<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 29, 1997
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
Ralston Purina Company
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
MISSOURI 43-0470580
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
CHECKERBOARD SQUARE
ST. LOUIS, MISSOURI 63164
TEL. (314) 982-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
J. M. NEVILLE, VICE PRESIDENT AND GENERAL COUNSEL
RALSTON PURINA COMPANY
CHECKERBOARD SQUARE
ST. LOUIS, MISSOURI 63164
TEL. (314) 982-1266
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------
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.
----------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
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, please 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. [_]
----------------
CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
BEING REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities and
Warrants to Purchase
Debt Securities...... $400,000,000 100% $400,000,000 *
</TABLE>
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- -------------------------------------------------------------------------------
* This Registration Statement relates solely to offers and sales of Debt
Securities and Warrants to Purchase Debt Securities previously registered
under Registration Statement No. 333-2069. $400,000,000 in Aggregate
Offering Price of Debt Securities and Warrants to Purchase Debt Securities
registered under that Registration Statement remain unsold and such amount
is being carried forward for offer and sale under this Registration
Statement.
----------------
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS HEREIN
IS A COMBINED PROSPECTUS AND ALSO RELATES TO REGISTRATION STATEMENT NO. 333-
2069 PREVIOUSLY FILED WITH THE COMMISSION ON FORM S-3 AND EFFECTIVE APRIL 21,
1996.
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 THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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- -------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
This Registration Statement contains a Prospectus and a Prospectus
Supplement. The Prospectus Supplement, at the time this Registration Statement
is declared effective, will only omit information allowed by Rule 430A of the
Securities Act of 1933.
<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 SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION DATED MAY 29, 1997
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE , 1997
,000,000 SAILSSM
Ralston Purina Company
% Exchangeable Notes Due 2000
Stock Appreciation Income Linked SecuritiesSM (SAILSSM)
--------
The principal amount of each of the % Exchangeable Notes Due , 2000 (each,
a "SAILS"), of Ralston Purina Company, a Missouri corporation ("Ralston"),
being offered hereby will be $ (the last sale price of the common stock,
par value $.01 per share (the "IBC Common Stock"), of Interstate Bakeries
Corporation, a Delaware corporation ("IBC"), on June , 1997, as reported on
the New York Stock Exchange Composite Tape) (the "Initial Price"). The SAILS
will mature on , 2000. Interest on the SAILS, at the rate of % of the
principal amount per annum, is payable quarterly on , , , of
each year, beginning , 1997. The SAILS are not subject to redemption or
any sinking fund prior to maturity.
At maturity (including as a result of acceleration or otherwise), the principal
amount of each SAILS will be mandatorily exchanged by Ralston into a number of
shares of IBC Common Stock (or, at Ralston's option, the cash equivalent
and/or such other consideration as permitted or required by the terms of the
SAILS) at the Exchange Rate (as defined herein). The Exchange Rate is equal
to, subject to certain adjustments, (a) if the Maturity Market Price (as
defined below) is greater than or equal to the Threshold Appreciation Price
of $ , . of a share of IBC Common Stock per SAILS, (b) if the Maturity
Market Price is less than the Threshold Appreciation Price of $ but is
greater than the Initial Price, a fraction of a share of IBC Common Stock
per SAILS having a value (determined using the Maturity Market Price) equal
to the Initial Price and (c) if the Maturity Market Price is less than or
equal to the Initial Price, one share of IBC Common Stock per SAILS. The
"Maturity Market Price" means the average Closing Price (as defined
herein) per share of IBC Common Stock for the 20 Trading Days (as defined
herein) immediately prior to maturity, except as otherwise described
herein. Accordingly, the value of the IBC Common Stock to be received by
holders of the SAILS (or, at Ralston's option, the cash equivalent
and/or such other consideration as permitted or required by the terms of
the SAILS) at maturity will not necessarily equal the principal amount
thereof.
The SAILS will be general unsecured obligations of Ralston ranking
pari passu with all of its other general unsecured and
unsubordinated indebtedness. IBC will have
no obligations with respect to
the SAILS. See
"Description
of
the
SAILS."
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN
CONNECTION WITH AN INVESTMENT IN THE SAILS, SEE
"RISK FACTORS RELATING TO SAILS"
BEGINNING ON PAGE S-4.
Attached hereto is a prospectus of IBC relating to the shares of IBC Common
Stock that may be received by holders of the SAILS at maturity. The IBC
Common Stock is listed on the New York Stock Exchange ("NYSE")
under the symbol "IBC." Application will be made for listing
of the SAILS on the NYSE.
For a discussion of certain United States federal income
tax consequences for holders of
SAILS, see
"Certain
United
States
Federal
Income
Tax
Considerations."
"Stock Appreciation Income Linked Securities" and "SAILS" are service marks of
Credit Suisse First Boston, Inc.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Underwriting
Price to Discounts And Proceeds to
Public(1) Commissions Ralston(1)(2)
--------- ------------- -------------
<S> <C> <C> <C>
Per SAILS................................. $ $ $
Total(3).................................. $ $ $
</TABLE>
(1) Plus accrued interest from the issue date.
(2) Before deducting expenses payable by Ralston, estimated to be $ .
(3) Ralston has granted to the Underwriters an option, exercisable by Credit
Suisse First Boston Corporation for 30 days from the date of this
prospectus supplement, to purchase a maximum of additional SAILS to
cover over-allotments of SAILS. If the option is exercised in full, the
total Price to Public will be $ , Underwriting Discounts and Commissions
will be $ and Proceeds to Ralston will be $ . See "Underwriting."
The SAILS are offered by the several Underwriters when, as and if issued by
Ralston, delivered to and accepted by, the Underwriters and subject to their
right to reject orders in whole or in part. It is expected that delivery of the
SAILS in book-entry form will be made through the facilities of The Depository
Trust Company on or about , 1997, against payment in immediately available
funds.
Credit Suisse First Boston
Bear, Stearns & Co. Inc.
J.P. Morgan & Co.
Lehman Brothers
Salomon Brothers Inc
Prospectus Supplement dated June , 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SAILS OR IBC
COMMON STOCK, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
S-2
<PAGE>
THE OFFERING
Securities Offered.......... ,000,000 SAILS-- % Exchangeable Notes Due
, 2000 of Ralston.
Price to Public............. $ . per SAILS (the last sales price per
share of the IBC Common Stock on , 1997).
Interest.................... % per annum, payable quarterly on each , ,
, and of each year, beginning ,
1997.
Mandatory Exchange.......... On , 2000 (including as a result of
acceleration or otherwise, "Maturity") the
principal amount of each SAILS will be
mandatorily exchanged by Ralston into a number of
shares of IBC Common Stock (or, at Ralston's
option, the cash equivalent and/or such other
consideration as permitted or required by the
terms of the SAILS) at an Exchange Rate equal to
(a) if the Maturity Market Price is greater than
or equal to the Threshold Appreciation Price
($ ), . of a share of IBC Common Stock per
SAILS, (b) if the Maturity Market Price is less
than the Threshold Appreciation Price of $ but
is greater than the Initial Price, a fraction of
a share of IBC Common Stock per SAILS, determined
by dividing the Initial Price by the Maturity
Market Price, that would have a value (determined
using the Maturity Market Price) equal to the
Initial Price and (c) if the Maturity Market
Price is less than or equal to the Initial Price,
one share of IBC Common Stock per SAILS, subject
in each case to adjustment in certain events.
Enhanced Yield; Less Equity
Appreciation............... Holders of SAILS will be entitled to receive
quarterly payments of interest at the rate of %
of the principal amount of the SAILS per annum.
IBC currently pays cash dividends at the rate of
$0.54 per share per annum (equivalent to % of
the Initial Price). The opportunity for equity
appreciation afforded by an investment in the
SAILS prior to Maturity is less than that
afforded by an investment in IBC Common Stock.
Holders of the SAILS will realize no equity
appreciation if at Maturity the Maturity Market
Price is less than the Threshold Appreciation
Price (which has been set at $ or % above the
Initial Price), and will realize only % of the
appreciation for the period prior to Maturity if
at Maturity the Maturity Market Price is above
the Threshold Appreciation Price. Holders of the
SAILS will realize the entire decline in equity
value for that period if at Maturity the Maturity
Market Price is below the Initial Price.
Not Redeemable.............. The SAILS are not redeemable prior to Maturity.
Ranking..................... The SAILS will be general unsecured obligations
of Ralston ranking pari passu with all of its
other general unsecured and unsubordinated
indebtedness. See "Capitalization." IBC will have
no obligations with respect to the SAILS.
Listing..................... Application will be made for listing of the SAILS
on the NYSE.
S-3
<PAGE>
RISK FACTORS RELATING TO SAILS
As described in more detail below, the trading price of the SAILS may vary
considerably prior to Maturity, due to, among other things, fluctuations in
the market price of IBC Common Stock and other events that are difficult to
predict and beyond Ralston's control.
COMPARISON TO OTHER DEBT SECURITIES; RELATIONSHIP TO IBC COMMON STOCK
The terms of the SAILS differ from those of ordinary debt securities in that
the value of the IBC Common Stock (or cash equivalent) that a holder of the
SAILS will receive upon the mandatory exchange of the principal amount thereof
at Maturity (the "Amount Receivable at Maturity") is not fixed, but is based
on the market price of the IBC Common Stock at Maturity ("Maturity Market
Price") as specified in the Exchange Rate (as defined under "Description of
the SAILS"). Because the market price of the IBC Common Stock is subject to
market fluctuations, the Amount Receivable at Maturity may be more or less
than the principal amount of the SAILS. For example, if the Maturity Market
Price of the IBC Common Stock is less than the Initial Price, the Amount
Receivable at Maturity will be less than the principal amount paid for the
SAILS, in which case an investment in SAILS would result in a loss of
principal and, if IBC is insolvent or bankrupt, could result in a total loss
of the principal amount. Holders of SAILS, therefore, bear the full risk of a
decline in the value of the IBC Common Stock prior to Maturity.
In addition, because each of the SAILS will be mandatorily exchangeable for
less than one share of IBC Common Stock (or its cash equivalent) at Maturity
if the Maturity Market Price exceeds the Initial Price, the opportunity for
equity appreciation afforded by an investment in the SAILS during the period
prior to Maturity is less than the opportunity for equity appreciation
afforded by a direct investment in IBC Common Stock. If the Maturity Market
Price is above the Initial Price but below the Threshold Appreciation Price
(as defined under "Description of the SAILS"), which has been set at $ and
which represents an appreciation of % over the Initial Price, holders of the
SAILS would realize no equity appreciation on the IBC Common Stock for that
period. If the Maturity Market Price is above the Threshold Appreciation
Price, holders of SAILS will realize only % of the appreciation of the IBC
Common Stock for that period above the Threshold Appreciation Price. See
"Description of the SAILS" for an illustration of the Amount Receivable at
Maturity that a SAILS holder would receive at various Maturity Market Prices.
MARKET FOR IBC COMMON STOCK; POTENTIAL IMPACT OF SAILS
It is impossible to predict whether the market price of IBC Common Stock
will rise or fall. Trading prices of IBC Common Stock will be influenced by
changes in IBC's financial condition, results of operations and prospects, and
by complex and interrelated political, economic, financial and other factors
that can affect the capital markets generally, the stock exchange or quotation
system on which IBC Common Stock is traded and the market segment of which IBC
is a part. See the prospectus relating to IBC and to IBC Common Stock attached
hereto. Trading prices of IBC Common Stock also may be influenced if Ralston,
IBC, another market participant or another principal stockholder of IBC
hereafter issues securities with terms similar to those of the SAILS or sells
or otherwise transfers a substantial amount of shares of IBC Common Stock.
Ralston owns an aggregate of 16,923,077 shares of IBC Common Stock,
constituting approximately 45% of the outstanding shares of IBC Common Stock
as of March 8, 1997. Pursuant to the Shareholder Agreement (described below)
Ralston has agreed to own no more than 14.9% of IBC's voting securities
outstanding on July 22, 2000. If IBC's purchase of 1,000,000 shares of IBC
Common Stock described under "Relationship Between Ralston Purina Company and
Interstate Bakeries Corporation" had been completed on March 8, 1997, Ralston
would have held approximately 43.5% of IBC's Common Stock. Assuming that
Ralston delivers one share of IBC Common Stock per SAILS at Maturity and the
number of shares of IBC Common Stock at July 22, 2000 is the same as the
number of such shares outstanding at March 8, 1997, under the Shareholder
Agreement Ralston would be required to dispose of an additional shares of
IBC Common Stock prior to July 22, 2000 ( additional shares if the
Underwriters' overallotment option is exercised in full). In addition, Mr.
William P. Stiritz, Chairman of the Board and Chief Executive Officer of
Ralston, and Mr. James R. Elsesser, Vice President and Chief Financial Officer
of Ralston, held 595,050 and 14,550 shares of IBC Common Stock, respectively,
S-4
<PAGE>
constituting approximately 1.6% as of March 8, 1997, of the outstanding shares
of IBC Common Stock. Ralston is unable to predict whether Mr. Stiritz or Mr.
Elsesser may sell shares of IBC Common Stock as Ralston reduces its ownership
of IBC Common Stock.
Moreover, any market that develops for the SAILS is likely to influence and
be influenced by the market for IBC Common Stock. For example, the price of
the IBC Common Stock could become more volatile and could be depressed by
investors' anticipation of the potential distribution into the market, upon
the Maturity of the SAILS, of the additional number of shares of IBC Common
Stock held by Ralston which may be delivered by Ralston upon Maturity of the
SAILS. Such shares currently constitute approximately % of the outstanding
IBC Common Stock. See "Relationship between Ralston Purina Company and
Interstate Bakeries Corporation." The price of IBC Common Stock could also be
affected by possible sales of IBC Common Stock by investors who view the SAILS
as a more attractive means of equity participation in IBC and by hedging or
arbitrage trading activity that may develop involving the SAILS and the IBC
Common Stock.
POTENTIAL DILUTION OF IBC COMMON STOCK
The Amount Receivable at Maturity is subject to adjustment for certain
described events arising from stock splits and combinations, stock dividends,
certain other actions of IBC that modify its capital structure and certain
other transactions involving IBC. See "Description of the SAILS--Dilution
Adjustments; Other Adjustment Events." The Amount Receivable at Maturity will
not be adjusted for other events, such as employee stock option grants and
offerings of IBC Common Stock for cash or in connection with acquisitions or
for certain other transactions involving IBC which are not specifically
described as "Adjustment Events," that may adversely affect the price of IBC
Common Stock, and possibly reduce its liquidity. Because of the relationship
of such Amount Receivable at Maturity to the price of IBC Common Stock, such
other events may adversely affect the trading price of the SAILS. There can be
no assurance that IBC will not make offerings of IBC Common Stock or as to the
amount of such offerings, if any, nor that IBC will not take such other action
in the future.
NO RIGHTS AS IBC STOCKHOLDERS
Until such time, if any, as Ralston shall deliver shares of IBC Common Stock
to holders of the SAILS at Maturity, holders of the SAILS will not be entitled
to any rights with respect to such shares of IBC Common Stock (including,
without limitation, voting rights (including voting rights in respect of IBC
transactions such as an acquisition of IBC), rights to respond to tender
offers and rights to receive any dividends or other distributions in respect
thereof). See "Relationship Between Ralston and IBC" below for a description
of the restrictions on Ralston's right to vote its shares of IBC Common Stock.
SAILS ARE GENERAL UNSECURED OBLIGATIONS OF RALSTON
The Indenture does not contain any restriction on Ralston's use of the
proceeds of this offering or on the ability of Ralston to sell, pledge or
convey all or any portion of the IBC Common Stock held by it or its
subsidiaries, and no such shares of IBC Common Stock will be pledged or
otherwise held in escrow for use at Maturity of the SAILS. Consequently, in
the event of a bankruptcy, insolvency or liquidation of Ralston or its
subsidiaries, the IBC Common Stock, if any, owned by Ralston or its
subsidiaries will be subject to the claims of creditors of Ralston or its
subsidiaries, respectively, including holders of SAILS. The SAILS do not
contain sinking fund or other mandatory redemption provisions. The SAILS are
not subject to payment prior to Maturity at the option of the holder.
FIXED YIELD
Although holders of SAILS will be entitled to receive quarterly payments of
interest at the rate of % of the principal amount of the SAILS per annum
and IBC currently pays cash dividends at the rate of $0.54 per share per annum
(equivalent to % of the Initial Price per annum), there can be no assurance
that the yield on the SAILS will remain higher than the dividend yield on
shares of IBC Common Stock.
S-5
<PAGE>
NO PRIOR MARKET; POSSIBLE ILLIQUIDITY OF THE SECONDARY MARKET FOR THE SAILS
The SAILS are novel and innovative securities and there is currently no
secondary market for the SAILS. It is impossible to predict how the SAILS will
trade in the secondary market or whether such market will be liquid. The
Underwriters currently intend, but are not obligated, to make a market in the
SAILS. There can be no assurance that a secondary market will develop or, if a
secondary market does develop, that it will provide the holders of the SAILS
with liquidity or that it will continue for the life of the SAILS.
Application will be made for listing of the SAILS on the NYSE. However, there
can be no assurance that the SAILS will be listed on the NYSE. Even if the
SAILS are listed, the NYSE could revoke the listing or stop trading of the
SAILS at any time. If the SAILS are no longer listed or traded on any
securities exchange or trading market, or if the NYSE or a securities exchange
or trading market stops trading of the SAILS, holders of the SAILS may have
difficulty obtaining pricing information and it may be more difficult to resell
the SAILS.
UNCERTAINTY OF FEDERAL INCOME TAX CONSEQUENCES
No statutory, judicial or administrative authority directly addresses the
characterization of the SAILS or instruments similar to the SAILS, for U.S.
federal income tax purposes. As a result, significant aspects of the U.S.
federal income tax consequences of an investment in the SAILS are not certain.
