<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 22, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE SHERWIN-WILLIAMS COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
<TABLE>
<CAPTION>
OHIO 5231 34-0526850
<S> <C> <C>
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or organization) Industrial Classification Identification Number)
Code Number)
</TABLE>
101 Prospect Avenue, N.W.
Cleveland, Ohio 44115
(216) 566-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
L.E. Stellato, Esq.
Vice President, General Counsel and Secretary
The Sherwin-Williams Company
101 Prospect Avenue, N.W.
Cleveland, Ohio 44115
(216) 566-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
Copy to:
Catherine Collins McCoy, Esq.
Arnold & Porter
555 12th Street, N.W.
Washington, D.C. 20004-1202
(202) 942-5055
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of the Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==============================================================================================================================
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE
TITLE OF EACH CLASS OF AMOUNT AGGREGATE OFFERING PRICE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED TO BE REGISTERED(1) PER SHARE(1) PRICE(1) REGISTRATION FEE(2)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7.375% Debentures Due 2027.......... $150,000,000 100% $150,000,000 $ 45,455
7.45% Debentures Due 2097........... $150,000,000 100% $150,000,000 $ 45,455
- ------------------------------------------------------------------------------------------------------------------------------
Total............................... $300,000,000 $300,000,000 $ 90,910
==============================================================================================================================
</TABLE>
- ---------------
(1) Estimated solely for purposes of calculating the registration fee.
(2) Calculated pursuant to Rule 457(f)(2).
------------------------
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.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY STATE.
PROSPECTUS
- ----------
SUBJECT TO COMPLETION, DATED APRIL , 1997
THE SHERWIN-WILLIAMS COMPANY
<TABLE>
<S> <C>
OFFER TO EXCHANGE OFFER TO EXCHANGE
ALL OUTSTANDING ALL OUTSTANDING
7.375% DEBENTURES DUE 2027 7.45% DEBENTURES DUE 2097
FOR FOR
7.375% DEBENTURES DUE 2027 7.45% DEBENTURES DUE 2097
WHICH HAVE BEEN REGISTERED WHICH HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT UNDER THE SECURITIES ACT
OF 1933, AS AMENDED OF 1933, AS AMENDED
</TABLE>
------------------------
THE EXCHANGE OFFERS
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1997 UNLESS EXTENDED
------------------------
The Sherwin-Williams Company, an Ohio corporation (the "Company"), hereby
offers (the "Exchange Offers"), upon the terms and subject to the conditions set
forth in this Prospectus and the accompanying Letter of Transmittal (the "Letter
of Transmittal"), to exchange its outstanding 7.375% Debentures Due 2027 (the
"Old 2027 Debentures"), of which an aggregate of $150,000,000 in principal
amount is outstanding as of the date hereof, for an equal principal amount of
newly issued 7.375% Debentures Due 2027 (the "New 2027 Debentures"), and to
exchange its outstanding 7.45% Debentures Due 2097 (the "Old 2097 Debentures"),
of which an aggregate of $150,000,000 in principal amount is outstanding as of
the date hereof, for an equal principal amount of newly issued 7.45% Debentures
Due 2097 (the "New 2097 Debentures"). The form and terms of the New 2027
Debentures and New 2097 Debentures (collectively, the "New Debentures") will be
the same as the form and terms of the Old 2027 Debentures and the Old 2097
Debentures (collectively, the "Old Debentures"), respectively, except that (i)
the New Debentures will be registered under the Securities Act of 1933, as
amended (the "Securities Act"), and hence will not bear legends restricting the
transfer thereof and (ii) the holders of the New Debentures will not be entitled
to certain rights of holders of the Old Debentures under the Registration
Agreement (as defined herein), which rights will terminate upon the consummation
of the Exchange Offers. The New 2027 Debentures and the New 2097 Debentures will
evidence the same debt as the Old 2027 Debentures and the Old 2097 Debentures,
respectively, and will be entitled to the benefits of an indenture dated as of
February 1, 1996, governing the Old Debentures and the New Debentures (the
"Indenture"). The Indenture provides for the issuance of both the New Debentures
and the Old Debentures. The New 2027 Debentures and the Old 2027 Debentures are
sometimes referred to herein collectively as the "2027 Debentures"; the Old 2097
Debentures and the New 2097 Debentures sometimes referred to herein collectively
as the "2097 Debentures"; and the 2027 Debentures and the 2097 Debentures are
sometimes referred to herein collectively as the "Debentures."
(Continued on next page)
------------------------
SEE "RISK FACTORS" COMMENCING ON PAGE 11 FOR CERTAIN INFORMATION THAT
SHOULD BE CONSIDERED BY HOLDERS WHO TENDER OLD DEBENTURES IN THE EXCHANGE
OFFERS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1997
<PAGE> 3
(Cover page continued)
Interest on the Debentures is payable semiannually on February 1 and August
1 of each year, commencing August 1, 1997. Each of the New 2027 Debentures and
the New 2097 Debentures is redeemable as a whole or in part, at the option of
the Company at any time, at a redemption price equal to the greater of (i) 100%
of the principal amount of each such New Debenture and (ii) the sum of the
present values of the Remaining Scheduled Payments (as defined herein) thereon
discounted at the Treasury Rate (as defined herein) plus, in the case of the New
2027 Debentures, 10 basis points and, in the case of the New 2097 Debentures, 15
basis points, plus, in either case, accrued interest to the date of redemption.
See "Description of the New Debentures -- Optional Redemption." Upon the
occurrence of a Tax Event (as defined herein) the Company will have the right to
shorten the maturity of the New 2097 Debentures to the extent required so that
the interest paid on the New 2097 Debentures will be deductible by the Company
for Federal income tax purposes. See "Description of the New
Debentures -- Conditional Right to Shorten Maturity; Certain Federal Income Tax
Considerations Relating to the 2097 Debentures."
Prior to the Exchange Offer, there has been no public market for the Old
Debentures. The Company does not intend to list the New Debentures on any
securities exchange or to seek approval for quotation through any automated
quotation system. There can be no assurance that an active market for the New
Debentures will develop. To the extent that a market for the New Debentures does
develop, the market value of the New Debentures will depend on market conditions
(such as yields on alternative investments), general economic conditions, the
Company's financial condition and other conditions. Such conditions might cause
the New Debentures, to the extent that they are actively traded, to trade at a
significant discount from face value.
The New Debentures will be available only in book-entry form. The Company
expects that the New Debentures issued pursuant to the Exchange Offers will be
issued in the form of one or more fully registered global debentures that will
be deposited with, or on behalf of, The Depository Trust Company ("DTC") and
registered in its name or in the name of Cede & Co., as its nominee. Beneficial
interests in the global debentures representing the New Debentures will be shown
on, and transfers thereof will be effected only through, records maintained by
DTC and its participants. After the initial issuance of such global debentures,
New Debentures in certificated form will be issued in exchange for the global
debentures only in accordance with the terms and conditions set forth in the
Indenture. See "Description of the New Debentures -- Book-Entry, Delivery and
Form" and "Description of the New Debentures -- Certificated Debentures."
The Company will accept for exchange any and all Old Debentures which are
properly tendered in the Exchange Offers prior to 5:00 p.m., New York City time,
on , 1997 (if and as extended, the "Expiration Date"). Tenders of
Old Debentures may be withdrawn at any time prior to 5:00 p.m., New York City
time, on the Expiration Date. The Exchange Offers are not conditioned upon any
minimum principal amount of Old Debentures being tendered for exchange. Old
Debentures may be tendered only in integral multiples of $1,000. In the event
the Company terminates either or both of the Exchange Offers and does not accept
for exchange any Old 2027 Debentures or Old 2097 Debentures, as the case may be,
the Company will promptly return all previously tendered Old 2027 Debentures or
Old 2097 Debentures, as the case may be, to the holders thereof.
Based on a previous interpretation by the staff of the Securities and
Exchange Commission (the "Commission") set forth in no-action letters to third
parties, the Company believes that the New Debentures issued pursuant to the
Exchange Offers in exchange for Old Debentures may be offered for resale,
resold, and otherwise transferred by a holder thereof (other than (i) a
broker-dealer who purchases such New Debentures directly from the Company to
resell pursuant to Rule 144A or any other available exemption under the
Securities Act or (ii) a person that is an affiliate of the Company (within the
meaning of Rule 405 under the Securities Act)) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that the holder is acquiring the New Debentures in its ordinary course of
business and is not participating, and has no arrangement or understanding with
any person to participate, in the distribution of the New Debentures. Holders of
Old Debentures wishing to accept either or both of the Exchange Offers must
represent to the Company that such conditions have been met.
2
<PAGE> 4
Each broker-dealer that receives New Debentures for its own account
pursuant to either or both of the Exchange Offers must acknowledge that it will
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Debentures. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter," within the meaning of
the Securities Act, in connection with resale of New Debentures received in
exchange for Old Debentures where such Old Debentures were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that, for a period of 180 days after the
Expiration Date, it will make this Prospectus available to any broker-dealer for
use in connection with any such resale. See "Plan of Distribution."
The Company believes that none of the registered holders of the Old
Debentures is an affiliate (as such term is defined in Rule 405 under the
Securities Act) of the Company. The Company has not entered into any arrangement
or understanding with any person to distribute the New Debentures to be received
in the Exchange Offers, and to the best of the Company's information and belief,
each person participating in either or both of the Exchange Offers is acquiring
the New Debentures in the ordinary course of business and has no arrangement or
understanding with any person to participate in the distribution of the New
Debentures to be received in either or both of the Exchange Offers.
The Company will not receive any proceeds from the Exchange Offers. The
Company has agreed to bear the expenses of the Exchange Offers. No underwriter
is being used in connection with the Exchange Offers.
3
<PAGE> 5
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Commission.
Such reports and other information may be inspected and copied at the public
reference facilities of the Commission, Room 1024, Judiciary Plaza, 450 Fifth
Street, N W., Washington, D.C. 20549, as well as at the following Regional
Offices: 7 World Trade Center, 13th Floor, New York, New York 10048 and 500 West
Madison Street-Suite 1400, Chicago, Illinois 60661. Copies of such material can
be obtained from the Commission by mail at prescribed rates. Requests should be
directed to the Commission's Public Reference Section, Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of documents filed
by the Company with the Commission may also be accessed electronically by means
of the Commission's home page on the world wide web on the Internet at
"http://www.sec.gov". Copies of such material may also be inspected at the
offices of the New York Stock Exchange, Inc. ("NYSE"), 20 Broad Street, New
York, New York.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act. This Prospectus omits
certain of the information contained in the Registration Statement in accordance
with the rules and regulations of the Commission. Reference is hereby made to
the Registration Statement and related exhibits for further information with
respect to the Company and the Debentures. Statements contained herein
concerning the provisions of any documents 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 filed by the Company with the Commission are
incorporated into this Prospectus by reference:
(i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1996; and
(ii) the Company's Current Reports on Form 8-K dated January 7, 1997
and January 29, 1997.
Each document or report filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of any offering of securities made by this Prospectus shall be
deemed to be incorporated by reference into this Prospectus and to be a part of
this Prospectus from the date of filing of such document. Any statement
contained herein, or in a document all or a portion of which is 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 such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE
MADE BY , 1997.
This Prospectus incorporates by reference documents which are not presented
herein or delivered herewith. The Company will provide without charge to any
person to whom this Prospectus is delivered, on the written or oral request of
such person, a copy of any or all of the foregoing documents incorporated by
reference herein (other than exhibits not specifically incorporated by reference
into the texts of such documents). Requests for such documents should be
directed to:
The Sherwin-Williams Company
101 Prospect Avenue, N.W.
12th Floor
Cleveland, OH 44115
Telephone: (216) 566-2000
Attention: Corporate Secretary
4
<PAGE> 6
THE COMPANY
The Sherwin-Williams Company (the "Company"), which was first incorporated
under the laws of the State of Ohio eighteen years after its founding in 1866,
is a leading manufacturer and retailer of coatings and related products to
professional, industrial, commercial and retail customers.
The Company's structure consists of two main segments: the Paint Stores
Segment and the Coatings Segment. The Paint Stores Segment, which operated 2,156
specialty paint stores in the United States, Canada and Puerto Rico at December
31, 1996, is the exclusive distributor of Sherwin-Williams(R) branded
architectural coatings, industrial maintenance products, industrial finishes and
related items produced by the Coatings Segment of the Company and others. The
Paint Stores Segment is also a distributor of similar coatings and other
products manufactured by third parties. Paint, wallcoverings, floorcoverings,
window treatments, spray equipment and other associated products are marketed by
store personnel and direct sale representatives to the do-it-yourself customer,
professional painter, contractor, industrial and commercial maintenance
customer, property manager, architect and manufacturer of products requiring a
factory finish.
The five divisions within the Coatings Segment (Coatings, Consumer Brands,
Automotive, Transportation Services and Diversified Brands) participate in the
manufacture, distribution or sale of coatings and related products. The Coatings
Segment employs a variety of trade names and trademarks including Sherwin-
Williams(R), Dutch Boy(R), Ralph Lauren(TM), Pratt & Lambert(R), Con-Lux(R),
H&C(R), Martin-Senour(R), Cuprinol(R), Krylon(R), Dupli-Color(R), Rubberset(R),
White Lightning(R), Standox(R), Rust Tough(R), Kem-Tone(R), Excelo(TM),
Lazzuril(TM), Colorgin(TM) and other brands.
The Coatings Division manufactures paint and paint-related products for
do-it-yourself customers, professional painters, contractors, industrial and
commercial maintenance accounts, and manufacturers of factory finished products.
Sherwin-Williams(R) branded architectural and industrial finishes are
manufactured exclusively for the Paint Stores Segment. Labels, color cards,
traffic paint, adhesives, private label and other branded products are
manufactured for the Paint Stores Segment, the Consumer Brands Division and
other divisions of the Company. In 1996, one of the primary goals of the
Coatings Division was to integrate the manufacturing operations of Pratt &
Lambert United, Inc. ("Pratt & Lambert"), which was acquired on January 8, 1996.
The Consumer Brands Division is responsible for the sales and marketing of
branded and private label products by a direct sales staff to unaffiliated home
centers, mass merchandisers, independent dealers and distributors. Many of the
country's leading retailers are among the Division's regional and national
customers. The acquisition of Pratt & Lambert provided the Division sales and
marketing responsibility over the Pratt & Lambert(R), Fabulon(R) and M.L.
Campbell(R) brands. In addition to expanding sales of branded products through
independently-owned paint and decorator stores, the acquisition enabled the
Division to significantly enlarge its distribution of private label products in
the mass merchandiser and home center channels. The home center channel
continues to consolidate, creating competition for the business of the best
regional and national home centers. The Division has been successful in
targeting the majority of the strong home centers. The Division's launch of the
Ralph Lauren(TM) paint line was highly successful in 1996, with distribution
through both the independent store and home center channels.
The Automotive Division develops and manufactures motor vehicle finish and
refinish products which are marketed under the Sherwin-Williams(R) and other
branded labels in the United States and Canada through its network of 135
company-operated branches at December 31, 1996. The branches are supported by a
direct sales staff. Products are also marketed through independent jobbers and
wholesale distributors. The Division sells directly to independent automotive
body shops, automotive dealerships, fleet owners and refinishers, production
shops, body builders and manufacturers requiring a factory finish. In
furtherance of the Division's international growth, Productos Quimicos Y
Pinturas, S.A. de C.V. and its affiliated companies ("Productos") were acquired
in January 1996. Productos is the second largest automotive paint distributor in
Mexico, manufacturing and marketing the highly recognized Excelo(TM) brand
product line for the vehicle refinish market. Also in 1996, the Division assumed
the management of the automotive coatings business of the Stierling Group of
companies, a leading producer of automotive coatings in Chile. Lazzuril Tintas
S/A, a Brazilian automotive coatings company, was also acquired.
5
<PAGE> 7
The Transportation Services Division provides warehousing, truckload
freight, pool assembly, freight brokerage and consolidation services primarily
for the Company and for certain external manufacturers, distributors and
retailers throughout the United States and Canada. This Division provides the
Company with total logistics service support which allows increased delivery
schedules, lower field inventory levels and fewer out-of-stocks. The Division
spent the majority of 1996 integrating and consolidating the distribution
centers obtained through the Pratt & Lambert acquisition into its existing
distribution network.
The Diversified Brands Division competes in the following areas: retail and
wholesale consumer aerosols; custom and industrial aerosols; paint applicators;
and cleaning products. The Division participates in the retail and wholesale
paint, automotive, homecare products, institutional, insecticide and industrial
markets. A wide variety of aerosol products are filled, packaged and distributed
to regional, national and international customers. Approximately 6.2 percent of
the Division's total sales in 1996 represented aerosols and paint applicators
sold to the Paint Stores Segment. The remaining products are marketed through
mass merchandisers, home centers, automotive chains and maintenance distribution
channels. In 1996, the Division added consumer, industrial and janitorial
cleaning products, with reputable brand names such as Cello(R) and Spring
Fresh(R), to its product selection in the United States through the acquisitions
of the Household and Professional Products Division of Grow Group, Inc.
(Cleaning Solutions Group) and Sunshine Quality Products, Inc. The Division also
expanded internationally in 1996 through the acquisition of Industria Quimica
Elgin Ltda., a leading producer and marketer of aerosol paint under the
Colorgin(TM) brand label in Brazil.
Since 1979, the Company's revenues and net income from continuing
operations and dividends have increased in each year. The Company's record is
the result of both internal growth and acquisitions. During 1995 and 1996, the
Company made several significant strategic acquisitions which expanded the
Company's products, distribution channels and geographic coverage. The Company's
largest acquisition over this period was Pratt & Lambert. Pratt & Lambert
manufactures and markets coatings to independent dealers, mass merchandisers,
home centers and specialty markets. The acquisition of Pratt & Lambert provided
the Company with an expanded customer base and the benefit of Pratt & Lambert's
reputation of providing quality products to independent dealers since 1849.
On January 7, 1997, the Company completed its acquisition (the "Thompson
Minwax Acquisition") of Thompson Minwax Holding Corp. ("Thompson Minwax"). The
total purchase price of Thompson Minwax, including the retirement of certain
indebtedness of Thompson Minwax, was approximately $830 million. The Company
funded the acquisition from the proceeds of borrowings of different maturities
and interest rates under the Company's commercial paper program. Thompson Minwax
is a major producer and marketer in the United States of interior stains and
varnishes under the Minwax(R) brand name, exterior water sealers and stains
under the Thompson's(R) brand name, finishing and enamel coating products under
the Formby's(R) and Red Devil(R) brand names, and high-performance specialty
lubricants under the Tri-Flow(TM) brand name. Ronseal Limited, a subsidiary of
Thompson Minwax, is a major producer and seller of interior and exterior stains
in Ireland and the United Kingdom under the leading Ronseal(TM) brand name. The
Company believes that the acquisition of Thompson Minwax broadens the Company's
product offerings, adds strong brand names, increases the Company's penetration
in home centers, mass merchandisers and independent paint stores, and provides a
platform to expand the distribution in the United Kingdom of branded products
currently produced by the Coatings Segment.
6
<PAGE> 8
SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus or incorporated herein by reference.
THE EXCHANGE
THE EXCHANGE OFFERS........ The Company is offering to exchange $1,000
principal amount of New 2027 Debentures and New
2097 Debentures, respectively, for each $1,000
principal amount of Old 2027 Debentures and Old
2097 Debentures, respectively, that are properly
tendered and accepted. The Company will issue the
New 2027 Debentures and New 2097 Debentures on or
promptly after the Expiration Date. There is
$150,000,000 aggregate principal amount of the Old
2027 Debentures outstanding and $150,000,000
aggregate principal amount of the Old 2097
Debentures outstanding. See "The Exchange Offers."
Based on an interpretation of the staff of the
Commission set forth in no-action letters issued to
third parties, the Company believes that New
Debentures issued pursuant to the Exchange Offers
in exchange for Old Debentures may be offered for
resale, resold and otherwise transferred by any
holder thereof (other than (i) a broker-dealer who
purchases such New Debentures directly from the
Company to resell pursuant to Rule 144A or any
other available exemption under the Securities Act
or (ii) any such holder which is an "affiliate" of
the Company within the meaning of Rule 405 under
the Securities Act) without compliance with the
registration and prospectus delivery provisions of
the Securities Act, provided that such New
Debentures are acquired in the ordinary course of
such holder's business and that such holder has no
arrangement or understanding with any person to
participate in the distribution of such New
Debentures. In the event that the Company's belief
is inaccurate, holders of New Debentures who
transfer New Debentures in violation of the
prospectus delivery provisions of the Securities
Act and without an exemption from registration
thereunder may incur liability thereunder. The
Company does not assume or indemnify holders
against such liability. The Exchange Offers are not
being made to, nor will the Company accept
surrenders for exchange from, holders of Old
Debentures (i) in any jurisdiction in which the
Exchange Offers or the acceptance thereof would not
be in compliance with the securities or blue sky
laws of such jurisdiction or (ii) if any holder is
engaged or intends to engage in a distribution of
New Debentures. Each broker-dealer that receives
New Debentures for its own account in exchange for
Old Debentures, where such Old Debentures were
acquired by such broker-dealer as a result of
market-making activities or other trading
activities, must acknowledge that it will deliver a
prospectus meeting the requirements of the
Securities Act in connection with any resale of
such New Debentures. See "Plan of Distribution."
EXPIRATION DATE............ The Exchange Offers will expire at 5:00 p.m., New
York City time, on , 1997, unless either
or both Exchange Offers are extended, in which case
the term "Expiration Date" shall mean the latest
date and time to which each of the Exchange Offers
is extended. The Company will accept for exchange
any and all Old Debentures which are properly
7
<PAGE> 9
tendered in the Exchange Offers prior to 5:00 p.m.,
New York City time, on the Expiration Date. The New
Debentures issued pursuant to the Exchange Offers
will be delivered on or promptly after the
Expiration Date.
CONDITIONS TO THE EXCHANGE
OFFERS................... The Company may terminate the Exchange Offers if it
determines that its ability to proceed with either
or both of the Exchange Offers could be materially
impaired due to any legal or governmental action,
any new law, statute, rule or regulation, any
interpretation by the staff of the Commission of
any existing law, statute, rule or regulation or
the failure to obtain any necessary approvals of
governmental agencies or holders of the Old
Debentures. The Company does not expect any of the
foregoing conditions to occur, although there can
be no assurances any such conditions will not
occur.
PROCEDURES FOR TENDERING
OLD DEBENTURES........... Each holder of Old Debentures wishing to accept
either or both of the Exchange Offers must
complete, sign and date the Letter of Transmittal,
or a facsimile thereof, in accordance with the
instructions contained herein and therein, and mail
or otherwise deliver such Letter of Transmittal, or
such facsimile, together with such Old Debentures
and any other required documentation to The Chase
Manhattan Bank, as Exchange Agent, at the address
set forth herein. By executing the Letter of
Transmittal or by transmitting an Agent's Message
(as defined below) in lieu thereof, each holder
will represent to the Company that, among other
things, the New Debentures acquired pursuant to the
Exchange Offers are being obtained in the ordinary
course of business of the person receiving such New
Debentures, such person does not have an
arrangement or understanding with any person to
participate in the distribution of such New
Debentures and that neither the holder nor any such
other person is an "affiliate," as defined in Rule
405 under the Securities Act, of the Company.
Certain brokers, dealers, commercial banks, trust
companies and other nominees may also effect
tenders by book-entry transfer, including an
Agent's Message in lieu of a Letter of Transmittal.
BENEFICIAL OWNERS.......... Any beneficial owner whose Old Debentures are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee and
who wishes to tender such Old Debentures in either
or both of Exchange Offers should contact such
registered holder promptly and instruct such
registered holder to tender on such beneficial
owner's behalf. If such beneficial owner wishes to
tender on such owner's own behalf, such owner must,
prior to completing and executing the Letter of
Transmittal and delivering his Old Debentures,
either make appropriate arrangements to register
ownership of the Old Debentures in such owner's
name or obtain a properly completed bond power from
the registered holder. The transfer of registered
ownership may take considerable time and may not be
able to be completed prior to the Expiration Date.
GUARANTEED DELIVERY
PROCEDURES............... Holders of Old Debentures who wish to tender their
Old Debentures and who cannot deliver their Old
Debentures or the Letter of Transmittal to The
Chase Manhattan Bank, as Exchange Agent, prior to
the Expiration Date, or the procedures for
book-entry transfer cannot be completed on a
8
<PAGE> 10
timely basis, must tender their Old Debentures
according to the guaranteed delivery procedures set
forth in "The Exchange Offers -- Guaranteed
Delivery Procedures."
WITHDRAWAL RIGHTS.......... Tenders of Old Debentures may be withdrawn at any
time prior to 5:00 p.m., New York City time, on the
Expiration Date.
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES............. For a discussion of certain federal income tax
consequences relating to the exchange of New
Debentures for Old Debentures, see "Certain Federal
Income Tax Consequences of Participation in the
Exchange Offers."
EXCHANGE AGENT............. The Chase Manhattan Bank is the Exchange Agent. Its
telephone number is (212) 638-0458. The address of
the Exchange Agent is set forth in "The Exchange
Offers -- Exchange Agent." The Chase Manhattan Bank
also serves as trustee under the Indenture.
SHELF REGISTRATION
STATEMENT................ Under certain circumstances described in the
Registration Agreement, certain holders of
Debentures (including holders who are not permitted
to participate in the Exchange Offers or who may
not freely resell New Debentures received in the
Exchange Offers) may require the Company to file,
and use best efforts to cause to become effective,
a shelf registration statement under the Securities
Act, which would cover resales of Debentures by
such holders. See "Description of the New
Debentures -- Registration Agreement."
CONDITIONS TO THE EXCHANGE
OFFERS................... The Exchange Offers are not conditioned on any
minimum principal amount of Old Debentures being
tendered for exchange. The Exchange Offers are
subject to certain other customary conditions, each
of which may be waived by the Company. See "The
Exchange Offers -- Certain Conditions to the
Exchange Offers."
9
<PAGE> 11
SUMMARY DESCRIPTION OF THE NEW DEBENTURES
The terms of the New Debentures and the Old Debentures are identical in all
material respects, except for certain transfer restrictions and registration
rights relating to the Old Debentures. Whenever defined terms of the Indenture
not otherwise defined herein are referred to, such defined terms are
incorporated herein by reference. In the event that neither this Registration
Statement is declared effective nor a Shelf Registration Statement (as defined
herein) is filed on or prior to August 9, 1997, the annual interest rate borne
by the Old Debentures will be increased by 0.25%. If the Exchange Offers are not
consummated and the Shelf Registration Statement is not declared effective by
September 8, 1997, the annual interest rate borne by the Old Debentures will be
increased by an additional 0.25%. If the annual interest rate borne by the Old
Debentures shall have been increased by reason of the circumstances described in
one or both of the two preceding sentences, upon (i) the declaration that this
Registration Statement is effective or a Shelf Registration Statement is filed
at any time after August 9, 1997, the previously increased annual interest rate
borne by the Old Debentures will be decreased by 0.25%, and (ii) the
consummation of the Exchange Offers or the effectiveness of the Shelf
Registration Statement at any time after September 8, 1997, the annual interest
rates on the Old Debentures will revert to the annual interest rates set forth
on the cover page of this Prospectus.
The New Debentures will bear interest from the most recent date to which
interest has been paid on the Old Debentures or, if no interest has been paid on
the Old Debentures, from February 10, 1997. Accordingly, registered holders of
New Debentures on the relevant record date for the first interest payment date
following the consummation of the Exchange Offers will receive interest accruing
from the most recent date to which interest has been paid on the Old Debentures
or, if no interest has been paid, from February 10, 1997. Old Debentures
accepted for exchange will cease to accrue interest from and after the date of
consummation of the Exchange Offers. Holders whose Old Debentures are accepted
for exchange will not receive any payment in respect of interest on such Old
Debentures otherwise payable on any interest payment date, the record date for
which occurs on or after consummation of the Exchange Offers.
THE NEW DEBENTURES
NEW DEBENTURES OFFERED..... $150,000,000 principal amount of 7.375% Debentures
Due 2027 and $150,000,000 principal amount of 7.45%
Debentures Due 2097.
MATURITY................... The New 2027 Debentures will mature on February 1,
2027 and the New 2097 Debentures will mature on
February 1, 2097.
INTEREST PAYMENT DATES..... Interest on the New Debentures is payable
semiannually on each February 1 and August 1,
commencing August 1, 1997.
OPTIONAL REDEMPTION........ Each of the New 2027 Debentures and the New 2097
Debentures will be redeemable as a whole or in
part, at the option of the Company at any time, at
a redemption price equal to the greater of (i) 100%
of the principal amount of each such Debenture and
(ii) the sum of the present values of the Remaining
Scheduled Payments thereon discounted at the
Treasury Rate plus, in the case of the New 2027
Debentures, 10 basis points and, in the case of the
New 2097 Debentures, 15 basis points, plus, in
either case, accrued interest to the date of
redemption. See "Description of the New
Debentures -- Optional Redemption."
CONDITIONAL RIGHTS TO
SHORTEN MATURITY OF 2097
DEBENTURES............... Upon the occurrence of a Tax Event, the Company
will have the right to shorten the maturity of the
New 2097 Debentures to the extent required so that
the interest paid on the New 2097 Debentures will
be deductible by the Company for federal income tax
purposes. See "Description of the New
Debentures -- Conditional Right to Shorten Maturity
of 2097 Debentures; Certain Federal Income Tax
Considerations Relating to the 2097 Debentures."
RANKING.................... The New Debentures will be senior securities of the
Company, ranking pari passu with all other
unsubordinated and unsecured indebtedness of the
Company.
10
<PAGE> 12
RISK FACTORS
Holders of Old Debentures should carefully review the information contained
elsewhere in this Prospectus and should particularly consider the following
matters.
CONDITIONAL RIGHT TO SHORTEN MATURITY OF 2097 DEBENTURES; CERTAIN FEDERAL INCOME
TAX CONSIDERATIONS RELATING TO THE 2097 DEBENTURES
The Company intends to deduct interest paid on the Debentures for Federal
income tax purposes. However, the Clinton Administration's budget proposal for
Fiscal Year 1998, released on February 6, 1997, contained a series of proposed
tax law changes that, among other things, would prohibit an issuer from
deducting interest payments on debt instruments with a maximum weighted average
maturity of more than 40 years. This proposal would be effective generally for
instruments issued on or after the date of first Congressional committee action
relating thereto. However, it is not clear from the proposal as to what
constitutes "Congressional Committee Action" with respect to the proposal. There
can be no assurance that this proposal or similar legislation affecting the
Company's ability to deduct interest paid on the Old or New 2097 Debentures will
not be enacted in the future or that any such legislation would not have a
retroactive effective date.
In addition, under existing general tax law principles, the Internal
Revenue Service or a court might take the position that debt instruments that do
not mature for a very long time (for example, debt instruments like the 2097
Debentures that mature in 100 years) should not be treated as debt for Federal
income tax purposes, but rather as equity. The Company believes that, based on
the factors applied under existing general tax law principles, the 2097
Debentures are valid debt, the Company can deduct interest payments thereon, and
holders should treat such payments as interest. If, however, the 2097 Debentures
were to be treated as equity, the Company would not be able to deduct interest
payments thereon, and holders would be required to treat such payments as
dividends (or other distributions on equity) and not as interest.
