recent Interest Payment Date to which interest has been paid or duly provided
for, at the rate of 7-7/8% per annum, until the principal hereof 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
installments of interest. The interest rate may also be subject to increase
pursuant to the terms of the Exchange Registration Rights Agreement dated as of
May 10, 1995, between the Company and CS First Boston Corporation.
This security is the Temporary Global Note issued on the date hereof which
represents 100% of the principal face amount of the Company's 7-7/8% Notes Due
2000 (the "Notes") offered and sold in reliance on Regulation S. Such Temporary
-----
Global Note is one of the duly authorized issues 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, the Second
Supplemental Indenture dated as of March 16, 1994 and the Third Supplemental
Indenture dated as of May 17, 1995 (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
B-2
<PAGE>
the holders of the Debentures and of the terms upon which the Debentures are,
and are to be, authenticated and delivered. All terms used in this Temporary
Global 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
Temporary Global Note is registered at 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
Temporary Global 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 Notes 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 Notes 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 Temporary Global 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.
Prior to expiration of the "40 day restricted period" (as defined in Rule
901 of Regulation S under the Securities Act) (the "40-day restricted period"),
------------------------
payments (if any) on this Temporary Global Note will only be paid to the bearer
hereof to the extent that there is presented by Cedel or Euroclear to the
Trustee a certificate, substantially in the form set out in
B-3
<PAGE>
Exhibit H to the Indenture, to the effect that it has received from or in
- ---------
respect of a person entitled to a Note (as shown by its records) a certificate
from such person in or substantially in the form of Exhibit I to the Indenture.
---------
After the 40-day restricted period, the holder of this Temporary Global Note
will not be entitled to receive any payment hereon.
On or after the 40-day restricted period, interests in this Temporary
Global Note may be exchanged (free of charge) for interests in the Regulation S
Global Note in the form of Exhibit C to the Third Supplemental Indenture upon
---------
presentation of this Temporary Global Note by the bearer hereof at the office to
the Trustee at an office outside the United States of America, its territories
and possessions. The Regulation S Global Note shall be so issued and delivered
in exchange for only that portion of this Temporary Global Note in respect of
which there shall have been presented to the Trustee by Euroclear or Cedel a
certificate, substantially in the form set out in Exhibit H to the Indenture, to
---------
the effect that it has received from or in respect of a person entitled to a
Note (as shown by its records) a certificate from such person in or
substantially in the form of Exhibit I to the Indenture.
---------
If an Event of Default with respect to the Notes shall have occurred and be
continuing, the principal of all of 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 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 holder of a beneficial interest in this Temporary
Global Note shall be conclusive and binding upon such holder and upon all future
holders of this Temporary Global Note and of any Debenture 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 Temporary
Global Note.
Holders of Debentures may not enforce their rights pursuant to the
Indenture or the Debentures except as provided in the
B-4
<PAGE>
Indenture. No reference herein to the Indenture and no provision of this
Temporary Global 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 Temporary Global Note at the times,
place and rate, and in the coin or currency, herein prescribed.
Interests in this Temporary Global Note are exchangeable or transferable in
whole or in part for interests in a U.S. Global Note or a Regulation S Global
Note (each as defined in the Indenture), in each case of the same Series, only
if such exchange or transfer complies with the Indenture.
On an exchange of the whole of this Temporary Global Note, this Temporary
Global Note shall be surrendered to the Trustee. Interests in this Temporary
Global Note will be transferable in accordance with the rules and procedures for
the time being of Euroclear or Cedel.
The statements set forth in the legend, if any, set forth hereon are an
integral part of the terms of this Temporary Global Note and by acceptance
hereof each holder of this Temporary Global Note agrees to be subject to and
bound by the terms and provisions set forth in such legend.
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 Temporary Global 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 Temporary Global Note is registered as
the owner hereof for all purposes, whether or not this Temporary Global Note
shall be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
Unless the certificate of authentication hereon has been duly executed by
the Trustee by manual signature, this Temporary Global Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purposes.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
B-5
<PAGE>
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, IN EACH CASE FOR A MINIMUM PURCHASE PRICE OF NOT LESS THAN
$500,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.
* * * * *
B-6
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: May 17, 1995
CINCINNATI MILACRON INC.,
by_______________________
Name:
Title:
Corporate Seal
Attest:
by_______________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Temporary Global Notes issued
under the within-mentioned Indenture.
BANKAMERICA NATIONAL TRUST COMPANY, as Trustee
by_______________________
Authorized Signatory
B-7
<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:_________________________
B-8
<PAGE>
SCHEDULE A
----------
SCHEDULE OF EXCHANGES
---------------------
The following exchanges of Notes for Notes represented by this Temporary Global
Note have been made:
<TABLE>
<CAPTION>
Principal Change in Principal Notation
Amount of this principal amount of this made
Temporary amount of this Temporary by or on
Global Note as Date Temporary Global behalf of
of May 17, Exchange Global Note Note following the
1995 made due to exchange such change Company
- -------------- -------- --------------- -------------- ---------
<S> <C> <C> <C> <C>
$0
</TABLE>
B-9
<PAGE>
EXHIBIT C
---------
[FORM OF REGULATION S GLOBAL NOTE]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE.
THIS NOTE IS A PERMANENT GLOBAL NOTE, WITHOUT COUPONS, EXCHANGEABLE UNDER
CERTAIN LIMITED CIRCUMSTANCES FOR DEFINITIVE NOTES. THE RIGHTS ATTACHING TO
THIS PERMANENT GLOBAL NOTE ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED
HEREIN).
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED.
C-1
<PAGE>
$100,000,000
CINCINNATI MILACRON INC.
NOTES DUE 2000
REGULATION S GLOBAL NOTE
ISIN NO.: USU 1716 PAB 05 PRINCIPAL AMOUNT
REPRESENTED
$100,000,000
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), 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 MILLION
----------
DOLLARS ($100,000,000) (or such lesser amount as shall be the outstanding
principal amount of this Regulation S Global Note shown in Schedule A hereto) on
----------
May 15, 2000 (the "Stated Maturity Date"), and to pay interest thereon
--------------------
semiannually in arrears on each May 15 and November 15 (each, an "Interest
--------
Payment Date"), beginning November 15, 1995, and at maturity, from May 17, 1995
- ------------
or the most recent Interest Payment Date to which interest has been paid or duly
provided for, at the rate of 7-7/8% per annum, until the principal hereof
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 installments of interest. The interest rate may also be subject to
increase pursuant to the terms of the Exchange Registration Rights Agreement
dated as of May 10, 1995 between the Company and CS First Boston Corporation.
This security is the Regulation S Global Note issued on the date hereof
which represents 100% of the principal face amount of the Company's 7-7/8% Notes
Due 2000 (the "Notes") deposited on behalf of the purchasers of the Notes with
-----
the custodian for the Depository for credit to their respective accounts at
Euroclear or Cedel. Such Regulation S Global Note is one of the duly authorized
issues 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, the Second Supplemental Indenture dated as of March 16,
1994 and the Third Supplemental Indenture dated as of May 17, 1995 (the
"Indenture"), to which Indenture reference is hereby made for a statement of the
---------
C-2
<PAGE>
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.
