<PAGE>
ORIGINAL ELECTRONICALLY TRANSMITTED TO THE SECURITIES AND EXCHANGE COMMISSION
ON JULY 9, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE PROCTER & GAMBLE COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 31-0411980
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
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ONE PROCTER & GAMBLE PLAZA
CINCINNATI, OHIO 45202
(513) 983-1100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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TERRY L. OVERBEY
SECRETARY
THE PROCTER & GAMBLE COMPANY
ONE PROCTER & GAMBLE PLAZA
CINCINNATI, OHIO 45202
(513) 983-4463
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
DOUGLAS W. CHERRY, ESQ. VALERIE FORD JACOB, ESQ.
THE PROCTER & GAMBLE COMPANY FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
ONE PROCTER & GAMBLE PLAZA ONE NEW YORK PLAZA
CINCINNATI, OHIO 45202 NEW YORK, NEW YORK 10004
(513) 983-5302 (212) 859-8000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement, as determined
in light of market conditions.
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If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
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If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES REGISTERED REGISTERED PER UNIT(2) OFFERING PRICE(2) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Debt Securities and War-
rants................. $1,375,000,000(1) 100% $1,375,000,000 $416,667
</TABLE>
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(1) Such amount represents the issue price of any Warrants and the issue price
rather than the principal amount of any Debt Securities issued at an
original issue discount. Any offering of Debt Securities denominated other
than in U.S. dollars will be treated as the equivalent in U.S. dollars
based on the official exchange rate applicable to the purchase of Debt
Securities from the Registrant.
(2) Estimated solely for purpose of calculating amount of registration fee.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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Pursuant to Rule 429 under the Securities Act of 1933, this Registration
Statement contains a combined prospectus that also relates to Registration
Statement No. 333-03821 on Form S-3 previously filed by the Registrant on May
15, 1996 and declared effective on May 22, 1996.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY STATE.
SUBJECT TO COMPLETION DATED JULY 9, 1997
THE PROCTER & GAMBLE COMPANY
DEBT SECURITIES AND WARRANTS
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The Company may from time to time offer Debt Securities consisting of
debentures, notes and/or other unsecured evidences of indebtedness in one or
more series and Warrants to purchase Debt Securities or to buy and sell
government debt securities, foreign currencies, currency units or units of a
currency index or currency basket, units of a stock index or stock basket or a
commodity or a commodity index from which the Company will receive proceeds of
up to an aggregate of $2,000,000,000 (or the equivalent in foreign currency or
currency units). The Debt Securities and Warrants may be offered independently
or together for sale directly to purchasers or through dealers, underwriters or
agents to be designated. The Debt Securities and Warrants will be offered to
the public on terms determined by market conditions. The Debt Securities and
Warrants may be sold for U.S. dollars, foreign currency or currency units and
the principal of and any premium and interest on the Debt Securities may
likewise be payable in U.S. dollars or, at the option of the Company if so
specified in the applicable Prospectus Supplement, in any other foreign
currency or currency units, including composite currencies such as the European
Currency Unit.
The specific designation, aggregate principal amount, purchase price,
maturity, rate (or manner of calculation thereof) and time of payment of
interest, if any, any listing on a securities exchange and other specific terms
not set forth herein of the Debt Securities in respect of which this Prospectus
is being delivered, the duration, purchase price, exercise price, detachability
and any other specific terms not set forth herein of any Warrants in respect of
which this Prospectus is being delivered, and the names of any underwriters,
dealers or agents, and the other terms and manner of the sale and distribution
of such Debt Securities and Warrants, are set forth in the accompanying
Prospectus Supplement ("Prospectus Supplement"). See "Description of Debt
Securities", "Description of Warrants" and "Plan of Distribution".
As used from time to time herein, the term "Securities" means the Debt
Securities and the Warrants.
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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.
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The date of this Prospectus is , 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
at Seven World Trade Center, 13th Floor, New York, New York 10048; and Suite
1400, Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois
60661-2511. Copies of such materials can be obtained by mail from the Public
Reference Branch of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, reports, proxy statements and other
information concerning the Company may also be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, and
the offices of the Cincinnati Stock Exchange, 400 S. LaSalle Street, 5th Floor,
Chicago, Illinois 60605.
The Company has filed with the Commission a registration statement on Form S-
3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended. This
Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-434) pursuant
to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1996 (which incorporates by reference portions of the Company's
definitive Proxy Statement dated August 30, 1996 for the Company's Annual
Meeting of Stockholders held on October 8, 1996 and portions of its 1996
Annual Report to Stockholders for the year ended June 30, 1996).
2. The Company's Quarterly Reports on Form 10-Q for the periods ended
September 30, 1996, December 31, 1996 and March 31, 1997.
3. All other 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 Securities.
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 the Registration Statement or this Prospectus to
the extent that a statement contained herein, in a Prospectus Supplement or
in any other document subsequently filed with the Commission which also is
or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of the
Registration Statement or this Prospectus.
The Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon the request of such person, a copy of any or all
of the documents which are incorporated by reference herein, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). Requests should be directed to Linda D.
Rohrer, Assistant Secretary, The Procter & Gamble Company, at One Procter &
Gamble Plaza, Cincinnati, Ohio 45202, telephone: (513) 983-8697.
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THE COMPANY
The Procter & Gamble Company (the "Company") was incorporated in Ohio in
1905, having been built from a business founded in 1837 by William Procter and
James Gamble. Today, the Company manufactures and markets a broad range of
consumer products in many countries throughout the world. Unless the context
otherwise requires, all references to the Company are to The Procter & Gamble
Company and its consolidated subsidiaries.
The Company's operations fall within five business segments: Laundry and
Cleaning, Paper, Beauty Care, Food and Beverage, and Health Care:
. The Laundry and Cleaning segment includes laundry, dishcare, hard surface
cleaners and fabric conditioners. Representative brands include Ariel, Tide,
Cascade, Dawn, Mr. Proper, Downy.
. The Paper segment includes tissue/towel, feminine protection and diapers.
Representative brands include Bounty, Charmin, Always, Whisper, Pampers.
. The Beauty Care segment includes hair care, deodorants, personal cleansing,
skin care and cosmetics and fragrances. Representative brands include
Pantene, Vidal Sassoon, Secret, Safeguard, Olay, Cover Girl.
. The Food and Beverage segment includes, coffee, peanut butter, juice, snacks,
shortening and oil, baking mixes and commercial services. Representative
brands include Folgers, Jif, Sunny Delight, Pringles, Crisco, Duncan Hines.
. The Health Care segment includes oral care, gastro-intestinal, respiratory
care and pharmaceuticals. Representative brands include Crest, Scope,
Metamucil, Vicks.
The Laundry category and Diaper category constituted 21% and 13% of
consolidated 1996 fiscal-year sales, respectively.
In the United States, the Company owned and operated manufacturing facilities
at 36 locations in 20 states as of June 30, 1996. In addition, it owned and
operated 90 manufacturing facilities in 43 other countries as of such date.
Laundry and Cleaning products were produced at 40 of these locations; Paper
products at 39; Health Care products at 30; Beauty Care products at 52; and
Food and Beverage products at 12.
The Company's principal executive offices are located at One Procter & Gamble
Plaza, Cincinnati, Ohio 45202, and its telephone number is (513) 983-1100.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement, the net
proceeds from the issuance of the Debt Securities and Warrants offered hereby
will be used for general corporate purposes.
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SUMMARY FINANCIAL INFORMATION
The following summary financial information for the years ended June 30, 1996
and 1995 has been derived from the Company's consolidated financial statements
contained in its Annual Report on Form 10-K for the fiscal year ended June 30,
1996. See "Incorporation of Certain Documents by Reference". The summary
financial information for the years ended June 30, 1992, 1993 and 1994 has been
derived from the Company's consolidated financial statements contained in its
Annual Reports to Shareholders for the years 1993 and 1994, as adjusted for
certain reclassifications made to conform to the presentation for the year
ended June 30, 1996.
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
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1992 1993 1994 1995 1996
------- ------- ------- ------- -------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
OPERATING RESULTS:
Net sales..................... $29,390 $30,498 $30,385 $33,482 $35,284
Cost of products sold......... 17,324 17,683 17,338 19,561 20,762
Earnings before income taxes
and prior years' effect of
accounting changes........... 2,885 349 3,346 4,000 4,669
Income taxes.................. 1,013 80 1,135 1,355 1,623
Net earnings/(loss)(1)........ 1,872 (656) 2,211 2,645 3,046
Net earnings/(loss) per common
share(1)..................... $ 2.62 $ (1.11) $ 3.09 $ 3.71 $ 4.29
Net earnings/(loss) per common
share assuming full
dilution(1).................. $ 2.45 $ (.96) $ 2.91 $ 3.48 $ 4.02
Average shares outstanding.... 677.4 680.4 683.1 686.0 686.3
Ratio of earnings to fixed
charges(2)................... 5.7 1.4 6.6 7.7 9.0
FINANCIAL POSITION
(AT PERIOD END):
Working capital............... $ 1,724 $ 1,688 $ 1,948 $ 2,194 $ 2,982
Total assets.................. 24,025 24,935 25,535 28,125 27,730
Long-term debt................ 5,223 5,174 4,980 5,161 4,670
Shareholders' equity.......... 9,071 7,441 8,832 10,589 11,722
</TABLE>
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(1)In 1993, net earnings and per share earnings include an after-tax charge of
$1,746 or $2.57 per share for restructuring and an after-tax charge of $925
or $1.36 per share for the prior years' effect of accounting changes.
(2)Earnings used to compute this ratio are earnings before income taxes and
before fixed charges (excluding interest capitalized during the period) and
after deducting undistributed earnings of equity method investees. Fixed
charges consist of interest, whether expensed or capitalized, amortization
of debt discount and expense, and one-third of all rent expense (considered
representative of the interest factor).
RESULTS OF OPERATIONS: YEAR ENDED JUNE 30, 1996 COMPARED TO THE YEAR ENDED JUNE
30, 1995
Worldwide net earnings for the year were $3,046 million, a 15% increase over
the prior year of $2,645 million. Current year results include settlement of
the Bankers Trust lawsuit, sale of the Company's share of a health care joint
venture, a reserve for estimated losses on a supply agreement entered into as
part of the previous divestiture of the commercial pulp business, and early
adoption of FASB Statement No. 121, covering recognition of impairment of long-
lived assets. Excluding these items, net earnings for the current year were
$3,031 million. The prior year results included a $50 million after-tax charge
for costs related to the earthquake in Kobe, Japan. Excluding the unusual items
in both years, net earnings grew 12%.
4
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Net earnings per share for the current year were $4.29, a 16% increase over
the prior year amount of $3.71. Excluding the unusual items in both years, net
earnings per share grew 13%.
Worldwide net sales for the current year were $35,284 million, up 5%.
Worldwide unit volume increased 7%, with all geographic regions achieving
record volume levels.
Worldwide gross margin for the current year was 41.2% compared to 41.6% in
the prior year. The current year was impacted by difficult economic conditions
in Mexico. Additionally, the early adoption of FASB Statement No. 121, which
provides new guidance on recognition of impaired assets, impacted the cost of
products sold by approximately $50 million.
Worldwide marketing, research, and administrative expenses were $9,707
million compared to $9,677 million in the prior year. This represents 27.5% of
sales, compared with 28.9% in the prior year, and reflects the emphasis on cost
control, as well as benefits of the restructuring program. Additionally,
expenses were reduced in certain markets as the Company expanded its value
pricing and simplification of trade terms initiatives, which are designed to
provide better value to consumers, to countries outside the United States.
Other income, net of expense, contributed $338 million before-tax in the
current year, including: a $120 million benefit to reverse the remaining
reserve previously established for two interest rate swap contracts following
settlement of a lawsuit against Bankers Trust; a $185 million gain on the sale
of the Company's 50% share of a health care joint venture to its venture
partner; and a $230 million charge to increase the reserve for estimated losses
on a supply agreement entered into as part of the previous sale of the
Company's commercial pulp business. In the prior year, other income was $244
million before-tax and contained a $77 million charge related to the Kobe,
Japan earthquake.
Net earnings margin increased to 8.6% in the current year from 7.9% in the
prior year, including the effects of unusual items in both years. Excluding the
unusual items, it was 8.6% in the current year, up from 8.0% in the prior year,
reflecting unit volume growth and continued emphasis on cost control through
the Company's simplification and standardization programs.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Debt Securities") and the
extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating
to such Offered Debt Securities.
The Offered Debt Securities are to be issued under an Indenture, dated as of
September 28, 1992 (the "Indenture"), between the Company and The First
National Bank of Chicago, as Trustee (the "Trustee"), a copy of which Indenture
is filed as an exhibit to the Registration Statement. 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 provisions
of the Indenture, including the definitions therein of certain terms. Wherever
particular provisions or defined terms of the Indenture are referred to, such
provisions or defined terms are incorporated herein by reference. Certain
defined terms in the Indenture are capitalized herein.
GENERAL
The Debt Securities will be unsecured obligations of the Company.
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The Indenture does not limit the amount of Debt Securities that may be issued
thereunder and provides that Debt Securities may be issued thereunder from time
to time in one or more series.