Accordingly, upon occurrence of a Tax Event (as defined herein), including,
without limitation, as a result of the circumstances described in the first two
paragraphs of this section, the Company will have the right to shorten the
maturity of the 2097 Debentures to the extent required, in the opinion of a
nationally recognized independent tax counsel, such that, after the shortening
of the maturity, interest paid on the 2097 Debentures will be deductible for
Federal income tax purposes. There can be no assurance that the Company would
not exercise its right to shorten the maturity of the 2097 Debentures upon the
occurrence of such a Tax Event.
If the 2097 Debentures constitute indebtedness for Federal income tax
purposes under current law, exercise by the Company of its right to shorten the
maturity of the 2097 Debentures would not be a taxable event to holders.
Prospective investors should be aware, however, that the Company's exercise of
its right to shorten the maturity of the 2097 Debentures will be a taxable event
to holders if the 2097 Debentures are treated as equity for purposes of Federal
income taxation under current law before the maturity is shortened, assuming
that the 2097 Debentures of shortened maturity are treated as debt for such
purposes.
Should the 2097 Debentures be treated as equity for Federal income tax
purposes, some holders of the 2097 Debentures may be adversely impacted from a
Federal income tax perspective. For example (and without limiting the potential
holders who might be adversely affected), if the 2097 Debentures are so treated
as equity and payments on the 2097 Debentures are therefore treated as
dividends, in the case of non-U.S. holders of the 2097 Debentures such dividends
would under current law be subject to U.S. withholding tax at a 30% rate or, if
applicable, at a lower rate prescribed by treaty, whereas under current law
interest for many non-U.S. holders are exempt from U.S. withholding tax.
CONSEQUENCES OF FAILURE TO EXCHANGE OLD DEBENTURES
The Old Debentures have not been registered under the Securities Act or any
state securities laws and therefore may not be offered, sold or otherwise
transferred except in compliance with the registration requirements of the
Securities Act and any other applicable securities laws, or pursuant to an
exemption therefrom or in a transaction not subject thereto, and in each case in
compliance with certain other conditions and restrictions. Old Debentures which
remain outstanding after consummation of the Exchange Offer will continue to
bear a legend reflecting such restrictions on transfer. In addition, upon
consummation of the
11
<PAGE> 13
Exchange Offers, holders of Old Debentures which remain outstanding will not be
entitled to any rights to have such Old Debentures registered under the
Securities Act or to any similar rights under the Registration Agreement
(subject to certain limited exceptions as described herein). See "Description of
the New Debentures -- Registration Agreement." The Company does not intend to
register under the Securities Act any Old Debentures which remain outstanding
after consummation of the Exchange Offer (subject to such limited exceptions, if
applicable). To the extent that Old Debentures are tendered and accepted in the
Exchange Offer, a holder's ability to sell untendered Old Debentures could be
adversely affected. See "The Exchange Offers -- Consequences of Failure to
Exchange Old Debentures."
ABSENCE OF PUBLIC MARKET
The Old Debentures were issued to, and the Company believes are currently
owned by, a relatively small number of beneficial owners. The Old Debentures
have not been registered under the Securities Act and will be subject to
restrictions on transferability to the extent that they are not exchanged for
the New Debentures. Although the New Debentures will generally be permitted to
be resold or otherwise transferred by the holders (who are not affiliates of the
Company) without compliance with the registration requirements under the
Securities Act, they will constitute a new issue of securities with no
established trading market. Any market-making activity will be subject to the
limits imposed by the Securities Act and the Exchange Act and may be limited
during the Exchange Offers. Accordingly, no assurance can be given that an
active public or other market will develop for the New Debentures or the Old
Debentures or as to the liquidity of or the trading market for New Debentures or
the Old Debentures. If an active public market does not develop, the market
price and liquidity of the New Debentures may be adversely affected.
If a public trading market for the New Debentures develops, future trading
prices of such securities will depend on many factors, including, among other
things, prevailing interest rates, results of operations and the market for
similar securities. Depending on prevailing interest rates, the market for
similar securities and other factors, including the financial condition of the
Company, the New Debentures may trade at a discount.
Notwithstanding the registration of the New Debentures in the Exchange
Offers, holders who are "affiliates" (as defined under Rule 405 of the
Securities Act) of the Company may publicly offer for sale or resell the New
Debentures only in compliance with the provisions of Rule 144 under the
Securities Act.
Each broker-dealer that receives New Debentures for its own account in
exchange for Old Debentures, where such Old Debentures were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such New Debentures. See "Plan of Distribution."
EXCHANGE OFFER PROCEDURES
Unless tenders are made by book-entry transfer, issuance of the New
Debentures in exchange for Old Debentures pursuant to the Exchange Offers will
be made only after a timely receipt by the Exchange Agent of such Old
Debentures, a properly completed and duly executed Letter of Transmittal and all
other required documents. Therefore, holders of the Old Debentures desiring to
tender such Old Debentures in exchange for New Debentures should allow
sufficient time to ensure timely delivery. Neither the Exchange Agent nor the
Company is under any duty to give notification of defects or irregularities with
respect to the tenders of Old Debentures for exchange.
USE OF PROCEEDS
The Company will not receive any proceeds from the Exchange Offers. On
February 10, 1997, the Company issued $150,000,000 principal amount of Old 2027
Debentures and $150,000,000 principal amount of Old 2097 Debentures (the
"Offering"). The Old Debentures were sold by the Company to Salomon Brothers Inc
(the "Initial Purchaser") and were in turn sold by the Initial Purchaser to a
limited number of qualified institutional buyers pursuant to Rule 144A under the
Securities Act and exemptions from applicable state securities laws, and the
Offering was not subject to the registration requirements of the Securities Act
and applicable state securities laws. The net proceeds from the sale of the Old
Debentures sold in the Offering were used to refinance a portion of the
Company's commercial paper outstanding.
12
<PAGE> 14
SUMMARY HISTORICAL FINANCIAL INFORMATION
The summary historical financial information presented below for the years
ended December 31, 1996, 1995, 1994, 1993 and 1992 and as of the end of each
such fiscal year is derived from the consolidated financial statements of the
Company, which have been audited by Ernst & Young LLP, independent auditors, and
should be read in conjunction with the information and audited consolidated
statements and related notes and Management's Discussion and Analysis of
Financial Condition and Results of Operations contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996. See also "Unaudited
Pro Forma Combined Condensed Financial Statements." The financial summary
information in the table below does not reflect the financial results of the
Company after December 31, 1996. See "Incorporation of Certain Documents by
Reference."
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, (a)
--------------------------------------------------
1996 1995 1994 1993 1992
------ ------ ------ ------ ------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Net Sales.................................. $4,133 $3,274 $3,100 $2,949 $2,748
Cost of goods sold......................... 2,405 1,877 1,773 1,697 1,589
Selling, general and administrative
expenses................................. 1,309 1,075 1,018 981 915
Interest expense........................... 25 3 3 6 9
Interest and net investment income......... (7) (12) (8) (7) (5)
Other...................................... 26 12 15 8 14
------ ------ ------ ------ ------
Income before income taxes and cumulative
effects of changes in accounting
methods.................................. 375 319 299 264 226
Income taxes............................... 146 118 112 99 81
------ ------ ------ ------ ------
Income before cumulative effects of changes
in accounting methods.................... 229 201 187 165 145
------ ------ ------ ------ ------
Net income................................. $ 229 $ 201 $ 187 $ 165 $ 63(b)
====== ====== ====== ====== ======
RATIO OF EARNINGS TO FIXED CHARGES (c)..... 3.9x 4.2x 4.1x 3.7x 3.4x
Other Data
EBITDA (d)................................. $ 522 $ 399 $ 383 $ 340 $ 310
EBITDA as a percentage of sales............ 12.6% 12.2% 12.4% 11.5% 11.3%
Capital expenditures....................... $ 123 $ 108 $ 79 $ 63 $ 69
Return on sales (e)........................ 5.5% 6.1% 6.0% 5.6% 5.3%
Debt to capitalization (f)................. 18.3 2.1 2.0 3.7 7.5
FINANCIAL POSITION
Total assets............................... $2,995 $2,141 $1,962 $1,915 $1,730
Working capital............................ 365 620 592 597 498
Long-term debt............................. 143 24 20 38 60
Shareholders' equity....................... 1,401 1,212 1,053 1,033 906
</TABLE>
- ---------------
(a) The Company has completed a number of acquisitions during the periods
presented. During 1995 and 1996, the Company made many acquisitions of
various sizes throughout North and South America, including the acquisition
of Pratt & Lambert in January 1996. Such acquisitions were accounted for
using the purchase method of accounting and may affect the comparability of
data on a year-to-year basis.
(b) Net income in 1992 includes the net additional annual expense and the
cumulative effects of changes in accounting methods related to the adoption
of Statement of Financial Accounting Standards (SFAS) No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions" and SFAS No.
109, "Accounting for Income Taxes", effective January 1, 1992.
(c) For purposes of computing such ratio, earnings consist of income before
income taxes and the cumulative effects of changes in accounting methods
plus fixed charges, and fixed charges consist of interest expense and gross
rent expense.
(d) "EBITDA" is defined as income before income taxes and cumulative effects of
changes in accounting methods plus interest expense, interest and net
investment income, depreciation, amortization and other. EBITDA is presented
solely as a supplement to the other information provided above. EBITDA is
not a substitute for operating and cash flow data as determined in
accordance with generally accepted accounting principles.
(e) For purposes of calculating return on sales, income before cumulative effect
of changes in accounting methods is divided by net sales.
(f) Debt includes short-term debt, current portion of long-term debt and
long-term debt. Capitalization includes debt and shareholders' equity.
13
<PAGE> 15
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed balance sheet as of
December 31, 1996 combines the historical consolidated balance sheet information
of the Company and Thompson Minwax as if the Thompson Minwax Acquisition had
been consummated at December 31, 1996. The unaudited pro forma combined
condensed statement of income for the year ended December 31, 1996 combines the
historical consolidated income statement information of the Company and Thompson
Minwax as if the Thompson Minwax Acquisition had been consummated on January 1,
1996. The Thompson Minwax Acquisition is recorded under the purchase method of
accounting after giving effect to the pro forma adjustments and assumptions
described in the accompanying notes.
The pro forma financial statements have been prepared by management of the
Company based upon the historical information incorporated herein by reference
and other financial information. These pro forma statements do not purport to be
indicative of the results which would have occurred had the Thompson Minwax
Acquisition been made as of December 31, 1996 or on January 1, 1996 or which may
be expected to occur in the future. The pro forma statements should be read in
conjunction with the financial statements and notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in the Annual Report on Form 10-K of the Company for the year ended
December 31, 1996, and the Consolidated Financial Statements of Thompson Minwax
which are contained in the Company's Current Report on Form 8-K dated January 7,
1997, both of which are incorporated herein by reference. See "Incorporation of
Certain Documents by Reference."
14
<PAGE> 16
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
THE SHERWIN-WILLIAMS COMPANY AND
THOMPSON MINWAX HOLDING CORP. AND SUBSIDIARIES
THOUSANDS OF DOLLARS
<TABLE>
<CAPTION>
DECEMBER 31, 1996
----------------------------------------------------------------
SHERWIN- THOMPSON PRO FORMA PRO FORMA
WILLIAMS MINWAX ADJUSTMENTS (h) COMBINED
---------- -------- ------------------------- ----------
DR CR
---------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents................. $ 1,880 $ 5,564 $ $ $ 7,444
Accounts receivable, less allowance....... 452,421 41,765 494,186
Finished goods.......................... 529,148
Work-in-process......................... 113,539
---------- ----------
Total inventories......................... 642,687 29,093 671,780
Other current assets...................... 319,199 7,222 326,421
---------- -------- ---------- ---------- ----------
Total current assets............... 1,416,187 83,644 0 0 1,499,831
Deferred pension assets..................... 254,376 254,376
Investment in Thompson Minwax............... 830,000(d) 830,538(g) 0
538(f)
Other assets, including goodwill and
deferred taxes............................ 774,636 641,083 530,446(g) 417,113(e) 1,549,637
20,585(c)
Property, plant and equipment............... 1,133,932 57,930 9,830(c) 1,182,032
Less allowances for depreciation and
amortization............................ 584,541 12,777 12,777(b) 584,541
---------- -------- ---------- ---------- ----------
549,391 45,153 12,777 9,830 597,491
---------- -------- ---------- ---------- ----------
Total assets................................ $2,994,590 $769,880 $1,394,345 $1,257,481 $3,901,335
========== ======== ========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable.......................... $ 385,928 $ 14,999 $ $ $ 400,927
Short-term borrowings..................... 168,001 830,000(d) 998,001
Other current liabilities................. 497,078 27,344 5,673(a) 538(f) 519,287
---------- -------- ---------- ---------- ----------
Total current liabilities.......... 1,051,007 42,343 5,673 830,538 1,918,215
Long-term debt.............................. 142,679 533,575 533,575(a) 142,679
Other long-term liabilities................. 399,672 39,537 439,209
Shareholders' equity:
Common stock, at par...................... 101,650 1 1(g) 101,650
Other capital............................. 203,223 176,693 176,693(g) 203,223
Retained earnings......................... 1,411,295 (23,002) 417,113(e) 539,248(a) 1,411,295
122,665(g) 12,777(b)
9,830(c) 20,585(c)
Cumulative foreign currency translation
adjustment................................ (18,982) 733 733(g) (18,982)
Treasury stock, at cost..................... (295,954) (295,954)
---------- -------- ---------- ---------- ----------
Total shareholders' equity.................. 1,401,232 154,424 727,035 572,610 1,401,232
---------- -------- ---------- ---------- ----------
Total liabilities and shareholders'
equity.................................... $2,994,590 $769,880 $1,266,283 $1,403,148 $3,901,335
========== ======== ========== ========== ==========
</TABLE>
- ---------------
(a) Remove net assets related to financing of Thompson Minwax.
(b) Remove accumulated depreciation of Thompson Minwax.
(c) Adjust fixed assets and intangibles balances to equal preliminary appraisal
amounts.
(d) Establish investment and record debt incurred to finance the acquisition.
(e) Eliminate goodwill previously recorded by Thompson Minwax.
(f) Record direct costs of acquisition.
(g) Eliminate investment and record initial goodwill based upon purchase price
less net book value of assets acquired.
(h) The majority of Thompson Minwax's assets and liabilities are included at
their historical values. Final appraisal values and purchase accounting
adjustments will not be available for several months.
15
<PAGE> 17
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
THE SHERWIN-WILLIAMS COMPANY AND
THOMPSON MINWAX HOLDING CORP. AND SUBSIDIARIES
THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1996
----------------------------------------------------------------
SHERWIN- THOMPSON PRO FORMA PRO FORMA
WILLIAMS MINWAX ADJUSTMENTS (g) COMBINED
---------- -------- ------------------------- ----------
DR CR
---------- -----------
<S> <C> <C> <C> <C> <C>
Net sales................................... $4,132,879 $364,371 $ $ $4,497,250
Costs and expenses:
Cost of goods sold........................ 2,405,178 130,347 2,535,525
Selling, general and administrative
expenses.................................. 1,309,086 185,885 14,022(b) 11,208(a) 1,497,785
Interest expense (income)................. 17,718 50,374 58,100(d) 50,374(c) 80,137
4,319(e)
Other expense (income).................... 25,520 (1,456) 24,064
---------- -------- ------- ------- --------
3,757,502 365,150 76,441 61,582 4,137,511
---------- -------- ------- ------- --------
Income before income taxes.................. 375,377 (779) 359,739
Income taxes................................ 146,220 1,320 4,216(f) 143,324
---------- -------- ------- --------
Net income.................................. $ 229,157 $(2,099) $ 216,415
========== ======= ========
Net income per share........................ $ 1.33 $ 1.25
========== ========
Average shares outstanding (in thousands)... 172,901 172,901
</TABLE>
- ---------------
(a) Remove goodwill amortization of Thompson Minwax related to L&F Products,
Inc.
(b) Record amortization of excess of purchase price over acquired net assets,
based on an estimated life of 40 years. Such amortization expenses is
subject to possible adjustment upon completion of Thompson Minwax appraisal
valuation.
(c) Remove interest expense of Thompson Minwax.
(d) Record additional estimated interest expense resulting from the end use of
debt to finance the acquisition.
(e) Remove interest income earned on short-term investments.
(f) Record tax effect, using a 35% statutory federal rate on the net
tax-deductible pro forma adjustments.
(g) The Company expects to achieve certain synergies in relation to the business
combination. Such synergies have not been directly identified, and thus are
not included in the above pro forma adjustments.
16
<PAGE> 18
THE EXCHANGE OFFERS
The Old Debentures were sold by the Company on February 10, 1997 to the
Initial Purchaser, who in turn sold the Old Debentures to a limited number of
qualified institutional buyers pursuant to Rule 144A under the Securities Act.
In connection with the sale of the Old Debentures, the Company and the Initial
Purchaser entered into a registration agreement dated as of February 4, 1997
(the "Registration Agreement"), which requires the Company to file with the
Commission a registration statement under the Securities Act with respect to the
New Debentures of the Company identical in all material respects to the Old
Debentures, and to use its best efforts to cause such registration statement to
become effective under the Securities Act. The Company is further obligated,
upon the effectiveness of that registration statement, to offer the holders of
the Old Debentures the opportunity to exchange their Old Debentures for a like
principal amount of New Debentures, which will be issued without a restrictive
legend and may be reoffered and resold by the holder without restrictions or
limitations under the Securities Act. In the event certain circumstances occur
which would result in either the New Debentures not becoming freely tradeable or
certain holders of the Old Debentures not being eligible to participate in the
Exchange Offer, then the Company is required to file and use its best efforts to
cause the Old Debentures to be registered under the Securities Act. A copy of
the Registration Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The Exchange Offers are being made
pursuant to the Registration Agreement to satisfy the Company's obligations
thereunder. The term "Holder" with respect to the Exchange Offers means any
person in whose name Old Debentures are registered on the Registrar's books or
any other person who has obtained a properly completed assignment from the
registered holder or any participant in The Depository Trust Company ("DTC")
system whose name appears on a security position listing as the holder of such
Old Debentures and who desires to deliver such Old Debentures by book-entry
transfer at DTC. See "Description of the New Debentures -- Registration
Agreement."
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal (which together constitute the
Exchange Offers), the Company will accept for exchange Old Debentures which are
properly tendered on or prior to the Expiration Date and not withdrawn as
permitted below. As used herein, the term "Expiration Date" means 5:00 p.m., New
York City time, on , 1997; provided, however, that if the Company,
in its sole discretion, has extended the period of time during which either or
both of the Exchange Offers are open, the term "Expiration Date" means the
latest time and date to which the applicable Exchange Offer is extended.
As of the date of this Prospectus, $150,000,000 aggregate principal amount
of the Old 2027 Debentures, and $150,000,000 aggregate principal amount of the
Old 2097 Debentures, are outstanding. This Prospectus, together with the Letter
of Transmittal, is first being sent on or about , 1997 to all
Holders of Old Debentures known to the Company. The Company's obligation to
accept Old Debentures for exchange pursuant to the Exchange Offers is subject to
certain customary conditions as set forth under "-- Certain Conditions to the
Exchange Offers" below.
The Company expressly reserves the right, at any time or from time to time,
to extend the period of time during which either or both of the Exchange Offers
are open, and thereby delay acceptance for exchange of any Old Debentures, by
giving oral or written notice of such extension to the Holders thereof as
described below. During any such extension, all Old Debentures previously
tendered will remain subject to the Exchange Offers and may be accepted for
exchange by the Company. Any Old Debentures not accepted for exchange for any
reason will be returned without expense to the tendering Holder thereof as
promptly as practicable after the expiration or termination of the Exchange
Offers.
Old Debentures tendered in the Exchange Offers must be in denominations of
principal amount of $1,000 or any integral multiple thereof.
The Company expressly reserves the right to amend or terminate either or
both of the Exchange Offers, and not to accept for exchange any Old Debentures
not theretofore accepted for exchange, upon the occurrence of any of the
conditions of the Exchange Offers specified below under "-- Certain Conditions
to the Exchange Offers." The Company will give oral or written notice of any
extension, amendment, non-acceptance or termination to the Holders of the Old
Debentures as promptly as practicable, such notice in the
17
<PAGE> 19
case of any extension to be issued by means of a press release or other public
announcement no later than 9:00 a.m., New York City time, on the next business
day after the previously scheduled Expiration Date.
PROCEDURES FOR TENDERING OLD DEBENTURES
Only a Holder of Old Debentures may tender such Old Debentures in the
Exchange Offers. The tender to the Company of Old Debentures by a Holder thereof
as set forth below and the acceptance thereof by the Company will constitute a
binding agreement between the tendering Holder and the Company upon the terms
and subject to the conditions set forth in this Prospectus and in the
accompanying Letter of Transmittal. A Holder who wishes to tender Old Debentures
for exchange pursuant to either or both of the Exchange Offers must transmit a
properly completed and duly executed Letter of Transmittal, including all other
documents required by such Letter of Transmittal, to The Chase Manhattan Bank
(the "Exchange Agent") at the address set forth below under "-- Exchange Agent"
or (in the case of a book-entry transfer) an Agent's Message in lieu of the
Letter of Transmittal on or prior to the Expiration Date. In addition, either
(i) certificates for such Old Debentures must be received by the Exchange Agent
along with the Letter of Transmittal, (ii) a timely confirmation of a book-entry
transfer (a "Book-Entry Confirmation") of such Old Debentures, if such procedure
is available, into the Exchange Agent's account at The Depository Trust Company
(the "Book-Entry Transfer Facility") pursuant to the procedure for book-entry
transfer described below, must be received by the Exchange Agent prior to the
Expiration Date, or (iii) the Holder must comply with the guaranteed delivery
procedures described below. THE METHOD OF DELIVERY OF OLD DEBENTURES, LETTERS OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE
HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL,
PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTERS OF
TRANSMITTAL OR CERTIFICATES FOR OLD DEBENTURES SHOULD BE SENT TO THE COMPANY.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to and received by the Exchange Agent and forming a part of a
Book-Entry Confirmation, which states that DTC has received an express
acknowledgment from the tendering Participant, which acknowledgment states that
such Participant has received and agrees to be bound by the Letter of
Transmittal and that the Company may enforce the Letter of Transmittal against
such Participant.
Any beneficial owner whose Old Debentures are registered in the name of a
broker, dealer, commercial bank, trust company, or other nominee and who wishes
to tender should contact the registered Holder promptly and instruct such
registered Holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's behalf, such owner must, prior
to completing and executing the Letter of Transmittal and delivering such
owner's Old Debentures, either make appropriate arrangements to register
ownership of the Old Debentures in such beneficial owner's name or obtain a
properly completed bond power from the registered Holder. The transfer of
registered ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal described
below (see "-- Withdrawal Rights"), as the case may be, must be guaranteed (see
"-- Guaranteed Delivery Procedures") unless the Old Debentures surrendered for
exchange pursuant thereto are tendered (i) by a registered Holder of the Old
Debentures who has not completed the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or
(ii) for the account of an Eligible Institution (as defined below). In the event
that signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, are required to be guaranteed, such guaranties must be by a
financial institution (including most banks, savings and loan associations and
brokerage houses) that is a participant in the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Program or the Stock
Exchanges Medallion Program (collectively, "Eligible Institutions"). If Old
Debentures are registered in the name of a person other than a signer of the
Letter of Transmittal, the Old Debentures surrendered for exchange must be
endorsed by or be accompanied by a written instrument or instruments of transfer
or exchange, in satisfactory form as determined by the Company in its sole
discretion, duly executed by the registered Holder exactly as the name
18
<PAGE> 20
or names of the registered Holder or Holders appear on the Old Debentures with
the signature thereon guaranteed by an Eligible Institution.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Old Debentures tendered for exchange will be
determined by the Company in its sole discretion, which determination shall be
final and binding. The Company reserves the absolute right to reject any and all
tenders of any particular Old Debentures not properly tendered or not to accept
any particular Old Debentures which acceptance might, in the judgment of the
Company or its counsel, be unlawful. The Company also reserves the absolute
right to waive any defects or irregularities or conditions of the Exchange
Offers as to any particular Old Debentures either before or after the Expiration
Date (including the right to waive the ineligibility of any Holder who seeks to
tender Old Debentures in the Exchange Offers). The interpretation of the terms
and conditions of the Exchange Offers as to any particular Old Debentures either
before or after the Expiration Date (including the Letter of Transmittal and the
instructions thereto) by the Company shall be final and binding on all parties.
Unless waived, any defects or irregularities in connection with tenders of Old
Debentures for exchange must be cured within such reasonable period of time as
the Company shall determine. None of the Company, the Exchange Agent or any
other person shall be under any duty to give notification of any defect or
irregularity with respect to any tender of Old Debentures for exchange, nor
shall any of them incur any liability for failure to give such notification.
If the Letter of Transmittal or any Old Debentures or powers of attorney
are signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such person should so indicate when signing and, unless waived by the
Company, proper evidence satisfactory to the Company of their authority to so
act must be submitted with the Letter of Transmittal.
By tendering, each Holder will represent to the Company that, among other
things, the New Debentures acquired pursuant to the Exchange Offers are being
obtained in the ordinary course of business of the person receiving such New
Debentures, whether or not such person is the Holder, and that neither the
Holder nor such other person has any arrangement or understanding with any
person to participate in the distribution of the New Debentures. If any Holder
or any such other person is an "affiliate," as defined under Rule 405 of the
Securities Act, of the Company or is engaged in or intends to engage in, or has
an arrangement or understanding with any person to participate in, a
distribution of such New Debentures to be acquired pursuant to the Exchange
Offers, such Holder or any such other person (i) may not rely on the applicable
interpretation of the staff of the Commission and (ii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. Each broker-dealer that receives New
Debentures for its own account in exchange for Old Debentures, where such Old
Debentures were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such New Debentures. See "Plan of Distribution." The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
ACCEPTANCE OF OLD DEBENTURES FOR EXCHANGE; DELIVERY OF NEW DEBENTURES
Upon satisfaction or waiver of all of the conditions to the Exchange
Offers, the Company will accept, promptly after the Expiration Date, all Old
Debentures properly tendered and will issue the New Debentures promptly after
acceptance of the Old Debentures. See "-- Certain Conditions to the Exchange
Offers" below. For purposes of the Exchange Offers, the Company will be deemed
to have accepted properly tendered Old Debentures for exchange when, as and if
the Company has given oral (promptly confirmed in writing) or written notice
thereof to the Exchange Agent.
For each Old Debenture accepted for exchange, the Holder of such Old
Debentures will receive as set forth below under "Description of the New
Debentures -- Book-Entry, Delivery and Form" a New Debenture having a principal
amount equal to that of the surrendered Old Debenture. Accordingly, registered
Holders of New Debentures on the relevant record date for the first interest
payment date following the consummation of
19
<PAGE> 21
the Exchange Offers will receive interest accruing from the most recent date to
which interest has been paid on the Old Debentures or, if no interest has been
paid, from February 10, 1997. Old Debentures accepted for exchange will cease to
accrue interest from and after the date of consummation of the Exchange Offers.
Holders whose Old Debentures are accepted for exchange will not receive any
payment in respect of accrued interest on such Old Debentures otherwise payable
on any interest payment date the record date for which occurs on or after
consummation of the Exchange Offers. If neither this Registration Statement is
declared effective nor the Shelf Registration Statement is filed on or prior to
August 9, 1997, the annual interest rate borne by the Old Debentures will be
increased by 0.25%. If the Exchange Offers are not consummated and the Shelf
Registration Statement is not declared effective by September 8, 1997, the
annual interest rate borne by the Old Debentures will be increased by an
additional 0.25%. If the annual interest rate borne by the Old Debentures shall
have been increased by reason of the circumstances described in one or both of
the two proceeding sentences, upon (i) the declaration that this Registration
Statement is effective or a Shelf Registration Statement is filed at any time
after August 9, 1997, the previously increased annual interest rate borne by the
Old Debentures will be decreased by 0.25%, and (ii) the consummation of the
Exchange Offers or the effectiveness of the Shelf Registration Statement at any
time after September 8, 1997, the annual interest rates on the Old Debentures
will revert to the annual interest rates set forth on the cover page of this
Prospectus. See "Description of the New Debentures -- Registration Agreement."
Old Debentures not tendered or not accepted for exchange will continue to accrue
interest from and after the date of consummation of the Exchange Offers.
In all cases, issuance of New Debentures for Old Debentures that are
accepted for exchange pursuant to the Exchange Offers will be made only after
timely receipt by the Exchange Agent of certificates for such Old Debentures or
a timely Book-Entry Confirmation of such Old Debentures into the Exchange
Agent's account at the Book-Entry Transfer Facility, a properly completed and
duly executed Letter of Transmittal or on Agent's Message in lieu there of and
all other required documents. If any tendered Old Debentures are not accepted
for any reason set forth in the terms and conditions of the Exchange Offers or
if Old Debentures are submitted for a greater principal amount than the Holder
desires to exchange, such unaccepted or non-exchanged Old Debentures will be
returned without expense to the tendering Holder thereof (or, in the cases of
Old Debentures tendered by book-entry transfer into the Exchange Agent's account
at the Book-Entry Transfer Facility pursuant to the book-entry procedures
described below, such non-exchanged Old Debentures will be credited to an
account maintained with such Book-Entry Transfer Facility) as promptly as
practicable after the expiration or termination of the Exchange Offers.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Old Debentures at the Book-Entry Transfer Facility for purposes of the
Exchange Offers within two business days after the date of this Prospectus
unless the Exchange Agent already has established an account with the Book-Entry
Transfer Facility suitable for the Exchange Offers, and any financial
institution that is a participant in the Book-Entry Transfer Facility's systems
may make book-entry delivery of Old Debentures by causing the Book-Entry
Transfer Facility to transfer such Old Debentures into the Exchange Agent's
account at the Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. However, although delivery of Old
Debentures may be effected through book-entry transfer at the Book-Entry
Transfer Facility, the Letter of Transmittal or a facsimile thereof, with any
required signature guarantees or on Agent's Message in lieu thereof and any
other required documents, must, in any case, be transmitted to and received by
the Exchange Agent at the addresses set forth below under "-- Exchange Agent" on
or prior to the Expiration Date or the guaranteed procedures described below
must be complied with.
GUARANTEED DELIVERY PROCEDURES
If a registered Holder of the Old Debentures desires to tender such Old
Debentures and time will not permit such Holder's Old Debentures or other
required documents to reach the Exchange Agent before the Expiration Date, or
the procedure for book-entry transfer cannot be completed on a timely basis, a
tender may be effected if (i) the tender is made through an Eligible
Institution, (ii) on or prior to 5:00 p.m., New York
20
<PAGE> 22
City time, on the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Company (by telegram, telex,
facsimile transmission, mail or hand delivery), setting forth the name and
address of the Holder of Old Debentures and the amount of Old Debentures
tendered, stating that the tender is being made thereby and guaranteeing that
within three New York Stock Exchange ("NYSE") trading days after the date of
execution of the Notice of Guaranteed Delivery, the certificates for all
physically tendered Old Debentures, in proper form for transfer, or a Book-Entry
Confirmation, as the case may be, together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof or Agent's Message in lieu
thereof) with any required signature guarantees and any other documents required
by the Letter of Transmittal will be deposited by the Eligible Institution with
the Exchange Agent, and (iii) the certificates for all physically tendered Old
Debentures, in proper form for transfer, or a Book-Entry Confirmation, as the
case may be, together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof or Agent's Message in lieu thereof) with any
required signature guarantees, and any other documents required by the Letter of
Transmittal will be deposited by the Eligible Institution within three NYSE
trading days after the date of execution of the Notice of Guaranteed Delivery.