All terms used in this Regulation S Global 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
Regulation S Global Note is registered at 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
Regulation S Global 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 Notes 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 Notes 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 Regulation S Global 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 represented by this Regulation S Global Note were originally
represented by a Temporary Global Note.
C-3
<PAGE>
Interests in this Regulation S Global Note will be transferable in
accordance with the rules and procedures for the time being of Euroclear or
Cedel. Each person who is shown in the records of Euroclear and Cedel as
entitled to a particular number of Notes by way of an interest in this
Regulation S Global Note will be treated by the Trustee and any paying agent as
the holder of such number of Notes, other than with respect to the payment of
principal and interest and other amounts payable on this Regulation S Global
Note, the right to which shall (except as provided below) be vested, as against
the Trustee and the paying agents, solely in the bearer of this Regulation S
Global Note. For purposes of this Regulation S Global Note, the securities
account records of Euroclear or Cedel shall, in the absence of manifest error,
be conclusive evidence of the identity of the holders of Notes and of the
principal amount of Notes represented by this Regulation S Global Note credited
to the securities accounts of such holders of Notes. Any statement issued by
Euroclear or Cedel to any holder relating to a specified Note or Notes credited
to the securities account of such holder and stating the principal amount of
such Note or Notes and certified by Euroclear or Cedel to be a true record of
such securities account shall, in the absence of manifest error, be conclusive
evidence of the records of Euroclear or Cedel for the purposes of the next
preceding sentence (but without prejudice to any other means of producing such
records in evidence).
If an Event of Default with respect to the Notes shall have occurred and be
continuing, the principal of all of the Notes may be declared due and payable in
the manner and with the effect provided in the Indenture. Notwithstanding any
provision to the contrary contained in this Regulation S Global Note, the
Company irrevocably agrees, for the benefit of such holder and its successors
and assigns, that upon the occurrence and continuance of an Event of Default,
each holder or its successor or assigns may without the consent and to the
exclusion of the bearer hereof, file any claim, take any action or institute any
proceeding to enforce, directly against the Company, the obligation of the
Company hereunder to pay any amount due in respect of each Note represented by
this Regulation S Global Note which is credited to such holder's securities
account with Euroclear or Cedel without the production of this Regulation S
Global Note; provided that the bearer hereof shall not theretofore have filed a
claim, taken action or instituted proceedings to enforce the same in respect of
such Note.
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 Indenture at any time by the Company and the Trustee with the
C-4
<PAGE>
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 holder of this Regulation S Global Note shall be
conclusive and binding upon such holder and upon all future holders of this
Regulation S Global Note and of any Debentures 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 Regulation S Global 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 Regulation S Global 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 Regulation S Global Note at the times, place and rate, and in
the coin or currency, herein prescribed.
Interests in this Regulation S Global Note are exchangeable or transferable
in whole or in part for interests in a U.S. Global Note (as defined in the
Indenture) of the same Series, only if such exchange or transfer complies with
the Indenture.
Under certain conditions set forth in the Indenture, interests in this
Regulation S Global Note are exchangeable in whole or in part for duly executed
and issued Definitive Debentures in the form of Exhibit D to the Third
Supplemental Indenture.
The statements set forth in the legend, if any, set forth hereon are an
integral part of the terms of this Regulation S Global Note and by acceptance
hereof each holder of this Regulation S Global Note agrees to be subject to and
bound by the terms and provisions set forth in such legend.
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 Regulation S Global 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 Regulation S Global Note is
registered as the owner
C-5
<PAGE>
hereof for all purposes, whether or not this Regulation S Global Note shall be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
Unless the certificate of authentication hereon has been duly executed by
the Trustee by manual signature, this Regulation S Global Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purposes.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1993, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPH (A)(1), (A)(2), (A)(3), OR (A)(7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR, IN EACH CASE FOR A
MINIMUM PURCHASE PRICE OF NOT LESS THAN $500,000, FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY
C-6
<PAGE>
THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
* * * * *
C-7
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: May 17, 1995
CINCINNATI MILACRON INC.,
by_______________________
Name:
Title:
Corporate Seal
Attest:
by_______________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Regulation S Global Notes issued
under the within-mentioned Indenture.
BANKAMERICA NATIONAL TRUST COMPANY, as Trustee
by_______________________
Authorized Signatory
C-8
<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:_________________________
C-9
<PAGE>
SCHEDULE A
----------
SCHEDULE OF EXCHANGES
---------------------
The following exchanges of Notes for Notes represented by this Regulation S
Global Note have been made:
<TABLE>
<CAPTION>
Change in
Principal principal Principal
Amount of this amount of this amount of this
Regulation S Regulation S Regulation S
Global Note as Global Note Global Note Notation made
of May 17, Date exchange due to following by or on behalf
1995 made exchange such change of the Company
- -------------- ------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
$0
</TABLE>
C-10
<PAGE>
EXHIBIT D
---------
[FORM OF DEFINITIVE DEBENTURE]
(Form of Face of Definitive Debenture due May 15, 2000)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1993, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPH (A)(1), (A)(2), (A)(3), OR (A)(7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR, IN EACH CASE FOR A
MINIMUM PURCHASE PRICE NOT LESS THAN $500,000, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
D-1
<PAGE>
IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY, THE HOLDER WILL DELIVER
TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH REGISTRAR OR TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
* * * * *
D-2
<PAGE>
R CUSIP NO.: 172172 AF5
See Reverse for Certain Definitions
CINCINNATI MILACRON INC.
7-7/8% NOTES DUE 2000
CINCINNATI MILACRON INC., a Delaware corporation, hereby promises to
pay to [ ], or its registered assigns, the principal sum of
[ ] DOLLARS on May 15, 2000.
Interest Payment Dates: May 15 and November 15.
Record Dates: May 1 and November 1.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated:
CINCINNATI MILACRON INC.,
by _______________________
Chairman
[Seal]
Attest
_______________________
Secretary
CERTIFICATE OF AUTHENTICATION
This Security is one of the Definitive Debentures issued under the
within-mentioned Indenture.
BANKAMERICA NATIONAL TRUST COMPANY, as Trustee
by _______________________
D-3
<PAGE>
(Form of Reverse of Definitive Debenture Due May 15, 2000)
CINCINNATI MILACRON INC.
7-7/8% Notes Due 2000
1. 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 interest on the principal amount of
this Security semiannually in arrears on each May 15 and November 15 (each, an
"Interest Payment Date"), beginning November 15, 1995, and at maturity, from the
---------------------
later of May 17, 1995 or the most recent Interest Payment Date on which interest
has been paid or duly provided for, at the rate of 7-7/8% 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). The interest rate may
also be subject to increase pursuant to the terms of the Exchange Registration
Rights Agreement dated as of May 10, 1995, between the Company and CS First
Boston Corporation.