Reference is made to the Prospectus Supplement relating to the Offered Debt
Securities for the following terms, where applicable, of the Offered Debt
Securities: (1) the title of the Offered Debt Securities; (2) any limit on the
aggregate principal amount of the Offered Debt Securities; (3) the date or
dates on which the Offered Debt Securities will mature; (4) the rate or rates
(which may be fixed or variable) at which the Offered Debt Securities will bear
interest, if any, and the date or dates from which such interest will accrue;
(5) the dates on which such interest, if any, will be payable and the Regular
Record Dates for such Interest Payment Dates; (6) any mandatory or optional
sinking fund or analogous provisions; (7) the price at which, the periods
within which, and the terms and conditions upon which the Offered Debt
Securities may, pursuant to any optional or mandatory redemption provisions, be
redeemed at the option of the Company; (8) the terms and conditions upon which
the Offered Debt Securities may be repayable prior to final maturity at the
option of the holder thereof (which option may be conditional); (9) the portion
of the principal amount of the Offered Debt Securities, if other than the
principal amount thereof, payable upon acceleration of maturity thereof; (10)
the right of the Company to defease the Offered Debt Securities or certain
restrictive covenants and certain Events of Default under the Indenture; (11)
if other than in United States dollars, the currency or currencies, including
composite currencies, of payment of principal of and premium, if any, and
interest on the Offered Debt Securities (and federal income tax consequences
and other special considerations applicable to any such Offered Debt Securities
denominated in a currency or currencies other than United States dollars); (12)
any index used to determine the amount of payments of principal of and premium,
if any, and interest, if any, on the Offered Debt Securities; (13) if the
Offered Debt Securities will be issuable only in the form of a Global Security
as described under "Book-Entry Debt Securities", the Depository or its nominee
with respect to the Offered Debt Securities and the circumstances under which
the Global Security may be registered for transfer or exchange in the name of a
Person other than the Depository or its nominee; and (14) any other terms of
the Offered Debt Securities. (Section 301)
Unless otherwise indicated in the Prospectus Supplement relating to Offered
Debt Securities, principal of and premium, if any, and interest, if any, on the
Debt Securities will be payable, and the Debt Securities will be exchangeable
and transfers thereof will be registrable, at the office of the Trustee at 14
Wall Street, 8th Floor, New York, New York 10005, provided that, at the option
of the Company, payment of interest may be made by: (1) wire transfer on the
date of payment in immediately available federal funds or next day funds to an
account specified by written notice to the Trustee from any Holder of Debt
Securities; (2) any similar manner that such Holder may designate in writing to
the Trustee; or (3) by check mailed to the address of the Person entitled
thereto as it appears in the Security Register. (Sections 301, 305 and 1002)
Any payment of principal and premium, if any, and interest, if any, required to
be made on an Interest Payment Date, Redemption Date or at Maturity which is
not a Business Day need not be made on such day, but may be made on the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date, Redemption Date or at Maturity, as the case may be, and
no interest shall accrue for the period from and after such Interest Payment
Date, Redemption Date or Maturity. (Section 113)
Unless otherwise indicated in the Prospectus Supplement relating to Offered
Debt Securities, the Debt Securities will be issued only in fully registered
form, without coupons, in denominations of $1,000 or any integral multiple
thereof. (Section 302) No service charge will be made for any transfer or
exchange of the Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. (Section 305)
Debt Securities may be issued under the Indenture as Original Issue Discount
Securities to be offered and sold at a substantial discount from their stated
principal amount. In addition, under Treasury Regulations it is possible that
Debt Securities which are offered and sold at their stated principal amount
would, under certain circumstances, be treated as issued at an original issue
discount for federal income
6
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tax purposes, and special rules may apply to Debt Securities and Warrants which
are considered to be issued as "investment units". Federal income tax
consequences and other special considerations applicable to any such Original
Issue Discount Securities (or other Debt Securities treated as issued at an
original issue discount) and to "investment units" will be described in the
Prospectus Supplement relating thereto. "Original Issue Discount Security"
means any security which provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration of the
Maturity thereof upon the occurrence of an Event of Default and the
continuation thereof. (Section 101)
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in the form of one or more
Global Securities that will be deposited with a Depository or its nominee
identified in the Prospectus Supplement relating to the Offered Debt
Securities. In such a case, one or more Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of Outstanding Debt Securities of the series to be represented
by such Global Security or Securities. Unless and until it is exchanged in
whole or in part for Debt Securities in definitive registered form, a Global
Security may not be registered for transfer or exchange except as a whole by
the Depository for such Global Security to a nominee of such Depository and
except in the circumstances described in the Prospectus Supplement relating to
the Offered Debt Securities. (Sections 204 and 305)
RESTRICTIVE COVENANTS
RESTRICTIONS ON SECURED DEBT
If the Company or any Domestic Subsidiary shall incur, assume or guarantee
any Debt secured by a Mortgage on any Principal Domestic Manufacturing Property
or on any shares of stock or debt of any Domestic Subsidiary, the Company will
secure, or cause such Domestic Subsidiary to secure, the Debt Securities then
outstanding equally and ratably with (or prior to) such Debt, unless after
giving effect thereto the aggregate amount of all such Debt so secured,
together with all Attributable Debt in respect of sale and leaseback
transactions involving Principal Domestic Manufacturing Properties, would not
exceed 5% of the Consolidated Net Tangible Assets of the Company and its
consolidated subsidiaries. The restriction will not apply to, and there shall
be excluded in computing secured Debt for the purpose of such restriction, Debt
secured by (a) Mortgages on property of, or on any shares of stock or debt of,
any corporation existing at the time such corporation becomes a Domestic
Subsidiary, (b) Mortgages in favor of the Company or a Domestic Subsidiary, (c)
Mortgages in favor of U.S. governmental bodies to secure progress or advance
payments, (d) Mortgages on property, shares of stock or debt existing at the
time of acquisition thereof (including acquisition through merger or
consolidation), purchase money Mortgages and construction cost Mortgages and
(e) any extension, renewal or refunding of any Mortgage referred to in the
foregoing clauses (a) through (d), inclusive. (Section 1004) The Indenture does
not restrict the incurrence of unsecured debt by the Company or its
subsidiaries.
RESTRICTIONS ON SALES AND LEASEBACKS
Neither the Company nor any Domestic Subsidiary may enter into any sale and
leaseback transaction involving any Principal Domestic Manufacturing Property,
the completion of construction and commencement of full operation of which has
occurred more than 120 days prior thereto, unless (a) the Company or such
Domestic Subsidiary could incur a lien on such property under the restrictions
described above under "Restrictions on Secured Debt" in an amount equal to the
Attributable Debt with respect to the sale and leaseback transaction without
equally and ratably securing the Debt Securities then outstanding or (b) the
Company, within 120 days, applies to the retirement of its Funded Debt an
amount not less than the greater of (i) the net proceeds of the sale of the
Principal Domestic Manufacturing Property leased pursuant to such arrangement
or (ii) the fair value of the Principal Domestic Manufacturing Property so
leased (subject to credits for certain voluntary retirements of
7
<PAGE>
Funded Debt). This restriction will not apply to any sale and leaseback
transaction (a) between the Company and a Domestic Subsidiary or between
Domestic Subsidiaries or (b) involving the taking back of a lease for a period
of less than three years. (Section 1005)
CERTAIN DEFINITIONS
The term "Attributable Debt" means the total net amount of rent (discounted
at 10% per annum compounded annually) required to be paid during the remaining
term of any lease. (Section 101)
The term "Consolidated Net Tangible Assets" means the aggregate amount of
assets (less applicable reserves and other properly deductible items) after
deducting therefrom (a) all current liabilities and (b) all goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and other
like intangibles, all as set forth on the most recent balance sheet of the
Company and its consolidated subsidiaries and computed in accordance with
generally accepted accounting principles. (Section 101)
The term "Domestic Subsidiary" means a subsidiary of the Company except a
subsidiary which neither transacts any substantial portion of its business nor
regularly maintains any substantial portion of its fixed assets within the
United States or which is engaged primarily in financing the operations of the
Company and its subsidiaries outside the United States. (Section 101)
The term "Funded Debt" means Debt having a maturity of, or by its terms
extendible or renewable for, a period of more than 12 months after the date of
determination of the amount thereof.
The term "Principal Domestic Manufacturing Property" means any facility
(together with the land on which it is erected and fixtures comprising a part
thereof) used primarily for manufacturing or processing, located in the United
States, owned or leased by the Company or a subsidiary of the Company and
having a gross book value in excess of 3/4 of 1% of Consolidated Net Tangible
Assets, other than any such facility or portion thereof (i) which is a
pollution control or other facility financed by obligations issued by a State
or local governmental unit pursuant to Section 103(b)(4)(E), 103(b)(4)(F) or
103(b)(6) of the Internal Revenue Code of 1954, or any successor provision
thereof, or (ii) which, in the opinion of the Board of Directors of the
Company, is not of material importance to the total business conducted by the
Company and its subsidiaries as an entirety. (Section 101)
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to Debt
Securities of any series: (a) failure to pay principal of or premium, if any,
on any Debt Security of that series when due; (b) failure to pay any interest
on any Debt Security of that series when due, continued for 30 days; (c)
failure to deposit any sinking fund payment, when due, in respect of any Debt
Security of that series; (d) failure to perform any other covenant of the
Company in the Indenture (other than a covenant included in the Indenture
solely for the benefit of a series of Debt Securities other than that series),
continued for 90 days after written notice as provided in the Indenture; (e)
certain events in bankruptcy, insolvency or reorganization; and (f) any other
Event of Default provided with respect to Debt Securities of that series.
(Section 501)
If an Event of Default with respect to Outstanding Debt Securities of any
series shall occur and be continuing, either the Trustee or the Holders of at
least 25% in principal amount of the Outstanding Debt Securities of that series
may declare the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities, such portion of the principal amount as may
be specified in the terms of that series) of all the Debt Securities of that
series to be due and payable immediately. At any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree based on acceleration has been obtained, the
Holders of a majority in
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<PAGE>
principal amount of the Outstanding Debt Securities of that series may, under
certain circumstances, rescind and annul such acceleration. (Section 502) For
information as to waiver of defaults, see "Modification and Waiver".
Reference is made to the Prospectus Supplement relating to each series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to acceleration of the Maturity of a portion of
the principal amount of such Original Issue Discount Securities upon the
occurrence of an Event of Default and the continuation thereof.
The Indenture provides that the Trustee will be under no obligation, subject
to the duty of the Trustee during default to act with the required standard of
care, to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. (Section 603) Subject to such
provisions for indemnification of the Trustee, the Holders of a majority in
principal amount of the Outstanding Debt Securities of any series will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, with respect to the Debt Securities of that series. (Section 512)
The Company will furnish to the Trustee annually a certificate as to
compliance by the Company with all conditions and covenants under the
Indenture. (Section 1007)
DEFEASANCE
The Prospectus Supplement will state if any defeasance provision will apply
to the Offered Debt Securities.
DEFEASANCE AND DISCHARGE
The Indenture provides that, if applicable, the Company will be discharged
from any and all obligations in respect of the Debt Securities of any series
(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, to replace stolen, lost or mutilated Debt Securities
of such series, to maintain paying agencies and to hold monies for payment in
trust) upon the deposit with the Trustee, in trust, of money and/or U.S.
Government Obligations (as defined) which through the payment of interest and
principal in respect thereof in accordance with their terms will provide money
in an amount sufficient to pay the principal of and premium, if any, and each
installment of interest on the Debt Securities of such series on the Stated
Maturity of such payments in accordance with the terms of the Indenture and the
Debt Securities of such series. Such a trust may only be established if, among
other things, (i) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling to the effect that Holders of the
Debt Securities of such series will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to 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, defeasance and discharge had not occurred, and (ii) the Company has
delivered to the Trustee an Opinion of Counsel (who may be an employee of or
counsel for the Company) to the effect that the Debt Securities of such series,
if then listed on the New York Stock Exchange, Inc., will not be delisted as a
result of such deposit, defeasance and discharge. (Section 403)
DEFEASANCE OF CERTAIN COVENANTS AND CERTAIN EVENTS OF DEFAULT
The Indenture provides that, if applicable, the Company may omit to comply
with any restrictive covenants in Sections 1004 (Limitation on Liens) and 1005
(Limitation on Sales and Leasebacks), and Section 501(4) (described in clause
(d) under "Events of Default") with respect to Sections 1004 and 1005 shall not
be deemed to be an Event of Default under the Indenture and the Debt Securities
of any
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<PAGE>
series, upon the deposit with the Trustee, in trust, of money and/or U.S.