WITHDRAWAL RIGHTS
Tenders of Old Debentures may be withdrawn at any time prior to 5:00 p.m.,
New York City time, on the Expiration Date. For a withdrawal to be effective, a
written notice or facsimile transmission notice of withdrawal must be received
by the Exchange Agent at the address set forth below under "-- Exchange Agent."
Any such notice of withdrawal must specify the name of the person having
tendered the Old Debentures to be withdrawn, identify the Old Debentures to be
withdrawn (including the principal amount of such Old Debentures), and (where
certificates for Old Debentures have been transmitted) specify the name in which
such Old Debentures are registered, if different from that of the withdrawing
Holder. If certificates for Old Debentures have been delivered or otherwise
identified to the Exchange Agent, then, prior to the release of such
certificates the withdrawing Holder must also submit the serial numbers of the
particular certificates to be withdrawn and a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution unless such Holder is an
Eligible Institution in which case such guarantee will not be required. If Old
Debentures have been tendered pursuant to the procedure for book-entry transfer
described above, any notice of withdrawal must specify the name and number of
the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Old Debentures and otherwise comply with the procedures of such
facility. All questions as to the validity, form and eligibility (including time
of receipt) of such notices will be determined by the Company, whose
determination will be final and binding on all parties. Any Old Debentures so
withdrawn will be deemed not to have been validly tendered for exchange for
purposes of the Exchange Offers. Any Old Debentures which have been tendered for
exchange but which are not exchanged for any reason will be returned to the
Holder thereof without cost to such Holder (or, in the case of Old Debentures
tendered by book-entry transfer into the Exchange Agent's account at the
Book-Entry Transfer Facility pursuant to the book-entry transfer procedures
described above, such Old Debentures will be credited to an account maintained
with such Book-Entry Transfer Facility for the Old Debentures) as soon as
practicable after withdrawal, rejection of tender or termination of the Exchange
Offers. Properly withdrawn Old Debentures may be retendered by following one of
the procedures described under "-- Procedures for Tendering Old Debentures"
above at any time on or prior to the Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFERS
Notwithstanding any other provisions of the Exchange Offers, and subject to
its obligations pursuant to the Registration Agreement, the Company shall not be
required to accept for exchange, or to issue New Debentures in exchange for, any
Old Debentures and may terminate or amend either or both of the Exchange Offers,
if at any time before the acceptance of such New Debentures for exchange, any of
the following events shall occur:
21
<PAGE> 23
(i) any injunction, order or decree shall have been issued by any
court or any governmental agency that would prohibit, prevent or otherwise
materially impair the ability of the Company to proceed with either of the
respective Exchange Offers; or
(ii) the Exchange Offers will violate any applicable law or any
applicable interpretation of the staff of the Commission.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company in whole or in part at any time and from time to time
upon advice of outside counsel. The failure by the Company at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and such right shall be deemed an ongoing right which may be asserted at
any time and from time to time.
In addition, the Company will not accept for exchange any Old Debentures
tendered and no New Debentures will be issued in exchange for any such Old
Debentures, if at such time any stop order is threatened by the Commission or in
effect with respect to the Registration Statement of which this Prospectus is a
part or the qualification of the Indenture under the Trust Indenture Act of
1939, as amended.
The Exchange Offer is not conditioned on any minimum principal amount of
Old Debentures being tendered for exchange.
EXCHANGE AGENT
The Chase Manhattan Bank has been appointed as the Exchange Agent for the
Exchange Offers. All executed Letters of Transmittal should be directed to the
Exchange Agent at the address set forth below. Questions and requests for
assistance, requests for additional copies of this Prospectus or of the Letter
of Transmittal and requests or Notices of Guaranteed Delivery should be directed
to the Exchange Agent addressed as follows:
The Chase Manhattan Bank, Exchange Agent
By Mail, Overnight Courier or Hand Delivery:
55 Water Street
Room 234, North Building
New York, New York 10041
Attention: Luis Padilla
By Facsimile:
212-638-7380
212-638-7381
Confirm by Telephone
212-638-0458
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL.
FEES AND EXPENSES
The Company will not make any payment to brokers, dealers, or others
soliciting acceptances of the Exchange Offers.
The cash expenses to be incurred in connection with the Exchange Offers
will be paid by the Company. Such expenses include registration fees, fees and
expenses of the Exchange Agent and Trustee, accounting and legal fees and
printing costs, among others.
TRANSFER TAXES
Holders who tender their Old Debentures for exchanges will not be obligated
to pay any transfer taxes in connection therewith, except that Holders who
instruct the Company to register New Debentures in the name
22
<PAGE> 24
of, or request that Old Debentures not tendered or not accepted in the Exchange
Offers be returned to, a person other than the registered tendering Holder will
be responsible for the payment of the applicable transfer tax thereon.
CONSEQUENCES OF FAILURE TO EXCHANGE OLD DEBENTURES
Holders of Old Debentures who do not exchange their Old Debentures for New
Debentures pursuant to the Exchange Offers will continue to be subject to the
provisions in the Old Debentures regarding transfer and exchange of the Old
Debentures and the restrictions on transfer of such Old Debentures as set forth
in the legend thereon as a consequence of the issuance of the Old Debentures
pursuant to exemptions from, or in transactions not subject to, the registration
requirements of the Securities Act and applicable state securities laws. In
general, the Old Debentures may not be offered or sold, unless registered under
the Securities Act and applicable state securities laws. The Company does not
currently anticipate that it will register Old Debentures under the Securities
Act. See "Description of the New Debentures -- Registration Agreement."
Based on interpretations by the staff of the Commission, as set forth in
no-action letters issued to third parties, the Company believes that New
Debentures issued pursuant to the Exchange Offers in exchange for Old Debentures
may be offered for resale, resold or otherwise transferred by Holders thereof
(other than any such holder which is an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such New Debentures are acquired in the ordinary course or such Holders'
business and such Holders, other than broker-dealers, have no arrangement or
understanding with any person to participate in the distribution of such New
Debentures. However, the Commission has not considered the Exchange Offers in
the context of a no-action letter and there can be no assurance that the staff
of the Commission would make a similar determination with respect to the
Exchange Offers as in such other circumstances. Each Holder, other than a
broker-dealer, must acknowledge that it is not engaged in, and does not intend
to engage in, a distribution of such New Debentures and has no arrangement or
understanding to participate in a distribution of New Debentures. If any Holder
is an affiliate of the Company or is engaged in or intends to engage in or has
any arrangements or understanding with respect to the distribution of the New
Debentures to be acquired pursuant to the Exchange Offers, such Holder (i) may
not rely on the applicable interpretations of the staff of the Commission and
(ii) must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction. Each broker-dealer
that receives New Debentures for its own account in exchange for Old Debentures
pursuant to the Exchange Offers must acknowledge that such Old Debentures were
acquired by such broker-dealer as a result of market-making activities or other
trading activities and that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such New
Debentures. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented form time to time, may be used by a
broker-dealer in connection with resales of New Debentures received in exchange
for Old Debentures where such Old Debentures were acquired by such broker-dealer
as a result of market-making activities or other trading activities. The Company
has agreed that for a period of 180 days after the Expiration Date, it will make
this Prospectus available to any broker-dealer for use in connection with any
such laws of certain jurisdictions, if applicable, where the New Debentures may
not be offered or sold unless they have been registered or qualified for sale in
such jurisdictions or any exemption from registration or qualification is
available and is complied with. The Company has agreed, pursuant to the
Registration Agreement, subject to certain limitations specified therein, to
register or qualify the New Debentures for offer or sale under the securities
laws of such jurisdictions as any Holder reasonably requests in writing. Unless
a Holder so requests, the Company does not currently intend to register or
qualify the sale of the New Debentures in any such jurisdictions.
23
<PAGE> 25
DESCRIPTION OF THE NEW DEBENTURES
GENERAL
The Old Debentures were issued under the Indenture and the New Debentures
also will be issued under the Indenture. The Old Debentures and the New
Debentures will be treated as a single class of securities under the Indenture.
The following summary of certain provisions of the Indenture does not purport to
be complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the Indenture, including the definitions of certain terms
therein and those terms made a part thereof by the Trust Indenture Act of 1939,
as amended. A copy of the Indenture is available from the Company upon request.
Whenever defined terms of the Indenture not otherwise defined herein are
referred to, such defined terms are incorporated herein by reference. The term
"Debentures" means the New Debentures and the Old Debentures treated as a single
class.
The Indenture does not limit the aggregate principal amount of securities
that can be issued thereunder. Securities may be issued in one or more series as
may be authorized from time to time by the Company. (Section 2.03.)
As long as the Debentures are represented by one or more Global Securities
(see "-- Book-Entry, Delivery and Form"), all payments of interest will be made
by the Company in immediately available funds. Otherwise, subject to certain
exceptions, payments of interest on the Debentures will be made by check mailed
to the Holders of such Debentures.
The Debentures may be transferred or exchanged at the office of the Trustee
at which its corporate trust business is principally administered in the United
States or at the office of the Trustee or the Trustee's agent in the Borough of
Manhattan, the City and State of New York, at which its corporate agency
business is conducted, subject to the limitations provided in the Indenture,
without the payment of any service charge, other than any tax or governmental
charge payable in connection therewith. (Section 2.07.)
All funds paid by the Company to a paying agent for the payment of
principal, premium, if any, or interest with respect to any Debentures that
remain unclaimed at the end of two years after such principal, premium, or
interest shall have become due and payable will be repaid to the Company, and
the holders of such Debentures will thereafter look only to the Company for
payment thereof.
CERTAIN TERMS OF THE DEBENTURES
Each of the 2027 Debentures and the 2097 Debentures will be limited to
$150,000,000 aggregate principal amount.
Maturity. The 2027 Debentures will mature on February 1, 2027; the 2097
Debentures will mature on February 1, 2097.
Interest. The Debentures will bear interest from February 10, 1997,
payable semiannually in arrears on February 1 and August 1 of each year,
commencing August 1, 1997, to the persons who are registered holders at the
close of business on January 15 and July 15 immediately preceding the interest
payment date. If an interest payment date would otherwise be a day that is not a
Business Day, such interest payment date shall not be postponed; provided,
however, that any payment required to be made on such date that is not a
Business Day need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on such date,
and no additional interest shall accrue as a result of such delayed payment.
RANKING
The Debentures will be senior securities of the Company and the
indebtedness evidenced thereby will rank pari passu with all other
unsubordinated and unsecured indebtedness of the Company.
24
<PAGE> 26
OPTIONAL REDEMPTION
Each of the 2027 Debentures and the 2097 Debentures will be redeemable as a
whole or in part, at the option of the Company at any time, at a redemption
price equal to the greater of (i) 100% of the principal amount of each such
Debenture to be redeemed and (ii) the sum of the present values of the Remaining
Scheduled Payments thereon discounted to the redemption date on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus, in the case of the 2027 Debentures, 10 basis points and, in
the case of the 2097 Debentures, 15 basis points, plus, in either case, accrued
interest on the principal amount being redeemed to the date of redemption.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Reference Treasury Dealer as having a maturity comparable to the
remaining term of such Debentures to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Debentures.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Quotations. "Reference Treasury Dealer
Quotations" means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Trustee by such Reference
Treasury Dealer at 5:00 p.m. on the third business day preceding such redemption
date.
"Reference Treasury Dealer" means Salomon Brothers Inc and its successor;
provided, however, that if the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to any such Debenture,
the remaining scheduled payments of the principal thereof to be redeemed and
interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that, if such redemption date is not an
interest payment date with respect to such Debenture, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to such redemption date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of any such Debentures to be
redeemed.
Unless the Company defaults in payment of the redemption price, on and
after the redemption date interest will cease to accrue on such Debentures or
portions thereof called for redemption.
CONDITIONAL RIGHT TO SHORTEN MATURITY OF 2097 DEBENTURES; CERTAIN FEDERAL INCOME
TAX CONSIDERATIONS RELATING TO THE 2097 DEBENTURES
The Company intends to deduct interest paid on the Debentures for Federal
income tax purposes. However, the Clinton Administration's budget proposal for
Fiscal Year 1998, released on February 6, 1997, contained a series of proposed
tax law changes that, among other things, would prohibit an issuer from
deducting interest payments on debt instruments with a maximum weighted average
maturity of more than
25
<PAGE> 27
40 years. This proposal would be effective generally for instruments issued on
or after the date of first Congressional committee action relating thereto.
However, it is not clear from the proposal as to what constitutes "Congressional
Committee Action" with respect to the proposal. There can be no assurance that
this proposal or similar legislation affecting the Company's ability to deduct
interest paid on the 2097 Debentures will not be enacted in the future or that
any such legislation would not have a retroactive effective date.
In addition, under existing general tax law principles, the Internal
Revenue Service or a court might take the position that debt instruments that do
not mature for a very long time (for example, debt instruments like the 2097
Debentures that mature in 100 years) should not be treated as debt for Federal
income tax purposes, but rather as equity. The Company believes that, based on
the factors applied under existing general tax law principles, the 2097
Debentures are valid debt, the Company can deduct interest payments thereon, and
holders should treat such payments as interest. If, however, the 2097 Debentures
were to be treated as equity, the Company would not be able to deduct interest
payments thereon, and holders would be required to treat such payments as
dividends (or other distributions on equity) and not as interest.
Accordingly, upon occurrence of a Tax Event, as defined below, including,
without limitation, as a result of the circumstances described in the first two
paragraphs of this section, the Company will have the right to shorten the
maturity of the 2097 Debentures to the extent required, in the opinion of a
nationally recognized independent tax counsel, such that, after the shortening
of the maturity, interest paid on the 2097 Debentures will be deductible for
Federal income tax purposes. There can be no assurance that the Company would
not exercise its right to shorten the maturity of the 2097 Debentures upon the
occurrence of such a Tax Event.
"Tax Event" means that the Company shall have received an opinion of a
nationally recognized independent tax counsel to the effect that on or after the
date of the issuance of the 2097 Debentures, as a result of (a) any amendment
to, clarification of, or change (including any announced prospective change) in
laws, or any regulations thereunder, of the United States, (b) any judicial
decision, official administrative pronouncement, ruling, regulatory procedure,
notice or announcement, including any notice or announcement of intent to adopt
such procedures or regulations (an "Administrative Action"), or (c) any
amendment to, clarification of, or change in the official position or the
interpretation of such Administrative Action or judicial decision that differs
from the theretofore generally accepted position, in each case, on or after, the
date of the issuance of the 2097 Debentures, such change in tax law creates a
more than insubstantial risk that interest paid by the Company on the 2097
Debentures is not, or will not be deductible, in whole or in part, by the
Company for purposes of United States Federal income tax.
In the event that the Company elects to exercise its right to shorten the
maturity of the 2097 Debentures on the occurrence of a Tax Event, the Company
will mail a notice of shortened maturity to each holder of record of the 2097
Debentures by first-class mail not more than 60 days after the occurrence of
such Tax Event, stating the new maturity date of the 2097 Debentures. Such
notice shall be effective immediately upon mailing.
If the 2097 Debentures constitute indebtedness for Federal income tax
purposes under current law, exercise by the Company of its right to shorten the
maturity of the 2097 Debentures would not be a taxable event to holders.
Prospective investors should be aware, however, that the Company's exercise of
its right to shorten the maturity of the 2097 Debentures will be a taxable event
to holders if the 2097 Debentures are treated as equity for purposes of Federal
income taxation under current law before the maturity is shortened, assuming
that the 2097 Debentures of shortened maturity are treated as debt for such
purposes.
Should the 2097 Debentures be treated as equity for Federal income tax
purposes, some holders of the 2097 Debentures may be adversely impacted from a
Federal income tax perspective. For example (and without limiting the potential
holders who might be adversely affected), if the 2097 Debentures are so treated
as equity and payments on the 2097 Debentures are therefore treated as
dividends, in the case of non-U.S. holders of the 2097 Debentures such dividends
would under current law be subject to U.S. withholding tax at a 30% rate or, if
applicable, at a lower rate prescribed by treaty, whereas under current law
interest for many non-U.S. holders is exempt from U.S. withholding tax.
26
<PAGE> 28
CERTAIN COVENANTS OF THE COMPANY
Limitation on Liens
The Company and its Restricted Subsidiaries will not create any Liens
unless the Debentures then outstanding are equally and ratably secured, with
certain exceptions, including but not limited to: (a) pledges or deposits under
worker's compensation laws, unemployment insurance laws or similar legislation,
or good faith deposits in connection with bids, tenders, contracts (including
government contracts, but excluding contracts for the payment of indebtedness)
or other obligations of like nature, in each case incurred in the ordinary
course of business, (b) statutory and tax Liens for sums not yet due or
delinquent or being contested in good faith by appropriate proceedings, (c)
certain encumbrances and easements, (d) Liens existing at the date of the
Indenture, (e) Liens securing only Indebtedness of a Wholly Owned Subsidiary of
the Company to the Company or one or more Wholly Owned Subsidiaries of the
Company, (f) Purchase Money Liens, (g) Liens on property or shares of stock of
another Person at the time such other Person becomes a Subsidiary of such
Person, provided that such Liens are not created in connection with such other
Person becoming a Subsidiary of such Person, (h) Liens securing a Hedging
Obligation, (i) Liens created in connection with a tax-free financing, (j) Liens
resulting from the deposit of funds or evidences of Indebtedness in trust for
the purpose of decreasing Indebtedness of the Company or any of its
Subsidiaries, (k) rights of a common owner of any interest in property, (l)
Liens placed upon any real property owned or acquired by the Company or any of
its Subsidiaries securing Indebtedness in an amount up to 80% of the fair market
value of such real property, (m) Liens to secure any refinancing, refunding,
extension, renewal or replacement of any Indebtedness secured by certain
permitted Liens, and (n) additional Liens not to exceed a total of 15% of
Consolidated Net Tangible Assets. (Section 4.07.)
Limitation on Sale/Leaseback Transactions
The Company and its Restricted Subsidiaries shall not enter into any
Sale/Leaseback Transaction with respect to any Principal Property unless (i) the
Company or such Restricted Subsidiary would be entitled to create a Lien on such
Principal Property securing Indebtedness in an amount equal to the Attributable
Indebtedness with respect to such Sale/Leaseback Transaction without securing
the Debentures pursuant to the provisions described above under "Limitation on
Liens" or (ii) the Company, within six months from the effective date of such
Sale/Leaseback Transaction, applies an amount equal to the Attributable
Indebtedness with respect to such Sale/Leaseback Transaction to the voluntary
defeasance or retirement of Debentures or other Indebtedness ranking pari passu
with the Debentures; provided that the foregoing will not prevent the Company or
any Restricted Subsidiary from (x) entering into any Sale/Leaseback Transaction
involving a lease with a term of less than three years or (y) entering into any
Sale/Leaseback Transaction between the Company and a Restricted Subsidiary or
between Restricted Subsidiaries. (Section 4.08.)
Limitation on Consolidations and Mergers
The Company shall not consolidate with or merge into, or sell, convey,
transfer, lease or otherwise dispose of all or substantially all of its assets
(in one transaction or a series of related transactions) to another entity
unless such entity is a corporation that assumes all the obligations under the
Debentures and the Indenture and certain other conditions are met (whereupon all
such obligations of the Company shall terminate). (Section 10.01.)
EVENTS OF DEFAULT AND REMEDIES
The following events are defined in the Indenture as "Events of Default"
with respect to the 2027 Debentures and the 2097 Debentures, as the case may be
(Section 6.01.):
(a) Default in the payment of any installment of interest on any such
Debenture, as and when the same shall become due and payable and
continuance of such default for a period of 30 days;
27
<PAGE> 29
(b) Default in the payment of all or any part of the principal or
premium with respect to any such Debenture as and when the same shall
become due and payable, whether at maturity, upon redemption, by
declaration, upon required repurchase, or otherwise;
(c) Failure on the part of the Company to comply with the provisions
of the Indenture relating to consolidations, mergers, and sales of assets;
(d) Failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in such
Debentures, in the Indenture with respect to such Debentures, or in any
supplemental indenture with respect to such Debentures (other than
covenants or agreements included solely by or for the benefit of Debt
Securities thereunder other than such Debentures) continuing for a period
of 90 days after the date on which written notice specifying such failure
and requiring the Company to remedy the same and stating that such notice
is a "Notice of Default" hereunder shall have been given to the Company by
the Trustee or to the Company and the Trustee by the holders of at least
25% in aggregate principal amount of such Debentures at the time
outstanding;
(e) The Company or any of its "Significant Subsidiaries" (defined as
any subsidiary of the Company that would be a "significant subsidiary" as
defined in Rule 405 under the Securities Act as in effect on the date of
the Indenture) shall (1) voluntarily commence any proceeding or file any
petition seeking relief under the United States Bankruptcy Code or other
federal or state bankruptcy, insolvency, or similar law, (2) consent to the
institution of, or fail to controvert within the time and in the manner
prescribed by law, any such proceeding or the filing of any such petition,
(3) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, or similar official for the Company or any such
Significant Subsidiary or for a substantial part of its property, (4) file
an answer admitting the material allegations of a petition filed against it
in any such proceeding, (5) make a general assignment for the benefit of
creditors, (6) admit in writing its inability or fail generally to pay its
debts as they become due, (7) take corporate action for the purpose of
effecting any of the foregoing, or (8) take any comparable action under any
foreign laws relating to insolvency of the Company or any Significant
Subsidiary;
(f) The entry of an order or decree by a court having competent
jurisdiction for (I) relief with respect to the Company or any of its
Significant Subsidiaries or a substantial part of any of their property
under the United States Bankruptcy Code or any other federal or state
bankruptcy, insolvency, or similar law, (2) the appointment of a receiver,
trustee, custodian, sequestrator, or similar official for the Company or
any such Significant Subsidiary or for a substantial part of any of their
property (except any decree or order appointing such official of any
Significant Subsidiary pursuant to a plan under which the assets and
operations of such Significant Subsidiary are transferred to or combined
with another Subsidiary or Subsidiaries of the Company or to the Company),
or (3) the winding-up or liquidation of the Company or any such Significant
Subsidiary (except any decree or order approving or ordering the winding-up
or liquidation of the affairs of a Significant Subsidiary pursuant to a
plan under which the assets and operations of such Significant Subsidiary
are transferred to or combined with another Subsidiary or Subsidiaries of
the Company or to the Company), and such order or decree shall continue
unstayed and in effect for 60 consecutive days, or any similar relief is
granted under any foreign laws and the order or decree stays in effect for
60 consecutive days.
If an Event of Default described in clause (a), (b), (c), (d), (e) (other
than with respect to the Company) or (f) (other than with respect to the
Company) above occurs and is continuing with respect to the 2027 Debentures or
the 2097 Debentures, unless the principal and interest with respect to all such
Debentures shall have already become due and payable, either the Trustee or the
holders of not less than 25% in aggregate principal amount of such Debentures
then outstanding may declare the principal amount of and interest on such
Debentures due and payable immediately. If an Event of Default described in
clause (e) or (f) (in each case with respect to the Company) above occurs,
unless the principal and interest with respect to all such Debentures shall have
become due and payable, the principal amount of and interest on such Debentures
then outstanding shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any holder of such
Debentures. (Section 6.01.)
28
<PAGE> 30
If an Event of Default occurs and is continuing with respect to the 2027
Debentures or the 2097 Debentures, the Trustee shall be entitled and empowered
to institute any action or proceeding for the collection of the sums so due and
unpaid or to enforce the performance of any provisions of such Debentures or the
Indenture, to prosecute any such action or proceeding to judgment or final
decree, and to enforce any such judgment or final decree against the Company or
any other obligor on such Debentures. In addition, if there shall be pending
proceedings for the bankruptcy or reorganization of the Company or any other
obligor on such Debentures, or if a receiver, trustee, or similar official shall
have been appointed for its property, the Trustee shall be entitled and
empowered to file and prove a claim for the whole amount of principal, premium,
if any, and interest owing and unpaid with respect to such Debentures. (Section
6.02.) No holder of any such Debentures shall have any right to institute any
action or proceeding upon or under or with respect to the Indenture, for the
appointment of a receiver or trustee, or for any other remedy, unless (a) such
holder previously shall have given to the Trustee written notice of an Event of
Default with respect to such Debentures and of the continuance thereof, (b) the
holders of not less than 25% in aggregate principal amount of such outstanding
Debentures shall have made written request to the Trustee to institute such
action or proceeding with respect to such Event of Default and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses, and liabilities to be incurred therein or thereby, and (c) the
Trustee, for 60 days after its receipt of such notice, request, and offer of
indemnity shall have failed to institute such action or proceeding and no
direction inconsistent with such written request shall have been given to the
Trustee pursuant to the provisions of the Indenture. (Section 6.04.)
Prior to the acceleration of the maturity of the 2027 Debentures or the
2097 Debentures, the holders of a majority in aggregate principal amount of such
Debentures at the time outstanding may, on behalf of the holders of such
Debentures, waive any past default or Event of Default and its consequences for
such Debentures except (a) a default in the payment of the principal, premium,
if any, or interest with respect to such Debentures or (b) a default with
respect to a provision of the Indenture that cannot be amended without the
consent of each holder affected thereby. In case of any such waiver, such
default shall cease to exist, any Event of Default arising therefrom shall be
deemed to have been cured for all purposes, and the Company, the Trustee, and
the holders of such Debentures shall be restored to their former positions and
rights under the Indenture. (Section 6.06.)
The Trustee shall within 90 days after the occurrence of a default known to
it with respect to the 2027 Debentures or the 2097 Debentures, give to the
holders of such Debentures notice of all uncured defaults with respect to such
Debentures known to it, unless such defaults shall have been cured or waived
before the giving of such notice; provided, however, that except in the case of
default in the payment of principal, premium, if any, or interest with respect
to such Debentures the Trustee shall be protected in withholding such notice if
it in good faith determines that the withholding of such notice is in the
interest of the holders of such Debentures. (Section 6.07.)
BOOK-ENTRY, DELIVERY AND FORM
Each of the 2027 Debentures and the 2097 Debentures sold will be issued in
the form of one or more Global Securities. The Global Securities will be
deposited with, or on behalf of, the Depository and registered in the name of
the Depository or its nominee. Except as set forth below, the Global Securities
may be transferred, in whole and not in part, only to the Depository or another
nominee of the Depository. Investors may hold their beneficial interests in the
Global Securities directly through the Depository if they have an account with
the Depository or indirectly through organizations which have accounts with the
Depository.
The Depository has advised the Company as follows: The Depository is a
limited-purpose trust company and organized under the laws of the State of New
York, a member of the Federal Reserve System, a "clearing corporation" within
the meaning of the New York Uniform Commercial Code, and "a clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. The
Depository was created to hold securities of institutions that have accounts
with the Depository ("participants") and to facilitate the clearance and
settlement of securities transactions among its participants in such securities
through electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depository's participants include securities brokers and dealers (which may
include
29
<PAGE> 31
the Initial Purchaser), banks, trust companies, clearing corporations and
certain other organizations. Access to the Depository's book-entry system is
also available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
whether directly or indirectly ("indirect participants").
Upon the issuance of the Global Securities, the Depository will credit, on
its book-entry registration and transfer system, the principal amount of the
Debentures represented by such Global Securities to the accounts of
participants. The accounts to be credited shall be designated by the Initial
Purchaser (as defined below) of such 2027 Debentures and 2097 Debentures.
Ownership of beneficial interests in the Global Securities will be limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests in the Global Securities will be shown on, and the
transfer of those ownership interests will be effected only through, records
maintained by the Depository (with respect to participants' interest) and such
participants (with respect to the owners of beneficial interests in the Global
Securities other than participants). The laws of some jurisdictions may require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and laws may impair the ability to transfer or
pledge beneficial interests in the Global Securities.
So long as the Depository, or its nominee, is the registered holder and
owner of the Global Securities, the Depository or such nominee, as the case may
be, will be considered the sole legal owner and holder of the related Debentures
for all purposes of such Debentures and the Indenture. Except as set forth
below, owners of beneficial interests in the Global Securities will not be
entitled to have the Debentures represented by the Global Securities registered
in their names, will not receive or be entitled to receive physical delivery of
certificated Debentures in definitive form and will not be considered to be the
owners or holders of any Debentures under the Global Securities. The Company
understands that under existing industry practice, in the event an owner of a
beneficial interest in the Global Securities desires to take any action that the
Depository, as the holder of the Global Securities, is entitled to take, the
Depository would authorize the participants to take such action, and that the
participants would authorize beneficial owners owning through such participants
to take such action or would otherwise act upon the instructions of beneficial
owners owning through them.
Payment of principal of and interest on Debentures represented by the
Global Securities registered in the name of and held by the Depository or its
nominee will be made to the Depository or its nominee, as the case may be, as
the registered owner and holder of the Global Securities.
The Company expects that the Depository or its nominee, upon receipt of any
payment of principal of or interest on the Global Securities, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Securities
as shown on the records of the Depository or its nominee, The Company also
expects that payments by participants to owners of beneficial interests in the
Global Securities held through such participants will be governed by standing
instructions and customary practices and will be the responsibility of such
participants. The Company will not have any responsibility or liability for any
aspect of the records relating to, or payments made on account of, beneficial
ownership interests in the Global Securities for any Debentures or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests or for any other aspect of the relationship between the
Depository and its participants or the relationship between such participants
and the owners of beneficial interests in the Global Securities owning through
such participants.
Unless and until exchanged in whole or in part for certificated Debentures
in definitive form, the Global Securities for the 2027 Debentures or the 2097
Debentures may not be transferred except as a whole by the Depository to a
nominee of such Depository or by a nominee of such Depository to such Depository
or another nominee of such Depository.
Although the Depository has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Securities among participants of
the Depository, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. Neither the
Trustee nor the Company will have any responsibility for the performance by the
Depository or its participants or indirect participants of their respective
obligations under the rules and procedures governing their operations.
30
<PAGE> 32
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Debentures will be made by the Initial Purchaser in
immediately available funds. So long as the Debentures are represented by the
Global Securities, all payments of principal and interest will be made by the
Company in immediately available funds.
The Debentures will trade in the Depository's Same-Day Funds Settlement
System until maturity, and secondary market trading activity in the Debentures
will therefore be required by the Depositary to settle in immediately available
funds. No assurance can be given as to the effect, if any, of settlement in
immediately available funds on trading activity in the Debentures.
CERTIFICATED DEBENTURES
If the Depository is at any time unwilling, unable, or ineligible to
continue as depositary, the Company shall appoint a successor depositary or, if
a successor depositary is not appointed by the Company within 90 days, the
Company will issue individual Debentures in exchange for the Global Security
representing such Debentures. (Section 2.15.) In addition, the Company may at
any time and in its sole discretion determine no longer to have Debentures
represented by a Global Security and, in such event, will issue individual
Debentures in exchange for the Global Security representing such Debentures.
(Section 2.15.) In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to physical delivery of individual Debentures
represented by such Global Security equal in principal amount to such beneficial
interest and to have such Debentures registered in its name.