2. This Security is one of the duly authorized issues 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,
the Second Supplemental Indenture dated as of March 16, 1994 and the Third
Supplemental Indenture dated as of May 17, 1995 (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 Notes are, and are to be, authenticated and delivered. All terms used in
this Security which are not defined herein shall have the meanings assigned to
them in the Indenture.
3. 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 Security is registered at 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 law or
executive order
D-4
<PAGE>
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 Security 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.
4. Interest on this Security 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.
5. This Security is not subject to redemption prior to Stated
Maturity.
6. If an Event of Default with respect to this Security shall have
occurred and be continuing, the principal of this Security may be declared due
and payable in the manner and with the effect provided in the Indenture.
7. 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 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 holder of this Security
shall be conclusive and binding upon such holder and upon all future holders of
this Security and of any Debenture issued upon the registration of transfer
hereof or
D-5
<PAGE>
in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.
8. 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 Security 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 Security at the times, place and rate, and in the coin or currency, herein
prescribed.
9. The statements set forth in the legend, if any, set forth hereon
are an integral part of the terms of this Security and by acceptance hereof each
holder of this Security agrees to be subject to and bound by the terms and
provisions set forth in such legend.
10. The definitive Securities of this series of Debentures are
issuable only in registered form without coupons in denominations of $1,000 and
integral multiples thereof.
11. 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.
12. Prior to due presentment of this Security 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 Security as the owner hereof for all
purposes, whether or not this Security is registered shall be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
13. Unless the certificate of authentication hereon has been duly
executed by the Trustee by manual signature, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purposes.
* * * * *
D-6
<PAGE>
CERTIFICATE OF TRANSFER
To transfer or assign this Security, fill in the form below:
I or we transfer and assign this Security to
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Print or Type assignee's name, address and zip code)
_________________________________________________________________
(Insert assignee's Soc. Sec. or tax I.D. No.)
and irrevocably appoint _____________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
Date:_____________ Your signature:_________________________
D-7
<PAGE>
EXHIBIT E
---------
[FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM U.S. GLOBAL
NOTE TO TEMPORARY GLOBAL NOTE]
[Trustee or Transfer Agent]
[address]
Re: CINCINNATI MILACRON INC.
$[ ]
--------------------------------
Reference is hereby made to the Indenture dated as of July 1, 1985 (the
"Indenture") between CINCINNATI MILACRON INC. (the "Company") and BANKAMERICA
--------- -------
NATIONAL TRUST COMPANY (formerly BANKAMERICA TRUST COMPANY OF NEW YORK) (the
"Trustee"), as supplemented by the First Supplemental Indenture dated as of
-------
February 26, 1987, the Second Supplemental Indenture dated as of March 16, 1994
and the Third Supplemental Indenture dated as of May 17, 1995. Capitalized
terms not defined in this Certificate shall have the meanings given to them in
the Indenture.
This letter relates to ________________ principal amount of Notes
represented by a beneficial interest in the U.S. Global Note (CUSIP No. ___)
held with the Depository by or on behalf of [transferor] as beneficial owner
(the "Transferor"). The Transferor has requested an exchange or transfer of its
----------
beneficial interest for an interest in the Temporary Global Note (CUSIP (CINS)
No. ___) to be held with [Euroclear] [Cedel] (ISIN Code ___) (Common Code ___)
through the Depository.
In connection with such request and in respect of such Notes, the
Transferor does hereby certify that such exchange or transfer has been effected
in accordance with the transfer restrictions set forth in the Notes and pursuant
to and in accordance with Regulation S under the Securities Act, and accordingly
the Transferor does hereby certify that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) (A) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person
acting on its behalf reasonably believed that the transferee
was outside the United States, or
(B) the transaction was executed in, on or through the
facilities of a designated offshore securities market and
neither the
E-1
<PAGE>
Transferor nor any person acting on its behalf knows that
the transaction was prearranged with a buyer in the United
States;
(3) no directed selling efforts have been made in contravention of
the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest being
transferred as described above was held with the Depository through
Euroclear or Cedel or both (Common Code ___ (ISIN Code ___)).
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the dealers.
[Insert Name of Transferor]
By: ______________________
Name:
Title:
Dated: _________, 199_
E-2
<PAGE>
EXHIBIT F
---------
[FORM OF TRANSFER CERTIFICATE FOR TRANSFER
OR EXCHANGE FROM U.S. GLOBAL NOTE OR DEFINITIVE DEBENTURE
TO REGULATION S GLOBAL NOTE]
[Trustee or Transfer Agent]
[address]
Re: CINCINNATI MILACRON INC.
$[ ]
----------------------------------
Reference is hereby made to the Indenture dated as of July 1, 1985 (the
"Indenture") between CINCINNATI MILACRON INC. (the "Company") and BANKAMERICA
--------- -------
NATIONAL TRUST COMPANY (formerly BANKAMERICA TRUST COMPANY OF NEW YORK) (the
"Trustee"), as supplemented by the First Supplemental Indenture dated as of
-------
February 26, 1987, the Second Supplemental Indenture dated as of March 16, 1994
and the Third Supplemental Indenture dated as of May 17, 1995. Capitalized
terms not defined in this Certificate shall have the meanings given to them in
the Indenture.
This letter relates to ________________ principal amount of Notes
[represented by a beneficial interest in the U.S. Global Note (CUSIP No. ___)
held with the Depository by or on behalf of] [held in the form of a Definitive
Debenture by] [transferor] as beneficial owner (the "Transferor"). The
----------
Transferor has requested an exchange or transfer of its interest for an interest
in the Regulation S Global Note (CUSIP No.[___]).
In connection with such request and in respect of such Notes, the
Transferor does hereby certify that such exchange or transfer has been effected
in accordance with the transfer restrictions set forth in the Notes and (i)
that, with respect to transfers made in reliance on Regulation S under the
Securities Act:
(i)(1) the offer of the Notes was not made to a person in the United
States;
(2) (A) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person
acting on its behalf reasonably believed that the transferee
was outside the United States, or
(B) the transaction was executed in, on or through the
facilities of a designated offshore securities market and
neither the Transferor nor any person acting on its behalf
knows that the transaction was pre-arranged with a buyer in
the United States;
F-1
<PAGE>
(3) no directed selling efforts have been made in contravention of
the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable,
and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
or (ii) that, with respect to transfers made in reliance on Rule 144 under the
Securities Act, the Notes are being transferred in a transaction permitted by
Rule 144 under the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the dealers.
[Insert Name of Transferor]
By: ______________________
Name:
Title:
Dated: __________, 199_
F-2
<PAGE>
EXHIBIT G
---------
[FORM OF TRANSFER CERTIFICATE FOR TRANSFER OR
EXCHANGE FROM TEMPORARY GLOBAL NOTE, REGULATION
S GLOBAL NOTE OR DEFINITIVE DEBENTURE
TO U.S. GLOBAL NOTE]
[Trustee or Transfer Agent]
[address]
Re: CINCINNATI MILACRON INC.