Government Obligations (as defined) which through the payment of interest and
principal in respect thereof in accordance with their terms will provide money
in an amount sufficient to pay the principal of and premium, if any, and each
installment of interest on the Debt Securities of such series on the Stated
Maturity of such payments in accordance with the terms of the Indenture and the
Debt Securities of such series. The obligations of the Company under the
Indenture and the Debt Securities of such series other than with respect to the
covenants referred to above and the Events of Default other than the Event of
Default referred to above shall remain in full force and effect. Such a trust
may only be established if, among other things, the Company has delivered to
the Trustee an Opinion of Counsel (who may be an employee of or counsel for the
Company) to the effect that (i) the Holders of the Debt Securities of such
series will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit and defeasance of certain covenants and Events of
Default and will be subject to 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, and (ii) the Debt Securities of such series,
if then listed on the New York Stock Exchange, Inc., will not be delisted as a
result of such deposit and defeasance. (Section 1006)
DEFEASANCE AND CERTAIN OTHER EVENTS OF DEFAULT
In the event the Company exercises its option to omit compliance with certain
covenants of the Indenture with respect to the Debt Securities of any series as
described above and the Debt Securities of such series are declared due and
payable because of the occurrence of any Event of Default other than the Event
of Default described in clause (d) under "Events of Default", the amount of
money and U.S. Government Obligations on deposit with the Trustee will be
sufficient to pay amounts due on the Debt Securities of such series at the time
of their Stated Maturity but may not be sufficient to pay amounts due on the
Debt Securities of such series at the time of the acceleration resulting from
such Event of Default. However, the Company shall remain liable for such
payments.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of 66 2/3% in principal amount of
the Outstanding Debt Securities of each series affected by such modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of the Holder of each Outstanding Debt Security affected
thereby, (a) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Debt Security, (b) reduce the principal
amount of, or the premium, if any, or interest, if any, on, any Debt Security,
(c) reduce the amount of principal of an Original Issue Discount Security
payable upon acceleration of the Maturity thereof, (d) change the place or
currency of payment of principal of, or premium, if any, or interest, if any,
on, any Debt Security, (e) impair the right to institute suit for the
enforcement of any payment on or with respect to any Debt Security, or (f)
reduce the percentage in principal amount of Outstanding Debt Securities of any
series, the consent of the Holders of which is required for modification or
amendment of the Indenture or for waiver of compliance with certain provisions
of the Indenture or for waiver of certain defaults. (Section 902)
The Holders of 66 2/3% in principal amount of the Outstanding Debt Securities
of any series may on behalf of the Holders of all Debt Securities of that
series waive, insofar as that series is concerned, compliance by the Company
with certain restrictive provisions of the Indenture. (Section 1008) The
Holders of a majority in principal amount of the Outstanding Debt Securities of
any series may on behalf of the Holders of all Debt Securities of that series
waive any past default under the Indenture with respect to that series, except
a default in the payment of the principal of or premium, if any, or interest on
any Debt Security of that series or in respect of a provision which under the
Indenture cannot be modified or amended without the consent of the Holder of
each Outstanding Debt Security of that series affected. (Section 513)
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<PAGE>
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any Holders of Outstanding Debt
Securities, may consolidate or merge with or into, or transfer or lease its
assets as an entirety to, any Person, provided that (i) the Person (if other
than the Company) formed by such consolidation or into which the Company is
merged or which acquires or leases the assets of the Company substantially as
an entirety is organized and existing under the laws of any United States
jurisdiction and assumes the Company's obligations on the Debt Securities and
under the Indenture, (ii) 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 (provided
that a transaction will only be deemed to be in violation of this condition
(ii) as to any series of Debt Securities as to which such Event of Default or
such event shall have occurred and be continuing), and (iii) certain other
conditions are met. (Article Eight)
REGARDING THE TRUSTEE
The First National Bank of Chicago is the Trustee under the Indenture. The
First National Bank of Chicago is also a depositary of the Company and has
performed other services for the Company and its subsidiaries in the normal
course of its business.
DESCRIPTION OF WARRANTS
The following description of the terms of the Warrants sets forth certain
general terms and provisions of the Warrants to which any Prospectus Supplement
may relate. The particular terms of the Warrants offered by any Prospectus
Supplement (the "Offered Warrants") and the extent, if any, to which such
general provisions may apply to the Warrants so offered will be described in
the Prospectus Supplement relating to such Offered Warrants.
The Company may issue Warrants for the purchase of Debt Securities, Warrants
to buy or sell debt securities of or guaranteed by the United States
("Government Debt Securities"), Warrants to buy or sell foreign currencies,
currency units or units of a currency index or currency basket, Warrants to buy
or sell units of a stock index or stock basket and Warrants to buy and sell a
commodity or a commodity index. Warrants may be issued independently or
together with any Debt Securities offered by any Prospectus Supplement and may
be attached to or separate from such Debt Securities. The Warrants will be
settled either through physical delivery or through payment of a cash
settlement value as set forth herein and in any applicable Prospectus
Supplement. The Offered Warrants will be issued under a Warrant Agreement to be
entered into between the Company and a bank or trust company, as Warrant Agent,
all as set forth in the Prospectus Supplement relating to the particular issue
of Warrants. The Warrant Agent will act solely as an agent of the Company in
connection with the Warrant Certificates and will not assume any obligation or
relationship of agency or trust for or with any holders of Warrant Certificates
or beneficial owners of Warrants. The following summaries of certain provisions
of the forms of Warrant Agreement do not purport to be complete and are subject
to, and are qualified in their entirety by reference to the provisions of the
forms of Warrant Agreement (including the forms of Warrant Certificates),
copies of which are filed as an exhibit to the Registration Statement.
GENERAL
The Prospectus Supplement will describe the following terms of the Offered
Warrants (to the extent such terms are applicable to such Warrants): (i) the
offering price; (ii) the currency, currency unit, currency index or currency
basket based on or relating to currencies (including ECU) for which Warrants
may be purchased; (iii) the date on which the right to exercise the Warrants
shall commence and the date on which such right shall expire; (iv) whether the
Warrant Certificates will be issuable in definitive registered form or global
form or both; (v) federal income tax consequences; (vi) whether the Warrant
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<PAGE>
is for Debt Securities, Government Debt Securities, currencies, currency units,
currency indices or currency baskets, stock indices, stock baskets,
commodities, commodity indices or such other index or reference as therein
described; and (vii) any other terms of the Warrants, including any terms which
may be required or advisable under United States laws or regulations.
If the Offered Warrants are to purchase Debt Securities, the Prospectus
Supplement will also describe (a) the designation, aggregate principal amount,
currency, currency unit or currency basket of denomination and other terms of
the Debt Securities purchasable upon exercise of the Offered Warrants; (b) the
designation and terms of the Debt Securities with which the Offered Warrants
are issued and the number of Offered Warrants issued with each such Debt
Security; (c) the date on and after which the Offered Warrants and the related
Debt Securities will be separately transferable; and (d) the principal amount
of Debt Securities purchasable upon exercise of one Offered Warrant and the
price at which and currency, currency unit or currency basket in which such
principal amount of Debt Securities may be purchased upon such exercise.
If the Offered Warrants are to buy or sell Government Debt Securities or a
foreign currency, currency unit, currency index or currency basket, such
Offered Warrants will be listed on a national securities exchange and the
Prospectus Supplement will describe the amount and designation of the
Government Debt Securities or currency, currency unit, currency index or
currency basket, as the case may be, subject to each Offered Warrant, whether
such Offered Warrants provide for cash settlement or delivery of the Government
Debt Securities or foreign currency, currency unit, units of the currency index
or currency basket upon exercise, and the national securities exchange on which
the Offered Warrants will be listed.
If the Offered Warrants are Offered Warrants on a stock index or a stock
basket, such Offered Warrants will provide for payment of an amount in cash
determined by reference to increases or decreases in such stock index or stock
basket and will be listed on a national securities exchange, and the Prospectus
Supplement will describe the terms of the Offered Warrants, the stock index or
stock basket covered by the Offered Warrants and the market to which such stock
index or stock basket relates, and the national securities exchange on which
the Offered Warrants will be listed.
If the Offered Warrants are Offered Warrants on a commodity or commodity
index, such Offered Warrants will provide for cash settlement or delivery of
the particular commodity or commodities and such Offered Warrants will be
listed on a national securities exchange. The Prospectus Supplement will
describe the terms of the Offered Warrants, the commodity or commodity index
covered by the Offered Warrants and the market, if any, to which such commodity
or commodity index relates and the national securities exchange on which the
Warrants will be listed.
Warrant Certificates may be exchanged for new Warrant Certificates of
different denominations, may (if in registered form) be presented for
registration of transfer, and may be exercised at the corporate trust office of
the Warrant Agent or any other office indicated in the Prospectus Supplement.
Warrants to buy or sell Government Debt Securities or a foreign currency,
currency unit, currency index or currency basket, and Warrants on stock indices
or stock baskets or on commodities or commodity indices, may be issued in the
form of a single Global Warrant Certificate, registered in the name of the
nominee of the depository of the Warrants, or may initially be issued in the
form of definitive certificates that may be exchanged, on a fixed date, or on a
date or dates selected by the Company, for interests in a Global Warrant
Certificate, as set forth in the applicable Prospectus Supplement. Prior to the
exercise of their Warrants, holders of Warrants to purchase Debt Securities
will not have any of the rights of holders of the Debt Securities purchasable
upon such exercise, including the right to receive payments of principal of,
premium, if any, or interest, if any, on the Debt Securities purchasable upon
such exercise or to enforce covenants in the Indenture.
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EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase such principal amount of
Debt Securities or buy or sell such amount of Government Debt Securities or of
a currency, currency unit, currency index or currency basket, stock index or
stock basket, commodity or commodities at such exercise price, or receive such
settlement value in respect of such amount of Government Debt Securities or of
a currency, currency unit, currency index or currency basket, stock index or
stock basket, commodity or commodity index, as shall in each case be set forth
in or calculable from, the Prospectus Supplement relating to the Warrants or as
otherwise set forth in the Prospectus Supplement. Warrants may be exercised at
any time up to 3:00 P.M. New York time on the date set forth in the Prospectus
Supplement relating to such Warrants or as may be otherwise set forth in the
Prospectus Supplement. After such time on that date (or such later date to
which such date may be extended by the Company), unexercised Warrants will
become void.
Subject to any restrictions and additional requirements that may be set forth
in the Prospectus Supplement relating thereto, Warrants may be exercised by
delivery to the Warrant Agent of the Warrant Certificate evidencing such
Warrants properly completed and duly executed and of payment as provided in the
Prospectus Supplement of the amount required to purchase the Debt Securities,
or (except in the case of Warrants providing for cash settlement) payment for
or delivery of the Government Debt Securities or currency, currency unit,
currency index, currency basket, stock index, stock basket, commodity or
commodities index as the case may be, purchased or sold upon such exercise.
Warrants will be deemed to have been exercised upon receipt of such Warrant
Certificate and any such payment, if applicable, at the corporate trust office
of the Warrant Agent or any other office indicated in the Prospectus Supplement
and the Company will, as soon as practicable thereafter, issue and deliver the
Debt Securities purchasable upon such exercise, or buy or sell such Government
Debt Securities or currency, currency unit, currency index or currency basket,
stock index or stock basket, commodity or commodities or pay the settlement
value in respect of such Warrants. If fewer than all of the Warrants
represented by such Warrant Certificate are exercised, a new Warrant
Certificate will be issued for the remaining amount of the Warrants.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities and Warrants to or through underwriters,
and also may sell Debt Securities and Warrants directly to other purchasers or
through agents. Such underwriters may also act as agents.
The distribution of the Debt Securities and Warrants, if any, may be effected
from time to time in one or more transactions at a fixed price or prices, which
may be changed, or at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities and Warrants, if any,
underwriters may receive compensation from the Company or from purchasers of
Debt Securities and Warrants, if any, for whom they may act as agents, in the
form of discounts, concessions or commissions. Underwriters may sell Debt
Securities and Warrants, if any, to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act
as agents. Underwriters, dealers and agents that participate in the
distribution of Debt Securities and Warrants, if any, may be deemed to be
underwriters, and any discounts or commissions received by them from the
Company and any profit on the resale of Debt Securities and Warrants, if any,
by them may be deemed to be underwriting discounts and commissions, under the
Securities Act of 1933, as amended (the "Act"). Any such underwriter or agent
will be identified, and any such compensation received from the Company will be
described, in the Prospectus Supplement.
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Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Debt Securities and Warrants, if
any, may be entitled to indemnification by the Company against certain
liabilities, including liabilities under the Act.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Debt Securities and Warrants, if any, from
the Company pursuant to contracts providing for payment and delivery on a
future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but in all cases
such institutions must be approved by the Company. The obligations of any
purchaser under any such contract will be subject to the condition that the
purchase of the Offered Debt Securities and Offered Warrants, if any, shall not
at the time of delivery be prohibited under the laws of the jurisdiction to
which such purchaser is subject. The underwriters and such other agents will
not have any responsibility in respect of the validity or performance of such
contracts.
LEGAL OPINIONS
Unless otherwise indicated in the Prospectus Supplement relating to Offered
Debt Securities and Offered Warrants, if any, the validity of Offered Debt
Securities and Offered Warrants, if any, will be passed upon for the Company by
Terry L. Overbey, Esq., Secretary and Associate General Counsel, The Procter &
Gamble Company, One Procter & Gamble Plaza, Cincinnati, Ohio 45202, and for the
underwriters or agents, as the case may be, by Fried, Frank, Harris, Shriver &
Jacobson (a partnership including professional corporations), One New York
Plaza, New York, New York 10004. Mr. Overbey may rely as to matters of New York
law upon the opinion of Fried, Frank, Harris, Shriver & Jacobson, and Fried,
Frank, Harris, Shriver & Jacobson may rely as to matters of Ohio law upon the
opinion of Mr. Overbey. Fried, Frank, Harris, Shriver & Jacobson from time to
time performs legal services for the Company.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference from the Company's Annual Report on Form 10-K have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which
is incorporated herein by reference, and has been so incorporated in reliance
upon such report given upon the authority of that firm as experts in auditing
and accounting.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is an itemized statement of estimated expenses (other than
underwriting discounts and commissions) to be incurred in connection with the
sale of the Debt Securities and Warrants:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee (actual)..... $ 416,667
Printing and engraving expenses.................................. 250,000
Accounting fees and expenses..................................... 25,000
Legal fees and expenses.......................................... 25,000
Blue Sky and legal investment fees and expenses.................. 15,000
Fees and expenses of Trustee..................................... 150,000
Rating agency fees............................................... 240,000
Miscellaneous.................................................... 10,000
----------
Total........................................................ $1,131,667
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1701.13(E) of the Ohio Revised Code provides as follows:
(E)(1) A corporation may indemnify or agree 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, trustee, officer, employee,
member, manager, or agent of another corporation, domestic or foreign,
nonprofit or for profit, a limited liability company, or a partnership,
joint venture, trust, or other enterprise, against expenses, including
attorney's fees, judgments, fines, and amounts paid in settlement actually
and reasonably incurred by him 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, if he had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit, or proceeding by judgment, order, settlement, or
conviction, or upon a plea of nolo contendere or its equivalent, shall not,
of itself, create a presumption that the person did not act 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, he had reasonable cause to believe that his conduct was
unlawful.