No ruling is being requested from the Internal Revenue Service ("IRS") with
respect to the SAILS and no assurance can be given that the IRS will agree with
the conclusions expressed under "Certain United States Federal Income Tax
Considerations."
RISK FACTORS RELATING TO IBC
Investors in the SAILS should carefully consider the information in the
prospectus of IBC attached hereto, including the information contained therein
under "Risk Factors" beginning on page 7 of such prospectus.
NO OBLIGATION ON THE PART OF IBC WITH RESPECT TO THE SAILS
IBC has no obligations with respect to the SAILS or the Amount Receivable at
Maturity, including any obligation to take the interests of Ralston or of
holders of the SAILS into consideration for any reason. See "Relationship
Between Ralston Purina Company and Interstate Bakeries Corporation." IBC will
not receive any of the proceeds of the offering of the SAILS made hereby and is
not responsible for, and has not participated in, the determination of the
timing of the offering or the prices for or quantities of SAILS to be issued.
IBC is not involved with the administration or trading of the SAILS or the
determination or calculation of the Amount Receivable at Maturity.
RELATIONSHIP BETWEEN RALSTON AND IBC
Because of the provisions in the Shareholder Agreement between Ralston and
IBC that limit Ralston's voting rights as described below (see "Relationship
Between Ralston Purina Company and Interstate Bakeries Corporation"), Ralston
is not in a position to influence the voting by holders of IBC Common Stock on
any matter other than any proposed merger of IBC or sale of all or
substantially all of the assets of IBC or creation of any other class of IBC
voting stock. In addition, the Shareholder Agreement provides that, unless
specifically permitted in writing in advance by the Chairman of the Board of
IBC, Ralston may not acquire additional shares of IBC Common Stock (except to
prevent dilution of its interest in certain circumstances) or propose or seek
to effect any business combination with IBC at any time prior to July 22, 2001.
Accordingly, Ralston does not believe it should be deemed a controlling
shareholder of IBC.
Two executive officers of Ralston currently serve on IBC's nine member Board
of Directors pursuant to the terms of the Shareholder Agreement (however, IBC
has no obligation under the terms of such Shareholder Agreement to nominate any
Ralston designee after their respective terms expire in 1997 and 1999).
Accordingly, Ralston is not in a position to control the voting of IBC's Board
of Directors on any matter involving the relationship between the two
companies. If IBC's Board of Directors is presented with a proposal putting
these
S-6
<PAGE>
officers in a conflicting situation between the interests of IBC and the
interests of Ralston, they may abstain from participating in the consideration
of such proposal and any such proposal would then be considered by, and be
subject to the approval of, a majority of the disinterested directors of IBC.
See "Relationship Between Ralston Purina Company and Interstate Bakeries
Corporation."
RALSTON PURINA COMPANY
Ralston, incorporated in Missouri in 1894, is the world's largest producer
of dry dog and dry and soft-moist cat foods. Ralston's pet foods are sold
under the Purina name, including "Dog Chow(R)," "Cat Chow(R)" and numerous
other dog and cat food brands. Ralston is also a significant manufacturer of
primary batteries, rechargeable batteries and battery-powered lighting
products, principally under the trademarks "Eveready(R)" and "Energizer(R)."
Ralston is also a major producer of other pet products, including cat box
filler (under the "Golden Cat(R)" and "Tidy Cat(R)" names), dietary soy
protein, fiber food ingredients and polymer products, and, outside the United
States, feeds for livestock and poultry. Ralston has announced its intention
to separate its international animal feeds business in a tax-free spin-off to
shareholders. Completion is anticipated in the second quarter of 1998 and is
contingent upon a favorable tax ruling from the IRS and final approval by
Ralston's Board of Directors.
On May 23, 1997, Ralston announced that Mr. William P. Stiritz will resign
as Chief Executive Officer and President on September 30, 1997, but will
remain as Ralston's Chairman of the Board, and will serve as Chairman and
Chief Executive Officer of Ralston's international animal feeds business upon
its spin-off. Messrs. W. Patrick McGinnis and J. Patrick Mulcahy will be
appointed as Co-Chief Executive Officers as of October 1, 1997.
Ralston maintains its principal executive offices at Checkerboard Square,
St. Louis, Missouri 63164, Tel. (314) 982-1000.
For additional information with respect to Ralston, see the documents
specified under "Incorporation of Certain Documents by Reference" in the
Prospectus of Ralston accompanying this Prospectus Supplement.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
Ralston for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, ---------------------------
1997 1996 1995 1994(A) 1993 1992
---------- ---- ---- ------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges(b)... 3.8 3.3 2.9 2.4 2.8 2.7
</TABLE>
- --------
(a) Excluding provisions for restructuring of Ralston's battery and bakery
operations in the fiscal year ended September 30, 1994. Earnings before
income taxes, extraordinary items and fixed charges were $766.1 million
and the ratio of earnings to fixed charges was 2.7.
(b) For the purpose of this ratio, "Earnings" consists of earnings before
income taxes, equity earnings, extraordinary items (1992, 1993, 1994, 1995
and 1996), cumulative effect of accounting changes (1993) and "fixed
charges." "Fixed charges" consist of preferred stock dividends, interest
and amortization of debt discount and expense on all indebtedness, and a
portion of net rental expense representative of the interest factor.
S-7
<PAGE>
INTERSTATE BAKERIES CORPORATION
IBC, through its wholly-owned operating subsidiary, Interstate Brands
Corporation ("Brands"), is the largest baker and distributor of fresh bakery
products in the United States. IBC produces, markets, distributes and sells a
wide range of breads, rolls, snack cakes, donuts, sweet goods and related
products. These products are sold under a number of national brand names, such
as "Wonder(R)," "Hostess(R)" and "Home Pride(R)," as well as regional brand
names, including "Butternut(R)," "Dolly Madison(R)" and "Merita(R)."
"Wonder(R)" white bread and "Home Pride(R)" wheat bread are the number one and
two top selling branded breads sold in the United States. "Hostess(R)"
products, including "Twinkies(R)," CupCakes, and "Ho-Ho's(R)" are among the
leading snack cake products sold in the United States.
IBC distributes its products in markets which include 90% of the United
States population. IBC operates 67 bakeries and 1,400 thrift stores and
employs over 32,000 people. IBC's driver-salesmen deliver products directly
from IBC's 1,200 distribution centers to more than 200,000 food outlets and
stores.
IBC has grown to its present size primarily through the acquisition of other
bakery businesses. In July 1995, IBC acquired Continental Baking Company
("CBC") from Ralston for $220.0 million in cash and 16,923,077 shares of IBC
Common Stock. Since the acquisition of CBC, IBC has taken significant steps to
continue to build and capitalize on the brand equity in the "Wonder(R)" and
"Hostess(R)" brands. IBC has also worked to realize cost savings from the CBC
acquisition and to achieve economies of scale in the operations of Brands and
CBC. As a result of the CBC acquisition and these actions, IBC has more than
doubled its net sales to $2.9 billion in fiscal 1996 from $1.2 billion in
fiscal 1995. IBC's operating income as a percentage of net sales increased to
5.5% for the forty weeks ended March 8, 1997 from 2.6% for the comparable
period in fiscal 1996. Net income per share increased to $1.78 per share for
the forty week period in fiscal 1997 from $.47 per share for the comparable
period in fiscal 1996.
For additional information about IBC, including risks associated with an
investment in IBC Common Stock, see the prospectus of IBC attached hereto. IBC
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"). The prospectus of IBC attached hereto
incorporates its Annual Report on Form 10-K for the fiscal year ended June 1,
1996, its Quarterly Reports on Form 10-Q for the quarters ended August 24,
1996, November 16, 1996 and March 8, 1997, the description of the IBC Common
Stock contained in IBC's Registration Statement on Form 8-A filed on May 28,
1992 and all documents filed by IBC pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of such prospectus and prior
to the termination of this SAILS offering. Such documents may be inspected and
copied at the public reference facilities maintained by the Commission in
Washington, D.C. and at its regional offices and at the offices of the NYSE on
which the IBC Common Stock is listed. Such documents, without exhibits, also
may be obtained by writing to Ray Sandy Sutton, Corporate Secretary,
Interstate Bakeries Corporation, 12 East Armour Boulevard, Kansas City, MO
64111 (telephone number (816) 502-4000). See "Available Information" and
"Incorporation of Certain Documents by Reference" in the prospectus of IBC
attached hereto. All information relating to IBC which is contained in this
Prospectus Supplement or contained in or incorporated by reference in the
prospectus of IBC attached hereto was provided by IBC. Ralston assumes no
responsibility for the accuracy of such information.
S-8
<PAGE>
RELATIONSHIP BETWEEN RALSTON PURINA COMPANY
AND INTERSTATE BAKERIES CORPORATION
Ralston, through a wholly-owned subsidiary, currently owns 16,923,077 shares
of IBC Common Stock, constituting approximately 45% of the outstanding shares
of IBC Common Stock as of March 8, 1997.
Pursuant to a Shareholder Agreement, dated as of July 22, 1995 (the
"Shareholder Agreement") among Ralston, IBC and a subsidiary of Ralston,
Ralston agreed, with certain limited exceptions, not to acquire any additional
shares of IBC Common Stock prior to July 22, 2001. Ralston also agreed
pursuant to the Shareholder Agreement to reduce its ownership of IBC Common
Stock, by July 22, 2000, to no more than 14.9% of IBC's total outstanding
voting securities. Ralston has registration rights with respect to the IBC
Common Stock owned by it, but the Shareholder Agreement provides that, with
certain limited exceptions, Ralston may not sell any of such IBC Common Stock
without first offering the securities to IBC. Ralston has offered to sell, and
IBC has declined the opportunity to purchase, the IBC Common Stock which may
be delivered pursuant to the SAILS offered hereby. IBC also has the right,
between July 22, 2000 and July 21, 2001, to acquire any of the IBC Common
Stock then held by Ralston at a price equal to 110% of its then current market
price, as defined in the Shareholder Agreement.
The Shareholder Agreement requires that Ralston vote the shares of IBC
Common Stock in accordance with the recommendation of IBC's Board of Directors
with respect to shareholder proposals and nominations to the IBC Board, and,
with respect to other proposals, in proportion to the votes of all other
shareholders; provided that Ralston may vote as it deems appropriate with
respect to proposals for the merger of IBC, the sale of all or substantially
all of IBC's assets or the issuance of any other class of voting stock of IBC.
Mr. William P. Stiritz and Mr. James R. Elsesser serve on the Board of
Directors of IBC at the request of Ralston pursuant to the terms of the
Shareholder Agreement. Mr. Stiritz's term expires in 1997 and Mr. Elsesser's
term expires in 1999. Upon expiration of their respective terms, IBC will have
no further obligation under the Shareholder Agreement or otherwise to nominate
any designee of Ralston for election as a director of IBC, but the Board of
Directors of IBC may ask either Mr. Stiritz or Mr. Elsesser, or both, to stand
for reelection at the end of their respective terms. If either or both are
reelected, their terms would extend beyond the Maturity of the SAILS.
IBC has agreed, simultaneously with the closing of the SAILS transaction, to
purchase from Ralston 1,000,000 shares of IBC Common Stock at a purchase price
per share equal to the Initial Price, less a 3% discount. For information
concerning the number of shares of IBC Common Stock, Ralston has agreed to
sell under the Shareholder Agreement, see "Risk Factors Relating to SAILS--
Market for IBC Common Stock; Potential Impact of SAILS."
IBC has agreed to indemnify Ralston against any losses caused by any untrue
statement or alleged untrue statement with regard to IBC Common Stock or IBC
contained in this Prospectus Supplement or the prospectus of IBC attached
hereto.
IBC has no obligations with respect to the SAILS. See "Risk Factors Relating
to SAILS--No Obligation on the Part of IBC with Respect to the SAILS."
S-9
<PAGE>
PRICE RANGE OF INTERSTATE BAKERIES CORPORATION
COMMON STOCK AND DIVIDENDS
IBC Common Stock is listed and traded on the NYSE under the symbol "IBC." The
following table sets forth, for each of the quarterly periods indicated, the
high and low sales prices for IBC Common Stock, as reported on the NYSE
Composite Tape.
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
------- ------- ---------
<S> <C> <C> <C>
FISCAL 1997 QUARTER
- -------------------
First.................................................... $30.125 $25.500 $.125
Second................................................... 45.250 29.625 .135
Third.................................................... 51.000 42.250 .135
Fourth (through May 23, 1997)..............................55.125. 46.375 .135
FISCAL 1996 QUARTER
- -------------------
First.................................................... $19.500 $14.375 $.125
Second................................................... 22.250 18.875 .125
Third.................................................... 23.250 20.500 .125
Fourth................................................... 27.625 22.500 .125
FISCAL 1995 QUARTER
- -------------------
First.................................................... $12.875 $11.875 $.125
Second................................................... 13.500 12.500 .125
Third.................................................... 15.375 12.500 .125
Fourth................................................... 14.875 14.125 .125
</TABLE>
As of May 23, 1997, there were 5,933 holders of record of IBC Common Stock.
For a recent sales price of the IBC Common Stock, see the cover page of this
Prospectus Supplement.
Ralston makes no representation as to the amount of dividends, if any, that
IBC will pay in the future. In any event, holders of the SAILS will not be
entitled to receive any dividends or other distributions that may be payable on
the IBC Common Stock until such time as Ralston, if it so elects, delivers
shares of IBC Common Stock at Maturity of the SAILS, and then only with respect
to dividends or other distributions having a record date on or after the date
of delivery of such shares of IBC Common Stock. See "Description of the SAILS."
S-10
<PAGE>
USE OF PROCEEDS
The net proceeds to be received by Ralston from the sale of the SAILS
offered hereby, after deducting underwriting discounts and commissions, but
before related expenses payable by Ralston, are estimated to be $349.2 million
($388.0 million if the Underwriter's over-allotment option is exercised in
full). Ralston intends to use the net proceeds from the offering of the SAILS
to repay short-term debt. At May 22, 1997, $424.0 million of short-term debt
was outstanding which at such date carried a weighted average interest rate of
5.787%.
CAPITALIZATION
The following table sets forth the consolidated capitalization of Ralston at
March 31, 1997, and as adjusted to reflect the application of the estimated
net proceeds from the sale of the SAILS (assuming the Underwriter's over-
allotment option is not exercised) to pay short-term debt.
<TABLE>
<CAPTION>
AT MARCH 31, 1997
----------------------
HISTORICAL AS ADJUSTED
---------- -----------
(IN MILLIONS)
<S> <C> <C>
Short-term debt, excluding current maturities:
Notes Payable.......................................... $ 791.8 $ 442.6
Long-term debt:
Debentures, 7 3/4%-9.30%............................... 1,206.0 1,206.0
ESOP Loan Guarantee.................................... 87.7 87.7
Medium Term Notes, 8.52%-10.18%........................ 71.9 71.9
Capitalized Lease Obligations, 5.8%-6.5%............... 6.2 6.2
Industrial Revenue Bonds, 4.5%-12.75%.................. 29.1 29.1
Revolving Credit Agreement LIBOR + 15 basis points..... 50.0 50.0
Other.................................................. 95.3 95.3
-------- --------
Total existing long-term debt........................ 1,546.2 1,546.2
SAILS.................................................. -- 360.0
-------- --------
Total long-term debt................................. 1,546.2 1,906.2
Current maturities of long-term debt..................... 97.5 97.5
-------- --------
Total long-term debt, less current maturities........ 1,448.7 1,808.7
-------- --------
Redeemable Preferred Stock............................... 314.3 314.3
-------- --------
Total shareholders' equity............................... 801.3 801.3
-------- --------
Total capitalization................................. $3,453.6 $3,464.4
======== ========
</TABLE>
The foregoing financial data should be read in conjunction with the
consolidated financial statements for the indicated periods which are included
in the documents incorporated by reference under "Incorporation of Certain
Documents by Reference" in the Prospectus of Ralston accompanying this
Prospectus Supplement.