$[ ]
--------------------------------
Reference is hereby made to the Indenture dated as of July 1, 1985 (the
"Indenture") between CINCINNATI MILACRON INC. (the "Company") and BANKAMERICA
--------- -------
NATIONAL TRUST COMPANY (formerly BANKAMERICA TRUST COMPANY OF NEW YORK) (the
"Trustee"), as supplemented by the First Supplemental Indenture dated as of
-------
February 26, 1987, the Second Supplemental Indenture dated as of March 16, 1994
and the Third Supplemental Indenture dated as of May 17, 1995. Capitalized
terms not defined in this Certificate shall have the meanings given to them in
the Indenture.
This letter relates to __________________ principal amount of Notes which
are held in the form of the [Temporary Global Note/Regulation S Global
Note/Definitive Debenture] (CUSIP No. ) with [[Euroclear/Cedel] (ISIN Code [
]) (Common Code [ ]) through the Depository by or on behalf of] [by]
[transferor] as beneficial owner (the "Transferor"). The Transferor has
----------
requested an exchange or transfer of its interest in the Notes for an interest
in the U.S. Global Note (CUSIP No. [ ]).
In connection with such request, and in respect of such Notes, the
Transferor does hereby certify that such Notes are being transferred in
accordance with Rule 144A under the United States Securities Act of 1933, as
amended (the "Securities Act") to a transferee that the Transferor reasonably
--------------
believes is purchasing the Notes for its own account or an account with respect
to which the transferee exercises sole investment discretion and the transferee
and any such account is a "qualified institutional buyer" within the meaning of
Rule 144A, in each case in a transaction meeting the requirements of Rule 144A
and in accordance with any applicable securities laws of any state of the United
States or any other jurisdiction.
G-1
<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the dealers of the Notes.
[Insert Name of Transferor]
By: _____________________
Name:
Title:
Dated: ________________, 199_
G-2
<PAGE>
EXHIBIT H
---------
FORM OF CLEARING SYSTEM CERTIFICATE
-----------------------------------
Re: CINCINNATI MILACRON INC.
$[ ]
----------------------------------
Reference is hereby made to the Indenture dated as of July 1, 1985 (the
"Indenture") between CINCINNATI MILACRON INC. (the "Company") and BANKAMERICA
--------- -------
NATIONAL TRUST COMPANY (formerly BANKAMERICA TRUST COMPANY OF NEW YORK (the
"Trustee"), as supplemented by the First Supplemental Indenture dated as of
-------
February 26, 1987, the Second Supplemental Indenture dated as of March 16, 1994
and the Third Supplemental Indenture dated as of May 17, 1995. Capitalized
terms not defined in this Certificate shall have the meanings given to them in
the Indenture.
This is to certify that, based solely on certifications we have received in
writing, by tested telex or by electronic transmission from member organizations
appearing in our records as persons being entitled to a portion of the principal
amount set forth below (our "Member Organizations") substantially to the effect
--------------------
set forth in the Indenture relating to the above-captioned Notes as of the date
hereof, ______________ principal amount of the Notes (i) is owned by persons
that are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
-------------
persons"), (ii) is owned by United States persons that (a) are foreign branches
- -------
of United States financial institutions (as defined in U.S. Treasury Regulations
Section 1.165-12(c)(l)(v) ("financial institutions")) purchasing for their own
account or for resale, or (b) acquired the Notes through foreign branches of
United States financial institutions and who hold the Notes through such United
States financial institutions on the date hereof (and in either case (a) or (b),
each such United States financial institution has agreed, on its own behalf or
through its agent, that we may advise the Company or the Company's agent that it
will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder), or
(iii) is owned by United States or foreign financial institutions for purposes
of resale during the restricted period (as defined in U.S. Treasury Regulations
Section l.163-5(c)(2)(i)(D)(7), and to the further effect that United States or
foreign financial institutions described in clause (iii) above (whether or not
also described in clause (i) or (ii)) have certified that they have not acquired
the Notes for purposes of resale directly or indirectly to a United States
person or to a person within the United States or its possessions.
If the Notes are of the category contemplated in Section 230.903(c) (3) of
Regulation S under the Securities Act of 1933,
H-1
<PAGE>
as amended (the "Act") then this is also to certify with respect to the
---
principal amount of Notes set forth above that, except as set forth below, we
have received in writing, by tested telex or by electronic transmission, from
our Member Organizations entitled to portion of such principal amount,
certifications with respect to such portion substantially to the effect set
forth in the Indenture.
We further certify (i) that we are not making available herewith for
exchange (or, if relevant, exercise of any rights or collection of any interest)
any portion of the Temporary Global Security excepted in such certifications and
(ii) that as of the date hereof we have not received any notification from any
of our Member Organizations to the effect that the statements made by such
Member Organizations with respect to any portion of the part submitted herewith
for exchange (or, if relevant, exercise of any rights or collection of any
interest) are no longer true and cannot be relied upon as the date hereof.
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States. In connection therewith, if administrative or legal proceedings are
commenced or threatened in connection with which this certification is or would
be relevant, we irrevocably authorize you to produce this certification to any
interested party in such proceedings.
Dated: ____________________, 199 /1/
-
Yours faithfully,
[MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
Brussels office, as operator of the Euroclear
System]
or
[CEDEL S.A.]
By _______________________________
- ----------
/1/ To be dated no earlier than the earliest of the Exchange Date or the
-
relevant Interest Payment Date or the redemption date (as the case may be).
H-2
<PAGE>
EXHIBIT I
---------
FORM OF CERTIFICATE OF BENEFICIAL OWNERSHIP
-------------------------------------------
Re: CINCINNATI MILACRON INC.
$[ ]
-----------------------------------
Reference is hereby made to the Indenture dated as of July 1, 1985 (the
"Indenture") between CINCINNATI MILACRON INC. (the "Company") and BANKAMERICA
--------- -------
NATIONAL TRUST COMPANY (formerly BANKAMERICA TRUST COMPANY OF NEW YORK) (the
"Trustee"), as supplemented by the First Supplemental Indenture dated as of
-------
February 26, 1987, the Second Supplemental Indenture dated as of March 16, 1994
and the Third Supplemental Indenture dated as of May 17, 1995. Capitalized
terms not defined in this Certificate shall have the meanings given to them in
the Indenture.
This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Notes held by you for our account (i) are owned by
persons that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States Federal income taxation regardless of its source
("United States persons"), (ii) are owned by United States person(s) that (a)
---------------------
are foreign branches of a United States financial institution (as defined in
U.S. Treasury Regulations Section 1.165-12(c)(l)(v)) ("financial institutions")
----------------------
purchasing for their own account or for resale, or (b) acquired the Securities
through foreign branches of United States financial institutions and who hold
the Notes through such United States financial institutions on the date hereof
(and in either case (a) or (b), each such United States financial institution
hereby agrees, on its own behalf or through its agent, that you may advise the
issuer or the issuer's agent that it will comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) are owned by United States or
foreign financial institution(s) for purposes of resale during the restricted
period (as defined in U.S. Treasury Regulation Section 1.163-5(c)(2)(i)(D)(7)),
and in addition if the owner of the Notes is a United States or foreign
financial institution described in clause (iii) above (whether or not also
described in clause (i) or (ii)) this is to further certify that such financial
institution has not acquired the Notes for purposes of resale directly or
indirectly to a United States person or to a person within the United States or
its possessions.