(2) A corporation may indemnify or agree 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 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, trustee, officer,
employee, member, manager, or agent of another corporation, domestic or
foreign, nonprofit or for profit, a limited liability company, or a
partnership, joint venture, trust, or other enterprise, against expenses,
including attorney's 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 of the following:
(a) Any claim, issue, or matter as to which such person is adjudged
to be liable for negligence or misconduct in the performance of his
duty to the corporation unless, and only to the extent that, the court
of common pleas or the court in which such action or suit was brought
determines, upon application, that, despite the adjudication of
liability, but in view of
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<PAGE>
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as the court of common pleas or
such other court shall deem proper;
(b) Any action or suit in which the only liability asserted against a
director is pursuant to section 1701.95 of the Revised Code.
(3) To the extent that a director, trustee, officer, employee, member,
manager, or agent has been successful on the merits or otherwise in defense
of any action, suit, or proceeding referred to in division (E)(1) or (2) of
this section, or in defense of any claim, issue, or matter therein, he
shall be indemnified against expenses, including attorney's fees, actually
and reasonably incurred by him in connection with the action, suit, or
proceeding.
(4) Any indemnification under division (E)(1) or (2) of this section,
unless ordered by a court, shall be made by the corporation only as
authorized in the specific case, upon a determination that indemnification
of the director, trustee, officer, employee, member, manager, or agent is
proper in the circumstances because he has met the applicable standard of
conduct set forth in division (E)(1) or (2) of this section. Such
determination shall be made as follows:
(a) By a majority vote of a quorum consisting of directors of the
indemnifying corporation who were not and are not parties to or
threatened with the action, suit, or proceeding referred to in division
(E)(1) or (2) of this section;
(b) If the quorum described in division (E)(4)(a) of this section is
not obtainable or if a majority vote of a quorum of disinterested
directors so directs, in a written opinion by independent legal counsel
other than an attorney, or a firm having associated with it an
attorney, who has been retained by or who has performed services for
the corporation or any person to be indemnified within the past five
years;
(c) By the shareholders;
(d) By the court of common pleas or the court in which the action,
suit, or proceeding referred to in division (E)(1) or (2) of this
section was brought.
Any determination made by the disinterested directors under division
(E)(4)(a) or by independent legal counsel under division (E)(4)(b) of this
section shall be promptly communicated to the person who threatened or
brought the action or suit by or in the right of the corporation under
division (E)(2) of this section, and, within ten days after receipt of such
notification, such person shall have the right to petition the court of
common pleas or the court in which such action or suit was brought to
review the reasonableness of such determination.
(5)(a) Unless at the time of a director's act or omission that is the
subject of an action, suit, or proceeding referred to in division (E)(1) or
(2) of this section, the articles or the regulations of a corporation
state, by specific reference to this division, that the provisions of this
division do not apply to the corporation and unless the only liability
asserted against a director in an action, suit, or proceeding referred to
in division (E)(1) or (2) of this section is pursuant to section 1701.95 of
the Revised Code, expenses, including attorney's fees, incurred by a
director in defending the action, suit, or proceeding shall be paid by the
corporation as they are incurred, in advance of the final disposition of
the action, suit, or proceeding, upon receipt of an undertaking by or on
behalf of the director in which he agrees to do both of the following:
(i) Repay such amount if it is proved by clear and convincing
evidence in a court of competent jurisdiction that his action or
failure to act involved an act or omission undertaken with deliberate
intent to cause injury to the corporation or undertaken with reckless
disregard for the best interests of the corporation;
(ii) Reasonably cooperate with the corporation concerning the action,
suit, or proceeding.
(b) Expenses, including attorney's fees, incurred by a director, trustee,
officer, employee, member, manager, or agent in defending any action, suit,
or proceeding referred to in division (E)(1) or (2) of this section, may be
paid by the corporation as they are incurred, in advance of the
II-2
<PAGE>
final disposition of the action, suit, or proceeding, as authorized by the
directors in the specific case, upon receipt of an undertaking by or on
behalf of the director, trustee, officer, employee, member, manager, or
agent to repay such amount, if it ultimately is determined that he is not
entitled to be indemnified by the corporation.
(6) The indemnification authorized by this section shall not be exclusive
of, and shall be in addition to, any other rights granted to those seeking
indemnification under the articles, the regulations, any agreement, a vote
of shareholders or disinterested directors, or otherwise, both as to action
in their official capacities and as to action in another capacity while
holding their offices or positions, and shall continue as to a person who
has ceased to be a director, trustee, officer, employee, member, manager,
or agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
(7) A corporation may purchase and maintain insurance or furnish similar
protection, including, but not limited to, trust funds, letters of credit,
or self-insurance, on behalf of or for 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, trustee, officer, employee,
member, manager, or agent of another corporation, domestic or foreign,
nonprofit or for profit, a limited liability company, or a partnership,
joint venture, trust, or other enterprise, against any liability asserted
against him and 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 this section. Insurance may be
purchased from or maintained with a person in which the corporation has a
financial interest.
(8) The authority of a corporation to indemnify persons pursuant to
division (E)(1) or (2) of this section does not limit the payment of
expenses as they are incurred, indemnification, insurance, or other
protection that may be provided pursuant to divisions (E)(5), (6), and (7)
of this section. Divisions (E)(1) and (2) of this section do not create any
obligation to repay or return payments made by the corporation pursuant to
divisions (E)(5), (6), or (7).
(9) As used in division (E) of this section, "corporation" includes all
constituent entities in a consolidation or merger and the new or surviving
corporation, so that any person who is or was a director, officer,
employee, trustee, member, manager, or agent of such a constituent entity,
or is or was serving at the request of such constituent entity as a
director, trustee, officer, employee, member, manager, or agent of another
corporation, domestic or foreign, nonprofit or for profit, a limited
liability company, or a partnership, joint venture, trust, or other
enterprise, shall stand in the same position under this section with
respect to the new or surviving corporation as he would if he had served
the new or surviving corporation in the same capacity.
Section 1701.13 (F)(7) of the Ohio Revised Code provides as follows:
(F) In carrying out the purposes stated in its articles and subject to
limitations prescribed by law or in its articles, a corporation may:
(7) Resist a change or potential change in control of the corporation if
the directors by a majority vote of a quorum determine that the change or
potential change is opposed to or not in the best interests of the
corporation:
(a) Upon consideration of the interests of the corporation's
shareholders and any of the matters set forth in division (E) of
section 1701.59 of the Revised Code; or
(b) Because the amount or nature of the indebtedness and other
obligations to which the corporation or any successor or the property
of either may become subject in connection with the change or potential
change in control provides reasonable grounds to believe that, within a
reasonable period of time, any of the following would apply:
(i) The assets of the corporation or any successor would be or
become less than its liabilities plus its stated capital, if any;
(ii) The corporation or any successor would be or become
insolvent;
(iii) Any voluntary or involuntary proceeding under the federal
bankruptcy laws concerning the corporation or any successor would be
commenced by any person.
II-3
<PAGE>
Section 1701.59 of the Ohio Revised Code provides as follows:
(A) Except where the law, the articles, or the regulations require action
to be authorized or taken by shareholders, all of the authority of a
corporation shall be exercised by or under the direction of its directors.
For their own government, the directors may adopt bylaws that are not
inconsistent with the articles or the regulations. The selection of a time
frame for the achievement of corporate goals shall be the responsibility of
the directors.
(B) A director shall perform his duties as a director, including his
duties as a member of any committee of the directors upon which he may
serve, in good faith, in a manner he reasonably believes to be in or not
opposed to the best interests of the corporation, and with the care that an
ordinarily prudent person in a like position would use under similar
circumstances. In performing his duties, a director is entitled to rely on
information, opinions, reports, or statements, including financial
statements and other financial data, that are prepared or presented by:
(1) One or more directors, officers, or employees of the corporation
who the director reasonably believes are reliable and competent in the
matters prepared or presented;
(2) Counsel, public accountants, or other persons as to matters that
the director reasonably believes are within the person's professional
or expert competence;
(3) A committee of the directors upon which he does not serve, duly
established in accordance with a provision of the articles or the
regulations, as to matters within its designated authority, which
committee the director reasonably believes to merit confidence.
(C) For purposes of division (B) of this section:
(1) A director shall not be found to have violated his duties under
division (B) of this section unless it is proved by clear and
convincing evidence that the director has not acted in good faith, in a
manner he reasonably believes to be in or not opposed to the best
interests of the corporation, or with the care that an ordinarily
prudent person in a like position would use under similar
circumstances, in any action brought against a director, including
actions involving or affecting any of the following:
(a) A change or potential change in control of the corporation,
including a determination to resist a change or potential change in
control made pursuant to division (F)(7) of section 1701.13 of the
Revised Code;
(b) A termination or potential termination of his service to the
corporation as a director;
(c) His service in any other position or relationship with the
corporation.
(2) A director shall not be considered to be acting in good faith if
he has knowledge concerning the matter in question that would cause
reliance on information, opinions, reports, or statements that are
prepared or presented by the persons described in divisions (B)(1) to
(3) of this section to be unwarranted.
(3) Nothing contained in this division limits relief available under
section 1701.60 of the Revised Code.
(D) A director shall be liable in damages for any action he takes or
fails to take as a director only if it is proved by clear and convincing
evidence in a court of competent jurisdiction that his action or failure to
act involved an act or omission undertaken with deliberate intent to cause
injury to the corporation or undertaken with reckless disregard for the
best interests of the corporation. Nothing contained in this division
affects the liability of directors under section 1701.95 of the Revised
Code or limits relief available under section 1701.60 of the Revised Code.
This division does not apply if, and only to the extent that, at the time
of a director's act or omission that is the subject of complaint, the
articles or the regulations of the corporation state by specific reference
to this division that the provisions of this division do not apply to the
corporation.
(E) For purposes of this section, a director, in determining what he
reasonably believes to be in the best interests of the corporation, shall
consider the interests of the corporation's shareholders and, in his
discretion, may consider any of the following:
II-4
<PAGE>
(1) The interests of the corporation's employees, suppliers,
creditors, and customers;
(2) The economy of the state and nation;
(3) Community and societal considerations;
(4) The long-term as well as short-term interests of the corporation
and its shareholders, including the possibility that these interests
may be best served by the continued independence of the corporation.
(F) Nothing contained in division (C) or (D) of this section affects the
duties of either of the following:
(1) A director who acts in any capacity other than his capacity as a
director;
(2) A director of a corporation that does not have issued and
outstanding shares that are listed on a national securities exchange or
are regularly quoted in an over-the-counter market by one or more
members of a national or affiliated securities association, who votes
for or assents to any action taken by the directors of the corporation
that, in connection with a change in control of the corporation,
directly results in the holder or holders of a majority of the
outstanding shares of the corporation receiving a greater consideration
for their shares than other shareholders.
Section 1701.95 of the Ohio Revised Code provides as follows:
(A)(1) In addition to any other liabilities imposed by law upon directors
of a corporation and except as provided in division (B) of this section,
directors shall be jointly and severally liable to the corporation as
provided in division (A)(2) of this section if they vote for or assent to
any of the following:
(a) The payment of a dividend or distribution, the making of a
distribution of assets to shareholders, or the purchase or redemption
of the corporation's own shares, contrary in any such case to law or
the articles;
(b) A distribution of assets to shareholders during the winding up of
the affairs of the corporation, on dissolution or otherwise, without
the payment of all known obligations of the corporation, or without
making adequate provision for their payment;
(c) The making of a loan, other than in the usual course of business,
to an officer, director, or shareholder of the corporation, other than
in either of the following cases:
(i) In the case of a savings and loan association or of a
corporation engaged in banking or in the making of loans generally;
(ii) At the time of the making of the loan, a majority of the
disinterested directors of the corporation voted for the loan and,
taking into account the terms and provisions of the loan and other
relevant factors, determined that the making of the loan could
reasonably be expected to benefit the corporation.
(2)(a) In cases under division (A)(1)(a) of this section, directors
shall be jointly and severally liable up to the amount of the dividend,
distribution, or other payment, in excess of the amount that could have
been paid or distributed without violation of law or the articles but
not in excess of the amount that would inure to the benefit of the
creditors of the corporation if it was insolvent at the time of the
payment or distribution or there was reasonable ground to believe that
by such action it would be rendered insolvent, plus the amount that was
paid or distributed to holders of shares of any class in violation of
the rights of holders of shares of any other class.