MODIFICATION OF THE INDENTURE
The Company and the Trustee may enter into supplemental indentures without
the consent of the holders of the 2027 Debentures or the 2097 Debentures for one
or more of the following purposes (Section 9.01.):
(a) To evidence the succession of another person to the Company
pursuant to the provisions of the Indenture relating to consolidations,
mergers, and sales of assets and the assumption by such successor of the
covenants, agreements, and obligations of the Company in the Indenture and
in such Debentures;
(b) To surrender any right or power conferred upon the Company by the
Indenture, to add to the covenants of the Company such further covenants,
restrictions, conditions, or provisions for the protection of the holders
of such Debentures as the Board of Directors of the Company shall consider
to be for the protection of the holders of such Debentures and to make the
occurrence, or the occurrence and continuance, of a default in any of such
additional covenants, restrictions, conditions or provisions a default or
an Event of Default under the Indenture (provided, however, that with
respect to any such additional covenant, restriction, condition or
provision, such supplemental Indenture may provide for a period of grace
after default, which may be shorter or longer than that allowed in the case
of other defaults, may provide for an immediate enforcement upon such
default, may limit the remedies available to the Trustee upon such default,
or may limit the right of holders of a majority in aggregate principal
amount of such Debentures);
(c) To cure any ambiguity or to correct or supplement any provision
contained in the Indenture, in any supplemental Indenture, or in any such
Debentures that may be defective or inconsistent with any other provision
contained therein;
(d) To modify or amend the Indenture in such a manner as to permit the
qualification of the Indenture or any supplemental Indenture under the
Trust Indenture Act as then in effect, except that the Indenture may not be
amended to include the provisions referred to in Section 316(a)(2) of the
Trust Indenture Act;
(e) To convey, transfer, assign, mortgage, or pledge any property to
or with the Trustee, or to make such other provisions in regard to matters
or questions arising under the Indenture as shall not adversely affect the
interests of any holders of such Debentures;
(f) To add guarantees with respect to such Debentures or to secure
such Debentures;
31
<PAGE> 33
(g) To make any change that does not adversely affect the rights of
any holder; and
(h) To evidence and provide for the acceptance of appointment by a
successor or separate Trustee with respect to such Debentures and to add to
or change any of the provisions of the Indenture as shall be necessary to
provide for or facilitate the administration of the Indenture by more than
one Trustee.
With the consent of the holders of a majority in aggregate principal amount
of the outstanding Debentures affected thereby, the Company and the Trustee may
from time to time and at any time enter into a supplemental Indenture for the
purpose of adding any provisions to, changing in any manner, or eliminating any
of the provisions of the Indenture or of any supplemental indenture or modifying
in any manner the rights of the holders of such Debentures; provided, however,
that without the consent of the holders of each Debenture so affected, no such
supplemental Indenture shall (a) reduce the percentage in principal amount of
the Debentures whose holders must consent to an amendment, (b) reduce the rate
of or extend the time for payment of interest on any Debenture, (c) reduce the
principal of or extend the stated maturity of any Debenture, (d) reduce the
premium payable upon the redemption of any Debenture or change the time at which
any Debenture may or shall be redeemed, (e) make any Debenture payable in a
currency other than that stated in the Debenture, (f) release any security that
may have been granted with respect to the Debenture or (g) make any change in
the provisions of the Indenture relating to waivers of defaults or amendments
that require unanimous consent. (Section 9.02.)
SATISFACTION AND DISCHARGE OF THE INDENTURE; DEFEASANCE
The Indenture shall generally cease to be of any further effect with
respect to the 2027 Debentures or the 2097 Debentures, as the case may be, if
(a) the Company has delivered to the Trustee for cancellation all such
Debentures or (b) all such Debentures not theretofore delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year, and the Company shall have deposited with the Trustee as trust funds
the entire amount sufficient (in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee) without consideration of any reinvestment and after
payment of all taxes or other charges and assessments in respect thereof payable
by the Trustee to pay at maturity or upon redemption all such Debentures, no
default with respect to such Debentures has occurred and is continuing on the
date of such deposit, such deposit does not result in a breach or violation of,
or constitute a default under, the Indenture or any other agreement or
instrument to which the Company is a party and the Company delivered an
officers' certificate and an opinion of counsel each stating that such
conditions have been complied with (and if, in either case, the Company shall
also pay or cause to be paid all other sums payable under the Indenture by the
Company). (Section 11.02.)
In addition, the Company shall have a "legal defeasance option" (pursuant
to which it may terminate, with respect to the 2027 Debentures or the 2097
Debentures, all of its obligations under such Debentures and the Indenture with
respect to such Debentures) and a "covenant defeasance option" (pursuant to
which it may terminate, with respect to the 2027 Debentures or the 2097
Debentures, its obligations with respect to such Debentures under certain
specified covenants contained in the Indenture). If the Company exercises its
legal defeasance option with respect to the 2027 Debentures or the 2097
Debentures, payment of such Debentures may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option with
respect to the 2027 Debentures or the 2097 Debentures, payment of such
Debentures may not be accelerated because of an Event of Default related to the
specified covenants. The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option. (Section
11.02.)
The Company may exercise its legal defeasance option or its covenant
defeasance option with respect to the 2027 Debentures or the 2097 Debentures
only if (a) the Company irrevocably deposits in trust with the Trustee cash or
U.S. Government Obligations (as defined in the Indenture) for the payment of
principal, premium, if any, and interest with respect to such Debentures to
maturity or redemption, as the case may be, (b) the Company delivers to the
Trustee a certificate from a nationally recognized form of independent public
accountants expressing their opinion that the payments of principal and interest
when due and without
32
<PAGE> 34
reinvestment on the deposited U.S. Government Obligations plus any deposited
money without investment will provide cash at such times and in such amounts as
will be sufficient to pay the principal, premium, if any, and interest when due
with respect to all such Debentures to maturity or redemption, as the case may
be, (c) 91 days pass after the deposit is made and during the 91-day period no
default described in clause (f) or (g) under "Description of Debt
Securities-Events of Default and Remedies" above with respect to the Company
occurs that is continuing at the end of such period, (d) no default has occurred
and is continuing on the date of such deposit and after giving effect thereto,
(e) the deposit does not constitute a default under any other agreement binding
on the Company, (f) the Company delivers to the Trustee an opinion of counsel to
the effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company Act of
1940, (g) the Company shall have delivered to the Trustee an opinion of counsel
addressing certain federal income tax matters relating to the defeasance, and
(h) the Company delivers to the Trustee an officers' certificate and an opinion
of counsel, each stating that all conditions precedent to the defeasance and
discharge of such Debentures as contemplated by the Indenture have been complied
with. (Section 11.03.)
The Trustee shall hold in trust cash or U.S. Government Obligations
deposited with it as described above and shall apply the deposited cash and the
proceeds from deposited U.S. Government Obligations to the payment of principal,
premium, if any, and interest with respect to such Debentures. (Section 11.04.)
The Company has the right to replace the Trustee under certain
circumstances, including (subject to the Company satisfying certain conditions)
if the Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to another corporation
or banking association. (Section 7.08.)
The Company may maintain banking and other commercial relationships with
the Trustee and its affiliates in the ordinary course of business, and the
Trustee may own Debentures.
REGISTRATION AGREEMENT
The Company entered into the Registration Agreement with the Initial
Purchaser on February 4, 1997 in connection with the sale of the Old Debentures
pursuant to which the Company has agreed, for the benefit of the Holders of each
of the Old 2027 Debentures and the Old 2097 Debentures, at the Company's cost,
to (i) file this Exchange Offer Registration Statement within 90 days after the
date of original issuance of the Old Debentures (the "Issue Date") with the
Commission with respect to the Exchange Offers and (ii) use its best efforts to
cause the Exchange Offer Registration Statement to be declared effective under
the Securities Act within 180 days after the Issue Date. Promptly after the
Exchange Offer Registration Statement is declared effective, the Company will
consummate the Exchange Offers. The Company will keep the Exchange Offers open
for not less than 30 days (or longer if required by applicable law) after the
date notice of the Exchange Offers is mailed to the holders of the Old
Debentures.
In the event that any changes in law or applicable interpretations of the
staff of the Commission do not permit the Company to effect the Exchange Offers
with respect to the Old 2027 Debentures or the Old 2097 Debentures, or if for
any reason the Exchange Offer Registration Statement is not declared effective
within 180 days following the Issue Date, or upon the request of the Initial
Purchaser under certain circumstances, the Company will, in lieu of effecting
the registration of the New Debentures pursuant to the Exchange Offer
Registration Statement and at its cost, (i) as promptly as practicable, file
with the Commission a Shelf Registration Statement covering resales of the
applicable Old Debentures, (ii) use its best efforts to cause the Shelf
Registration Statement to be declared effective under the Securities Act by the
210th day after the Issue Date (or promptly in the event of a request by the
Initial Purchaser) and (iii) keep effective the Shelf Registration Statement
until the earliest of (x) the third anniversary of the Issue Date (or the first
anniversary of the effective date if such Shelf Registration Statement is filed
at the request of the Initial Purchaser), (y) the time when the Old Debentures
registered thereunder can be sold by non-affiliates pursuant to Rule 144 under
the Securities Act without limitation under clauses (c), (e), (f) and (h) of
Rule 144, or (z) such time as all the Debentures registered thereunder have been
sold. During any consecutive 365-day period, the Company will have the ability
to suspend the availability of the Shelf Registration Statement for up to two
33
<PAGE> 35
periods of up to 45 consecutive days, but no more than an aggregate of 60 days
during any 365-day period. The Company will, in the event of the filing of a
Shelf Registration Statement, provide to each holder of such applicable Old
Debentures copies of the prospectus which is part of the Shelf Registration
Statement, notify each such holder when the Shelf Registration Statement for
such Old Debentures has become effective and take certain other actions as are
required to permit unrestricted resales of such Old Debentures. A Holder of such
Debentures that sells such Debentures pursuant to the Shelf Registration
Statement generally will be required to be named as a selling security holder in
the related prospectus and to deliver a prospectus to the purchaser, will be
subject to certain of the civil liability provisions under the Securities Act in
connection with such sales and will be bound by the provisions of the
Registration Agreement which are applicable to such a holder (including certain
indemnification obligations). In addition, each Holder of such Old Debentures
will be required to deliver information to be used in connection with the Shelf
Registration Statement and to provide comments on the Shelf Registration
Statement within the time periods set forth in the Registration Agreement in
order to have their Old Debentures included in the Shelf Registration Statement
and to benefit from the provisions regarding Special Interest set forth in the
following paragraph. If the Company has consummated the Exchange Offers, then,
subject to certain limited exceptions, the Company will have no obligation to
file or to maintain the effectiveness of a Shelf Registration Statement with
respect to any Old 2027 Debentures or Old 2097 Debentures that are not tendered
in the Exchange Offers.
In the event that (i) by the 90th day following the Issue Date, the
Exchange Offer Registration Statement is not filed with the Commission, (ii) by
the 180th day following the Issue Date, neither the Exchange Offer Registration
Statement is declared effective nor (if the Exchange Offers are not permitted as
described above) the Shelf Registration Statement is filed with the Commission,
or (iii) by the 210th day following the Issue Date, neither the Exchange Offers
with respect to the Old 2027 Debentures and the Old 2097 Debentures are
consummated nor the Shelf Registration Statement is declared effective (each
such event referred to in clauses (i) through (iii), a "Registration Default"),
interest will accrue on the applicable Old Debentures (in addition to stated
interest on such Debentures) from and including the next day following each such
Registration Default. In each case such additional interest (the "Special
Interest") will be payable in cash semiannually in arrears each February 1 and
August 1, at a rate per annum equal to 0.25% of the principal amount of such
Debentures for each such Registration Default. The aggregate amount of Special
Interest payable pursuant to the above provisions could in no event ever have
exceeded 0.75% per annum of the principal amount of such Debentures, and,
because the Company filed the Exchange Offer Registration Statement by the 90th
day following the Issue Date, the aggregate amount of Special Interest payable
pursuant to the above provisions will not exceed 0.50% per annum of the
principal amount of such Debentures. Upon (a) the filing of the Exchange Offer
Registration Statement after the 90-day period described in clause (i) above,
(b) the effectiveness of the Exchange Offer Registration Statement or the filing
of the Shelf Registration Statement after the 180-day period described in clause
(ii) above or (c) the consummation of the Exchange Offer for such Debentures or
the effectiveness of a Shelf Registration Statement, as the case may be, after
the 210-day period described in clause (iii) above, the Special Interest payable
on such Debentures as a result of the applicable Registration Default will cease
to accrue. For purposes of the preceding sentence, the curing of a Registration
Default by the means described in clause (b) above shall constitute a cure of
the Registration Defaults described in clauses (i) and (ii) above, and the
curing of a Registration Default by the means described in clause (c) above
shall constitute a cure of the Registration Defaults described in clauses (i),
(ii) and (iii) above.
In the event that a Shelf Registration Statement is declared effective
pursuant to the paragraph preceding the immediately preceding paragraph, if the
Company fails to keep such Registration Statement continuously effective for the
period required by the Registration Agreement (except as specifically permitted
therein ), then from such time as the Shelf Registration Statement is no longer
effective until the earlier of (i) the date that the Shelf Registration
Statement is again deemed effective and (ii) the date that is the earliest of
(x) the third anniversary of the Issue Date (or until the first anniversary of
the effective date if the Shelf Registration Statement is filed at the request
of the Initial Purchaser), (y) the time when the Debentures registered
thereunder can be sold by non-affiliates pursuant to Rule 144 under the
Securities Act without any limitations under clauses (c), (e), (f) and (h) of
Rule 144, or (z) the date as of which all of such Debentures are sold pursuant
to the Shelf Registration Statement, Special Interest shall accrue at a rate per
annum equal to 0.25%
34
<PAGE> 36
of the principal amount of the Debentures (0.50% thereof if the Shelf
Registration Statement is no longer effective for 30 days or more) and shall be
payable in cash semiannually in arrears each February 1 and August 1.
The summary herein of certain provisions of the Registration Agreement does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, all the provisions of the Registration Agreement, a copy of
which is available upon request to the Company.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION
IN THE EXCHANGE OFFERS
Regardless of whether the Old Debentures are characterized as debt or
equity for federal income tax purposes, an exchange of the Old Debentures for
the New Debentures pursuant to the Exchange Offers will not constitute a taxable
event for federal income tax purposes. As a result, Holders who exchange their
Old Debentures for New Debentures should not recognize any income, gain or loss
for federal income tax purposes with respect to such exchange. An exchanging
Holder will have the same adjusted basis and holding period in the New
Debentures as it had in the Old Debentures immediately before the exchange. An
exchange of Old Debentures for New Debentures should not effect the
determination of whether the Debentures are characterized as debt or equity for
federal income tax purposes.
For a discussion of proposed legislation which could effect, and other
information regarding, the tax treatment of the 2097 Debentures, see
"Description of the New Debentures -- Conditional Right to Shorten Maturity of
2097 Debentures; Certain Federal Income Tax Considerations Relating to the 2097
Debentures."
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISOR AS TO THE PARTICULAR TAX
CONSEQUENCES TO THEM OF EXCHANGING OLD DEBENTURES FOR NEW DEBENTURES IN THE
EXCHANGE OFFERS, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, OR
FOREIGN TAX LAWS.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Debentures for its own account
pursuant to the Exchange Offers must acknowledge that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such New Debentures. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of New Debentures received in exchange for Old Debentures where
such Old Debentures were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, starting on the Expiration Date and ending on the close of business 180
days after the Expiration Date, it will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such
resale.
The Company will not receive any proceeds from any sale of New Debentures
by broker-dealers. New Debentures received by broker-dealers for their own
account pursuant to the Exchange Offers may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Debentures or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or at negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from any
such broker-dealer and/or the purchasers of any such New Debentures. Any
broker-dealer that resells New Debentures that were received by it for its own
account pursuant to the Exchange Offers and any broker or dealer that
participates in a distribution of such New Debentures may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit of any
such resale of New Debentures and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will deliver
and by delivering a prospectus meeting the requirements of the Securities Act, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
35
<PAGE> 37
For a period of 180 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offers (including the expenses of one counsel for the
Holders of the Old Debentures) other than commissions or concessions of any
brokers or dealers and will indemnify the Holders of the Debentures (including
any brokerdealers) against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
The validity of the New Debentures offered hereby will be passed upon for
the Company by Louis E. Stellato, Vice President, General Counsel and Secretary
of the Company. At December 31, 1996, Mr. Stellato beneficially owned 17,273
shares of common stock of the Company and held options to purchase an additional
39,800 shares of common stock of which 34,466 were exercisable within 60 days of
such date.
INDEPENDENT ACCOUNTANTS
The consolidated financial statements and schedule of the Company appearing
in the Company's Annual Report on Form 10-K for the year ended December 31,
1996, incorporated by reference in this Prospectus, have been audited by Ernst &
Young LLP, independent auditors, as stated in their report included therein.
The consolidated financial statements relating to Thompson Minwax as of
December 31, 1995 and for the year ended December 31, 1995, incorporated by
reference in this Prospectus have been audited by Deloitte & Touche LLP,
independent accountants, as stated in their report incorporated by reference
herein.
36
<PAGE> 38
======================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE AS OF WHICH
INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 4
Incorporation of Certain Documents by
Reference........................... 4
The Company........................... 5
Summary............................... 7
Risk Factors.......................... 11
Use of Proceeds....................... 12
Summary Historical Financial
Information......................... 13
Unaudited Pro Forma Combined Condensed
Financial Statements................ 14
The Exchange Offers................... 17
Description of the New Debentures..... 24
Certain Federal Income Tax
Consequences of Participation in the
Exchange Offers..................... 35
Plan of Distribution.................. 35
Legal Matters......................... 36
Independent Accountants............... 36
</TABLE>
======================================================
======================================================
$300,000,000
THE SHERWIN-WILLIAMS
COMPANY
$150,000,000
7.375% DEBENTURES DUE 2027
$150,000,000
7.45% DEBENTURES DUE 2097
LOGO
PROSPECTUS
DATED , 1997
----------------------------------------------------------
----------------------------------------------------------
<PAGE> 39
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article IV of the Company's Code of Regulations, as amended April 27, 1988
("Regulations"), filed as Exhibit 4(b) to Post-Effective Amendment No. 1 to Form
S-8 Registration Statement Number 2-91401, dated April 29, 1988, is incorporated
herein by reference.
Reference is made to Section 1701.13(E) of the Ohio Revised Code relating
to the indemnification of directors and officers of an Ohio corporation and to
Sections 1 and 2 of Article IV of the Regulations.
The Ohio Revised Code and Section 1 of Article IV of the Regulations
provide that the Company will indemnify its directors, officers, employees and
agents against amounts which may be incurred in connection with certain actions,
suits or proceedings under the circumstances as set out in Sections 1(a) and
1(b) of Article IV of the Regulations. However, the Ohio Revised Code and
Section 1 of Article IV of the Regulations limit indemnification in respect of
certain claims, issues or matters as to which such party is adjudged to be
liable for negligence or misconduct in performance of his duty to the Company
and also in actions in which the only liability asserted against a director is
for certain statutory violations. The Ohio Revised Code and Section 1 of Article
IV of the Regulations also provide that general indemnification provisions as
found in Sections 1(a) and 1(b) of Article IV of the Regulations do not limit
the remaining provisions of Article IV of the Regulations.
In addition, the Ohio Revised Code and Section 1(e) of Article IV of the
Regulations provide that the Company may pay certain expenses in advance of the
final disposition of an action if the person receiving the advance undertakes to
repay the advance if it is ultimately determined that the person receiving the
advance is not entitled to indemnification. Also, with certain limited
exceptions, expenses incurred by a director in defending an action must be paid
by the Company as they are incurred in advance of the final disposition if the
director agrees (i) to repay such advances if it is proved by clear and
convincing evidence that the director's action or failure to act involved an act
or omission undertaken with reckless disregard for the Company's interests and
(ii) to reasonably cooperate with the Company concerning the action.
The Company may from time to time maintain insurance on behalf of any
person who is or was a director or officer against any loss arising from any
claim asserted against such director or officer in any such capacity, subject to
certain exclusions. The Company also has entered into indemnification agreements
with its directors and certain of its officers providing protection as permitted
by law.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
An index of exhibits appears at page II-5.
ITEM 22. 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:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended ("Securities Act").
(b) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20
II-1
<PAGE> 40
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement.
(c) 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.
2. That, for the purpose 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 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 to respond to requests for
information that is incorporated by reference into the Prospectus/Proxy
Statement pursuant to Items 4, 10(b), 11 or 13 of this Form, within one business
day of receipt of such request, and to send the incorporated documents by
first-class mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of the
Registration Statement through the date of responding to the request.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
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.
The undersigned Registrant hereby undertakes to supply means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
The undersigned Registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this Registration Statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other Items of the applicable form.
The Registrant undertakes that every prospectus (i) that is filed pursuant
to the paragraph immediately preceding, or (ii) that purports to meet the
requirements of Section 10(a)(3) of the Securities Act and is used in connection
with an offering of securities subject to Rule 415, will be filed as a part of
an amendment to the Registration Statement and will not be used until such
amendment is effective, and 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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by the
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 Securities Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE> 41
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CLEVELAND, STATE OF OHIO,
ON THE 22ND DAY OF APRIL, 1997.
THE SHERWIN-WILLIAMS COMPANY
By /s/ L. E. STELLATO
------------------------------------
L. E. Stellato, Esq.
Vice President, General Counsel &
Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------- --------------------------------- ---------------------
<S> <C> <C>
/s/ J. G. BREEN Director, Chairman of the Board April 22, 1997
- ------------------------------------- and Chief Executive Officer,
J. G. Breen Principal Executive Officer
/s/ T. A. COMMES Director, President and Chief April 22, 1997
- ------------------------------------- Operating Officer
T. A. Commes
/s/ L. J. PITORAK Senior Vice President-Finance, April 22, 1997
- ------------------------------------- Treasurer and Chief Financial
L. J. Pitorak Officer, Principal Financial
Officer
/s/ J. L. AULT Vice President-Corporate April 22, 1997
- ------------------------------------- Controller, Principal Accounting
J. L. Ault Officer
* Director *
- -------------------------------------
J. M. Biggar
* Director *
- -------------------------------------
D. E. Collins
* Director *
- -------------------------------------
D. E. Evans
* Director *
- -------------------------------------
R. W. Mahoney
* Director *
- -------------------------------------
W. G. Mitchell
* Director *
- -------------------------------------
A. M. Mixon, III
* Director *
- -------------------------------------
C. E. Moll
* Director *
- -------------------------------------
H. O. Petrauskas
* Director *
- -------------------------------------
R. K. Smucker
</TABLE>
* The undersigned, by signing his name hereto, does sign and execute this
Registration Statement on behalf of the designated Officers and Directors of
The Sherwin-Williams Company pursuant to Powers of Attorney executed on behalf
of each of such Directors and Officers which are filed as an Exhibit hereto.
*By: /s/ L. E. STELLATO April 22, 1997
-----------------------------------------------------------
L. E. Stellato
Attorney-in-Fact
II-3
<PAGE> 42
INDEX OF EXHIBITS
<TABLE>
<S> <C>
Exhibit 4.1 Indenture between The Sherwin-William Company and The Chase Manhattan Bank
(formerly known as Chemical Bank), as Trustee, dated February 1, 1996,
incorporated herein by reference to Exhibit 4(b) to the Company's
Registration Statement on Form S-3 (File No. 333-01093).
Exhibit 4.2 Purchase Agreement dated February 4, 1997 between the Company and Salomon
Brothers Inc, filed herewith.
Exhibit 4.3 Registration Agreement dated February 4, 1997 between the Company and Salomon
Brothers Inc, filed herewith.
Exhibit 4.4* Form of New 7.375% Debenture Due 2027.
Exhibit 4.5* Form of New 7.45% Debenture Due 2097.
Exhibit 5 Opinion of L. E. Stellato, Esq., Vice President, General Counsel and
Secretary of the Company, regarding validity of New Debentures being
registered, filed herewith.
Exhibit 8 Opinion of Arnold & Porter regarding the federal income tax consequences of
the Exchange Offers, filed herewith.
Exhibit 12 Statement regarding the computation of the ratio of earnings to fixed
charges.
Exhibit 23.1 Consent of Ernst & Young LLP, independent accountants for the Company, filed
herewith.
Exhibit 23.2 Consent of Deloitte & Touche LLP, regarding financial statements of Thompson
Minwax, filed herewith.
Exhibit 23.3 Consent of L. E. Stellato, Esq., contained in the opinion filed as Exhibit 5
hereto.
Exhibit 23.4 Consent of Arnold & Porter, contained in the opinion filed as Exhibit 8
hereto.
Exhibit 24 Powers of Attorney of certain directors and officers of the Company, filed
herewith.
Exhibit 99.1 Form of Letter of Transmittal, filed herewith.
Exhibit 99.2 Form of Exchange Agent Agreement between the Company and The Chase Manhattan
Bank, as Exchange Agent, filed herewith.
</TABLE>
- ---------------
* To be filed by amendment.
<PAGE> 1
Exhibit 4.2
THE SHERWIN-WILLIAMS COMPANY
$150,000,000 7.375% Debentures Due 2027
$150,000,000 7.450% Debentures Due 2097
PURCHASE AGREEMENT
New York, New York
February 4, 1997
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
The Sherwin-Williams Company, an Ohio corporation (the
"Company"), proposes to issue and sell to Salomon Brothers Inc (the "Initial
Purchaser") as set forth on Schedule I hereto, $150,000,000 principal amount of
its 7.375% Debentures due 2027 (the "2027 Debentures") and $150,000,000
principal amount of its 7.450% Debentures due 2097 (the "2097 Debentures" and
collectively with the 2027 Debentures, the "Debentures"). The Debentures are to
be issued under an indenture (the "Indenture") dated as of February 1, 1996,
between the Company and The Chase Manhattan Bank (formerly known as Chemical
Bank), as trustee.
The sale of the Debentures to the Initial Purchaser will be
made without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Company
that you will offer and sell the Debentures purchased hereunder in accordance
with Section 4 hereof as soon as you deem advisable.
In connection with the sale of the Debentures, the Company has
prepared a preliminary offering memorandum, dated January 28, 1997 (including
any and all exhibits thereto and any information incorporated by reference
therein, the "Preliminary Memorandum"), and a final offering memorandum, dated
February 4, 1997 (including any and all exhibits thereto and any information
incorporated by reference therein, the "Final Memorandum"). Each of the
Preliminary Memorandum and the Final Memorandum sets forth certain information
concerning the Company and the Debentures.
<PAGE> 2
The Company hereby confirms that it has authorized the use of the Preliminary
Memorandum and the Final Memorandum, and any amendment or supplement thereto, in
connection with the offer and sale of the Debentures by the Initial Purchaser.
Unless stated to the contrary, all references herein to the Final Memorandum are
to the Final Memorandum at the Execution Time (as defined below) and are not
meant to include any amendment or supplement, or any information incorporated by
reference therein, subsequent to the Execution Time and any references herein to
the terms "amend", "amendment" or "supplement" with respect to the Final
Memorandum shall be deemed to refer to and include any information filed under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), subsequent
to the Execution Time which is incorporated by reference therein.
The holders of the Debentures will be entitled to the
benefits, and bound by the terms and conditions, of the Registration Agreement
dated the date hereof between the Company and the Initial Purchaser (the
"Registration Agreement").
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the Initial Purchaser as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did not
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The Final
Memorandum, at the date hereof, does not, and at the Closing Date (as
defined below) will not (and any amendment or supplement thereto, at
the date thereof and at the Closing Date, will not), contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company makes no representation or warranty as to the
information contained in or omitted from the Preliminary Memorandum or
the Final Memorandum, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of the Initial Purchaser specifically
for inclusion therein.
(b) Neither the Company, nor any of its Affiliates (as defined
in Rule 501(b) of Regulation D under the Securities Act ("Regulation
D")), nor any person (other than the Initial Purchaser) acting on its
or their behalf has, directly or indirectly, made offers or sales of
any security, or solicited offers to buy any security, under
2
<PAGE> 3
circumstances that would require the registration of the Debentures
under the Securities Act.
(c) Neither the Company, nor any of its Affiliates, nor any
person (other than the Initial Purchaser) acting on its or their behalf
has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer or
sale of the Debentures.
(d) The Debentures satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.
(e) The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), without taking account of any exemption
arising out of the number of holders of the Company's securities.
(f) The Company is subject to and in full compliance with the
reporting requirements of Section 13 of the Exchange Act.
(g) The Company has not paid or agreed to pay to any person
any compensation for soliciting another to purchase any securities of
the Company (except as contemplated by this Agreement).
2. PURCHASE AND SALE. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to the Initial Purchaser, and the Initial Purchaser
agrees to purchase from the Company, (i) at a purchase price of 99.056% of the
principal amount thereof, plus accrued interest, if any, from February 10, 1997,
to the Closing Date, the principal amount of 2027 Debentures set forth opposite
the Initial Purchaser's name in Schedule I hereto and (ii) at a purchase price
of 98.464% of the principal amount thereof, plus accrued interest, if any, from
February 10, 1997, to the Closing Date, the principal amount of 2097 Debentures
set forth opposite the Initial Purchaser's name in Schedule I hereto.
3. DELIVERY AND PAYMENT. Delivery of and payment for the
Debentures shall be made at 10:00 AM, New York City time, on February 10, 1997,
or such later date (not later than February 17, 1997), as the Initial Purchaser
shall designate, which date and time may be postponed by agreement between the
Initial Purchaser and the Company (such date and time of delivery and payment
for the Debentures being herein called the "Closing Date"). Delivery of the
Debentures shall be made to the Initial Purchaser against payment by the Initial
Purchaser of the
3
<PAGE> 4
purchase price thereof to or upon the order of the Company by wire transfer of
immediately available funds or such other manner of payment as may be agreed by
the Company and the Initial Purchaser. Delivery of the Debentures shall be made
at such location as the Initial Purchaser shall reasonably designate at least
one business day in advance of the Closing Date. Certificates for the Debentures
shall be registered in such names and in such denominations as the Initial
Purchaser may request not less than three full business days in advance of the
Closing Date.
The Company agrees to have the Debentures available for
inspection, checking and packaging by the Initial Purchaser in New York, New
York, not later than 1:00 p.m. on the business day prior to the Closing Date.
4. OFFERING OF DEBENTURES. The Initial Purchaser, represents
and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell,
any Debentures except to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Securities Act)
and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Debentures is
aware that such sale is being made in reliance on Rule 144A.
(b) Neither it nor any person acting on its behalf has made or
will make offers or sales of the Debentures by means of any form of
general solicitation or general advertising (within the meaning of
Regulation D), except pursuant to a registered public offering as
provided in the Registration Agreement.
5. AGREEMENTS. The Company agrees with the Initial Purchaser
that:
(a) The Company will furnish to the Initial Purchaser and to
Counsel for the Initial Purchaser, without charge, during the period
referred to in paragraph (c) below, as many copies of the Final
Memorandum and any amendments and supplements thereto as it may
reasonably request. The Company will pay the expenses of printing or
other production of all documents relating to the offering.
(b) The Company will not amend or supplement the Final
Memorandum, other than by filing documents under the Exchange Act which
are incorporated by reference therein, without the prior written
consent of the Initial Purchaser; PROVIDED, HOWEVER, that, prior to the
completion of the distribution of the Debentures by the Initial
Purchaser (as
4
<PAGE> 5
determined by the Initial Purchaser), the Company will not file any
document under the Exchange Act which is incorporated by reference in
the Final Memorandum unless, prior to such proposed filing, the Company
has furnished the Initial Purchaser with a copy of such document for
their review and has reasonably considered the comments promptly made
thereon by the Initial Purchaser. The Company will promptly advise the
Initial Purchaser when any document filed under the Exchange Act which
is incorporated by reference in the Final Memorandum shall have been
filed with the Securities and Exchange Commission (the "Commission").
(c) If at any time prior to the completion of the sale of the
Debentures by the Initial Purchaser (as determined by the Initial
Purchaser), any event occurs as a result of which the Final Memorandum,
as then amended or supplemented, would include any untrue statement of
a material fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading, or if it should be necessary to amend
or supplement the Final Memorandum to comply with applicable law, the
Company will promptly notify the Initial Purchaser of the same and,
subject to the requirements of paragraph (b) of this Section 5, will
prepare and provide to the Initial Purchaser pursuant to paragraph (a)
of this Section 5 an amendment or supplement which will correct such
statement or omission or effect such compliance.
