<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 5, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
THE SHERWIN-WILLIAMS COMPANY
(Exact name of registrant as specified in its charter)
OHIO
(State or jurisdiction of
incorporation or organization)
34-0526850
(I.R.S. Employer
Identification Number)
101 PROSPECT AVENUE, N.W.
CLEVELAND, OH 44115
(216) 566-2000
(Address and telephone number of registrant's principal executive office)
------------------
L. E. STELLATO
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
THE SHERWIN-WILLIAMS COMPANY
101 PROSPECT AVENUE, N.W.
CLEVELAND, OH 44115
(216) 566-2000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------
Copies to:
TIMOTHY G. MASSAD
CRAVATH, SWAINE & MOORE
825 EIGHTH AVENUE
NEW YORK, NEW YORK 10019-7415
(212) 474-1000
------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined by
the market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration number for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
<TABLE>
<S> <C> <C> <C> <C>
CALCULATION OF REGISTRATION FEE
==============================================================================================================================
PROPOSED
MAXIMUM PROPOSED
AGGREGATE AGGREGATE OFFERING MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE(1) FEE
- ------------------------------------------------------------------------------------------------------------------------------
Debt Securities............................... $150,000,000(2) $(2) $150,000,000 $44,250(2)
==============================================================================================================================
</TABLE>
(1) United States dollars or the equivalent thereof in one or more foreign
currencies, foreign currency units or composite currencies.
(2) The aggregate offering price per unit has been omitted pursuant to
Securities Act Release No. 6964. The registration fee has been calculated in
accordance with Rule 457(o) under the Securities Act of 1933. The aggregate
amount registered reflects the offering price rather than the principal
amount of any Debt Securities issued at a discount.
------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
PROSPECTUS SUPPLEMENT
(To Prospectus Dated , 1997)
U.S. $150,000,000
THE SHERWIN-WILLIAMS COMPANY Sherwin-Williams(R) LOGO
MEDIUM-TERM NOTES, SERIES B
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
The Sherwin-Williams Company (the "Company") may from time to time offer
pursuant to this Prospectus Supplement its Medium-Term Notes, Series B (the
"Notes"), with an aggregate initial public offering price or purchase price of
up to $150,000,000, (or the equivalent thereof in one or more foreign or
composite currencies), subject to reduction as a result of the sale of other
securities under the Registration Statement of which this Prospectus Supplement
and the accompanying Prospectus form a part or under a Registration Statement to
which this Prospectus Supplement and the accompanying Prospectus relate.
Unless otherwise specified in the applicable Pricing Supplement, each Note will
mature on a Business Day nine months or more from its date of issue (the "Stated
Maturity"), which maturity date may be subject to extension at the option of the
Company. Each Note may also be subject to redemption at the option of the
Company, or to repayment at the option of the holders of the Notes (each a
"Holder"), prior to its Stated Maturity. The Notes may bear interest at a fixed
rate (a "Fixed Rate Note"), which may be zero in the case of certain Discount
Notes, or at a floating rate (a "Floating Rate Note") determined by reference to
LIBOR, the CD Rate, the Commercial Paper Rate, the Federal Funds Rate, the
Treasury Rate, the Prime Rate, the CMT Rate, the Eleventh District Cost of Funds
Rate or any other Base Rate, as selected by the purchaser and agreed to by the
Company, adjusted by the Spread or Spread Multiplier, if any, applicable to such
Note. Unless otherwise indicated, interest on each Fixed Rate Note will be
payable semiannually in arrears on each June 1 and December 1 (each an "Interest
Payment Date") and at Stated Maturity. A Note may be issued as an amortizing
note (an "Amortizing Note") on which a portion or all the principal amount is
payable prior to Stated Maturity in accordance with a schedule, by application
of a formula, or by reference to an index. A Note may be issued as an indexed
note (an "Indexed Note") on which the amount of any interest payment will be
determined by reference to the level of a specific index as defined on the
applicable Pricing Supplement. The currency in which payment of principal,
premium, if any, and interest on the Notes will be payable (the "Specified
Currency"), interest rate or interest rate formula, reset provisions, Issue
Price, Stated Maturity, Interest Payment Dates, redemption, repayment and
extension provisions and certain other terms with respect to each Note will be
established at the time of issuance and set forth in a pricing supplement to
this Prospectus Supplement (a "Pricing Supplement").
Each Note will be represented by either a Global Security registered in the name
of a nominee of The Depository Trust Company, as Depositary (a "Book-Entry
Note") or a certificate delivered to the Holder thereof or a person designated
by such Holder (a "Certificated Note"). Beneficial interests in Global
Securities representing Book-Entry Notes will be shown on, and transfers thereof
will be effected only through, records maintained by the Depositary and its
participants. Book-Entry Notes will not be issuable as Certificated Notes except
under the circumstances described herein.
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 THE PROSPECTUS, THIS PROSPECTUS SUPPLEMENT OR ANY
SUPPLEMENT HERETO. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO AGENT'S PROCEEDS TO THE
PUBLIC(1) COMMISSION(2) COMPANY(2)(3)
<S> <C> <C> <C>
Per Note...................... 100.000% .125%-.750% 99.875%-99.250%
Total(4)...................... US $150,000,000 $187,500-$1,125,000 $149,812,500-$148,875,000
</TABLE>
- --------------------------------------------------------------------------------
(1) Unless otherwise specified in the applicable Pricing Supplement, the price
to public will be 100% of the principal amount.
(2) The Company will pay to Salomon Brothers Inc and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Agents") a
commission of from .125% to .750% of the principal amount of any Note,
depending upon its Stated Maturity through 30 years, sold through the
Agents.
(3) Before deduction of expenses payable by the Company estimated at $328,750,
including reimbursement of certain expenses of the Agents.
(4) Or the equivalent thereof in one or more foreign or composite currencies.
The Notes are being offered on a continuous basis by the Company through the
Agents, which have agreed to use their reasonable efforts to solicit orders to
purchase the Notes. The Company may also sell Notes at a discount to the Agents
for their own accounts or for resale to one or more purchasers at varying prices
related to prevailing market prices at the time of resale or, if set forth in
the applicable Pricing Supplement, at a fixed public offering price, as
determined by the Agents. In addition, the Agents may offer Notes purchased by
them as principal to other dealers. Unless otherwise specified in the applicable
Pricing Supplement, any Note purchased by an Agent as principal will be
purchased at 100% of the principal amount thereof less a percentage equal to the
commission applicable to an agency sale of a Note of identical maturity. The
Notes will not be listed on any securities exchange, and there can be no
assurance that the maximum amount of Notes offered by this Prospectus Supplement
will be sold or that there will be a secondary market for the Notes. The Company
reserves the right to withdraw, cancel or modify the offer made hereby without
notice. The Company or the Agents may reject any order to purchase Notes,
whether or not solicited, in whole or in part. See "Plan of Distribution".
SALOMON SMITH BARNEY MERRILL LYNCH & CO.
The date of this Prospectus Supplement is , 1997.
<PAGE> 3
COMPANY DESCRIPTION
The Sherwin-Williams Company, which was first incorporated in 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.
PRICING SUPPLEMENT
Provisions of each transaction will be more fully described in a Pricing
Supplement to this Prospectus Supplement and the accompanying Prospectus.
Inconsistencies will be as described in the Pricing Supplement.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes supplements,
and to the extent inconsistent therewith replaces, the description of the
general terms and provisions of the Debt Securities set forth in the Prospectus,
to which description reference is hereby made.
GENERAL
The Notes are a series of Debt Securities issued under an Indenture dated
as of February 1, 1996 with The Chase Manhattan Bank (formerly known as Chemical
Bank), as Trustee. At the date of this Prospectus Supplement, the Notes offered
pursuant to this Prospectus Supplement are limited to an aggregate initial
public offering price or purchase price of up to $150,000,000 or the equivalent
thereof in one or more foreign or composite currencies, which amount is subject
to reduction as a result of the sale of other securities under the Registration
Statement of which this Prospectus Supplement and the accompanying Prospectus
form a part or under a Registration Statement to which this Prospectus
Supplement and the accompanying Prospectus relate. The aggregate amount of Notes
may be increased from time to time to such larger amount as may be authorized by
the Company. The U.S. dollar equivalent of the public offering price or purchase
price of a Note having a Specified Currency other than U.S. dollars will be
determined on the basis of the noon buying rate in New York City for cable
transfers in foreign currencies as certified for customs purposes by the Federal
Reserve Bank of New York (the "Market Exchange Rate") for such Specified
Currency on the applicable issue date. Such determination will be made by the
Company or its agent, as exchange rate agent for the Notes (the "Exchange Rate
Agent"). The Notes will constitute senior indebtedness of the Company and will
rank pari passu with all other senior unsecured indebtedness of the Company.
The Notes will consist of Registered Notes, and will be offered on a
continuous basis. Notes will be issued in fully registered form only, without
coupons. Each Note will be issued initially as either a Book-Entry Note or, if
specified in the applicable Pricing Supplement, a Certificated Note. Except as
set forth in the Prospectus under "Description of Debt Securities -- Global
Securities", Book-Entry Notes will not be issuable as Certificated Notes. See
"Book-Entry System" below.
Unless otherwise specified in the applicable Pricing Supplement, the
authorized denominations of Notes denominated in U.S. dollars will be $1,000 and
any larger amount that is an integral multiple of $1,000, and the authorized
denominations of Notes having a Specified Currency other than U.S. dollars will
be the approximate equivalents thereof in the Specified Currency.
Unless otherwise specified in the applicable Pricing Supplement, each Note
will mature on a Business Day more than nine months from its date of issue, as
selected by the purchaser and agreed to by the Company (the "Stated Maturity"),
which maturity date may be subject to extension at the option of the Company.
Each Note may also be subject to redemption at the option of the Company, or
repayment at the option of the Holder, prior to its Stated Maturity.
Notwithstanding the foregoing, each Note having a Specified Currency of Japanese
yen will have a Stated Maturity of not less than one year from its Original
Issue Date (as defined below), and will not be subject to optional redemption or
S-2
<PAGE> 4
repayment prior to such time. Each Note having a Specified Currency of Pounds
Sterling will mature in compliance with such regulations as the Bank of England
may promulgate from time to time. Each Floating Rate Note will mature on an
Interest Payment Date for such Note.
The Pricing Supplement relating to a Note will describe the following
terms: (i) the Specified Currency for such Note; (ii) whether such Note is a
Fixed Rate Note, a Floating Rate Note, an Amortizing Note and/or an Indexed
Note; (iii) the price (expressed as a percentage of the aggregate principal
amount or face amount thereof) at which such Note will be issued (the "Issue
Price"); (iv) the date on which such Note will be issued (the "Original Issue
Date"); (v) the date of the Stated Maturity; (vi) if such Note is a Fixed Rate
Note, the rate per annum at which such Note will bear interest, if any, and
whether and the manner in which such rate may be changed prior to its Stated
Maturity; (vii) if such Note is a Floating Rate Note, the Base Rate, the Initial
Interest Rate, the Interest Reset Period or the Interest Reset Dates, the
Interest Payment Dates, and, if applicable, the Index Maturity, the Maximum
Interest Rate, the Minimum Interest Rate, the Spread or Spread Multiplier (all
as defined below), and any other terms relating to the particular method of
calculating the interest rate for such Note and whether and the manner in which
such Spread or Spread Multiplier may be changed prior to Stated Maturity; (viii)
whether such Note is an Original Issue Discount Note (as defined below); (ix) if
such Note is an Amortizing Note, the terms for repayment prior to Stated
Maturity; (x) if such Note is an Indexed Note, in the case of an Indexed Rate
Note, the manner in which the amount of any interest payment will be determined
or, in the case of an Indexed Principal Note, its Face Amount and the manner in
which the principal amount payable at Stated Maturity will be determined; (xi)
whether such Note may be redeemed at the option of the Company, or repaid at the
option of the Holder, prior to Stated Maturity as described under "Optional
Redemption, Repayment and Repurchase" below and, if so, the provisions relating
to such redemption or repayment, including, in the case of an Original Issue
Discount Note or Indexed Note, the information necessary to determine the amount
due upon redemption or repayment; (xii) whether such Note is subject to an
optional extension beyond its Stated Maturity as described under "Extension of
Maturity" below; and (xiii) any other terms of such Note not inconsistent with
the provisions of the Indenture under which such Note will be issued.
"Business Day" with respect to any Note means any day, other than a
Saturday or Sunday, that is (i) not a legal holiday or a day on which banking
institutions are authorized or required by law, regulation or executive order to
be closed in (a) The City of New York or (b) if the Specified Currency for such
Note is other than U.S. dollars, the financial center of the country issuing
such Specified Currency (which, in the case of ECU, shall be Brussels, Belgium)
and (ii) if such Note is a LIBOR Note (as defined below), a London Banking Day.
"London Banking Day" with respect to any Note means any day on which dealings in
deposits in the Specified Currency of such Note are transacted in the London
interbank market.
"Original Issue Discount Note" means (i) a Note, including any such Note
whose interest rate is zero, that has a stated redemption price at Stated
Maturity that exceeds its Issue Price by at least 0.25% of its stated redemption
price at Stated Maturity, multiplied by the number of full years from the
Original Issue Date to the Stated Maturity for such Note and (ii) any other Note
designated by the Company as issued with original issue discount for United
States Federal income tax purposes.
A "basis point" or "bp" equals one one-hundredth of a percentage point.
PAYMENT OF PRINCIPAL AND INTEREST
The principal of and any premium and interest on each Note are payable by
the Company in the Specified Currency for such Note. If the Specified Currency
for a Note is other than U.S. dollars, the Company will (unless otherwise
specified in the applicable Pricing Supplement) arrange to convert all payments
in respect of such Note into U.S. dollars in the manner described in the
following paragraph. The Holder of a Note having a Specified Currency other than
U.S. dollars may (if the applicable Pricing Supplement and such Note so
indicate) elect to receive all payments in respect of such Note in the Specified
Currency by delivery of a written notice to the Trustee for such Note not later
than fifteen calendar days prior to the applicable payment date, except under
the circumstances described under
S-3
<PAGE> 5
"Currency Risks -- Payment Currency" below. Such election will remain in effect
until revoked by written notice to such Trustee received not later than fifteen
calendar days prior to the applicable payment date.
In the case of a Note having a Specified Currency other than U.S. dollars,
the amount of any U.S. dollar payment in respect of such Note will be determined
by the Exchange Rate Agent based on the highest firm bid quotation expressed in
U.S. dollars received by the Exchange Rate Agent at approximately 11:00 a.m.,
New York City time, on the second Business Day preceding the applicable payment
date (or, if no such rate is quoted on such date, the last date on which such
rate was quoted), from three (or, if three are not available, then two)
recognized foreign exchange dealers in The City of New York (one of which may be
an Agent and another of which may be the Exchange Rate Agent) selected by the
Exchange Rate Agent, for the purchase by the quoting dealer, for settlement on
such payment date, of the aggregate amount of such Specified Currency payable on
such payment date in respect of all Notes denominated in such Specified
Currency. All currency exchange costs will be borne by the Holders of such Notes
by deductions from such payments. If no such bid quotations are available, such
payments will be made in such Specified Currency, unless such Specified Currency
is unavailable due to the imposition of exchange controls or to other
circumstances beyond the Company's control, in which case such payments will be
made as described under "Currency Risks -- Payment Currency" below.