(b) In cases under division (A)(1)(b) of this section, directors
shall be jointly and severally liable to the extent that the
obligations of the corporation that are not otherwise barred by statute
are not paid, or for the payment of which adequate provision has not
been made.
(c) In cases under division (A)(1)(c) of this section, directors
shall be jointly and severally liable for the amount of the loan with
interest on it at the rate set forth in section 1343.03 of the Revised
Code until the amount has been paid.
II-5
<PAGE>
(B)(1) A director is not liable under division (A)(1) (a) or (b) of this
section if, in determining the amount available for any dividend, purchase,
redemption, or distribution to shareholders, he in good faith relied on a
financial statement of the corporation prepared by an officer or employee
of the corporation in charge of its accounts or certified by a public
accountant or firm of public accountants, or he in good faith considered
the assets to be of their book value, or he followed what he believed to be
sound accounting and business practice.
(2) A director is not liable under division (A)(1)(c) of this section for
making any loan to, or guaranteeing any loan to or other obligation of, an
employee stock ownership plan, as defined in section 4975(e)(7) of the
Internal Revenue Code.
(C) A director who is present at a meeting of the directors or a
committee of the directors at which action on any matter is authorized or
taken and who has not voted for or against the action shall be presumed to
have voted for the action unless his written dissent from the action is
filed, either during the meeting or within a reasonable time after the
adjournment of the meeting, with the person acting as secretary of the
meeting or with the secretary of the corporation.
(D) A shareholder who knowingly receives any dividend, distribution, or
payment made contrary to law or the articles shall be liable to the
corporation for the amount received by him that is in excess of the amount
which could have been paid or distributed without violation of law or the
articles.
(E) A director against whom a claim is asserted under or pursuant to this
section and who is held liable on the claim shall be entitled to
contribution, on equitable principles, from other directors who also are
liable. In addition, any director against whom a claim is asserted under or
pursuant to this section or who is held liable shall have a right of
contribution from the shareholders who knowingly received any dividend,
distribution, or payment made contrary to law or the articles, and such
shareholders as among themselves shall also be entitled to contribution in
proportion to the amounts received by them respectively.
(F) No action shall be brought by or on behalf of a corporation upon any
cause of action arising under division (A)(1)(a) or (b) of this section at
any time after two years from the day on which the violation occurs.
(G) Nothing contained in this section shall preclude any creditor whose
claim is unpaid from exercising such rights as he otherwise would have by
law to enforce his claim against assets of the corporation paid or
distributed to shareholders.
(H) The failure of a corporation to observe corporate formalities
relating to meetings of directors or shareholders in connection with the
management of the corporation's affairs shall not be considered a factor
tending to establish that the shareholders have personal liability for
corporate obligations.
Section 8 of Article III of the Company's Regulations provides as follows:
Section 8. Indemnification of Directors and Officers. The Company shall
indemnify each present and future Director and officer, his heirs,
executors and administrators against all costs, expenses (including
attorneys' fees), judgments, and liabilities, reasonably incurred by or
imposed on him in connection with or arising out of any claim or any
action, suit or proceeding, civil or criminal, in which he may be or become
involved by reason of his being or having been a Director or officer of the
Company, or of any of its subsidiary companies, or of any other company in
which he served or serves as a Director or officer at the request of the
Company, irrespective of whether or not he continues to be a Director or an
officer at the time he incurs or becomes subjected to such costs, expenses
(including attorneys' fees), judgments, and liabilities; but such
indemnification shall not be operative with respect to any matter as to
which in any such action, suit or proceeding he shall have been finally
adjudged to have been derelict in the performance of his duties as such
Director or officer. Such indemnification shall apply when the adjudication
in such action, suit or
II-6
<PAGE>
proceeding is otherwise than on the merits and also shall apply when a
settlement or compromise is effected, but in such cases indemnification
shall be made only if the Board of Directors of the Company, acting at a
meeting at which a majority of the quorum of the Board is unaffected by
self interest, shall find that such Director or officer has not been
derelict in the performance of his duty as such Director or officer with
respect to the matter involved, and shall adopt a resolution to that effect
and in cases of settlement or compromise shall also approve the same; in
cases of settlement or compromise such indemnification shall not include
reimbursement of any amounts which by the terms of the settlement or
compromise are paid or payable to the Company itself by the Director or
officer (or in the case of a Director or officer of a subsidiary or another
company in which such Director or officer is serving at the request of the
Company any amounts paid or payable by such Director or officer to such
company). If the Board of Directors as herein provided refuses or fails to
act or is unable to act due to the self interest of some or all of its
members, the Company at its expense shall obtain the opinion of counsel and
indemnification shall be had only if it is the opinion of such counsel that
the Director or officer has not been derelict in the performance of his
duties as such Director or officer with respect to the matter involved.
The right of indemnification provided for in this section shall not be
exclusive of other rights to which any Director or officer may be entitled
as a matter of law and such rights, if any, shall also inure to the benefit
of the heirs, executors or administrators of any such Director or officer.
The Company's Directors, officers and certain other key employees of the
Company are insured by directors and officers liability insurance policies. The
Company pays the premiums for this insurance. The Company's basic directors and
officers liability insurance provides coverage up to an annual aggregate
liability limitation of $25,000,000. The Company has also contracted for excess
directors and officers liability insurance coverage with an annual aggregate
liability limitation of $125,000,000.
The Company's Directors, officers and certain other key employees of the
Company are insured against liabilities arising under the Employee Retirement
Income Security Act of 1974 and certain other liabilities by fiduciary
responsibility insurance with an annual aggregate liability limitation of
$30,000,000.
The form of Underwriting Agreement provides for indemnification of the
Company and its Directors, officers and certain other persons under certain
circumstances described therein by each underwriter participating in an
offering of Debt Securities and Warrants.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
(1) --Form of Underwriting Agreement (including form of Delayed
Delivery Contract).
*(4)(i)(a) --Indenture, dated as of September 28, 1992, between the Com-
pany and The First National Bank of Chicago, as Trustee.
*(4)(i)(b) --Form of Debt Securities (included in Exhibit (4)(i)(a) at
pages 15 through 21).
**(4)(i)(c) --Form of Warrant Agreement (to purchase Debt Securities).
**(4)(i)(d) --Form of Warrant Agreement.
(5) --Opinion of Terry L. Overbey, Esq., Secretary and Associate
General Counsel of the Company, as to the legality of the
Debt Securities and Warrants being registered.
***(12) --Statement re Computation of Ratio of Earnings to Fixed
Charges.
(23)(i)(a) --Consent of Deloitte & Touche LLP.
(23)(i)(b) --Consent of Terry L. Overbey, Esq. is contained in his opin-
ion filed as Exhibit (5).
(25) --Statement of Eligibility of The First National Bank of Chi-
cago, as Trustee, on Form T-1.
</TABLE>
- --------
* Incorporated by reference to Registration Statement No. 33-43919 filed on
November 13, 1991 as amended by Post-Effective Amendment No.1 filed on
September 29, 1992.
** Incorporated by reference to Registration Statement No. 33-55471 filed on
September 14, 1994, as amended by Amendment No. 1 filed on January 5,
1995, and declared effective on January 6, 1995.
*** Incorporated by reference to Exhibit 12 to Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 1997.
II-7
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering; and
(b) For purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-8
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CINCINNATI, STATE OF OHIO, ON JULY 8, 1997.
THE PROCTER & GAMBLE COMPANY
/s/ John E. Pepper
By____________________________________
JOHN E. PEPPER CHAIRMAN OF THE
BOARD AND CHIEF EXECUTIVE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED
ON JULY 8, 1997.
SIGNATURE TITLE
/s/ John E. Pepper Chairman of the Board and Chief
____________________________________ Executive and Director (Principal
JOHN E. PEPPER Executive Officer)
/s/ Erik G. Nelson Senior Vice President (Principal
____________________________________ Financial Officer)
ERIK G. NELSON
/s/ Edwin H. Eaton, Jr. Vice President and Comptroller
____________________________________ (Principal Accounting Officer)
EDWIN H. EATON, JR.
/s/ Edwin L. Artzt Director
____________________________________
EDWIN L. ARTZT
/s/ Norman R. Augustine Director
____________________________________
NORMAN R. AUGUSTINE
/s/ Donald R. Beall Director
____________________________________
DONALD R. BEALL
/s/ Gordon F. Brunner Director
____________________________________
GORDON F. BRUNNER
/s/ Richard B. Cheney Director
____________________________________
RICHARD B. CHENEY
/s/ Harald Einsmann Director
____________________________________
HARALD EINSMANN
II-9
<PAGE>
SIGNATURE TITLE
* Director
_____________________________________
RICHARD J. FERRIS
/s/ Joseph T. Gorman Director
_____________________________________
JOSEPH T. GORMAN
/s/ Durk I. Jager Director
_____________________________________
DURK I. JAGER
/s/ Charles R. Lee Director
_____________________________________
CHARLES R. LEE
/s/ Lynn M. Martin Director
_____________________________________
LYNN M. MARTIN
/s/ John C. Sawhill Director
_____________________________________
JOHN C. SAWHILL
/s/ John F. Smith Director
_____________________________________
JOHN F. SMITH
/s/ Ralph Snyderman Director
_____________________________________
RALPH SNYDERMAN
/s/ Robert D. Storey Director
_____________________________________
ROBERT D. STOREY
/s/ Marina v. N. Whitman Director
_____________________________________
MARINA V. N. WHITMAN
II-10
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
----------- --------
<C> <S> <C>
(1) --Form of Underwriting Agreement (including form of
Delayed Delivery Contract).
*(4)(i)(a) --Indenture, dated as of September 28, 1992, be-
tween the Company and The First National Bank of
Chicago, as Trustee.
*(4)(i)(b) --Form of Debt Securities (included in Exhibit
(4)(i)(a) at pages 15 through 21).
**(4)(i)(c) --Form of Warrant Agreement (to purchase Debt Secu-
rities).
**(4)(i)(d) --Form of Warrant Agreement.
(5) --Opinion of Terry L. Overbey, Esq., Secretary and
Associate General Counsel of the Company, as to
the legality of the Debt Securities and Warrants
being registered.
***(12) --Statement re Computation of Ratio of Earnings to
Fixed Charges.
(23)(i)(a) --Consent of Deloitte & Touche LLP.
(23)(i)(b) --Consent of Terry L. Overbey, Esq. is contained in
his opinion filed as Exhibit (5).
(25) --Statement of Eligibility of The First National
Bank of Chicago, as Trustee, on Form T-1.
</TABLE>
- --------
* Incorporated by reference to Registration Statement No. 33-43919 filed on
November 13, 1991 as amended by Post-Effective Amendment No. 1 filed on
September 29, 1992.
** Incorporated by reference to Registration Statement No. 33-55471 filed on
September 14, 1994, as amended by Amendment No. 1 filed on January 5, 1995,
and declared effective on January 6, 1995.
*** Incorporated by reference to Exhibit 12 to the Quarterly Report on Form 10-
Q for the quarterly period ended March 31, 1997.
<PAGE>
EXHIBIT 1
THE PROCTER & GAMBLE COMPANY
DEBT SECURITIES
UNDERWRITING AGREEMENT*
...... , 199..
To the Representatives of the
several Underwriters named in
the respective Pricing Agreements
hereinafter described.
Dear Sirs/Mesdames:
From time to time The Procter & Gamble Company (the "Company") proposes to
enter into one or more Pricing Agreements (each a "Pricing Agreement") in the
form of Annex I hereto, with such additions and deletions as the parties
thereto may determine, and, subject to the terms and conditions stated herein
and therein, to issue and sell to the firms named in Schedule I to the
applicable Pricing Agreement (such firms constituting the "Underwriters" with
respect to such Pricing Agreement and the securities specified therein) certain
of its debt securities (the "Securities") specified in Schedule II to such
Pricing Agreement (with respect to such Pricing Agreement, the "Designated
Securities"), less the principal amount of Designated Securities covered by
Delayed Delivery Contracts, if any, as provided in Section 3 hereof and as may
be specified in Schedule II to such Pricing Agreement (with respect to such
Pricing Agreement, any Designated Securities to be covered by Delayed Delivery
Contracts being herein sometimes referred to as "Contract Securities" and the
Designated Securities to be purchased by the Underwriters (after giving effect
to the deduction, if any, for Contract Securities) being herein sometimes
referred to as "Underwriters' Securities").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time to time to
the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Securities or as an obligation
of any of the Underwriters to purchase any of the Securities. The obligation of
the Company to issue and sell any of the Securities and the obligation of any
of the Underwriters to purchase any of the Securities shall be evidenced by the
Pricing Agreement with respect to the Designated Securities specified therein.
Each Pricing Agreement shall specify the aggregate principal amount of such
Designated Securities, the initial public offering price of such Designated
Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters, the principal amount of such
Designated Securities to be purchased by each Underwriter and whether any of
such Designated Securities shall be covered by Delayed Delivery Contracts (as
defined in Section 3 hereof) and the commission payable to the Underwriters
with respect thereto and shall set forth the date, time and manner of delivery
of such Designated Securities and payment therefor. The Pricing Agreement shall
also specify (to the extent not set forth in the Indenture and the registration
statement and prospectus with respect thereto) the terms of such Designated
Securities. The Pricing Agreement also
- --------
* Appropriate modifications may be made to this form of Underwriting Agreement
in the event of an offering of Securities and warrants to purchase
Securities.