S-11
<PAGE>
SELECTED FINANCIAL INFORMATION
The following table sets forth selected financial information for Ralston
for, and at the end of, the six-month periods ended March 31, 1997 and 1996
and each of the five years in the period ended September 30, 1996. The
selected financial information for the five years ended September 30, 1996 has
been derived from Ralston's consolidated financial statements, which have been
audited by Price Waterhouse LLP, independent auditors. Certain
reclassifications have been made to historical financial information to
conform with current year presentation. The selected financial information for
the six-month periods ended March 31, 1997 and 1996 is derived from unaudited
financial statements. The unaudited financial statements, in the opinion of
Ralston's management, include all adjustments, consisting of normal recurring
accruals, necessary for a fair presentation of the financial position and
results of operations for these periods. Financial information for the interim
periods presented is not necessarily indicative of financial information to be
anticipated for the full year. The information should be read in conjunction
with the consolidated financial statements, related notes and other financial
information incorporated by reference in the Prospectus accompanying this
Prospectus Supplement.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31, FOR THE YEAR ENDED SEPTEMBER 30,
------------------ ------------------------------------------------
1997 1996 1996 1995(1) 1994(2) 1993 1992
-------- -------- -------- -------- -------- -------- --------
(IN MILLIONS EXCEPT PER SHARE AND PERCENTAGE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS
DATA
Net Sales............... $3,279.8 $3,071.4 $6,114.3 $7,171.6 $7,676.6 $7,874.8 $7,725.9
Costs and Expenses
Cost of products sold.. 1,956.7 1,812.1 3,668.1 4,088.0 4,282.5 4,322.0 4,223.1
Selling, general and
administrative........ 571.8 529.4 1,068.1 1,734.1 1,861.3 1,879.8 1,784.9
Advertising and
promotion............. 348.5 319.0 592.8 598.4 771.2 848.1 904.8
Interest expense....... 87.0 99.2 190.3 199.8 220.4 238.1 242.9
Provisions for
restructuring......... -- -- 18.0 90.8 99.9 -- 79.0
Gain on sale of CBC.... -- -- -- (50.3) -- -- --
Gain on sale of
assets................ -- -- -- -- -- -- (41.5)
Other (income)/expense,
net................... (0.9) 14.4 14.7 (3.4) 19.6 6.4 (9.4)
-------- -------- -------- -------- -------- -------- --------
Earnings before Income
Taxes, Equity
Earnings,
Extraordinary Item and
Cumulative Effect of
Accounting Changes.... 316.7 297.3 562.3 514.2 421.7 580.4 542.1
Income Taxes........... (117.2) (113.0) (212.2) (215.0) (203.3) (239.1) (221.4)
-------- -------- -------- -------- -------- -------- --------
Earnings before Equity
Earnings, Extraordinary
Item, and Cumulative
Effect of Accounting
Changes................ 199.5 184.3 350.1 299.2 218.4 341.3 320.7
Equity Earnings, Net of
Taxes.................. 14.6 3.3 11.6 0.9 -- -- --
-------- -------- -------- -------- -------- -------- --------
Earnings before
Extraordinary Item and
Cumulative Effect of
Accounting Changes..... 214.1 187.6 361.7 300.1 218.4 341.3 320.7
Extraordinary Item--Loss
on Early Retirement of
Debt................... -- -- (2.1) (3.7) (9.5) (11.8) (7.5)
-------- -------- -------- -------- -------- -------- --------
Earnings before
Cumulative Effect of
Accounting Changes..... 214.1 187.6 359.6 296.4 208.9 329.5 313.2
Cumulative Effect of
Accounting Changes:
Postretirement benefits
other than pensions... -- -- -- -- -- (171.9) --
Income taxes........... -- -- -- -- -- (35.0) --
-------- -------- -------- -------- -------- -------- --------
Net Earnings............ $ 214.1 $ 187.6 $ 359.6 $ 296.4 $ 208.9 $ 122.6 $ 313.2
======== ======== ======== ======== ======== ======== ========
BALANCE SHEET DATA
Total Assets............ $4,811.7 $4,671.5 $4,785.1 $4,567.2 $4,622.3 $5,071.9 $5,150.5
-------- -------- -------- -------- -------- -------- --------
Long-Term Debt.......... 1,448.7 1,547.2 1,437.0 1,602.1 1,594.6 2,054.5 2,111.3
-------- -------- -------- -------- -------- -------- --------
Stockholders Equity..... 801.3 602.3 689.0 494.2 355.6 469.8 655.2
-------- -------- -------- -------- -------- -------- --------
</TABLE>
- --------
(1) Effective July 22, 1995, Ralston sold CBC. Ralston's earnings and cash
flows reflect the operations of CBC through July 22, 1995.
(2) On March 31, 1994, Ralston effected a spin-off of Ralcorp Holdings, Inc.,
its private label and branded cereal, baby food, crackers and cookies, ski
resort and coupon redemption businesses. Ralston's earnings and cash flows
reflect the operations of those businesses through March 31, 1994.
S-12
<PAGE>
DESCRIPTION OF THE SAILS
The following description of the particular terms of the SAILS offered
hereby (referred to in the Prospectus accompanying this Prospectus Supplement
as "Debt Securities") supplements, and to the extent inconsistent therewith
replaces, the description of the general terms and conditions of Debt
Securities set forth in the Prospectus, to which description reference is
hereby made.
GENERAL
The SAILS are a series of Debt Securities, to be issued under an indenture,
dated as of May 26, 1995, as supplemented by a supplemental indenture dated as
of June , 1997, (the "Indenture"), between Ralston and The First National
Bank of Chicago, as Trustee (the "Trustee"). In the event of any disparity
between the description of the SAILS contained herein and the description of
the Debt Securities contained in the accompanying Prospectus of Ralston, and
subject to the Indenture, the description of the SAILS contained herein shall
be deemed to be controlling. Initially capitalized terms used herein and not
defined herein shall bear the meanings ascribed thereto in the Indenture as
described in the Prospectus of Ralston accompanying this Prospectus
Supplement.
The SAILS will be unsecured and unsubordinated indebtedness of Ralston and
will rank pari passu with all other general unsecured and unsubordinated
indebtedness of Ralston. The SAILS constitute a single series of the Debt
Securities referred to in the accompanying Prospectus of Ralston. The
aggregate number of SAILS to be issued will be ,000,000 plus such additional
number of SAILS as may be issued pursuant to the over-allotment option granted
by Ralston to the Underwriters. See "Underwriting." The SAILS will mature on
, 2000 (the "Stated Maturity").
Each of the SAILS, which will be issued with a principal amount of $ ,
will bear interest at the annual rate of % of the principal amount per annum
(or approximately $ per annum) from the date of original issuance, or from
the most recent Interest Payment Date (as defined below) to which interest has
been paid or provided for, until the principal amount thereof is exchanged at
Maturity pursuant to the terms of the SAILS. Interest on the SAILS will be
payable quarterly in arrears on , , and , commencing , 1997
(each, an "Interest Payment Date"), to the persons in whose names the SAILS
are registered at the close of business on the day of the calendar month
immediately preceding such Interest Payment Date, provided that interest
payable at Maturity shall be payable to the person to whom the principal is
payable. Interest on the SAILS will be computed on the basis of a 360-day year
of twelve 30-day months. If an Interest Payment Date falls on a day which is
not a business day or which is a legal holiday on which the corporate trust
office of the Trustee or banking institutions in the place of payment are
authorized or required to close, the interest payment to be made on such
Interest Payment Date will be made on the next succeeding business day with
the same force and effect as if made on such Interest Payment Date, and no
additional interest will accrue as a result of such delayed payment.
At Maturity, the principal amount of each of the SAILS will be mandatorily
exchanged by Ralston into a number of shares of IBC Common Stock (or, at
Ralston's option, the equivalent amount of cash and/or such other
consideration as permitted or required to be paid by the terms of the SAILS)
at the Exchange Rate (as defined below). The "Exchange Rate" is equal to, (a)
if the Maturity Market Price (as defined below) is greater than or equal to
$ (the "Threshold Appreciation Price"), . of a share of IBC Common Stock
per SAILS, (b) if the Maturity Market Price is less than the Threshold
Appreciation Price but is greater than the Initial Price, (i) a fraction equal
to the Initial Price divided by the Maturity Market Price of (ii) one share of
IBC Common Stock per SAILS that would have a value (determined at the Maturity
Market Price) equal to the Initial Price and (c) if the Maturity Market Price
is less than or equal to the Initial Price, one share of IBC Common Stock per
SAILS. The Exchange Rate is subject to adjustment as provided below under
"Dilution Adjustments; Other Adjustment Events." THE VALUE OF THE IBC COMMON
STOCK TO BE RECEIVED BY HOLDERS OF THE SAILS (OR, AS DISCUSSED BELOW, THE CASH
EQUIVALENT TO BE RECEIVED IN LIEU OF SUCH SHARES) AT MATURITY WILL NOT
NECESSARILY EQUAL THE PRINCIPAL
S-13
<PAGE>
AMOUNT OF SUCH SAILS. The ratios of shares of IBC Common Stock per SAILS
specified in clauses (a), (b) (ii) and (c) above of the Exchange Rate
definition are hereinafter referred to as the "Share Components." Any shares
of IBC Common Stock delivered by Ralston to the holders of the SAILS who are
not affiliated with IBC shall be free of any transfer restrictions, and the
holders of the SAILS will be responsible for the payment of any and all
brokerage costs upon the subsequent sale of such shares. No fractional shares
of IBC Common Stock will be issued at Maturity as provided under "Fractional
Shares" below. Although it is Ralston's current intention to deliver shares of
IBC Common Stock at Maturity, Ralston may, at its option, deliver cash, in
lieu of delivering such shares of IBC Common Stock. The amount of cash
deliverable in respect of each SAILS shall be equal to the product of the
number of shares of IBC Common Stock otherwise deliverable in respect of such
SAILS on the date of Maturity multiplied by the Maturity Market Price. In the
event Ralston elects to deliver cash in lieu of shares of IBC Common Stock at
Maturity, it will be obligated pursuant to the Indenture to deliver cash to
all holders of SAILS. On or prior to the fourth Business Day prior to ,
2000, Ralston will notify the Trustee, which in turn will notify the
registered holders of the SAILS (which, so long as the SAILS shall be in the
form of one or more Global Securities, shall be The Depository Trust Company
or its nominee), and publish a notice in a daily newspaper of national
circulation stating whether the principal amount of each SAILS will be
exchanged for shares of IBC Common Stock or cash (and/or such other
consideration as permitted or required by the terms of the SAILS); provided,
however, that if Ralston intends to deliver cash, Ralston shall have the
right, as a condition to delivery of such cash, to require certification as to
the domicile and residency of each beneficial holder of the SAILS.
Notwithstanding the foregoing, (i) in the case of certain dilution events,
the Exchange Rate will be subject to adjustment and (ii) in the case of
certain adjustment events, the consideration received by holders of the SAILS
at Maturity will be shares of IBC Common Stock, other securities and/or cash.
See "Dilution Adjustments; Other Adjustment Events" below.
The "Maturity Market Price" is defined as the average Closing Price per
share of IBC Common Stock for the 20 Trading Days immediately prior to (but
not including) the date of Maturity; provided, however, that if there are not
20 Trading Days for the IBC Common Stock occurring later than the 60th
calendar day immediately prior to, but not including, the date of Maturity,
"Maturity Market Price" will be defined as the market value per share of IBC
Common Stock at Maturity as determined by a nationally recognized investment
banking firm retained for such purpose by Ralston. The Maturity Market Price
is subject to adjustment as provided under "Dilution Adjustments; Other
Adjustment Events" below. The "Closing Price" of any security on any date of
determination means (i) the closing sale price (or, if no closing sale price
is reported, the last reported sale price) of such security (regular way) on
the NYSE on such date, (ii) if such security is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which such security is so
listed, (iii) if such security is not so listed on a United States national or
regional securities exchange, as reported by the NASDAQ Stock Market, (iv) if
such security is not so reported, the last quoted bid price for such security
in the over-the-counter market as reported by the National Quotation Bureau or
similar organization, or (v) if such security is not so quoted, the average of
the mid-point of the last bid and ask prices for such security from each of at
least three nationally recognized investment banking firms selected by Ralston
for such purpose. A "Trading Day" is defined as a Business Day on which the
Closing Price of the security to be valued (A) is not suspended from trading
on any national or regional securities exchange or association or over-the-
counter market at the close of business and (B) has traded at least once on
the national or regional securities exchange or association or over-the-
counter market that is the primary market for the trading of such security.
"Business Day" means any day that is not a Saturday, a Sunday or a day on
which the NYSE, banking institutions or trust companies in The City of New
York are authorized or obligated by law or executive order to close.
For illustrative purposes only, the following chart shows the number of
shares of IBC Common Stock or the amount of cash that a holder of the SAILS
would receive for each SAILS at various Maturity Market Prices. The table
assumes that there will be no adjustments to the Exchange Rate described under
"Dilution Adjustments; Other Adjustment Events" below. There can be no
assurance that the Maturity Market Price will be within the range set forth
below. Given the Initial Price of $ per SAILS and the Threshold
S-14
<PAGE>
Appreciation Price of $ , a SAILS holder would receive at Maturity the
following number of shares of IBC Common Stock or amount of cash (if Ralston
elects to pay the SAILS in cash):
<TABLE>
<CAPTION>
MATURITY MARKET PRICE OF NUMBER OF SHARES OF AMOUNT OF
IBC COMMON STOCK IBC COMMON STOCK CASH
------------------------ ------------------- ---------
<S> <C> <C>
$
$
$
$
</TABLE>
As the foregoing chart illustrates, if at Maturity, the Maturity Market
Price is greater than or equal to $ , Ralston will be obligated to deliver
. of a share of IBC Common Stock per SAILS, resulting in Ralston receiving
% of the appreciation in market value of the IBC Common Stock for the
period between the date hereof and Maturity and the SAILS holder receiving
% of the appreciation in market value above $ . If at Maturity, the Maturity
Market Price is greater than $ and less than $ , Ralston will be
obligated to deliver only a fraction of a share of IBC Common Stock having a
market value equal to $ , resulting in Ralston retaining all appreciation in
the market value of the IBC Common Stock for that period. If at Maturity, the
Maturity Market Price is less than or equal to $ , Ralston will be obligated
to deliver one share of IBC Common Stock per SAILS, regardless of the market
price of such shares, resulting in the SAILS holder realizing the entire loss
on the decline in market value of the IBC Common Stock for that period.
Interest on the SAILS will be payable, and delivery of IBC Common Stock (or,
at the option of Ralston, its cash equivalent and/or such other consideration
as permitted or required as described below) in exchange for the SAILS at
Maturity will be made upon surrender of such SAILS, at the office or agency of
Ralston maintained for such purposes; provided, however, that payment of
interest may be made at the option of Ralston by check mailed to the persons
in whose names the SAILS are registered at the close of business on the day
of the calendar month immediately preceding the relevant Interest Payment
Date. See "Book-Entry System" below. Initially such office will be the
principal corporate trust office of the Trustee, First National Plaza, Suite
126, Chicago, Illinois 60670.
The SAILS will be transferrable at any time or from time to time at the
aforementioned office. No service charge will be made to the holder for any
such transfer except for any tax or governmental charge payable in connection
therewith.
The Indenture does not contain any restriction on the ability of Ralston to
sell, pledge or convey all or any portion of the IBC Common Stock held by it
or its subsidiaries, and no shares of IBC Common Stock will be pledged or
otherwise held in escrow for use at Maturity of the SAILS. Consequently, in
the event of a bankruptcy, insolvency or liquidation of Ralston or its
subsidiaries, the IBC Common Stock, if any, owned by Ralston or its
subsidiaries will be subject to the claims of the creditors of Ralston or its
subsidiaries, respectively, including holders of SAILS. In addition, as
described herein, Ralston will have the option, exercisable in its sole
discretion, to satisfy its obligations pursuant to the mandatory exchange for
the principal amount of each SAILS at Maturity by delivering to holders of the
SAILS either the number of shares of IBC Common Stock specified above or cash
in an amount equal to the product of such number of shares multiplied by the
Maturity Market Price. As a result, there can be no assurance that Ralston
will elect at Maturity to deliver IBC Common Stock or, if it so elects, that
it will use all or any portion of its holdings of IBC Common Stock at that
time, if any, to make such delivery. Holders of the SAILS will not be entitled
to any rights with respect to IBC Common Stock (including, without limitation,
voting rights (including voting rights in respect of IBC transactions such as
an acquisition of IBC), rights to respond to tender offers, and rights to
receive any dividends or other distributions in respect thereof) until such
time, if any, as Ralston shall have delivered shares of IBC Common Stock to
holders of the SAILS at Maturity thereof, and the applicable record date, if
any, for the exercise of such rights occurs after such date.
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DILUTION ADJUSTMENTS; OTHER ADJUSTMENT EVENTS
The Exchange Rate is subject to adjustment if IBC shall (i) pay a stock
dividend or make a distribution, in each case, with respect to IBC Common
Stock in shares of IBC Common Stock, (ii) subdivide or split its outstanding
shares of IBC Common Stock into a greater number of shares, (iii) effect a
reverse stock split or other action which combines the outstanding shares of
IBC Common Stock into a smaller number of shares, (iv) issue by
reclassification (other than a reclassification pursuant to clause (ii),
(iii), (iv) or (v) of the definition of Adjustment Event below) of the
outstanding shares of IBC Common Stock any shares of common stock of IBC, or
(v) issue rights or warrants to all holders of IBC Common Stock entitling them
to subscribe for or purchase shares of IBC Common Stock at a price per share
less than the Market Price (as defined below) of the IBC Common Stock on the
Business Day next following the record date for the determination of holders
of IBC Common Stock entitled to receive such rights or warrants.
Notwithstanding (v) above, however, the Exchange Rate will not be subject to
adjustment in the event that IBC shall (1) issue rights to purchase shares of
IBC Common Stock pursuant to a plan for the reinvestment of dividends or (2)
distribute rights or warrants to all holders of IBC Common Stock which, upon
the occurrence of a specified event or events, entitle the holders thereof to
subscribe for or purchase shares of IBC's Common Stock at a price per share
less than the Market Price of the IBC Common Stock at the time of such
occurrence; provided, however, in the case of rights or warrants described in
clause (2), the Exchange Rate will be so adjusted at the time that any of such
rights or warrants actually become exercisable at such lower price, and the
calculation of the adjustment of the Exchange Rate will be made with respect
to the Business Day next following the occurrence of the specified event or
events instead of the record date for the determination of holders of IBC
Common Stock entitled to receive such rights or warrants.
In the case of the events referred to in clauses (i), (ii), (iii) and (iv)
above, the Exchange Rate shall be adjusted by adjusting each of the Share
Components of the Exchange Rate in effect immediately prior to such event so
that a holder of any SAILS shall be entitled to receive, upon mandatory
exchange of the principal amount of such SAILS at Maturity, the number of
shares of IBC Common Stock (or, in the case of a reclassification referred to
in clause (iv) above, the number of other shares of common stock of IBC issued
pursuant thereto) which such holder of such SAILS would have owned or been
entitled to receive immediately following such event had such SAILS been
exchanged immediately prior to such event or any record date with respect
thereto.