If the Notes are of the category contemplated in Section 230.903(c)(3) of
Regulation S under the Securities Act of 1933, as amended (the "Act"), then this
---
is also to certify that, except as set forth below, (i) in the case of debt
securities, the Notes are beneficially owned by (a) non-U.S. person(s) or (b)
I-1
<PAGE>
U.S. person(s) who purchased the Notes in transactions which did not require
registration under the Act; or (ii) in the case of equity securities, the Notes
are owned by (x) non-U.S. persons (and such person(s) are not acquiring the
Notes for the account or benefit of U.S. person(s)) or (y) U.S. person(s) who
purchased the Notes in a transaction which did not require registration under
the Act. If this certification is being delivered in connection with the
exercise of warrants pursuant to Section 230.902(m) of Regulation S under the
Act, then this is further to certify that, except as set forth below, the Notes
are being exercised by and on behalf of non-U.S. person(s). As used in this
paragraph the terms "U.S. person" has the meaning given to it by Regulation S
under the Act.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the date
on which you intend to submit your certification relating to the Notes held by
you for our account in accordance with your operating procedures if any
applicable statement herein is not correct on such date, and in the absence of
any such notification it may be assumed that this certification applies as of
such date.
I-2
<PAGE>
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States. In connection therewith, if administrative or legal proceedings are
commenced or threatened in connection with which this certification is or
would be relevant, we irrevocably authorize you to produce this certification to
any interested party in such proceedings.
Date: ______________, 19__/2/
-
By: _____________________________________________
As, or as agent for, the beneficial owner(s) of the Notes to which this
certificate relates.
- ----------
/2/ Not earlier than 15 days prior to the certification event to which the
-
certification relates.
I-3
<PAGE>
EXHIBIT J
---------
Form of Letter to be Delivered by Accredited Investors
------------------------------------------------------
Cincinnati Milacron Inc.
4701 Marburg Avenue
Cincinnati, Ohio 45209
and
CS FIRST BOSTON CORPORATION
BT SECURITIES CORPORATION
J.P. MORGAN SECURITIES INC.
As Initial Purchasers
c/o CS First Boston Corporation
Park Avenue Plaza,
New York, N.Y. 10055
Dear Sirs:
We are delivering this letter in connection with an offering of $[
] (the "Securities") of Cincinnati Milacron Inc., a Delaware corporation (the
"Company"), all as described in the Confidential Offering Circular (the
"Offering Circular") relating to the offering.
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule 501(a)(1),
(2) or (3) under the Securities Act of 1933, as amended (the "Securities Act"),
or an entity in which all of the equity owners are accredited investors within
the meaning of Rule 501(a)(1), (2) or (3) under the Securities Act (an
"Institutional Accredited Investor");
(ii) (A) any purchase of the Securities by us will be for our own account or
for the account of one or more other Institutional Accredited Investors or as
fiduciary for the account of one or more trusts, each of which is an "accredited
investor" within the meaning of Rule 501(a)(7) under the Securities Act and for
each of which we exercise sole investment discretion or (B) we are a "bank",
within the meaning of Section 3(a)(2) of the Securities Act, or a "savings and
loan association" or other institution described in Section 3(a)(5)(A) of the
Securities Act, that is acquiring the Securities as fiduciary for the account of
one or more institutions for which we exercise sole investment discretion;
(iii) in the event that we purchase any of the Securities, we will acquire
Securities having a minimum purchase price of not less than $500,000 for our own
account or for any separate account for which we are acting;
J-1
<PAGE>
(iv) we have such knowledge and experience in financial and business matters
that we are capable of evaluating the merits and risks of purchasing the
Securities;
(v) we are not acquiring the Securities with a view to distribution thereof
or with any present intention of offering or selling any of the Securities,
except inside the United States in accordance with Rule 144A under the
Securities Act or outside the United States in accordance with Regulation S
under the Securities Act, as provided below; provided that the disposition of
our property and the property of any accounts for which we are acting as
fiduciary shall remain at all times within our control; and
(vi) we have received a copy of the Offering Circular relating to the
offering of the Securities and acknowledge that we have had access to such
financial and other information, and have been afforded the opportunity to ask
such questions of representatives of the Company and receive answers thereto, as
we deem necessary in connection with our decision to purchase the Securities.
We understand that the Securities are being offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and that the Securities have not been and will not be registered
under the Securities Act, and we agree, on our own behalf and on behalf of each
account for which we acquire any Securities, that if in the future we decide to
resell, pledge or otherwise transfer such Securities, such Securities may be
offered, resold, pledged or otherwise transferred only (i) pursuant to an
effective registration statement under the Securities Act, (ii) inside the
United States to a person who we reasonably believe is a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act) in a
transaction meeting the requirements of Rule 144A, or (iii) outside the United
States in a transaction meeting the requirements of Rule 904 under the
Securities Act and (iv) in each case, in accordance with any applicable
securities laws of any State of the United States or any other applicable
jurisdiction. We understand that the registrar and transfer agent for the
Securities will not be required to accept for registration of transfer any
Securities acquired by us, except upon presentation of evidence satisfactory to
the Company and the transfer agent that the foregoing restrictions on transfer
have been complied with. We further understand that any Securities acquired by
us will be in the form of definitive physical certificates and that such
certificates bear a legend reflecting the substance of this paragraph.
We acknowledge that you, the Company and others will rely upon our
confirmations, acknowledgements and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
J-2
<PAGE>
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
Date:______________________ __________________________
(Name of Purchaser)
By:_______________________
Name:
Title:
Address:
J-3
<PAGE>
EXHIBIT 4.4
[FORM OF 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.
-1-
<PAGE>
$
CINCINNATI MILACRON INC.
7-7/8% NOTES DUE 2000
GLOBAL EXCHANGE NOTE
CUSIP NO.: PRINCIPAL AMOUNT
REPRESENTED
$
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 MILLION DOLLARS ($100,000,000) (or such lesser amount as shall be
the outstanding principal amount of this U.S. Global Note shown in Schedule A
----------
hereto) on May 15, 2000 (the "Stated Maturity"), and to pay interest thereon
---------------
semiannually in arrears on each May 15 and November 15 (each, an "Interest
--------
Payment Date"), beginning November 15, 1995, and at maturity, from the later of
- ------------
May 17, 1995, or the most recent Interest Payment Date to which interest has
been paid or duly provided for, at the rate of 7-7/8% 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 security is the Global Exchange Note issued on the date hereof which
represents 100% of the principal face amount of the Company's 7-7/8% Notes Due
2000 (the "Notes"), which Notes have been registered under the Securities Act of
-----
1933, as amended. This Global Exchange Note is one of the duly authorized
issues 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, the Second Supplemental Indenture dated as of March 16,
1994 and the Third Supplemental Indenture dated as of May 17, 1995 (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
-2-
<PAGE>
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 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 Notes 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.
-3-
<PAGE>
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 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 in the form of Exhibit D to the Third Supplemental
Indenture.