<PAGE>
may specify such additional terms and conditions as the parties thereto may
agree. A Pricing Agreement shall be in the form of an executed writing (which
may be in counterparts), and may be evidenced by an exchange of telegraphic
communications or any other rapid transmission device designed to produce a
written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement (File No. 333-03821) and a registration
statement (File No. 333- ), each in respect of a portion of the
Securities, have been filed with the Securities and Exchange Commission
(the "Commission") in the forms heretofore delivered or to be delivered to
the Representatives and, excluding exhibits to such registration
statements, but including all documents incorporated by reference in the
combined prospectus relating to all the Securities contained in the latest
registration statement (File No. 333- ), to the Representatives for each
of the other Underwriters and such registration statements in such forms
have been declared effective by the Commission and no stop order suspending
the effectiveness of either such registration statement has been issued and
no proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in either such registration
statement being hereinafter called a "Preliminary Prospectus"; the various
parts of each such registration statement, including all exhibits thereto
but excluding Form T-1, each such part as amended at the time such part
became effective, being hereinafter collectively called the "Registration
Statement"; the combined prospectus relating to the Securities, in the form
in which it has most recently been filed, or mailed for filing, with the
Commission on or prior to the date of this Agreement, being hereinafter
called the "Prospectus"; any reference herein to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the
Securities Act of 1933, as amended (the "Act"), as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference to
any amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference; and any reference to the Prospectus as amended
or supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Securities in the
form in which it is first filed with the Commission pursuant to Rule 424(b)
under the Act, including any documents incorporated by reference therein as
of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder and will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by an Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented related to
such Securities;
(c) The Registration Statement and the Prospectus conform, and any
amendments or supplements thereto will conform, in all material respects to
the requirements of the Act and the
2
<PAGE>
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement
and any amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Securities;
(d) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree which is material to the Company and its
subsidiaries considered as a whole, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has not been any material change in the capital stock or long-term
debt of the Company or in the consolidated capitalization of the Company
and its consolidated subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
consolidated subsidiaries considered as a whole, otherwise than as set
forth or contemplated in the Prospectus;
(e) The Securities have been duly authorized, and, when Designated
Securities are issued and delivered pursuant to this Agreement and the
Pricing Agreement with respect to such Designated Securities and, in the
case of any Contract Securities, pursuant to Delayed Delivery Contracts
with respect to such Contract Securities, such Designated Securities will
have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company enforceable
in accordance with their terms, subject as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles, and
entitled to the benefits provided by the Indenture, which will be
substantially in the form filed as an exhibit to the Registration
Statement; the Indenture has been duly authorized and, at the Time of
Delivery (as defined in Section 4 hereof) the Indenture will be duly
qualified under the Trust Indenture Act and will constitute a valid and
legally binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Securities and the
Indenture will conform to the descriptions thereof in the Prospectus as
amended or supplemented;
(f) In the event any of the Securities are purchased pursuant to Delayed
Delivery Contracts, each of such Delayed Delivery Contracts has been duly
authorized by the Company and, when executed and delivered by the Company
and the purchaser named therein, will constitute a valid and legally
binding agreement of the Company enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and any Delayed Delivery Contracts
will conform to the description thereof in the Prospectus as amended or
supplemented;
(g) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, each
of the Delayed Delivery Contracts, if any, this Agreement and any Pricing
Agreement, and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its domestic subsidiaries is a party or by
3
<PAGE>
which the Company or any of its domestic subsidiaries is bound or to which
any of the property or assets of the Company or any of its domestic
subsidiaries is subject, nor will such action result in
any violation of the provisions of the Amended Articles of Incorporation,
Regulations or By Laws of the Company or any applicable statute or any
applicable order, rule or regulation known to the Company of any court or
governmental agency or body having jurisdiction over the Company or any of
its domestic subsidiaries or any of its or their properties; and no
consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the
issue and sale of the Securities or the consummation by the Company of the
other transactions contemplated by this Agreement or any Pricing Agreement
or the Indenture or any Delayed Delivery Contract, except such as have
been, or will have been prior to the Time of Delivery, obtained under the
Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters; and
(h) There are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property of
the Company or any of its subsidiaries is subject other than (i) as set
forth in the Prospectus and (ii) legal or governmental proceedings which,
if determined adversely to the Company or any of its subsidiaries, would
not in the aggregate have a material adverse effect on the financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries considered as a whole; and no such proceedings are known
by the Company to be threatened or contemplated by governmental authorities
or threatened by others.
3. Upon the execution of the Pricing Agreement applicable to any Designated
Securities and authorization by the Representatives of the release of the
Underwriters' Securities, the several Underwriters propose to offer the
Underwriters' Securities for sale upon the terms and conditions set forth in
the Prospectus as amended or supplemented.
The Company may specify in Schedule II to the Pricing Agreement applicable to
any Designated Securities that the Underwriters are authorized to solicit
offers to purchase Designated Securities from the Company pursuant to delayed
delivery contracts (herein called "Delayed Delivery Contracts"), substantially
in the form of Annex III attached hereto but with such changes therein as the
Representatives and the Company may authorize or approve. If so specified, the
Underwriters will endeavor to make such arrangements, and as compensation
therefor the Company will pay to the Representatives, for the accounts of the
Underwriters, at the Time of Delivery, such commission, if any, as may be set
forth in such Pricing Agreement. Delayed Delivery Contracts, if any, are to be
with investors of the types described in the Prospectus and subject to other
conditions therein set forth. The Underwriters will not have any responsibility
in respect of the validity or performance of any Delayed Delivery Contracts.
The principal amount of Contract Securities to be deducted from the principal
amount of Designated Securities to be purchased by each Underwriter as set
forth in Schedule I to the Pricing Agreement applicable to such Designated
Securities shall be, in each case, the principal amount of Contract Securities
which the Company has been advised by the Representatives have been attributed
to such Underwriter, provided that, if the Company has not been so advised, the
amount of Contract Securities to be so deducted shall be, in each case, that
proportion of Contract Securities which the principal amount of Designated
Securities to be purchased by such Underwriter under such Pricing Agreement
bears to the total principal amount of the Designated Securities (rounded as
the Representatives may determine). The total principal amount of Underwriters'
Securities to be purchased by all the Underwriters pursuant to such Pricing
Agreement shall be the total principal amount of Designated Securities set
forth in Schedule I to such Pricing Agreement less the principal amount of the
Contract Securities. The Company will deliver to the Representatives not later
than 3:30 p.m., New
4
<PAGE>
York City time, on the third business day preceding the Time of Delivery
specified in the applicable Pricing Agreement (or such other time and date as
the Representatives and the Company may agree upon in writing) a written notice
setting forth the principal amount of Contract Securities.
4. Underwriters' Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in definitive form to the extent
practicable, and in such authorized denominations and registered in such names
as the Representatives may request upon at least forty-eight hours' prior
notice to the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor in the funds and in
the manner specified in such Pricing Agreement, all at the place and time and
date specified in such Pricing Agreement or at such other place and time and
date as the Representatives and the Company may agree upon in writing, such
time and date being herein called the "Time of Delivery" for such Securities.
Concurrently with the delivery of and payment for the Underwriters'
Securities, the Company will deliver to the Representatives for the accounts of
the Underwriters a check payable to the order of the party designated in the
Pricing Agreement relating to such Securities in the amount of any compensation
payable by the Company to the Underwriters in respect of any Delayed Delivery
Contracts as provided in Section 3 hereof and in the Pricing Agreement relating
to such Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of the
Pricing Agreement relating to such Securities and prior to the Time of
Delivery for such Securities which shall reasonably be disapproved by the
Representatives for such Securities promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment or
supplement after such Time of Delivery and furnish the Representatives with
copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act for so long as the delivery of a prospectus is required in connection
with the offering or sale of such Securities, and during such same period
to advise the Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been filed
or has become effective or any supplement to the Prospectus or any amended
Prospectus has been filed or mailed for filing, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any prospectus relating to the Securities, of the suspension of the
qualification of such Securities for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such purpose, or
of any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the
Securities or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as the Representatives
may reasonably request to qualify such Securities for offering and sale
under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of
sales and dealings therein such jurisdictions for as long as may be
necessary to complete the distribution of such Securities, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as amended
or supplemented in such quantities as the Representatives may from time to
time reasonably request, and, if the delivery of a prospectus is required
at any time in connection with the offering or sale of the Securities and
if at such time any event shall have occurred as a result of which the
Prospectus as
5
<PAGE>
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Act, the Exchange Act or the Trust Indenture Act, to notify the
Representatives and upon their request to file such document and to prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement, an earning statement of the
Company and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations of the Commission
thereunder (including at the option of the Company Rule 158); and
(e) During the period beginning on the date of the Pricing Agreement for
such Designated Securities and continuing to and including the earlier of
(i) the termination of trading restrictions for such Designated Securities,
as notified to the Company by the Representatives and (ii) the Time of
Delivery for such Designated Securities, not to offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company which
mature more than one year after such Time of Delivery and which are
substantially similar to such Designated Securities, without the prior
written consent of the Representatives.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, any Pricing Agreement, any Indenture, any
Delayed Delivery Contracts, any Blue Sky and Legal Investment Memoranda and any
other documents in connection with the offering, purchase, sale and delivery of
the Securities; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and legal investment surveys; (iv) any fees charged by securities
rating services for rating the Securities; (v) any filing fees incident to any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Securities; (vi) the cost of preparing the Securities;
(vii) the fees and expenses of any Trustee and any agent of any Trustee and the
fees and disbursements of counsel for any Trustee in connection with the
Indenture and the Securities; and (viii) all other costs and expenses incident
to the performance of its obligations hereunder and under any Delayed Delivery
Contracts which are not otherwise specifically provided for in this Section. It
is understood, however, that, except as provided in this Section, Section 8 and
Section 11 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters of any Designated Securities under the
Pricing Agreement relating to such Designated Securities shall be subject, in
the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in such Pricing Agreement are, at and as of the Time
of Delivery for such
6
<PAGE>
Designated Securities, true and correct, the condition that the Company shall
have performed all of its obligations hereunder theretofore to be performed,
and the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
(b) Fried, Frank, Harris, Shriver & Jacobson, counsel for the
Underwriters, shall have furnished to the Representatives such opinion or
opinions, dated the Time of Delivery for such Designated Securities, with
respect to the incorporation of the Company, the validity of the Indenture,
the Designated Securities, the Delayed Delivery Contracts, if any, the
Registration Statement, the Prospectus as amended or supplemented and other
related matters as the Representatives may reasonably request, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters. In rendering
such opinion or opinions, such counsel may rely as to all matters governed
by Ohio law upon the opinion referred to in subsection (c) of this Section;
(c) Terry L Overbey, Esq., Secretary and Associate General Counsel for
the Company, shall have furnished to the Representatives his written
opinion, dated the Time of Delivery for such Designated Securities, in form
and substance satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Ohio,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus as amended or supplemented;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus as amended or supplemented and all of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable;
(iii) Each domestic subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation; and all of the
issued shares of capital stock of each such subsidiary have been duly
and validly authorized and issued and are fully paid and non-assessable
(such counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of matters of fact
upon certificates of officers of the Company or its domestic
subsidiaries);
(iv) The Company and each of its domestic subsidiaries are duly
authorized and are in good standing to do business in each jurisdiction
in the United States, other than their respective jurisdictions of
incorporation, in which they own or lease properties, or conduct any
business, so as to require such qualification (such counsel being
entitled to rely in respect of the opinion in this clause upon opinions
of local counsel and in respect of matters of fact upon certificates of
officers of the Company or its domestic subsidiaries);
(v) To the best of such counsel's knowledge, there are no legal or
governmental proceedings pending to which the Company or any of its
domestic subsidiaries is a party or of which any property of the
Company or any of its domestic subsidiaries is the subject, other than
as set forth in the Prospectus and other than legal or governmental
proceedings which, if determined adversely to the Company and its
domestic subsidiaries, would not in the aggregate have a material
adverse effect on the consolidated financial position, shareholders'
equity or results of operations of the Company and its subsidiaries
considered as a whole; and, to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(vi) This Agreement and the Pricing Agreement with respect to the
Designated Securities have been duly authorized, executed and delivered
by the Company;
7
<PAGE>
(vii) In the event any of the Designated Securities are to be
purchased pursuant to Delayed Delivery Contracts, each of such Delayed
Delivery Contracts has been duly authorized, executed and delivered by
the Company and, assuming such Contract has been duly executed and
delivered by the purchaser named therein, constitutes a valid and
legally binding agreement of the Company enforceable in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and any
Delayed Delivery Contracts conform to the description thereof in the
Prospectus as amended or supplemented;
(viii) The Designated Securities have been duly authorized; the
Underwriters' Securities have been duly executed, authenticated, issued
and delivered and constitute valid and legally binding obligations of
the Company enforceable in accordance with their terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles, and entitled to the benefits provided by
the Indenture; the Contract Securities, if any, when executed,
authenticated, issued and delivered pursuant to the Indenture and
Delayed Delivery Contracts, if any, will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by
the Indenture; and the Designated Securities and the Indenture conform
to the descriptions thereof in the Prospectus as amended or
supplemented;
(ix) The Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; and the Indenture has been duly qualified
under the Trust Indenture Act;
(x) The issue and sale of the Designated Securities and the
compliance by the Company with all of the provisions of the Designated
Securities, the Indenture, each of the Delayed Delivery Contracts, if
