<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-01093
THIS PROSPECTUS SUPPLEMENT RELATES TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AND IS SUBJECT TO COMPLETION OR
AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
ACCEPTED PRIOR TO THE DELIVERY OF A FINAL PROSPECTUS SUPPLEMENT AND
PROSPECTUS. THIS PRELIMINARY PROSPECTUS SUPPLEMENT AND ACCOMPANYING
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE
IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
JANUARY 28, 1997
PROSPECTUS SUPPLEMENT
(To Prospectus Dated February 28, 1996)
$400,000,000
THE SHERWIN-WILLIAMS COMPANY [Sherwin-Williams Logo]
$100,000,000 % NOTES DUE 2000
$100,000,000 % NOTES DUE 2002
$200,000,000 % NOTES DUE 2007
The % Notes due 2000 (the "Notes Due 2000"), which will mature on
, 2000, the % Notes due 2002 (the "Notes Due 2002"), which will
mature on , 2002 and the % Notes due 2007 (the "Notes Due
2007"), which will mature on , 2007 (collectively, with the Notes
Due 2000 and the Notes Due 2002, the "Securities") are being offered by The
Sherwin-Williams Company (the "Company"). Interest on the Securities will be
payable semiannually on and of each year, commencing
, 1997.
The Notes Due 2000 and the Notes Due 2002 are not redeemable prior to maturity.
The Notes Due 2007 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 such Notes Due 2007 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 accrued interest to the
date of redemption. See "Description of the Securities -- Certain Terms of the
Notes Due 2007".
The Company will use the net proceeds from the sale of the Securities offered
hereby, as well as the net proceeds from the concurrent offering of an
additional $300 million principal amount of debt securities (the "Concurrent
Offering") to refinance a portion of its outstanding commercial paper debt, $830
million of which was incurred to fund the acquisition of Thompson Minwax Holding
Corp. Closing of the sale of the Securities is not conditioned on the closing of
the Concurrent Offering.
Each of the Notes Due 2000, the Notes Due 2002 and the Notes Due 2007 will be
represented by one or more Global Securities registered in the name of the
nominee of The Depository Trust Company, as Depositary. See "Description of the
Securities -- Delivery and Form; -- Book-Entry System; -- Same-Day Settlement
and Payment."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
<S> <C> <C> <C>
Per Note Due 2000....................... % % %
Total................................... $ $ $
Per Note Due 2002....................... % % %
Total................................... $ $ $
Per Note Due 2007....................... % % %
Total................................... $ $ $
<FN>
- --------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from , 1997, to the date of
delivery.
(2) Before deducting expenses payable by the Company estimated to be $200,000 in
the aggregate for all the Securities.
</TABLE>
The Securities are offered subject to receipt and acceptance by the
Underwriters, to prior sale and to the Underwriters' right to reject any order
in whole or in part and to withdraw, cancel or modify the offer without notice.
It is expected that delivery of the Securities will be made in book-entry form
only through the facilities of The Depository Trust Company, on or about
, 1997, against payment therefor in immediately available
funds.
SALOMON BROTHERS INC
CREDIT SUISSE FIRST BOSTON
MERRILL LYNCH & CO.
The date of this Prospectus Supplement is , 1997.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------------
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, exclusively distributes Sherwin-Williams(R) branded architectural
coatings, industrial maintenance products and industrial finishes produced by
the Coatings Segment of the Company and similar coatings and related items
produced by others. 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), Old Quaker(R), White Lightning(R), Standox(R), Rust Tough(R) and
other brand names.
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. During 1995, the Division targeted the best regional home centers for
paint and stain partnerships to expand its distribution outlets throughout the
United States with notable success being achieved in previously
under-represented geographic regions. In 1996, the Division built on its already
strong marketing programs, focusing on its new Ralph Lauren(TM) product line,
which was first introduced at the end of 1995. In addition, the Division
integrated marketing and sales programs for Pratt & Lambert(R) products, which
have a strong presence in the independently-owned paint and decorator stores.
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, and products are marketed through 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
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<PAGE> 3
affiliated companies ("Productos") were acquired in January 1996. Productos is
the second largest automotive paint distributor in Mexico, manufacturing and
marketing the Excelo(R) brand product line for the vehicle refinish market.
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. 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's primary focus in
1996 was to identify logistic synergies and merge the distribution functions of
Pratt & Lambert with the Company.
The Diversified Brands Division competes in three areas: custom and
industrial aerosols; paint applicators; and retail and wholesale consumer
aerosols and liquid 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 and national customers. Approximately six 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.
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 acquired 16 companies 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(R) 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(R) 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.
1996 OPERATING RESULTS
At the end of January 1997, the Company expects to announce its operating
results for the quarter and year ended December 31, 1996. This information will
be included in a Current Report on Form 8-K which will be incorporated by
reference herein.
USE OF PROCEEDS
The net proceeds from the sale of the Securities offered hereby and the net
proceeds from the Concurrent Offering (which are estimated to be $694.3 million
in the aggregate) will be used to refinance a portion of the Company's
commercial paper outstanding. At January 23, 1997, commercial paper outstanding
had maturities ranging from one to 129 days and interest rates ranging from
5.33% to 5.58% per annum. The proceeds from the issuance of $830 million in
commercial paper were used to finance the Thompson Minwax Acquisition.
S-3
<PAGE> 4
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company at September 30, 1996 (i) on an actual historical basis, (ii) on a pro
forma basis for the Thompson Minwax Acquisition and (iii) as further adjusted to
give effect to the issuance of the Securities as well as the Concurrent Offering
and the application of the estimated net proceeds therefrom as described under
"Use of Proceeds." The consummation of the offering of the Securities is not
conditioned on consummation of the Concurrent Offering. For additional
information as to the capitalization of the Company, see "Summary Historical
Financial Information" and "Unaudited Pro Forma Combined Condensed Financial
Statements" contained herein and Management's Discussion and Analysis of
Financial Condition and Results of Operations and the consolidated financial
statements of the Company and Thompson Minwax and the related notes thereto in
the reports of the Company incorporated by reference herein.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
-------------------------------------------
PRO FORMA
HISTORICAL PRO FORMA AS ADJUSTED
---------- ---------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
SHORT-TERM DEBT
Commercial paper................................ $ 221,321 $1,051,321 $ 357,021
----------- ----------- ------------
Total short-term debt................... 221,321 1,051,321 357,021
----------- ----------- ------------
LONG-TERM DEBT
9.875% debentures due 2016...................... 15,900 15,900 15,900
SunTrust Bank loan due 1998..................... 50,000 50,000 50,000
SunTrust Bank loan due 1999..................... 50,000 50,000 50,000
Other long-term debt............................ 21,741 21,741 21,741
Debt Securities Offered Hereby and in the
Concurrent Offering:
% Notes Due 2000........................... -- -- 100,000
% Notes Due 2002........................... -- -- 100,000
% Notes Due 2007........................... -- -- 200,000
% Debentures Due 2027...................... -- -- 150,000
% Debentures Due 2097...................... -- -- 150,000
----------- ----------- ------------
Total long-term debt.................... 137,641 137,641 837,641
----------- ----------- ------------
Total debt.............................. $ 358,962 $1,188,962 $ 1,194,662
----------- ----------- ------------
SHAREHOLDERS' EQUITY.............................. $1,367,696 $1,367,696 $ 1,367,696
----------- ----------- ------------
Total capitalization.................... $1,726,658 $2,556,658 $ 2,562,358
=========== =========== ============
</TABLE>
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<PAGE> 5
SUMMARY HISTORICAL FINANCIAL INFORMATION
The summary historical financial information presented below for the years
ended December 31, 1995, 1994, 1993, 1992 and 1991 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, 1995. The selected
consolidated financial data and related notes for and as of the nine-month
periods ended September 30, 1996 and 1995 are unaudited and, in the opinion of
the Company's management, include all adjustments, consisting of normal
recurring accruals, necessary for a fair presentation of such information. Such
unaudited information should be read in conjunction with Management's Discussion
and Analysis of Financial Condition and Results of Operations and other
information and the consolidated financial statements contained in the Company's
Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 1996,
June 30, 1996 and September 30, 1996, which are incorporated herein by
reference. 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 September 30, 1996. See "The
Company -- 1996 Operating Results" and "Information Incorporated by Reference."