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 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.
-4-
<PAGE>
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 overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
Unless the certificate of authentication 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 valid 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: _______________, 1995
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>
SCHEDULE A
----------
SCHEDULE OF EXCHANGES
---------------------
The following exchanges of Notes for Notes represented by this Global Exchange
Note have been made:
<TABLE>
<CAPTION>
Change in
Principal principal Principal
Amount of this amount of this amount of this
Global Global Global
Exchange Note Exchange Note Exchange Note Notation made
as of date of Date exchange due to following by or on behalf
issue made exchange such exchange of the Company
- -------------- ------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
$
</TABLE>
<PAGE>
EXHIBIT 4.5
CINCINNATI MILACRON INC.
$100,000,000 Principal Amount of 7-7/8% Notes Due 2000
EXCHANGE REGISTRATION RIGHTS AGREEMENT
--------------------------------------
May 10, 1995
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"), $100,000,000 principal amount of its 7-7/8% Notes due 2000 (the
"Notes"). The Notes will be issued pursuant to 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 such
indenture was supplemented by a first supplemental indenture, dated February 26,
1987, a second supplemental indenture, dated March 16, 1994 and a third
supplemental indenture dated May 17, 1995 (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
<PAGE>
debt securities of the Company identical in all material respects to the Notes,
except for the transfer restrictions relating to 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
-2-
<PAGE>
requirements in order to resell the Exchange Notes; provided that 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 30 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(d) 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(e) of the
Purchase Agreement with such changes as are customary in connection with
the preparation of a Registration Statement, (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 and (iv) Coopers & Lybrand GmbH 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(b) of the Purchase Agreement,
with appropriate date changes.
-10-
<PAGE>
(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 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
-11-
<PAGE>
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 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
-12-
<PAGE>
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, 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.
-13-
<PAGE>
(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 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
-14-
<PAGE>
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 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 June 16, 1995, Additional Interest shall be
accrued on the Notes over and above the stated interest from and including
June 17, 1995, until but excluding the earlier of (A) the date the Exchange
Offer Registration Statement in respect of
-15-
<PAGE>
the Notes is filed with the Commission and (B) September 15, 1995, at a
rate of .50% per annum;
(ii) if by September 14, 1995, neither the Registered Exchange Offer
is consummated nor the Shelf Registration Statement in respect of the Notes
is declared effective by the Commission, Additional Interest shall be
accrued on the Notes over and above the stated interest from and including
September 15, 1995, 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
-16-
<PAGE>
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
Fax No.: (312) 750-1829
Attention: Bryan S. Doyal
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
is 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
-17-
<PAGE>
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.
(f) Governing Law. THIS AGREEMENTS SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
(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-Finance
The foregoing Exchange Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.
CS FIRST BOSTON CORPORATION
By: /s/ Brian S. Doyal
-----------------------------
Vice President
Acting on behalf of itself and
as the Representative of the
several Initial Purchasers
-19-
<PAGE>
EXHIBIT 5
[Letterhead of]
CRAVATH, SWAINE & MOORE
June 8, 1995
$100,000,000
------------
Cincinnati Milacron Inc.
------------------------
7-7/8% Notes due 2000
---------------------
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
June 8, 1995, with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Securities Act"). The Registration Statement
relates to $100,000,000 aggregate principal amount of the Company's 7-7/8% Notes
Due 2000 (the "New Notes") to be offered in exchange for an equal principal
amount of the Company's outstanding 7-7/8% Notes Due 2000 (the "Old Notes"),
pursuant to a Prospectus (the "Prospectus") contained in the Registration
Statement.
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 Restated 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 dated as of February 26, 1987,
the Second Supplement Indenture dated as of March 16, 1994 and the Third
Supplemental Indenture dated as of May 17, 1995 (as so supplemented, the
"Indenture"), between the Company and
<PAGE>
2
BankAmerica National Trust Company (formerly BankAmerica Trust Company of New
York), as Trustee (the "Trustee").
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; and that the statements contained in the Prospectus
under the heading "Certain Federal Income Tax Considerations" accurately
describe the material United States Federal income tax consequences to a holder
of Old Notes that exchanges Old Notes for New Notes.
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>
1994 1993 1992 1991 1990
----- ------ ----- ------ -----
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Earnings:
Income (loss) before taxes......... $48.9 $(37.2) $27.0 $(73.4) $(7.8)
Add fixed charges (see below)...... 25.0 21.7 22.4 21.9 23.4
Other adjustments(a)............... -- -- -- (.4) (1.2)
----- ------ ----- ------ -----
Earnings as defined................ $73.9 $(15.5) $49.4 $(51.9) $14.4
===== ====== ===== ====== =====
Fixed Charges:
Interest expense................... $17.9 $ 15.7 $19.1 $ 19.1 $19.7
Other adjustments(a)............... 7.1 6.0 3.3 2.8 3.7
----- ------ ----- ------ -----
Fixed charges as defined........... $25.0 $ 21.7 $22.4 $ 21.9 $23.4
===== ====== ===== ====== =====
Ratio of earnings to fixed charges. 3.0 $(37.2)(b) 2.2 $(73.8)(c) $(9.0)(d)
===== ====== ===== ====== =====
</TABLE>
- --------
(a) Other adjustments in the earnings computation represents capitalized
interest. Other adjustments in the fixed charges computation represents
capitalized interest and a portion of rental expense representative of an
interest factor.
(b) The deficiency of $37.2 million in fiscal year 1993 resulted from a charge
of $47.1 million for the consolidation of domestic machine tool
manufacturing operations and 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 resulted from a charge
of $75.1 million for plant closing and the relocation of certain machine
tool manufacturing operations.
(d) The deficiency of $9.0 million in fiscal year 1990 resulted from a 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 24, 1995 in the Registration Statement on
Form S-4 and related Prospectus of Cincinnati Milacron Inc. for the
registration of $100,000,000 aggregate principal amount of 7 7/8% Notes due
2000.
ERNST & YOUNG LLP
Cincinnati, Ohio
June 5, 1995
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
As independent auditors, we hereby consent to the incorporation by reference,
in the Registration Statement on Form S-4 and related Prospectus of Cincinnati
Milacron Inc., for the registration of $100,000,000 aggregate principal amount
of 7 7/8% Notes due 2000, of our report dated February 28, 1995. We also
consent to the reference to our firm under the caption "Experts."
COOPERS & LYBRAND GmbH
Wirtschaftsprufungsgesellschaft
Buiting Wiegand
Wirtschaftsprufer Wirtschaftsprufer and
Certified Public Accountant
Dusseldorf, Germany
June 7, 1995
<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 $100,000,000 principal amount of Notes
Due 2000.
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 (including
post-effective 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 on this 25th day of April,
1995.
/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 $100,000,000 principal amount of Notes
Due 2000.
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 (including
post-effective 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 on this 25th day of April,
1995.
/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 $100,000,000 principal amount of Notes
Due 2000.
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 (including
post-effective 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 on this 25th day of April,
1995.
/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 $100,000,000 principal amount of Notes
Due 2000.