In the case of any event referred to in clause (v) above, the Exchange Rate
shall be adjusted by multiplying each of the Share Components of the Exchange
Rate in effect on the record date for the issuance of the rights or warrants
referred to in clause (v) above, by a fraction, of which the numerator shall
be (A) the number of shares of IBC Common Stock outstanding on the record date
for the issuance of such rights or warrants, plus (B) the number of additional
shares of IBC Common Stock offered for subscription or purchase pursuant to
such rights or warrants, and of which the denominator shall be (x) the number
of shares of IBC Common Stock outstanding on the record date for the issuance
of such rights or warrants, plus (y) the number of additional shares of IBC
Common Stock which the aggregate offering price of the total number of shares
of IBC Common Stock so offered for subscription or purchase pursuant to such
rights or warrants would purchase at the Market Price of the IBC Common Stock
on the Business Day next following the record date for the determination of
holders of IBC Common Stock entitled to receive such rights or warrants, which
number of additional shares shall be determined by multiplying such total
number of shares by the exercise price of such rights or warrants and dividing
the product so obtained by such Market Price. To the extent that such rights
or warrants expire prior to the Maturity of the SAILS and shares of IBC Common
Stock are not delivered pursuant to such rights or warrants prior to such
expiration, the Exchange Rate shall be readjusted to the Exchange Rate which
would then be in effect had such adjustments for the issuance of such rights
or warrants been made upon the basis of delivery of only the number of shares
of IBC Common Stock actually delivered pursuant to such rights or warrants.
Any shares of IBC Common Stock issuable in payment of a dividend shall be
deemed to have been issued immediately prior to the close of business on the
record date for such dividend for purposes of calculating the number of
outstanding shares of IBC Common Stock under this paragraph.
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"Market Price" means, as of any date of determination, the average Closing
Price per share of IBC Common Stock for the 20 Trading Days immediately prior
to the date of determination; provided, however, that if there are not 20
Trading Days for IBC Common Stock occurring later than the 60th calendar day
immediately prior to, but not including, such date, the Market Price shall be
determined as the market value per share of IBC Common Stock as of such date
as determined by a nationally recognized investment banking firm retained for
such purpose by Ralston.
All adjustments to the Exchange Rate will be calculated to the nearest
1/10,000th of a share of IBC Common Stock (or, if there is not a nearest
1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment
in the Exchange Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided, however, that
any adjustments which by reason of the foregoing are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
If an adjustment is made to the Exchange Rate pursuant to clauses (i), (ii),
(iii), (iv) or (v) above, an adjustment shall also be made to the Maturity
Market Price as such term is used to determine which of clauses (a), (b) or
(c) of the Exchange Rate definition will apply at Maturity and for purposes of
calculating the fraction in sub-clause (b)(i) of the definition of Exchange
Rate. The required adjustment to the Maturity Market Price shall be made at
Maturity by multiplying the Maturity Market Price by the cumulative number or
fraction determined pursuant to the Share Component adjustment procedure
described above. In the case of the reclassification of any shares of IBC
Common Stock into any common stock of IBC other than IBC Common Stock, such
common stock shall be deemed to be shares of IBC Common Stock solely to
determine the Maturity Market Price and to apply the Exchange Rate at
Maturity. Each such adjustment to the Exchange Rate and the Maturity Market
Price shall be made successively.
In the event of (i) any dividend or distribution by IBC to all holders of
IBC Common Stock of evidences of its indebtedness or other assets (other than
1) dividends or distributions referred to in clause (i) of the first paragraph
under this caption "Dilution Adjustments; Other Adjustment Events," 2) any
common shares issued pursuant to a reclassification referred to in clause (iv)
of such paragraph and 3) Ordinary Cash Dividends (as defined below)) or any
issuance by IBC to all holders of IBC Common Stock of rights or warrants
(other than rights or warrants for which adjustment is required, as referred
to in clause (v) of the first paragraph under this caption "Dilution
Adjustments; Other Adjustment Events" or for which an adjustment is then or
may be later required as set forth in the last sentence of such first
paragraph), (ii) any consolidation or merger of IBC with or into another
entity (other than a merger or consolidation in which IBC is the continuing
corporation and in which the shares of IBC Common Stock outstanding
immediately prior to the merger or consolidation are not exchanged for cash,
securities or other property of IBC or another corporation), (iii) any sale,
transfer, lease or conveyance to another corporation of the property of IBC as
an entirety or substantially as an entirety, (iv) any statutory exchange of
securities of IBC with another corporation (other than in connection with a
merger or acquisition) or (v) any liquidation, dissolution or winding up of
IBC (any such event, an "Adjustment Event"), each Holder of a SAILS will
receive at Maturity, in lieu of or (in the case of an Adjustment Event
described in clause (i) above) in addition to, shares of IBC Common Stock as
described above (calculated using the formula set forth in "General" and the
Maturity Market Price set forth in the last sentence of this paragraph), cash
in an amount equal to (A) if the Maturity Market Price is greater than or
equal to the Threshold Appreciation Price, . multiplied by the Transaction
Value (as defined below), (B) if the Maturity Market Price is less than the
Threshold Appreciation Price but is greater than the Initial Price, the
product of (x) the Initial Price divided by the Maturity Market Price
multiplied by (y) the Transaction Value and (C) if the Maturity Market Price
is less than or equal to the Initial Price, the Transaction Value. Following
an Adjustment Event, the Maturity Market Price, as such term is used in this
paragraph and throughout the definition of Exchange Rate, shall be deemed to
equal (A) the Maturity Market Price of the shares of IBC Common Stock, as
adjusted pursuant to the method set forth in the preceding paragraph, plus (B)
the Transaction Value.
Notwithstanding the foregoing, with respect to any securities received in an
Adjustment Event (A) that are (i) listed on a United States national
securities exchange, (ii) that are reported on a United States national
securities system subject to last sale reporting, (iii) that are traded in the
over-the-counter market and reported on the National Quotation Bureau or
similar organization or (iv) for which bid and ask prices are available from
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at least three nationally recognized investment banking firms and (B) that are
either (x) perpetual equity securities or (y) non-perpetual equity or debt
securities with a stated maturity after the Stated Maturity of the SAILS
("Reported Securities"), Ralston may, at its option, in lieu of delivering the
amount of cash deliverable in respect of Reported Securities received in an
Adjustment Event, as determined in accordance with the previous paragraph,
deliver a number of such Reported Securities with a value equal to such cash
amount, as determined in accordance with clause (ii) of the definition of
Transaction Value, as applicable; provided, however, that (i) if such option
is exercised, Ralston shall deliver Reported Securities in respect of all, but
not less than all, cash amounts that would otherwise be deliverable in respect
of Reported Securities received in an Adjustment Event, (ii) Ralston may not
exercise such option if Ralston has elected to deliver cash in lieu of shares
of IBC Common Stock, if any, deliverable upon Maturity or if such Reported
Securities have not yet been delivered to the holders entitled thereto
following such Adjustment Event or any record date with respect thereto, and
(iii) subject to Ralston's obligation to deliver cash with respect to any
Reported Security that had not yet been delivered to holders entitled thereto,
Ralston must exercise such option if Ralston does not elect to deliver cash in
lieu of shares of IBC Common Stock, if any, deliverable upon Maturity. If
Ralston elects to deliver Reported Securities, each holder of a SAILS will be
responsible for the payment of any and all brokerage and other transaction
costs upon the sale of such Reported Securities. If, following any Adjustment
Event, any Reported Security ceases to qualify as a Reported Security, then
(x) Ralston may no longer elect to deliver such Reported Security in lieu of
an equivalent amount of cash and (y) notwithstanding clause (ii) of the
definition of Transaction Value, the Transaction Value of such Reported
Security shall mean the fair market value of such Reported Security on the
date such security ceases to qualify as a Reported Security, as determined by
a nationally recognized investment banking firm retained for this purpose by
Ralston.
The amount of cash and/or the kind and amount of securities into which the
SAILS shall be exchangeable after an Adjustment Event shall be subject to
adjustment following such Adjustment Event in the same manner and upon the
occurrence of the same type of events as described under this caption
"Dilution Adjustments; Other Adjustment Events" with respect to IBC Common
Stock and IBC.
For purposes of the foregoing, the term "Ordinary Cash Dividend" means, with
respect to any consecutive 365-day period, any dividend with respect to IBC
Common Stock paid in cash to the extent that the amount of such dividend,
together with the aggregate amount of all other dividends on IBC Common Stock
paid in cash during such 365-day period, does not exceed on a per share basis
10% of the average of the Closing Prices per share of IBC Common Stock over
such 365-day period.
The term "Transaction Value" means (i) for any cash received in any
Adjustment Event, the amount of cash received per share of IBC Common Stock,
(ii) for any Reported Securities received in any Adjustment Event, an amount
equal to (x) the average Closing Price per security of such Reported
Securities for the 20 Trading Days immediately prior to Maturity multiplied by
(y) the number of such Reported Securities (as adjusted pursuant to the second
preceding paragraph) received for each share of IBC Common Stock and (iii) for
any property received in any Adjustment Event other than cash or such Reported
Securities, an amount equal to the fair market value of the property received
per share of IBC Common Stock on the date such property is received, as
determined by a nationally recognized investment banking firm retained for
this purpose by Ralston; provided, however, that in the case of clause (ii),
(x) with respect to securities that are Reported Securities by virtue of only
clause (A)(iv) of the definition of Reported Securities in the third preceding
paragraph, Transaction Value with respect to any such Reported Security means
the average of the mid-point of the last bid and ask prices for such Reported
Security as of Maturity from each of at least three nationally recognized
investment banking firms retained for such purpose by Ralston multiplied by
the number of such Reported Securities (as adjusted pursuant to the method set
forth in the second preceding paragraph) received for each share of IBC Common
Stock and (y) with respect to all other Reported Securities, if there are not
20 Trading Days for any particular Reported Security occurring later than the
60th calendar day immediately prior to, but not including, the date of
Maturity, Transaction Value with respect to such Reported Security means the
market value per security of such Reported Security as of Maturity as
determined by a nationally recognized investment banking firm retained for
such purpose by Ralston multiplied by the number of such Reported Securities
(as adjusted pursuant to the method set forth in the second preceding
paragraph) received for each share of IBC Common Stock. For purposes of
calculating the Transaction Value, any cash, Reported Securities or other
property
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receivable in any Adjustment Event shall be deemed to have been received
immediately prior to the close of business on the record date for such
Adjustment Event or, if there is no record date for such Adjustment Event,
immediately prior to the close of business on the effective date of such
Adjustment Event.
No adjustments will be made for certain other events, such as employee stock
option grants or offerings of IBC Common Stock by IBC for cash or in
connection with acquisitions.
Ralston is required, within ten Business Days following the occurrence of an
event that requires an adjustment to the Exchange Rate or the occurrence of an
Adjustment Event (or, in either case, if Ralston is not aware of such
occurrence, as soon as practicable after becoming so aware), to provide
written notice to the Trustee and to each holder of SAILS of the occurrence of
such event, including a statement in reasonable detail setting forth the
method by which the adjustment to the Exchange Rate or change in the
consideration to be received by holders of SAILS following the Adjustment
Event was determined and setting forth the revised Exchange Rate or
consideration, as the case may be; provided, however that, in respect of any
adjustment to the Maturity Market Price, such notice will only disclose the
factor by which the Maturity Market Price is to be multiplied in order to
determine which clause of the Exchange Rate definition will apply at Maturity.
FRACTIONAL SHARES
No fractional shares of IBC Common Stock or Reported Securities will be
issued if Ralston exchanges the SAILS for shares of IBC Common Stock or
Reported Securities. If more than one SAILS is surrendered for exchange at one
time by the same holder, the number of full shares of IBC Common Stock or
Reported Securities which shall be delivered upon exchange, in whole or in
part, as the case may be, shall be computed on the basis of the aggregate
number of SAILS so surrendered at Maturity. In lieu of any fractional share or
other security otherwise issuable in respect of all SAILS of any holder which
are exchanged at Maturity, such holder shall be entitled to receive an amount
in cash equal to the value of such fractional share or security at the
Maturity Market Price.
DELIVERY OF SECURITIES UPON MATURITY
All shares of IBC Common Stock and Reported Securities deliverable to
holders of the SAILS upon Maturity will be delivered to such holders, whenever
practicable, in such manner (such as by book-entry transfer) so as to assure
same-day transfer of such securities to such holders and otherwise in the
manner customary at such time for delivery of such securities and securities
of the same type. Notwithstanding the foregoing, it may not be possible under
market practices prevailing at the Maturity of the SAILS to transfer IBC
Common Stock and/or Reported Securities so as to assure same-day transfer of
such securities to holders of the SAILS. Accordingly, such holders of the
SAILS may receive all or a portion of the IBC Common Stock and/or Reported
Securities into which such SAILS are exchangeable after the date of Maturity.
REDEMPTION
The SAILS are not subject to redemption prior to Maturity and do not contain
sinking fund or other mandatory redemption provisions. The SAILS are not
subject to payment at the option of the holder prior to Maturity.
BOOK-ENTRY SYSTEM
It is expected that the SAILS will be issued in the form of one or more
global securities (the "Global Securities") deposited with The Depository
Trust Company (the "Depositary") and registered in the name of a nominee of
the Depositary.
The Depositary has advised Ralston and the Underwriters as follows: the
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to Section 17A of the Exchange Act. The
Depositary was created to hold securities
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of persons who have accounts with the Depositary ("Participants") and to
facilitate the clearance and settlement of securities transactions among its
Participants in such securities through electronic book-entry changes in
accounts of the Participants, thereby eliminating the need for physical
movement of certificates. Such Participants include securities brokers and
dealers, banks, trust companies and other clearing corporations. Indirect
access to the Depositary's book-entry system also is available to others, such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly.
Upon the issuance of a Global Security, the Depositary or its nominee will
credit the respective SAILS represented by such Global Security to the accounts
of Participants. The accounts to be credited shall be designated by the
Underwriters. Ownership of beneficial interests in the Global Securities will
be limited to Participants or persons that may hold interests through
Participants. See "Description of the Debt Securities--Global Securities" in
the Prospectus of Ralston accompanying this Prospectus Supplement.
SAME-DAY FUNDS SETTLEMENT SYSTEM AND PAYMENT
Settlement for the SAILS will be made by the Underwriters in immediately
available funds. All payments of principal and interest on the Global
Securities will be made by Ralston in immediately available funds.
The SAILS will trade in the Depositary's Same-Day Funds Settlement System
until Maturity, and secondary market trading activity in the SAILS will
therefore be required by the Depositary to settle in immediately available
funds.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is based upon the advice of Bryan Cave LLP, special
tax counsel to Ralston, as to certain of the material U.S. federal income tax
consequences that may be relevant to a citizen or resident of the United
States, a corporation or partnership created or organized under the laws of the
United States, an estate the income of which is subject to U.S. federal income
taxation regardless of its source, or a trust which is subject to the
supervision of a court within the United States and the control of a United
States fiduciary as described in Section 7701(a)(30) of the Internal Revenue
Code of 1986, as amended (the "Code") (any of the foregoing, a "U.S. Person")
who is the beneficial owner of a SAILS (a "U.S. Holder"). All references to
"holders" (including U.S. Holders) are to beneficial owners of the SAILS. This
summary is based on U.S. federal income tax laws, regulations, rulings and
decisions in effect as of the date of this Prospectus Supplement (or, in the
case of certain Treasury regulations in proposed form, as of such date), all of
which are subject to change at any time (possibly with retroactive effect).
Because such laws, regulations, rulings and decisions are technical and
complex, the discussion below necessarily represents only a general summary.
This summary addresses the U.S. federal income tax consequences to U.S.
Holders who are initial holders of the SAILS, who purchase the SAILS at the
offering price set forth on the cover page of this Prospectus Supplement and
who will hold the SAILS and, if applicable, the IBC Common Stock and Reported
Securities as capital assets. This summary does not address all aspects of
federal income taxation that may be relevant to a particular U.S. Holder in
light of the holder's individual investment circumstances or to certain types
of U.S. Holders subject to special treatment under the U.S. federal income tax
laws, such as dealers in securities or foreign currency, financial
institutions, insurance companies, tax-exempt organizations and taxpayers
holding the SAILS as part of a "straddle," "hedge," "conversion transaction,"
"synthetic security," or other integrated investment. Moreover, the effect of
any applicable state, local or foreign tax laws is not discussed.
No statutory, judicial or administrative authority directly addresses the
characterization of the SAILS or instruments similar to the SAILS for U.S.
federal income tax purposes. As a result, significant aspects of the U.S.
federal income tax consequences of an investment in the SAILS are not certain.
No ruling is being requested from the IRS with respect to the SAILS and no
assurance can be given that the IRS will agree with the conclusions expressed
herein. ACCORDINGLY, A PROSPECTIVE INVESTOR (INCLUDING A TAX-
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EXEMPT INVESTOR) IN THE SAILS SHOULD CONSULT ITS OWN TAX ADVISOR IN
DETERMINING THE TAX CONSEQUENCES OF AN INVESTMENT IN THE SAILS, INCLUDING THE
APPLICATION OF STATE, LOCAL OR OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF
CHANGES IN FEDERAL OR OTHER TAX LAWS.
Pursuant to the terms of the Indenture, Ralston and every holder of a SAILS
will be obligated (in the absence of an administrative determination or
judicial ruling to the contrary) to characterize a SAILS for all tax purposes
as a forward purchase contract to purchase IBC Common Stock and Reported
Securities at Maturity (including as a result of acceleration or otherwise).