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, (1) YEAR ENDED DECEMBER 31, (1)
----------------- --------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
------ ------ ------ ------ ------ ------ ------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Net sales.................................... $3,174 $2,533 $3,274 $3,100 $2,949 $2,748 $2,541
Cost of goods sold........................... 1,874 1,462 1,877 1,773 1,697 1,589 1,500
Selling, general and administrative
expenses................................... 968 810 1,075 1,018 981 915 826
Interest expense............................. 19 2 3 3 6 9 12
Interest and net investment income........... (5) (8) (12) (8) (7) (5) (5)
Other........................................ 6 2 12 15 8 14 9
------ ------ ------ ------ ------ ------ ------
Income before income taxes and cumulative
effects of changes in accounting methods... 312 265 318 299 264 226 199
Income taxes................................. 122 98 118 112 99 81 71
------ ------ ------ ------ ------ ------ ------
Income before cumulative effects of changes
in accounting methods...................... 190 167 201 187 165 145 128
------ ------ ------ ------ ------ ------ ------
Net income................................... $ 190 $ 167 $ 201 $ 187 $ 165 $ 63(2) $ 128
====== ====== ====== ====== ====== ====== ======
RATIO OF EARNINGS TO FIXED CHARGES (3)....... 4.2x 4.6x 4.2x 4.1x 3.7x 3.4x 3.1x
OTHER DATA
EBITDA (4)................................... $ 407 $ 318 $ 399 $ 383 $ 340 $ 310 $ 275
EBITDA as a percentage of sales.............. 12.8% 12.6% 12.2% 12.4% 11.5% 11.3% 10.8%
Capital expenditures......................... $ 86 $ 75 $ 108 $ 79 $ 63 $ 69 $ 51
Return on sales (5).......................... 6.0% 6.6% 6.1% 6.0% 5.6% 5.3% 5.0%
Debt to capitalization (6)................... 20.8 2.0 2.1 2.0 3.7 7.5 11.7
FINANCIAL POSITION
Total assets................................. $2,942 $2,110 $2,141 $1,962 $1,915 $1,730 $1,612
Working capital.............................. 267 665 620 592 597 498 399
Long-term debt............................... 138 23 24 20 38 60 72
Shareholders' equity......................... 1,368 1,179 1,212 1,053 1,033 906 868
<FN>
- ---------------
(1) The Company has completed a number of acquisitions during the periods
presented. Sixteen acquisitions occurred during 1995 and 1996 including the
acquisition of Pratt & Lambert in January 1996. Such acquisitions were
accounted for using the purchase method and may affect the comparability of
data on a year-to-year basis.
(2) Net income in 1992 includes the net additional expense 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."
(3) For purposes of computing such ratio, earnings consist of income before
income taxes and the cumulative effect of accounting changes plus fixed
charges, and fixed charges consist of interest expense and gross rent
expense.
(4) "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.
(5) For purposes of calculating return on sales, income before cumulative effect
of changes in accounting methods is divided by net sales.
(6) Debt includes short-term debt, current portion of long-term debt and
long-term debt. Capitalization includes debt and shareholders' equity.
</TABLE>
S-5
<PAGE> 6
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed balance sheet as of
September 30, 1996 combines the historical consolidated balance sheet
information of the Company and Thompson Minwax as if the Thompson Minwax
Acquisition had been consummated at September 30, 1996. The unaudited pro forma
combined condensed statements of income for the year ended December 31, 1995 and
for the nine months ended September 30, 1996 combine the historical consolidated
income statement information of the Company and Thompson Minwax as if the
Thompson Minwax Acquisition had been consummated on January 1 of each respective
period. The unaudited pro forma combined condensed statement of income for the
year ended December 31, 1995 also gives effect to the Company's acquisition of
Pratt & Lambert, which was consummated on January 8, 1996, as if the Pratt &
Lambert acquisition had been consummated on January 1, 1995. Both transactions
are 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 September 30, 1996 or on January 1 of each
respective period (or if the acquisition of Pratt & Lambert had been made on
January 1, 1995) 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, 1995, in the Quarterly Report on Form 10-Q of
the Company for the quarter ended September 30, 1996, in the Consolidated
Financial Statements of Pratt & Lambert which are contained in the Company's
Current Reports on Form 8-K and 8-K/A dated January 8, 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, all of which are
incorporated herein by reference. See "Information Incorporated by Reference."
S-6
<PAGE> 7
<TABLE>
THE SHERWIN-WILLIAMS COMPANY AND
THOMPSON MINWAX HOLDING CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
THOUSANDS OF DOLLARS
<CAPTION>
SEPTEMBER 30, 1996
------------------------------------------------------------------
PRO FORMA ADJUSTMENTS (f)
SHERWIN- THOMPSON ------------------------- PRO FORMA
WILLIAMS MINWAX DR CR COMBINED
---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents................... $ 6,194 $ 14,675 $ $ 14,675(a) $ 6,194
Accounts receivable, less allowance......... 584,023 39,999 624,022
Finished goods.............................. 476,538 476,538
Work-in-process............................. 103,978 103,978
---------- ----------
Total inventories........................... 580,516 31,251 611,767
Other current assets........................ 223,313 4,956 33(a) 228,236
---------- --------- ---------- ---------- ----------
Total current assets.................. 1,394,046 90,881 0 14,708 1,470,219
Deferred pension assets....................... 245,244 245,244
Investment in Thompson Minwax................. 830,000(b) 830,058(e) 0
58(d)
Other assets, including goodwill and deferred
taxes....................................... 749,561 630,983 565,400(e) 419,410(c) 1,520,559
5,976(a)
Income tax receivable......................... 0
Property, plant and equipment................. 1,154,790
Less allowances for depreciation and
amortization.............................. 601,577
---------- --------- ---------- ---------- ----------
553,213 45,814 599,027
---------- --------- ---------- ---------- ----------
Total assets.................................. $2,942,064 $ 767,678 $1,395,458 $1,270,151 $3,835,049
========== ========= ========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable............................ $ 367,522 $15,499 $ $ $ 383,021
Short-term borrowings....................... 221,321 830,000(b) 1,051,321
Other current liabilities................... 537,790 34,800 13,590(a) 58(d) 559,058
---------- --------- ---------- ---------- ----------
Total current liabilities............. 1,126,633 50,299 13,590 830,058 1,993,400
Long-term debt................................ 137,641 532,000 532,000(a) 137,641
Other long-term liabilities................... 310,094 26,218 336,312
Shareholders' equity:
Common stock, at par........................ 101,508 2 2(e) 101,508
Other capital............................... 193,247 176,692 176,692(e) 193,247
Retained earnings........................... 1,387,214 (17,533) 419,410(c) 524,906(a) 1,387,214
Cumulative foreign currency translation 87,963(e)
adjustment................................ (20,530) (20,530)
Treasury stock, at cost..................... (293,743) (293,743)
---------- --------- ---------- ---------- ----------
Total shareholders' equity.................... 1,367,696 159,161 684,067 524,906 1,367,696
---------- --------- ---------- ---------- ----------
Total liabilities and shareholders' equity.... $2,942,064 $ 767,678 $1,229,657 $1,354,964 $3,835,049
========== ========= ========== ========== ==========
<FN>
- ---------------
(a) Remove net assets related to financing of Thompson Minwax.
(b) Establish investment and record debt incurred to finance the acquisition.
(c) Eliminate goodwill previously recorded by Thompson Minwax.
(d) Record direct costs of acquisition.
(e) Eliminate investment and record initial goodwill based upon purchase price less net book value of assets
acquired.
(f) All assets and liabilities are included at Thompson Minwax's historical values. The Company will obtain fair
market values for these assets and liabilities to be used as the basis for establishing the opening balance
sheet values for the net assets. These fair market values will not be available for several months.