(d) The Company will use its best efforts to arrange for the
qualification of the Debentures for sale by the Initial Purchaser under
the laws of such jurisdictions as the Initial Purchaser may designate
and to maintain such qualifications in effect so long as required for
the sale of the Debentures. The Company will promptly advise the
Initial Purchaser of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Debentures
for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose.
(e) The Company will not, and will not permit any of its
Affiliates to, resell any Debentures that have been acquired by any of
them.
(f) Neither the Company, nor any of its Affiliates, nor any
person (other than the Initial Purchaser) acting on its or their behalf
will, directly or indirectly, make offers or sales of any security, or
solicit offers to buy any security, under circumstances that would
require the registration of the Debentures under the Securities Act.
5
<PAGE> 6
(g) Neither the Company, nor any of its Affiliates, nor any
person (other than the Initial Purchaser) acting on its or their behalf
will engage in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer or
sale of the Debentures, except pursuant to a registered public offering
as provided in the Registration Agreement.
(h) So long as any of the Debentures are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities
Act, the Company will, during any period in which it is not subject to
and in compliance with Section 13 or 15(d) of the Exchange Act, provide
to each holder of such restricted securities and to each prospective
purchaser (as designated by such holder) of such restricted securities,
upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the
Securities Act. Such information provided by the Company will not, at
the date thereof, contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. This covenant is intended to be for the benefit of the
holders, and the prospective purchasers designated by such holders,
from time to time of such restricted securities.
(i) The Company will cooperate with the Initial Purchaser and
use its best efforts to permit the Debentures to be eligible for
clearance and settlement through The Depository Trust Company.
(j) The Company will not, until 10 business days following the
Closing Date, without the prior written consent of the Initial
Purchaser, offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce the offering of, any debt
securities issued or guaranteed by the Company (other than (i) the
Debentures, (ii) pursuant to a registered public offering as provided
in the Registration Agreement, (iii) the 6.25% Notes due 2000, the
6.50% Notes due 2002 and the 6.85% Notes due 2007 offered pursuant to
the Prospectus Supplement dated as of February 4, 1997, (iv) commercial
paper with a maturity which does not exceed 270 days, (v) debt
securities issued by foreign wholly owned subsidiaries of the Company
and (vi) borrowings under the Company's five-year and 364 day revolving
credit agreements).
6. CONDITIONS TO THE OBLIGATIONS OF THE INITIAL PURCHASER. The
obligations of the Initial Purchaser to purchase the Debentures shall be subject
to the accuracy of the represen-
6
<PAGE> 7
tations and warranties on the part of the Company contained herein at the date
and time that this Agreement is executed and delivered by the parties hereto
(the "Execution Time") and the Closing Date, to the accuracy of the statements
of the Company made in any certificates pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Company shall have furnished to the Initial Purchaser
the opinion of the Vice President, General Counsel and Secretary of the
Company, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Ohio, with full corporate power to own
its properties and conduct its business as described in the
Final Memorandum and is qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns
or leases material properties or conducts material business
except where the failure to so qualify would not have a
material adverse effect on the Company and its subsidiaries
taken as a whole. The Company's significant subsidiaries (as
defined in Rule 405 under the Securities Act) (the
"Subsidiaries") are duly incorporated and validly existing as
corporations in good standing under the laws of the
jurisdiction in which it is organized, each with full
corporate power and authority to own properties and conduct
business as described in the Final Memorandum, and are duly
qualified to do business as foreign corporations and are in
good standing under the laws of each jurisdiction which
requires such qualification wherein each such Subsidiary owns
or leases material properties or conducts material business
except where the failure to so qualify would not have a
material adverse effect on the operations of the Company and
its Subsidiaries taken as a whole;
(ii) all the outstanding shares of capital stock of the
Company and each Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable,
and, except as otherwise set forth in the Final Memorandum,
all outstanding shares of capital stock of the Subsidiaries
are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any security interest
and, to the knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or encumbrances;
7
<PAGE> 8
(iii) the Company's authorized equity capitalization
is as set forth in the Final Memorandum;
(iv) the Indenture has been duly authorized, executed
and delivered, and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with
its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time
to time in effect); the Debentures have been duly and validly
authorized and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid
for by the Initial Purchaser pursuant to this Agreement, will
constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture; and the statements
set forth under the heading "Description of Debentures" in the
Final Memorandum, insofar as such statements purport to
summarize certain provisions of the Debentures and the
Indenture, provide a fair summary of such provisions;
(v) this Agreement and the Registration Agreement
have been duly authorized, executed and delivered and
constitute legal, valid and binding instruments enforceable
against the Company in accordance with their terms;
(vi) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated herein or in the
Registration Agreement, except such as may be required under
the Securities Act or the Exchange Act with respect to the
Registration Agreement and the transactions contemplated
thereunder and such as may be required under the blue sky or
state securities laws in connection with the purchase and sale
of the Debentures by the Initial Purchaser and such other
approvals (specified in such opinion) as have been obtained;
and
(vii) neither the issue and sale of the Debentures,
the execution and delivery of the Indenture, this Agreement or
the Registration Agreement, the consummation of any other of
the transactions herein or therein contemplated nor the
fulfillment of the terms hereof or thereof will conflict with,
result in a breach or violation of, or constitute a default
under the Amended Articles of Incorporation or the Code of
Regulations, as amended, of the Company or the terms of any
8
<PAGE> 9
indenture or other agreement or instrument known to such
counsel and to which the Company or any of its subsidiaries is
a party or bound by any judgment, order or decree known to
such counsel to be applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction
over the Company or any of its subsidiaries.
Such counsel shall also state that nothing has caused
him to believe that at the Execution Time or the Closing Date the Final
Memorandum contains or contained an untrue statement of a material fact
or omits or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading (including in each case, for the
avoidance of doubt, the documents incorporated by reference therein as
of such date, but other than the financial statements and other
financial and statistical information contained therein as to which
such counsel need express no opinion).
In rendering such opinion, such counsel may rely (A)
as to matters involving the application of laws of any jurisdiction
other than the State of Ohio or the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to Counsel for the Initial Purchaser and (B) as to matters
of fact, to the extent deemed proper, on certificates of responsible
officers of the Company and public officials.
All references in this Section 6(a) to the Final
Memorandum shall be deemed to include any amendment or supplement
thereto at the Closing Date.
(b) The Company shall have furnished to the Initial Purchaser
the opinion of Arnold & Porter, counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Debentures conform to the description thereof
contained in the Final Memorandum;
(ii) the Indenture has been duly qualified under the
Trust Indenture Act; and
(iii) no registration of the Debentures under the
Securities Act is required for the offering or sale of the
Debentures to the Initial Purchaser or in connection with the
initial resale of such Debentures by the Initial Purchaser in
accordance with this
9
<PAGE> 10
Agreement, it being understood that no opinion is expressed as
to any subsequent resale of any Debenture.
Such counsel shall also state that nothing has caused
them to believe that at the Execution Time the Final Memorandum
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading
(except for the documents incorporated by reference in the Final
Memorandum and the financial statements and other financial and
statistical information contained therein, as to which such counsel
need not express any opinion).
In rendering such opinion, such counsel may rely (A)
as to matters involving the application of laws of the State of Ohio,
to the extent deemed proper and specified in such opinion, upon the
opinion of the Vice President, General Counsel and Secretary of the
Company and (B) as to matters of fact, to the extent they deem proper,
on certificates of responsible officers of the Company and public
officials.
All references in this Section 6(b) to the Final
Memorandum shall be deemed to include any amendment or supplement
thereto at the Closing Date.
(c) The Initial Purchaser shall have received from Cravath,
Swaine & Moore, counsel for the Initial Purchaser such opinion or
opinions, dated the Closing Date, with respect to the issuance and sale
of the Debentures, the Final Memorandum (as amended or supplemented at
the Closing Date) and other related matters as the Initial Purchaser
may reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(d) The Company shall have furnished to the Initial Purchaser
a certificate of the Company, signed by the Senior Vice
President-Finance, Treasurer and Chief Financial Officer and Vice
President and Assistant Treasurer of the Company, dated the Closing
Date, to the effect that the signers of such certificate have carefully
examined the Final Memorandum, any amendment or supplement to the Final
Memorandum and this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date with
10
<PAGE> 11
the same effect as if made on the Closing Date, and the
Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date; and
(ii) since the date of the most recent financial
statements included in the Final Memorandum, there has been no
material adverse change in the condition (financial or other),
earnings, business or properties of the Company and its
subsidiaries, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
(e) At the Execution Time and at the Closing Date, Ernst &
Young LLP shall have furnished to the Initial Purchaser a letter or
letters, dated respectively as of the Execution Time and as of the
Closing Date, substantially in the forms attached hereto as Exhibits A
and B.
(f) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Final Memorandum, there shall
not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (e) of this Section 6 or (ii) any
change, or any development involving a prospective change, in or
affecting the business or properties of the Company and its
subsidiaries the effect of which, in any case referred to in clause (i)
or (ii) above, is, in the judgment of the Initial Purchaser, so
material and adverse as to make it impractical or inadvisable to market
the Debentures as contemplated by the Final Memorandum.
(g) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities
by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Securities Act) or any
notice given of any intended or potential decrease in any such rating
or of a possible change in any such rating that does not indicate the
direction of the possible change.
(h) Prior to the Closing Date, the Registration Agreement
shall have been executed and delivered to the Initial Purchaser and the
Trustee and the Company shall have furnished to the Initial Purchaser
such further information, certificates and documents as the Initial
Purchaser may reasonably request.
11
<PAGE> 12
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Initial Purchaser and Cravath, Swaine
& Moore, counsel for the Initial Purchaser, this Agreement and all obligations
of the Initial Purchaser hereunder may be canceled at, or at any time prior to,
the Closing Date by the Initial Purchaser. Notice of such cancellation shall be
given to the Company in writing or by telephone or telegraph confirmed in
writing.
The documents required to be delivered by this Section 6 will
be delivered at the office of Cravath, Swaine & Moore, counsel for the Initial
Purchaser, at Worldwide Plaza, 825 Eighth Avenue, New York, New York, on the
Closing Date.
7. REIMBURSEMENT OF INITIAL PURCHASER'S EXPENSES. The Company
will pay all costs, expenses, fees, disbursements and taxes incident to (i) the
preparation by the Company, printing and distribution of the Final Memorandum,
each Preliminary Memorandum and all amendments and supplements to any of them
prior to or during the period specified in Section 5(c), (ii) the printing
(including duplication costs) and delivery of this Agreement, and all other
agreements, memoranda, correspondence and other documents printed and delivered
in connection with the offering of the Debentures, (iii) the offer and sale of
the Debentures, and (iv) the performance by the Company of its other obligations
under this Agreement.
In addition, if the sale of the Debentures provided for herein
is not consummated because any condition to the obligations of the Initial
Purchaser set forth in Section 6 hereof is not satisfied, because of any
termination pursuant to Section 9 hereof or because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or comply
with any provision hereof other than by reason of a default by any of the
Initial Purchaser in payment for the Debentures on the Closing Date, the Company
will reimburse the Initial Purchaser upon demand for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Debentures.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless the Initial Purchaser, the directors, officers,
employees and agents of the Initial Purchaser and each person who controls the
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities,
12
<PAGE> 13
joint or several, to which they or any of them may become subject under the
Securities Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Memorandum, the Final Memorandum or any information provided by
the Company to any holder or prospective purchaser of Debentures pursuant to
Section 5(h), or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and agrees to reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action; PROVIDED,
HOWEVER, that (i) the Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by the Initial Purchaser specifically for
inclusion therein and (ii) such indemnity with respect to the Preliminary
Memorandum or the Final Memorandum shall not inure to the benefit of the Initial
Purchaser (or any person controlling the Initial Purchaser) from whom the person
asserting any such loss, claim, damage or liability purchased the Debentures
which are the subject thereof if such person did not receive a copy of the Final
Memorandum (or the Final Memorandum as supplemented) excluding documents
incorporated therein by reference at or prior to the confirmation of the sale of
such Debentures to such person and the untrue statement or omission of a
material fact contained in the Preliminary Memorandum was corrected in the Final
Memorandum (or the Final Memorandum as supplemented). This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) The Initial Purchaser agrees to indemnify and hold
harmless the Company, its directors, its officers, and each person who controls
the Company within the meaning of either the Securities Act or the Exchange Act,
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact in the written information
relating to the Initial Purchaser furnished to the Company by or
13
<PAGE> 14
on behalf of the Initial Purchaser specifically for inclusion in the Preliminary
Memorandum or the Final Memorandum (or in any amendment or supplement thereto),
or arise out of or are based upon the omission or alleged omission to state in
such written information a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending such loss, claim,
damage, liability or action. This indemnity agreement will be in addition to any
liability which the Initial Purchaser may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page and under the heading "Plan of Distribution" in the Preliminary Memorandum
and the Final Memorandum constitute the only information furnished in writing by
or on behalf of the Initial Purchaser for inclusion in the Preliminary
Memorandum or the Final Memorandum (or in any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure to so notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reason-
14
<PAGE> 15
ably concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action or (iv)
the indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding. Any indemnifying party shall not be liable for any
settlement, compromise or consent of any proceeding effected by the indemnified
party without the written consent, of the indemnifying party (which consent
shall not be unreasonably withheld) unless the indemnifying party has waived its
right to appoint counsel to represent the indemnified party in such proceeding
in which case the indemnified party may effect such a settlement, compromise or
consent without the consent of the indemnifying party.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchaser agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively, "Losses") to which the Company and the Initial
Purchaser may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company and by the Initial Purchaser from the
offering of the Debentures; PROVIDED, HOWEVER, that in no case shall the Initial
Purchaser be responsible for any amount in excess of the purchase discount or
commission applicable to the Debentures purchased by the Initial Purchaser
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Initial Purchaser shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and of the Initial
Purchaser in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from the
offering (before
15
<PAGE> 16
deducting expenses), and benefits received by the Initial Purchaser shall be
deemed to be equal to the total purchase discounts and commissions received by
the Initial Purchaser from the Company in connection with the purchase of the
Debentures hereunder. Relative fault shall be determined by reference to whether
any alleged untrue statement or omission relates to information provided by the
Company or the Initial Purchaser. The Company and the Initial Purchaser agree
that it would not be just and equitable if contribution were determined by pro
rata allocation or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls an
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act and each director, officer, employee and agent of an Initial
Purchaser shall have the same rights to contribution as such Initial Purchaser,
and each person who controls the Company within the meaning of either the
Securities Act or the Exchange Act and each officer and director of the Company
shall have the same rights to contribution as the Company, subject in each case
to the applicable terms and conditions of this paragraph (d).
9. TERMINATION. This Agreement shall be subject to termination
in the absolute discretion of the Initial Purchaser, by notice given to the
Company prior to delivery of and payment for the Debentures, if prior to such
time (i) trading in any of the Company's securities shall have been suspended by
the Commission or the New York Stock Exchange or trading in securities generally
on the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the judgment of the Initial Purchaser, impracticable or inadvisable to
proceed with the offering or delivery of the Debentures as contemplated by the
Final Memorandum.
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchaser set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchaser or the Company
or any of the officers, directors or controlling persons
16
<PAGE> 17
referred to in Section 8 hereof, and will survive delivery of and payment for
the Debentures. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
11. NOTICES. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Initial Purchaser, will be
mailed, delivered or telegraphed and confirmed to them, care of Salomon Brothers
Inc, at Seven World Trade Center, New York, New York, 10048; or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at 101
Prospect Avenue, N.W., Cleveland, Ohio, 44115, attention: Louis E. Stellato,
Esq., Vice President, General Counsel and Secretary.
12. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and, except as expressly set forth in Section 5(h) hereof, no other person will
have any right or obligation hereunder.
13. APPLICABLE LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
14. BUSINESS DAY. For purposes of this Agreement, "business
day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a
day on which banking institutions in The City of New York, New York are
authorized or obligated by law, executive order or regulation to close.
15. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
17
<PAGE> 18
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
between the Company and the Initial Purchaser.
Very truly yours,
The Sherwin-Williams Company
By /s/ Larry J. Pitorak
-------------------------------
Name: Larry J. Pitorak
Title: Senior Vice President-
Finance, Treasurer
and Chief Financial
Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
By /s/ Thomas J. Spoto
------------------------
Name: Thomas J. Spoto
Title: Associate
18
<PAGE> 19
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount Principal Amount
of 2027 Debentures of 2097 Debentures
Initial Purchaser to be Purchased to be Purchased
----------------- --------------- ---------------
<S> <C> <C>
Salomon Brothers Inc.......................... $150,000,000 $150,000,000
------------ ------------
Total................................. $150,000,000 $150,000,000
</TABLE>
19
<PAGE> 20
EXHIBIT A
*Intentionally Omitted*
A-1
<PAGE> 21
EXHIBIT B
*Intentionally Omitted*
B-1
<PAGE> 22
Annex 1
[SALOMON BROTHERS INC LETTERHEAD]
_____________, 1997
Ernst & Young LLP
[address]
Ladies and Gentlemen:
Reference is hereby made to the Purchase Agreement (the
Agreement") dated [ ], 1997 between the undersigned (the "Initial
Purchaser"), and The Sherwin-Williams Company (the "Company") pursuant to which
the Company will sell to the Initial Purchaser, and the Initial Purchaser will
purchase from the Company, $150,000,000 principal amount of the Company's
[ ]% Debentures Due 2027 and $150,000,000 principal amount of the Company's
[ ]% Debentures Due 2097 (the "Debentures").
Pursuant to Section 6(e) of the Purchase Agreement, you are
required to deliver certain letters, in form and substance satisfactory to us,
setting forth the matters described in such Section (the "Auditor's Letters").
In connection with your delivery of the Auditor's Letters, we confirm to you
that:
(i) we are knowledgeable with respect to the due diligence
review process that would be performed if this placement of Debentures
were being registered pursuant to the Securities Act of 1933, as
amended (the "Act"); and
(ii) we will be reviewing certain information relating to the
Company that will be included or incorporated by reference in the Final
Memorandum (as defined in the Purchase Agreement) and this review
process, applied to the information relating to the Company, will be
substantially consistent with the due diligence review process that we
would perform if this placement of Debentures were being registered
pursuant to the Act.
In accordance with the foregoing, we hereby request that you
deliver to us the Auditor's Letters.
This letter is being furnished to you solely for the purpose
of obtaining the Auditor's Letters and may not be relied
Annex 1-1
<PAGE> 23
upon or used by you for any other purpose, or given or shown to any other
person, without our prior written consent.
Very truly yours,
SALOMON BROTHERS INC
By__________________________
Name:
Title:
Annex 1-2
<PAGE> 1
Exhibit 4.3
THE SHERWIN-WILLIAMS COMPANY
$150,000,000 7.375% Debentures Due 2027
$150,000,000 7.450% Debentures Due 2097
REGISTRATION AGREEMENT
February 4, 1997
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
The Sherwin-Williams Company, an Ohio corporation (the
"Company"), proposes to issue and sell to Salomon Brothers Inc (the "Initial
Purchaser"), upon the terms set forth in a purchase agreement of even date
herewith (the "Purchase Agreement"), $150,000,000 principal amount of 7.375%
Debentures due 2027 (the "2027 Debentures") and $150,000,000 principal amount of
7.450% Debentures due 2097 (the "2097 Debentures" and, together with the 2027
Debentures, the "Debentures") (the "Initial Placement"). As an inducement to the
Initial Purchaser to enter into the Purchase Agreement and in satisfaction of a
condition to your obligations thereunder, the Company agrees with you, (i) for
your benefit and (ii) for the benefit of the holders from time to time (each of
the foregoing a "Holder" and together the "Holders") of the Debentures or the
Exchange Debentures (as defined herein), as follows:
1. DEFINITIONS. Capitalized terms used herein
without definition shall have their respective meanings set
forth in the Purchase Agreement. As used in this Agreement,
the following capitalized defined terms shall have the
following meanings:
"ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder, each as the same
may be amended from time to time.
<PAGE> 2
"AFFILIATE" shall have the meaning ascribed to that term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
"CLOSING DATE" has the meaning given such term in the Purchase
Agreement.
"COMMISSION" means the Securities and Exchange Commission.
"DEBENTURES" has the meaning set forth in the preamble hereto.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder,
each as the same may be amended from time to time.
"EXCHANGE DEBENTURES" means, with respect to the 2027
Debentures, the 2027 Exchange Debentures, and with respect to the 2097
Debentures, the 2097 Exchange Debentures.
"EXCHANGE OFFER REGISTRATION PERIOD" means the 180-day period
following the consummation of the Registered Exchange Offers, exclusive of any
period during which any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement.
"EXCHANGE OFFER REGISTRATION STATEMENT" means a registration
statement of the Company on an appropriate form under the Act with respect to
the Registered Exchange Offers, all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"EXCHANGING DEALER" means any Holder (which may include any
Initial Purchaser) which is a broker-dealer electing to exchange Debentures
acquired for its own account as a result of market-making activities or other
trading activities for Exchange Debentures.
"FINAL MEMORANDUM" has the meaning set forth in the Purchase
Agreement.
"HOLDER" has the meaning set forth in the preamble hereto.
<PAGE> 3
"INDENTURE" means the Indenture relating to the Debentures
dated as of February 1, 1996, between the Company and The Chase Manhattan Bank
(formerly known as Chemical Bank), as trustee, as the same may be amended from
time to time in accordance with the terms thereof.
"INITIAL PLACEMENT" has the meaning set forth in the preamble
hereto.
"LOSSES" has the meaning given such term in Section 6(d)
hereof.
"MAJORITY HOLDERS" means the Holders of a majority of the
aggregate principal amount of Debentures or Exchange Debentures registered under
the Registration Statement.
"MANAGING UNDERWRITERS" means the investment banker or
investment bankers and manager or managers that shall administer an underwritten
offering.
"PROSPECTUS" means the prospectus included in any Registration
Statement (including a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A under the Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Debentures or the Exchange Debentures, covered by such Registration
Statement, and all amendments and supplements to the Prospectus, including
post-effective amendments.
"PURCHASE AGREEMENT" has the meaning set forth in the preamble
hereto.
"INITIAL PURCHASER" has the meaning set forth in the preamble
hereto.
"REGISTERED EXCHANGE OFFERS" means the proposed offers to the
Holders to issue and deliver to such Holders a like principal amount of (i) 2027
Exchange Debentures, in exchange for 2027 Debentures and (ii) 2097 Exchange
Debentures, in exchange for 2097 Debentures.
"REGISTRATION DEFAULT" has the meaning given such term in
Section 7(a) hereof.
"REGISTRATION STATEMENT" means any Exchange Offer Registration
Statement or Shelf Registration Statement that
<PAGE> 4
covers any of the Debentures or the Exchange Debentures pursuant to the
provisions of this Agreement, and amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"SHELF REGISTRATION" means a registration effected pursuant to
Section 3 hereof.
"SHELF REGISTRATION PERIOD" has the meaning given
such term in Section 3(b) hereof.
"SHELF REGISTRATION STATEMENT" means a "shelf" registration
statement of the Company pursuant to the provisions of Section 3 hereof which
covers some or all of the Debentures or the Exchange Debentures, as applicable,
on an appropriate form under Rule 415 under the Act, or any similar rule that
may be adopted by the Commission, and amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"SPECIAL INTEREST" has the meaning given such term in Section
7(a) hereof.
"TRUSTEE" means The Chase Manhattan Bank, as Trustee, under
the Indenture.
"2097 DEBENTURES" has the meaning set forth in the preamble
hereto.
"2097 EXCHANGE DEBENTURES" means the debentures of the Company
which are identical in all material respects to the 2097 Debentures (except that
the 2097 Exchange Debentures will not contain terms with respect to transfer
restrictions or Special Interest) to be issued under the Registered Exchange
Offers in exchange for the 2097 Debentures.
"2027 DEBENTURES" has the meaning set forth in the preamble
hereto.
"2027 EXCHANGE DEBENTURES" means the debentures of the Company
which are identical in all material respects to the 2027 Debentures (except that
the 2097 Exchange Debentures will not contain terms with respect to transfer
<PAGE> 5
restrictions or Special Interest) to be issued under the Registered Exchange
Offers in exchange for the 2027 Debentures.
"UNDERWRITER" means any underwriter of Debentures in
connection with an offering thereof under a Shelf Registration Statement.
2. REGISTERED EXCHANGE OFFERS; RESALES OF EXCHANGE DEBENTURES
BY EXCHANGING DEALERS. (a) The Company shall prepare and, not later than 90 days
following the Closing Date, shall file with the Commission the Exchange Offer
Registration Statement. The Company shall use its best efforts to cause the
Exchange Offer Registration Statement to become effective under the Act within
180 days of the Closing Date.
(b) Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Registered Exchange Offers,
it being the objective of such Registered Exchange Offers to enable each Holder
electing to exchange Debentures for Exchange Debentures (assuming that such
Holder is not an Affiliate of the Company, acquires the Exchange Debentures in
the ordinary course of such Holder's business and at the time of the
commencement of the Exchange Offers, has no arrangements with any person to
participate in the distribution (within the meaning of the Act) of the Exchange
Debentures) to transfer such Exchange Debentures from and after their receipt
without any limitations or restrictions under the Act.
(c) In connection with the Registered Exchange Offers, the
Company shall:
(i) mail to each Holder a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(ii) keep each Registered Exchange Offers open for not less
than 30 days after the date notice thereof is mailed to the Holders (or
longer if required by applicable law);
(iii) utilize the services of a depositary for the Registered
Exchange Offers with an address in the Borough of Manhattan, the City
of New York; and
<PAGE> 6
(iv) comply in all respects with all applicable laws.
(d) As soon as practicable after the close of each Registered
Exchange Offer, the Company shall:
(i) accept for exchange all Debentures tendered and not
validly withdrawn pursuant to such Registered Exchange Offer;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Debentures so accepted for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver
to each Holder of tendered Debentures, Exchange Debentures equal in
principal amount to the Debentures of such Holder so accepted for
exchange therefor.
(e) The Initial Purchaser and the Company acknowledge that,
pursuant to interpretations by the Commission's staff of Section 5 of the Act,
and in the absence of an applicable exemption therefrom, each Exchanging Dealer
is required to deliver a Prospectus in connection with a sale of any Exchange
Debentures received by such Exchanging Dealer pursuant to the Registered
Exchange Offers in exchange for Debentures acquired for its own account as a
result of market-making activities or other trading activities. Accordingly, the
Company shall:
(i) include the information set forth in Annex A hereto on the
cover of the Exchange Offer Registration Statement, in Annex B hereto
in the forepart of the Exchange Offer Registration Statement in a
section setting forth details of the Registered Exchange Offers, and in
Annex C hereto in the underwriting or plan of distribution section of
the Prospectus forming a part of the Exchange Offer Registration
Statement, and include the information set forth in Annex D hereto in
the Letter of Transmittal delivered pursuant to the Registered Exchange
Offers; and
(ii) to the extent that it is notified by an Exchanging Dealer
that such Exchanging Dealer intends to rely upon the procedures set
forth in this Section 2(e), use its best efforts to keep the Exchange
Offer Registration Statement continuously effective under the Act
during the Exchange Offer Registration
<PAGE> 7
Period for delivery of the Prospectus forming a part thereof by
Exchanging Dealers in connection with sales of Exchange Debentures
received pursuant to the Registered Exchange Offers, as contemplated by
Section 4(h) below.
(f) If the Company has consummated the Exchange Offers, then,
subject to Section 3(iii), (iv) and (v), the Company will have no obligation to
file or to maintain the effectiveness of a Shelf Registration Statement with
respect to any Debentures that are not tendered in the Exchange Offers.
3. SHELF REGISTRATION. If (i) because of any change in law or
applicable interpretations thereof by the Commission's staff, the Company
determines upon advice of its outside counsel that it is not permitted to effect
the Registered Exchange Offers as contemplated by Section 2 hereof or (ii) if
for any reason the Exchange Offer Registration Statement is not declared
effective within 180 days following the Closing Date or (iii) for any other
reason the Registered Exchange Offers are not consummated within 210 days
following the Closing Date, or (iv) the Initial Purchaser so requests with
respect to Debentures not eligible to be exchanged for Exchange Debentures in a
Registered Exchange Offer and held by it following consummation of the
Registered Exchange Offers, or (v) if under any applicable laws or applicable
interpretations thereof any Holder at the time of the Registered Exchange Offers
(including the Initial Purchaser) is not eligible to participate in the
Registered Exchange Offers or (vi) any Holder that participates in the
Registered Exchange Offer (other than an Exchanging Dealer), does not receive
freely tradeable thereafter Exchange Debentures in exchange for tendered
Debentures, the following provisions shall apply:
(a) The Company shall at its own cost, as promptly as
practicable file and use its best efforts to cause to be declared effective
under the Act by the 210th day after the Closing Date (or promptly in the event
of a request by the Initial Purchaser) a Shelf Registration Statement relating
to the offer and sale of the Debentures or the Exchange Debentures, as
applicable, by the applicable Holders from time to time in accordance with the
methods of distribution elected by such Holders and set forth in such Shelf
Registration Statement; PROVIDED, HOWEVER, that with respect to Exchange
Debentures received by the Initial Purchaser in exchange for Debentures
constituting any
<PAGE> 8
portion of an unsold allotment, the Company may, if permitted by current
interpretations by the Commission's staff, file a post-effective amendment to
the Exchange Offer Registration Statement containing the information required by
Regulation S-K Items 507 and/or 508, as applicable, in satisfaction of its
obligations under this paragraph (a) with respect thereto, and any such Exchange
Offer Registration Statement, as so amended, shall be referred to herein as, and
governed by the provisions herein applicable to, a Shelf Registration Statement.
(b) The Company shall keep the Shelf Registration Statement
continuously effective until the earliest of (i) the third anniversary of the
Closing Date (or the first anniversary of the effective date of the Shelf
Registration Statement if such Shelf Registration Statement is filed at the
request of the Initial Purchaser), (ii) the time when the Debentures registered
under the Shelf Registration Statement can be sold by non-Affiliates pursuant to
Rule 144 under the Act without any limitations under clauses (c), (e), (f) and
(h) of Rule 144 or (iii) such time as all the Debentures or Exchange Debentures,
as applicable, covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement (in any such case, such period
being called the "Shelf Registration Period"); PROVIDED, HOWEVER, that the
Company will have the ability to suspend the availability of the Shelf
Registration Statement during any consecutive 365-day period for up to two
periods of up to 45 consecutive days, but no more than an aggregate of 60 days
during any 365-day period (a "Suspension"), PROVIDED that the Company notifies
the holders of the Debentures covered thereby of any such Suspension as required
by Section 4(c)(2)(iii).
4. REGISTRATION PROCEDURES. In connection with any Shelf
Registration Statement and, to the extent specified, any Exchange Offer
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to the Initial Purchaser, prior
to the filing thereof with the Commission, a copy of any Shelf
Registration Statement and any Exchange Offer Registration Statement,
and each amendment thereof and each amendment or supplement, if any, to
the Prospectus included therein and shall not include in any such
document, when so filed with the Commission, any material as to which
the Initial Purchaser may reasonably object.
<PAGE> 9
(b) The Company agrees that (i) any Registration Statement and
any amendment thereto and any Prospectus forming part thereof and any
amendment or supplement thereto complies in all material respects with
the Act and the rules and regulations thereunder, (ii) any Registration
Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (iii) any Prospectus
forming part of any Registration Statement, and any amendment or
supplement to such Prospectus, does not include an untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements, in light of the circumstances under which they
were made, not misleading.