Under the terms of the forward contract: (a) at the time of issuance of the
SAILS the holder deposits irrevocably with Ralston a fixed amount of cash
equal to the Initial Price of the SAILS to assure the fulfillment of the
holder's purchase obligation described in clause (c) below, (b) until Maturity
Ralston will be obligated to pay interest on the deposit at a rate equal to
the stated rate of interest on the SAILS as compensation to the holder for
Ralston's use of the cash deposit during the term of the SAILS, and (c) at
Maturity the cash deposit unconditionally and irrevocably will be applied by
Ralston in full satisfaction of the holder's obligation under the forward
purchase contract, and Ralston will deliver to the holder the number of shares
of IBC Common Stock and Reported Securities that the holder is entitled to
receive at the time pursuant to the terms of the SAILS (subject to Ralston's
right to deliver cash in lieu of shares of IBC Common Stock and Reported
Securities). Consistent with the above characterization, (i) amounts paid to
Ralston in respect of the original issue of a SAILS will be treated as
allocable in their entirety to the amount of the cash deposit attributable to
such SAILS, and (ii) amounts denominated as interest that are payable with
respect to the SAILS will be characterized as interest payable on the amount
of such deposit, includible annually in the income of a U.S. Holder as
interest income in accordance with the holder's method of accounting.
(Prospective investors should note that cash proceeds of this offering will
not be segregated by Ralston during the term of the SAILS, but instead will be
commingled with Ralston's other assets and applied in a manner consistent with
the "Use of Proceeds" discussion above.)
Under the above characterization of the SAILS, a U.S. Holder's tax basis in
a SAILS generally will equal the holder's cost for that SAILS. Upon the sale
or other taxable disposition of a SAILS, a U.S. Holder generally will
recognize gain or loss equal to the difference between the amount realized on
the sale or other taxable disposition and the U.S. Holder's tax basis in the
SAILS. Such gain or loss generally will be long-term capital gain or loss if
the U.S. Holder has held the SAILS for more than one year at the time of
disposition.
Under the above characterization of the SAILS, if Ralston delivers IBC
Common Stock and Reported Securities at Maturity, a U.S. Holder will recognize
no gain or loss on the purchase of IBC Common Stock and Reported Securities
against application of the monies received by Ralston in respect of the SAILS.
A U.S. Holder will have a tax basis in such stock equal to the U.S. Holder's
tax basis in the SAILS (less the portion of the tax basis of the SAILS
allocable to any fractional share, as described in the next sentence). A U.S.
Holder will recognize gain or loss (which will be short-term capital gain or
loss) with respect to cash received in lieu of fractional shares, in an amount
equal to the difference between the cash received and the portion of the basis
of the SAILS allocable to fractional shares (based on the relative number of
fractional shares and full shares delivered to the holder). If at Maturity
Ralston pays the SAILS in cash, a U.S. Holder will recognize gain or loss
equal to any difference between the amount of cash received from Ralston and
the U.S. Holder's tax basis in the SAILS at that time.
Due to the absence of authority as to the proper characterization of the
SAILS, no assurance can be given that the IRS will accept, or that a court
will uphold, the characterization and tax treatment described above. In
particular, the IRS could seek to analyze the federal income tax consequences
of owning a SAILS under Treasury regulations promulgated in June 1996
governing contingent payment debt instruments (the "Contingent Payment
Regulations"). The Contingent Payment Regulations apply to debt instruments
issued on or after August 13, 1996. The Contingent Payment Regulations are
complex, but very generally apply the original issue discount rules of the
Code to a contingent payment debt instrument by requiring that original issue
discount be accrued every year at a "comparable yield" for the issuer of the
instrument, determined at the time of issuance of the obligation. In addition,
the Contingent Payment Regulations require that a projected payment schedule,
which
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results in such a "comparable yield", be determined, and that adjustments to
income accruals be made to account for differences between actual payments and
projected amounts. To the extent that the comparable yield as so determined
exceeds the interest actually paid on a contingent debt instrument, the owner
of that instrument recognizes ordinary interest income in excess of the cash
the owner receives. In addition, any gain realized on the sale, exchange or
redemption of a contingent payment debt instrument is treated as ordinary
income. Any loss realized on such sale, exchange or redemption is treated as
an ordinary loss to the extent the U.S. Holder's original issue discount
inclusions with respect to the obligation exceed prior reversals of such
inclusions required by the adjustment mechanism described above. Any loss
realized in excess of such amount generally is treated as a capital loss.
The Contingent Payment Regulations should not apply to the SAILS, because
those Regulations apply only to debt instruments that provide for contingent
payments. The SAILS are payable by the delivery of shares of IBC Common Stock
and Reported Securities (unless Ralston exercises its option to deliver cash
at Maturity) and provide economic returns that are indexed to the performance
of IBC Common Stock and Reported Securities. The SAILS therefore offer no
assurance that a U.S. Holder's investment will be returned to the holder at
Maturity. Accordingly, the SAILS should be characterized for tax purposes, not
as debt instruments, but as forward purchase contracts in respect of which
holders have deposited a fixed amount of cash with Ralston, on which interest
is payable at a fixed rate. If, however, the IRS argued successfully that the
Contingent Payment Regulations applied to the SAILS, then, among other
matters, (i) gain realized by a U.S. Holder on the sale or other taxable
disposition of a SAILS (including as a result of payments made at Maturity)
generally would be characterized as ordinary income, rather than as short- or
long-term capital gain (depending on whether the SAILS had been held for more
than one year at the time of such disposition), and (ii) a U.S. Holder would
recognize ordinary income, or ordinary or capital loss (as the case may be,
under the rules summarized above) on the receipt of shares of IBC Common Stock
and Reported Securities, rather than capital gain or loss upon the ultimate
sale of such stock.
Even if the Contingent Payment Regulations do not apply to the SAILS, it is
possible that the IRS could seek to characterize the SAILS in a manner that
results in tax consequences to initial U.S. Holders of the SAILS different
from those reflected in the Indenture and described above.
NON-UNITED STATES PERSONS
In the case of a holder of the SAILS that is not a U.S. Person, payments
made with respect to the SAILS should not be subject to U.S. withholding tax,
provided that such holder complies with applicable certification requirements.
Any capital gain realized upon the sale or other disposition of the SAILS by a
holder that is not a U.S. Person will generally not be subject to U.S. federal
income tax if (i) such gain is not effectively connected with a U.S. trade or
business of such holder and (ii) in the case of an individual, such individual
is not present in the United States for 183 days or more in the taxable year
of the sale or other disposition of the SAILS or the gain is not attributable
to a fixed place of business maintained by such individual in the United
States.
BACKUP WITHHOLDING AND INFORMATION REPORTING
A holder of the SAILS may be subject to information reporting and to backup
withholding at a rate of 31% of certain amounts paid to the holder unless such
holder provides proof of an applicable exemption or a correct taxpayer
identification number, and otherwise complies with applicable requirements of
the backup withholding rules of the IRS. Any amounts withheld under the backup
withholding rules are not an additional tax and may be refunded or credited
against the U.S. Holder's U.S. federal income tax liability, provided the
required information is furnished to the IRS.
S-22
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated , 1997 (the "Underwriting Agreement") the underwriters
named below (the "Underwriters") for whom Credit Suisse First Boston
Corporation, Bear, Stearns & Co. Inc., J.P. Morgan Securities Inc., Lehman
Brothers Inc. and Salomon Brothers Inc are acting as representatives (the
"Representatives"), have severally but not jointly agreed to purchase from
Ralston the following respective numbers of SAILS:
<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SAILS
----------- ---------------
<S> <C>
Credit Suisse First Boston Corporation...................
Bear, Stearns & Co. Inc..................................
J.P. Morgan Securities Inc...............................
Lehman Brothers Inc. ....................................
Salomon Brothers Inc.....................................
----
Total..................................................
====
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all of the SAILS offered hereby (other than those shares
covered by the over-allotment option described below), if any are purchased.
The Underwriting Agreement provides that, in the event of a default by an
Underwriter, in certain circumstances the purchase commitments of the non-
defaulting Underwriters may be increased or the Underwriting Agreement may be
terminated.
Ralston has granted to the Underwriters an option, expiring on the close of
business on the 30th day after the date of this Prospectus Supplement, to
purchase up to additional SAILS at the initial public offering price, less
the underwriting discounts and commissions, all as set forth on the cover page
of this Prospectus Supplement. Such option may be exercised only to cover
over-allotments in the sale of the SAILS. To the extent such option is
exercised, each Underwriter will become obligated, subject to certain
conditions, to purchase approximately the same percentage of the additional
SAILS as it was obligated to purchase pursuant to the Underwriting Agreement.
Ralston has been advised by the Representatives that the Underwriters
propose to offer the SAILS offered hereby to the public initially at the
public offering price set forth on the cover page of this Prospectus
Supplement and through the Representatives to certain dealers at such price
less a concession of $ per share, and the Underwriters and such dealers may
allow a discount of $ per share on sales to certain other dealers. After
the initial public offering, the public offering price and concession and
discount to dealers may be changed by the Representatives.
Ralston, IBC and IBC's officers and directors, including Mr. Stiritz and Mr.
Elsesser, have agreed that they will not issue, sell, offer, agree to sell,
pledge or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Securities Act relating to any
additional SAILS or shares of IBC Common Stock, any options, warrants or other
rights to purchase any shares of IBC Common Stock, or securities convertible
into, exercisable or exchangeable for any shares of IBC Common Stock without
the prior written consent of Credit Suisse First Boston Corporation for a
period of 90 days from the date of this Prospectus Supplement, except (i)
sales of IBC Common Stock by Ralston to IBC or (ii) options granted and IBC
Common Stock issued pursuant to employee benefit plans and stock option plans
existing on the date of this Prospectus Supplement.
S-23
<PAGE>
Ralston and IBC have agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act, or
contribute to payments which the Underwriters may be required to make in
respect thereof.
The Representatives, on behalf of the Underwriters, may engage in over-
allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Exchange Act. Over-
allotment involves syndicate sales in excess of the offering size, which
creates a syndicate short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed
a specified maximum. Syndicate covering transactions involve purchases of
SAILS in the open market after the distribution has been completed in order to
cover syndicate short positions. Penalty bids permit the Representatives to
reclaim a selling concession from a syndicate member when SAILS originally
sold by such syndicate member are purchased in a syndicate covering
transaction to cover syndicate short positions. Such stabilizing transactions,
syndicate covering transactions and penalty bids may cause the price of SAILS
to be higher than it would otherwise be in the absence of such transactions.
The SAILS will be a new issue of securities with no established trading
market. The NYSE has approved the SAILS for listing, subject to official
notice of issuance, and the Underwriters intend to make a market in the SAILS,
subject to applicable laws and regulations. However, the Underwriters are not
obligated to do so and any such market-making may be discontinued at any time
at the sole discretion of the Underwriters without notice. Accordingly, no
assurance can be given as to the liquidity of such market.
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the SAILS in Canada is being made only on a private
placement basis exempt from the requirement that Ralston prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of SAILS are effected. Accordingly, any resale of the SAILS in Canada
must be made in accordance with applicable securities laws which will vary
depending on the relevant jurisdiction, and which may require resales to be
made in accordance with available statutory exemptions or pursuant to a
discretionary exemption granted by the applicable Canadian securities
regulatory authority. Purchasers are advised to seek legal advice prior to any
resale of the SAILS.
REPRESENTATIONS OF PURCHASERS
Each purchaser of SAILS in Canada who receives a purchase confirmation will
be deemed to represent to Ralston and the dealer from whom such purchase
confirmation is received that (i) such purchaser is entitled under applicable
provincial securities laws to purchase such SAILS without the benefit of a
prospectus qualified under such securities laws, (ii) where required by law,
that such purchaser is purchasing as principal and not as agent, and (iii)
such purchaser has reviewed the text above under "Resale Restrictions."
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available,
including common law rights of action for damages or rescission or rights of
action under the civil liability provisions of the U.S. federal securities
laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be
possible for Canadian purchasers to effect service of process within Canada
S-24
<PAGE>
upon the issuer or such persons. All or a substantial portion of the assets of
the issuer and such persons may be located outside of Canada and, as a result,
it may not be possible to satisfy a judgment against the issuer or such
persons in Canada or to enforce a judgment obtained in Canadian courts against
such issuer or persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of SAILS to whom the Securities Act (British Columbia) applies
is advised that such purchaser is required to file with the British Columbia
Securities Commission a report within ten days of the sale of any SAILS
acquired by such purchaser pursuant to this offering. Such report must be in
the form attached to British Columbia Securities Commission Blanket Order BOR
#95/17, a copy of which may be obtained from Ralston. Only one such report
must be filed in respect of SAILS acquired on the same date and under the same
prospectus exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of SAILS should consult their own legal and tax advisers
with respect to the tax consequences of an investment in the SAILS in their
particular circumstances and with respect to the eligibility of the SAILS for
investment by the purchaser under relevant Canadian legislation.
LEGAL OPINIONS
The validity of the SAILS will be passed upon for Ralston by James M.
Neville, Vice President, General Counsel and Assistant Secretary of Ralston.
Certain tax matters with respect to the SAILS will be passed upon for Ralston
by Bryan Cave LLP, St. Louis, Missouri. Certain legal matters will be passed
upon for the Underwriters by Simpson Thacher & Bartlett (a partnership which
includes professional corporations), New York, New York. Simpson Thacher &
Bartlett will rely on the opinion of James M. Neville as to certain matters of
Missouri law.
S-25
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+THE INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION. A REGISTRATION +
+STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND +
+EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY +
+BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. +
+THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF +
+AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE +
+IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO +
+REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PRELIMINARY PROSPECTUS DATED MAY 29, 1997
$400,000,000
Ralston Purina Company
Debt Securities and Warrants to Purchase Debt Securities
-----------
Ralston Purina Company (the "Company") may offer from time to time in one or
more series, either jointly or separately, for proceeds of up to $400,000,000
(or the equivalent in one or more foreign currencies or composite currencies,
including European Currency Units ("ECU")), of debt securities, including
debt securities exchangeable at maturity for securities of the Company or
another issuer (the "Debt Securities") or warrants to purchase Debt
Securities (the "Warrants"). The Debt Securities and Warrants may be
offered directly, or through agents designated from time to time, or
through broker-dealers or underwriters also to be designated. The Debt
Securities and Warrants (collectively, the "Offered Securities") may be
offered separately or as units with other securities, in separate
series, in amounts, at prices, and on terms, to be determined at the
time of sale and to be set forth in a supplement to this Prospectus
(a "Prospectus Supplement").
The designation, the specific aggregate principal amount, denominations,
offering price, maturity, interest rate (which may be fixed or variable) and
time of payment of interest, if any, the coin or currency in which principal,
premium, if any, and interest, if any, will be payable, conversion, exchange,
redemption and sinking fund provisions, if any, of the Debt Securities, the
duration, offering price, if any, exercise price and detachability of any
Warrants, the name of each agent, broker-dealer, underwriter or other
purchaser, if any, in connection with the sale of the Offered Securities
and any listing on a securities exchange are set forth in the accompanying
Prospectus Supplement.
If an agent of the Company or a broker-dealer, underwriter or other purchaser
is involved in the sale of the Offered Securities in respect of which this
Prospectus is being delivered, the agent's commission or broker-dealer's or
underwriter's discount will be set forth in, or may be calculated from, the
Prospectus Supplement. The net proceeds to the Company will be the
purchase price less applicable commission in the case of a sale through
an agent, the purchase price in the case of a broker-dealer or other
purchaser or the public offering price less discount in the case of an
underwriter less, in each case, other issuance expenses. See "Plan of
Distribution" for possible indemnification arrangements for agents,
broker-dealers, underwriters and other purchasers.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------
The date of the Prospectus is , 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other informational documents
with the Securities and Exchange Commission (the "Commission"). Such documents
can be inspected and copied at the public reference facilities maintained by
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549 and at the following regional offices of the
Commission: Seven World Trade Center, 13th Floor, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such materials can be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Commission also maintains an Internet site on the World Wide Web at
http://www.sec.gov that contains reports, proxy statements and other
information regarding the Company. Such documents can also be inspected at the
offices of The New York Stock Exchange, Inc., 20 Broad Street, New York, N.Y.
10005, the Chicago Stock Exchange, 440 South LaSalle Street, Chicago, Illinois
60605, and The Pacific Stock Exchange, Incorporated, 301 Pine Street, San
Francisco, California 94104.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the securities offered hereby. This Prospectus
omits certain of the information contained in the Registration Statement, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the
securities offered hereby. Any statements contained herein concerning the
provisions of any document are not necessarily complete, and in each instance
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, heretofore filed with the Commission by the Company
under the Exchange Act, are incorporated herein by reference:
(i) Annual Report on Form 10-K for the fiscal year ended September 30,
1996;
(ii) Quarterly Report on Form 10-Q for the fiscal quarters ended December
31, 1996 and March 31, 1997; and
(iii) Current Report on Form 8-K dated May 23, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Offered Securities shall be deemed to be
incorporated in this Prospectus by reference and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon written or oral request of such person, a
copy of any documents incorporated herein by reference (other than exhibits to
such documents unless such exhibits are specifically incorporated by reference
in such documents). Such a request may be directed in writing to the Investor
Relations Department, Ralston Purina Company, Checkerboard Square, St. Louis,
Missouri 63164 or by telephone to (314) 982-2374.