</TABLE>
S-7
<PAGE> 8
<TABLE>
THE SHERWIN-WILLIAMS COMPANY AND
THOMPSON MINWAX HOLDING CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA
<CAPTION>
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
------------------------------------------------------------------
PRO FORMA ADJUSTMENTS (g)
SHERWIN- THOMPSON ------------------------- PRO FORMA
WILLIAMS MINWAX DR CR COMBINED
---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net sales..................................... $3,174,035 $288,370 $ $ $3,462,405
Costs and expenses:
Cost of goods sold.......................... 1,874,324 102,584 1,976,908
Selling, general and administrative
expenses.................................. 968,354 143,877 10,601(b) 8,242(a) 1,114,591
Interest expense (income)................... 14,179 37,929 43,575(d) 37,929(c) 60,716
2,962(e)
Other....................................... 5,629 107 5,736
---------- ---------- ---------- ---------- ----------
2,862,486 284,497 57,137 46,171 3,157,951
---------- ---------- ---------- ---------- ----------
Income before income taxes.................... 311,549 3,873 304,454
Income taxes.................................. 121,504 503 3,013(f) 118,994
---------- ---------- ---------- ---------- ----------
Net income.................................... $ 190,045 $ 3,370 $ 185,460
========== ========== ==========
Net income per share.......................... $ 2.20 $ 2.15
========== ==========
Average shares outstanding (in thousands)..... 86,359 86,359
<FN>
- ---------------
(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 expense 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 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 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.
</TABLE>
S-8
<PAGE> 9
<TABLE>
THE SHERWIN-WILLIAMS COMPANY AND
PRATT & LAMBERT UNITED, INC. AND
THOMPSON MINWAX HOLDING CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1995
---------------------------------------------------------------------------------
PRO FORMA ADJUSTMENTS (i)
PRO FORMA
SHERWIN- PRATT & THOMPSON ------------------------- PRO FORMA
WILLIAMS LAMBERT MINWAX DR CR COMBINED
---------- ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net sales...................... $3,273,819 $ 396,362 $ 367,710 $ $ $4,037,891
Costs and expenses:
Cost of goods sold........... 1,877,083 291,891 137,934 2,306,908
Selling, general and
administrative expenses.... 1,075,442 83,031 170,212 23,317(b) 13,394(a) 1,340,458
1,380(f)
470(g)
Interest expense (income).... (8,986) 6,291 52,156 80,293(d) 65,180(c) 73,592
0 9,018(e)
Other........................ 11,782 (137) 16,964 28,609
---------- -------- --------- ---------- ---------- ----------
2,955,321 381,076 377,266 114,477 78,574 3,749,567
---------- -------- --------- ---------- ---------- ----------
Income before income taxes..... 318,498 15,286 (9,556) 288,324
Income taxes................... 117,844 8,100 298 9,093(h) 117,149
---------- -------- --------- ---------- ---------- ----------
Net income..................... $ 200,654 $ 7,186 $ (9,854) $ 171,175
========== ======== ========= ==========
Net income per share........... $ 2.34 $ 2.00
========== ==========
Average shares outstanding (in
thousands)................... 85,743 85,743
<FN>
- ---------------
(a) Remove goodwill amortization of Pratt & Lambert related to United Coatings,
Inc. and 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 expense is
subject to possible adjustment upon completion of Thompson Minwax appraisal
valuation.
(c) Remove interest expense of Pratt & Lambert and Thompson Minwax.
(d) Record additional estimated interest expense resulting from the use of debt
to finance the acquisitions.
(e) Remove interest income earned on short-term investments.
(f) Record additional estimated depreciation expense due to write-up of Pratt &
Lambert fixed assets. Such depreciation expense is subject to possible
additional adjustment upon completion of Thompson Minwax appraisal
valuation.
(g) Record amortization expense of Pratt & Lambert identified trademarks. Such
amortization expense is subject to additional adjustment upon completion of
Thompson Minwax appraisal valuation.
(h) Record tax effect, using a 35% statutory federal rate, on the net pro forma
adjustments.
(i) 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.
</TABLE>
S-9
<PAGE> 10
DESCRIPTION OF THE SECURITIES
CERTAIN TERMS OF THE NOTES DUE 2000
The Notes Due 2000 are a series of Debt Securities described in the
accompanying Prospectus, will be limited to $100 million aggregate principal
amount and will mature on , 2000. Reference should be made to the
accompanying Prospectus for a detailed summary of additional provisions of the
Notes Due 2000 and of the Indenture dated as of February 1, 1996 (the
"Indenture") between the Company and The Chase Manhattan Bank (formerly known as
Chemical Bank), as trustee (the "Trustee"), under which the Notes Due 2000 will
be issued.
The Notes Due 2000 will bear interest at the rate of % per annum from
, 1997, payable semiannually in arrears on and
of each year, commencing , 1997, to the persons in
whose names the Notes Due 2000 are registered at the close of business on the
preceding or , each a record date, as the case may be. Interest
will be computed on the basis of a 360-day year consisting of twelve 30-day
months.
The Notes Due 2000 may not be redeemed prior to their stated maturity and
will not be subject to any sinking fund.
CERTAIN TERMS OF THE NOTES DUE 2002
The Notes Due 2002 are a series of Debt Securities described in the
accompanying Prospectus, will be limited to $100 million aggregate principal
amount and will mature on , 2002. Reference should be made to the
accompanying Prospectus for a detailed summary of additional provisions of the
Notes Due 2002 and of the Indenture under which the Notes Due 2002 will be
issued.
The Notes Due 2002 will bear interest at the rate of % per annum from
, 1997, payable semiannually in arrears on and of
each year, commencing , 1997, to the persons in whose names the
Notes Due 2002 are registered at the close of business on the preceding
or , each a record date, as the case may be. Interest will be computed on
the basis of a 360-day year consisting of twelve 30-day months.
The Notes Due 2002 may not be redeemed prior to their stated maturity and
will not be subject to any sinking fund.
CERTAIN TERMS OF THE NOTES DUE 2007
The Notes Due 2007 are a series of Debt Securities described in the
accompanying Prospectus, will be limited to $200 million aggregate principal
amount and will mature on , 2007. Reference should be made to the
accompanying Prospectus for a detailed summary of additional provisions of the
Notes Due 2007 and of the Indenture under which the Notes Due 2007 will be
issued.
The Notes Due 2007 will bear interest at the rate of % per annum from
, 1997, payable semiannually in arrears on and
of each year, commencing , 1997, to the persons in
whose names the Notes Due 2007 are registered at the close of business on the
preceding or , each a record date, as the case may
be. Interest will be computed on the basis of a 360-day year consisting of
twelve 30-day months.
The Notes Due 2007 will not be subject to any sinking fund.
The Notes Due 2007 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 the Notes Due 2007 to be redeemed and (ii) the
sum of the present values of the Remaining Scheduled Payments (as hereinafter
defined) 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 accrued interest on the principal amount being redeemed to the date
of redemption.
S-10
<PAGE> 11
"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 an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes Due 2007 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 Notes Due 2007. "Independent Investment Banker" means one
of the Reference Treasury Dealers appointed by the Trustee after consultation
with the Company.
"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 each of Salomon Brothers Inc, Credit
Suisse First Boston Corporation and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and their respective successors; provided, however, that if any of
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 Note Due 2007,
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 Note Due 2007, 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 Notes Due 2007 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 the Notes Due 2007 or
portions thereof called for redemption.
DELIVERY AND FORM
Each of the Securities initially will be represented by one or more global
securities ("Global Securities") deposited with The Depository Trust Company
("DTC") and registered in the name of the nominee of DTC, except as set forth
below. Each of the Securities will be available for purchase in denominations of
$1,000 and integral multiples thereof, in book-entry form only. Unless and until
certificated Securities are issued under the limited circumstances described
below, no beneficial owner of a Security shall be entitled to receive a
definitive certificate representing a Security. So long as DTC or any successor
depositary (collectively, the "Depositary") or its nominee is the registered
holder of the Global Securities, the Depositary, or such nominee, as the case
may be, will be considered to be the sole owner or holder of the Securities for
all purposes of the Indenture.