Unless otherwise specified in the applicable Pricing Supplement, U.S.
dollar payments of interest on Notes (other than interest payable at Stated
Maturity, on redemption or repayment) will be made, except as provided below, by
check mailed to the Registered Holders of such Notes as of the preceding Regular
Record Date (as defined below) (which, in the case of Global Securities
representing Book-Entry Notes, will be a nominee of the Depositary); provided,
however, that, in the case of a Note issued between a Regular Record Date and
the related Interest Payment Date, unless otherwise specified in the related
Pricing Supplement, interest for the period beginning on the Original Issue Date
for such Note and ending on such Interest Payment Date shall be paid on the next
succeeding Interest Payment Date to the Registered Holder of such Note on the
related Regular Record Date. A Holder of $10,000,000 (or the equivalent thereof
in a Specified Currency other than U.S. dollars) or more in aggregate principal
amount of Notes of like tenor and terms shall be entitled to receive such U.S.
dollar interest payments by wire transfer of immediately available funds, but
only if appropriate wire transfer instructions have been received in writing by
the Paying Agent for such Notes not later than fifteen calendar days prior to
the applicable Interest Payment Date. Simultaneously with the election by any
Holder to receive payments in a Specified Currency other than U.S. dollars (as
provided above), such Holder shall provide appropriate wire transfer
instructions to the Paying Agent for such Notes. Unless otherwise specified in
the applicable Pricing Supplement, principal and any premium and interest
payable at the Stated Maturity, on redemption or repayment of a Note will be
paid in immediately available funds upon surrender of such Note at the corporate
trust office or agency of the Paying Agent for such Note in The City of New
York, such interest being paid to the person to whom principal is payable.
Unless otherwise specified in the applicable Pricing Supplement, if the
principal of any Discount Note is declared to be due and payable immediately as
described under "Description of Debt Securities -- Events of Default" in the
Prospectus, the amount of principal due and payable with respect to such Note
shall be limited to the aggregate principal amount (or face amount, in the case
of an Indexed Principal Note) of such Note multiplied by the sum of its Issue
Price (expressed as a percentage of the aggregate principal amount) plus the
original issue discount amortized from the date of issue to the date of
declaration, which amortization shall be calculated using the "interest method"
(computed in accordance with generally accepted accounting principles in effect
on the date of declaration).
The "Regular Record Date" with respect to any Interest Payment Date for a
Floating Rate Note or for an Indexed Rate Note shall be the date (whether or not
a Business Day) fifteen calendar days immediately preceding such Interest
Payment Date, and for a Fixed Rate Note (unless otherwise specified in the
applicable Pricing Supplement) shall be the May 15 or November 15 (whether or
not a Business Day) immediately preceding such Interest Payment Date.
S-4
<PAGE> 6
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Original Issue Date, or
from the last Interest Payment Date to which interest has been paid or duly
provided for, at the rate per annum stated in the applicable Pricing Supplement
until the principal amount thereof is paid or made available for payment, except
as described below under "Subsequent Interest Periods" and "Extension of
Maturity", and except that if so specified in the applicable Pricing Supplement,
the rate of interest payable on certain Fixed Rate Notes may be subject to
adjustment from time to time as described in such Pricing Supplement. Unless
otherwise set forth in the applicable Pricing Supplement, interest on each Fixed
Rate Note will be payable semiannually in arrears on each June 1 and December 1
(each such day being an "Interest Payment Date") and at Stated Maturity. If an
Interest Payment Date with respect to any Fixed Rate Note would otherwise be a
day that is not a Business Day, such Interest Payment Date shall not be
postponed; provided, however, that any payment required to be made in respect of
such Note on a date (including the day of Stated Maturity) that is not a
Business Day for such Note need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if made on such
date, and no additional interest shall accrue as a result of such delayed
payment. Each payment of interest in respect of an Interest Payment Date shall
include interest accrued through the day before such Interest Payment Date.
Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of
twelve 30-day months.
FLOATING RATE NOTES
Unless otherwise specified in the applicable Pricing Supplement, each
Floating Rate Note will bear interest from its Original Issue Date to the first
Interest Reset Date (as defined below) (such period, the "Initial Interest
Period") for such Note at the Initial Interest Rate set forth on the face
thereof and in the applicable Pricing Supplement. The interest rate on such Note
for each Interest Reset Period (as defined below) (and for the Initial Interest
Period if so specified in the applicable Pricing Supplement) will be determined
by reference to an interest rate basis (the"Base Rate"), plus or minus the
Spread, if any, or multiplied by the Spread Multiplier, if any. The "Spread" is
the number of basis points that may be specified in the applicable Pricing
Supplement as being applicable to such Note, and the "Spread Multiplier" is the
percentage that may be specified in the applicable Pricing Supplement as being
applicable to such Note, except in each case as described below under
"Subsequent Interest Periods" and "Extension of Maturity", and except that if so
specified in the applicable Pricing Supplement, the Spread or Spread Multiplier
on certain Floating Rate Notes may be subject to adjustment from time to time as
described in such Pricing Supplement. The applicable Pricing Supplement will
designate one of the following Base Rates as applicable to a Floating Rate Note:
(i) LIBOR (a "LIBOR Note"), (ii) the Commercial Paper Rate (a "Commercial Paper
Rate Note"), (iii) the Treasury Rate (a "Treasury Rate Note"), (iv) the Prime
Rate (a "Prime Rate Note"), (v) CMT Rate (a "CMT Note"), (vi) the Federal Funds
Rate (a "Federal Funds Rate Note"), (vii) the CD Rate (a "CD Rate Note"), (viii)
the Eleventh District Cost of Funds Rate (an "Eleventh District Cost of Funds
Rate Note") or (ix) such other Base Rate as is set forth in such Pricing
Supplement and in such Note. The "Index Maturity" for any Floating Rate Note is
the period of maturity of the instrument or obligation from which the Base Rate
is calculated. "H.15(519)" means the publication entitled "Statistical Release
H.15(519), 'Selected Interest Rates' ", or any successor publication, published
by the Board of Governors of the Federal Reserve System. "Composite Quotations"
means the daily statistical release entitled "Composite 3:30 p.m. Quotations for
U.S. Government Securities" published by the Federal Reserve Bank of New York.
As specified in the applicable Pricing Supplement, a Floating Rate Note may
also have either or both of the following (in each case expressed as a rate per
annum on a simple interest basis): (i) a maximum limitation, or ceiling, on the
rate at which interest may accrue during any interest period ("Maximum Interest
Rate") and (ii) a minimum limitation, or floor, on the rate at which interest
may accrue during any interest period ("Minimum Interest Rate"). In addition to
any Maximum Interest Rate that may be applicable to any Floating Rate Note, the
interest rate on a Floating Rate Note will in no event be higher than the
maximum rate permitted by applicable law, as the same may be modified by United
States law of
S-5
<PAGE> 7
general application. The Notes will be governed by the law of the State of New
York and, under such law as of the date of this Prospectus Supplement, the
maximum rate of interest under provisions of the penal law, with certain
exceptions, is 25% per annum on a simple interest basis. Such maximum rate of
interest only applies to obligations that are less than $2,500,000.
Unless otherwise specified in the Pricing Supplement, the Trustee will be
the "Calculation Agent". Upon request of the holder of any Floating Rate Note,
the Calculation Agent will provide the interest rate then in effect and, if
determined, the interest rate which will become effective as a result of a
determination for the next Interest Reset Date with respect to such Floating
Rate Note. Unless otherwise specified in the applicable Pricing Supplement, the
"Calculation Date", if applicable, pertaining to any Interest Determination Date
will be the earlier of (i) the tenth calendar day after such Interest
Determination Date, or, if such day is not a Business Day, the next succeeding
Business Day or (ii) the Business Day immediately preceding the applicable
Interest Payment Date, redemption date, repayment date or Stated Maturity, as
the case may be.
The interest rate on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually (such period being the "Interest
Reset Period" for such Note, and the first day of each Interest Reset Period
being an "Interest Reset Date"), as specified in the applicable Pricing
Supplement. Unless otherwise specified in the applicable Pricing Supplement, the
Interest Reset Dates will be, in the case of Floating Rate Notes that reset
daily, each Business Day; in the case of Floating Rate Notes (other than
Treasury Rate Notes) that reset weekly, Wednesday of each week; in the case of
Treasury Rate Notes that reset weekly, Tuesday of each week (except as provided
below under "Treasury Rate Notes"); in the case of Floating Rate Notes that
reset monthly, the third Wednesday of each month; in the case of Floating Rate
Notes that reset quarterly, the third Wednesday of March, June, September and
December of each year; in the case of Floating Rate Notes that reset
semiannually, the third Wednesday of each of two months of each year specified
in the applicable Pricing Supplement; and, in the case of Floating Rate Notes
that reset annually, the third Wednesday of one month of each year specified in
the applicable Pricing Supplement. If an Interest Reset Date for any Floating
Rate Note would otherwise be a day that is not a Business Day, such Interest
Reset Date shall be postponed to the next succeeding Business Day, except that,
in the case of a LIBOR Note, if such Business Day is in the next succeeding
calendar month, such Interest Reset Date shall be the immediately preceding
Business Day.
Unless otherwise specified in the applicable Pricing Supplement, the rate
of interest that goes into effect on any Interest Reset Date shall be determined
on a date (the "Interest Determination Date") preceding such Interest Reset
Date, as further described below. Such Interest Determination Date may be
referred to below as a "CD Rate Determination Date" in the case of a CD Rate
Note, a "Commercial Paper Rate Determination Date" in the case of a Commercial
Paper Rate Note, a "Federal Funds Rate Determination Date" in the case of a
Federal Funds Rate Note, a "LIBOR Determination Date" in the case of a LIBOR
Rate Note, a "Treasury Rate Determination Date" in the case of a Treasury Rate
Note, a "Prime Rate Determination Date" in the case of a Prime Rate Note, a "CMT
Rate Determination Date" in the case of a Constant Maturity Treasury Rate Note
or an "Eleventh District Cost of Funds Rate Determination Date" in the case of
an Eleventh District Cost of Funds Rate Note.
Unless otherwise specified in the applicable Pricing Supplement, interest
payable in respect of Floating Rate Notes shall be the accrued interest from and
including the Original Issue Date or the last date to which interest has been
paid or duly provided for, as the case may be, to but excluding the applicable
Interest Payment Date.
With respect to a Floating Rate Note, accrued interest shall be calculated
by multiplying the principal amount of such Note (or, in the case of a Floating
Rate Note that is an Indexed Principal Note, its Face Amount) by an accrued
interest factor. Such accrued interest factor will be computed by adding the
interest factors calculated for each day in the period for which accrued
interest is being calculated. Unless otherwise specified in the applicable
Pricing Supplement the interest factor (expressed as a decimal calculated to
seven decimal places without rounding) for each such day is computed by dividing
the interest rate in effect on such day by 360, in the case of LIBOR Notes,
Prime Rate Notes, Commercial
S-6
<PAGE> 8
Paper Rate Notes, Federal Funds Rate Notes, Eleventh District Cost of Funds Rate
Notes, and CD Rate Notes or by the actual number of days in the year, in the
case of CMT Rate Notes or Treasury Rate Notes. For purposes of making the
foregoing calculation, the interest rate in effect on any Interest Reset Date
will be the applicable rate as reset on such date.
Unless otherwise specified in the applicable Pricing Supplement, all
percentages resulting from any calculation of the rate of interest on a Floating
Rate Note will be rounded, if necessary, to the nearest 1/100,000 of 1%
(.0000001), with five one-millionths of a percentage point rounded upward, and
all currency amounts used in or resulting from such calculation on Floating Rate
Notes will be rounded to the nearest one-hundredth of a unit (with .005 of a
unit being rounded upward).
Unless otherwise indicated in the applicable Pricing Supplement and except
as provided below, interest will be payable, in the case of Floating Rate Notes
that reset daily, weekly or monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December of each year, as
specified in the applicable Pricing Supplement; in the case of Floating Rate
Notes that reset quarterly, on the third Wednesday of March, June, September,
and December of each year; in the case of Floating Rate Notes that reset
semiannually, on the third Wednesday of each of two months of each year
specified in the applicable Pricing Supplement; and, in the case of Floating
Rate Notes that reset annually, on the third Wednesday of one month of each year
specified in the applicable Pricing Supplement (each such day being an "Interest
Payment Date"). If an Interest Payment Date with respect to any Floating Rate
Note would otherwise be a day that is not a Business Day, such Interest Payment
Date shall be postponed to the next succeeding Business Day, except that, in the
case of a LIBOR Note, if such Business Day is in the next succeeding calendar
month, such Interest Payment Date shall be the immediately preceding Business
Day.
CD RATE NOTES
Each CD Rate Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the CD Rate and the Spread or Spread
Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "CD
Rate" for each Interest Reset Period shall be the rate as of the second Business
Day prior to the Interest Reset Date for such Interest Reset Period (a "CD Rate
Determination Date") for negotiable certificates of deposit having the Index
Maturity designated in the applicable Pricing Supplement as published in
H.15(519) under the heading "CDs (Secondary Market)". In the event that such
rate is not published prior to 3:00 p.m., New York City time, on the Calculation
Date pertaining to such CD Rate Determination Date, then the "CD Rate" for such
Interest Reset Period will be the rate on such CD Rate Determination Date for
negotiable certificates of deposit of the Index Maturity designated in the
applicable Pricing Supplement as published in Composite Quotations under the
heading "Certificates of Deposit". If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not yet published in either H.15(519) or Composite
Quotations, then the "CD Rate" for such Interest Reset Period will be calculated
by the Calculation Agent for such CD Rate Note and will be the arithmetic mean
of the secondary market offered rates as of 10:00 a.m., New York City time, on
such CD Rate Determination Date of three leading nonbank dealers in negotiable
U.S. dollar certificates of deposit in The City of New York selected by the
Calculation Agent for such CD Rate Note for negotiable certificates of deposit
of major United States money center banks of the highest credit standing (in the
market for negotiable certificates of deposit) with a remaining maturity closest
to the Index Maturity designated in the Pricing Supplement in a denomination of
$5,000,000; provided, however, that if the dealers selected as aforesaid by such
Calculation Agent are not quoting offered rates as mentioned in this sentence,
the "CD Rate" for such Interest Reset Period will be the same as the CD Rate for
the immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the Initial Interest Rate).
S-7
<PAGE> 9
COMMERCIAL PAPER RATE NOTES
Each Commercial Paper Rate Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the Commercial Paper
Rate and the Spread or Spread Multiplier, if any, specified in such Note and in
the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Commercial Paper Rate" for each Interest Reset Period will be determined by the
Calculation Agent for such Commercial Paper Rate Note as of the second Business
Day prior to the Interest Reset Date for such Interest Reset Period (a
"Commercial Paper Rate Determination Date") and shall be the Money Market Yield
(as defined below) on such Commercial Paper Rate Determination Date of the rate
for commercial paper having the Index Maturity specified in the applicable
Pricing Supplement, as such rate shall be published in H.15(519) under the
heading "Commercial Paper Non-Financial". In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Commercial Paper Rate Determination Date, then the
"Commercial Paper Rate" for such Interest Reset Period shall be the Money Market
Yield on such Commercial Paper Rate Determination Date of the rate for
commercial paper of the specified Index Maturity as published in Composite
Quotations under the heading "Commercial Paper". If by 3:00 p.m., New York City
time, on such Calculation Date such rate is not yet published in either
H.15(519) or Composite Quotations, then the "Commercial Paper Rate" for such
Interest Reset Period shall be the Money Market Yield of the arithmetic mean of
the offered rates, as of 11:00 a.m., New York City time, on such Commercial
Paper Rate Determination Date of three leading dealers of commercial paper in
The City of New York selected by the Calculation Agent for such Commercial Paper
Rate Note for commercial paper of the specified Index Maturity placed for an
industrial issuer whose bonds are rated "AA" or the equivalent by a nationally
recognized rating agency; provided, however, that if the dealers selected as
aforesaid by such Calculation Agent are not quoting offered rates as mentioned
in this sentence, the "Commercial Paper Rate" for such Interest Reset Period
will be the same as the Commercial Paper Rate for the immediately preceding
Interest Reset Period (or, if there was no such Interest Reset Period, the
Initial Interest Rate).
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
<TABLE>
<S> <C>
Money Market Yield = D X 360 X 100
-------------
360 - (D X M)
</TABLE>
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
FEDERAL FUNDS RATE NOTES
Each Federal Funds Rate Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the Federal Funds Rate
and the Spread or Spread Multiplier, if any, specified in such Note and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Federal Funds Rate" for each Interest Reset Period shall be the effective rate
on the Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate
Determination Date") for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)". In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Federal Funds Rate Determination Date, the "Federal Funds
Rate" for such Interest Reset Period shall be the rate on such Federal Funds
Rate Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate". If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not yet published in either H.15(519) or Composite
Quotations, then the "Federal Funds Rate" for such Interest Reset Period shall
be the rate on such Federal Funds Rate Determination Date made publicly
available by the Federal Reserve Bank of New York which is equivalent to the
rate which appears in H.15(519) under the heading "Federal Funds (Effective)";
provided, however, that if such rate is not made publicly available
S-8
<PAGE> 10
by the Federal Reserve Bank of New York by 3:00 p.m., New York City time, on
such Calculation Date, the "Federal Funds Rate" for such Interest Reset Period
will be the same as the Federal Funds Rate in effect for the immediately
preceding Interest Reset Period (or, if there was no such Interest Reset Period,
the Initial Interest Rate).