(c) (1) The Company shall notify the Initial Purchaser and, in
the case of a Shelf Registration Statement, the Holders of securities
covered thereby, and, if requested by you or any such Holder, confirm
such notice in writing:
(i) when a Registration Statement and any amendment
thereto has been filed with the Commission and when the
Registration Statement or any post-effective amendment thereto
has become effective; and
(ii) of any request by the Commission for amendments
or supplements to the Registration Statement or the Prospectus
included therein or for additional information.
(2) The Company shall notify the Initial Purchaser and, in the
case of a Shelf Registration Statement, the Holders of securities
covered thereby, and, in the case of an Exchange Offer Registration
Statement, any Exchanging Dealer which has provided in writing to the
Company a telephone or facsimile number and address for notices, and,
if requested by you or
<PAGE> 10
any such Holder or Exchanging Dealer, confirm such notice in writing of
the inability to use the Shelf Registration Statement for resales of
the Debentures or the Exchange Debentures as a result of:
(i) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose;
(ii) the receipt by the Company of any notification
with respect to the suspension of the qualification of the
securities included therein for sale in any jurisdiction or
the initiation or threatening of any proceeding for such
purpose;
(iii) a Suspension; or
(iv) the happening of any event that requires the
making of any changes in the Registration Statement or the
Prospectus so that, as of such date, the statements therein
are not misleading and do not omit to state a material fact
required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of
the circumstances under which they were made) not misleading
(which notice shall be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes
have been made).
(d) The Company shall use its best efforts to obtain the
withdrawal of any order suspending the effectiveness of any
Registration Statement at the earliest possible time.
(e) The Company shall furnish to each Holder of securities
included within the coverage of any Shelf Registration Statement,
without charge, at least one copy of such Shelf Registration Statement
and any post-effective amendment thereto, including financial
statements and schedules, and, if the Holder so requests in writing,
all exhibits (including those incorporated by reference).
(f) The Company shall, during the Shelf Registration Period,
deliver to each Holder of securities included within the coverage of
any Shelf
<PAGE> 11
Registration Statement, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) included in such
Shelf Registration Statement and any amendment or supplement thereto as
such Holder may reasonably request; and the Company consents to the use
of the Prospectus or any amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the
securities covered by the Prospectus or any amendment or supplement
thereto.
(g) The Company shall furnish to each Exchanging Dealer which
so requests, without charge, at least one copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, any documents
incorporated by reference therein, and, if the Exchanging Dealer so
requests in writing, all exhibits thereto (including those incorporated
by reference).
(h) The Company shall, during the Exchange Offer Registration
Period, promptly deliver to each Exchanging Dealer, without charge, as
many copies of the Prospectus included in such Exchange Offer
Registration Statement and any amendment or supplement thereto as such
Exchanging Dealer may reasonably request for delivery by such
Exchanging Dealer in connection with a sale of Exchange Debentures
received by it pursuant to the Registered Exchange Offers; and the
Company consents to the use of the Prospectus or any amendment or
supplement thereto by any such Exchanging Dealer, as aforesaid.
(i) Prior to the Registered Exchange Offers or any other
offering of Debentures pursuant to any Registration Statement, the
Company shall use its best efforts to register or qualify, and shall
cooperate with the Holders of Debentures included therein and their
respective counsel in connection with the registration or qualification
of, such Debentures for offer and sale under the securities or blue sky
laws of such jurisdictions as any such Holder reasonably requests in
writing and do any and all other acts or things necessary or advisable
to enable the offer and sale in such jurisdictions of the Debentures
covered by such Registration Statement; PROVIDED, HOWEVER, that the
Company will not be required to qualify generally to do business in any
jurisdiction where it is not then
<PAGE> 12
so qualified or to take any action which would subject it to general
service of process or to taxation in any such jurisdiction where it is
not then so subject.
(j) Unless the applicable Debentures shall be in book-entry
only form, the Company shall cooperate with the Holders to facilitate
the timely preparation and delivery of certificates representing the
Debentures to be sold pursuant to any Registration Statement free of
any restrictive legends and in such authorized denominations and
registered in such names as Holders may request prior to sales of
Debentures pursuant to such Registration Statement.
(k) Upon the occurrence of any event contemplated by
paragraphs c(1)(ii) or (c)(2)(iii) above, the Company shall promptly
prepare a post-effective amendment to any Registration Statement or an
amendment or supplement to the related Prospectus or file any other
required document so that, as thereafter delivered to purchasers of the
securities included therein, the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(l) Not later than the effective date of any Shelf
Registration Statement hereunder, the Company shall use its best
efforts to cause The Depository Trust Company ("DTC") to remove (i)
from any existing CUSIP number assigned to the Debentures or Exchange
Debentures, as the case may be, any designation indicating that such
Debentures are "restricted securities", which efforts shall include
delivery to DTC of a letter executed by the Company substantially in
the form of Annex E hereto and (ii) any other stop or restriction on
DTC's system with respect to such Debentures. Upon compliance with the
foregoing requirements of this Section 4(l), the Company shall provide
the Trustee with printed certificates for such Debentures, in a form
eligible for deposit with DTC.
(m) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make
generally available to its security holders as soon as practicable
after the effective date of the applicable Registration Statement
<PAGE> 13
an earnings statement satisfying the provisions of Section 11(a) of the
Act.
(n) The Company may require each Holder of Debentures to be
sold pursuant to any Shelf Registration Statement to furnish to the
Company such information regarding such Holder and the distribution of
such Debentures by such Holder as the Company may from time to time
reasonably require for inclusion in such Registration Statement.
(o) The Company shall, if requested by the Managing
Underwriters or the Holders of Debentures covered by such Shelf
Registration Statement, promptly incorporate in a Prospectus supplement
or post-effective amendment to a Shelf Registration Statement, such
information with respect to such Managing Underwriters and Holders as
such Managing Underwriters or Holders reasonably request to include
therein and shall make all required filings of such Prospectus
supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such Prospectus supplement or
post-effective amendment.
(p) In the case of any Shelf Registration Statement, the
Company shall enter into such agreements (including underwriting
agreements) and take all other appropriate actions in order to expedite
or facilitate the registration or the disposition of the Debentures or
the Exchange Debentures, as the case may be, and in connection
therewith, if an underwriting agreement is entered into, cause the same
to contain indemnification provisions and procedures no less favorable
than those set forth in Section 6 (or such other provisions and
procedures acceptable to the Majority Holders and the Managing
Underwriters, if any) with respect to all parties to be indemnified
pursuant to Section 6.
(q) In the case of any Shelf Registration Statement, the
Company shall (i) make reasonably available for inspection by the
Holders of Debentures to be registered thereunder, any underwriter
participating in any distribution pursuant to such Registration
Statement, and any attorney, accountant or other agent retained by such
Holders or any such underwriter all relevant financial and other
records, pertinent corporate documents and properties of the Company
and its subsidiaries as is customary for
<PAGE> 14
similar due diligence examinations; (ii) cause the Company's officers,
directors and employees and any relevant Trustee to supply at the
Company's expense all relevant information reasonably requested by such
Holders or any such underwriter, attorney, accountant or agent in
connection with any such Registration Statement as is customary for
similar due diligence examinations; PROVIDED, HOWEVER, that, in the
case of clause (i) and (ii) above, any information that is designated
in writing by the Company, in good faith, as confidential at the time
of delivery of such information shall be kept confidential by such
Holders and any such underwriter, attorney, accountant or agent (and,
at the request of the Company each of the foregoing shall enter into a
confidentiality agreement in form and substance reasonably satisfactory
to the Company prior to the delivery of any such information), unless
such disclosure is made in connection with a court proceeding or
required by law, or such information becomes available to the public
generally or through a third party without an accompanying obligation
of confidentiality; (iii) make such representations and warranties to
the Holders of Debentures registered thereunder and the underwriters,
if any, in form, substance and scope as are customarily made by issuers
to underwriters in primary underwritten offerings and covering matters
including, but not limited to, those set forth in the Purchase
Agreement; (iv) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the Managing Underwriters, if any)
addressed to each selling Holder and the underwriters, if any, covering
such matters as are customarily covered in opinions requested in
underwritten offerings and taking into account the opinions delivered
in connection with the Initial Placement and such other matters as may
be reasonably requested by such Holders and underwriters (it being
agreed that the matters to be covered by such counsel shall include,
without limitation, as of the date of the opinions and as of the
effective date of the Registration Statement or most recent
post-effective amendment thereto, as the case may be, a statement by
such counsel regarding the absence from such Registration Statement and
the Prospectus included therein, as then amended or supplemented,
including the documents incorporated by reference therein, of an untrue
statement of a material fact or the omission to
<PAGE> 15
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading); (v) obtain
comfort letters and updates thereof from the independent certified
public accountants of the Company, and, if necessary, any other
independent certified public accountants of any subsidiary of the
Company (and, if necessary, shall use its best efforts to obtain such
letters and updates from any independent certified public accountants
of any business acquired by the Company for which financial statements
and financial data are, or are required to be, included in the Shelf
Registration Statement), addressed to each selling Holder of Debentures
registered thereunder and the underwriters, if any, in customary form
and covering matters of the type customarily covered in comfort letters
in connection with primary underwritten offerings; and (vi) deliver
such documents and certificates as may be reasonably requested by the
Majority Holders and the Managing Underwriters, if any, including those
to evidence compliance with Section 4(k) and with any customary
conditions contained in the underwriting agreement or other agreement
entered into by the Company. The foregoing actions set forth in clauses
(iii), (iv), (v) and (vi) of this Section 4(q) shall be performed at
(A) the effectiveness of such Shelf Registration Statement and each
post-effective amendment thereto and (B) each closing under any
underwriting or similar agreement as and to the extent required
thereunder.
5. REGISTRATION EXPENSES. The Company shall bear all expenses
incurred in connection with the performance of their obligations under Sections
2, 3 and 4 hereof and, in the event of any Shelf Registration Statement, will
reimburse the Holders of Debentures registered thereunder for the reasonable
fees and disbursements of one firm or counsel designated by the Majority Holders
to act as counsel for such Holders in connection therewith, and, in the case of
any Exchange Offer Registration Statement, will reimburse the Initial Purchaser
for the reasonable fees and disbursements of counsel acting in connection
therewith.
6. INDEMNIFICATION AND CONTRIBUTION. (a) In connection with
any Registration Statement, the Company agrees to indemnify and hold harmless
each Holder of Debentures or Exchange Debentures, as the case may be, covered
thereby (including the Initial Purchaser and, with
<PAGE> 16
respect to any Prospectus delivery as contemplated in Section 4(h) hereof, each
Exchanging Dealer), the directors, officers, employees and agents of each such
Holder and each person who controls any such Holder within the meaning of either
the Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement as originally filed or in any amendment thereof, or
in any preliminary Prospectus or Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that (i) the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any such Holder specifically for inclusion
therein and (ii) such indemnity with respect to any preliminary Prospectus shall
not inure to the benefit of any Holder (or any person controlling such Holder)
from whom the person asserting any such loss, claim, damage or liability
purchased the Debentures or Exchange Debentures, as the case may be, which are
the subject thereof if such person did not receive a copy of the Prospectus (or
the Prospectus as supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of such Debentures or
Exchange Debentures, as the case may be, in any case where such delivery is
required by the Act and the untrue statement or omission of a material fact
contained in the preliminary Prospectus was corrected in the Prospectus (or the
Prospectus as supplemented). This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
<PAGE> 17
The Company also agrees to indemnify or contribute to Losses
of, as provided in Section 6(d), any underwriters of Debentures or Exchange
Debentures registered under a Shelf Registration Statement, their officers and
directors and each person who controls such underwriters on substantially the
same basis as that of the indemnification of the Initial Purchaser and the
selling Holders provided in this Section 6(a) and shall, if requested by any
underwriter, enter into an underwriting agreement reflecting such agreement, as
provided in Section 4(p) hereof.
(b) Each Holder of Debentures or Exchange Debentures covered
by a Registration Statement (including the Initial Purchaser and, with respect
to any Prospectus delivery as contemplated in Section 4(h) hereof, each
Exchanging Dealer) severally agrees to indemnify and hold harmless (i) the
Company, (ii) each of the Company's directors, (iii) each of the Company's
officers or any Trustee who signs such Registration Statement and (iv) each
person who controls the Company within the meaning of either the Act or the
Exchange Act to the same extent as the foregoing indemnity from the Company to
each such Holder, but only with reference to written information relating to
such Holder furnished to the Company by or on behalf of such Holder specifically
for inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any such Holder
may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 6, notify the indemnifying party in writing of the
commencement thereof; but the failure to so notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above or paragraph
(d) below unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b). The indemnifying
party shall be entitled to appoint counsel of the indemnifying party's choice at
the indemnifying party's expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying party
shall not
<PAGE> 18
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel (and local counsel) if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded,
after consultation with legal counsel of its choosing, that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding. Any
indemnifying party shall not be liable for any settlement, compromise or consent
of any proceeding effected by the indemnified party without the written consent
of the indemnifying party (which consent shall not be unreasonably witheld),
unless the indemnifying party has waived its right to appoint counsel to
represent the indemnified party in such proceeding in which case the indemnified
party may effect such a settlement, compromise or consent without the consent of
the indemnifying party.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 6 is unavailable to or
<PAGE> 19
insufficient to hold harmless an indemnified party for any reason, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall have a joint and several obligation to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending the same) (collectively
"Losses") to which such indemnified party may be subject in such proportion as
is appropriate to reflect the relative benefits received by such indemnifying
party, on the one hand, and such indemnified party, on the other hand, from the
Initial Placement and the Registration Statement which resulted in such Losses;
PROVIDED, HOWEVER, that in no case shall the Initial Purchaser be responsible,
in the aggregate, for any amount in excess of the purchase discount or
commission applicable to such Debenture, or in the case of an Exchange
Debenture, applicable to the Debenture which was exchangeable into such Exchange
Debenture, as set forth on the cover page of the Final Memorandum, nor shall any
underwriter be responsible for any amount in excess of the underwriting discount
or commission applicable to the Debentures or Exchange Debentures purchased by
such underwriter under the Registration Statement which resulted in such Losses.
If the allocation provided by the immediately preceding sentence is unavailable
for any reason, the indemnifying party and the indemnified party shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on the
one hand, and such indemnified party, on the other hand, in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the Initial Placement (before
deducting expenses) as set forth on the cover page of the Final Memorandum.
Benefits received by the Initial Purchaser shall be deemed to be equal to the
total purchase discounts and commissions as set forth on the cover page of the
Final Memorandum, and benefits received by any other Holders shall be deemed to
be equal to the excess, if any, of the value to such Holder of receiving
Debentures or Exchange Debentures, as applicable, registered under the Act over
the value to such Holder of holding Debentures not registered under the Act.
Benefits received by any underwriter shall be deemed to be equal to the total
underwriting discounts and commissions, as set forth on the cover page of the
Prospectus forming a part of the Registration Statement which resulted in such
Losses.
<PAGE> 20
Relative fault shall be determined by reference to whether any alleged untrue
statement or omission relates to information provided by the indemnifying party,
on the one hand, or by the indemnified party, on the other hand. The parties
agree that it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person who controls a
Holder within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of such Holder shall have the same rights
to contribution as such Holder, and each person who controls the Company within
the meaning of either the Act or the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to the applicable terms and conditions of this paragraph (d).
(e) The provisions of this Section 6 will remain in full force
and effect, regardless of any investigation made by or on behalf of any Holder,
the Company or any of the officers, directors, trustees or controlling persons
referred to in Section 6 hereof, and will survive the sale by a Holder of
securities covered by a Registration Statement.
7. SPECIAL INTEREST UNDER CERTAIN CIRCUMSTANCES. (a)
Additional interest (the "Special Interest") shall become payable in respect of
the 2027 Debentures or the 2097 Debentures, as the case may be, as follows if
any of the following events occur with respect to such Debentures (each such
event in clauses (i) through (iv) below, a "Registration Default"):
(i) if the Exchange Offer Registration Statement is not filed
with the Commission on or prior to the 90th day following the Closing Date;
(ii) if neither the Exchange Offer Registration Statement is
declared effective nor (if the Exchange Offers are not permitted as described in
Section 3) the Shelf
<PAGE> 21
Registration Statement is filed with the Commission on or prior to the 180th day
following the Closing Date;
(iii) if the Registered Exchange Offer with respect to such
Debentures is not consummated or the Shelf Registration Statement with respect
to such Debentures is not declared effective on or prior to the 210th day
following the Closing Date; or
(iv) if, after the 210th day following the Closing Date, and
after the Shelf Registration Statement is declared effective, the Company fails
to keep the Shelf Registration Statement continuously effective (except as
permitted by the proviso to Section 3(b)) then from such time as the Shelf
Registration Statement is no longer effective until the earlier of (i) the date
that the Shelf Registration Statement is again deemed effective and (ii) the
date that is the earliest of (x) the third anniversary of the Closing Date (or
until the first anniversary of the effective date of the Shelf Registration
Statement if the Shelf Registration Statement is filed at the request of the
Initial Purchaser), (y) the time when the Debentures registered thereunder can
be sold by non-Affiliates pursuant to Rule 144 under the Act without any
limitations under clauses (c), (e), (f) and (h) of Rule 144, or (z) the date as
of which all of such Debentures are sold pursuant to the Shelf Registration
Statement.
Special Interest shall accrue on the 2027 Debentures or the
2097 Debentures, as the case may be, over and above the interest rate set forth
in the Indenture applicable to such Debentures following the occurrence of each
Registration Default set forth in clauses (i), (ii), (iii) and (iv) above from
and including the next day following each such Registration Default, in each
case at a rate equal to 0.25% per annum of the principal amount of such
Debentures (0.50% thereof if pursuant to clause (iv) the Shelf Registration
Statement is no longer effective for 30 days or more) payable in cash
semiannually in arrears; PROVIDED, HOWEVER, that the aggregate amount of Special
Interest payable with respect to the 2027 Debentures or the 2097 Debentures
pursuant this Section 7(a) will in no event exceed 0.75% per annum of the
principal amount of such Debentures. The Special Interest attributable to each
Registration Default shall cease to accrue from the date such Registration
Default is cured. Upon (a) the filing of the Exchange Offer Registration
Statement after the 90-day period described in clause (i) above, (b) the
effectiveness
<PAGE> 22
of the Exchange Offer Registration Statement or the filing of the Shelf
Registration Statement after the 180-day period described in clause (ii) above
or (c) the consummation of the Exchange Offer for such Debentures or the
effectiveness of a Shelf Registration Statement, as the case may be, after the
210-day period described in clause (iii) above, Special Interest payable on such
Debentures as a result of the applicable Registration Default will cease to
accrue. For purposes of the preceding sentence, the curing of a Registration
Default by the means described in clause (b) above shall constitute a cure of
the Registration Defaults described in clauses (i) and (ii) above, and the
curing of a Registration Default by the means described in clause (c) above
shall constitute a cure of the Registration Defaults described in clauses (i),
(ii) and (iii) above.
(b) Any amounts of Special Interest due pursuant to the
foregoing paragraphs will be payable in cash on February 1 and August 1 of each
year to the holders of record on the preceding January 15 and July 15,
respectively.
8. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company has not, as of the
date hereof, entered into, nor shall it, on or after the date hereof, enter
into, any agreement with respect to the Debentures that is inconsistent with the
rights granted to the Holders herein or otherwise conflicts with the provisions
hereof.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Holders of at least a majority of the then outstanding aggregate
principal amount of Debentures (or, after the consummation of any Exchange Offer
in accordance with Section 2 hereof, of Exchange Debentures); PROVIDED, HOWEVER,
that, with respect to any matter that directly or indirectly affects the rights
of any Initial Purchaser hereunder, the Company shall obtain the written consent
of the Initial Purchaser. Notwithstanding the foregoing (except the foregoing
proviso), a waiver or consent to departure from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders whose
Debentures are being sold pursuant to a
<PAGE> 23
Registration Statement and that does not directly or indirectly affect the
rights of other Holders may be given by the Majority Holders, determined on the
basis of Debentures being sold rather than registered under such Registration
Statement.
(c) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given
by such holder to the Company in accordance with the
provisions of this Section 8(c), which address initially is,
with respect to each Holder, the address of such Holder
maintained by the Registrar under the Indenture, with a copy
in like manner to Salomon Brothers Inc;
(2) if to you, initially at the address set forth in
the Purchase Agreement; and
(3) if to the Company, initially at the address set
forth in the Purchase Agreement.
All such notices and communications shall be deemed to have
been duly given when received.
The Initial Purchaser or the Company by notice to the other
may designate additional or different addresses for subsequent notices or
communications.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent by
the Company thereto, subsequent Holders of Debentures and/or Exchange
Debentures. The Company hereby agrees to extend the benefits of this Agreement
to any Holder of Debentures and/or Exchange Debentures and any such Holder may
specifically enforce the provisions of this Agreement as if an original party
hereto.
(e) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall
<PAGE> 24
be deemed to be an original and all of which taken together shall constitute one
and the same agreement.
(f) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed in said State.
(h) SEVERABILITY. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
(i) SECURITIES HELD BY THE COMPANY, ETC. Whenever the consent
or approval of Holders of a specified percentage of principal amount of
Debentures or Exchange Debentures is required hereunder, Debentures or Exchange
Debentures, as applicable, held by the Company or its Affiliates (other than
subsequent Holders of Debentures or Exchange Debentures if such subsequent
Holders are deemed to be Affiliates solely by reason of their holdings of such
Debentures or Exchange Debentures) shall not be counted in determining whether
such consent or approval was given by the Holders of such required percentage.
<PAGE> 25
Please confirm that the foregoing correctly sets forth the
agreement between the Company and you.
Very truly yours,
THE SHERWIN-WILLIAMS COMPANY,
by: /s/ Larry J. Pitorak
------------------------------
Name: Larry J. Pitorak
Title: Senior Vice President-
Finance, Treasurer and
Chief Financial Officer
Accepted as of the date hereof
SALOMON BROTHERS INC
by: /s/ Thomas J. Spoto
----------------------------
Name: Thomas J. Spoto
Title: Associate
<PAGE> 26
Annex A
-------
Each broker-dealer that receives Exchange Debentures for its
own account pursuant to the Exchange Offer must acknowledge that it will deliver
a prospectus meeting the requirements of the Securities Act in connection with
any resale of such Exchange Debentures. The Letter of Transmittal states that by
so acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act. This Prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with resales of Exchange Debentures
received in exchange for Debentures acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has agreed
that, starting on the Expiration Date (as defined herein) and ending on the
close of business 180 days after the Expiration Date, it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution".
<PAGE> 27
Annex B
-------
Each broker-dealer that receives Exchange Debentures for its
own account in exchange for Debentures, where such Debentures were acquired by
such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Debentures. See "Plan of Distribution".
<PAGE> 28
Annex C
Plan of Distribution
--------------------
Each broker-dealer that receives Exchange Debentures for its
own account pursuant to the Exchange Offer must acknowledge that it will deliver
a prospectus meeting the requirements of the Securities Act in connection with
any resale of such Exchange Debentures. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Debentures received in exchange for Debentures where
such Debentures were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that, starting on
the Expiration Date and ending on the close of business 180 days after the
Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale.
The Company will not receive any proceeds from any sale of
Exchange Debentures by broker-dealers. Exchange Debentures received by
broker-dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Debentures or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer and/or the
purchasers of any such Exchange Debentures. Any broker-dealer that resells
Exchange Debentures that were received by it for its own account pursuant to the
Exchange Offer and any broker or dealer that participates in a distribution of
such Exchange Debentures may be deemed to be an "underwriter" within the meaning
of the Securities Act and any profit of any such resale of Exchange Debentures
and any commissions or concessions received by any such persons may be deemed to
be underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a prospectus
meeting the requirements of the Securities Act, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
For a period of 180 days after the Expiration Date, the
Company will promptly send additional copies of
<PAGE> 29
this Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal. The
Company has agreed to pay all expenses incident to the Exchange Offer (including
the expenses of one counsel for the holders of the Debentures) other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the Debentures (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
[If applicable, add information required by Regulation S-K
Items 507 and/or 508.]
<PAGE> 30
Annex D
Rider A
-------
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:__________________________________________
Address: ______________________________________
______________________________________
Rider B
-------
If the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to engage in, a
distribution of Exchange Debentures. If the undersigned is a broker-dealer that
will receive Exchange Debentures for its own account in exchange for Debentures,
it represents that the Debentures to be exchanged for Exchange Debentures were
acquired by it as a result of market-making activities or other trading
activities and acknowledges that it will deliver a prospectus in connection with
any resale of such Exchange Debentures; however, by so acknowledging and by
delivering a prospectus, the undersigned will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
<PAGE> 31
Annex E
FORM OF LETTER TO BE PROVIDED BY ISSUER TO
THE DEPOSITORY TRUST COMPANY
The Sherwin-Williams Company
101 Prospect Avenue, N.W. (12th Floor)
Cleveland, OH 44115
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004
Re: 7.375% Debentures Due 2027
7.450% Debentures Due 2029
Ladies and Gentlemen:
Please be advised that the Securities and Exchange Commission
has declared effective a Registration Statement on Form S-3 under the Securities
Act of 1933 with regard to all of the Debentures referenced above. Accordingly,
there is no longer any restriction as to whom such Debentures may be sold and
any restrictions on the CUSIP designation are no longer appropriate and may be
removed. We understand that upon receipt of this letter, DTC will remove any
stop or restriction on its system with respect to this issue.
As always, please do not hesitate to call if we can be of
further assistance.
THE SHERWIN-WILLIAMS COMPANY,
by:
_____________________________
Authorized Officer
<PAGE> 1
EXHIBIT 5
April 22, 1997
The Sherwin-Williams Company
101 Prospect Avenue, N.W.
Cleveland, Ohio 44115-1075
Re: Registration Statement on Form S-4 of The Sherwin-Williams Company
Ladies and Gentlemen:
As General Counsel of The Sherwin-Williams Company, an Ohio corporation
(the "Company"), I am delivering this opinion for use as an Exhibit to the
Registration Statement on Form S-4 (the "Registration Statement") relating to
the 7.375% Debentures Due 2027 and the 7.45% Debentures Due 2097 (collectively,
the "Debentures") of the Company. With respect thereto, I have examined:
A. The Registration Statement, including the Exhibits filed
therewith and the Prospectus related thereto; and
B. Such other documents and instruments as I have deemed
necessary to render the opinion set forth below.
Based upon the foregoing, I am of the opinion that the Debentures, when
issued pursuant to and in the manner contemplated by the Registration Statement,
will be validly issued and will be binding obligations of the Company.
I am a member of the Bar of the State of Pennsylvania and do not
purport to be an expert in, nor do I express any opinion with respect to, the
laws of any jurisdiction other than the Federal laws of the United States and
the laws of the States of Ohio and Pennsylvania.
I am delivering this opinion solely in connection with the filing of
the Registration Statement. This letter may not be relied upon for any other
purpose or by any person other than the directors and officers of the Company.
I consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the reference to me, in my capacity as General
Counsel of the Company, under the caption "Legal Matters" in the Registration
Statement. In giving this consent, I do not admit that I am in the category of
persons whose consent is required under Section 7 of the Securities Act of 1933
or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ L.E. Stellato
<PAGE> 1
Exhibit 8
April 22, 1997
The Sherwin-Williams Company
101 Prospect Avenue, N.W.
Cleveland, Ohio 44115
Ladies and Gentlemen:
Reference is made to the information set forth under the heading
"Certain Federal Income Tax Consequences of Participation in the Exchange
Offers" contained in the Prospectus included in the Registration Statement on
Form S-4 relating to the 7.375% Debentures Due 2027 and the 7.45% Debentures Due
2097. It is our opinion that the discussion of the consequences of participation
in the exchange offers under that heading, to the extent it reflects matters of
law or legal conclusions, and subject to the assumptions and conditions
described therein, accurately summarizes in all material respects the matters
discussed therein.
This opinion is based on the case law, Internal Revenue Code,
Treasury Regulations and Internal Revenue Service rulings as they now exist.
These authorities are all subject to change, and such change may be made with
retroactive effect. There can be no assurance that, after such change, this
opinion would not be different. We undertake no responsibility to update or
supplement this opinion.
We hereby consent to the filing with the Securities and Exchange
Commission of this opinion as an exhibit to the Registration Statement of which
the Prospectus is a part. In giving such consent, we do not thereby admit that
we are in the category of persons whose consent is required under Section 7 of
the Securities Act of 1933.
Very truly yours,
/s/ Arnold & Porter
_______________________
ARNOLD & PORTER
<PAGE> 1
Page 1 Exhibit 12
THE SHERWIN-WILLIAMS COMPANY
CALCULATION OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Earnings:
Income before income
taxes and cumulative
effects of changes in
accounting methods 375 318 299 264 226
Fixed charges 130 98 97 98 96
---- ---- ---- --- ---
Earnings (1) 505 416 396 362 322
=== ==== ==== === ===
Fixed Charges:
Interest expense 25 2 3 6 9
Gross rent expense 105 96 94 92 87
---- ---- --- --- ---
Fixed charges (2) 130 98 97 98 96
==== ==== === === ===
Ratio of earnings to
fixed charges (1)/(2) 3.9 4.2 4.1 3.7 3.4
==== ==== === === ===
</TABLE>
<PAGE> 1
Exhibit 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Summary Historical
Financial Information" in the Registration Statement (Form S-4) and related
Prospectus of The Sherwin-Williams Company for the registration of $300,000,000
of debentures and to the incorporation by reference therein of our report dated
January 23, 1997 (except for Note 17, as to which the date is January 29,
1997), with respect to the consolidated financial statements and schedule of
The Sherwin-Williams Company included in its Annual Report (Form 10-K) for the
year ended December 31, 1996, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Cleveland, Ohio
April 21, 1997
<PAGE> 1
[DELOITTE & TOUCHE LLP - LOGO] Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement
(Form S-4) for the registration of $300,000,000 of Debentures of The
Sherwin-Williams Company of our report dated March 26, 1996 (except for Notes 11
and 12, as to which the dates are November 22, 1996 and January 3, 1997,
respectively) with regard to the consolidated financial statements of Thompson
Minwax Holding Corp. and Subsidiaries for the year ended December 31, 1995 (as
restated), included in the Current Report on Form 8-K of The Sherwin-Williams
Company dated January 7, 1997
/s/ Deloitte & Touche LLP
April 21, 1997
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
----------------------------
The undersigned Director of The Sherwin-Williams Company, an Ohio
corporation, which corporation anticipates filing with the Securities and
Exchange Commission, under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, Registration Statement(s) on Form S-4 (or any other appropriate
form) relating to the registration of debentures to be exchanged for the
Company's 7.375% Debentures due 2027 and 7.45% Debentures due 2097, hereby
constitutes and appoints J.G. Breen, T.A. Commes, L.J. Pitorak and L.E.
Stellato, and each of them, with full power of substitution and resubstitution,
as attorneys or attorney to sign for me and in my name, in the capacity
indicated below, said Registration Statement(s) and any and all amendments
thereto (including post-effective amendments), and to file the same, with all
supplements and exhibits thereto and any and all applications or other documents
in connection therewith, with the Securities and Exchange Commission and any
national securities exchange, granting unto said attorneys, and each one of
them, full power and authority to do and perform any and all acts and things
whatsoever required and necessary to be done in the premises, hereby ratifying
and approving the acts of said attorneys, or any of them or any substitutes.
Executed the date set opposite my name.