S-11
<PAGE> 12
BOOK-ENTRY SYSTEM
DTC has advised the Company that it is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participating organizations (the "Participants") and
facilitate the clearance and settlement of securities transactions between
Participants through electronic book-entry changes in accounts of its
Participants, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks, trust
companies and clearing corporations and may include certain other organizations
(including the Underwriters). Indirect access to the DTC system also is
available to others such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a Participant, either
directly or indirectly (the "Indirect Participants"). Beneficial owners of the
Securities that are not Participants or Indirect Participants who desire to
purchase, sell or otherwise transfer ownership of, or other interest in, the
Securities may do so only through Participants and Indirect Participants.
Payments with respect to the Global Securities will be made by the Paying
Agent to DTC or any successor depositary, or its nominee. The Company expects
that any such Depositary, or its nominee, upon receipt of any payment of
principal or of interest on the Global Securities will credit the accounts of
its Participants with payments in amounts proportionate to such Participants'
ownership interest in the Global Securities. Beneficial owners of the
Securities, directly or indirectly, will receive distributions of principal and
interest in proportion to their beneficial ownership through the Participants.
Consequently, any payments to beneficial owners of the Securities will be
subject to the terms, conditions and time of payment required by the Depositary,
the Participants and Indirect Participants, as applicable. The Company expects
that such payments will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of customers
registered in "street name." Such payments will be the responsibility of such
Participants and Indirect Participants. Neither the Company, the Trustee for the
Securities, any Paying Agent nor the Note Registrar for the Securities will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Securities or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers among Participants
on whose behalf it acts with respect to the Securities and is required to
receive and transmit distributions of principal and interest on the Securities.
Participants and Indirect Participants with which beneficial owners of the
Securities have accounts similarly are required to make book-entry transfers and
receive and transmit such payments on behalf of their respective beneficial
owners of the Securities. Accordingly, although beneficial owners of the
Securities will not possess certificated Securities, beneficial owners will
receive payments and will be able to transfer their interests.
Since it is anticipated that the only holder of the Securities will be the
Depositary or its nominee, beneficial owners of the Securities will not be
recognized as holders of the Securities under the Indenture unless certificated
definitive Securities are issued. So long as the Securities are represented by
the Global Securities, beneficial owners of the Securities will only be
permitted to exercise the rights of holders of the Securities indirectly through
the Participants who in turn will exercise such rights through the Depositary.
If the Depositary is at any time unwilling, unable or ineligible to
continue as depositary and a successor depositary is not appointed by the
Company within 90 days, the Company will issue individual Securities in
definitive form in exchange for the Global Securities representing the
Securities. In addition, the Company may at any time and in its sole discretion
determine not to have the Securities represented by Global Securities and, in
such event, will issue individual Securities in definitive form in exchange for
the Global Securities representing the Securities. Furthermore, if the Company
so specifies with respect
S-12
<PAGE> 13
to the Securities, an owner of a beneficial interest in a Global Security
representing Securities may, on terms acceptable to the Company, the Trustee,
and the Depositary, receive individual Securities of such series in exchange for
such beneficial interests.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Securities will be made by the Underwriters in
immediately available funds. So long as the Securities are represented by the
Global Securities, all payments of principal and interest will be made by the
Company in immediately available funds.
The Securities will trade in DTC's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Securities will therefore
be required by DTC 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 Securities.
S-13
<PAGE> 14
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting Agreement,
the Company has agreed to sell to each of the Underwriters named below, and each
of the Underwriters has severally agreed to purchase, the principal amount of
Securities set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PRINCIPAL AMOUNT PRINCIPAL AMOUNT
UNDERWRITERS OF NOTES DUE 2000 OF NOTES DUE 2002 OF NOTES DUE 2007
- ------------ ----------------- ----------------- -----------------
<S> <C> <C> <C>
Salomon Brothers Inc .....................
Credit Suisse First Boston Corporation....
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................
-------- -------- --------
Total...................................
======== ======== ========
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters to pay for and accept delivery of the Securities are subject to
certain conditions precedent, that the Underwriting Agreement may be terminated
under certain circumstances, and that the Underwriters will be obligated to
purchase all of the Securities if any are purchased.
The Company has been advised by the Underwriters that the Underwriters
propose initially to offer the Securities to the public at the public offering
price set forth on the cover page of this Prospectus Supplement and to certain
dealers at such price less a concession not in excess of %, in the case of the
Notes Due 2000, not in excess of %, in the case of the Notes Due 2002, and not
in excess of %, in the case of the Notes Due 2007, of the principal amount
thereof. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of %, in the case of the Notes Due 2000, not in excess of %,
in the case of the Notes Due 2002 and not in excess of %, in the case of the
Notes Due 2007, of the principal amount thereof on sales to other dealers. After
the initial public offering, the public offering price and such concessions may
be changed.
The Securities are new issues of securities with no established trading
market. The Company does not intend to apply for listing of the Securities on a
national securities exchange, but has been advised by the Underwriters that they
presently intend to make a market in the Securities, as permitted by applicable
laws and regulations. The Underwriters are not obligated, however, to make a
market in the Securities, and any such market making may be discontinued at any
time at the sole discretion of the Underwriters. Accordingly, no assurance can
be given as to the liquidity of, or the trading market for, the Securities.
The Underwriters and certain of their affiliates and associates may be
customers of, have borrowing relationships with, engage in transactions with,
and/or perform services, including investment banking services, for, the Company
and its affiliates in the ordinary course of business. One of the Underwriters
is acting as the initial purchaser of the securities to be offered in the
Concurrent Offering and is receiving customary compensation in connection
therewith.
S-14
<PAGE> 15
INFORMATION INCORPORATED BY REFERENCE
As described in the Prospectus, the Company is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
documents filed by the Company with the Commission now 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".
The following documents filed by the Company with the Commission are
incorporated into the Prospectus and this Prospectus Supplement by reference:
(i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1995;
(ii) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996; and
(iii) the Company's Current Reports on Form 8-K and Form 8-K/A dated
January 8, 1996, November 22, 1996, January 7, 1997 and January , 1997.
All documents and reports 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 the Prospectus and this
Prospectus Supplement shall be deemed to be incorporated by reference into the
Prospectus and this Prospectus Supplement and to be a part of the Prospectus and
this Prospectus Supplement 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 the Prospectus and this Prospectus
Supplement 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 the Prospectus and this Prospectus Supplement.
The Company will provide without charge to any person to whom the
Prospectus and this Prospectus Supplement is delivered, on the written or oral
request of such person, a copy of any or all of the 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
LEGAL MATTERS
The validity of the Securities offered by the Company hereby will be passed
upon for the Company by Arnold & Porter, Washington, D.C., who will rely as to
matters of Ohio law on the opinion of Louis E. Stellato, Vice President, General
Counsel and Secretary of the Company. Certain legal matters in connection with
the offerings contemplated herein are being passed upon for the Underwriters by
Cravath, Swaine & Moore, New York, New York.
S-15
<PAGE> 16
PROSPECTUS
THE SHERWIN-WILLIAMS COMPANY [Sherwin Williams logo]
DEBT SECURITIES
The Sherwin-Williams Company (the "Company") from time to time may offer its
debt securities (the "Debt Securities"), in one or more series, from which the
Company will receive up to $450,000,000 in proceeds, including the equivalent
thereof in other currencies or composite currency units such as the European
Currency Unit. The Debt Securities may be offered in one or more series, in
amounts, at prices and on terms determined at the time of sale and set forth in
a supplement to this Prospectus (a "Prospectus Supplement").
Unless otherwise specified in an accompanying Prospectus Supplement, the Debt
Securities will be senior securities of the Company, ranking equally with all
other unsubordinated and unsecured indebtedness of the Company.