any, this Agreement and the Pricing Agreement with respect to the
Designated Securities and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or
any of its domestic subsidiaries is a party or by which the Company or
any of its domestic subsidiaries is bound or to which any of the
property or assets of the Company or any of its domestic subsidiaries
is subject, nor will such action result in any violation of the
provisions of the Amended Articles of Incorporation, Regulations or By
Laws of the Company or any applicable statute or any applicable order,
rule or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of its
domestic subsidiaries or any of its or their properties; and no
consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required
for the issue and sale of the Designated Securities or the consummation
by the Company of the other transactions contemplated by this Agreement
or such Pricing Agreement or the Indenture or any of such Delayed
Delivery Contracts, except such as have been obtained under the Act and
the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Securities by the Underwriters;
(xi) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion), when they became effective or were filed with the Commission,
as the case may be, complied as to form in all material respects with
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of
8
<PAGE>
the Commission thereunder; and such counsel has no reason to believe
that any of such documents, when they became effective or were so
filed, as the case may be, contained, in the case of a registration
statement which became effective under the Act, an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and, in the case of other documents which were filed under
the Act or the Exchange Act with the Commission, an untrue statement of
a material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not misleading;
and
(xii) The Registration Statement and the Prospectus as amended or
supplemented and any further amendments and supplements thereto made by
the Company prior to the Time of Delivery for the Designated Securities
(other than the financial statements and related schedules therein, as
to which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the Trust
Indenture Act and the rules and regulations thereunder; such counsel
has no reason to believe that, as of the effective date of the
Registration Statement, either the Registration Statement or the
Prospectus (or, as of its date, any further amendment or supplement
thereto made by the Company prior to the Time of Delivery) contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that, as of the Time of Delivery, either the
Registration Statement or the Prospectus (or any such further amendment
or supplement thereto) contains an untrue statement of a material fact
or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; such counsel
does not know of any contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus as amended
or supplemented or required to be described in the Registration
Statement or the Prospectus as amended or supplemented which are not
filed or incorporated by reference or described as required; and the
statements in the Prospectus as amended or supplemented describing the
Designated Securities are accurate and fairly present the information
required or purported to be shown;
In rendering such opinion or opinions, such counsel may rely as to all
matters governed by New York law upon the opinions referred to in
subsection (b) of this Section;
(d) At the Time of Delivery for such Designated Securities, Deloitte &
Touche LLP, who have rendered their opinion on the financial statements of
the Company and its subsidiaries included or incorporated by reference in
the Registration Statement, shall have furnished to the Representatives a
letter dated such Time of Delivery, to the effect set forth in Annex II
hereto, and as to such other matters as the Representatives may reasonably
request and in form and substance satisfactory to the Representatives;
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as amended or
supplemented, and (ii) since the respective dates as of which information
is given in the Prospectus as amended or supplemented there shall not have
been any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or in the consolidated capitalization of the
Company and its consolidated subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries considered as a whole,
otherwise than as set forth or contemplated in the Prospectus as amended
9
<PAGE>
or supplemented, the effect of which, in any such case described in Clause
(i) or (ii), is in the judgment of the Representatives so material and
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Designated Securities on the terms
and in the manner contemplated in the Prospectus as amended or
supplemented;
(f) Subsequent to the date of the Pricing Agreement relating to the
Designated Securities no downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the Act and no public announcement
shall have been made by any such organization that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities;
(g) Subsequent to the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally
on the New York Stock Exchange; (ii) a general moratorium on commercial
banking activities in New York declared by either Federal or New York State
authorities; or (iii) the outbreak or escalation of hostilities involving
the United States or the declaration by the United States, on or after the
date of such Pricing Agreement, of a national emergency or war, if the
effect of any such event specified in this Clause (iii) in the judgment of
the Representatives makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Underwriters' Securities on the
terms and in the manner contemplated in the Prospectus as amended or
supplemented; and
(h) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities
certificates of officers of the Company satisfactory to the Representatives
as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the
Company of all of its obligations hereunder to be performed at or prior to
such Time of Delivery, as to the matters set forth in subsections (a) and
(e) of this Section, and as to such other matters as the Representatives
may reasonably request.
8. (a) The Company will indemnify and hold harmless such Underwriter against
any losses, claims, damages or liabilities, joint or several, in which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented or any other prospectus relating to the Securities, or 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 will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented or any other prospectus
relating to the Securities, or any such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter of Designated Securities through the Representatives expressly for
use in the Prospectus as amended or supplemented relating to such Securities.
(b) Each Underwriter will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
10
<PAGE>
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented or any
other prospectus relating to the Securities, or 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, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
as amended or supplemented or any other prospectus relating to the Securities,
or any such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to any indemnified
party otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel 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 shall not be
liable to such indemnified party under such subsection for any legal expenses
of other counsel or any other expenses, in each case subsequently incurred by
such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters of the Designated
Securities on the other from the offering of the Designated Securities to which
such loss, claim, damage or liability (or action in respect thereof) relates.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and the Underwriters of
the Designated Securities on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and such Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from such offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by such Underwriters. The relative fault 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 Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the
11
<PAGE>
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the applicable
Designated Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters of Designated Securities
in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to such Securities and not
joint.
(e) The obligations of the Company under this Section 8 shall be in addition
to any liability which the Company may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Underwriters' Securities which it has agreed to purchase under the Pricing
Agreement relating to such Securities, the Representatives may in their
discretion arrange for themselves or another party or other parties to purchase
such Underwriters' Securities on the terms contained herein. If within thirty-
six hours after such default by any Underwriter the Representatives do not
arrange for the purchase of such Underwriters' Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Underwriters' Securities on such terms. In the event that, within
the respective prescribed period, the Representatives notify the Company that
they have so arranged for the purchase of such Underwriters' Securities, or the
Company notifies the Representatives that it has so arranged for the purchase
of such Underwriters' Securities, the Representatives or the Company shall have
the right to postpone the Time of Delivery for such Underwriters' Securities
for a period of not more than seven days, in order to effect whatever changes
may thereby be made necessary in the Registration Statement or the Prospectus
as amended or supplemented, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as used
in this Agreement and the Pricing Agreement with respect to such Securities
shall include any person substituted under this Section with like effect as if
such person had originally been a party to such Pricing Agreement with respect
to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Underwriters' Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Underwriters' Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require
each non-defaulting Underwriter to purchase the principal amount of
Underwriters' Securities which such Underwriter agreed to purchase under the
Pricing Agreement relating to such Designated Securities and, in addition, to
require each non-defaulting Underwriter to purchase its pro rata share (based
on the principal amount of Designated Securities which such Underwriter agreed
to purchase under such Pricing Agreement) of the
12
<PAGE>
Underwriters' Securities of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Underwriters' Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Underwriters' Securities which remains
unpurchased exceeds one-eleventh of the aggregate principal amount of the
Designated Securities, as referred to in subsection (b) above, or if the
Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Underwriters' Securities of a
defaulting Underwriter or Underwriters, then the Pricing Agreement relating to
such Designated Securities shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Company, except for the expenses
to be borne by the Company and the Underwriters as provided in Section 6 hereof
and the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Section 6 and Section 8 hereof; but, if for any other
reason Underwriters' Securities are not delivered by or on behalf of the
Company as provided herein, the Company will reimburse the Underwriters through
the Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing, and if to the
Underwriters shall be sufficient in all respects if delivered or sent by
registered mail to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be sufficient in all respects if
delivered, or sent by registered mail to the address of the Company set forth
in the Registration Statement, Attention: Secretary; provided, however, that
any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered
or sent by registered mail to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by the Representatives upon request.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Section 8 and Section 10 hereof, the officers and directors
of the Company and each person who controls the Company or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and
no
13
<PAGE>
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
Very truly yours,
THE PROCTER & GAMBLE COMPANY
By:................................
14
<PAGE>
ANNEX I
PRICING AGREEMENT
. . . . . . . . ., 199. .
[Name of Representatives,]
[Name of any Co-Representative(s),]
As representatives of the several Underwriters
named in Schedule I hereto,
[c/o Representatives,]
[Address of Representatives].
Dear Sirs/Mesdames:
The Procter & Gamble Company (the "Company") proposes, subject to the terms
and conditions stated herein and in the Underwriting Agreement, dated
. . . . . . . . ., 199. . (the "Underwriting Agreement"), to issue and sell to
the Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty in Section 2 of the Underwriting Agreement which
makes reference to the Prospectus shall be deemed to be a representation and
warranty as of the date of the Underwriting Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
the date of this Pricing Agreement in relation to the Prospectus as amended or
supplemented relating to the Designated Securities which are the subject of
this Pricing Agreement. Each reference to the Representatives herein and in the
provisions of the Underwriting Agreement so incorporated by reference shall be
deemed to refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on behalf of the Representatives and on behalf of each of the
Underwriters of the Designated Securities pursuant to Section 12 of the
Underwriting Agreement and the address of the Representatives referred to in
such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed, or in the case of
a supplement mailed for filing, with the Commission.
Subject to the terms and conditions set forth herein and in the Underwriting
Agreement incorporated herein by reference, the Company agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto, less the principal amount of Designated
Securities covered by Delayed Delivery Contracts, if any, as may be specified
in such Schedule II.
If the foregoing is in accordance with your understanding, please sign and
return to us . . . . counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters
<PAGE>
may be pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company for
examination, upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
THE PROCTER & GAMBLE COMPANY
By:................................
Accepted as of the date hereof:
.....................................
(Name of Representative Partnership)
[Name of Representative Corporation]
By:.................................
(Title)
.....................................
(Name of Co-Representative
Partnership)
[Name of Co-Representative Corporation]
By:.................................
(Title)
On behalf of each of the
Underwriters
2
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
DESIGNATED SECURITIES
UNDERWRITER TO BE PURCHASED
<S> <C>
[Name of Representatives]................................ [$]
[Name(s) of any Co-Representatives]......................
[Names of any other Underwriters]........................
-----
Total................................................ [$]
=====
</TABLE>
<PAGE>
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due
[Warrants]
AGGREGATE PRINCIPAL AMOUNT:
[$]
PRICE TO PUBLIC:
% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization, if any, from
to ]
PURCHASE PRICE BY UNDERWRITERS:
% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization, if any, from
to ]
METHOD OF AND SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
[By certified or official bank check or checks, payable to the order of the
Company in [New York Clearing House] [same day] funds]
[By wire transfer to a bank account specified by the Company in same day
funds]
[Other specified method]
INDENTURE:
Indenture, dated as of September 28, 1992, between the Company and The First
National Bank of Chicago, as Trustee
TIME OF DELIVERY:
[Time and date], 199 .
CLOSING LOCATION:
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
SECURITIES EXCHANGE:
[Securities to be listed on the [New York] Stock Exchange]
<PAGE>
DELAYED DELIVERY:
[None] [Underwriters' commission shall be % of the principal amount of
Designated Securities for which Delayed Delivery Contracts have been entered
into. Such commission shall be payable to the order of .]
MATURITY:
INTEREST RATE:
[ %] [Zero Coupon] [See Floating Rate Provisions]
INTEREST PAYMENT DATES:
[months and dates]
REDEMPTION PROVISIONS:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the amount
of $ or an integral multiple thereof, ]
[on or after , at the following redemption prices (expressed in
percentages of principal amount). If [redeemed on or before , %,
and if] redeemed during the 12-month period beginning ,
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
</TABLE>
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.]
[on any interest payment date falling on or after , , at the election
of the Company, at a redemption price equal to the principal amount
thereof, plus accrued interest to the date of redemption.]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
SINKING FUND PROVISIONS:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund to
retire $ principal amount of Designated Securities on in each of the
years through at 100% of their principal amount plus accrued interest]
[, together with [cumulative] [non-cumulative] redemptions at the option of the
Company to retire an additional $ principal amount of Designated Securities
in the years through at 100% of their principal amount plus accrued
interest.]
2
<PAGE>
[If Securities are Extendible Debt Securities, insert--
EXTENDIBLE PROVISIONS:
Securities are repayable on , [insert date and years], at the option
of the holder, at their principal amount with accrued interest. Initial annual
interest rate will be %, and thereafter annual interest rate will be adjusted
on , and to a rate not less than % of the effective annual
interest rate on U.S. Treasury obligations with -year maturities as of the
[insert date 15 days prior to maturity date] prior to such [insert maturity
date].]
[If Securities are Floating Rate Debt Securities, insert--
FLOATING RATE PROVISIONS:
Initial annual interest rate will be % through [and thereafter will be
adjusted [monthly] [on each , , and ] [to an annual rate of %
above the average rate for -year [month] [securities] [certificates of
deposit] by and [insert names of banks].] [and the annual interest
rate [thereafter] [from through ] will be the interest yield
equivalent of the weekly average per annum market discount rate for -month
Treasury bills plus % of Interest Differential (the excess, if any, of (i)
then current weekly average per annum secondary market yield for -month
certificates of deposit over (ii) then current interest yield equivalent of the
weekly average per annum market discount rate of -month Treasury bills);
[from and thereafter the rate will be the then current yield equivalent
plus % of Interest Differential].]
DEFEASANCE:
[The provisions of Sections 403 and 1006 of the Indenture relating to
defeasance shall apply to the Designated Securities.]