Date: February 18, 1997 /s/ James M. Biggar
----------------------------- --------------------------------
J. M. Biggar
Director
<PAGE> 2
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
----------------------------
The undersigned Director of The Sherwin-Williams Company, an Ohio
corporation, which corporation anticipates filing with the Securities and
Exchange Commission, under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, Registration Statement(s) on Form S-4 (or any other appropriate
form) relating to the registration of debentures to be exchanged for the
Company's 7.375% Debentures due 2027 and 7.45% Debentures due 2097, hereby
constitutes and appoints J.G. Breen, T.A. Commes, L.J. Pitorak and L.E.
Stellato, and each of them, with full power of substitution and resubstitution,
as attorneys or attorney to sign for me and in my name, in the capacity
indicated below, said Registration Statement(s) and any and all amendments
thereto (including post-effective amendments), and to file the same, with all
supplements and exhibits thereto and any and all applications or other documents
in connection therewith, with the Securities and Exchange Commission and any
national securities exchange, granting unto said attorneys, and each one of
them, full power and authority to do and perform any and all acts and things
whatsoever required and necessary to be done in the premises, hereby ratifying
and approving the acts of said attorneys, or any of them or any substitutes.
Executed the date set opposite my name.
Date: February 19, 1997 /s/ D. E. Collins
----------------------------- --------------------------------
D. E. Collins
Director
<PAGE> 3
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
----------------------------
The undersigned Director of The Sherwin-Williams Company, an Ohio
corporation, which corporation anticipates filing with the Securities and
Exchange Commission, under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, Registration Statement(s) on Form S-4 (or any other appropriate
form) relating to the registration of debentures to be exchanged for the
Company's 7.375% Debentures due 2027 and 7.45% Debentures due 2097, hereby
constitutes and appoints J.G. Breen, T.A. Commes, L.J. Pitorak and L.E.
Stellato, and each of them, with full power of substitution and resubstitution,
as attorneys or attorney to sign for me and in my name, in the capacity
indicated below, said Registration Statement(s) and any and all amendments
thereto (including post-effective amendments), and to file the same, with all
supplements and exhibits thereto and any and all applications or other documents
in connection therewith, with the Securities and Exchange Commission and any
national securities exchange, granting unto said attorneys, and each one of
them, full power and authority to do and perform any and all acts and things
whatsoever required and necessary to be done in the premises, hereby ratifying
and approving the acts of said attorneys, or any of them or any substitutes.
Executed the date set opposite my name.
Date: February 16, 1997 /s/ D. E. Evans
----------------------------- --------------------------------
D. E. Evans
Director
<PAGE> 4
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
----------------------------
The undersigned Director of The Sherwin-Williams Company, an Ohio
corporation, which corporation anticipates filing with the Securities and
Exchange Commission, under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, Registration Statement(s) on Form S-4 (or any other appropriate
form) relating to the registration of debentures to be exchanged for the
Company's 7.375% Debentures due 2027 and 7.45% Debentures due 2097, hereby
constitutes and appoints J.G. Breen, T.A. Commes, L.J. Pitorak and L.E.
Stellato, and each of them, with full power of substitution and resubstitution,
as attorneys or attorney to sign for me and in my name, in the capacity
indicated below, said Registration Statement(s) and any and all amendments
thereto (including post-effective amendments), and to file the same, with all
supplements and exhibits thereto and any and all applications or other documents
in connection therewith, with the Securities and Exchange Commission and any
national securities exchange, granting unto said attorneys, and each one of
them, full power and authority to do and perform any and all acts and things
whatsoever required and necessary to be done in the premises, hereby ratifying
and approving the acts of said attorneys, or any of them or any substitutes.
Executed the date set opposite my name.
Date: February 14, 1997 /s/ R. W. Mahoney
----------------------------- --------------------------------
R. W. Mahoney
Director
<PAGE> 5
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
----------------------------
The undersigned Director of The Sherwin-Williams Company, an Ohio
corporation, which corporation anticipates filing with the Securities and
Exchange Commission, under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, Registration Statement(s) on Form S-4 (or any other appropriate
form) relating to the registration of debentures to be exchanged for the
Company's 7.375% Debentures due 2027 and 7.45% Debentures due 2097, hereby
constitutes and appoints J.G. Breen, T.A. Commes, L.J. Pitorak and L.E.
Stellato, and each of them, with full power of substitution and resubstitution,
as attorneys or attorney to sign for me and in my name, in the capacity
indicated below, said Registration Statement(s) and any and all amendments
thereto (including post-effective amendments), and to file the same, with all
supplements and exhibits thereto and any and all applications or other documents
in connection therewith, with the Securities and Exchange Commission and any
national securities exchange, granting unto said attorneys, and each one of
them, full power and authority to do and perform any and all acts and things
whatsoever required and necessary to be done in the premises, hereby ratifying
and approving the acts of said attorneys, or any of them or any substitutes.
Executed the date set opposite my name.
Date: February 19, 1997 /s/ W. G. Mitchell
----------------------------- --------------------------------
W. G. Mitchell
Director
<PAGE> 6
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
----------------------------
The undersigned Director of The Sherwin-Williams Company, an Ohio
corporation, which corporation anticipates filing with the Securities and
Exchange Commission, under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, Registration Statement(s) on Form S-4 (or any other appropriate
form) relating to the registration of debentures to be exchanged for the
Company's 7.375% Debentures due 2027 and 7.45% Debentures due 2097, hereby
constitutes and appoints J.G. Breen, T.A. Commes, L.J. Pitorak and L.E.
Stellato, and each of them, with full power of substitution and resubstitution,
as attorneys or attorney to sign for me and in my name, in the capacity
indicated below, said Registration Statement(s) and any and all amendments
thereto (including post-effective amendments), and to file the same, with all
supplements and exhibits thereto and any and all applications or other documents
in connection therewith, with the Securities and Exchange Commission and any
national securities exchange, granting unto said attorneys, and each one of
them, full power and authority to do and perform any and all acts and things
whatsoever required and necessary to be done in the premises, hereby ratifying
and approving the acts of said attorneys, or any of them or any substitutes.
Executed the date set opposite my name.
Date: February 17, 1997 /s/ A. M. Mixon
----------------------------- --------------------------------
A. M. Mixon
Director
<PAGE> 7
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
----------------------------
The undersigned Director of The Sherwin-Williams Company, an Ohio
corporation, which corporation anticipates filing with the Securities and
Exchange Commission, under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, Registration Statement(s) on Form S-4 (or any other appropriate
form) relating to the registration of debentures to be exchanged for the
Company's 7.375% Debentures due 2027 and 7.45% Debentures due 2097, hereby
constitutes and appoints J.G. Breen, T.A. Commes, L.J. Pitorak and L.E.
Stellato, and each of them, with full power of substitution and resubstitution,
as attorneys or attorney to sign for me and in my name, in the capacity
indicated below, said Registration Statement(s) and any and all amendments
thereto (including post-effective amendments), and to file the same, with all
supplements and exhibits thereto and any and all applications or other documents
in connection therewith, with the Securities and Exchange Commission and any
national securities exchange, granting unto said attorneys, and each one of
them, full power and authority to do and perform any and all acts and things
whatsoever required and necessary to be done in the premises, hereby ratifying
and approving the acts of said attorneys, or any of them or any substitutes.
Executed the date set opposite my name.
Date: February 18, 1997 /s/ Curtis E. Moll
----------------------------- --------------------------------
C. E. Moll
Director
<PAGE> 8
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
----------------------------
The undersigned Director of The Sherwin-Williams Company, an Ohio
corporation, which corporation anticipates filing with the Securities and
Exchange Commission, under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, Registration Statement(s) on Form S-4 (or any other appropriate
form) relating to the registration of debentures to be exchanged for the
Company's 7.375% Debentures due 2027 and 7.45% Debentures due 2097, hereby
constitutes and appoints J.G. Breen, T.A. Commes, L.J. Pitorak and L.E.
Stellato, and each of them, with full power of substitution and resubstitution,
as attorneys or attorney to sign for me and in my name, in the capacity
indicated below, said Registration Statement(s) and any and all amendments
thereto (including post-effective amendments), and to file the same, with all
supplements and exhibits thereto and any and all applications or other documents
in connection therewith, with the Securities and Exchange Commission and any
national securities exchange, granting unto said attorneys, and each one of
them, full power and authority to do and perform any and all acts and things
whatsoever required and necessary to be done in the premises, hereby ratifying
and approving the acts of said attorneys, or any of them or any substitutes.
Executed the date set opposite my name.
Date: February 19, 1997 /s/ H. O. Petrauskas
----------------------------- --------------------------------
H. O. Petrauskas
Director
<PAGE> 9
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
----------------------------
The undersigned Director of The Sherwin-Williams Company, an Ohio
corporation, which corporation anticipates filing with the Securities and
Exchange Commission, under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, Registration Statement(s) on Form S-4 (or any other appropriate
form) relating to the registration of debentures to be exchanged for the
Company's 7.375% Debentures due 2027 and 7.45% Debentures due 2097, hereby
constitutes and appoints J.G. Breen, T.A. Commes, L.J. Pitorak and L.E.
Stellato, and each of them, with full power of substitution and resubstitution,
as attorneys or attorney to sign for me and in my name, in the capacity
indicated below, said Registration Statement(s) and any and all amendments
thereto (including post-effective amendments), and to file the same, with all
supplements and exhibits thereto and any and all applications or other documents
in connection therewith, with the Securities and Exchange Commission and any
national securities exchange, granting unto said attorneys, and each one of
them, full power and authority to do and perform any and all acts and things
whatsoever required and necessary to be done in the premises, hereby ratifying
and approving the acts of said attorneys, or any of them or any substitutes.
Executed the date set opposite my name.
Date: February 19, 1997 /s/ R. K. Smucker
----------------------------- --------------------------------
R. K. Smucker
Director
<PAGE> 1
Exhibit 99.1
LETTER OF TRANSMITTAL
THE SHERWIN-WILLIAMS COMPANY
<TABLE>
<S> <C>
OFFER TO EXCHANGE OFFER TO EXCHANGE
ALL OUTSTANDING ALL OUTSTANDING
7.375% DEBENTURES DUE 2027 7.45% DEBENTURES DUE 2097
FOR FOR
7.375% DEBENTURES DUE 2027 7.45% DEBENTURES DUE 2097
WHICH HAVE BEEN REGISTERED UNDER THE WHICH HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, SECURITIES ACT OF 1933, AS AMENDED,
PURSUANT TO THE PROSPECTUS, PURSUANT TO THE PROSPECTUS,
DATED ________, 1997 DATED ________, 1997
</TABLE>
----------
THE EXCHANGE OFFERS
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON _______________, 1997 UNLESS EXTENDED ("THE EXPIRATION DATE")
----------
THE CHASE MANHATTAN BANK, Exchange Agent
By Mail, Hand or
Overnight Delivery:
The Chase Manhattan Bank
55 Water Street
Room 234, North Building
New York, New York 10041
Attention: Luis Padilla
By Facsimile: 212-638-7380
212-638-7381
Confirm by Telephone: 212-638-0458
<PAGE> 2
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER OTHER THAN
AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
The undersigned acknowledges that he or she has received and reviewed the
Prospectus, dated, , 1997 (the "Prospectus"), of The Sherwin-Williams Company,
an Ohio corporation (the "Company"), and this Letter of Transmittal (the
"Letter"), which together constitute the Company's offers (the "Exchange
Offers") to exchange, from the registered holders (the "Holders") thereof (i) an
aggregate principal amount of up to $150,000,000 of the Company's 7.375%
Debentures Due 2027 (the "New 2027 Debentures"), which have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to
a Registration Statement of which the Prospectus is part, for a like principal
amount of the issued and outstanding 7.375% Debentures Due 2027 (the "Old 2027
Debentures") of the Company and (ii) an aggregate principal amount of up to
$150,000,000 of the Company's 7.45% Debentures Due 2097 (the "New 2097
Debentures"), which have been registered under the Securities Act, pursuant to a
Registration Statement of which the Prospectus is a part, for a like principal
amount of issued and outstanding 7.45% Debenture Due 2097 (the "Old 2097
Debentures") of the Company. The New 2027 Debentures and the New 2097 Debentures
are sometimes referred to herein collectively as the "New Debentures," and the
Old 2027 Debentures and the Old 2097 Debentures are sometime referred to herein
collectively as the "Old Debentures."
For each Old Debenture accepted for exchange, the Holder of such Old
Debenture will receive a New Debenture having a principal amount equal to that
of the surrendered Old Debenture. Accordingly, registered Holders of New
Debentures on the relevant record date for the first interest payment date
following the consummation of the Exchange Offer will receive interest accruing
from the most recent date to which interest has been paid on the Old Debentures
or, if no interest has been paid, from February 10, 1997. Old Debentures
accepted for exchange will cease to accrue interest from and after the date of
consummation of the Exchange Offer. Holders whose Old Debentures are accepted
for exchange will not receive any payment in respect of accrued interest on such
Old Debentures otherwise payable on any interest payment date the record date
for which occurs on or after consummation of the Exchange Offer.
This Letter is to be completed by a Holder of Old Debentures either if
certificates for such Old Debentures are to be forwarded herewith or if a tender
is to be made by book-entry transfer to the account maintained by the Exchange
Agent at The Depository Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedures set forth in "The Exchange Offers -- Book-Entry
Transfer" section of the Prospectus and an Agent's Message is not delivered.
Tenders by book-entry transfer may also be made by delivering an Agent's Message
in lieu of this Letter of Transmittal. The term "Agent's Message" means a
message, transmitted by the Book-Entry Transfer Facility to and received by the
Exchange Agent and forming a part of a Book-Entry Confirmation (as defined
below), which states that the Book-Entry Transfer Facility has received an
express acknowledgment from the tendering Participant, which acknowledgment
states that such Participant has received and agrees to be bound by the Letter
of Transmittal and that the Company may enforce the Letter of Transmittal
against such Participant. Holders of Old Debentures whose certificates are not
immediately available, or who are unable to deliver their certificates or
confirmation of the book-entry tender of their Old Debentures into the Exchange
Agent's account at the Book-Entry Transfer Facility (a "Book-Entry
Confirmation") and all other documents required by this Letter to the Exchange
Agent on or prior to the Expiration Date, must tender their Old Debentures
according to the guaranteed delivery procedures set forth in "The Exchange
Offers -- Guaranteed Delivery Procedures" section of the Prospectus. See
Instruction 1. Delivery of documents to the Book-Entry Transfer Facility does
not constitute delivery to the Exchange Agent.
The undersigned has completed the appropriate boxes below and signed this
Letter to indicate the action the undersigned desires to take with respect to
the Exchange Offers.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF 7.375%
DEBENTURES DUE 2027" BELOW AND/OR THE BOX ENTITLED "DESCRIPTION OF 7.45%
DEBENTURES DUE 2097" BELOW AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE
TENDERED THE OLD DEBENTURES AS SET FORTH IN SUCH BOXES BELOW.
<PAGE> 3
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOXES
List below the Old Debentures to which this Letter relates. If the space
provided below is inadequate, the certificate numbers and principal amount of
Old Debentures should be listed on a separate signed schedule affixed hereto.
DESCRIPTION OF 7.375% DEBENTURES DUE 2027
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Aggregate Principal
Principal Amount Tendered
Amount (must be in
Names and address(es) of Represented integral
Registered Holders Certificate by multiples
(Please fill in, if blank) Number(s)* Certificate(s) of $1,000)**
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
Total
- ---------------------------------------------------------------------------------------
<FN>
* Need not be completed by book-entry holders.
** Unless indicated in the column labeled "Principal Amount Tendered," any tendering Holder of 7.375%
Debentures Due 2027 will be deemed to have tendered the entire aggregate principal amount represented by the
column labeled "Aggregate Principal Amount Represented by Certificates(s)."
If the space provided above is inadequate, list the certificate numbers and principal amounts on a separate signed
schedule and affix the list to this Letter of Transmittal.
The minimum permitted tender is $1,000 in principal amount of 7.375% Debentures Due 2027 and all tenders
must be in integral multiples of $1,000 in principal amount.
</TABLE>
<PAGE> 4
DESCRIPTION OF 7.45% DEBENTURES DUE 2097
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Aggregate Principal
Principal Amount Tendered
Amount (must be in
Names and address(es) of Represented integral
Registered Holders Certificate by multiples
(Please fill in, if blank) Number(s)* Certificate(s) of $1,000)**
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
Total
- ---------------------------------------------------------------------------------------
<FN>
* Need not be completed by book-entry holders.
** Unless indicated in the column labeled "Principal Amount Tendered," any tendering Holder of 7.45%
Debentures Due 2097 will be deemed to have tendered the entire aggregate principal amount represented by the
column labeled "Aggregate Principal Amount Represented by Certificates(s)."
If the space provided above is inadequate, list the certificate numbers and principal amounts on a separate signed
schedule and affix the list to this Letter of Transmittal.
The minimum permitted tender is $1,000 in principal amount of 7.45% Debentures Due 2097 and all tenders
must be in integral multiples of $1,000 in principal amount.
__
|__| CHECK HERE IF TENDERED OLD DEBENTURES ARE ENCLOSED HEREWITH.
__
|__| CHECK HERE IF TENDERED OLD DEBENTURES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND
COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS (AS HEREINAFTER
DEFINED) ONLY):
Name of Tendering Institution_____________________________________________
Account Number____________________________________________________________
Transaction Code Number___________________________________________________
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
__
|__| CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD DEBENTURES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name(s) of Registered Holder(s)____________________________________________________________________
Date of Execution of Notice of Guaranteed Delivery_________________________________________________
Window Ticket Number (if available)________________________________________________________________
Name of Institution which Guaranteed Delivery______________________________________________________
Account Number (if delivered by book entry transfer)_______________________________________________
Transaction Code Number (if delivered by book-entry transfer)______________________________________
Tendering Institution (if delivered by book/entry transfer)________________________________________
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 3, 4 and 5) (See Instructions 3 and 4)
To be completed ONLY (i) if certificates for Old To be completed ONLY if certificates for Old Debentures
Debentures not tendered, or New Debentures issued in not tendered, or New Debentures issued in exchange for
exchange for Old Debentures accepted for exchange, Old Debentures accepted for exchange, are to be sent to
are to be issued in the name of someone other than the someone other than the undersigned, or to the undersigned
undersigned, or (ii) if Old Debentures tendered by at an address other than that shown above.
book-entry transfer which are not exchanged are to be
returned by credit to an account maintained at The
Depository Trust Company ("DTC") other than
the DTC Account Number set forth above.
Mail to:
Issue certificate(s) to:
Name ________________________________________________ Name ______________________________________________________
(Please Print) (Please Print)
Address _____________________________________________ Address ___________________________________________________
_____________________________________________________ ___________________________________________________________
(Include Zip Code) (Include Zip Code)
_____________________________________________________ ___________________________________________________________
(Tax Identification or Social Security No.) (Tax Identification or Social Security No.)
Credit Old Debentures not exchanged and delivered by
book-entry transfer to the DTC account set forth
below:
___________________________
DTC Account Number
</TABLE>
<PAGE> 6
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offers, the
undersigned hereby tenders to the Company the aggregate principal amount of Old
Debentures indicated below. Subject to, and effective upon, the acceptance for
exchange of the Old Debentures tendered hereby, the undersigned hereby sells,
assigns and transfers to, or upon the order of, the Company all right, title and
interest in and to such Old Debentures as are being tendered hereby. The
undersigned hereby irrevocably constitutes and appoints the Exchange Agent its
agent and attorney-in-fact (with full knowledge that the Exchange Agent also
acts as the agent of the Company) with respect to the tendered Old Debentures
with full power of substitution to (i) deliver certificates for such Old
Debentures, or transfer ownership of such Old Debentures on the account books
maintained by DTC, to the Company and deliver all accompanying evidences of
transfer and authenticity to, or upon the order of, the Company and (ii) present
such Old Debentures for transfer on the books of the Company and receive all
benefits and otherwise exercise all rights of beneficial ownership of such Old
Debentures, all in accordance with the terms of the Exchange Offer. The power of
attorney granted in this paragraph shall be deemed irrevocable and coupled with
an interest.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Old Debentures
tendered hereby and that the Company will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances and
not subject to any adverse claim when the same are accepted by the Company. The
undersigned hereby further represents that any New Debentures acquired in
exchange for Old Debentures tendered hereby will have been acquired in the
ordinary course of business of the person receiving such New Debentures, whether
or not such person is the undersigned, that neither the Holder of such Old
Debentures nor any such other person has an arrangement or understanding with
any person to participate in the distribution of such New Debentures and that
neither the Holder of such Old Debentures nor any such other person is an
"affiliate," as defined in Rule 405 under the Securities Act of 1933, as amended
(the "Securities Act"), of the Company.
The undersigned also acknowledges that the Exchange Offers are being made
in reliance on interpretations by the staff of the Securities and Exchange
Commission (the "SEC"), as set forth in no-action letters issued to third
parties, that the New Debentures issued pursuant to the Exchange Offers in
exchange for the Old Debentures may be offered for resale, resold and otherwise
transferred by Holders thereof (other than any such Holder which is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New Debentures are acquired
in the ordinary course of such Holders' business and such Holders have no
arrangement with any person to participate in a distribution of such New
Debentures. However, the SEC has not considered the Exchange Offers in the
context of a no-action letter and there can be no assurance that the staff of
the SEC would make a similar determination with respect to the Exchange Offers
as in other circumstances. If the undersigned is not a broker-dealer, the
undersigned represents that it is not engaged in, and does not intend to engage
in, a distribution of New Debentures and has no arrangement or understanding to
participate in a distribution of New Debentures. If any Holder is an affiliate
of the Company, is engaged in or intends to engage in, or has any arrangement or
understanding with any person to participate in, a distribution of the New
Debentures to be acquired pursuant to the Exchange Offers, such Holder (i) could
not rely on the applicable interpretations of the staff of the SEC and (ii) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction. If the undersigned is
a broker-dealer that will receive New Debentures for its own account pursuant to
the Exchange Offers, it represents that the Old Debentures to be exchanged for
the New Debentures were acquired by it as a result of market-making activities
or other trading activities and acknowledges that it will deliver a prospectus
in connection with any resale of such New Debentures; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to complete the
sale, assignment and transfer of the Old Debentures tendered hereby. All
authority conferred or agreed to be conferred in this Letter and every
obligation of the undersigned hereunder shall be binding upon
<PAGE> 7
the successors, assigns, heirs, executors, administrators, trustees in
bankruptcy and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned. This
tender may be withdrawn only in accordance with the procedures set forth in "The
Exchange Offers --Withdrawal Rights" section of the Prospectus.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please issue the New Debentures (and, if applicable,
substitute certificates representing Old Debentures for any Old Debentures not
exchanged) in the name of the undersigned or, in the case of a book-entry
delivery of Old Debentures, please credit the account indicated above maintained
at the Book-Entry Transfer Facility. Similarly, unless otherwise indicated under
the box entitled "Special Delivery Instructions" below, please send the New
Debentures (and, if applicable, substitute certificates representing Old
Debentures for any Old Debentures not exchanged) to the undersigned at the
address(es) shown above in the box entitled "Description of 7.375% Debentures
Due 2027" and/or the box entitled "Description of 7.45% Debentures Due 2097."
<PAGE> 8
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(Complete accompanying Substitute W-9 on reverse side)
X , 1997
- -------------------------------- ----------
Date
X , 1997
- -------------------------------- ----------
Signature(s) of Holder(s) Date
Area Code and Telephone Number: _______________________
This letter must be signed by the registered holder(s) as the name(s)
appear(s) on the certificate(s) for the Old Debentures hereby tendered or on a
security position listing, or by any person(s) authorized to become registered
holder(s) by endorsements and documents transmitted herewith. If signature is by
a trustee, executor, administrator, guardian, officer or other person acting in
a fiduciary or representative capacity, please set forth full title. See
Instruction 3.
Name(s): ___________________________________________________________
___________________________________________________________
(Please Type or Print)
Capacity (Full Title): ______________________________________________
Address: ____________________________________________________________
____________________________________________________________
(Including Zip Code)
SIGNATURE GUARANTEE (if required by Instruction 3)
Signature(s) Guaranteed by an Eligible Institution:
______________________________________________________________________
(Authorized Signature)
______________________________________________________________________
(Title)
______________________________________________________________________
(Name of Firm)
______________________________________________________________________
(Address)
<PAGE> 9
______________________________________________________________________
(Area Code and Telephone Number)
Dated: _______________________, 1997
<PAGE> 10
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFERS
1. DELIVERY OF THIS LETTER AND OLD DEBENTURES; GUARANTEED DELIVERY PROCEDURES.
This Letter is to be completed by holders of Old Debentures either if
certificates for such Old Debentures are to be forwarded herewith or if tenders
are to be made pursuant to the procedures for delivery by book-entry transfer
set forth in "The Exchange Offers --Book-Entry Transfer" section of the
Prospectus and an Agent's Message is not delivered. Tenders by book-entry
transfer may also be made by delivering an Agent's Message in lieu of this
Letter of Transmittal. The term "Agent's Message" means a message, transmitted
by the Book-Entry Transfer Facility to and received by the Exchange Agent and
forming a part of a Book-Entry Confirmation, which states that the Book-Entry
Transfer Facility has received an express acknowledgment from the tendering
Participant, which acknowledgment states that such Participant has received and
agrees to be bound by the Letter of Transmittal and that the Company may enforce
the Letter of Transmittal against such Participant. Certificates for all
physically tendered Old Debentures, or Book-Entry Confirmation, as the case may
be, as well as a properly completed and duly executed Letter (or facsimile
hereof or Agent's Message in lieu thereof) and any other documents required by
this Letter, must be received by the Exchange Agent at the address set forth
herein on or prior to the Expiration Date, or the tendering holder must comply
with the guaranteed delivery procedures set forth below. Old Debentures tendered
hereby must be in denominations of principal amount of $1,000 and any integral
multiple thereof.
Holders whose certificates for Old Debentures are not immediately available
or who cannot deliver their certificates and all other required documents to the
Exchange Agent on or prior to the Expiration Date, or who cannot complete the
procedure for book-entry transfer on a timely basis, may tender their Old
Debentures pursuant to the guaranteed delivery procedures set forth in "The
Exchange Offers --Guaranteed Delivery Procedures" section of the Prospectus.
Pursuant to such procedures, (i) such tender must be made through an Eligible
Institution; (ii) on or prior to 5:00 p.m., New York City time, on the
Expiration Date, the Exchange Agent must receive from such Eligible Institution
a properly completed and duly Notice of Guaranteed Delivery, substantially in
the form provided by the Company (by telegram, telex, facsimile transmission,
mail or hand delivery), setting forth the name and address of the holder of Old
Debentures and the amount of Old Debentures tendered stating that the tender is
being made thereby and guaranteeing that within three New York Stock Exchange
("NYSE") trading days after the date of execution of the Notice of Guaranteed
Delivery, the certificates for all physically tendered Old Debentures, in proper
form for transfer, or a Book-Entry Confirmation, as the case may be, together
with a properly completed and duly executed Letter (or facsimile thereof or
Agent's Message in lieu thereof) with any required signature guarantees and any
other documents required by this Letter will be deposited by the Eligible
Institution with the Exchange Agent; and (iii) the certificates for all
physically tendered Old Debentures, in proper form for transfer, or Book-Entry
Confirmation, as the case may be, together with a properly completed and duly
executed Letter (or facsimile thereof or Agent's Message in lieu thereof) with
any required signature guarantees and all other documents required by this
Letter, are deposited by the Eligible Institution within three NYSE trading days
after the date of execution of the Notice of Guaranteed Delivery.
The method of delivery of this Letter, the Old Debentures and all other
required documents is at the election and risk of the tendering Holders, but the
delivery will be deemed made only when actually received or confirmed by the
Exchange Agent. If Old Debentures are sent by mail, it is suggested that the
mailing be registered mail, properly insured, with return receipt requested, and
made sufficiently in advance of the Expiration Date to permit delivery to the
Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date.
Only a Holder (as defined in the Prospectus) of Old Debentures may tender
such Old Debentures in the Exchange Offers. Any beneficial holder of Old
Debentures who is not the registered holder and who wishes to tender should
arrange with the registered holder to execute and deliver this Letter of
Transmittal on his behalf or must, prior to completing and executing this Letter
of Transmittal and delivering his Old Debentures, either make appropriate
arrangements to register ownership of the Old Debentures in such holder's name
or obtain a properly completed bond power from the registered holder.
<PAGE> 11
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Debentures and withdrawal of tendered Old
Debentures will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the absolute right
to reject any and all Old Debentures not properly tendered or any Old Debentures
the Company's acceptance of which would, in the opinion of counsel for the
Company, be unlawful. The Company also reserves the right to waive any
irregularities or conditions of tender as to particular Old Debentures. The
Company's interpretation of the terms and conditions of the Exchange Offers
(including the instructions in this Letter of Transmittal) shall be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Old Debentures must be cured within such time as the
Company shall determine. Neither the Company, the Exchange Agent nor any other
person shall be under any duty to give notification of defects or irregularities
with respect to tenders of Old Debentures, nor shall any of them incur any
liability for failure to give such notification. Tenders of Old Debentures will
not be deemed to have been made until such defects or irregularities have been
cured or waived. Any Old Debentures received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned by the Exchange Agent to the tendering Holders
of Old Debentures, unless otherwise provided in this Letter of Transmittal, as
soon as practicable following the Expiration Date.
See "The Exchange Offers" section of the Prospectus.
2. PARTIAL TENDERS (NOT APPLICABLE TO DEBENTURE HOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If less than all of the Old Debentures evidenced by a submitted
certificate are to be tendered, the tendering Holder(s) should fill in the
aggregate principal amount of Old Debentures to be tendered in the boxes above
entitled "Description of 7.375% Debentures Due 2027 -- Principal Amount
Tendered" and "Description of 7.45% Debentures Due 2097 -- Principal Amount
Tendered." A reissued certificate representing the balance of nontendered Old
Debentures will be sent to such tendering holder, unless otherwise provided in
the appropriate box of this Letter, promptly after the Expiration Date. All of
the Old Debentures delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated.
3. SIGNATURES ON THIS LETTER, BOND POWERS AND ENDORSEMENTS, GUARANTEE OF
SIGNATURES. If this Letter is signed by the Holder of the Old Debentures
tendered hereby, the signature must correspond exactly with the name as written
on the face of the certificates or on a DTC security position listing without
any change whatsoever.
If any tendered Old Debentures are owned of record by two or more joint
owners, all of such owners must sign this Letter.
If any tendered Old Debentures are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
copies of this letter as there are different registrations of certificates.
When this Letter is signed by the registered holder or holders of the Old
Debentures specified herein and tendered hereby, no endorsements of certificates
or separate bond powers are required. If, however, the New Debentures are to be
issued, or any untendered Old Debentures are to be reissued, to a person other
than the registered holder, then endorsements of any certificates transmitted
hereby or separate bond powers are required. Signatures on such certificate(s)
must be guaranteed by an Eligible Institution.
If this Letter is signed by a person other than the registered holder or
holders of any certificate(s) specified herein, such certificate(s) must be
endorsed accompanied by appropriate bond powers, in either case signed exactly
as the name or names of the registered holder or holders appear(s) on the
certificate(s) and signatures on such certificate(s) must be guaranteed by an
Eligible Institution.
<PAGE> 12
If this Letter or any certificates or bond powers are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by the Company,
proper evidence satisfactory to the Company of their authority to so act must be
submitted.
Endorsements on certificates for Old Debentures or signatures on bond
powers required by this Instruction 3 must be guaranteed by a financial
institution (including most banks, savings and loan associations and brokerage
houses) that is a participant in the Securities Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Program or the Stock
Exchanges Medallion Program (each, an "Eligible Institution").