2
<PAGE>
RALSTON PURINA COMPANY
The Company, incorporated in Missouri in 1894, is the world's largest
producer of dry dog and dry and soft-moist cat foods. The Company's pet foods
are sold under the PURINA name, including DOG CHOW, CAT CHOW and numerous other
dog and cat food brands. The Company is also a significant manufacturer of
primary batteries, rechargeable batteries and battery-powered lighting
products, principally under the trademarks EVEREADY and ENERGIZER. The Company
is also a major producer of other pet products, including cat box filler (under
the GOLDEN CAT and TIDY CAT names), dietary soy protein, fiber food ingredients
and polymer products, and, outside the United States, feeds for livestock and
poultry. The Company maintains its principal executive offices at Checkerboard
Square, St. Louis, Missouri 63164, Tel. (314) 982-1000.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the Offered
Securities and Warrants will be added to the general funds of the Company and
may be used for general corporate purposes, including possible repayment of
debt, future acquisitions, capital expenditures, repurchase of the Company's
stock, and such other purposes as may be specified in the Prospectus
Supplement.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for the
Company for the periods indicated (dollars in millions):
<TABLE>
<CAPTION>
QUARTER
ENDED YEAR ENDED SEPTEMBER 30
MARCH 31 ---------------------------
1997 1996 1995 1994(A) 1993 1992
-------- ---- ---- ------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges (b).... 3.8 3.3 2.9 2.4 2.8 2.7
=== === === === === ===
</TABLE>
- --------
(a) Excluding provisions for restructuring of the Company's battery and bakery
operations in the year ended September 30, 1994. Earnings before income
taxes, extraordinary item and fixed charges were $766.1 million and the
ratio of earnings to fixed charges was 2.7.
(b) For the purpose of this ratio, "Earnings" consists of earnings before
income taxes, equity earnings, extraordinary items (1992, 1993, 1994, 1995
and 1996), cumulative effect of accounting changes (1993) and "fixed
charges." "Fixed charges" consist of preferred stock dividends, interest
and amortization of debt discount and expense on all indebtedness, and a
portion of net rental expense representative of the interest factor.
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description 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 and the extent, if any, to which such general provisions
do not apply to such Debt Securities will be described in the Prospectus
Supplement relating to such Debt Securities.
The Debt Securities will be issued in one or more series under an Indenture,
dated as of May 26, 1995, between the Company and The First National Bank of
Chicago as Trustee. (Such Indenture, as it may be supplemented or amended from
time to time is hereinafter referred to as the "Indenture"). A copy of the
Indenture has been included as an exhibit to the Registration Statement of
which this Prospectus is a part. 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 the provisions of the
Indenture, including the definition therein of certain terms. Whenever
particular Sections, Articles or defined terms of the Indenture are referred
to, it is intended that such Sections, Articles or defined terms shall be
incorporated herein by reference.
GENERAL
The Indenture does not limit the amount of Debt Securities which can be
issued thereunder and provides that Debt Securities of any series may be
issued thereunder up to the aggregate principal amount which may be authorized
from time to time by the Company. The Indenture does not limit the amount of
other indebtedness or securities which may be issued by the Company. All Debt
Securities will be unsecured and will rank pari passu with all other unsecured
and unsubordinated indebtedness of the Company, unless they are specifically
designated as subordinated.
Reference is made to the Prospectus Supplement for the following terms to
the extent they are applicable to the Debt Securities offered thereby: (i)
designation, aggregate principal amount and denomination; (ii) the purchase
price of such offered Debt Securities (expressed as a percentage of the
principal amount thereof); (iii) date or dates of maturity; (iv) currency or
currencies for which Debt Securities may be purchased and currency or
currencies in which principal of and any interest may be payable; (v) if the
currency for which Debt Securities may be purchased or in which principal of
and any interest may be payable is at the purchaser's election, the manner in
which such an election may be made; (vi) interest rate or rates (and the
method by which such rate or rates will be determined) and date or dates on
which interest will begin to accrue; (vii) the times at which interest will be
payable and regular record dates for interest payment dates; (viii) the period
or periods, if any, within which, and the price or prices at which, such
Offered Securities may be redeemed at the option of the Company or otherwise;
(ix) any mandatory or optional sinking fund or analogous provisions; (x) the
terms and conditions, if any, upon which the Debt Securities may be
convertible into or exchanged for common stock, preferred stock, other Debt
Securities, or warrants for Debt Securities, preferred stock, common stock or
indebtedness or other securities of any kind of the Company or any other
issuer or obligor and the terms and conditions upon which such conversion or
exchange shall be effected, including the initial conversion or exchange price
or rate, the conversion or exchange period, and any other additional
provisions, (xi) federal income tax consequences; (xii) whether such offered
Debt Securities are to be issued in whole or in part in the form of one or
more global Debt Securities ("Global Securities") and, if so, the identity of
the depositary, if any, for such Global Security or Securities; (xiii) whether
the provisions of the Indenture relating to the defeasance of Debt Securities
shall apply to the Offered Securities; and (xiv) any other specific terms of
the Securities.
REGISTRATION, PAYMENT AND DENOMINATIONS
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Debt Securities will be issued only in fully registered form without
coupons. Principal and interest will be payable, and the Debt Securities will
be transferable, at the office or offices or agency or agencies maintained by
the Company for such purposes, provided that payment of interest on any Debt
Securities may be made at the option of the Company by check mailed to the
registered holders. Interest will be payable on any interest payment date to
the persons in whose
4
<PAGE>
name the Debt Securities are registered at the close of business on the record
date with respect to such interest payment date. Unless otherwise specified in
the Prospectus Supplement and except as provided in the Indenture, if the
interest payment date is the first day of a calendar month, the record date
will be the fifteenth day of the next preceding calendar month or, if such
interest payment date is the fifteenth day of a calendar month, the record
date will be the first day of such calendar month, whether or not such record
date is a Business Day.
The Debt Securities offered hereby will be issued in denominations of $1,000
or any whole multiple of $1,000 or the equivalent thereof in a foreign
denominated or composite currency or in ECUs, unless otherwise specified in
the Prospectus Supplement (Section 2.7). 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 2.8).
Debt Securities may also be issued under the Indenture upon the exercise of
Warrants issued by the Company. See "Description of Warrants".
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on
behalf of, a depositary (the "Depositary") identified in the Prospectus
Supplement relating to such series. Each Global Security shall be registered
in the name of the Depositary for such Global Security or its nominee (Section
2.14). Unless and until it is exchanged in whole or in part for the individual
Debt Securities represented thereby, a Global Security may not be transferred
except as a whole by the Depositary for such Global Security to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or any such nominee
to a successor Depositary for such series or a nominee of such successor
Depositary (Section 2.14).
The specific terms of the depositary arrangement with respect to any Global
Securities will be described in the Prospectus Supplement relating to such
series. The Company anticipates that the following provisions will apply to
all depositary arrangements.
Upon the issuance of a Global Security, the Depositary or its nominee will
credit the accounts of persons holding Debt Securities through it with the
respective principal amounts of the Debt Securities represented by such Global
Security. Such accounts shall be designated by the underwriters with respect
to Debt Securities placed by underwriters for the Company. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the Depositary ("participants") or persons that may hold
interests through participants. Ownership of beneficial interests by
participants in a Global Security will be shown on and the transfer of that
ownership interest will be effected only through, records maintained by the
Depositary, its nominee (with respect to interests of participants) for such
Global Security and on the records of participants (with respect to interests
of persons other than participants). The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interest in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for the purposes of receiving
payment on the Debt Security receiving notices and for all other purposes
under the Indenture governing such Debt Securities. Except as provided above,
owners of beneficial interests in a Global Security will not be entitled to
have Debt Securities of the series represented by such Global Security
registered in their names and will not receive or be entitled to receive
physical delivery of Debt Securities of such series in definitive form and
will not be considered the owners or holders thereof under the Indenture
governing such Debt Securities.
Any payment of principal, premium or interest on Debt Securities registered
in the name of a Depositary or its nominee represented by any such Global
Security will be made to the Depositary or its nominee, as the case
5
<PAGE>
may be, as the sole registered owner of the Global Security representing such
Debt Securities. None of the Company, the Trustee, any agent of the Company or
the Trustee or any underwriter will have any responsibility or liability for
any aspect of the Depositary's records relating to or payments made on account
of beneficial ownership interests in a Global Security representing any Debt
Securities or for maintaining, supervising or reviewing any of the
Depositary's records relating to such beneficial ownership interests.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest,
will credit immediately participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security as shown on the records of such Depositary or its
nominee. The Company also expects that payments by participants to owners of
beneficial interests in a Global Security held through such participants will
be governed by standing instructions and customary practices as is now the
case with securities held for customer accounts registered in "street name",
and will be the sole responsibility of such participants.
A Global Security may not be transferred except as a whole by the Depositary
to a nominee of the Depositary, except as otherwise provided in the Indenture.
A Global Security representing Debt Securities is exchangeable only if (x) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Security or if at any time the Depositary ceases to
be a clearing agency registered under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and the Company fails to appoint a successor
Depositary within 90 days or (y) the Company in its sole discretion determines
that such Global Security shall be exchangeable or (z) there shall have
occurred and be continuing an Event of Default or an event which with the
giving of notice or lapse of time or both would constitute an Event of Default
with respect to the Debt Securities represented by such Global Security. Any
Global Security that is exchangeable pursuant to the preceding sentence shall
be exchangeable for certificates in definitive form representing Debt
Securities issuable in such denominations and in such names as the Depositary
holding such Global Security shall direct. Subject to the foregoing, the
Global Security is not exchangeable, except for a Global Security of like
denomination to be registered in the name of the Depositary or its nominee.
CERTAIN COVENANTS
Limitations on Liens. The Company covenants that it will not have, nor will
it permit any Domestic Subsidiary (defined as a Subsidiary the majority of the
operating assets of which are located within, and the principal business of
which is carried on in, the United States of America, other than a subsidiary
engaged primarily in the business of purchasing accounts receivable, making
loans and advances against accounts receivable and chattels and related types
of financing or engaged primarily in the business of owning, developing or
leasing real property (Section 1.1)) to have, any lien on its properties or
assets or upon any income or profits therefrom without equally and ratably
securing the Debt Securities. This restriction does not apply to certain
permitted liens, including (a) liens on property existing at the time of
acquisition thereof and certain purchase money mortgages; (b) liens on
property of any corporation existing at the time such corporation becomes a
Domestic Subsidiary; (c) liens existing as of the date of the Indenture; (d)
liens which secure debt owing to the Company or a Domestic Subsidiary by a
Domestic Subsidiary; (e) liens arising from assignments of moneys due under
contracts within the United States; (f) liens on property created in
contemplation of the sale or disposition of such property provided that after
120 days from the creation of such lien such property shall not be owned by
the Company or any Domestic Subsidiary and any indebtedness secured by such
mortgage shall be without recourse to the Company or any Domestic Subsidiary;
(g) liens arising from judgments being appealed and from certain pledges and
deposits; and (h) any extension, renewal or replacement of any lien referred
to in the foregoing clauses (a) through (g), inclusive (Section 3.6).
Limitations on Sale and Lease-back Transactions. The Company covenants that
it will not enter, nor will it permit any Domestic Subsidiary to enter, into
any sale and lease-back transactions involving any Principal Property (as
defined), other than a sale by a Domestic Subsidiary to the Company and other
than transactions for temporary periods not exceeding five years by the end of
which period it is intended that the use of the leased
6
<PAGE>
property by the lessee will be discontinued, unless the Company, within 120
days after the transfer of title to such Principal Property, applies to the
redemption of Debt Securities at the then applicable optional redemption price
or the redemption of other pari passu indebtedness maturing more than 12
months after its creation an amount equal to the net proceeds received by the
Company or such Domestic Subsidiary upon such sale (Section 3.7). Under the
Indenture, a Principal Property is defined as a battery, protein or pet food
manufacturing plant owned by the Company or a Subsidiary as of May 26, 1995,
(and any future additions or improvements thereto) and located within the
United States of America (Section 1.1).
Exempted Transactions. Notwithstanding the foregoing provisions, the Company
or any Domestic Subsidiary may create liens on its property or assets without
equally and ratably securing the Debt Securities or enter into sale and lease-
back transactions involving a Principal Property without redeeming Debt
Securities or other indebtedness if, after giving effect thereto, the
aggregate amount of indebtedness of the Company and its Domestic Subsidiaries
secured by liens otherwise prohibited plus the aggregate amount of
Attributable Debt (defined as the present value, computed by discounting at
the rate of interest per annum borne by the offered Debt Securities, of the
obligation of a lessee for net rental payments during the remaining term of
any lease) in respect of such sale and lease-back transactions does not exceed
5% of the Consolidated Net Tangible Assets (defined as total assets less (a)
all liabilities except (i) notes payable; (ii) current maturities of long-term
debt; (iii) current maturities of obligations under capital leases; (iv) long-
term debt and long-term obligations under capital leases; and (b) goodwill and
intangible assets) of the Company and its Domestic Subsidiaries (Sections 3.6
and 3.7).
EVENTS OF DEFAULT
An Event of Default with respect to any series of Debt Securities is defined
in the Indenture as being: (a) default for 30 days in payment of any
installment of interest on the Debt Securities of such series; (b) default in
the payment of any principal on the Debt Securities of such series; (c)
default by the Company in payment of any sinking fund installment with respect
to such series of Debt Securities; (d) default by the Company in performance
of any of the covenants or warranties in the Indenture contained therein for
the benefit of the Debt Securities of such series which shall not have been
remedied for a period of 90 days after written notice to the Company by the
Trustee or to the Company and the Trustee by the Holders of not less than 25%
in principal amount of the Debt Securities of such series then outstanding;
and (e) certain events of bankruptcy, insolvency or reorganization of the
Company (Section 5.1). No Event of Default described in clause (a), (b), (c)
or (d) above with respect to a particular series of Debt Securities
necessarily constitutes an Event of Default with respect to any other series
of Debt Securities.
The Indenture provides that if an Event of Default under clause (a), (b),
(c) or (d) above (but only if, in the case of clause (d), the Event of Default
is with respect to less than all series of Debt Securities then outstanding)
shall have occurred and be continuing with respect to one or more series of
the Debt Securities, either the Trustee or the Holders of not less than 25% in
aggregate principal amount of the then outstanding Debt Securities of the
series affected by such Event of Default (each such series treated as a
separate class) may declare the principal of all the Debt Securities of such
series, together with accrued interest, to be due and payable immediately. If
an Event of Default under clause (d) (if the Event of Default under clause (d)
is with respect to all of the series of Debt Securities then outstanding), or
(e) above shall have occurred and be continuing, either the Trustee or the
Holders of not less than 25% in the aggregate principal amount of all the Debt
Securities of such series then outstanding (each such series treated as one
class), may declare the principal of all the Debt Securities in such series,
together with accrued interest, to be due and payable immediately. Upon
certain conditions such declaration (including a declaration caused by a
default in the payment of principal or interest, the payment for which has
subsequently been provided) may be annulled by the Holders of a majority in
principal amount of the Debt Securities of the series then outstanding (each
such series treated as a separate class) or all Debt Securities treated as one
class, as the case may be, as were entitled to declare such default. In
addition, past defaults may be waived by the Holders of a majority in
principal amount of the Debt Securities of the series then outstanding (each
such series treated as a separate class) or all Debt Securities treated as one
class, as the case may be, as
7
<PAGE>
were entitled to declare such default, except a default in the payment of the
principal of or interest on the Debt Securities or in respect of a covenant or
provision of the Indenture which cannot be modified or amended without the
approval of the Holder of each Debt Security so affected (Sections 5.1 and
5.10).
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during default to act with the required standard of care,
to be indemnified by the Holders of Debt Securities before proceeding to
exercise any right or power under the Indenture at the request of the Holders
of such Debt Securities (Section 6.2). The Indenture also provides that the
Holders of a majority in principal amount of the outstanding Debt Securities
of all series affected (each series treated as a separate class) may 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 such series (Section 5.9).
The Indenture contains a covenant that the Company will file annually with
the Trustee a certificate as to the absence of any default or specifying any
default that exists (Section 3.5).
SATISFACTION AND DISCHARGE
The Indenture shall be satisfied and discharged with respect to any series
of Debt Securities when: (1) either (A) all Debt Securities of that series
theretofore authenticated and delivered have been delivered to the Trustee
canceled or for cancellation; or (B) all Debt Securities of that series not
theretofore delivered to the Trustee canceled or for cancellation (i) have
become due and payable, or (ii) will become due and payable at their maturity
within one year, or (iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee and the Company, in the case of (i), (ii) or (iii)
above, has deposited or caused to be deposited with the Trustee an amount
sufficient to pay and discharge the entire indebtedness of such Debt
Securities for principal and interest to the date of such deposit (in the case
of Debt Securities which have become due and payable), or to the maturity or
redemption date, as the case may be; (2) the Company has paid or caused to be
paid all other sums payable under the Indenture by the Company with respect to
the Debt Securities of such series; and (3) the Company has delivered to the
Trustee an officer's certificate and an Opinion of Counsel each stating that
all conditions precedent provided in the Indenture relating to the
satisfaction and discharge thereof with respect to the Debt Securities of such
series have been complied with (Section 10.1).
DEFEASANCE
Except as may otherwise be set forth in the Prospectus Supplement relating
to a series of Debt Securities, the Indenture provides that the Company, at
its option, (i) 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, replace stolen,
lost or mutilated Debt Securities of such series, maintain paying agencies and
hold moneys for payment in trust) or (ii) will not be subject to provisions of
the Indenture concerning limitations upon liens and sale and lease-back
transactions, and consolidation, merger and sale or lease of assets (and any
other obligation of the Company or restrictive covenant applicable to such
Debt Securities as specified in the applicable Prospectus Supplement), in each
case if the Company deposits with the Trustee, in trust, money or U.S.
Government Obligations (as defined) (or another comparable instrument with
respect to the currency of the Debt Securities as selected by the Company with
the consent of the Trustee) which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money in an
amount sufficient to pay all the principal and interest on the outstanding
Debt Securities of such series on the dates such payments are due in
accordance with the terms of such Debt Securities. To exercise such option,
the Company is required, among other things to deliver to the Trustee (1) an
opinion of counsel or a ruling published by the Internal Revenue Service to
the effect that the deposit and related defeasance would not cause the Holders
of the Debt Securities of such series to recognize income, gain or loss for
United States income tax purposes and (2) if the Debt Securities of such
series are then listed on any national securities exchange, an Opinion of
Counsel or a letter or other document from such exchange, to the effect that
such Securities would not be delisted from such exchange as a result of the
exercise of such option (Section 13.2).