[OTHER TERMS]*:
- --------
* A description of particular tax, accounting or other unusual features of
the Securities should be set forth, or referenced to an attached and
accompanying description, if necessary, to the issuer's understanding of the
transaction contemplated. Such a description might appropriately be in the form
in which such features will be described in the Prospectus Supplement for the
offering.
3
<PAGE>
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, Deloitte & Touche LLP
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited by them and included or
incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder;
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for five such fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included or incorporated by reference in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act as it applies to Form 10-Q
and the related published rules and regulations thereunder or are not
in conformity with generally accepted accounting principles applied on
a basis substantially consistent with the basis for the audited
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in
the unaudited consolidated financial statements from which such data
and items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial statements
included or incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived any unaudited income statement
data and balance sheet items included in the Prospectus and referred to
in Clause (B) were not determined on a basis substantially consistent
with the basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on Form 10-K
for the most recent fiscal year;
<PAGE>
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options
and stock appreciation rights, upon earn-outs of performance shares and
upon conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its subsidiaries, or any
decreases in consolidated shareholders' equity or other items specified
by the Representatives, or any increases in any items specified by the
representatives of the Underwriters (the "Representatives"), in each
case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in each
case for changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter; or
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the date
specified by the Representatives there were any decreases in
consolidated net sales or earnings from operations before income taxes
or the total or per share amounts of consolidated net income or other
items specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in each
case for increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(v) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are derived
from the general accounting records of the Company and its subsidiaries,
which appear in the Prospectus (excluding documents incorporated by
reference), or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives or in documents
incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer to
the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.
2
<PAGE>
ANNEX III
DELAYED DELIVERY CONTRACT
. . . . . . . . . , 199 . .
THE PROCTER & GAMBLE COMPANY,
c/o [Name and address of appropriate
Representatives].
Attention:
Dear Sirs/Mesdames:
The undersigned hereby agrees to purchase from The Procter & Gamble Company
(hereinafter called the "Company"), and the Company agrees to sell to the
undersigned,
[$].......................................
principal amount of the Company's [Title of Designated Securities] (hereinafter
called the "Designated Securities"), offered by the Company's Prospectus dated
. . . . . . . . . , 199 . ., as amended or supplemented, receipt of a copy of
which is hereby acknowledged, at a purchase price of % of the principal
amount thereof [, plus accrued interest from the date from which interest
accrues as set forth below,] [and accrued amortization, if any, from
[. . . . . . . . . ] [the date from which interest accrues as set forth below]]
and on the further terms and conditions set forth in this contract.
The undersigned will purchase the Designated Securities from the Company on
. . . . . . . . . , 199 . . (the "Delivery Date") and interest on the
Designated Securities so purchased will accrue from . . . . . . . . . , 199 . .
[The undersigned will purchase the Designated Securities from the Company on
the delivery date or dates and in the principal amount or amounts set forth
below:
<TABLE>
<CAPTION>
PRINCIPAL DATE FROM WHICH
DELIVERY DATE AMOUNT INTEREST ACCRUES
------------- --------- ----------------
<S> <C> <C>
. . . . . . . . . . . , 199. . [$] . . . . . . . . . . . , 199. .
. . . . . . . . . . . , 199. . [$] . . . . . . . . . . . , 199. .
</TABLE>
Each such date on which Designated Securities are to be purchased hereunder is
hereinafter referred to as a "Delivery Date".]
Payment for the Designated Securities which the undersigned has agreed to
purchase on [the] [each] Delivery Date shall be made to [the Company or its
order by certified or official bank check in [New York Clearing House] [same
day] funds at the office of . . . . . . . . . , . . . . . . . . . ,
. . . . . . . . . , or by wire transfer of same day funds to a bank account
specified by the Company] [or specify other means], on [the] [such] Delivery
Date upon delivery to the undersigned of the Designated Securities then to be
purchased by the undersigned in definitive fully registered form and in such
denominations and registered in such names as the undersigned may designate by
written or telegraphic communications addressed to the Company not less than
five full business days prior to [the] [such] Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
Designated Securities on [the] [each] Delivery Date shall be subject to the
condition that the purchase of Designated
<PAGE>
Securities to be made by the undersigned shall not on [the] [such] Delivery
Date be prohibited under the laws of the jurisdiction to which the undersigned
is subject. The obligation of the undersigned to take delivery of and make
payment for Designated Securities shall not be affected by the failure of any
purchaser to take delivery of and make payment for Designated Securities
pursuant to other contracts similar to this contract.
[The undersigned understands that underwriters (the "Underwriters") are also
purchasing Designated Securities from the Company, but that the obligations of
the undersigned hereunder are not contingent on such purchases. Promptly after
completion of the sale to the Underwriters the Company will mail or deliver to
the undersigned at its address set forth below notice to such effect,
accompanied by a copy of the opinion of counsel for the Company delivered to
the Underwriters in connection therewith.]
The undersigned represents and warrants that, as of the date of this
contract, the undersigned is not prohibited from purchasing the Designated
Securities hereby agreed to be purchased by it under the laws of the
jurisdiction to which the undersigned is subject.
This contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
This contract may be executed by either of the parties hereto in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
It is understood that the acceptance by the Company of any Delayed Delivery
Contract (including this contract) is in the Company's sole discretion and
that, without limiting the foregoing, acceptances of such contracts need not be
on a first-come, first-served basis. If this contract is acceptable to the
Company, it is requested that the Company sign the form of acceptance below and
mail or deliver one of the counterparts hereof to the undersigned at its
address set forth below. This will become a binding contract between the
Company and the undersigned when such counterpart is so mailed or delivered by
the Company.
Yours very truly,
...................................
(Name of Purchaser)
By...................................
(Signature)
...................................
(Name and Title)
...................................
(Address)
Accepted,..................., 199 . .
THE PROCTER & GAMBLE COMPANY
By...................................
Title
2
<PAGE>
EXHIBIT 5
THE PROCTER & GAMBLE COMPANY
Legal Division
P.O. Box 599
Cincinnati, Ohio 45201
July 9, 1997
The Procter & Gamble Company
One Procter & Gamble Plaza
Cincinnati, Ohio 45202
Gentlemen/Mesdames:
This opinion is rendered for use in connection with the Registration
Statement on Form S-3, filed by The Procter & Gamble Company (the "Company")
with the Securities and Exchange Commission on July 9, 1997 (the "Registration
Statement"), under which $1,375,000,000 aggregate principal amount of debt
securities (the "Debt Securities") consisting of debentures, notes and/or other
unsecured evidences of indebtedness of the Company and warrants to purchase
Debt Securities or to buy and sell government securities, foreign currencies,
currency units or units of a currency index or currency basket, units of a
stock index or stock basket or a commodity or a commodity index (the
"Warrants") to be offered as set forth in the Registration Statement are being
registered for sale to the public.
As counsel for the Company, I have examined and am familiar with originals or
copies, certified or otherwise, identified to my satisfaction, of such
statutes, documents, corporate records, certificates of public officials and
other instruments as I have deemed necessary for the purpose of this opinion,
including the Amended Articles of Incorporation, Regulations and By Laws of the
Company and the records of the proceedings of the shareholders and directors of
the Company.
Upon the basis of the foregoing, I am of the opinion that:
(a) The Company has been duly incorporated and is validly existing and in
good standing as a corporation under the laws of Ohio;
(b) When the Registration Statement shall have been declared effective by
order of the Securities and Exchange Commission, the terms of the Debt
Securities and Warrants and of their issue and sale have been duly
established, with respect to the Debt Securities, in conformity with the
Indenture dated as of September 28, 1992 between the Company and The First
National Bank of Chicago, as Trustee, and, with respect to the Warrants, in
conformity with the Warrant Agreement (for Debt Securities) or the Warrant
Agreement, as the case may be, and the Debt Securities and Warrants shall
have been duly executed by the Company and, with respect to the Debt
Securities, authenticated and delivered by the Trustee in accordance with
said Indenture and the Debt Securities and Warrants issued and sold as
contemplated in the Registration Statement, then the Debt Securities and
Warrants will be legally issued and will constitute valid and binding
obligations of the Company in accordance with their terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles, and shall be entitled to the benefits of said
Indenture and Warrant Agreements, as the case may be, respectively.
I hereby consent to the filing of this opinion as Exhibit (5) to the
Registration Statement and to the reference to my name in the Registration
Statement.
Very truly yours,
/s/ Terry L. Overbey
Terry L. Overbey Secretary and
Associate General Counsel
<PAGE>
EXHIBIT 23(i)(a)
CONSENT OF DELOITTE & TOUCHE LLP
(INDEPENDENT AUDITORS' CONSENT)
The Procter & Gamble Company:
We consent to the incorporation by reference in this Registration Statement
of The Procter & Gamble Company on Form S-3 of our report dated August 8, 1996
incorporated by reference in the Annual Report on Form 10-K of The Procter &
Gamble Company for the year ended June 30, 1996 and to the reference to us
under the heading "Experts" in the Prospectus which is part of such
Registration Statement.
Deloitte & Touche LLP
/s/ Deloitte & Touche LLP
Cincinnati, Ohio
July 8, 1997
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
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) _____
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
-----------------------------------
THE PROCTER & GAMBLE COMPANY
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
OHIO 31-0411980
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
ONE PROCTER & GAMBLE PLAZA
CINCINNATI, OHIO 45202-3315
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)
<PAGE>
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 Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
------------------------------
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
-----------------
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, 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 Chicago and State of Illinois, on the 18th day of June, 1997.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
BY /S/ RICHARD D. MANELLA
RICHARD D. MANELLA
VICE PRESIDENT
* EXHIBITS 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS
BEARING IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK
OF CHICAGO, FILED AS EXHIBIT 25.1 TO THE REGISTRATION STATEMENT ON FORM S-3 OF
SUNAMERICA INC. FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 25,
1996 (REGISTRATION NO. 333-14201).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
June 25, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between The Procter &
Gamble Company and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
BY: /s/ RICHARD D. MANELLA
RICHARD D. MANELLA
VICE PRESIDENT
4
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/97
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
DOLLAR AMOUNTS IN ---------
THOUSANDS RCFD BIL MIL THOU
----------------- ---- ------------
ASSETS
<S> <C> <C> <C>
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1)......... 0081 3,871,170 1.a.
b. Interest-bearing balances(2).................................. 0071 6,498,314 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)..... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D).. 1773 3,901,208 2.b.
3. Federal funds sold and securities purchased under agreements to
resell 1350 4,612,975 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C). RCFD 2122 23,345,201 4.a.
b. LESS: Allowance for loan and lease losses..................... RCFD 3123 420,963 4.b.
c. LESS: Allocated transfer risk reserve......................... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c).......................... 2125 22,924,238 4.d.
5. Trading assets (from Schedule RD-D).............................. 3545 8,792,158 5.
6. Premises and fixed assets (including capitalized leases)......... 2145 706,928 6.
7. Other real estate owned (from Schedule RC-M)..................... 2150 6,563 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)................................... 2130 61,551 8.
9. Customers' liability to this bank on acceptances outstanding..... 2155 488,866 9.
10. Intangible assets (from Schedule RC-M)........................... 2143 291,569 10.
11. Other assets (from Schedule RC-F)................................ 2160 1,775,283 11.
12. Total assets (sum of items 1 through 11)......................... 2170 53,930,823 12.
- ------------------
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/97
ST-BK: 17-1630
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS BIL MIL THOU
----------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)................................... RCON 2200 21,550,056 13.a.
(1) Noninterest-bearing(1).................................... RCON 6631 8,895,137 13.a.1
(2) Interest-bearing.......................................... RCON 6636 12,654,919 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)............................ RCFN 2200 12,364,650 13.b.
(1) Noninterest bearing....................................... RCFN 6631 287,496 13.b.1
(2) Interest-bearing.......................................... RCFN 6636 12,077,154 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 3,817,421 14
15. a. Demand notes issued to the U.S. Treasury...................... RCON 2840 63,621 15.a.
b. Trading Liabilities(from Sechedule RC-D)...................... RCFD 3548 5,872,831 15b.
16. Other borrowed money:
a. With original maturity of one year or less.................... RCFD 2332 2,607,549 16.a.
b. With original maturity of more than one year................. RCFD 2333 322,414 16b.
17. Not applicable
18. Bank's liability on acceptance executed and outstanding.......... RCFD 2920 488,866 18.
19. Subordinated notes and debentures................................ RCFD 3200 1,550,000 19.
20. Other liabilities (from Schedule RC-G)........................... RCFD 2930 1,196,229 20.
21. Total liabilities (sum of items 13 through 20)................... RCFD 2948 49,833,637 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.................... RCFD 3838 0 23.
24. Common stock..................................................... RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)......... RCFD 3839 2,944,244 25.
26. a. Undivided profits and capital reserves........................ RCFD 3632 954,885 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities.................................................... RCFD 8434 (1,089) 26.b.
27. Cumulative foreign currency translation adjustments.............. RCFD 3284 (1,712) 27.
28. Total equity capital (sum of items 23 through 27)................ RCFD 3210 4,097,186 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)............................ RCFD 3300 53,930,823 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external
<TABLE>
<S> <C> <C> <C>
Number
auditors as of any date during 1996................................ RCFD 6724 [2] M.1.
1 = Independent audit of the bank conducted in accordance 4. = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
</TABLE>
6