LIBOR NOTES
Each LIBOR Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to LIBOR and the Spread or Spread
Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
"LIBOR" for each Interest Reset Period will be determined by the
Calculation Agent for such LIBOR Notes as follows:
(i) On the second London Banking Day prior to the Interest Reset Date for
such Interest Reset Period (a "LIBOR Determination Date"), the Calculation Agent
for such LIBOR Note will determine (a) in the case of LIBOR Dow Jones Market (as
defined below), the offered rate, and (b) in the case of LIBOR Reuters (as
defined below), the arithmetic mean of the offered rates, for deposits in the
Specified Currency for the period of the Index Maturity specified in the
applicable Pricing Supplement, commencing on such Interest Reset Date, which
appear on the Designated LIBOR Page at approximately 11:00 a.m., London time, on
such LIBOR Determination Date. "Designated LIBOR Page" means "LIBOR Dow Jones
Market", which shall be the display designated as page "3750" on the Dow Jones
Market service (or such other page as may replace page "3750" on such service or
such other service as may be nominated by the British Bankers' Association for
the purpose of displaying the London interbank offered rates of major banks),
unless "LIBOR Reuters" is designated in the applicable Pricing Supplement, in
which case "Designated LIBOR Page" means the display designated as page "LIBO"
on the Reuters Monitor Money Rates Service (or such other page as may replace
the LIBO page on such service or such other service as may be nominated by the
British Bankers' Association for the purpose of displaying London interbank
offered rates of major banks). In the case of LIBOR Reuters, if at least two
such offered rates appear on the Designated LIBOR Page, "LIBOR" for such
Interest Reset Period will be the arithmetic mean of such offered rates as
determined by the Calculation Agent for such LIBOR Note.
(ii) In the case of LIBOR Dow Jones Market, if no rate appears, or in the
case of LIBOR Reuters, if fewer than two offered rates appear, on the Designated
LIBOR Page on such LIBOR Determination Date, the Calculation Agent for such
LIBOR Note will request the principal London offices of each of four major banks
in the London interbank market selected by such Calculation Agent to provide
such Calculation Agent with its offered quotations for deposits in U.S. dollars
for the period of the specified Index Maturity, commencing on such Interest
Reset Date, to prime banks in the London interbank market at approximately 11:00
a.m., London time, on such LIBOR Determination Date and in a principal amount
equal to an amount of not less than $1,000,000 that is representative of a
single transaction in such market at such time. If at least two such quotations
are provided, "LIBOR" for such Interest Reset Period will be the arithmetic mean
of such quotations. If fewer than two such quotations are provided, "LIBOR" for
such Interest Reset Period will be the arithmetic mean of rates quoted by three
major banks in The City of New York selected by the Calculation Agent for such
LIBOR Note at approximately 11:00 a.m., New York City time, on such LIBOR
Determination Date for loans in U.S. dollars to leading European banks, for the
period of the specified Index Maturity, commencing on such Interest Reset Date,
and in a principal amount equal to an amount of not less than $1,000,000 that is
representative of a single transaction in such market at such time; provided,
however, that if fewer than three banks selected as aforesaid by such
Calculation Agent are quoting rates as mentioned in this sentence, "LIBOR" for
such Interest Reset Period will be the same as LIBOR for the immediately
preceding Interest Reset Period (or, if there was no such Interest Reset Period,
the Initial Interest Rate).
S-9
<PAGE> 11
TREASURY RATE NOTES
Each Treasury Rate Note will bear interest for each Interest Reset Period
at the interest rate calculated with reference to the Treasury Rate and the
Spread or Spread Multiplier, if any, specified in such Note and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Treasury Rate" for each Interest Reset Period will be the rate for the auction
held on the Treasury Rate Determination Date (as defined below) for such
Interest Reset Period of direct obligations of the United States ("Treasury
securities") having the Index Maturity specified in the applicable Pricing
Supplement, as such rate shall be published in H.15(519) under the heading "U.S.
Government Securities -- Treasury bills -- auction average (investment)" or, in
the event that such rate is not published prior to 3:00 p.m., New York City
time, on the Calculation Date pertaining to such Treasury Rate Determination
Date, the auction average rate (expressed as a bond equivalent on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis) on such
Treasury Rate Determination Date as otherwise announced by the United States
Department of the Treasury. In the event the results of the auction of Treasury
securities having the specified Index Maturity are not published or reported as
provided above by 3:00 p.m., New York City time, on such Calculation Date, or if
no such auction is held on such Treasury Rate Determination Date, then the
"Treasury Rate" for such Interest Reset Period shall be calculated by the
Calculation Agent for such Treasury Rate Note and shall be a yield to maturity
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 p.m., New York City time,
on such Treasury Rate Determination Date, of three leading primary United States
government securities dealers selected by such Calculation Agent for the issue
of Treasury securities with a remaining maturity closest to the specified Index
Maturity; provided, however, that if the dealers selected as aforesaid by such
Calculation Agent are not quoting bid rates as mentioned in this sentence, then
the "Treasury Rate" for such Interest Reset Period will be the same as the
Treasury Rate for the immediately preceding Interest Reset Period (or, if there
was no such Interest Reset Period, the Initial Interest Rate).
The "Treasury Rate Determination Date" for each Interest Reset Period will
be the day of the week in which the Interest Reset Date for such Interest Reset
Period falls on which Treasury securities would normally be auctioned. Treasury
securities are normally sold at auction on Monday of each week, unless that day
is a legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday. If, as
the result of a legal holiday, an auction is so held on the preceding Friday,
such Friday will be the Treasury Rate Determination Date pertaining to the
Interest Reset Period commencing in the next succeeding week. If an auction date
shall fall on any day that would otherwise be an Interest Reset Date for a
Treasury Rate Note, then such Interest Reset Date shall instead be the Business
Day immediately following such auction date.
PRIME RATE NOTES
Each Prime Rate Note will bear interest at the interest rate calculated
with reference to the Prime Rate and the Spread or Spread multiplier, if any
specified in such Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "Prime
Rate" for each Interest Reset Period will be determined by the Calculation Agent
for such Prime Rate Note as of the second Business Day prior to the Interest
Reset Date for such Interest Reset Period (a "Prime Rate Determination Date")
and shall be the rate on such date as published in H.15(519) under the heading
"Bank Prime Loan." In the event that such rate is not published by 9:00 a.m.,
New York City time, on the Calculation Date pertaining to such Prime Rate
Determination Date, then the Prime Rate will be determined by the Calculation
Agent and will be the arithmetic mean of the rates of interest publicly
announced by each bank that appears on the Reuters Screen USPRIME1 Page (as
defined below) as such bank's prime rate or base lending rate as in effect for
such Prime Rate Determination Date. "Reuters Screen USPRIME1" means the display
designated as page "USPRIME1" on the Reuters Monitor Money
S-10
<PAGE> 12
Rates Service (or such other page as may replace the USPRIME1 page on that
service or such other service as may be nominated by the British Bankers'
Association for the purpose of displaying prime rates or base lending rates of
major United States banks). If fewer than four such rates but more than one such
rate appear on the Reuters Screen USPRIME1 Page for such Prime Rate
Determination Date, the Prime Rate shall be determined by the Calculation Agent
and will be the arithmetic mean of the prime rates quoted on the basis of actual
number of days in the year divided by 360 as of the close of business on such
Prime Rate Determination Date by at least two major money center banks in New
York City selected by the Calculation Agent (after consulting with the Company).
If fewer than two such rates appear on the Reuters Screen USPRIME1 Page, the
Prime Rate will be determined by the Calculation Agent and will be the
arithmetic mean of the prime rates furnished in New York City by three
substitute banks or trust companies organized and doing business under the laws
of the United States, or any State thereof, in each case having total equity
capital of at least U.S. $500,000,000 and being subject to supervision or
examination by Federal or State authority, selected by the Calculation Agent
(after consulting with the Company) to provide such rate or rates; provided,
however, that if the banks selected as aforesaid are not quoting as mentioned in
this sentence, the Prime Rate will remain the Prime Rate in effect on such Prime
Rate Determination Date (or, if there was no preceding Interest Reset Period,
the Initial Interest Rate).
CMT RATE NOTES
Each CMT Rate Note will bear interest at the rate (calculated with
reference to the CMT Rate and the Spread and/or Spread Multiplier, if any)
specified in such CMT Rate Note and in any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "CMT
Rate" for each Interest Reset Period will be determined by the Calculation Agent
for such CMT Rate Note as of the second Business Day prior to the Interest Reset
Date for such Interest Reset Period (a "CMT Rate Interest Determination Date")
and shall be the rate displayed on the Designated CMT Dow Jones Market Page
under the caption "...Treasury Constant Maturities...Federal Reserve Board
release H.15... Mondays approximately 3:45 P.M.," under the column for the
Designated CMT Maturity Index (as defined below) for (i) if the Designated Dow
Jones Market Page is 7055, the rate on such CMT Rate Interest Determination Date
and (ii) if the Designated CMT Dow Jones Market Page is 7052, the week, or the
month, as applicable, ended immediately preceding the week in which the related
CMT Rate Interest Determination Date occurs. If such rate is no longer displayed
on the relevant page, or if not displayed by 3:00 P.M., New York City time, on
the related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in H.15(519). If such rate is no
longer published, or if not published by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with
respect to the related Interest Reset Date as may then be published by either
the Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Dow Jones Market
Page and published in the relevant H.15(519). If such information is not
provided by 3:00 P.M., New York City time, on the related Calculation Date, then
the CMT Rate for such CMT Rate Interest Determination Date will be calculated by
the Calculation Agent and will be a yield to maturity, based on the arithmetic
mean of the secondary market closing side offer prices as of approximately 3:30
P.M., New York City time, on the CMT Rate Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer") in the City of New
York selected by the Calculation Agent (from five such Reference Dealers
selected by the Calculation Agent and eliminating the highest quotation (or, in
the event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest)), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Notes") with
an original maturity of approximately the Designated CMT Maturity Index and a
S-11
<PAGE> 13
remaining term to maturity of not less than such Designated CMT Maturity Index
minus one year. If the Calculation Agent cannot obtain three such Treasury Note
quotations, the CMT Rate for such CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to maturity based on the
arithmetic mean of the secondary market offer side prices as of approximately
3:30 P.M., New York City time, on the CMT Rate Interest Determination Date of
three Reference Dealers in the City of New York (from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest quotation (or,
in the event of equality, one of the lowest)), for such Treasury Notes with an
original maturity of the number of years that is the next highest to the
Designated CMT Maturity Index and a remaining term to maturity closest to the
Designated CMT Maturity Index in an amount of at least U.S. $100 million. If
three or four (and not five) of such Reference Dealers are quoting as described
above, then the CMT Rate will be based on the arithmetic mean of the offer
prices obtained and neither the highest nor the lowest of such quotes will be
eliminated; provided, however, that if fewer than three Reference Dealers
selected by the Calculation Agent are quoting as described herein, the CMT Rate
will be the CMT Rate in effect on such CMT Rate Interest Determination Date (or,
if there is no preceding Interest Reset Period, the Initial Interest Rate). If
two Treasury Notes with an original maturity as described in the third preceding
sentence have remaining terms to maturity equally close to the Designated CMT
Maturity Index, the quotes for the CMT Rate Note with the shorter remaining term
to maturity will be used.
"Designated CMT Dow Jones Market Page" means the display on the Dow Jones
Market service designated in the applicable Pricing Supplement for the purpose
of displaying Treasury Constant Maturities as reported in H.15(519) (or any
other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)). If no such
page is specified in the applicable Pricing Supplement, the Designated CMT Dow
Jones Market Page shall be 7052 for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified in the applicable Pricing Supplement with respect to which the CMT
Rate will be calculated. If no such maturity is specified in the applicable
Pricing Supplement, the Designated CMT Maturity Index shall be 2 years.
ELEVENTH DISTRICT COST OF FUNDS RATE
Each Eleventh District Cost of Funds Rate Note will bear interest at
interest rates calculated with reference to the Eleventh District Cost of Funds
Rate and the Spread or Spread Multiplier, if any, specified in such Note and in
the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Eleventh
District Cost of Funds Rate" for each Interest Reset Period shall be determined
by the Calculation Agent on the "Eleventh District Cost of Funds Rate
Determination Date" (as defined below) as the rate equal to the monthly weighted
average cost of funds for the calendar month immediately preceding the month in
which such Eleventh District Cost of Funds Rate Determination Date falls, as set
forth under the caption "11th district" on Dow Jones Market Page 7058 (as
defined below) as of 11:00 A. M., San Francisco time, on such Eleventh District
Cost of Funds Rate Determination Date. If such rate does not appear on Dow Jones
Market Page 7058 on such Eleventh District Cost of Funds Rate Determination
Date, then the Eleventh District Cost of Funds Rate on such Eleventh District
Cost of Funds Rate Determination Date will be the monthly weighted average cost
of funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced (the "Index") by the FHLB of San
Francisco as such cost of funds for the calendar month immediately preceding the
date of such announcement. If the FHLB of San Francisco fails to announce such
rate for the calendar month immediately preceding such Eleventh District Cost of
Funds Rate Determination Date, then the Eleventh District Cost of Funds Rate
determined as of such Eleventh District Cost of Funds Rate Determination Date
will be the Eleventh District Cost of Funds Rate in effect on such Eleventh
District Cost of Funds Rate Determination Date (or, if there is no preceding
Interest Reset Period, the Initial Interest Rate).
S-12
<PAGE> 14
The "Eleventh District Cost of Funds Rate Determination Date" will be the
last working day of the month on which the Federal Home Loan Bank of San
Francisco (the "FHLB of San Francisco") publishes the Index (as defined above)
immediately preceding the Interest Reset Date. "Dow Jones Market Page 7058"
means the display designated as page "7058" on the Dow Jones Market service (or
such other page as may replace the 7058 page on that service or such other
service as may be nominated by the British Bankers' Association for the purpose
of displaying the monthly weighted average cost of funds paid by member
institutions of the Eleventh Federal Home Loan Bank District).
SUBSEQUENT INTEREST PERIODS
The Pricing Supplement relating to each Note will indicate whether the
Company has the option to reset the interest rate (in the case of a Fixed Rate
Note) with respect to such Note or the Spread or Spread Multiplier (in the case
of a Floating Rate Note) with respect to such Note and, if so, the date or dates
on which such interest rate or such Spread or Spread Multiplier, as the case may
be, may be reset (each an "Optional Reset Date").
The Company shall notify the Trustee for a Note whether or not it intends
to exercise such option with respect to such Note at least 50 but not more than
60 calendar days prior to an Optional Reset Date for such Note. Not later than
40 calendar days prior to such Optional Reset Date, the Trustee for such Note
will mail to the Holder of such Note a notice (the "Reset Notice"), first class,
postage prepaid, indicating whether the Company has elected to reset the
interest rate (in the case of a Fixed Rate Note) or the Spread or Spread
Multiplier (in the case of a Floating Rate Note) and if so, (i) such new
interest rate or such new Spread or Spread Multiplier, as the case may be; and
(ii) the provisions, if any, for redemption during the period from such Optional
Reset Date to the next Optional Reset Date or, if there is no such next Optional
Reset Date, to the Stated Maturity of such Note (each such period a "Subsequent
Interest Period"), including the date or dates on which or the period or periods
during which and the price or prices at which such redemption may occur during
such Subsequent Interest Period.