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 (including
post-effective 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 on this 25th day of April,
1995.
/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 $100,000,000 principal amount of Notes
Due 2000.
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 (including
post-effective 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 on this 25th day of April,
1995.
/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 $100,000,000 principal amount of Notes
Due 2000.
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 (including
post-effective 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 on this 25th day of April,
1995.
/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 $100,000,000 principal amount of Notes
Due 2000.
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 (including
post-effective 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 on this 25th day of April,
1995.
/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 $100,000,000 principal amount of Notes
Due 2000.
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 (including
post-effective 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 on this 25th day of April,
1995.
/s/ James E. Perrella
------------------------------
James E. Perrella
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 $100,000,000 principal amount of Notes
Due 2000.
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 (including
post-effective 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 on this 25th day of April,
1995.
/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 $100,000,000 principal amount of Notes
Due 2000.
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 (including
post-effective 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 on this 25th day of April,
1995.
/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 $100,000,000 principal amount of Notes
Due 2000.
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 (including
post-effective 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 on this 25th day of April,
1995.
/s/ Harry C. Stonecipher
------------------------------
Harry C. Stonecipher
Director
<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)
Not Applicable
(Jurisdiction of incorporation or organization if not a U.S. national bank)
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
Bank of America NT & SA
335 Madison Avenue, 4th Floor
New York, NY 10017
(212) 503-8297
(Name, address and telephone number of agent for services)
--------------------------
Cincinnati Milacron Inc.
(Exact name obligor as specified in its
its charter)
Delaware 31-1062125
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4701 Marburg Avenue 45209
Cincinnati, Ohio (Zip Code)
(Address of principal executive offices)
---------------------------------------
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, 250 E Street,
S.W., Washington, D.C. 20219; Federal Deposit
Insurance Corporation, 550 17th Street, N.W.,
Washington, D.C. 20429; Board of Governors of The
Federal Reserve System, 20th and C Streets, N.W.,
Washington, D.C. 20551
(b) Whether it is authorized to exercise corporate trust
powers.
Yes
Item 2. Affiliations with Obligor
If the obligor is an affiliate of the trustee, describe
each such affiliation.
The obligor is not an affiliate of the trustee. (See
Note on Page 3)
Items
3-15. Not Applicable.
Item 16. List of Exhibits
List below are 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 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 Form T-1
Statement, Registration No. 33-34670.
Exhibit 5 Not Applicable.
-2-
<PAGE>
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 laws or the
requirements of its supervising or examining
authority.
Exhibit 8 Not Applicable.
Exhibit 9 Not Applicable.
------------------------------
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 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 7th day of June, 1995.
BANKAMERICA NATIONAL TRUST COMPANY
By /s/ Geovanni Barris
--------------------------------
Assistant Vice President
-3-
<PAGE>
BANKAMERICA NATIONAL TRUST COMPANY Exhibit 7 to Form T-1
One World Trade Center, 18th Floor
New York City, NY 10048
FDIC Certificate Number 24430
Consolidated Report of Condition for
Insured Commercial Banks for March 31, 1995
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
___________________________________________________________
Assets
1. Cash and balances due from depository
institutions (from Schedule RC-A):
a. Noninterest-bearing balances and
currency and coin [1].............................281,576
b. Interest-bearing balances [2].....................25,821
2. Securities:
a. Held-to-maturity securities
(from Schedule RC-B, column A).....................2,011
b. Available-for-sale securities
(from Schedule RC-B, column D).....................4,749
3. Federal funds sold and securities
purchases under agreements to resell:
a. Federal funds sold...............................25,000
b. Securities purchased under
agreements to resell.............................9,175
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned
income (from Schedule RC-C).....................139,779
b. LESS: Allowance for loan and
lease losses....................................338
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)....................................139,441
5. Assets held in trading accounts (from
Schedule RC-D)........................................950
6. Premises and fixed assets (including
capitalized leases)...................................
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)................9,063
11. Other assets (from Schedule RC-F).....................43,002
12. Total assets (sum of items 1 through 11...............540,788
_______________
<PAGE>
[1] Includes cash items in process of collection and unposted debits.
[2] Includes time certificates of deposit not held in trading accounts.
SCHEDULE RC-CONTINUED
Dollar Amounts in Thousands
_________________________________________________________________
Liabilities
13. Deposits:
a. In domestic offices (sum of totals of columns
A and C from Schedule RC-E)........................379,774
(1) Noninterest-bearing [1]........................379,774
(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............................
b. Securities sold under agreements to repurchase.....
15. Demand notes issued to the U.S. Treasury..............
16. Other borrowed money..................................
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)................ 36,611
21. Total liabilities (sum of items 13 through 20)........416,385
22. Limited-life preferred stock..........................
EQUITY CAPITAL
23. Perpetual preferred stock.............................
24. Common Stock..........................................500
25. Surplus...............................................134,223
26(a)Undivided profits and capital reserves................(10,334)
26(b)Net unrealized holding gains (losses) on available for sale
securities............................................14
27. Cumulative foreign currency translation adjustments...
28. Total equity capital (sum of items 23 through 27).....124,403
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21,22 and 28)........540,788
_______________
1] Includes total demand deposits and noninterest-bearing time and
savings deposits.
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
CINCINNATI
MILACRON INC.
OFFER TO EXCHANGE ITS REGISTERED
7 7/8% NOTES DUE 2000
FOR ANY AND ALL OF ITS OUTSTANDING
7 7/8% NOTES DUE 2000
PURSUANT TO THE PROSPECTUS, DATED , 1995.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON ,
1995, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN
PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON , 1995.
By Mail: Facsimile Transmission Number: By Hand/Overnight
Delivery:
BankAmerica National (212) 390-3116
Trust Company BankAmerica National
Corporate Trust Trust Company
Operations (For Eligible Institutions Only) Corporate Trust
P.O. Box 464, Bowling Confirm by Telephone: Operations
Green Station (212) 390-3039 One World Trade Center
New York, New York 18th Floor
10274-0464 New York, New York 10048
For Information Call: (212) 390-2853
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 , 1995 (the "Prospectus"), of Cincinnati Milacron Inc.,
a Delaware corporation (the "Company"), and this Letter of Transmittal (this
"Letter"), which together constitute the Company's offer (the "Exchange
Offer") to exchange an aggregate principal amount of up to $100,000,000 of 7
7/8% Notes Due 2000 (the "New Notes") of the Company for an equal principal
amount of the Company's outstanding 7 7/8% Notes Due 2000 (the "Old Notes").
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. The New Notes will bear interest at the rate of 7 7/8%
per annum from the most recent date to which interest has been paid on the Old
Notes or, if no interest has been paid on the Old Notes, from May 17, 1995. If
by September 14, 1995, 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 September
15, 1995, 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 3/8% per annum, representing an additional 1/2% per annum over the
interest rate stated on the face of the Old Notes (such additional 1/2% per
annum being herein called "Additional Interest"). Holders of Old Notes whose
Old Notes are accepted for exchange will not receive any payment in respect of
accrued and unpaid interest (including Additional Interest, if any) on such
Old Notes. However, holders of New Notes will receive, on the next interest
payment date following the Expiration Date, a payment equal to the amount of
accrued and unpaid Additional Interest, if any, on the Old Notes exchanged for
such New 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 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 of Old Notes
should be listed on a separate signed schedule affixed hereto.