8
<PAGE>
MODIFICATION, WAIVER AND MEETINGS
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than 50% in principal amount of
the Debt Securities of all series then outstanding affected by such
supplemental indenture (treated as one class), to execute supplemental
indentures adding any provisions to or changing or eliminating any of the
provisions of the Indenture or modifying the rights of the Holders of Debt
Securities of each such series, except that no such supplemental indenture
may, without the consent of the Holders of all outstanding Debt Securities (i)
change the final maturity of the principal of, or installment of interest, if
any, on, any Debt Security, or reduce the principal amount thereof or the
interest thereon or any amount payable upon redemption thereof, or change the
maturity of or reduce the amount of any payment to be made with respect to any
Coupon, or change the currency or currencies in which the principal of or
interest on such Debt Security is denominated or payable, or reduce the amount
of the principal of a Discount Security that would be due and payable upon a
declaration of acceleration of the maturity thereof, or adversely affect the
right of repayment or repurchase, if any, at the option of the Holder, or
reduce the amount of, or postpone the date fixed for, any payment under any
sinking fund or analogous provisions for any Debt Security, or impair the
right to institute suits for the enforcement of any payment on or after the
maturity thereof (or, in the case of redemption, on or after the redemption
date); or (ii) reduce the percentage in principal amount of the outstanding
Debt Securities of any series, the consent of the Holders of which is required
for any supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of the Indenture
or certain defaults thereunder and their consequences provided for in the
Indenture (Section 8.2).
The Holders of a majority in aggregate principal amount of the outstanding
Debt Securities of any series may on behalf of all Holders of the Debt
Securities of such series (i) waive any past default under the Indenture with
respect to such Debt Securities, except a default in the payment of principal
or interest or a covenant or provision that cannot be modified or amended
without the consent of the Holders of each outstanding Debt Security of such
series, and (ii) waive compliance by the Company with certain provisions of
the Indenture, including the provisions concerning limitations upon liens and
sale and lease-back transactions, in each case with respect to the Debt
Securities of such series (Sections 5.10 and 3.9).
The Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series (Section 7.6). A meeting may be called at any time
by the Trustee, and also, upon request, by the Company or the Holders of at
least 25% in aggregate principal amount of the outstanding Debt Securities of
such series or of all series, as the case may be (Section 7.6(c)). Any
resolution passed or decision taken at any meeting of Holders of Debt
Securities of any series duly held in accordance with the Indenture will be
binding on all Holders of Debt Securities of that series (Sections 7.5 and
7.6).
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company covenants that it will not merge or consolidate or sell or
convey all or substantially all of its assets unless the successor corporation
is the Company or is a domestic corporation which assumes the Company's
obligations on the Debt Securities and under the Indenture, and after giving
effect to such transaction the Company or the successor corporation would not
be in default under the Indenture (Section 9.1).
CONCERNING THE TRUSTEE
The First National Bank of Chicago is the trustee under the Indenture with
regard to the 7 7/8% Debentures due 2025 and the 7 3/4% Debentures due 2015
previously issued, and also an Indenture dated as of January 31, 1992, with
the Company, with regard to the following securities previously issued: (i) 8
5/8% Debentures due 2022 and (ii) 8 1/8% Debentures due 2023. The Company
maintains a deposit account and conducts other banking transactions with the
Trustee in the ordinary course of business.
GOVERNING LAW
The Indenture and each Debt Security shall be deemed to be contracts under
the law of the State of New York and for all purposes shall be construed in
accordance with the law of such state.
9
<PAGE>
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities. 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 are to be issued under Warrant Agreements 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. A copy of the form of
Warrant Agreement, including the form of Warrant Certificate representing the
Warrants, will be filed as an exhibit to a current report on Form 8-K of the
Company with respect to each offering of the Debt Securities and incorporated
herein by reference. The following summaries of certain provisions of the form
of Warrant Agreement and Warrant Certificate do not purport to be complete and
are subject to, and are qualified in their entirety by reference to, all the
provisions of the Warrant Agreement and the Warrant Certificate.
GENERAL
If Warrants are offered, the Prospectus Supplement will describe the Warrant
Agreement and the terms of the Warrants, including the following: (i) the
offering price; (ii) the currency for which Warrants may be purchased; (iii)
the designation, aggregate principal amount, currency and terms of the Debt
Securities purchasable upon exercise of the Warrants; (iv) if applicable, the
designation and terms of the Debt Securities with which the Warrants are
issued and the number of Warrants issued with each such Debt Security; (v) if
applicable, the date on and after which the Warrants and the related Debt
Securities will be separately transferable; (vi) the principal amount of Debt
Securities purchasable upon exercise of one Warrant and the price and currency
at which such principal amount of Debt Securities may be purchased upon such
exercise; (vii) the date on which the right to exercise the Warrants shall
commence and the date (the "Expiration Date") on which such right shall
expire; (viii) federal income tax consequences; (ix) whether the Warrants
represented by the Warrant Certificates will be issued in registered or bearer
form; and (x) any other terms of the Warrants.
Warrant Certificates may be exchanged for new Warrant Certificates of
different denomination, 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. Prior to the exercise of their Warrants, holders of Warrants 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.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase such principal amount of
Debt Securities at such exercise price as shall in each case be set forth in,
or calculable from, the Prospectus Supplement relating to the Warrants.
Warrants may be exercised at any time up to 5:00 P.M. New York time on the
Expiration Date set forth in the Prospectus Supplement relating to such
Warrants. After the close of business on the Expiration Date (or such later
date to which such Expiration Date may be extended by the Company),
unexercised Warrants will become void.
Warrants may be exercised by delivery to the Warrant Agent of payment as
provided in the Prospectus Supplement of the amount required to purchase the
Debt Securities purchasable upon such exercise together with certain
information set forth on the reverse side of the Warrant Certificate. Warrants
will be deemed to have been exercised upon receipt of the exercise price,
subject to the receipt within five business days of the Warrant Certificate
evidencing such Warrants. Upon receipt of such payment and the Warrant
Certificate properly completed and duly executed at the corporate trust office
of the Warrant Agent or any other office indicated in the Prospectus
Supplement, the Company will, as soon as practicable, issue and deliver the
Debt Securities purchasable upon such exercise. 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 Warrants.
10
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities to or through underwriters,
dealers, or agents, and also may sell the Offered Securities to one or more
other purchasers or through a combination of any such methods of sale.
The Prospectus Supplement with respect to the Offered Securities sets forth
the terms of the offering (and, in certain circumstances, any reoffering),
including the name or names of any underwriters, agents or other purchasers,
the purchase price in respect of the Offered Securities, the proceeds to the
Company, any initial public offering price, any discounts, commissions and
other items constituting compensation from the Company and any discounts,
concessions or commissions allowed or reallowed or paid by any underwriters to
other dealers.
The distribution of the Offered Securities may be effected by one or more
agents, broker-dealers, underwriters or other purchasers from time to time in
one or more transactions in the over-the-counter market, in negotiated
transactions, or in a combination of such methods of sale, 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. If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of
sale. The Offered Securities may be offered to the public through underwriting
syndicates represented by managing underwriters or by underwriters without a
syndicate. Unless otherwise set forth in the Prospectus Supplement, the
obligations of an agent, broker-dealer, underwriter or other purchaser to
purchase Offered Securities will be subject to satisfaction of certain
conditions, and such underwriters will be obligated to purchase all such
Offered Securities if any are purchased. Any initial public offering price and
any discounts or concessions allowed or realized or paid to dealers may be
changed from time to time. The Offered Securities may be sold directly by the
Company or through agents designated by the Company from time to time. Any
agent involved in the offer or sale of the Debt Securities in respect of which
this Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the related Prospectus Supplement.
Unless otherwise indicated in the Prospectus Supplement, any agent will be
acting on a best efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company may authorize
underwriters, dealers or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase from the Company at the
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a future date. Such
contracts will be subject only to those conditions set forth in the Prospectus
Supplement and the Prospectus Supplement will set forth the commissions
payable for solicitation of such contracts.
Agents and underwriters may from time to time purchase and sell the Offered
Securities in the secondary market, but are not obligated to do so, and there
can be no assurance that there will be a secondary market for the Offered
Securities or liquidity in the secondary market if one develops. From time to
time, agents and underwriters may make a market in the Offered Securities.
Underwriters, agents and other purchasers who participate in the
distribution of the Offered Securities may be entitled under agreements which
may be entered into by the Company to indemnification by the Company against
certain liabilities, including liabilities under the Act, or to contribution
with respect to payments which the underwriters, agents or other purchasers
may be required to make in respect thereof. Such underwriters, agents and
other purchasers may be customers of, engage in transactions with, or perform
services for the Company in the ordinary course of business.
11
<PAGE>
LEGAL OPINIONS
The legality of the Offered Securities offered hereby will be passed upon
for the Company by James M. Neville, Vice President and General Counsel of
Ralston Purina Company, Checkerboard Square, St. Louis, Missouri 63164. At
April 30, 1997, Mr. Neville was the beneficial owner of 26,485 shares of
Common Stock of the Company. Additionally, as of April 30, 1997, 437 shares of
Common Stock, and 1485 shares of the Company's Series A ESOP Preferred Stock,
convertible under certain conditions into Common Stock, of the Company were
allocated to Mr. Neville's accounts under certain of the Company's benefit
plans.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Ralston Purina Company Annual Report on Form 10-K for the year ended September
30, 1996, have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm
as experts in auditing and accounting.
12
<PAGE>
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS SUPPLE-
MENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTA-
TION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY RALSTON OR ANY UN-
DERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER BY BUY ANY OF THE SECURITIES OF-
FERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH AN OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIR-
CUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF RALSTON SINCE SUCH DATE.
-----------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
The Offering............................................................. S-3
Risk Factors Relating to Sails........................................... S-4
Ralston Purina Company................................................... S-7
Ratio of Earnings to Fixed Charges....................................... S-7
Interstate Bakeries Corporation.......................................... S-8
Relationship between Ralston Purina Company and Interstate Bakeries
Corporation............................................................. S-9
Price Range of Interstate Bakeries Corporation Common Stock and
Dividends............................................................... S-10
Use of Proceeds.......................................................... S-11
Capitalization........................................................... S-11
Selected Financial Information........................................... S-12
Description of the Sails................................................. S-13
Certain United States Federal Income Tax Considerations.................. S-20
Underwriting............................................................. S-23
Notice to Canadian Residents............................................. S-24
Legal Opinions........................................................... S-25
PROSPECTUS
Available Information.................................................... 2
Incorporation of Certain Documents by Reference.......................... 2
Ralston Purina Company................................................... 3
Use of Proceeds.......................................................... 3
Ratio of Earnings to Fixed Charges....................................... 3
Description of Debt Securities........................................... 4
Description of Warrants.................................................. 10
Plan of Distribution..................................................... 11
Legal Opinions........................................................... 12
Experts.................................................................. 12
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[RALSTON LOGO]
,000,000 SAILS
Stock Appreciation Income Linked Securities (SAILS)
% Exchangeable Notes Due , 2000
PROSPECTUS SUPPLEMENT
CREDIT SUISSE FIRST BOSTON
BEAR, STEARNS & CO. INC.
J.P. MORGAN & CO.
LEHMAN BROTHERS
SALOMON BROTHERS INC
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth various expenses in connection with the sale
and distribution of the securities being registered, other than the
underwriting discounts and commissions. All amounts shown are estimates except
the Commission's registration fee.
<TABLE>
<S> <C>
Filing Fee--Securities and Exchange Commission....................... $ 0
Legal Fees........................................................... *
Auditor's Fees....................................................... *
NYSE Listing Fees.................................................... *
Printing and Engraving Fees.......................................... *
Transfer Agent & Registrar........................................... *
Miscellaneous........................................................ *
----
Total............................................................ $ *
====
</TABLE>
IBC will bear all of its legal and auditors' fees, transfer agent and
registrar fees and travel expenses and will be responsible for half of the
printing fees. In addition, IBC will reimburse Ralston for 50% of the filing
fees previously paid by Ralston. Ralston will bear responsibility for all
other fees in connection with the sale and distribution of the SAILS.
- --------
*To be filed by amendment
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 351.355 of the Missouri General and Business Corporation Law
("GBCL") and the Company's Restated Articles of Incorporation, the Company
must indemnify any person (other than a party plaintiff serving on his or her
behalf or in the right of the Company) who is or was a director, officer or
employee of the Company, or is or was serving at the request of the Company as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, to the maximum extent permitted by
law, against any and all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement, actually and reasonably incurred by such
person in connection with any civil, criminal, administrative or investigative
action, proceeding or claim (including an action by or in the right of the
Company), by reason of the fact that such person is or was serving in such
capacity, provided that such person's conduct is not finally adjudged to have
been knowingly fraudulent, deliberately dishonest or willful misconduct. The
Company's directors and executive officers also have indemnification
agreements with the Company pursuant to which the Company agrees to indemnify
such persons to the full extent authorized or permitted by the GBCL. The
agreements also provide for indemnification to the extent not covered by the
GBCL or insurance policies purchased and maintained by the Company (e.g. if
the GBCL is amended to change the scope of indemnification). Such
indemnification would be co-extensive with the indemnification currently
permitted by the GBCL as described above, but no indemnity would be paid (i)
in respect to remuneration paid to such person if it shall be finally adjudged
that such remuneration was in violation of law; (ii) on account of any suit
for an accounting of profits made from the purchase or sale by such person of
securities of the Company pursuant to the provision of Section 16(b) of the
Exchange Act or similar provision of any state or local statutory law; (iii)
on account of such person's conduct which is finally judicially adjudged to
have been knowingly fraudulent, deliberately dishonest or willful misconduct;
or (iv) if a final decision by a court having jurisdiction in the matter (all
appeals having been denied or none having been taken) shall determine that
such indemnification is not lawful.
The Company has directors' and officers' insurance which protects each
director or officer from liability for actions taken in their capacity as
directors or officers. This insurance may provide broader coverage for such
individuals than may be required by the provisions of the Company's Restated
Articles of Incorporation.
II-1
<PAGE>
The foregoing represents a summary of the general effect of Missouri law and
the Company's Restated Articles of Incorporation for purposes of general
description only. Additional information regarding indemnification of
directors and officers can be found in the Missouri statutes, the Company's
Restated Articles of Incorporation and its pertinent insurance contracts.
The Underwriting Agreement General Terms and Provisions filed as Exhibit 1
hereto provides for indemnification of the Company's directors and officers
against civil liabilities, including liabilities under the Securities Act of
1933.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
1 Form of Underwriting Agreement General Terms and Provisions.**
4(a) Form of Indenture is incorporated by reference from the Company's Form
S-3 Registration Statement, No. 33-59663 filed on May 26, 1995.
4(b) Form of supplemental indenture, dated as of June , 1997.**
4(c) Form of Note.*
4(d) Form of Debenture.*
4(e) Form of Extendible Note.*
4(f) Form of Warrant Agreement, including Form of Warrant.*
5 Opinion of James M. Neville, Vice President and General Counsel.
8 Opinion of Bryan Cave LLP as to certain tax matters.**
12 Statement and Computation Showing the Ratio of Earnings to Fixed
Charges.
23(a) Consent of Price Waterhouse LLP
23(b) Consent of James M. Neville, Vice President and General Counsel (in-
cluded in Exhibit 5 above).
23(c) Consent of Bryan Cave LLP (included in Exhibit 8 above).
24 Powers of Attorney (included on signature page on II-5).
25 Form T-1, Statement of Eligibility under the Trust Indenture Act of 1939
of The First National Bank of Chicago.
99 Stock Repurchase Agreement by and among Ralston Purina Company, VCS
Holding Company and Interstate Bakeries Corporation dated April 29,
1997.
</TABLE>
- --------
* The form of security with respect to each particular offering of securities
registered hereunder, and the form of Warrant Agreement, if any, will be
filed as an exhibit to a Current Report on Form 8-K of the Company and
incorporated by reference herein.
**To be filed by amendment.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(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, unless the information required to be included in such
post-effective amendment is contained in a periodic report filed by
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
and incorporated herein by reference;
(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
II-2
<PAGE>
deviation from the low or high and 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 aggreage, the changes in
volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(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 (i) and (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 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for purposes of determining any liability under the Securities
Act, 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.
(3) To remove from the registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing, 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 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.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
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.
II-3
<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 ST. LOUIS, STATE OF MISSOURI, ON MAY 29, 1997.
Ralston Purina Company
/s/ William P. Stiritz
By: _________________________________
WILLIAM P. STIRITZ,
CHAIRMAN OF THE BOARD AND CHIEF
EXECUTIVE OFFICER
Know all men by these presents, that each person whose signature appears
below constitutes and appoints J. M. Neville and T. L. Grosch, and each of
them, his or her true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully and to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do, or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW ON MAY 29, 1997 BY THE FOLLOWING
PERSONS IN THE CAPACITIES INDICATED.
SIGNATURE TITLE
/s/ William P. Stiritz Chairman of the Board,
- ------------------------------------- Chief Executive
WILLIAM P. STIRITZ Officer, and Director
/s/ James R. Elsesser Vice President and Chief
- ------------------------------------- Financial Officer
JAMES R. ELSESSER
/s/ Anita M. Wray Vice President and
- ------------------------------------- Controller
ANITA M. WRAY
/s/ David R. Banks Director
- -------------------------------------
DAVID R. BANKS
/s/ John H. Biggs Director
- -------------------------------------
JOHN H. BIGGS
II-4
<PAGE>
SIGNATURE TITLE
/s/ Donald Danforth, Jr. Director
- -------------------------------------
DONALD DANFORTH, JR.