Notwithstanding the foregoing, not later than 20 calendar days prior to an
Optional Reset Date for a Note, the Company may, at its option, revoke the
interest rate (in the case of a Fixed Rate Note) or the Spread or Spread
Multiplier (in the case of a Floating Rate Note) provided for in the Reset
Notice with respect to such Optional Reset Date and establish a higher interest
rate (in the case of a Fixed Rate Note) or a higher Spread or Spread Multiplier
(in the case of a Floating Rate Note) for the Subsequent Interest Period
commencing on such Optional Reset Date by causing the Trustee for such Note to
mail notice of such higher interest rate or higher Spread or Spread Multiplier,
as the case may be, first class, postage prepaid, to the Holder of such Note.
Such notice shall be irrevocable. All Notes with respect to which the interest
rate or Spread or Spread Multiplier is reset on an Optional Reset Date will bear
such higher interest rate (in the case of Fixed Rate Notes) or higher Spread or
Spread Multiplier (in the case of Floating Rate Notes), whether or not tendered
for repayment.
The Holder of a Note will have the option to elect repayment of such Note
by the Company on each Optional Reset Date at a price equal to the principal
amount thereof, plus interest accrued to such Optional Reset Date. In order for
a Note to be repaid on an Optional Reset Date, the Holder thereof must follow
the procedures set forth below under "Optional Redemption, Repayment and
Repurchase" for optional repayment, except that the period for delivery of such
Note or notification to the Trustee for such Note shall be at least 25 but not
more than 35 calendar days prior to such Optional Reset Date, and except that a
Holder who has tendered a Note for repayment pursuant to a Reset Notice may, by
written notice to the Trustee for such Note, revoke any such tender for
repayment until the close of business on the tenth day prior to such Optional
Reset Date.
AMORTIZING NOTES
The Company may from time to time offer Notes ("Amortizing Notes") on which
a portion or all the principal amount is payable prior to Stated Maturity in
accordance with a schedule, by application of a formula, or by reference to an
Index (as defined below). Further information concerning additional terms
S-13
<PAGE> 15
and conditions of any Amortizing Notes, including terms for repayment thereof,
will be set forth in the applicable Pricing Supplement.
INDEXED NOTES
The Company may from time to time offer Notes ("Indexed Notes") on which
certain or all interest payments (in the case of an "Indexed Rate Note"), and/or
the principal amount payable at Stated Maturity or earlier redemption or
retirement (in the case of an "Indexed Principal Note"), is determined by
reference to the principal amount of such Notes (or, in the case of an Indexed
Principal Note, to the amount designated in the applicable Pricing Supplement as
the "Face Amount" of such Indexed Note) and by reference to prices, changes in
prices, or differences between prices, of securities, currencies, intangibles,
goods, articles or commodities or by such other objective price, economic or
other measures as are described in the applicable Pricing Supplement (the
"Index"). A description of the Index used in any determination of an interest or
principal payment, and the method or formula by which interest or principal
payments will be determined by reference to such Index, will be set forth in the
applicable Pricing Supplement.
In the case of a Fixed Rate Note, Floating Rate Note or Indexed Rate Note
that is also an Indexed Principal Note, the amount of any interest payment will
be determined by reference to the Face Amount of such Indexed Note unless
specified otherwise in the applicable Pricing Supplement. In the case of an
Indexed Principal Note, the principal amount payable at Stated Maturity or any
earlier redemption or repayment of the Indexed Note may be different from the
Face Amount.
If the determination of the Index on which any interest payment or the
principal amount of an Indexed Note is calculated or announced by a third party,
which may be an Agent or another affiliate of the Company, and such third party
either suspends the calculation or announcement of such Index or changes the
basis upon which such Index is calculated (other than changes consistent with
policies in effect at the time such Indexed Note was issued and permitted
changes described in the applicable Pricing Supplement), then such Index shall
be calculated for purposes of such Indexed Note by another third party selected
by the Company, which may be an Agent or another affiliate of the Company,
subject to the same conditions and controls as applied to the original third
party. If for any reason such Index cannot be calculated on the same basis and
subject to the same conditions and controls as applied to the original third
party, then the indexed interest payments, if any, or any indexed principal
amount of such Indexed Note shall be calculated in the manner set forth in the
applicable Pricing Supplement. Any determination of such third party shall in
the absence of manifest error be binding on all parties.
EXTENSION OF MATURITY
The Pricing Supplement relating to each Note will indicate whether the
Company has the option to extend the Stated Maturity of such Note for one or
more periods of whole years from one to five (each an "Extension Period") up to
but not beyond the date (the "Final Maturity") set forth in such Pricing
Supplement.
The Company may exercise such option with respect to a Note by notifying
the Trustee for such Note at least 50 but not more than 60 calendar days prior
to the old Stated Maturity of such Note. Not later than 40 calendar days prior
to the old Stated Maturity of such Note, the Trustee for such Note will mail to
the Holder of such Note a notice (the "Extension Notice"), first class, postage
prepaid. The Extension Notice will set forth (i) the election of the Company to
extend the Stated Maturity of such Note; (ii) the new Stated Maturity; (iii) in
the case of a Fixed Rate Note, the interest rate applicable to the Extension
Period or, in the case of a Floating Rate Note, the Spread or Spread Multiplier
applicable to the Extension Period; and (iv) the provisions, if any, for
redemption during the Extension Period, including the date or dates on which or
the period or periods during which and the price or prices at which such
redemption may occur during the Extension Period. Upon the mailing by such
Trustee of an Extension Notice to the Holder of a Note, the Stated Maturity of
such Note shall be extended automatically, and, except as
S-14
<PAGE> 16
modified by the Extension Notice and as described in the next paragraph, such
Note will have the same terms as prior to the mailing of such Extension Notice.
Notwithstanding the foregoing, not later than 20 calendar days prior to the
old Stated Maturity of such Note, the Company may, at its option, revoke the
interest rate (in the case of a Fixed Rate Note) or the Spread or Spread
Multiplier (in the case of a Floating Rate Note) provided for in the Extension
Notice for such Note and establish a higher interest rate (in the case of a
Fixed Rate Note) or a higher Spread or Spread Multiplier (in the case of a
Floating Rate Note) for the Extension Period, by causing the Trustee for such
Note to mail notice of such higher interest rate or higher Spread or Spread
Multiplier, as the case may be, first class, postage prepaid, to the Holder of
such Note. Such notice shall be irrevocable. All Notes with respect to which the
Stated Maturity is extended will bear such higher interest rate (in the case of
Fixed Rate Notes) or higher Spread or Spread Multiplier (in the case of Floating
Rate Notes) for the Extension Period, whether or not tendered for repayment.
If the Company extends the Stated Maturity of a Note, the Holder of such
Note will have the option to elect repayment of such Note by the Company on the
old Stated Maturity at a price equal to the principal amount thereof, plus
interest accrued to such date. In order for a Note to be repaid on the old
Stated Maturity once the Company has extended the Stated Maturity thereof, the
Holder thereof must follow the procedures set forth below under "Optional
Redemption, Repayment and Repurchase" for optional repayment, except that the
period for delivery of such Note or notification to the Trustee for such Note
shall be at least 25 but not more than 35 days prior to the old Stated Maturity
and except that a Holder who has tendered a Note for repayment pursuant to an
Extension Notice may, by written notice to the Trustee for such Note, revoke any
such tender for repayment until the close of business on the tenth day before
the old Stated Maturity.
OPTIONAL REDEMPTION, REPAYMENT AND REPURCHASE
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be redeemed prior to its Stated Maturity or that such Note will be
redeemable at the option of the Company, in whole or in part, and the date or
dates (each an "Optional Redemption Date") on which such Note may be redeemed
and the price (the "Redemption Price") at which (together with accrued interest
to such Optional Redemption Date) such Note may be redeemed on each such
Optional Redemption Date. The Company may exercise such option with respect to a
Note by notifying the Trustee for such Note at least 60 days prior to any
Optional Redemption Date. Unless otherwise specified in the applicable Pricing
Supplement, at least 30 but not more than 60 days prior to the date of
redemption, such Trustee shall mail notice of such redemption, first class,
postage prepaid, to the Holder of such Note. In the event of redemption of a
Note in part only, a new Note or Notes for the unredeemed portion thereof shall
be issued to the Holder thereof upon the cancellation thereof. The Notes will
not be subject to any sinking fund.
The Pricing Supplement relating to each Note will also indicate whether the
Holder of such Note will have the option to elect repayment of such Note by the
Company prior to its Stated Maturity, and, if so, such Pricing Supplement will
specify the date or dates on which such Note may be repaid (each an "Optional
Repayment Date") and the price (the "Optional Repayment Price") at which,
together with accrued interest to such Optional Repayment Date, such Note may be
repaid on each such Optional Repayment Date.
In order for a Note to be repaid, the Trustee for such Note must receive,
at least 30 but not more than 45 days prior to an Optional Repayment Date (i)
such Note with the form entitled "Option to Elect Repayment" on the reverse
thereof duly completed, or (ii) a telegram, telex, facsimile transmission or
letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company in
the United States setting forth the name of the Holder of such Note, the
principal amount of such Note to be repaid, the certificate number or a
description of the tenor and terms of such Note, a statement that the option to
elect repayment is being exercised thereby and a guarantee that the Note to be
repaid with the form entitled "Option to Elect Repayment" on the reverse of the
Note duly completed will be received by such Trustee not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter. If the procedure described in clause
S-15
<PAGE> 17
(ii) of the preceding sentence is followed, then such Note and form duly
completed must be received by such Trustee by such fifth Business Day. Any
tender of a Note by the Holder for repayment (except pursuant to a Reset Notice
or an Extension Notice) shall be irrevocable. The repayment option may be
exercised by the Holder of a Note for less than the entire principal amount of
such Note provided that the principal amount of such Note remaining outstanding
after repayment is an authorized denomination. Upon such partial repayment, such
Note shall be cancelled and a new Note or Notes for the remaining principal
amount thereof shall be issued in the name of the Holder of such repaid Note.
If a Note is represented by a Global Security, the Depositary's nominee
will be the Holder of such Note and therefore will be the only entity that can
exercise a right to repayment. In order to ensure that the Depositary's nominee
will timely exercise a right to repayment with respect to a particular Note, the
beneficial owner of such Note must instruct the broker or other direct or
indirect participant through which it holds an interest in such Note to notify
the Depositary of its desire to exercise a right to repayment. Different firms
have different cut-off times for accepting instructions from their customers
and, accordingly, each beneficial owner should consult the broker or other
direct or indirect participant through which it holds an interest in a Note in
order to ascertain the cut-off time by which such an instruction must be given
in order for timely notice to be delivered to the Depositary.
Notwithstanding anything in this Prospectus Supplement to the contrary, if
a Note is an Original Issue Discount Note (other than an Indexed Note), the
amount payable on such Note in the event of redemption or repayment prior to its
Stated Maturity shall be the Amortized Face Amount of such Note as of the date
of redemption or the date of repayment, as the case may be. The "Amortized Face
Amount" of a Discount Note shall be the amount equal to (i) the Issue Price set
forth in the applicable Pricing Supplement plus (ii) that portion of the
difference between the Issue Price and the principal amount of such Note that
has accrued at the Yield to Maturity set forth in the Pricing Supplement
(computed in accordance with generally accepted United States bond yield
computation principles) by such date of redemption or repayment, but in no event
shall the Amortized Face Amount of a Discount Note exceed its principal amount.
The Company may at any time purchase Notes at any price in the open market
or otherwise. Notes so purchased by the Company may, at the discretion of the
Company, be held or resold or surrendered to the Trustee for cancellation.
BOOK-ENTRY SYSTEM
Upon issuance, and subject to the rules of the Depositary, all Book-Entry
Notes having the same Original Issue Date and otherwise identical terms will be
represented by a single Global Security. Each Global Security representing
Book-Entry Notes will be deposited with, or on behalf of, The Depository Trust
Company, New York, New York (the "Depositary"), and registered in the name of a
nominee of the Depositary. Book-Entry Notes will not be exchangeable for
Certificated Notes and, except under the circumstances described in the
Prospectus under "Description of Debt Securities -- Global Securities", will not
otherwise be issuable as Certificated Notes.
The Depositary has advised the Company and the Agents as follows: The
Depositary is a limited-purpose trust company organized under New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. The Depositary was created to hold securities of its
participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers (including the Agents), banks, trust
companies, clearing corporations, and certain other organizations, some of whom
(and/or their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly.
S-16
<PAGE> 18
A further description of the Depositary's procedures with respect to Global
Securities representing Book-Entry Notes is set forth in the Prospectus under
"Description of Debt Securities -- Global Securities". The Depositary has
confirmed to the Company, the Agents and the Trustee that it intends to follow
such procedures.
CURRENCY RISKS
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in a Note having a Specified Currency other than U.S. dollars
entails significant risks that are not associated with a similar investment in a
security denominated in U.S. dollars. Such risks include, without limitation,
the possibility of significant changes in rates of exchange between the U.S.
dollar and such Specified Currency and the possibility of the imposition or
modification of foreign exchange controls with respect to such Specified
Currency. Such risks generally depend on factors over which the Company has no
control and which cannot be readily foreseen, such as economic and political
events and the supply of and demand for the relevant currencies. In recent
years, rates of exchange between the U.S. dollar and certain currencies have
been highly volatile, and such volatility may be expected in the future.
Fluctuations in any particular exchange rate that have occurred in the past are
not necessarily indicative, however, of fluctuations in the rate that may occur
during the term of any Note. Depreciation of the Specified Currency for a Note
against the U.S. dollar would result in a decrease in the effective yield of
such Note below its coupon rate and, in certain circumstances, could result in a
substantial loss to the investor on a U.S. dollar basis.
Governments have from time to time imposed, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a Specified Currency for making payments in respect of Notes denominated in
such currency. At present, the Company has identified the following currencies
in which payments of principal, premium and interest on Notes may be made:
Australian dollars, Canadian dollars, Danish kroner, English pounds sterling,
French francs, German deutsche marks, Italian lire, Japanese yen, New Zealand
dollars, U.S. dollars and ECU. However, the Company may determine at any time to
issue Notes with Specified Currencies other than those listed. There can be no
assurances that exchange controls will not restrict or prohibit payments of
principal, premium or interest in any Specified Currency. Even if there are no
actual exchange controls, it is possible that, on a payment date with respect to
any particular Note, the currency in which amounts then due in respect of such
Note are payable would not be available to the Company. In that event, the
Company will make such payments in the manner set forth under "Description of
Notes -- Payment of Principal and Interest" above.
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT DESCRIBE
ALL THE RISKS OF AN INVESTMENT IN NOTES DENOMINATED IN A CURRENCY OTHER THAN
U.S. DOLLARS, AND THE COMPANY DISCLAIMS ANY RESPONSIBILITY TO ADVISE PROSPECTIVE
PURCHASERS OF SUCH RISKS AS THEY EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT
OR AS SUCH RISKS MAY CHANGE FROM TIME TO TIME. PROSPECTIVE PURCHASERS SHOULD
CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN
INVESTMENT IN NOTES DENOMINATED IN A CURRENCY OTHER THAN U.S. DOLLARS. SUCH
NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR PERSONS WHO ARE UNSOPHISTICATED WITH
RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
The information set forth in this Prospectus Supplement is directed to
prospective purchasers of Notes who are United States residents, and the Company
disclaims any responsibility to advise prospective purchasers who are residents
of countries other than the United States with respect to any matters that may
affect the purchase or holding of, or receipt of payments of principal, premium
or interest in respect of, Notes. Such persons should consult their own advisors
with regard to such matters.
Any Pricing Supplement relating to Notes having a Specified Currency other
than U.S. dollars will contain a description of any material exchange controls
affecting such currency and any other required information concerning such
currency.
S-17
<PAGE> 19
PAYMENT CURRENCY
Except as set forth below, if payment in respect of a Note is required to
be made in a Specified Currency other than U.S. dollars and such currency is
unavailable due to the imposition of exchange controls or other circumstances
beyond the Company's control or is no longer used by the government of the
country issuing such currency or for the settlement of transactions by public
institutions of or within the international banking community, then all payments
in respect of such Note shall be made in U.S. dollars until such currency is
again available or so used. The amounts so payable on any date in such currency
shall be converted into U.S. dollars on the basis of the most recently available
Market Exchange Rate for such currency or as otherwise indicated in the
applicable Pricing Supplement. Any payment in respect of such Note made under
such circumstances in U.S. dollars will not constitute an Event of Default under
the Indenture under which such Note shall have been issued.