<TABLE>
- --------------------------------------------------------------------------------
<CAPTION>
DESCRIPTION OF OLD NOTES 1 2 3
- --------------------------------------------------------------------------------
AGGREGATE
NAME(S) AND ADDRESS(ES) OF PRINCIPAL PRINCIPAL
REGISTERED HOLDER(S) CERTIFICATE AMOUNT OF AMOUNT
(PLEASE FILL IN, IF BLANK) NUMBER(S)* OLD NOTE(S) TENDERED**
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
----------- ----------- -----------
----------- ----------- -----------
----------- ----------- -----------
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 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 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
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if cer-
tificates for Old Notes not
exchanged and/or New Notes
are to be issued in the name
of and sent to someone other
than the person(s) whose sig-
nature(s) appear(s) on this
Letter above, or if Old Notes
delivered by book-entry
transfer which are not ac-
cepted for exchange are to be
returned by credit to an ac-
count maintained at the Book-
Entry Transfer Facility other
than the account indicated
above.
Issue New Notes and/or Old
Notes to:
Name(s): .....................
(PLEASE TYPE OR PRINT)
..............................
(PLEASE TYPE OR PRINT)
Address: .....................
..............................
(INCLUDING ZIP CODE)
(COMPLETE ACCOMPANYING
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)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if cer-
tificates for Old Notes not
exchanged and/or New Notes
are to be sent to someone
other than the person(s)
whose signature(s) appear(s)
on this Letter above or to
such person(s) at an address
other than shown in the box
entitled "Description of Old
Notes" on this Letter above.
Mail New Notes and/or Old Notes
to:
Name(s):......................
(PLEASE TYPE OR PRINT)
..............................
(PLEASE TYPE OR PRINT)
Address: .....................
..............................
(INCLUDING ZIP CODE)
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: .................................. , 1995
x ............................ ...... , 1995
x ............................ ...... , 1995
(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: ............................. , 1995
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER TO EXCHANGE REGISTERED 7
7/8% NOTES DUE 2000 FOR ANY AND ALL OUTSTANDING 7 7/8% NOTES DUE 2000 OF
CINCINNATI MILACRON INC.
1. DELIVERY OF THIS LETTER AND OLD NOTES; GUARANTEED DELIVERY PROCEDURES.
This Letter is to be completed by holders of Old Notes 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 of Transmittal (or facsimile thereof) 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.
Holders of Old Notes 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 (as defined below), (ii) prior to the Expiration Date,
the Exchange Agent must receive from such Eligible Institution a properly
completed and duly executed Letter of Transmittal (or 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 this 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 HOLDERS OF OLD NOTES 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 of Old Notes to be tendered in the box above entitled "Description of
Old Notes--Principal Amount 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 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 certificates
must be guaranteed by an Eligible Institution.
If this Letter is signed by a person other than the registered holder of any
certificates specified herein, such certificates must be endorsed or
accompanied by appropriate bond powers, in either case signed exactly as the
name of the registered holder appears on the certificates and the signatures
on such certificates 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. A holder of Old Notes 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 holder of
Old Notes 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 of New Notes to such tendering holder 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,
(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.
PART 1--PLEASE PROVIDE
YOUR TIN IN THE BOX AT
RIGHT AND CERTIFY BY SIGN-
ING AND DATING BELOW.
SUBSTITUTE TIN:
-----------------------
FORM W-9 (SOCIAL SECURITY NUMBER
DEPARTMENT OF PART 2--TIN APPLIED FOR OR EMPLOYER
THE TREASURY [_] IDENTIFICATION NUMBER)
INTERNAL ------------------------------------------------------------
REVENUE ------------------------------------------------------------
SERVICE
CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY
PAYOR'S THAT:
REQUEST FOR
TAXPAYER
IDENTIFICATION
NUMBER ("TIN")
AND
CERTIFICATION
(1) the number shown on this form is my correct Taxpayer
Identification Number (or I am waiting for a number
to be issued to me).
(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 , 1995 (the "Prospectus"), and the enclosed Letter of
Transmittal (the "Letter of Transmittal") 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
By Mail: Facsimile Transmission Number: By Hand/Overnight
BankAmerica National (212) 390-3116 Delivery:
Trust Company BankAmerica National
Trust Company
Corporate Trust (For Eligible Institutions Only)
Operations Confirm by Telephone: Corporate Trust
P.O. Box 464 Bowling (212) 390-3039 Operations
Green Station One World Trade Center
New York, New York 18th Floor
10274-0464 New York, New York 10048
For Information Call:
(212) 390-2853
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 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 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 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 the name(s) of such holder(s)
appear(s) on the Old Notes certificate(s) 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 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
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 TO EXCHANGE ITS REGISTERED
7 7/8% NOTES DUE 2000
FOR ANY AND ALL OF ITS OUTSTANDING
7 7/8% NOTES DUE 2000
TO:BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
Cincinnati Milacron Inc. (the "Company") is offering to exchange (the
"Exchange Offer"), upon and subject to the terms and conditions set forth in
the Prospectus, dated , 1995 (the "Prospectus"), and the enclosed Letter
of Transmittal (the "Letter of Transmittal"), its registered 7 7/8% Notes Due
2000 (the "New Notes") for any and all of its outstanding 7 7/8% Notes Due 2000
(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 May 10, 1995, 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 , 1995;
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 , 1995 (THE "EXPIRATION DATE"), UNLESS EXTENDED
BY THE COMPANY. THE OLD NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE
WITHDRAWN AT ANY TIME BEFORE , 1995.
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 OTHER
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 TO EXCHANGE ITS REGISTERED
7 7/8 NOTES DUE 2000
FOR ANY AND ALL OF ITS OUTSTANDING
7 7/8 NOTES DUE 2000
TO OUR CLIENTS:
Enclosed for your consideration is a Prospectus, dated , 1995 (the
"Prospectus"), and the enclosed Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of Cincinnati
Milacron Inc. (the "Company") to exchange its registered 7 7/8% Notes Due 2000
(the "New Notes") for any and all of its outstanding 7 7/8% Notes Due 2000 (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 May 10, 1995, 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 , 1995, unless extended by the Company. Any Old
Notes tendered pursuant to the Exchange Offer may be withdrawn at any time
before 5:00 p.m., New York City time, on , 1995.
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 ,
1995, 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 OF OLD
NOTES
7 7/8% Notes Due 2000 . . . . . . . . _____________________________________
[_]Please do not tender any Old Notes
held by you for my account.
Dated: _______________________ , 1995 _____________________________________
_____________________________________
Signature(s)
_____________________________________
_____________________________________
_____________________________________
Please print name(s) here
_____________________________________
_____________________________________
Address(es)
_____________________________________
Area Code(s) and Telephone Number(s)
_____________________________________
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.