Signatures on this Letter need not be guaranteed by an Eligible
Institution, provided the Old Debentures are tendered: (i) by a registered
holder of Old Debentures who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on this Letter, or
(ii) for the account of an Eligible Institution.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders of Old
Debentures should indicate in the applicable box the name and address to which
New Debentures issued pursuant to the Exchange Offers and/or substitute
certificates evidencing Old Debentures not exchanged are to be issued or sent,
if different from the name or address of the person signing this Letter. In the
case of issuance in a different name, the employer identification or social
security number of the person named must also be indicated. Debenture holders
tendering Old Debentures by book-entry transfer may request that Old Debentures
not exchanged be credited to such account maintained at the Book-Entry Transfer
Facility as such noteholder may designate hereon. If no such instructions are
given, such Old Debentures not exchanged will be returned to the name and
address of the person signing this Letter.
5. TRANSFER TAXES. The Company will pay all transfer taxes, if any, applicable
to the transfer of Old Debentures to it or its order pursuant to the Exchange
Offers. If, however, New Debentures and/or substitute Old Debentures not
exchanged are to be delivered to, or are to be registered or issued in the name
of, any person other than the registered holder of the Old Debentures tendered
hereby, or if tendered Old Debentures are registered in the name of any person
other than the person signing this Letter, or if a transfer tax is imposed for
any reason other than the transfer of Old Debentures to the Company or its order
pursuant to the Exchange Offers, the amount of any such transfer taxes (whether
imposed on the registered holder or any other persons) will be payable by the
tendering holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted herewith, the amount of such transfer taxes will be
billed to such tendering holder and the Exchange Agent will retain possession of
an amount of New Debentures with a face amount equal to the amount of such
transfer taxes due by such tendering holder pending receipt by the Exchange
Agent of the amount of such taxes.
Except as provided in this Instruction 5, it will not be necessary for
transfer tax stamps to be affixed to the Old Debentures specified in this
Letter.
6. WAIVER OF CONDITIONS. The Company reserves the absolute right to waive
satisfaction of any or all conditions enumerated in the Prospectus.
7. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or contingent
tenders will be accepted. All tendering holders of Old Debentures, by execution
of this Letter or on Agent's Message in lieu thereof, shall waive any right to
receive notice of the acceptance of their Old Debentures for exchange.
Although the Company intends to notify holders of defects or irregularities
with respect to tenders of Old Debentures, neither the Company, the Exchange
Agent nor any other person shall incur any liability for failure to give any
such notice.
<PAGE> 13
8. MUTILATED, LOST, STOLEN OR DESTROYED OLD DEBENTURES. Any holder whose Old
Debentures have been mutilated, lost, stolen or destroyed should contact the
Exchange Agent at the address indicated above for further instructions.
9. WITHDRAWAL OF TENDERS. Tenders of Old Debentures may be withdrawn at any time
prior to 5:00 p.m., New York City time, on the Expiration Date.
For a withdrawal of a tender of Old Debentures to be effective, a written
or facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth above prior to 5:00 p.m., New York City time, on
the Expiration Date. Any such notice of withdrawal must (i) specify the name of
the person having deposited the Old Debentures to be withdrawn (the
"Depositor"), (ii) identify the Old Debentures to be withdrawn (including the
certificate number or numbers (where certificates for Old Debentures have been
transmitted) and principal amount of such Old Debentures), (iii) be signed by
the holder in the same manner as the original signature on this Letter
(including any required signature guarantees) or be accompanied by documents of
transfer sufficient to have the trustee under the Indenture register the
transfer of such Old Debentures into the name of the person withdrawing the
tender and (iv) specify the name in which any such Old Debentures are
registered, if different from that of the Depositor. All questions as to the
validity, form and eligibility (including time of receipt) of such notices will
be determined by the Company, whose determination shall be final and binding on
all parties. Any Old Debentures so withdrawn will be deemed not to have been
validly tendered for exchange for purposes of the Exchange Offers. Any Old
Debentures that have been tendered for exchange but which are not exchanged for
any reason will be returned to the holder thereof without cost to such holder as
soon as practicable after withdrawal, rejection of tender or termination of the
Exchange Offers. Properly withdrawn Old Debentures may be retendered by
following the procedures described above at any time on or prior to 5:00 p.m.,
New York City time, on the Expiration Date.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the
procedure for tendering, as well as requests for additional copies of the
Prospectus, this Letter and other related documents may be directed to the
Exchange Agent, at the address and telephone number indicated above.
11. IMPORTANT TAX INFORMATION. Under current federal income tax law, a holder of
New Debentures is required to provide the Company (as payor) with such holder's
correct taxpayer identification number ("TIN") on Substitute Form W-9 or
otherwise establish a basis for exemption from backup withholding to prevent
backup withholding on any New Debentures delivered pursuant to the Exchange
Offer and any payments received in respect of the New Debentures. If a holder of
New Debentures is an individual, the TIN is such holder's social security
number. If the Company is not provided with the correct taxpayer identification
number, a holder of New Debentures may be subject to a $50 penalty imposed by
the Internal Revenue Service. Accordingly, each prospective holder of New
Debentures to be issued pursuant to Special Issuance Instructions should
complete the attached Substitute Form W-9. The Substitute Form W-9 need not be
completed if the box entitled Special Issuance Instructions has not been
completed.
Certain holders of New Debentures (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. Exempt prospective holders of New
Debentures should indicate their exempt status on Substitute Form W-9. A foreign
individual may qualify as an exempt recipient by submitting to the Company,
through the Exchange Agent, a properly completed Internal Revenue Service Form
W-8 (which the Exchange Agent will provide upon request) signed under penalty of
perjury, attesting to the holder's exempt status. See the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Company is required to withhold 31% of
any payment made to the holder of New Debentures or other payee. Backup
withholding is not an additional federal income tax. Rather, the federal income
tax liability of persons subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
<PAGE> 14
To prevent backup withholding on any New Debentures delivered pursuant to
the Exchange Offers and any payments received in respect of the New Debentures,
each prospective holder of New Debentures to be issued pursuant to Special
Issuance Instructions should provide the Company, through the Exchange Agent,
with either: (i) such prospective holder's correct TIN by completing the form
below, certifying that the TIN provided on Substitute Form W-9 is correct (or
that such prospective holder is awaiting a TIN) and that (A) such prospective
holder has not been notified by the Internal Revenue Service that he or she is
subject to backup withholding as a result of a failure to report all interest or
dividends or (B) the Internal Revenue Service has notified such prospective
holder that he or she is no longer subject to backup withholding; or (ii) an
adequate basis for exemption.
The prospective holder of New Debentures to be issued pursuant to Special
Issuance Instructions is required to give the Exchange Agent the TIN (e.g.,
social security number or employer identification number) of the prospective
record owner of the New Debentures. If the New Debentures will be held in more
than one name or are not held in the name of the actual owner, consult the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional guidance regarding which number to report.
To prevent backup withholding, each tendering holder of Old Debentures must
provide its correct TIN by completing the Substitute Form W-9 set forth below,
certifying that the TIN provided is correct (or that such holder is awaiting a
TIN) and that (i) the holder is exempt from backup withholding, or (ii) the
holder has not been notified by the Internal Revenue Service that such holder is
subject to backup withholding as a result of a failure to report all interest or
dividends or (iii) the Internal Revenue Service has notified the holder that
such holder is no longer subject to backup withholding. If the tendering holder
of Old Debentures is a nonresident alien or foreign entity not subject to backup
withholding, such holder must give the Company a completed Form W-8, Certificate
of Foreign Status. These forms may be obtained from the Exchange Agent. If the
Old Debentures are in more than one name or are not in the name of the actual
owner, such holder should consult the W-9 Guidelines for information on which
TIN to report. If such holder does not have a TIN, such holder should consult
the W-9 Guidelines for instructions on applying for a TIN, check the box in Part
2 of the Substitute Form W-9 and write "applied for" in lieu of its TIN.
Debenture: Checking this box and writing "applied for" on the form means that
such holder has already applied for a TIN or that such holder intends to apply
for one in the near future. If such holder does not provide its TIN to the
Company within 60 days, backup withholding will begin and continue until such
holder furnishes its TIN to the Company.
<PAGE> 15
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 5)
PAYOR'S NAME: THE SHERWIN-WILLIAMS COMPANY
SUBSTITUTE
Form W-9
PART I -- PLEASE PROVIDE YOUR TIN IN THE TIN:__________________________
BOX AT RIGHT AND CERTIFY BY SIGNING AND (Social Security Number or
DATING BELOW. Employer Identification
Number)
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
PART II -- TIN Applied for / /
CERTIFICATION UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or I am waiting for a number to be issued to me);
(2) I am not subject to backup withholding either because: (a) I am exempt from
backup withholding, or (b) I have not been notified by the Internal Revenue
Service (the 'IRS') that I am subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified me that
I am no longer subject to backup withholding; and
(3) any other information provided on this form is true and correct.
Signature:_______________________________________________________
Date:____________________________________________________________, 1997
You must cross out item (2) of the above certification if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting of interest or dividends on your tax return and you have not been
notified by the IRS that you are no longer subject to backup withholding.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART II OF
SUBSTITUTE FORM W-9
<PAGE> 16
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of the
exchange, 31 percent of all reportable payments made to me thereafter will be
withheld until I provide a number.
Signature:________________________________________________________
Date:_____________________________________________________________, 1997
<PAGE> 17
NOTICE OF GUARANTEED DELIVERY FOR THE SHERWIN-WILLIAMS COMPANY
This form or one substantially equivalent hereto must be used to accept the
Exchange Offers of The Sherwin- Williams Company (the "Company") made pursuant
to the Prospectus, dated __________, 1997 (the "Prospectus"), if certificates
for the outstanding 7.375% Debentures Due 2027 (the "Old 2027 Debentures") of
the Company or the 7.45% Debenture Due 2097 of the Company (the "Old 2097
Debentures" and with the Old 2027 Debentures, the "Old Debentures") are not
immediately available or if the procedure for book-entry transfer cannot be
completed on a timely basis or time will not permit all required documents to
reach the Exchange Agent prior to 5:00 p.m., New York City time, on the
Expiration Date of the Exchange Offers. Such form may be delivered or
transmitted by telegram, telex, facsimile transmission, mail or hand delivery to
The Chase Manhattan Bank ("Exchange Agent") as set forth below. Capitalized
terms not defined herein are defined in the Prospectus.
THE CHASE MANHATTAN BANK, Exchange Agent
By Mail, Hand or
Overnight Delivery:
The Chase Manhattan Bank, 55 Water Street, Room 234, North Building, New
York, New York 10041 Attention: Luis Padilla
By Facsimile: (212) 638-7380 or (212) 638-7381
Confirm by Telephone: (212) 638-0458
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF THIS INSTRUMENT VIA FACSIMILE TO A NUMBER OTHER THAN AS SET
FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, the signature guarantee must appear in the
applicable space provided in the signature box in the Letter of Transmittal.
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus, the undersigned
hereby tenders to the Company the principal amount of Old 2027 Debentures and/or
Old 2097 Debentures set forth below, pursuant to the guaranteed delivery
procedure described in "The Exchange Offers --Guaranteed Delivery Procedures"
section of the Prospectus.
<TABLE>
<S> <C>
Principal Amount of Old 2027 Debentures Tendered: If Old 2027 Debentures will be delivered to
Depository Trust Company,
provide account number.
$_______________________
Certificate Nos. (if available):
________________________
</TABLE>
<PAGE> 18
<TABLE>
<S> <C>
Total Principal Amount Represented by Certificate(s):
$_____________________ Account Number:______________________
Principal Amount of Old 2097 Debentures Tendered: If Old 2097 Debentures will be delivered to
Depository Trust Company, provide account
number.
$_____________________
Certificate Nos. (if available):
______________________
Total Principal Amount Represented by Certificate(s):
$_____________________ Account Number:______________________
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
PLEASE SIGN HERE
X , 1997
- -------------------------------- ----------
Date
X , 1997
- -------------------------------- ----------
Signatures of Holder(s) or Date
Authorized Signatory
Must be signed by the holder(s) of Old Debentures as their name(s)
appear(s) on certificates for Old Debentures or on a security position listing,
or by person(s) authorized to become registered holder(s) by endorsement and
documents transmitted with this Notice of Guaranteed Delivery. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact, officer or
other person acting in a fiduciary or representative capacity, such person must
set forth his or her full title below. If Old Debentures will be delivered by
book-entry transfer to The Depository Trust Company, provide account number.
Please print name(s) and address(es)
Name(s):________________________________________________
Capacity:_______________________________________________
</TABLE>
<PAGE> 19
Address(es): _________________________________________
_________________________________________
_________________________________________
Area Code and Telephone Number:_______________________
Account Number:_______________________________________
GUARANTEE
(Not to be used for signature guarantees)
The undersigned, a financial institution (including most banks, savings and
loan associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Program or the Stock Exchanges Medallion Program, hereby guarantees
that the undersigned will deliver to the Exchange Agent the certificates
representing the Old Debentures being tendered hereby in proper form for
transfer or confirmation of book-entry transfer of such Old Debentures into the
Exchange Agent's account at The Depository Trust Company pursuant to the
procedures for book-entry transfer set forth in the Prospectus, in either case,
together with one or more properly completed and duly executed letters of
transmittal/or facsimile thereof or Agent's Message in lieu thereof and any
other documents required by the Letter of Transmittal within three New York
Stock Exchange trading days after the date of execution of this Notice of
Guaranteed Delivery.
Name of Firm:_________________________________________
Address: _________________________________________
_________________________________________
Area Code & Telephone No.:____________________________
<PAGE> 20
____________________________________________
Authorized Signature
____________________________________________
Name (Please Type or Print)
____________________________________________
Title
____________________________________________, 1997
Dated
NOTE: DO NOT SEND CERTIFICATES OF OLD DEBENTURES WITH THIS FORM. CERTIFICATES OF
OLD DEBENTURES SHOULD BE SENT ONLY WITH A COPY OF THE PREVIOUSLY EXECUTED LETTER
OF TRANSMITTAL.
<PAGE> 1
Exhibit 99.2
EXCHANGE AGENT AGREEMENT
____________, 1997
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, New York 10001
Ladies and Gentlemen:
The Sherwin-Williams Company (the "Issuer") proposes to make an offer
(the "Exchange Offer") to exchange its outstanding 7.375% Debentures Due 2027
(the "Old 2027 Debentures"), of which an aggregate of $150,000,000 in principal
amount is outstanding as of the date hereof, for an equal principal amount of
newly issued 7.375% Debentures Due 2027 (the "New 2027 Debentures") which have
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), and to exchange its outstanding 7.45% Debentures Due 2097 (the "Old 2097
Debentures"), of which an aggregate of $150,000,000 in principal amount is
outstanding as of the date hereof, for an equal principal amount of newly issued
7.45% Debentures Due 2097 (the "New 2097 Debentures") which have been registered
under the Securities Act. The Old 2027 Debentures and the Old 2097 Debentures
are collectively referred to herein as the "Old Debentures" and the New 2027
Debentures and the New 2097 Debentures are collectively referred to herein as
the "New Debentures." The Old Debentures and New Debentures are collectively
referred to herein as the "Debentures." The terms and conditions of the Exchange
Offer as currently contemplated are set forth in a prospectus, dated April __,
1997 (the "Prospectus"), proposed to be distributed to all record holders of the
Old Debentures and beneficial interests therein. Terms used and not defined
herein have the meanings set forth in the Prospectus or the Letter of
Transmittal (except that the term "Old Debentures" shall include beneficial
interests therein, held by or through participants in The Depository Trust
Company (the "Book-Entry Transfer Facility") (Book-Entry Interests") and Old
Debentures held in definitive registered form ("Definitive Registered
Debentures")).
The Issuer hereby appoints The Chase Manhattan Bank to act as exchange
agent (the "Exchange Agent") in connection with the Exchange Offer. References
hereinafter to "you" shall refer to The Chase Manhattan Bank.
<PAGE> 2
The Exchange Offer is expected to be commenced by the Issuer on or
about _______, 1997. The Letter of Transmittal accompanying the Prospectus is to
be used by the holders of the Old Debentures to accept the Exchange Offer, and
contains certain instructions with respect to the delivery of Book-Entry
Interests and Definitive Registered Debentures.
The Exchange Offer shall expire at 5:00 p.m., New York City time,
____________, 1997 or on such later date or time to which the Issuer may extend
the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions
set forth in the Prospectus, the Issuer expressly reserves the right to extend
the Exchange Offer from time to time and may extend the Exchange Offer by giving
oral (confirmed in writing) or written notice to you before 9:00 a.m., New York
City time, on the business day following the previously scheduled Expiration
Date.
The Issuer expressly reserves the right to amend or terminate the
Exchange Offer, and not to accept for exchange any Old Debentures not
theretofore accepted for exchange, upon the occurrence of any of the conditions
of the Exchange Offer specified in the Prospectus under the section "Certain
Conditions to the Exchange Offers." The Issuer will give oral (confirmed in
writing) or written notice of any amendment, termination or nonacceptance to you
as promptly as practicable.
In carrying out your duties as Exchange Agent, you are to act in
accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth in the section of the Prospectus captioned "The Exchange
Offers," as specifically set forth in the Letter of Transmittal, and as
specifically set forth herein and such duties which are necessarily incidental
thereto; PROVIDED, HOWEVER, that in no way will your general duty to act in good
faith be discharged by the foregoing.
2. You will establish an account with respect to the Old Debentures at
the Book-Entry Transfer Facility for purposes of the Exchange Offer within two
business days after the date of the Prospectus or, if you already have
established an account with the Book-Entry Transfer Facility suitable for the
Exchange Offer, you will identify such preexisting account to be used in the
Exchange Offer, and any financial institution that is a participant in the
Book-Entry
- 2 -
<PAGE> 3
Transfer Facility's systems may make book-entry delivery of the Old Debentures
by causing the Book-Entry Transfer Facility to transfer such Old Debentures into
your account in accordance with the Book-Entry Transfer Facility's procedure for
such transfer.
3. You are to examine each of the Letters of Transmittal, each of the
certificates for Old Debentures in the case of Definitive Registered Debentures,
or, in the case of Book-Entry Interests, confirmation of book-entry transfer
into your account at the Book-Entry Transfer Facility via the Book-Entry
Transfer Facility's Automated Tender Offer Program and any accompanying Agent's
Message and any other documents delivered or mailed to you by or for holders of
the Old Debentures to ascertain whether: (i) the Letters of Transmittal and any
such other documents are duly executed and properly completed in accordance with
instructions set forth therein and (ii) the Old Debentures have otherwise been
properly tendered. In each case where the Letter of Transmittal or any other
document has been improperly completed or executed, any of the certificates for
Old Debentures are not in proper form for transfer or some other irregularity in
connection with the acceptance of the Exchange Offer exists, you will endeavor
to inform the presenters of the need for fulfillment of all requirements and to
take any other action as may be necessary or advisable to cause such
irregularity to be corrected.
4. With the approval of the Chief Financial Officer of the Company, the
Company Secretary or the Vice President and Assistant Treasurer of the Company
(such approval, if given orally, to be confirmed in writing) or any other party
designated by such an officer in writing, you are authorized to waive any
irregularities in connection with any tender of Old Debentures pursuant to the
Exchange Offer.
5. Tenders of Old Debentures may be made only as set forth in the
section of the Prospectus captioned "Procedures for Tendering Old Debentures" or
in the Letter of Transmittal, and Old Debentures shall be considered properly
tendered to you only when tendered in accordance with the procedures set forth
therein.
Notwithstanding the provisions of this Paragraph 5, Old Debentures
which the Chief Financial Officer of the Company, the Company Secretary or the
Vice President and Assistant Treasurer of the Company or any other party
designated by such an officer in writing shall approve as having been properly
tendered shall be considered to be properly tendered (such
- 3 -
<PAGE> 4
approval, if given orally, shall be confirmed in writing).
6. You shall advise the Company with respect to any Old Debentures
delivered subsequent to the Expiration Date and accept its instructions with
respect to disposition of such Old Debentures.
7. You shall accept tenders:
a. in cases where the Old Debentures are registered in two or more
names only if signed by all named holders;
b. in cases where the signing person (as indicated on the Letter of
Transmittal) is acting in a fiduciary or a representative
capacity only when proper evidence of his or her authority to so
act is submitted; and
c. from persons other than the registered holder of Old Debentures
provided that customary transfer requirements, including any
applicable transfer taxes, are fulfilled.
8. Upon satisfaction or waiver of all of the conditions to the Exchange
Offer, the Issuer will notify you (such notice if given orally, to be confirmed
in writing) of its acceptance, promptly after the Expiration Date, of all Old
Debentures properly tendered; and you, on behalf of the Issuer, will exchange
such Old Debentures for New Debentures and cause such Old Debentures to be
canceled. Delivery of New Debentures will be made on behalf of the Issuer by you
at the rate of $1,000 principal amount of New Debentures for each $1,000
principal amount of the Old Debentures tendered promptly after notice (such
notice if given orally, to be confirmed in writing) of acceptance of said Old
Debentures by the Issuer; PROVIDED, HOWEVER, that in all cases, Old Debentures
tendered pursuant to the Exchange Offer will be exchanged only after timely
receipt by you of properly endorsed Definitive Registered Debentures or
confirmation of book-entry transfer into your account at the Book-Entry Transfer
Facility, or a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantees (or in lieu thereof an
Agent's Message, where applicable) and any other required document. You shall
issue New Debentures only in denominations of $1,000 or any integral multiple
thereof.
- 4 -
<PAGE> 5
9. Tenders pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and upon the conditions set forth in the Prospectus and the
Letter of Transmittal, Old Debentures tendered pursuant to the Exchange Offer
may be withdrawn at any time prior to the Expiration Date.
10. The Issuer shall not be required to exchange any Old Debentures
tendered if any of the conditions set forth in the Exchange Offer are not met.
Notice of any decision by the Issuer not to exchange any Old Debentures tendered
shall be given (such notice, if given orally, shall be confirmed in writing) by
the Issuer to you.
11. If, pursuant to the Exchange Offer, the Issuer does not accept for
exchange all or part of the Old Debentures tendered because of an invalid
tender, the occurrence of certain other events set forth in the Prospectus under
the caption "Certain Conditions to the Exchange Offers" or otherwise, you shall
as soon as practicable after the expiration or termination of the Exchange Offer
effect the appropriate book-entry transfer of the unaccepted Old Debentures, and
return any related required documents and the Letters of Transmittal relating
thereto that are in your possession, to the persons who deposited them.
12. You are not authorized to pay or offer to pay any concessions,
commission or solicitation fees to any broker, dealer, bank or other persons or
to engage or utilize any person to solicit tenders.
13. As Exchange Agent hereunder you:
a. will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or
genuineness of Old Debentures, and will not be required to and
will make no representations as to the validity, value or
genuineness of the Exchange Offer; PROVIDED, HOWEVER, that in no
way will your general duty to act in good faith be discharged by
the foregoing;
b. shall not be obligated to take any legal action hereunder which
might in your reasonable judgment involve any expense or
liability, unless you shall have been furnished with reasonable
indemnity;
- 5 -
<PAGE> 6
c. shall not be liable to the Issuer for any action taken or omitted
by you, or any action suffered by you to be taken or omitted,
without negligence, misconduct or bad faith on your part, by
reason of or as a result of the administration of your duties
hereunder in accordance with the terms and conditions of this
Agreement or by reason of your compliance with the instructions
set forth herein or with any written or oral instructions
delivered to you pursuant hereto, and may reasonably rely on and
shall be protected in acting in good faith in reliance upon any
certificate, instrument, opinion, notice, letter, facsimile or
other document or security delivered to you and reasonably
believed by you to be genuine and to have been signed by the
proper party or parties;
d. may reasonably act upon any tender, statement, request, comment,
agreement or other instrument whatsoever not only as to its due
execution and validity and the effectiveness of its provisions,
but also as to the truth and accuracy of any information
contained therein, which you shall in good faith reasonably
believe to be genuine or to have been signed or represented by a
proper person or persons;
e. may rely on and shall be protected in acting upon written or oral
instructions from any officer of the Issuer with respect to the
Exchange Offer;
f. shall not advise any person tendering Old Debentures pursuant to
the Exchange Offer as to the wisdom of making such tender or as
to the market value or decline or appreciation in market value of
any Old Debentures; and
g. may consult with your counsel and the written opinion of such
counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by you
hereunder in good faith and in accordance with such written
opinion of such counsel.
- 6 -
<PAGE> 7
14. You shall take such action as may from time to time be requested by
the Issuer or its counsel (and such other action as you may reasonably deem
appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the
Notice of Guaranteed Delivery or such other forms as may be approved from time
to time by the Issuer to all persons requesting such documents and to accept and
comply with telephone requests for information relating to the Exchange Offer,
provided that such information shall relate only to the procedures for accepting
(or withdrawing from) the Exchange Offer. The Issuer will furnish you with
copies of such documents at your request. All other requests for information
relating to the Exchange Offer shall be directed to:
The Sherwin-Williams Company
101 Prospect Avenue, N.W.
12th Floor
Cleveland, Ohio 44115
Attn: Corporate Secretary
15. You shall advise by facsimile transmission or telephone, and
promptly thereafter, confirm in writing to:
Richard Legenza
The Sherwin-Williams Company
101 Prospect Avenue, N.W.
Legal Department
Cleveland, Ohio 44115
Telephone: (216) 566-2478
Facsimile: (216) 566-1708
and such other person or persons as the Company may request, daily, and more
frequently if reasonably requested, up to and including the Expiration Date, as
to the principal amount of the Old Debentures which have been tendered pursuant
to the Exchange Offer and the items received by you pursuant to this Agreement,
separately reporting and giving cumulative totals as to items properly received
and items improperly received. In addition, you will also inform, and cooperate
in making available to, the Issuer or any such other person or persons as the
Issuer requests from time to time prior to the Expiration Date of such other
information as they, it or he reasonably requests. Such cooperation shall
include, without limitation, the granting by you to the Issuer and such persons
as the Issuer may request of access to those persons on your staff who are
responsible for receiving tenders in order to ensure that immediately prior to
the Expiration Date, the Issuer shall have received information in sufficient
detail to enable it to decide
- 7 -
<PAGE> 8
whether to extend the Exchange Offer. You shall prepare a list of persons who
failed to tender or whose tenders were not accepted and the aggregate principal
amount of Old Debentures not tendered or Old Debentures not accepted and deliver
said list to the Issuer at least seven days prior to the Expiration Date. You
shall also prepare a final list of all persons whose tenders were accepted, the
aggregate principal amount of Old Debentures tendered and the aggregate
principal amount of Old Debentures accepted and deliver said list to the Issuer.
16. Letters of Transmittal and Notices of Guaranteed Delivery shall be
stamped by you as to the date and the time of receipt thereof and shall be
preserved by you for a period of time at least equal to the period of time you
preserve other records pertaining to the transfer of securities. You shall
dispose of unused Letters of Transmittal and other surplus materials by
returning them to the Issuer.
17. For services rendered as Exchange Agent hereunder you shall be
entitled to a fee of [ ] and you shall be entitled to reimbursement of
your expenses (including fees and expenses of your counsel, which fees are
expected under normal circumstances to be not in excess [ ]) incurred in
the connection with the Exchange Offer.
18. You hereby acknowledge receipt of the Prospectus and the Letter of
Transmittal attached hereto and further acknowledge that you have examined each
of them to the extent that they relate to your duties hereunder. Any
inconsistency between this Agreement, on the one hand, and the Prospectus and
the Letter of Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the latter two documents, except with
respect to the duties, liabilities and indemnification of you as Exchange Agent
which shall be controlled by this Agreement.
19. The Issuer agrees to indemnify and hold you harmless in your
capacity as Exchange Agent hereunder against any liability, cost or expense,
including reasonable attorneys' fees, arising out or in connection with the
acceptance or administration of your duties hereunder, including, without
limitation, in connection with any act, omission, delay or refusal made by you
in reasonable reliance upon any signature, endorsement, assignment, certificate,
order, request, notice, instruction or other instrument or document reasonably
believed by you to be valid, genuine and sufficient and in accepting any tender
or effecting any
- 8 -
<PAGE> 9
transfer of Old Debentures reasonably believed by you in good faith to be
authorized, and in delaying or refusing in good faith to accept any tenders or
effect any transfer of Old Debentures; PROVIDED, HOWEVER, that the Issuer shall
not be liable for indemnification or otherwise for any loss, liability, cost or
expense to the extent arising out of your negligence, willful breach of this
Agreement, willful misconduct or bad faith. In no case shall the Issuer be
liable under this indemnity with respect to any claim against you unless the
Issuer shall be notified by you, by letter or cable or by facsimile confirmed by
letter, of the written assertion of a claim against you or of any other action
commenced against you, promptly after you shall have received any such written
assertion or commencement of action. The Issuer shall be entitled to participate
at its own expense in the defense of any such claim or other action, and, if the
Issuer so elects, the Issuer shall assume the defense of any suit brought to
enforce any such claim. In the event that the Issuer shall assume the defense of
any such suit, the Issuer shall not be liable for the fees and expenses of any
additional counsel thereafter retained by you so long as the Issuer shall retain
counsel reasonably satisfactory to you to defend such suit. You shall not
compromise or settle any such action or claim without the consent of the Issuer.
20. This Agreement and your appointment as Exchange Agent hereunder
shall be construed and enforced in accordance with the laws of the State of New
York applicable to agreements made and to be performed entirely within such
state, and without regard to conflicts of law principles, and shall inure to the
benefit of, and the obligations created hereby shall be binding upon, the
successors and assigns of each of the parties hereto.
21. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original and all of which taken together
constitute one and the same agreement.
22. In case any provision of this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
23. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative
- 9 -
<PAGE> 10
of the party to be charged. This Agreement may not be modified orally.
24. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile)
and shall be given to such party, addressed to it, at its address or telecopy
number set forth below:
If to the Issuer:
The Sherwin-Williams Company
101 Prospect Ave. N.W.
Cleveland, OH 44115
Telephone: (216) 566-2000
Facsimile: (216) 566-2984
Attn: Cynthia D. Brogan, Vice President and
Assistant Treasurer
with a copy to:
The Sherwin-Williams Company
101 Prospect Ave. N.W.
Cleveland, OH 44115
Telephone: (216) 566-2000
Facsimile: (216) 566-1708
Attn: L.E. Stellato, Corporate Secretary
and with a copy to:
Catherine Collins McCoy, Esq.
Arnold & Porter
555 12th Street, N.W.
Washington, D.C. 20004-1202
Telephone: (202) 942-5055
Facsimile: (202) 942-5999
If to the Exchange Agent:
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, New York 10001
Telephone: (212) 946-3487
Facsimile: (212) 946-815-8159
Attention: Francine Springer
25. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 90 days following the Expiration Date. Notwithstanding the
foregoing, Paragraphs 17 and 19 shall survive the termination of this Agreement.
Upon any termination of this Agreement, you shall promptly deliver to the Issuer
any funds or property (including, without limitation, Letters of Transmittal and
any other documents
- 10 -
<PAGE> 11
relating to the Exchange Offer) then held by you as Exchange Agent under this
Agreement except as provided in Section 16.
26. This Agreement shall be binding and effective as of the date
hereof.
Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
THE SHERWIN-WILLIAMS COMPANY
By:
Name:
Title:
Accepted as the date first above written:
THE CHASE MANHATTAN BANK
By: ___________________________
Name:
Title:
- 11 -