If payment in respect of a Note is required to be made in ECU and ECU are
no longer used in the European Monetary System, then all payments in respect of
such Note shall be made in U.S. dollars until ECU are again so used. The amount
of each payment in U.S. dollars shall be computed on the basis of the equivalent
of ECU in U.S. dollars, determined as described below, as of the second Business
Day prior to the date on which such payment is due.
The equivalent of ECU in U.S. dollars as of any date (the "Day of
Valuation") shall be determined by the Trustee or the Exchange Rate Agent for
such Note on the following basis. The component currencies of ECU for this
purpose (the "Components") shall be the currency amounts that were components of
ECU as of the last date on which ECU were used in the European Monetary System.
The equivalent of ECU in U.S. dollars shall be calculated by aggregating the
U.S. dollar equivalents of the Components. The U.S. dollar equivalent of each of
the Components shall be determined by such Trustee or such Exchange Rate Agent,
as the case may be, on the basis of the most recently available Market Exchange
Rates for such Components or as otherwise indicated in the applicable Pricing
Supplement.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
shall be divided or multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as Components shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated component currencies
expressed in such single currency. If any component currency is divided into two
or more currencies, the amount of that currency as a Component shall be replaced
by amounts of such two or more currencies, each of which shall be equal to the
amount of the former component currency divided by the number of currencies into
which that currency was divided.
All determinations referred to above made by the Trustee for the Notes or
the Exchange Rate Agent, as the case may be, shall be at its sole discretion and
shall, in the absence of manifest error, be conclusive for all purposes and
binding on Holders of Notes.
FOREIGN CURRENCY JUDGMENTS
The Notes will be governed by and construed in accordance with the law of
the State of New York. Courts in the United States customarily have not rendered
judgments for money damages denominated in any currency other than the U.S.
dollar. A 1987 amendment to the Judiciary Law of the State of New York provides,
however, that an action based upon an obligation denominated in a currency other
than U.S. dollars will be rendered in the foreign currency of the underlying
obligation and converted into U.S. dollars at the rate of exchange prevailing on
the date of the entry of the judgment or decree.
S-18
<PAGE> 20
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the principal U.S. Federal tax consequences
resulting from the beneficial ownership of Notes by certain persons. This
summary does not purport to consider all the possible U.S. Federal tax
consequences of the purchase, ownership or disposition of the Notes and is not
intended to reflect the individual tax position of any beneficial owner. It
deals only with Notes and currencies or composite currencies other than U.S.
dollars ("Foreign Currency") held as capital assets. Moreover, except as
expressly indicated, it addresses initial purchasers that purchase Notes for the
original issue price and does not address beneficial owners with a special tax
status or special tax situations, such as dealers in securities or currencies,
Notes (or Foreign Currency) held as a hedge against currency risks or as part of
a straddle with other investments or as part of a "synthetic security" or other
integrated investment (including a "conversion transaction") comprised of a Note
and one or more other investments, or situations in which the functional
currency of the beneficial owner is not the U.S. dollar. This summary is not
applicable to non-United States persons not subject to U.S. Federal income tax
on their worldwide income. This summary is based upon the U.S. Federal tax laws
and regulations as now in effect and as currently interpreted and does not take
into account possible changes in such tax laws or such interpretations, any of
which may be applied retroactively. It does not include any description of the
tax laws of any state, local or foreign governments that may be applicable to
the Notes or Holders thereof. Persons considering the purchase of Notes should
consult their own tax advisors concerning the application of the U.S. Federal
tax laws to their particular situations as well as any consequences to them
under the laws of any other taxing jurisdiction.
PAYMENTS OF INTEREST
In general, interest on a Note, whether payable in U.S. dollars or a
Foreign Currency (other than certain payments on a Discount Note, as defined and
described below under "Original Issue Discount"), will be taxable to a Holder as
ordinary income at the time it is received or accrued, depending on the Holder's
method of accounting for tax purposes. If an interest payment is denominated in
or determined by reference to a Foreign Currency, then special rules, described
below under "Foreign Currency Notes", apply.
The rate of interest payable on certain Fixed Rate Notes and the Spread and
Spread Multiplier on certain Floating Rate Notes may be subject to adjustment
from time to time as described in the applicable Pricing Supplement. These
adjustments may result in a United States Federal income tax treatment different
than described herein. The applicable Pricing Supplement will discuss such
different treatment.
ORIGINAL ISSUE DISCOUNT
The following discussion summarizes the United States Federal income tax
consequences to Holders of Notes issued with original issue discount ("OID").
Special rules apply to OID on a Discount Note that is denominated in
Foreign Currency. See "Foreign Currency Notes--Foreign Currency Discount Notes".
General. A Note will be treated as issued with OID (a "Discount Note") if
the excess of the Note's "stated redemption price at maturity" over its issue
price is greater than a de minimis amount (set forth in the Internal Revenue
Code of 1986, as amended, (the "Code") and the regulations promulgated
thereunder (the "Regulations")). Generally, the issue price of a Note (or any
Note that is part of an issue of Notes) will be the first price at which a
substantial amount of Notes that are part of such issue of Notes are sold. Under
the Regulations, the "stated redemption price at maturity" of a Note is the sum
of all payments provided by the Note that are not payments of "qualified stated
interest". A "qualified stated interest" payment includes any stated interest
payment on a Note that is unconditionally payable at least annually at a single
fixed rate (or at certain floating rates) that appropriately takes into account
the length of the interval between stated interest payments. The applicable
Pricing Supplement will state whether a particular issue of Notes will
constitute an issue of Discount Notes.
S-19
<PAGE> 21
In general, if the excess of a Note's stated redemption price at maturity
over its issue price is de minimis, then such excess constitutes "de minimis
OID". Under the Regulations, unless the election described below under "Election
to Treat All Interest as Original Issue Discount" is made, such a Note will not
be treated as issued with OID, (in which case the following paragraphs under
"Original Issue Discount" will not apply) and a Holder of such a Note will
recognize capital gain, with respect to such de minimis OID as stated principal
payments on the Note are made. The amount of such gain with respect to each such
payment will equal the product of the total amount of the Note's de minimis OID
and a fraction, the numerator of which is the amount of the principal payment
made and the denominator of which is the stated principal amount of the Note.
In certain cases, Notes that bear stated interest and are issued at par may
be deemed to bear OID for Federal income tax purposes, with the result that the
inclusion of interest in income for Federal income tax purposes may vary from
the actual cash payments of interest made on such Notes, generally accelerating
income for cash method taxpayers. Under the Regulations, a Note may be a
Discount Note where, among other things, (i) a Note bearing interest at a
floating rate (a "Floating Rate Note") provides for a maximum interest rate or a
minimum interest rate that is reasonably expected as of the issue date to cause
the yield on the debt instrument to be significantly less, in the case of a
maximum rate, or more, in the case of a minimum rate, than the expected yield
determined without the maximum or minimum rate, as the case may be, (ii) a
Floating Rate Note provides for significant front-loading or back-loading of
interest, or (iii) a Note bears interest at a floating rate in combination with
one or more other floating or fixed rates. Notice will be given in the
applicable Pricing Supplement when the Company determines that a particular Note
will be a Discount Note. Unless specified in the applicable Pricing Supplement,
Floating Rate Notes will not be Discount Notes.
The Code and the Regulations provide rules that require a Holder of a
Discount Note having a maturity of more than one year from its date of issue to
include OID in gross income before the receipt of cash attributable to such
income, without regard to the Holder's method of accounting for tax purposes.
The amount of OID includible in gross income by a Holder of a Discount Note is
the sum of the "daily portions" of OID with respect to the Discount Note for
each day during the taxable year or portion of the taxable year in which the
Holder holds such Discount Note ("accrued OID"). The daily portion is determined
by allocating to each day in any "accrual period" a pro rata portion of the OID
allocable to that accrual period. Under the Regulations, accrual periods with
respect to a Note may be any set of periods (which may be of varying lengths)
selected by the Holder as long as (i) no accrual period is longer than one year
and (ii) each scheduled payment of interest or principal on the Note occurs on
the first day or final day of an accrual period.
The amount of OID allocable to an accrual period equals the excess of (a)
the product of the Discount Note's adjusted issue price at the beginning of the
accrual period and the Discount Note's yield to maturity (determined on the
basis of compounding at the close of each accrual period and properly adjusted
for the length of the accrual period) over (b) the sum of any payments of
qualified stated interest on the Discount Note allocable to the accrual period.
The "adjusted issue price" of a Discount Note at the beginning of the first
accrual period is the issue price and at the beginning of any accrual period
thereafter is (x) the sum of the issue price of such Discount Note, the accrued
OID for each prior accrual period (determined without regard to the amortization
of any acquisition premium or bond premium, which are discussed below), and the
amount of any qualified stated interest on the Note that has accrued prior to
the beginning of the accrual period but is not payable until a later date, less
(y) any prior payments on the Discount Note that were not qualified stated
interest payments. If a payment (other than a payment of qualified stated
interest) is made on the first day of an accrual period, then the adjusted issue
price at the beginning of such accrual period is reduced by the amount of the
payment. If a portion of the initial purchase price of a Note is attributable to
interest that accrued prior to the Note's issue date, the first stated interest
payment on the Note is to be made within one year of the Note's issue date and
such payment will equal or exceed the amount of pre-issuance accrued interest,
then the Holder may elect to decrease the issue price of the Note by the amount
of pre-issuance accrued interest, in
S-20
<PAGE> 22
which case a portion of the first stated interest payment will be treated as a
return of the excluded pre-issuance accrued interest and not as an amount
payable on the Note.
The OID Regulations contain certain special rules that generally allow any
reasonable method to be used in determining the amount of OID allocable to a
short initial accrual period (if all other accrual periods are of equal length),
and require that the amount of OID allocable to the final accrual period equal
the excess of the amount payable at the maturity of the Note (other than any
payment of qualified stated interest) over the Note's adjusted issue price as of
the beginning of such final accrual period. In addition, if an interval between
payments of qualified stated interest on a Note contains more than one accrual
period, then the amount of qualified stated interest payable at the end of such
interval is allocated pro rata (on the basis of their relative lengths) between
the accrual periods contained in the interval.
Holders of Discount Notes generally will have to include in income
increasingly greater amounts of OID over the life of the Notes.
Optional Redemption. If the Company has an option to redeem a Note, or the
Holder has an option to cause a Note to be repurchased, prior to the Note's
stated maturity, such option will be presumed to be exercised if, by utilizing
any date on which such Note may be redeemed or repurchased as the maturity date
and the amount payable on such date in accordance with the terms of such Note
(the "redemption price") as the stated redemption price at maturity, the yield
on the Note would be (i) in the case of an option of the Company, lower than its
yield to stated maturity, or (ii) in the case of an option of the Holder, higher
than its yield to stated maturity. If such option is not in fact exercised when
presumed to be exercised, the Note would be treated solely for OID purposes as
if it were redeemed or repurchased, and a new Note were issued, on the presumed
exercise date for an amount equal to the Note's adjusted issue price on that
date.
Short-Term Notes. Under the Code, special rules apply with respect to OID
on Notes that mature one year or less from the date of issuance ("Short-Term
Notes"). In general, a cash basis holder of a Short-Term Note is not required to
include OID in income as it accrues for United States Federal income tax
purposes unless it elects to do so. Accrual basis Holders and certain other
Holders, including banks, regulated investment companies, dealers in securities,
and cash basis Holders who so elect, are required to include OID, in income as
it accrues on Short-Term Notes on either a straight-line basis or under the
constant yield method (based on daily compounding), at the election of the
Holder. In the case of a Holder not required and not electing to include OID in
income currently, any gain realized on the sale or retirement of Short-Term
Notes will be ordinary income to the extent of the OID accrued on a
straight-line basis (unless an election is made to accrue the original issue
discount under the constant yield method) through the date of sale or
retirement. Holders who are not required and do not elect to include OID on
Short-Term Notes in income as it accrues will be required to defer deductions
for interest on borrowings allocable to Short-Term Notes in an amount not
exceeding the deferred income until the deferred income is realized.
Any Holder of a Short-Term Note can elect to apply the rules in the
preceding paragraph taking into account the amount of "acquisition discount", if
any, with respect to the Note (rather than the OID with respect to such Note).
Acquisition discount is the excess of the stated redemption price at maturity of
the Short-Term Note over the Holder's purchase price therefor. Acquisition
discount will be treated as accruing on a ratable basis or, at the election of
the Holder, on a constant-yield basis.
For purposes of determining the amount of OID subject to these rules, the
Regulations provide that no interest payments on a Short-Term Note are qualified
stated interest, but instead such interest payments are included in the
Short-Term Note's stated redemption price at maturity.
ELECTION TO TREAT ALL INTEREST AS ORIGINAL ISSUE DISCOUNT.
Any Holder may elect to include in gross income all interest that accrues
on a Note using the constant yield method described above under the heading
"Original Issue Discount--General", with the
S-21
<PAGE> 23
modifications described below. For purposes of this election, interest includes
stated interest, OID, de minimis OID.
In applying the constant yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing
Holder's adjusted basis in the Note immediately after its acquisition, the issue
date of the Note will be the date of its acquisition by the electing Holder, and
no payments on the Note will be treated as payments of qualified stated
interest. This election is generally applicable only to the Note with respect to
which it is made and may not be revoked without the consent of the IRS.
VARIABLE RATE NOTES
Floating Rate Notes and Indexed Notes ("Variable Notes") are subject to
special rules. A Variable Note that provides for stated interest at one or more
qualified floating rates, a single fixed rate and one or more qualified floating
rates, a single objective rate, or a single fixed rate and a single objective
rate that is a qualified inverse floating rate throughout the term thereof
generally will qualify as a "variable rate debt instrument." In general, the
amount and accrual of original issue discount and qualified stated interest on
such a Variable Note is calculated by converting it into a debt instrument with
an appropriate fixed rate and then applying the general original issue discount
rules.
If a Variable Note does not qualify as a "variable rate debt instrument,"
then the Variable Note would be treated as a contingent payment debt obligation.
A Holder of such an instrument generally must include future contingent and
noncontingent interest payments in income as such interest accrues based upon a
projected payment schedule. Moreover, in general, any gain recognized by a
Holder on the sale, exchange, or retirement of a contingent payment debt
instrument will be treated as ordinary income and a portion of any loss realized
could be treated as ordinary loss as opposed to capital loss (depending upon the
circumstances).
The proper United States Federal income tax treatment of Variable Notes
that are treated as contingent payment debt obligations will be more fully
described in the applicable Pricing Supplement. Investors considering the
purchase of Variable Notes should consult their own tax advisors.
PURCHASE, SALE AND RETIREMENT OF THE NOTES
General. A Holder's tax basis in a Note will generally be its U.S. dollar
cost (which, in the case of a Note purchased with a foreign currency, will be
the U.S. dollar value of the purchase price on the date of purchase), increased
by the amount of any OID, included in the Holder's income with respect to the
Note and the amount, if any, of income attributable to de minimis OID included
in the Holder's income with respect to the Note, and reduced by the amount of
any payments that are not qualified stated interest payments. A Holder generally
will recognize gain or loss on the sale or retirement of a Note equal to the
difference between the amount realized on the sale or retirement and the tax
basis of the Note. The amount realized on a sale or retirement for an amount in
foreign currency will be the U.S. dollar value of such amount on the date of
sale or retirement. Except to the extent described above under "Original Issue
Discount -- Short Term Notes" or below under "Foreign Currency Notes -- Exchange
Gain or Loss", and except to the extent attributable to accrued but unpaid
qualified stated interest, gain or loss recognized on the sale or retirement of
a Note will generally be capital gain or loss.