The specific terms of the Debt Securities with respect to which this Prospectus
is being delivered will be set forth in an accompanying Prospectus Supplement
including, where applicable, the specific designation, aggregate principal
amount, ranking, authorized denomination, maturity, rate or method of
calculation of interest and dates for payment thereof, any exchangeability,
conversion, redemption, prepayment, or sinking fund provisions, the currency or
currency unit in which principal, premium, or interest is payable, the
designation of the trustee acting under the applicable indenture, the initial
offering price and any other specific terms of such Debt Securities. The
Prospectus Supplement will also contain information, where applicable, about
material United States federal income tax considerations relating to, and any
listing on a securities exchange of, the Debt Securities covered by such
Prospectus Supplement.
The Company may sell the Debt Securities directly, through agents designated
from time to time, or through underwriters or dealers. If any agents,
underwriters, or dealers are involved in the sale of the Debt Securities, the
names of such agents, underwriters, or dealers and any applicable commissions or
discounts and the net proceeds to the Company from such sale will be set forth
in the applicable Prospectus Supplement.
The Debt Securities may be issued only in registered form, including in the form
of one or more global securities ("Global Securities"), unless otherwise set
forth in the Prospectus Supplement.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF DEBT SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
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 February 28, 1996.
<PAGE> 17
IN CONNECTION WITH THE OFFERING OF CERTAIN SECURITIES, THE UNDERWRITERS MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE
OF THE DEBT SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company with the Commission pursuant to the
informational requirements of the Exchange Act may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at the Commission's
regional offices located at Seven World Trade Center, 13th Floor, New York, New
York 10048; and Northwestern Atrium Center, 500 West Madison Street (Suite
1400), Chicago, Illinois 60661; and copies of such material may be obtained from
the Public Reference Section of the Commission, Washington, D.C. 20549, at
prescribed rates. Such reports, proxy statements and other information 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 of 1933, as amended (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 Debt
Securities. 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.
INFORMATION INCORPORATED BY REFERENCE
The Company incorporates herein by reference the following documents filed
with the Commission pursuant to the Exchange Act:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1995, June 30, 1995 and September 30, 1995.
(c) The Company's Current Report on Form 8-K dated January 8, 1996 and
Form 8-K/A dated February 8, 1996, amending such Form 8-K.
All documents and reports subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the Debt Securities
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus or any Prospectus Supplement to the extent that
a statement contained herein or in any other subsequently filed document that
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 or any Prospectus Supplement.
2
<PAGE> 18
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus and the accompanying Prospectus
Supplement are delivered, upon the written or oral request of such person, a
copy of any or all the documents incorporated herein by reference, other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference in such documents, and any other documents specifically identified
herein as incorporated by reference into the Registration Statement to which
this Prospectus relates or into such other documents.
Requests for such copies should be addressed to:
The Sherwin-Williams Company
Att.: Corporate Secretary
101 Prospect Avenue, N.W.
Cleveland, Ohio 44115
Telephone Number: (216) 566-2000
THE COMPANY
The Sherwin-Williams Company, which was first incorporated under the Laws
of the State of Ohio eighteen years after its founding in 1866, is engaged in
the manufacture, distribution and sale of paints, coatings and related products
to professional, industrial, commercial and retail customers.
The Sherwin-Williams Company, together with its consolidated subsidiaries,
is herein called the "Company". The Company's principal executive offices are
located at 101 Prospect Avenue, N.W., Cleveland, Ohio 44115, and its telephone
number is (212) 566-2000.
RECENT DEVELOPMENTS
For the year ended December 31, 1995, net sales of the Company increased
5.6% to $3,273,819,000 from $3,100,069,000 for the year ended December 31, 1994.
Net income for 1995 increased 7.5% to $200,654,000, while income per share for
1995 increased 8.8% to $2.34 from $2.15 in 1994. Net sales in the Company's
Paint Stores Segment for 1995 were up 7.3% to $2,130,559,000, with
comparable-store sales increasing 6.5%. Operating profit for the Paint Stores
Segment for 1995 improved 12.7% to $158,458,000. The annual net sales of the
Company's Coating Segment for 1995 increased 2.7% to $1,129,429,000 from
$1,099,460,000 in 1994. Operating profits of the Coating Segment for 1995
increased .6% to $202,361,000.
In the three-month period ended December 31, 1995, consolidated net sales
of the Company were $740,907,000, 5.3% higher than the corresponding three-month
period of 1994. Net income for the three-month period increased 10.1% to
$33,766,000 and net income per share increased to $.39 from $.36 for the
corresponding three-month period in 1994. The Paint Stores Segment had a sales
gain of 5.4% in this three-month period and a 12.4% operating profit
improvement. The Coating Segment's sales increased 5.1 % in this three-month
period while the operating profit for the Coating Segment increased 2.1%.
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the net
proceeds from the sale of the Debt Securities will be used for general corporate
purposes, which may include repayment of indebtedness, acquisitions, additions
to working capital and capital expenditures. Additional information on the use
of net proceeds from the sale of any particular Debt Securities will be set
forth in the Prospectus Supplement relating to such Debt Securities.
3
<PAGE> 19
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges (a) for each of 1994, 1993, 1992, 1991 and 1990 and
for the nine months ended September 30, 1995 on a historical basis and (b) for
1994 and the nine months ended September 30, 1995 on a pro forma basis. The pro
forma ratios give effect to the acquisition of all the capital stock of Pratt &
Lambert United, Inc., a New York corporation, at $35.00 per share, by the
Company pursuant to a public tender offer by SWACQ, Inc., a New York corporation
and a wholly owned subsidiary of the Company, which was followed by the merger
of SWACQ, Inc. into Pratt & Lambert United, Inc. resulting in Pratt & Lambert
United, Inc. becoming a wholly owned subsidiary of the Company, as if such
transaction had been completed on January 1, 1994.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
NINE MONTHS ------------------------------------------------------------
ENDED
SEPTEMBER 30, 1995 1994 1993 1992 1991 1990
------------------------ ------------------------ ---- ---- ---- ----
HISTORICAL PRO FORMA HISTORICAL PRO FORMA
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings
to fixed charges(a) 4.6 4.1 4.1 3.5 3.7 3.4 3.1 3.0
</TABLE>
- ---------------
(a) For purposes of computing such ratio, earnings consist of income before
income taxes and the cumulative effect of accounting changes plus fixed
charges, and fixed charges consist of interest expense and gross rent
expense.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Debt Securities so offered will be described
in the Prospectus Supplement relating to such Debt Securities. Accordingly, for
a description of the terms of a particular issue of Debt Securities, reference
must be made to both the Prospectus Supplement relating thereto and to the
following description.
Debt Securities will be issued under an indenture dated as of February 1,
1996 (the "Indenture"), between the Company and Chemical Bank, as trustee (the
"Trustee"). A copy of the form of Indenture has been filed as an exhibit to the
Registration Statement filed with the Commission. The following discussion of
certain provisions of the Indenture is a summary only and does not purport to be
a complete description of the terms and provisions of the Indenture. References
appearing below are to the Indenture and, wherever particular provisions are
referred to, such provisions are incorporated by reference as a part of the
statement made, and the statement is qualified in its entirety by such
reference. Accordingly, the following discussion is qualified in its entirety by
reference to the provisions of the Indenture, including the definition therein
of terms used below with their initial letters capitalized.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities that can be issued thereunder. The Debt Securities may be issued in
one or more series as may be authorized from time to time by the Company.