/s/ William H. Danforth Director
- -------------------------------------
WILLIAM H. DANFORTH
/s/ David C. Farrell Director
- -------------------------------------
DAVID C. FARRELL
/s/ M. Darrell Ingram Director
- -------------------------------------
M. DARRELL INGRAM
/s/ Richard A. Liddy Director
- -------------------------------------
RICHARD A. LIDDY
/s/ John F. McDonnell Director
- -------------------------------------
JOHN F. MCDONNELL
Director
- -------------------------------------
W. PATRICK MCGINNIS
Director
- -------------------------------------
J. PATRICK MULCAHY
/s/ Katherine D. Ortega Director
- -------------------------------------
KATHERINE D. ORTEGA
II-5
<PAGE>
FORM OF
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------- -------
<C> <S>
1 Form of Underwriting Agreement General Terms and Provisions.**
4(a) Form of Indenture is incorporated by reference from the Company's Form
S-3 Registration Statement, No. 33-59663, filed on May 26, 1995.
4(b) Form of supplemental indenture, dated as of June , 1997.**
4(c) Form of Note.*
4(d) Form of Debenture.*
4(e) Form of Extendible Note.*
4(f) Form of Warrant Agreement, including Form of Warrant.*
5 Opinion of James M. Neville, Vice President and General Counsel.
8 Opinion of Bryan Cave LLP as to certain tax matters.**
12 Statement and Computation Showing the Ratio of Earnings to Fixed
Charges.
23(a) Consent of Price Waterhouse LLP.
23(b) Consent of James M. Neville, Vice President and General Counsel (in-
cluded in Exhibit 5 above).
23(c) Consent of Bryan Cave LLP (included in Exhibit 8 above).
24 Powers of Attorney (included on signature page on page II-5)
25 Form T-1, Statement of Eligibility under the Trust Indenture Act of
1939 of The First National Bank of Chicago.
99 Stock Repurchase Agreement by and among Ralston Purina Company, VCS
Holding Company and Interstate Bakeries Corporation dated April 29,
1997.
</TABLE>
- --------
* The form of security with respect to each particular offering of securities
registered hereunder, and the form of Warrant Agreement, if any, will be
filed as an exhibit to a Current Report on Form 8-K of the Company and
incorporated herein by reference.
** To be filed by amendment.
<PAGE>
EXHIBITS 5 and 23(b)
______________________
May 29, 1997
The Board of Directors
Ralston Purina Company
Checkerboard Square
St. Louis, Missouri 63164
Gentlemen:
I am Vice President, General Counsel and Assistant Secretary of Ralston
Purina Company. I have acted as counsel to the Company in connection with the
Registration Statement on Form S-3 to be filed by the Company with the
Securities and Exchange Commission on May 29, 1997, for the purpose of
registering under the Securities Act of 1933, $400,000,000 aggregate principal
amount of the Company's debt securities, including debt securities exchangeable
at maturity for securities of the Company or another issuer, that may be sold
from time to time pursuant to Rule 415 of the Securities and Exchange
Commission. In that capacity, I have examined such matters of fact and law as I
have deemed necessary or appropriate for the purpose of this opinion.
Based on the foregoing examination, I am of the opinion that the Indenture
incorporated by reference in the Registration Statement has been duly executed
by the parties thereto, and that when debt securities in any of the forms filed
as exhibits to the Registration Statement shall have been duly authorized and
executed by the Company pursuant to the terms of the Indenture, and such debt
securities have been duly authenticated in accordance with the Indenture and
duly delivered to and paid for by the purchasers thereof, the debt securities
will constitute valid and binding obligations of the Company.
The undersigned hereby consents to the filing of this Opinion as Exhibit
(5) to said Registration Statement, and to its use and to the reference to the
undersigned under the heading "Legal Opinion" in the said Registration
Statement.
Very truly yours,
James M. Neville
Vice President, General Counsel
and Assistant Secretary
<PAGE>
EXHIBIT 12
RALSTON PURINA COMPANY AND SUBSIDIARIES
STATEMENT AND COMPUTATION SHOWING THE RATIO
OF EARNINGS TO FIXED CHARGES
(dollars in millions)
<TABLE>
<CAPTION>
Six Months
Ended -----------------------------------------------
March 31 Year Ended September 30
-------------------------------------------------------------
1997 1996 1995 1994(a) 1993 1992
------ ------ ------ ------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Earnings Before
Extraordinary Item and
Cumulative Effect of
Accounting Changes $214.1 $361.7 $300.1 $218.4 $341.3 $320.7
Income Taxes 117.2 212.2 215.0 203.3 239.1 221.4
------ ------ ------ ------ ------ ------
331.3 573.9 515.1 421.7 580.4 542.1
Equity Company Adjustments:
Equity earnings, net of taxes (14.6) (11.6) (0.9)
Dividends received, net
of taxes 4.2 7.9
------ ------ ------ ------ ------ ------
320.9 570.2 514.2 421.7 580.4 542.1
------ ------ ------ ------ ------ ------
Fixed Charges:
Preferred stock
dividend, pre-tax 10.7 22.7 30.9 33.8 34.4 34.4
Interest incurred 92.1 196.2 202.2 223.0 241.3 246.9
Rentals 7.5 16.2 22.6 24.1 23.3 23.4
------ ------ ------ ------ ------ ------
Total fixed charges 110.3 235.1 255.7 280.9 299.0 304.7
------ ------ ------ ------ ------ ------
Less capitalized
interest and preferred
stock dividend (15.8) (28.6) (33.3) (36.4) (37.6) (38.4)
------ ------ ------ ------ ------ ------
Earnings Before Income
Taxes, Equity Earnings,
Extraordinary Item,
Cumulative Effect of
Accounting Changes and
Fixed Charges $415.4 $776.7 $736.6 $666.2 $841.8 $808.4
====== ====== ====== ====== ====== ======
Ratio of Earnings to
Fixed Charges (b) 3.8 3.3 2.9 2.4 2.8 2.7
====== ====== ====== ====== ====== ======
</TABLE>
- -------------------
(a) Excluding provisions for restructuring of the Company's battery and bakery
operations in the year ended September 30, 1994, earnings before income
taxes, extraordinary item and fixed charges were $766.1 and the ratio of
earnings to fixed charges was 2.7.
(b) For the purpose of this ratio, "Earnings" consists of earnings before
income taxes, equity earnings, extraordinary items (1992, 1993, 1994, 1995
and 1996), cumulative effect of accounting changes (1993) and "fixed
charges". "Fixed charges" consist of preferred stock dividends, interest
and amortization of debt discount and expense on all indebtedness, and a
portion of net rental expense representative of the interest factor.
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
November 1, 1996, which appears on page 27 of the Ralston Purina Company Annual
Report to Shareholders 1996, which is incorporated by reference in Ralston
Purina Company's Annual Report on Form 10-K for the year ended September 30,
1996. We also consent to the reference to us under the heading "Experts" in such
Prospectus.
PRICE WATERHOUSE LLP
Price Waterhouse LLP
One Boatmen's Plaza
St. Louis, Missouri
May 29, 1997
<PAGE>
EXHIBIT 25
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)
-----------------------------------
RALSTON PURINA COMPANY
(Exact name of obligor as specified in its charter)
Missouri 43-0470580
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
Checkerboard Square
St. Louis, Missouri 63164
(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 27th day of May, 1997.
The First National Bank of Chicago,
Trustee
By /s/ Richard D. Manella
Richard D. Manella
Vice President and Senior Counsel
* 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
May 27, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Ralston Purina
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 and Senior Counsel
4
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C>
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
---------
</TABLE>
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> <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>
<TABLE>
<CAPTION>
Legal Title of Bank: The First National Bank Call Date: 03/31/97
of Chicago ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Page RC-2
Ste 0303
City, State Zip: Chicago, IL 60670
<S> <C> <C> <C> <C>
FDIC Certificate No.: 0/3/6/1/8
---------
Schedule RC-Continued
Dollar Amounts in
Thousands Bil Mil Thou
-------------------------------------- ---------
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals
of columns A and C
from Schedule RC-E, 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. RCON 2840 63,621 15.a.
Treasury
b. Trading
Liabilities(from
Sechedule RC-D)...... RCFD 3548 5,872,831 15b.
16. Other borrowed money:
a. With original maturity of one year RCFD 2332 2,607,549 16.a.
or less
b. With original maturity of more RCFD 2333 322,414 16b.
than one year
17. Not applicable
18. Bank's liability on acceptance RCFD 2920 488,866 18.
executed and outstanding
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 RCFD 2948 49 ,833,637 21.
through 20)
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related RCFD 3838 0 23.
surplus
24. Common stock RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related RCFD 3839 2,944,244 25.
to preferred stock)
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 RCFD 3284 (1,712) 27.
translation adjustments
28. Total equity capital (sum of items 23 RCFD 3210 4,097,186 28.
through 27)
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 Number
<TABLE>
<CAPTION>
auditors as of any date
during 1996 . . . . . . .
. . . . . . . . . . . . .
. . . . . . . . . .. . .
. ....RCFD 6724 M.1.
<S> <C> <C> <C>
2
1 = Independent audit of the bank 4. = Directors' examination of the
conducted in accordance 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 5 = Review of the bank's financial
parent holding company 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 8 = No external audit work
bank conducted in
accordance with generally accepted auditing standards
</TABLE>
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.
6
<PAGE>
EXHIBIT 99
================================================================================
STOCK REPURCHASE AGREEMENT
by and among
RALSTON PURINA COMPANY,
VCS HOLDING COMPANY,
and
INTERSTATE BAKERIES CORPORATION
dated
April 29, 1997
================================================================================
<PAGE>
STOCK REPURCHASE AGREEMENT
THIS STOCK REPURCHASE AGREEMENT ("Repurchase Agreement") is dated as
of April 29, 1997, by and among RALSTON PURINA COMPANY, a Missouri corporation
("RPC"), VCS HOLDING COMPANY, a Delaware corporation ("VCS") (RPC and VCS being
collectively referred to as "Ralston"), and INTERSTATE BAKERIES CORPORATION, a
Delaware corporation ("IBC"). Capitalized terms not defined herein shall have
the meanings set forth in the Ralston and IBC Shareholders Agreement dated July
22, 1995 (the "Agreement"), as modified herein.
WHEREAS, the Agreement related to the acquisition by Ralston of
16,923,077 shares of common stock of IBC (referred to as the "IBC Equity" in
Section 11.13 of the Agreement) pursuant to the acquisition of Continental
Baking Company ("CBC");
WHEREAS, Ralston desires to exercise one of its Demand Registrations
to register a certain number of shares of the IBC Equity (the "Offered Shares")
in conjunction with Ralston's offering of between $360,000,000 and $400,000,000
of exchangeable notes (the "Notes"), which will be exchangeable at maturity
three years after issuance for the Offered Shares or cash (the "Notes
Transaction");
WHEREAS, pursuant to the Agreement, IBC has a right of First Offer
with respect to all, but not less than all, of the Offered Shares but has
notified Ralston of its waiver of such right with respect to the Offered Shares
that are transferred in exchange for the Notes; and
WHEREAS, notwithstanding IBC's waiver of its right to acquire all of
the Offered Shares, IBC desires to acquire from Ralston, and Ralston desires to
sell to IBC certain of the IBC Equity (not part of the Offered Shares) on the
terms and subject to the conditions as more fully set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows.
ARTICLE I
STOCK REPURCHASE OBLIGATION
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Section 1.1 The Stock Repurchase Obligation. Subject to any
restrictions contained in applicable laws, Ralston and IBC hereby agree that in
connection with the closing of
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the Notes Transaction, Ralston shall sell to IBC and IBC shall repurchase from
Ralston, 1,000,000 shares (the "Repurchase Shares") of the IBC Equity (other
than the Offered Shares) pursuant to the terms and conditions hereof (the
"Repurchase Obligation").
Section 1.2 Purchase Price. The aggregate purchase price (the "Purchase
Price") to be paid for all of the Repurchase Shares shall be (a) 1,000,000
multiplied by the initial price per share of the IBC Equity used to set the
exchange rate for the Notes; (b) such aggregate amount in (a) multiplied by .97;
(c) plus an amount equal to dividends declared on the Repurchase Shares but not
paid prior to the Closing Date.
Section 1.3 Closing of the Purchase. The closing of the purchase of the
Repurchase Shares shall occur at 10:00 a.m. central time at the offices of
Shook, Hardy & Bacon L.L.P., 1200 Main Street, Suite 3100, Kansas City, Missouri
64105, immediately following the closing of the Notes Transaction (which will
occur in New York City) or at such other place and time as the parties mutually
agree (the "Closing Date"). The parties agree that they shall negotiate in good
faith the rescheduling of the Closing Date (which in no event shall be later
than sixty days after the closing of the Notes Transaction), if necessary to
comply with Regulation M issued pursuant to the Securities Exchange Act of 1934,
as amended. If the Closing Date is more than five days after the closing of the
Notes Transaction, then IBC shall pay to RPC interest on the Purchase Price
equal to the rate of interest then paid by IBC on its principal bank
indebtedness.
Section 1.4 Payment. On the Closing Date, Ralston shall surrender to IBC
its duly endorsed stock certificates representing the Repurchase Shares, free
and clear of all liens and encumbrances whatsoever, and IBC shall pay to Ralston
the Purchase Price in immediately available funds by wire transfer to an account
designated in writing by Ralston to IBC. Ralston shall deliver the wire
transfer instructions to IBC at least three business days prior to the Closing
Date.
Section 1.5 Transfer of Title. Transfer of title to the Repurchase
Shares shall be deemed to occur automatically on the Closing Date, subject to
payment by IBC on such date of the Purchase Price.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
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Section 2.1 Representations and Warranties of Ralston. Ralston hereby
represents and warrants to IBC as follows:
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(a) Ralston has all requisite legal and corporate power to
execute and deliver this Repurchase Agreement and to carry out and perform
its obligations under the terms of this Repurchase Agreement.
(b) The execution and delivery of this Repurchase Agreement and
the consummation of the transactions herein do not and will not violate any
agreement binding upon Ralston; and this Repurchase Agreement is the valid
and binding agreement of Ralston, enforceable against Ralston in accordance
with its terms subject to laws of general application relating to
bankruptcy, insolvency, the relief of debtors, general equity principles
and limitations upon rights to indemnity.
(c) Ralston has good and marketable title to at least 1,000,000
shares of the IBC Equity, free and clear of any liens, encumbrances,
restrictions on transfer or rights of others and shall keep such shares
free and clear of any liens, encumbrances, restrictions on transfer or
rights of others.
Section 2.2 Representations and Warranties of IBC. IBC hereby
represents and warrants to Ralston as follows:
(a) IBC has all requisite legal and corporate power to execute
and deliver this Repurchase Agreement and to carry out and perform its
obligations under the terms of this Repurchase Agreement.
(b) The execution and delivery of this Repurchase Agreement, and
the consummation of the transactions herein provided, do not and will not
violate any agreement binding upon IBC, and this Agreement is the valid and
binding agreement of IBC, enforceable against IBC in accordance with its
terms subject to laws of general application relating to bankruptcy,
insolvency, the relief of debtors, general equity principles and
limitations on rights to indemnity.
ARTICLE III
GENERAL PROVISIONS
------------------
Section 3.1 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Repurchase
Agreement was not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or in equity.
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Section 3.2 Expenses. Except as otherwise provided in this
Repurchase Agreement, each party shall bear its own expenses and costs in
connection with this Repurchase Agreement.
Section 3.3 Amendment. This Repurchase Agreement may not be
modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by the parties hereto.
Section 3.4 Successors and Assigns. No party to this Repurchase
Agreement may assign any of its rights or obligations under this Repurchase
Agreement without the prior written consent of the other parties.
Section 3.5 Notices. All notices, requests, claims, demands and
other communications hereunder, unless this Repurchase Agreement expressly
provides otherwise, shall be in writing and shall be given (and shall be deemed
to have been duly given upon receipt) by delivery in person, by facsimile or by
registered or certified mail (postage prepaid, return receipt requested), to the
other party to the addresses set forth in Section 11.5 of the Agreement.
Section 3.6 Governing Law. This Repurchase Agreement shall be
governed by and construed in accordance with the laws of Missouri without giving
effect to the provisions thereof relating to conflicts of laws.
Section 3.7 Termination. This Repurchase Agreement and the rights
and obligations hereunder shall terminate (if not consummated) upon the written
notification by Ralston of its decision not to consummate the Notes Transaction
or upon the mutual agreement of the parties. In addition, IBC shall have the
right to terminate this Repurchase Agreement if the Notes Transaction has not
been consummated by August 15, 1997. No such termination shall relieve any
party from liability for any breach of this Repurchase Agreement.
Section 3.8 Severability. The provisions of this Repurchase
Agreement shall be deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability of the other
provisions hereof. If any provision of this Repurchase Agreement, or the
application thereof to any person or entity or any circumstance, is invalid or
unenforceable, (i) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid and unenforceable provision and (ii) the
remainder of this Repurchase Agreement and the application of such provision to
other persons, entities or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
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Section 3.9 Entire Agreement. This Repurchase Agreement and the
other documents delivered pursuant hereto and thereto, constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersede all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.
Section 3.10 Descriptive Headings. The descriptive headings herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Repurchase Agreement.
Section 3.11 Counterparts. This Repurchase Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Repurchase
Agreement as of the day and year first above written.
RALSTON PURINA COMPANY
By: /s/ James R. Elsesser
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Name: James R. Elsesser
Title: Vice President and Chief Financial Officer
VCS HOLDING COMPANY
By: /s/ Timothy L. Grosch
---------------------------------------------
Name: Timothy L. Grosch
Title: Secretary
INTERSTATE BAKERIES CORPORATION
By: /s/ Ray Sandy Sutton
----------------------------------------------
Name: Ray Sandy Sutton
Title: Vice President, Corporate Secretary and
General Counsel
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