FOREIGN CURRENCY NOTES
Interest Payments. If a qualified stated interest payment is denominated in
or determined by reference to a Foreign Currency, the amount of income
recognized by a cash basis Holder will be the U.S. dollar value of the interest
payment, based on the exchange rate in effect on the date of receipt, regardless
of whether the payment is in fact converted into U.S. dollars. Accrual basis
Holders may determine the amount of income recognized with respect to such
interest payment in accordance with either of two methods. Under the first
method, the amount of income recognized will be based on the average exchange
rate in effect during the interest accrual period (or, with respect to an
accrual period
S-22
<PAGE> 24
that spans two taxable years, the partial period within the taxable year). Upon
receipt of an interest payment (including a payment attributable to accrued but
unpaid qualified stated interest upon the sale or retirement of a Note)
determined by reference to a Foreign Currency, an accrual basis Holder will
recognize ordinary income or loss measured by the difference between such
average exchange rate and the exchange rate in effect on the date of receipt,
regardless of whether the payment is in fact converted into U.S. dollars. Under
the second method, an accrual basis Holder may elect to translate interest
income into U.S. dollars at the exchange rate in effect on the last day of the
accrual period or, in the case of an accrual period that spans two taxable
years, at the exchange rate in effect on the last day of the partial period
within the taxable year. Additionally, if a payment of interest is actually
received within 5 business days of the last day of the accrual period or taxable
year, an accrual basis Holder applying the second method may instead translate
such accrued interest into U.S. dollars at the spot exchange rate in effect on
the day of actual receipt (in which case no exchange gain or loss will result).
Any election to apply the second method will apply to all debt instruments held
by the Holder at the beginning of the first taxable year to which the election
applies or thereafter acquired by the Holder and may not be revoked without the
consent of the IRS.
Exchange of Amounts in Other than U.S. Dollars. Foreign Currency received
as interest on a Note or on the sale or retirement of a Note will have a tax
basis equal to its U.S. dollar value at the time such interest is received or at
the time of such sale or retirement, as the case may be. Foreign Currency that
is purchased will generally have a tax basis equal to the U.S. dollar value of
the Foreign Currency on the date of purchase. Any gain or loss recognized on a
sale or other disposition of a Foreign Currency (including its use to purchase
Notes or upon exchange for U.S. dollars) will be ordinary income or loss.
Foreign Currency Discount Notes. OID for any accrual period on a Discount
Note that is denominated in a Foreign Currency will be determined in the Foreign
Currency and then translated into U.S. dollars in the same manner as qualified
stated interest accrued by an accrual basis Holder. Upon receipt of an amount of
Foreign Currency attributable to original issue discount (whether in connection
with a payment of interest or the sale or retirement of a Note), a Holder may
recognize ordinary income or loss.
Exchange Gain or Loss. Gain or loss recognized by a holder on the sale or
retirement of a Note that is attributable to changes in exchange rates will be
treated as ordinary income or loss. However, exchange gain or loss is taken into
account only to the extent of total gain or loss realized on the transaction.
INDEXED NOTES, AMORTIZING NOTES OR NOTES WITH EXTENDABLE STATED MATURITY
The applicable Pricing Supplement will contain a discussion of any special
United States Federal income tax rules with respect to Indexed Rate Notes,
Indexed Principal Notes, Amortizing Notes or Notes the Stated Maturity of which
may be extended at the option of the Company.
INFORMATION REPORTING AND BACKUP WITHHOLDING
For each calendar year in which the Notes are outstanding, the Company is
required to provide the IRS with certain information, including the Holder's
name, address and taxpayer identification number (either the Holder's Social
Security number or its employer identification number, as the case may be), the
aggregate amount of principal and interest paid (including OID, if any) to that
Holder during the calendar year and the amount of tax withheld, if any. This
obligation, however, does not apply with respect to certain Holders, including
corporations, tax-exempt organizations, qualified pension and profit sharing
trusts and individual retirement accounts and foreign Holders who provide
appropriate certification that they are not United States persons or have
otherwise established an exemption.
In the event that a Holder subject to the reporting requirements described
above fails to supply its correct taxpayer identification number in the manner
required by applicable law or underreports its tax liability, the Company, its
agents or paying agents or a broker may be required to "backup" withhold a tax
equal to 31% of each payment of interest (including OID) and principal
(including premium, if any) on the Notes. This backup withholding is not an
additional tax and may be credited against the Holder's U.S. Federal income tax
liability, provided that the required information is furnished to the IRS.
S-23
<PAGE> 25
PLAN OF DISTRIBUTION
The Notes are being offered on a continuous basis by the Company through
the Agents which have agreed to use their reasonable efforts to solicit orders
to purchase Notes. The Company will have the sole right to accept orders to
purchase Notes and may reject proposed purchases in whole or in part. The Agents
shall have the right, in their discretion reasonably exercised and without
notice to the Company, to reject any proposed purchase of Notes in whole or in
part. The Company will pay the Agents a commission of from .125% to .750% of the
principal amount of Notes sold through them, depending upon the Stated Maturity.
The Company may also sell Notes at a discount to the Agents for their own
accounts or for resale to one or more purchasers at varying prices related to
prevailing market prices at the time of resale or, if set forth in the
applicable Pricing Supplement, at a fixed public offering price, as determined
by the Agents. After any initial public offering of Notes to be resold to
purchasers at a fixed public offering price, the public offering price and any
concession or discount may be changed. In addition, the Agents may offer Notes
purchased by them as principal to other dealers. Notes sold by an Agent to a
dealer may be sold at a discount and, unless otherwise specified in the
applicable Pricing Supplement, such discount allowed will not be in excess of
the discount received by such Agent from the Company. Unless otherwise specified
in the applicable Pricing Supplement, any Note purchased by an Agent as
principal will be purchased at 100% of the principal amount or face amount
thereof less a percentage equal to the commission applicable to an agency sale
of a Note of identical maturity.
No Note will have an established trading market when issued. The Notes will
not be listed on any securities exchange. The Agents may make a market in the
Notes, but the Agents are not obligated to do so and may discontinue any
market-making at any time without notice. There can be no assurance of a
secondary market for any Notes, or that the Notes will be sold.
Each Agent, whether acting as agent or principal, may be deemed to be an
"underwriter" within the meaning of the Securities Act. The Company has agreed
to indemnify each Agent against certain liabilities, including liabilities under
the Securities Act, or to contribute to payments that such Agent may be required
to make in respect thereof.
S-24
<PAGE> 26
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED DECEMBER 5, 1997
PROSPECTUS
THE SHERWIN-WILLIAMS COMPANY SHERWIN-WILLIAMS(R) 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 $150,000,000 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 , 1997.
<PAGE> 27
IN CONNECTION WITH THE OFFERING OF CERTAIN SECURITIES, CERTAIN PERSONS
PARTICIPATING IN SUCH OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE,
MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE OFFERED SECURITIES, INCLUDING
OVERALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE SHORTCOVERING TRANSACTIONS
AND THE IMPOSITION OF A PENALTY BID, DURING AND AFTER THE OFFERING. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION."
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. Copies of documents filed by the Company with the Commission
may also be accessed electronically by means of the Commission's home page on
the world wide web on the Internet at "http://www.sec.gov". 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, 1996.
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997.
(c) The Company's Current Reports on Form 8-K dated April 23, 1997,
January 29, 1997 and January 7, 1997.
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
2
<PAGE> 28
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.
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
Attn.: 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 (216) 566-2000.
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.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges for each of 1996, 1995, 1994, 1993 and 1992 and for
the nine months ended September 30, 1996 and 1997 on a historical basis.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- ----------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings
to fixed charges(a) 3.4 4.2 3.9 4.2 4.1 3.7 3.4
</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.
3
<PAGE> 29
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 The Chase Manhattan Bank
(formerly known as Chemical Bank), as trustee (the "Trustee"). A copy of the
form of Indenture has been filed as an exhibit to the Registration Statement
(file no. 333-01093) filed with the Commission on February 20, 1996 and is
incorporated by reference herein. 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;
(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;
4
<PAGE> 30
(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;
(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,
5
<PAGE> 31
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.
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
6
<PAGE> 32
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 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
7
<PAGE> 33
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 on any Principal Property or
shares of capital stock of any Restricted Subsidiary 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 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
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
8
<PAGE> 34
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 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
9
<PAGE> 35
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; and
(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.)
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
10
<PAGE> 36
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
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;
11
<PAGE> 37
(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.)
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.
12
<PAGE> 38
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 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.)
13
<PAGE> 39
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.
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.
14
<PAGE> 40
During and after the offering of the Debt Securities, underwriters or
agents may purchase or sell Debt Securities in the open market. These
transactions may include over allotment and stabilizing transactions and
purchases to cover short positions created in connection with the sale of the
Debt Securities. Underwriters may also impose a penalty bid, whereby selling
concessions allowed to broker-dealers in respect of the Debt Securities sold for
their account may be reclaimed by the underwriters if such Debt Securities are
repurchased by the underwriters in stabilizing or covering transactions. These
activities may stabilize, maintain or otherwise affect the market price of the
Debt Securities at a price which may be higher than the price that might
otherwise prevail in the open market, and, if commenced, may be discontinued at
any time.
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 September 30, 1997, Mr. Stellato beneficially owned
approximately 37,000 shares of Common Stock of the Company and held options to
purchase an additional 103,600 shares of Common Stock of which 68,932 shares
were exercisable at such date.
EXPERTS
The consolidated financial statements and schedule of the Company appearing
in the Company's Annual Report on Form 10-K for the year ended December 31, 1996
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein 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 of Thompson Minwax Holding Corp. and
its subsidiaries for the year ended December 31, 1995 (As Restated) incorporated
by reference herein have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
15
<PAGE> 41
NO DEALER, SALESMAN 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 SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PROSPECTUS SUPPLEMENT
Company Description.................. S-2
Pricing Supplement................... S-2
Description of Notes................. S-2
Currency Risks....................... S-17
Certain U. S. Federal Income Tax
Considerations..................... S-19
Plan of Distribution................. S-24
PROSPECTUS
Available Information................ 2
Information Incorporated by
Reference.......................... 2
The Company.......................... 3
Use of Proceeds...................... 3
Ratios of Earnings to Fixed
Charges............................ 3
Description of Debt Securities....... 4
Plan of Distribution................. 14
Legal Opinions....................... 15
Experts.............................. 15
</TABLE>
U.S. $150,000,000
THE SHERWIN-WILLIAMS
COMPANY
MEDIUM-TERM NOTES,
SERIES B
DUE NINE MONTHS OR
MORE FROM DATE OF ISSUE
[SHERWIN-WILLIAMS(R) LOGO]
SALOMON SMITH BARNEY
MERRILL LYNCH & CO.
PROSPECTUS SUPPLEMENT
DATED , 1997
<PAGE> 42
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following statement sets forth the estimated amounts of expenses, other
than underwriting discounts, to be borne by the Registrant in connection with
the distribution of the Securities.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee..................... $ 44,250
Trustees' fees.......................................................... 13,000
Printing and engraving expenses......................................... 50,000
Rating agency fees...................................................... 130,000
Accounting fees and expenses............................................ 40,000
Legal fees and expenses................................................. 50,000
Blue Sky fees and expenses.............................................. 1,500
--------
Total Expenses.......................................................... $328,750
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article IV of the Company's Code of Regulations, as amended April 27, 1988
("Regulations"), filed as Exhibit 4(b) to Post-Effective Amendment No. 1 to Form
S-8 Registration Statement Number 2-91401, dated April 29, 1988, is incorporated
herein by reference.
Reference is made to Section 1701.13(E) of the Ohio Revised Code relating
to the indemnification of directors and officers of an Ohio corporation and to
Sections 1 and 2 of Article IV of the Regulations.
The Ohio Revised Code permits and Section 1 of Article IV of the
Regulations provides that the Company shall indemnify its directors, officers,
employees and agents against amounts which may be incurred in connection with
certain actions, suits or proceedings under the circumstances as set out in
Sections 1(a) and 1(b) of Article IV of the Regulations. However, the Ohio
Revised Code and Section 1 of Article IV of the Regulations limit
indemnification in respect of certain claims, issues or matters as to which such
party is adjudged to be liable for negligence or misconduct in performance of
his duty to the Company and also in actions in which the only liability asserted
against a director is for certain statutory violations. The Ohio Revised Code
and Section 1 of Article IV of the Regulations also provide that general
indemnification provisions as found in Sections 1(a) and 1(b) of Article IV of
the Regulations do not limit the remaining provisions of Article IV of the
Regulations.
In addition, with certain limited exceptions, expenses incurred by a
director in defending an action must be paid by the Company as they are incurred
in advance of the final disposition if the director agrees (i) to repay such
advances if it is proved by clear and convincing evidence that the director's
action or failure to act involved an act or omission undertaken with deliberate
intent to cause injury to the Company or undertaken with reckless disregard for
the Company's best interests and (ii) to reasonably cooperate with the Company
concerning the action. Also, the Company may pay certain expenses incurred by an
officer in defending an action as they are incurred in advance of the final
disposition of an action if the officer receiving the advance undertakes to
repay the advance if it is ultimately determined that the officer receiving the
advance is not entitled to indemnification.
The Company may from time to time maintain insurance on behalf of any
person who is or was a director or officer against any loss arising from any
claim asserted against such director or officer in any such capacity, subject to
certain exclusions. The Company also has entered into indemnification agreements
with its directors and certain of its officers providing protection as permitted
by law.
II-1
<PAGE> 43
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
(1)(a) -- Form of Underwriting Agreement.
(1)(b) -- Form of Selling Agency Agreement for Medium Term Notes.
(3)(a) -- Amended Articles of Incorporation of the Company, as amended April 28,
1993 (filed as Exhibit 4(a) to the Registrant's Registration Statement on
Form S-8 (File No. 33-52227) filed with the Commission on February 10,
1994 and incorporated herein by reference).
(3)(b) -- Regulations of the Company, as amended, dated April 27, 1988 (filed as
Exhibit 4(b) to Post-Effective Amendment No. 1. to the Registrant's
Registration Statement on Form S-8 (File No. 2-91401) filed with the
Commission on April 29, 1988 and incorporated herein by reference).
(4)(a) -- Form of Indenture between The Sherwin-Williams Company and Chemical Bank,
as Trustee (filed as Exhibit 4(a) to the Registrant's Registration
Statement on Form S-3 (File No. 333-01093) filed with the Commission on
February 20, 1996 and incorporated herein by reference).
(4)(b)-1 -- Form of Fixed Rate Debt Security.
(4)(b)-2 -- Form of Floating Rate Debt Security.
(5) -- Opinion of Counsel
(12) -- Statement regarding the computation of the ratio of earnings to fixed
charges.
(23)(a) -- Consent of Ernst & Young LLP, Independent Auditors.
(23)(b) -- Consent of Deloitte and Touche LLP, Independent Auditors.
(23)(c) -- Consent of Counsel (included in Exhibit (5)).
(24) -- Powers of Attorney
(25) -- Statement of Eligibility on Form T-1 of The Chase Manhattan Bank.
</TABLE>
ITEM 17. UNDERTAKINGS.
A. UNDERTAKING PURSUANT TO RULE 415
The undersigned Registrant hereby undertakes:
(a) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Act");
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement,
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the
II-2
<PAGE> 44
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), that are incorporated by reference
in the Registration Statement;
(b) that, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(c) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
B. UNDERTAKING REGARDING FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS
BY REFERENCE.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in the Registration
Statement shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
C. UNDERTAKING IN RESPECT OF INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions described in Item 15 above, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether or not such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
D. UNDERTAKINGS IN RESPECT OF RULE 430A
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-3
<PAGE> 45
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CLEVELAND, STATE OF OHIO, ON DECEMBER 5, 1997.