(Section 2.03.) Reference is made to the applicable Prospectus Supplement for
the following terms of the Debt Securities of the series with respect to which
such Prospectus Supplement is being delivered:
(a) The title of the Debt Securities of the series;
(b) Any limit on the aggregate principal amount of the Debt Securities
of the series that may be authenticated and delivered under the Indenture;
(c) The date or dates on which the principal and premium with respect
to the Debt Securities of the series are payable;
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(d) The rate or rates (which may be fixed or variable) at which the
Debt Securities of the series shall bear interest (if any) or the method of
determining such rate or rates, the date or dates from which such interest
shall accrue, the interest payment dates on which such interest shall be
payable or the method by which such dates will be determined, the record
dates for the determination of holders thereof to whom such interest is
payable, and the basis upon which interest will be calculated if other than
that of a 360-day year of twelve 30-day months;
(e) The place or places, if any, in addition to or instead of the
Corporate Trust Office of the Trustee, where the principal, premium, and
interest with respect to Debt Securities of the series shall be payable;
(f) The price or prices at which, the period or periods within which,
and the terms and conditions upon which Debt Securities of the series may
be redeemed, in whole or in part, at the option of the Company or
otherwise;
(g) The obligation, if any, of the Company to redeem, purchase, or
repay Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a holder thereof and the price or
prices at which, the period or periods within which, and the terms and
conditions upon which Debt Securities of the series shall be redeemed,
purchased, or repaid, in whole or in part, pursuant to such obligations;
(h) The terms, if any, upon which the Debt Securities of the series
may be convertible into or exchanged for Common Stock, Preferred Stock
(which may be represented by Depositary Shares), other Debt Securities, or
warrants for Common Stock, Preferred Stock, or indebtedness or other
securities of any kind of the Company or any other issuer or obligor and
the terms and conditions upon which such conversion or exchange shall be
effected, including the initial conversion or exchange price or rate, the
conversion or exchange period, and any other additional provisions;
(i) If other than denominations of $1,000 or any integral multiple
thereof, the denominations in which Debt Securities of the series shall be
issuable;
(j) If the amount of principal, premium, if any, or interest with
respect to the Debt Securities of the series may be determined with
reference to an index or pursuant to a formula, the manner in which such
amounts will be determined;
(k) If the principal amount payable at the stated maturity of Debt
Securities of the series will not be determinable as of any one or more
dates prior to such stated maturity, the amount that will be deemed to be
such principal amount as of any such date for any purpose, including the
principal amount thereof which will be due and payable upon any maturity
other than the stated maturity or which will be deemed to be outstanding as
of any such date (or, in any such case, the manner in which such deemed
principal amount is to be determined);
(l) Any changes or additions to the provisions of the Indenture
dealing with defeasance, including the addition of additional covenants
that may be subject to the Company's covenant defeasance option;
(m) If other than such coin or currency of the United States as at the
time of payment is legal tender for payment of public and private debts,
the coin or currency in which payment of the principal, premium, if any,
and interest with respect to Debt Securities of the series shall be
payable, and if necessary, the manner of determining the equivalent thereof
in United States currency.
(n) If other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series that shall be payable
upon declaration of acceleration of the maturity thereof or provable in
bankruptcy;
(o) Any addition to or change in the Events of Default with respect to
the Debt Securities of the series and any change in the right of the
Trustee or the holders to declare the principal, premium, if any, and
interest with respect to such Debt Securities due and payable;
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(p) If the Debt Securities of the series shall be issued in whole or
in part in the form of a Global Security, the terms and conditions, if any,
upon which such Global Security may be exchanged in whole or in part for
other individual Debt Securities in definitive registered form, the
Depositary for such Global Security, and the form of any legend or legends
to be borne by any such Global Security in addition to or in lieu of the
legend referred to in the Indenture;
(q) Any trustee, authenticating or paying agents, transfer agents, or
registrars;
(r) The applicability of, and any addition to or change in, the
covenants and definitions then set forth in the Indenture or in the terms
then set forth in the Indenture relating to permitted consolidations,
mergers, or sales of assets, including conditioning any merger, conveyance,
transfer, or lease permitted by the Indenture upon the satisfaction of an
indebtedness coverage standard by the Company and any successor to the
Company;
(s) The terms, if any, of any guarantee of the payment of principal,
premium, and interest with respect to Debt Securities of the series and any
corresponding changes to the provision of the Indenture as then in effect;
(t) The terms, if any, of the transfer, mortgage, pledge, or
assignment as security for the Debt Securities of the series of any
properties, assets, moneys, proceeds, securities, or other collateral,
including whether certain provisions of the Trust Indenture Act are
applicable and any corresponding changes to provisions of the Indenture as
then in effect;
(u) With regard to Debt Securities of the series that do not bear
interest, the dates for certain required reports to the Trustee; and
(v) Any other terms of the Debt Securities of the series (which terms
shall not be prohibited by the provisions of the Indenture). (Section
2.03.)
The Prospectus Supplement will also describe any material United States
federal income tax consequences or other special considerations applicable to
the series of Debt Securities to which such Prospectus Supplement relates,
including those applicable to (a) Debt Securities with respect to which payments
of principal, premium, if any, or interest are determined with reference to an
index or formula (including changes in prices of particular securities,
currencies or commodities), (b) Debt Securities with respect to which principal,
premium, if any, or interest is payable in a foreign or composite currency, (c)
Debt Securities that are issued at a discount below their stated principal
amount, bearing no interest or interest at a rate that at the time of issuance
is below market rates ("Original Issue Discount Debt Securities"), and (d)
variable rate Debt Securities that are exchangeable for fixed rate Debt
Securities.
Payments of interest on Registered Securities may be made at the option of
the Company by check mailed to the registered holders thereof or, if so provided
in the applicable Prospectus Supplement, at the option of a holder by wire
transfer to an account designated by such holder. (Section 2.12.)
Unless otherwise provided in the applicable Prospectus Supplement,
Registered Securities 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 Debt Securities 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 Debt Securities will thereafter look only to the Company for
payment thereof.
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GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities. (Section 2.15.) A Global Security is a
Debt Security that represents, and is denominated in an amount equal to the
aggregate principal amount of, all outstanding Debt Securities of a series, or
any portion thereof, in either case having the same terms, including the same
original issue date, date or dates on which principal and interest are due, and
interest rate or method of determining interest. A Global Security will be
deposited with, or on behalf of, a Depositary, which will be identified in the
Prospectus Supplement relating to such Debt Securities. Global Securities may be
issued in only fully registered form and in either temporary or definitive form.
Unless and until it is exchanged in whole or in part for the individual Debt
Securities represented thereby, a Global Security may not be transferred except
as a whole by the Depositary to a nominee of the Depositary, or by the
Depositary or any nominee of the Depositary to a successor Depositary or any
nominee of such successor. (Section 2.15.)
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such Debt Securities. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the individual Debt Securities represented by
such Global Security to the accounts of persons that have accounts with the
Depositary ("participants"). Such accounts shall be designated by the dealers or
underwriters with respect to such Debt Securities or, if such Debt Securities
are offered and sold directly by the Company or through one or more agents, by
the Company or such agents. Ownership of beneficial interests in a Global
Security will be limited to participants or persons that hold beneficial
interests through participants. Ownership of beneficial interests in such Global
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the Depositary (with respect to interests of
participants) or records maintained by participants (with respect to interests
of persons other than participants). The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limitations and laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or nominee, as the
case may be, will be considered the sole owner or holder of the individual Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as provided below, owners of beneficial interests in a Global
Security will not be entitled to have any of the individual Debt Securities
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of any of such Debt Securities in
definitive form, and will not be considered the owners or holders thereof under
the Indenture. (Section 2.15.) Accordingly, each person owning a beneficial
interest in a Global Security must rely on the procedures of the Depository for
such Global Security and, if such person is not a participant, on the procedures
of the participant through which such person owns its interest, to exercise any
rights of a holder under the Indenture. The Company understands that under
existing industry practices, if the Company requests any action of holders or if
an owner of a beneficial interest in a Global Security desires to give or take
any action which a holder is entitled to give or take under the Indenture, the
Depositary for such Global Security would authorize the participants holding the
relevant beneficial interests to give or take such action, and such participants
would authorize beneficial owners owning through such participants to give or
take such action or would otherwise act upon the instructions of beneficial
owners holding through them.