By: /s/ Louis E. Stellato
-------------------------------------
LOUIS E. STELLATO
VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW ON DECEMBER 5, 1997, BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ---------------------------------------- ---------------------------------------------------
<C> <S>
(i) Principal Executive Officers:
*J. G. Breen Director, Chairman of the Board and Chief Executive
- ---------------------------------------- Officer
(J. G. BREEN)
*T. A. Commes Director, President and Chief Operating Officer
- ----------------------------------------
(T. A. COMMES)
(ii) Principal Financial Officer:
*L. J. Pitorak Senior Vice President-Finance, Treasurer and Chief
- ---------------------------------------- Financial Officer
(L. J. PITORAK)
(iii) Principal Accounting Officer:
*J. L. Ault Vice President-Corporate Controller
- ----------------------------------------
(J. L. AULT)
(iv) Directors:
*J. M. Biggar
- ----------------------------------------
(J. M. BIGGAR)
*D. E. Collins
- ----------------------------------------
(D. E. COLLINS)
*D. E. Evans
- ----------------------------------------
(D. E. EVANS)
*R. W. Mahoney
- ----------------------------------------
(R. W. MAHONEY)
*W. G. Mitchell
- ----------------------------------------
(W. G. MITCHELL)
*A. M. Mixon, III
- ----------------------------------------
(A. M. MIXON, III)
</TABLE>
II-4
<PAGE> 46
<TABLE>
<CAPTION>
SIGNATURE
- ----------------------------------------
<C> <S>
*C. E. Moll
- ----------------------------------------
(C. E. MOLL)
*H. O. Petrauskas
- ----------------------------------------
(H. O. PETRAUSKAS)
*R. K. Smucker
- ----------------------------------------
(R. K. SMUCKER)
</TABLE>
* The undersigned, by signing his name hereto, does sign and execute this
Registration Statement on behalf of the designated Officers and Directors of
The Sherwin-Williams Company pursuant to Powers of Attorney executed on behalf
of each of such Directors and Officers which are filed as an Exhibit hereto.
<TABLE>
<S> <C>
By: /s/ Louis E. Stellato December 5, 1997
- ----------------------------------------
LOUIS E. STELLATO
(ATTORNEY-IN-FACT)
</TABLE>
II-5
<PAGE> 47
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- -------- ----------------------------------------------------------------
<C> <S> <C>
1(a) Form of Underwriting Agreement.
1(b) Form of Selling Agency Agreement for Medium Term Notes.
3(a) Amended Articles of Incorporation of the Company, as amended
April 28, 1993 (filed as Exhibit 4(a) to the Registrant's
Registration Statement on Form S-8 (File No. 33-52227) filed
with the Commission on February 10, 1994 and incorporated herein
by reference).
3(b) Regulations of the Company, as amended, dated April 27, 1988
(filed as Exhibit 4(b) to Post-Effective Amendment No. 1. to the
Registrant's Registration Statement on Form S-8 (File No.
2-91401) filed with the Commission on April 29, 1988 and
incorporated herein by reference).
4(a) Form of Indenture between The Sherwin-Williams Company and
Chemical Bank, as Trustee (filed as Exhibit 4(a) to the
Registrant's Registration Statement on Form S-3 (File No.
333-01093) filed with the Commission on February 20, 1996 and
incorporated herein by reference).
4(b)-1 Form of Fixed Rate Debt Security.
4(b)-2 Form of Floating Rate Debt Security.
5 Opinion of Counsel.
12 Statement regarding the computation of the ratio of earnings to
fixed charges.
23(a) Consent of Ernst & Young LLP, Independent Auditors.
23(b) Consent of Deloitte and Touche LLP, Independent Auditors.
23(c) Consent of Counsel (included in Exhibit 5).
24 Powers of Attorney.
25 Statement of Eligibility on Form T-1 of The Chase Manhattan
Bank.
</TABLE>
II-6
<PAGE> 1
Exhibit 1(a)
The Sherwin-Williams Company
[Form of Underwriting Agreement]
New York, New York
To the Representatives
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
The Sherwin-Williams Company, an Ohio corporation (the "Company"),
proposes to sell to the underwriters named in Schedule II hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, the principal amount of its securities identified in Schedule I
hereto (the "Securities"), to be issued under an indenture (the "Indenture")
dated as of February 1, 1996, between the Company and The Chase Manhattan Bank
(formerly known as Chemical Bank), as trustee (the "Trustee"). If the firm or
firms listed in Schedule II hereto include only the firm or firms listed in
Schedule I hereto, then the terms "Underwriters" and "Representatives", as used
herein, shall each be deemed to refer to such firm or firms.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to, and agrees with, each Underwriter as set forth below in this Section 1.
Certain terms used in this Section 1 are defined in paragraph (c) hereof.
(a) If the offering of the Securities is a Delayed Offering
(as specified in Schedule I hereto), paragraph (i) below is applicable
and, if the offering of the Securities is a Non-Delayed Offering (as so
specified), paragraph (ii) below is applicable.
(i) The Company meets the requirements for the use of
Form S-3 under the Securities Act of 1933 (the "Act") and has
filed with the Securities and Exchange Commission (the
"Commission") registration statements (the file numbers of
which are set forth in Schedule I hereto) on such Form,
including the same basic prospectus, for registration under
the Act of the offering and sale of the Securities. The
Company may have
<PAGE> 2
filed one or more amendments thereto, and may have used a
Preliminary Final Prospectus, each of which has previously
been furnished to you. Schedule I hereto will specify the
registration statement under which such Securities are
registered or, if portions of such Securities are registered
under each of such registration statements, the respective
portions thereof. Such registration statements, as so amended,
have become effective. The offering of the Securities is a
Delayed Offering and, although the Basic Prospectus may not
include all the information with respect to the Securities and
the offering thereof required by the Act and the rules
thereunder to be included in the Final Prospectus, the Basic
Prospectus includes all such information required by the Act
and the rules thereunder to be included therein as of the
Effective Date. The Company will next file with the Commission
pursuant to Rules 415 and 424(b)(2) or (5) a final supplement
to the form of prospectus included in such registration
statement relating to the Securities and the offering thereof.
As filed, such final prospectus supplement shall include all
required information with respect to the Securities and the
offering thereof and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the
Company has advised you, prior to the Execution Time, will be
included or made therein. If the Rule 434 Delivery Alternative
is used, the Company will also file the Rule 434 Term Sheet in
accordance with Rule 434. As filed, such Rule 434 Term Sheet
shall contain all the information required by Rule 434, and
except to the extent the Representatives shall agree in
writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and
other changes (beyond that contained in the latest Preliminary
Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein. Upon your
request, but not
<PAGE> 3
without your agreement, the Company will also file
a Rule 462(b) Registration Statement in accordance
with Rule 462(b).
(ii) The Company meets the requirements for the use
of Form S-3 under the Act and has filed with the Commission a
registration statement (the file number of which is set forth
in Schedule I hereto) on such Form, including the same basic
prospectus, for registration under the Act of the offering and
sale of the Securities. The Company may have filed one or more
amendments thereto, including a Preliminary Final Prospectus,
each of which has previously been furnished to you. Schedule I
hereto will specify the registration statement under which
such Securities are registered. The Company will next file
with the Commission either (x) a final prospectus supplement
relating to the Securities in accordance with Rules 430A and
424(b)(1) or (4), or (y) prior to the effectiveness of the
registration statement, an amendment to the registration
statement, including the form of final prospectus supplement.
In the case of clause (x), the Company has included in such
registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the
Act and the rules thereunder to be included in the Final
Prospectus with respect to the Securities and the offering
thereof. As filed, such final prospectus supplement or such
amendment and form of final prospectus supplement shall
contain all Rule 430A Information, together with all other
such required information, with respect to the Securities and
the offering thereof and, except to the extent the
Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein. If the Rule
434 Delivery Alternative is used, the Company will also file
the Rule 434 Term Sheet in accordance with Rule 434. As filed,
such Rule 434 Term Sheet shall contain all the information
required by
<PAGE> 4
Rule 434, and except to the extent the Representatives shall
agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you,
prior to the Execution Time, will be included or made therein.
Upon your request, but not without your agreement, the Company
will also file a Rule 462(b) Registration Statement in
accordance with Rule 462(b).
(b) On the Effective Date, the registration statement referred
to in paragraph (a) above did or will, and when the Final Prospectus is
first filed (if required) in accordance with Rule 424(b) and on the
Closing Date, the Final Prospectus (and any supplement thereto) will,
comply in all material respects with the applicable requirements of the
Act, the Securities Exchange Act of 1934 (the "Exchange Act") and the
Trust Indenture Act of 1939 (the "Trust Indenture Act") and the rules
thereunder; on the Effective Date, such registration statement did not
or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; on the Effective
Date and on the Closing Date the Indenture did or will comply in all
material respects with the requirements of the Trust Indenture Act and
the rules thereunder; and, on the Effective Date, the Final Prospectus,
if not filed pursuant to Rule 424(b), did not or will not, and on the
date of any filing pursuant to Rule 424(b) and on the Closing Date, the
Final Prospectus (together with any supplement thereto) will not,
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that the Company makes no representations or
warranties as to (i) that part of the Registration Statement which
shall constitute the Statement of Eligibility and Qualification (Form
T-1) under the Trust Indenture Act of the Trustee or (ii) the
information contained in or omitted from the Registration Statement or
the Final Prospectus (or any supplement thereto) in reliance upon and
in conformity with information furnished in writing
<PAGE> 5
to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration
Statement or the Final Prospectus (or any supplement thereto).
(c) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "the Effective Date" shall mean,
with respect to the registration statement referred to in paragraph (a)
above, the date that such registration statement, any post-effective
amendment or amendments thereto and any Rule 462(b) Registration
Statement became or become effective and each date after the date
hereof on which a document incorporated by reference in the
Registration Statement is filed. "Execution Time" shall mean the date
and time that this Agreement is executed and delivered by the parties
hereto. "Basic Prospectus" shall mean the prospectus referred to in
paragraph (a) above contained in the Registration Statement at the
Effective Date including, in the case of a Non-Delayed Offering, any
Preliminary Final Prospectus. "Preliminary Final Prospectus" shall mean
any preliminary prospectus supplement to the Basic Prospectus which
describes the Securities and the offering thereof and is used prior to
filing of the Final Prospectus. "Final Prospectus" shall mean the
prospectus supplement relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time, together with the
Basic Prospectus or, if, in the case of a Non-Delayed Offering, no
filing pursuant to Rule 424(b) is required, shall mean the form of
final prospectus relating to the Securities, including the Basic
Prospectus, included in the Registration Statement at the Effective
Date. If the Rule 434 Delivery Alternative is used, such term shall
also include the Basic Prospectus and the Rule 434 Term Sheet, taken
together. "Registration Statement" shall mean the registration
statement referred to in paragraph (a) above, including incorporated
documents, exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form
in which it shall become effective) and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date (as hereinafter
defined), shall also mean such registration statement as so amended.
Such term shall include any Rule 430A Information and Rule 434
Information deemed to be included therein at the Effective Date as
provided by Rule 430A and Rule 434, respectively. "Rule 415",
<PAGE> 6
"Rule 424", "Rule 430A", "Rule 434", "Rule 462(b)" and "Regulation S-K"
refer to such rules or regulations under the Act. "Rule 430A
Information" means information with respect to the Securities and the
offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A. "Rule 434
Delivery Alternative" shall mean the delivery alternative permitted by
Rule 434. "Rule 434 Information" shall mean any information to be
included in a Rule 434 Term Sheet. "Rule 434 Term Sheet" shall mean the
term sheet or abbreviated term sheet delivered by the Underwriters to
investors and filed by the Company with the Commission pursuant to Rule
434. "Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the final Delayed Offering covered by the initial
Registration Statement (file number 333- ). Any reference herein
to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue
date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be; and any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "Non-Delayed Offering" shall mean an offering of
securities which is intended to commence promptly after the effective
date of a registration statement, with the result that, pursuant to
Rules 415 and 430A, all information (other than Rule 430A Information)
with respect to the securities so offered must be included in such
registration statement at the effective date thereof. A "Delayed
Offering" shall mean an offering of securities pursuant to Rule 415
which does not commence promptly after the effective date of a
registration statement, with the result that only information required
pursuant to Rule 415 need be included in such registration statement at
the effective date thereof with respect to the
<PAGE> 7
securities so offered. Whether the offering of the
Securities is a Non-Delayed Offering or a Delayed
Offering shall be set forth in Schedule I hereto.
2. PURCHASE AND SALE. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at the purchase price set forth in
Schedule I hereto the principal amount of the Securities set forth opposite such
Underwriter's name in Schedule II hereto, except that, if Schedule I hereto
provides for the sale of Securities pursuant to delayed delivery arrangements,
the respective principal amounts of Securities to be purchased by the
Underwriters shall be as set forth in Schedule II hereto less the respective
amounts of Contract Securities determined as provided below. Securities to be
purchased by the Underwriters are herein sometimes called the "Underwriters'
Securities" and Securities to be purchased pursuant to Delayed Delivery
Contracts as hereinafter provided are herein called "Contract Securities".
If so provided in Schedule I hereto, the Underwriters are authorized to
solicit offers to purchase Securities from the Company pursuant to delayed
delivery contracts ("Delayed Delivery Contracts"), substantially in the form of
Schedule III hereto but with such changes therein as the Company may authorize
or approve. The Underwriters will endeavor to make such arrangements and, as
compensation therefor, the Company will pay to the Representatives, for the
account of the Underwriters, on the Closing Date, the percentage set forth in
Schedule I hereto of the principal amount of the Securities for which Delayed
Delivery Contracts are made. Delayed Delivery Contracts are to be with
institutional investors, including commercial and savings banks, insurance
companies, pension funds, investment companies and educational and charitable
institutions. The Company will enter into Delayed Delivery Contracts in all
cases where sales of Contract Securities arranged by the Underwriters have been
approved by the Company but, except as the Company may otherwise agree, each
such Delayed Delivery Contract must be for not less than the minimum principal
amount set forth in Schedule I hereto and the aggregate principal amount of
Contract Securities may not exceed the maximum aggregate principal amount set
forth in Schedule I hereto. The Underwriters will not have any responsibility in
respect of the validity or performance of Delayed Delivery Contracts. The
principal amount of Securities to be purchased by each Underwriter as set forth
in
<PAGE> 8
Schedule II hereto shall be reduced by an amount which shall bear the same
proportion to the total principal amount of Contract Securities as the principal
amount of Securities set forth opposite the name of such Underwriter bears to
the aggregate principal amount set forth in Schedule II hereto, except to the
extent that you determine that such reduction shall be otherwise than in such
proportion and so advise the Company in writing; PROVIDED, HOWEVER, that the
total principal amount of Securities to be purchased by all Underwriters shall
be the aggregate principal amount set forth in Schedule II hereto less the
aggregate principal amount of Contract Securities.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Underwriters'
Securities shall be made on the date and at the time specified in Schedule I
hereto (or such later date not later than five business days after such
specified date as the Representatives shall designate), which date and time may
be postponed by agreement between the Representatives and the Company or as
provided in Section 8 hereof (such date and time of delivery and payment for the
Underwriters' Securities being herein called the "Closing Date"). Delivery of
the Underwriters' Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof to or
upon the order of the Company by wire transfer of immediately available funds.
Delivery of the Underwriters' Securities shall be made at such location as the
Representatives shall reasonably designate at least one business day in advance
of the Closing Date. Certificates for the Underwriters' Securities shall be
registered in such names and in such denominations as the Representatives may
request not less than two full business days in advance of the Closing Date.
The Company agrees to have the Underwriters' Securities available for
inspection, checking and packaging by the Representatives in New York, New York,
not later than 1:00 p.m. on the business day prior to the Closing Date.
4. AGREEMENTS. The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of
the Registration Statement or supple-
<PAGE> 9
ment (including the Final Prospectus or any Preliminary Final
Prospectus) to the Basic Prospectus or any Rule 462(b) Registration
Statement unless the Company has furnished you a copy for your review
prior to filing and will not file any such proposed amendment or
supplement or Rule 462(b) Registration Statement to which you
reasonably object. Subject to the foregoing sentence, the Company will
cause the Final Prospectus, properly completed, and any supplement
thereto to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Representatives of such timely
filing. If the Rule 434 Delivery Alternative is used, the Company will
also cause the Rule 434 Term Sheet, properly completed, to be filed
with the Commission pursuant to Rule 434 within the time period
prescribed and will provide evidence satisfactory to the
Representatives of each timely filing. Upon your request, the Company
will cause the Rule 462(b) Registration Statement, properly completed,
to be filed with the Commission pursuant to Rule 462(b) and will
provide evidence satisfactory to the Representatives of such filing.