Payments of principal, premium, if any, and interest with respect to
individual Debt Securities represented by a Global Security will be made to the
Depositary or its nominee, as the case may be, as the registered owner or holder
of such Global Security. Neither the Company, the Trustee, any paying agent or
registrar for such Debt Securities, or any agent of the Company or the Trustee
will have any responsibility or liability for (a) any aspect of the records
relating to or payments made by the
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Depositary, its nominee, or any participants on account of beneficial interests
in the Global Security or for maintaining, supervising, or reviewing any
records relating to such beneficial interests, (b) the payment to the owners of
beneficial interests in the Global Security of amounts paid to the Depositary
or its nominee, or (c) any other matter relating to the actions and practices
of the Depositary, its nominee, or its participants. (Section 2.15.) Neither
the Company, the Trustee, any paying agent or registrar for such Debt
Securities, or any agent of the Company or the Trustee will be liable for any
delay by the Depositary, its nominee, or any of its participants in identifying
the owners of beneficial interests in the Global Security, and the Company and
the Trustee may conclusively rely on, and will be protected in relying on,
instructions from the Depositary or its nominee for all purposes.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium, if any, or
interest with respect to a definitive Global Security representing any of such
Debt Securities, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security, as shown on the records of the Depositary or its
nominee. The Company also expects that payments by participants to owners of
beneficial interests in such Global Security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers and registered in "street
name." Such payments will be the responsibility of such participants.
If the Depositary for a series of Debt Securities is at any time
unwilling, unable, or ineligible to continue as depositary, the Company shall
appoint a successor depositary. If a successor depositary is not appointed by
the Company within 90 days, the Company will issue individual Debt Securities
of such series in exchange for the Global Security representing such series of
Debt Securities. (Section 2.15.) In addition, the Company may at any time
and in its sole discretion, subject to any limitations described in the
Prospectus Supplement relating to such Debt Securities, determine no longer to
have Debt Securities of a series represented by a Global Security and, in such
event, will issue individual Debt Securities of such series in exchange for the
Global Security representing such series of Debt Securities. (Section 2.15.)
Furthermore, if the Company so specifies with respect to the Debt Securities of
a series, an owner of a beneficial interest in a Global Security representing
Debt Securities of such series may, on terms acceptable to the Company, the
Trustee, and the Depositary for such Global Security, receive individual Debt
Securities of such series in exchange for such beneficial interests, subject to
any limitations described in the Prospectus Supplement relating to such Debt
Securities. In any such instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery of individual Debt Securities of
the series represented by such Global Security equal in principal amount to
such beneficial interest and to have such Debt Securities registered in its
name.
CERTAIN COVENANTS OF THE COMPANY
Limitation on Liens
Unless otherwise provided in the Prospectus Supplement, the Company and its
Restricted Subsidiaries will not create any Liens unless Debt Securities 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
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Indebtedness in trust for the purpose of defeasing 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
Unless otherwise provided in the Prospectus Supplement, 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 Debt Securities
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 Debt Securities or other Indebtedness ranking pari
passu with the Debt Securities; 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
Debt Securities 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 a series of Debt Securities (Section 6.01.):
(a) Default in the payment of any installment of interest on any Debt
Securities of that series, as and when the same shall become due and
payable and continuance of such default for a period of 30 days;
(b) Default in the payment of all or any part of the principal or
premium with respect to any Debt Securities of that series as and when the
same shall become due and payable, whether at maturity, upon redemption, by
declaration, upon required repurchase, or otherwise;
(c) Default in the payment of any sinking fund payment with respect to
any Debt Securities of that series as and when the same shall become due
and payable and continuance of such default for a period of 30 days;
(d) Failure on the part of the Company to comply with the provisions
of the Indenture relating to consolidations, mergers, and sales of assets;
(e) 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 the Debt
Securities of that series, in the Indenture with respect to such series, or
in any supplemental Indenture with respect to such series (other than
covenants or agreements included solely by or for the benefit of a series
of Debt Securities thereunder other than that series) continuing for a
period of 90 days after the date on which written
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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 the Debt
Securities of that series at the time outstanding;
(f) 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.
(g) The entry of an order or decree by a court having competent
jurisdiction for (1) 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;
(h) Any other Event of Default provided with respect to Debt
Securities of that series.
An Event of Default with respect to one series of Debt Securities is not
necessarily an Event of Default for another series.
If an Event of Default described in clause (a), (b), (c), (d), (e), (f)
(other than with respect to the Company), (g) (other than with respect to the
Company) or (h) above occurs and is continuing with respect to any series of
Debt Securities, unless the principal and interest with respect to all the Debt
Securities of such series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Debt Securities of such series (each such series voting as a separate class)
then outstanding may declare the principal amount (or, if Original Issue
Discount Debt Securities, such portion of the principal amount as may be
specified in such series) of and interest on all the Debt Securities of such
series due and payable immediately. If an Event of Default described in clause
(f) or (g) (in each case with respect to the Company) above occurs, unless the
principal and interest with respect to all the Debt Securities of all series
shall have become due and payable, the principal amount (or, if any series are
Original Issue Discount Debt Securities, such portion of the principal amount as
may be specified in such series) of and interest on all Debt Securities of all
series 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 Debt
Securities. (Section 6.01.)
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If an Event of Default occurs and is continuing, 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
the Debt Securities of the affected series 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 the Debt
Securities of such series. In addition, if there shall be pending proceedings
for the bankruptcy or reorganization of the Company or any other obligor on the
Debt Securities, 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, and interest (or,
in the case of Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms of such series) owing and
unpaid with respect to the Debt Securities. (Section 6.02.) No holder of any
Debt Security of any series 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 Debt Securities of that series and of the continuance thereof,
(b) the holders of not less than 25% in aggregate principal amount of the
outstanding Debt Securities of that series (each such series voting as a
separate class) 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 Debt Securities of any
series, the holders of a majority in aggregate principal amount of the Debt
Securities of that series at the time outstanding may, on behalf of the holders
of all Debt Securities of that series, waive any past default or Event of
Default and its consequences for that series, except (a) a default in the
payment of the principal, premium, if any, or interest with respect to such Debt
Securities 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 the Debt Securities of that series
shall be restored to their former positions and rights under the Indenture.
(Section 6.06.)
The Trustee shall promptly after the occurrence of a default known to it
with respect to a series of Debt Securities, give to the holders of the Debt
Securities of such series notice of all uncured defaults with respect to such
series 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 the
Debt Securities of such series or in the making of any sinking fund payment with
respect to the Debt Securities of such series, 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 Debt Securities. (Section
6.07.)
MODIFICATION OF THE INDENTURE
The Company and the Trustee may enter into supplemental Indentures without
the consent of the holders of Debt Securities 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 the Debt Securities;
(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 all or any series of Debt Securities as the Board of Directors of the
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Company shall consider to be for the protection of the holders of such Debt
Securities 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 any or all series of Debt
Securities to waive such default);
(c) To cure any ambiguity or to correct or supplement any provision
contained in the Indenture, in any supplemental Indenture, or in any Debt
Securities 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;
(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 Debt Securities of any series;
(f) To comply with the provisions of the Indenture relating to
consolidations, mergers, and sales of assets;
(g) To add guarantees with respect to the Debt Securities or to secure
the Debt Securities;
(h) To make any change that does not adversely affect the rights of
any holder;
(i) To add to, change, or eliminate any of the provisions of the
Indenture with respect to one or more series of Debt Securities, so long as
any such addition, change, or elimination not otherwise permitted under the
Indenture shall (1) neither apply to any Debt Security of any series
created prior to the execution of such supplemental Indenture and entitled
to the benefit of such provision nor modify the rights of the holders of
any such Debt Security with respect to such provision or (2) become
effective only when there is no such Debt Security outstanding;
(j) To evidence and provide for the acceptance of appointment by a
successor or separate Trustee with respect to the Debt Securities of one or
more series 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; and
(k) To establish the form or terms of Debt Securities as described
under "Description of Debt Securities -- General" above.
With the consent of the holders of a majority in aggregate principal amount
of the outstanding Debt Securities of each series 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 holder of the Debt
Securities of such series; provided, however, that without the consent of the
holders of each Debt Security so affected, no such supplemental Indenture shall
(a) reduce the percentage in principal amount of Debt Securities of any series
whose holders must consent to an amendment, (b) reduce the rate of or extend the
time for payment of interest on any Debt Security, (c) reduce the principal of
or extend the stated maturity of any Debt Security, (d) reduce the premium
payable upon the redemption of any Debt Security or change the time at which any
Debt Security may or shall be redeemed, (e) make any Debt Security payable in a
currency other than that stated in the Debt Security, (f) release any security
that may have been granted with respect to the Debt Securities 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.)
12
<PAGE> 28
CONSOLIDATION, MERGER, AND SALE OF ASSETS
The Company may not consolidate with or merge with or into any person, 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), unless
the following conditions have been satisfied (Section 10.01.):
(a) Either (1) the Company shall be the continuing person in the case
of a merger or (2) the resulting, surviving, or transferee person, if other
than the Company (the "Successor Company"), shall be a corporation
organized and existing under the laws of the United States, any State, or
the District of Columbia and shall expressly assume all of the obligations
of the Company under the Debt Securities and the Indenture;
(b) Immediately after giving effect to such transaction (and treating
any indebtedness that becomes an obligation of the Successor Company or any
subsidiary of the Company as a result of such transaction as having been
incurred by the Successor Company or such subsidiary at the time of such
transaction), no Default or Event of Default would occur or be continuing;
(c) The Company shall have delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that such
consolidation, merger, or transfer complies with the Indenture.
SATISFACTION AND DISCHARGE OF THE INDENTURE; DEFEASANCE
The Indenture shall generally cease to be of any further effect with
respect to a series of Debt Securities if (a) the Company has delivered to the
Trustee for cancellation all Debt Securities of such series (with certain
limited exceptions) or (b) all Debt Securities of such series 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 Debt Securities, no default with respect to the Debt Securities 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 Debt Securities of a particular
series, all of its obligations under such Debt Securities and the Indenture with
respect to such Debt Securities) and a "covenant defeasance option" (pursuant to
which it may terminate, with respect to the Debt Securities of a particular
series, its obligations with respect to such Debt Securities under certain
specified covenants contained in the Indenture). If the Company exercises its
legal defeasance option with respect to a series of Debt Securities, payment of
such Debt Securities may not be accelerated because of an Event of Default. If
the Company exercises its covenant defeasance option with respect to a series of
Debt Securities, payment of such Debt Securities may not be accelerated because
of an Event of Default related to the specified covenants. (Section 11.02.)
The Company may exercise its legal defeasance option or its covenant
defeasance option with respect to the Debt Securities of a series 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 Debt Securities to
maturity or redemption, as the case may be, (b) the Company delivers to the
Trustee a certificate from a nationally recognized firm of independent public
accountants expressing their opinion that the payments of principal and interest
when due and without reinvestment on the deposited U.S. Government Obligations
plus any deposited
13
<PAGE> 29
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 the Debt Securities of such series 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, (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 the Debt Securities of such series 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 the Debt Securities of the
defeased series. (Section 11.04.)
THE TRUSTEE
The Company may appoint a separate Trustee for any series of Debt
Securities. As used herein in the description of a series of Debt Securities,
the term "Trustee" refers to the Trustee appointed with respect to such series
of Debt Securities. In addition, the Company has the right to replace the
Trustee under certain circumstances, including (subject to 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 Debt Securities.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities in or outside the United States
through underwriters or dealers, directly to one or more purchasers, or through
agents. The Prospectus Supplement with respect to the Debt Securities will set
forth the terms of the offering of the Debt Securities, including the name or
names of any underwriters, dealers, or agents, the purchase price of the Debt
Securities and the proceeds to the Company from such sale, any delayed delivery
arrangements, any underwriting discounts and other items constituting
underwriters' compensation, the initial public offering price, any discounts or
concessions allowed or reallowed or paid to dealers, and any securities
exchanges on which the Debt Securities may be listed.
If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The Debt
Securities may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by one or more
firms acting as underwriters. The underwriter or underwriters with respect to a
particular underwritten offering of Debt Securities will be named in the
Prospectus Supplement relating to such offering, and if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth on
the cover of such Prospectus Supplement. Unless otherwise set forth in the
Prospectus Supplement relating thereto, the obligations of the underwriters or
agents to purchase the Debt Securities will be subject to conditions precedent
and the underwriters will be obligated to purchase all the Debt Securities if
any are purchased. The initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
14
<PAGE> 30
If dealers are utilized in the sale of Debt Securities with respect to
which this Prospectus is delivered, the Company will sell such Debt Securities
to the public at varying prices to be determined by such dealers at the time of
resale. The names of the dealers and the terms of the transaction will be set
forth in the Prospectus Supplement relating thereto.
Debt Securities may be sold directly by the Company or through agents
designated by the Company from time to time at fixed prices, which may be
changed, or at varying prices determined at the time of sale. Any agent
involved in the offer or sale of the Debt Securities with respect to which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement relating
thereto. Unless otherwise indicated in the Prospectus Supplement, any such
agent will be acting on a best efforts basis for the period of its appointment.
In connection with the sale of the Debt Securities, underwriters or agents
may receive compensation from the Company or from purchasers of Debt Securities
for whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters, agents, and dealers participating in the distribution
of the Debt Securities may be deemed to be underwriters, and any discounts or
commissions received by them from the Company and any profit on the resale of
the Debt Securities by them may be deemed to be underwriting discounts or
commissions under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters, or dealers to solicit offers from certain types of
institutions to purchase Debt Securities from the Company at the public offering
price set forth in the Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
Such contracts will be subject only to those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Agents, dealers, and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments that such agents, dealers, or underwriters may be
required to make with respect thereto. Agents, dealers, and underwriters may be
customers of, engage in transactions with, or perform services for the Company
in the ordinary course of business.
The Debt Securities may or may not be listed on a national securities
exchange. No assurances can be given that there will be a market for the Debt
Securities.
LEGAL OPINIONS
Certain legal matters in connection with the Debt Securities will be passed
upon for the Company by Louis E. Stellato, Vice President, General Counsel and
Secretary of the Company, and for the underwriters or agents, if any, by
Cravath, Swaine & Moore. At December 31, 1995, Mr. Stellato beneficially owned
16,848 shares of Common Stock of the Company and held options to purchase an
additional 36,800 shares of Common Stock of which 25,799 shares were exercisable
at such date.
EXPERTS
The consolidated financial statements and schedules of the Company
appearing in the Company's Annual Report on Form 10-K for the year ended as of
December 31, 1994 have been audited by Ernst & Young LLP, independent auditors
as set forth in their report thereon included therein and incorporated therein
by reference. Such consolidated financial statements are incorporated by
reference herein in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
The consolidated financial statements and schedules of Pratt & Lambert
United, Inc. as of December 31, 1994 and 1993, and for each of the years in the
three-year period ended December 31, 1994, have been incorporated by reference
herein in reliance upon the report of Deloitte & Touche LLP, independent
certified public accountants, and upon the authority of said firm as experts in
accounting and auditing.
15
<PAGE> 31
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND
THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR BY ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
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 DATES HEREOF OR THEREOF. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE
ACCOMPANYING PROSPECTUS CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITY BY ANYONE IN ANY JURISDICTION 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.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
The Company.......................... S-2
Use of Proceeds...................... S-3
Capitalization....................... S-4
Summary Historical Financial
Information........................ S-5
Unaudited Pro Forma Combined
Condensed Financial Statements..... S-6
Description of the Securities........ S-10
Underwriting......................... S-14
Information Incorporated by
Reference.......................... S-15
Legal Matters........................ S-15
PROSPECTUS
Available Information................ 2
Information Incorporated by
Reference.......................... 2
The Company.......................... 3
Recent Developments.................. 3
Use of Proceeds...................... 3
Ratios of Earnings to Fixed
Charges............................ 4
Description of Debt Securities....... 4
Plan of Distribution................. 14
Legal Opinions....................... 15
Experts.............................. 15
</TABLE>
$400,000,000
THE SHERWIN-WILLIAMS
COMPANY
$100,000,000
% NOTES DUE 2000
$100,000,000
% NOTES DUE 2002
$200,000,000
% NOTES DUE 2007
SALOMON BROTHERS INC
CREDIT SUISSE FIRST BOSTON
MERRILL LYNCH & CO.
PROSPECTUS SUPPLEMENT
DATED , 1997