The Company will promptly advise the Representatives (i) when the
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, shall have become effective, (ii) when the Final
Prospectus, any supplement thereto, any Rule 434 Term Sheet or any Rule
462(b) Registration Statement shall have been filed with the Commission
pursuant to Rule 424(b), (iii) when, prior to termination of the
offering of the Securities, any amendment to the Registration Statement
shall have been filed or become effective, (iv) of any request by the
Commission for any amendment of the Registration Statement or
supplement to the Final Prospectus or for any additional information,
(v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (vi) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the
<PAGE> 10
Act, any event occurs as a result of which the Final Prospectus as then
supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Final Prospectus to comply with the Act or
the Exchange Act or the respective rules thereunder, the Company
promptly will (i) prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 4, an amendment or
supplement which will correct such statement or omission or effect such
compliance and (ii) supply any supplemented Prospectus to you in such
quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters, without charge, copies of the
Registration Statement (including exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by
the Act, as many copies of any Preliminary Final Prospectus and the
Final Prospectus and any supplement thereto as the Representatives may
reasonably request.
(e) The Company will use its best efforts to arrange for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate and to maintain such
qualifications in effect so long as required for the distribution of
the Securities and, if requested by the Representatives, will arrange
for the determination of the legality of the Securities for purchase by
institutional investors.
(f) Until the business date set forth on Schedule I hereto,
the Company will not, without the consent of the Representatives,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any debt securities issued or
guaranteed by the Company (other than (i) the Securities, (ii)
commercial paper with a maturity which
<PAGE> 11
does not exceed 270 days, (iii) debt securities issued by foreign
wholly owned subsidiaries of the Company, and (iv) borrowings under the
Company's five-year and 364 day revolving credit agreements).
(g) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, AN ACT RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA, and
the Company further agrees that if it commences engaging in business
with the government of Cuba or with any person or affiliate located in
Cuba after the date the Registration Statement becomes or has become
effective with the Commission or with the Florida Department of Banking
and Finance (the "Department"), whichever date is later, or if the
information reported in the Prospectus, if any, concerning the
Company's business with Cuba or with any person or affiliate located in
Cuba changes in any material way, the Company will provide the
Department notice of such business or change, as appropriate, in a form
acceptable to that Department.
5. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the Underwriters to purchase the Underwriters' Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time and the Closing Date, to the accuracy
of the statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 p.m. New York City time, on the date
of determination of the public offering price, if such determination
occurred at or prior to 3:00 p.m. New York City time on such date or
(ii) 12:00 Noon on the business day following the day on which the
public offering price was determined, if such determination occurred
after 3:00 p.m. New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule 424(b),
or if the filing of the Rule 434 Term Sheet is required
<PAGE> 12
pursuant to Rule 434, the Rule 434 Term Sheet will be filed in the
manner and within the time period required by Rule 434; and no stop
order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) (i) The Company shall have furnished to the
Representatives the opinion of the Vice President, General Counsel and
Secretary of the Company, dated the Closing Date, to the effect that:
(1) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Ohio, with full corporate power to own
its properties and conduct its business as described in the
Final Prospectus and is qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns
or leases material properties or conducts material business
except where the failure to so qualify would not have a
material adverse effect on the Company and its subsidiaries
taken as a whole. The Company's significant subsidiaries (as
defined in Rule 405 under the Securities Act) (the
"Subsidiaries") are duly incorporated and validly existing as
corporations in good standing under the laws of the
jurisdiction in which it is organized, each with full
corporate power and authority to own properties and conduct
business as described in the Final Prospectus, and are duly
qualified to do business as foreign corporations and are in
good standing under the laws of each jurisdiction which
requires such qualification wherein each such Subsidiary owns
or leases material properties or conducts material business
except where the failure to so qualify would not have a
material adverse effect on the operations of the Company and
its Subsidiaries taken as a whole;
(2) all the outstanding shares of capital stock of
each Subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Final Prospectus, all outstanding
shares of capital stock of the Subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries
free and clear of any
<PAGE> 13
perfected security interest and, to the knowledge of such
counsel, after due inquiry, any other security interests,
claims, liens or encumbrances;
(3) the Company's authorized equity capitalization
is as set forth in the Final Prospectus;
(4) the Indenture has been duly authorized, executed
and delivered, and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with
its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time
to time in effect); and the Securities have been duly
authorized and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid
for by the Underwriters pursuant to this Agreement, in the
case of the Underwriters' Securities, or by the purchasers
thereof pursuant to Delayed Delivery Contracts, in the case of
any Contract Securities, will constitute legal, valid and
binding obligations of the Company entitled to the benefits of
the Indenture;
(5) to the knowledge of such counsel, after due
inquiry, there is no pending or threatened action, suit or
proceeding before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
subsidiaries, of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in
the Final Prospectus, and there is no franchise, contract or
other document of a character required to be described
<PAGE> 14
in the Registration Statement or Final Prospectus, or to be
filed as an exhibit, which is not described or filed as
required; and the statements included or incorporated in the
Final Prospectus describing any legal proceedings or material
contracts or agreements relating to the Company fairly
summarize such matters;
(6) the Registration Statement and the Final
Prospectus (including, for the avoidance of doubt, the
documents incorporated by reference therein as of such date,
other than the financial statements and other financial and
statistical information contained therein as to which such
counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act
and the Exchange Act and the respective rules thereunder;
(7) this Agreement and any Delayed Delivery
Contracts have been duly authorized, executed and
delivered by the Company;
(8) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated herein or in
any Delayed Delivery Contracts, except such as have been
obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in such
opinion) as have been obtained;
(9) neither the execution and delivery of this
Agreement or the Indenture, the issue and sale of the
Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the
terms hereof or of any Delayed Delivery Contracts will
conflict with, result in a breach or violation of, or
constitute a default under the Amended Articles of
Incorporation or the Code of Regulations, as amended, of the
Company or the terms of any indenture or other material
agreement or instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or bound or any
judgment, order or decree known to such counsel to be
applicable to the Company or
<PAGE> 15
any of its subsidiaries of any court, regulatory body, or
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries; and
(10) no holders of securities of the Company have
rights to the registration of such securities under the
Registration Statement.
Such counsel shall also state that nothing has caused him to
believe that at the Effective Date the Registration Statement contained
any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Final Prospectus includes
any untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (including in
each such case, for the avoidance of doubt, the documents incorporated
by reference therein as of such date, but other than the financial
statements and other financial and statistical information contained
therein as to which such counsel need not express an opinion).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the State of Ohio or the United States, to the extent deemed
proper and specified in such opinion, upon the opinion of other counsel
of good standing believed to be reliable and who are satisfactory to
counsel for the Underwriters and (B) as to matters of fact, to the
extent deemed proper, on certificates of responsible officers of the
Company and public officials. References to the Final Prospectus in
this paragraph (b) (i) include any supplements thereto at the Closing
Date.
(ii) The Company shall have furnished to the
Representatives the opinion of Arnold & Porter, outside
counsel for the Company, dated the Closing Date, to the effect
that:
(1) the Securities conform to the
description thereof contained in the Final
Prospectus;
(2) the Indenture has been duly qualified
under the Trust Indenture Act; and
(3) the Registration Statement has become
effective under the Act; any required filing of
<PAGE> 16
the Basic Prospectus, any Preliminary Final Prospectus and the
Final Prospectus, and any supplements thereto, pursuant to
Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b), or if the Rule 434 Delivery
Alternative was used, the required filing of the Rule 434 Term
Sheet has been made in the manner and time period required by
Rule 434; to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been
instituted or threatened, and the Registration Statement and
the Final Prospectus (other than the financial statements and
other financial and statistical information contained therein
as to which such counsel need express no opinion) comply as to
form in all material respects with the applicable requirements
of the Act and the Trust Indenture Act and the respective
rules thereunder.
Such counsel shall also state that nothing has caused them to
believe that at the Effective Date the Registration Statement contained
any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Final Prospectus includes
any untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in each case
except for the documents incorporated by reference in the Registration
Statement and the Final Prospectus and the financial statements and
other financial and statistical information contained therein, as to
which such counsel need not express any opinion).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of State of Ohio, to the
extent deemed proper and specified in such opinion, upon the opinion of
the Vice President, General Counsel and Secretary of the Company and
(B) as to matters of fact, to the extent deemed proper, on certificates
of responsible officers of the Company and public officials. References
to the Final Prospectus in this paragraph (b)(ii) include any
supplements thereto at the Closing Date.
(c) The Representatives shall have received from Cravath,
Swaine & Moore, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the issuance and sale of the
Securities, the
<PAGE> 17
Indenture, any Delayed Delivery Contracts, the Registration Statement,
the Final Prospectus (together with any supplement thereto) and other
related matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Senior Vice
President-Finance, Treasurer and Chief Financial Officer and Vice
President and Assistant Treasurer of the Company, dated the Closing
Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Final Prospectus, any
supplement to the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date and the Company has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing
Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Final Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
in the condition (financial or other), earnings, business or
properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(e) At the Execution Time and at the Closing Date, Ernst &
Young LLP shall have furnished to the Representatives a letter or
letters (which may refer to letters previously delivered to the
Representatives), dated respectively as of the Execution Time and as of
<PAGE> 18
the Closing date, substantially in the forms attached hereto as
Exhibits A and B.
(f) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto), there shall not have been (i)
any change or decrease specified in the letter or letters referred to
in paragraph (e) of this Section 5 or (ii) any change, or any
development involving a prospective change, in or affecting the
business or properties of the Company and its subsidiaries the effect
of which, in any case referred to in clause (i) or (ii) above, is, in
the judgment of the Representatives, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Registration
Statement (exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto).
(g) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities
by Moody's Investors Service Inc. ("Moody's"), Standard & Poor's
Corporation ("S&P"), Duff & Phelps Inc. ("Duff & Phelps") or any
successor to such rating organizations or any other nationally
recognized statistical rating organization which is comparable to
Moody's, S&P or Duff & Phelps, or any notice given of any intended or
potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible
change.
(h) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request, including
any further items specified in Schedule I.
(i) The Company shall have accepted Delayed Delivery Contracts
in any case where sales of Contract Securities arranged by the
Underwriters have been approved by the Company.
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or
<PAGE> 19
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or telecopy confirmed in writing.
The documents required to be delivered by this Section 5 shall be
delivered at the offices of Cravath, Swaine & Moore, counsel for the
Underwriters, at Worldwide Plaza, 825 Eighth Avenue, New York, New York, on the
Closing Date.
6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. The Company will pay all
costs, expenses, fees, disbursements and taxes incident to (i) the preparation
by the Company, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits), the Final
Prospectus, each Preliminary Final Prospectus and all amendments and supplements
to any of them prior to or during the period specified in Section 4(b), (ii) the
printing (including duplication costs) and delivery of this Agreement,
preliminary and supplemental blue sky memoranda and all other agreements,
memoranda, correspondence and other documents printed and delivered in
connection with the offering of the Securities, (iii) the registration with the
Commission and the offer and sale of the Securities, (iv) the registration or
qualification of the Securities for offer and sale under the securities or blue
sky laws of the several states (including the reasonable fees and disbursements
of your counsel relating to such registration or qualification), (v) filings and
clearance with the National Association of Securities Dealers, Inc., in
connection with the offering, and (vi) the performance by the Company of its
other obligations under this Agreement.
In addition, if the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 5 hereof is not satisfied, because of any termination pursuant
to Section 9 hereof or because of any refusal, inability or failure on the part
of the Company to perform any agreement herein or comply with any provision
hereof other than by reason of a default by any of the Underwriters, the Company
will reimburse the Underwriters severally upon demand for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of
<PAGE> 20
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Securities.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that (i) the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein and (ii) such indemnity with
respect to the Basic Prospectus or any Preliminary Final Prospectus shall not
inure to the benefit of any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any such loss, claim, damage or
liability purchased the Securities which are the subject thereof if such person
did not receive a copy of the Final Prospectus (or the Final Prospectus as
supplemented) excluding documents incorporated therein by reference at or prior
to the confirmation of the sale of such Securities to such person in any case
where such delivery is required by the Act and the untrue statement or omission
of a material fact contained in the Basic Prospectus or any Preliminary Final
Prospectus was corrected in the Final Prospectus (or the Final Prospectus as
supplemented). This indemnity agreement will be in
<PAGE> 21
addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers and employees who sign
the Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact in written information relating to such Underwriter furnished
to the Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state in such written information a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which any Underwriter may
otherwise have. The Company acknowledges that the statements set forth in the
last paragraph of the cover page, under the heading "Underwriting" or "Plan of
Distribution" and, if Schedule I hereto provides for sales of Securities
pursuant to delayed delivery arrangements, in the last sentence under the
heading "Delayed Delivery Arrangements" in any Preliminary Final Prospectus or
the Final Prospectus constitute the only information furnished in writing by or
on behalf of the several Underwriters for inclusion in the documents referred to
above, and you, as the Representatives, confirm that such statements are
correct.
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party
<PAGE> 22
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure to so notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indem nified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded after consultation with legal
counsel of its choosing that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified party
in writing to employ separate counsel at the expense of the indemnifying party.
An indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding. Any
<PAGE> 23
indemnifying party shall not be liable for any settlement, compromise or consent
of any proceeding effected by the indemnified party without the written consent
of the indemnifying party (which consent shall not be unreasonably withheld),
unless the indemnifying party has waived its right to appoint counsel to
represent the indemnified party in such proceeding in which case the indemnified
party may effect such a settlement, compromise or consent without the consent of
the indemnifying party.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 7 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and the Underwriters agree to contribute to
the aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company and by the Underwriters from the offering of
the Securities; PROVIDED, HOWEVER, that in no case shall any Underwriter (except
as may be provided in any agreement among underwriters relating to the offering
of the Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Underwriters shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and of the
Underwriters in connection with the statements or omissions which resulted in
such Losses as well as any other relevant equitable considerations. Benefits
received by the Company shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses), and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the Final
Prospectus. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company or the Underwriters. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution
<PAGE> 24
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 7, each person who controls an Underwriter within the
meaning of either the Act or the Exchange Act and each director, officer,
employee and agent of an Underwriter shall have the same rights to contribution
as such Underwriter, and each person who controls the Company within the meaning
of either the Act or the Exchange Act, each officer of the Company who shall
have signed the Registration Statement and each director of the Company shall
have the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
8. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Securities set forth opposite the names of all the remaining Underwriters)
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; PROVIDED, HOWEVER, that in the event that the aggregate
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities set
forth in Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any nondefaulting
Underwriter or the Company. In the event of a default by any Underwriter as set
forth in this Section 8, the Closing Date shall be postponed for such period,
not exceeding seven days, as the Representatives shall determine in order that
the required changes in the Registration Statement and the Final Prospectus or
in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting Underwriter of its liability, if
any, to the Company and any nondefaulting Underwriter for damages occasioned by
its default hereunder.
9. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time
<PAGE> 25
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the judgment of the Representatives, impracticable or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Final Prospectus (exclusive of any supplement thereto).
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in Section 7 hereof,
and will survive delivery of and payment for the Securities. The provisions of
Sections 6 and 7 hereof shall survive the termination or cancellation of this
Agreement.
11. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telegraphed and confirmed to them, at the address specified in
Schedule I hereto; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 101 Prospect Avenue, N.W., Cleveland, Ohio
44115, attention: Louis E. Stellato, Esq., Vice President, General Counsel and
Secretary.
12. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7 hereof, and no
other person will have any right or obligation hereunder.
13. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us
<PAGE> 26
the enclosed duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement among the Company and the several Underwriters.
Very truly yours,
THE SHERWIN-WILLIAMS COMPANY,
by
-------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the date
specified in Schedule I hereto.
SALOMON BROTHERS INC
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
by Salomon Brothers Inc
by
--------------------------
Name:
Title:
For themselves and the other several
Underwriters, if any, named in Schedule
II to the foregoing Agreement.
<PAGE> 27
SCHEDULE I
Underwriting Agreement dated ,
Representatives:
Salomon Brothers Inc
Seven World Trade Center
New York, NY 10048
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
North Tower
10th Floor
New York, NY 10281
Title, Purchase Price and Description of Securities:
Title:
Principal amount:
Purchase price: (include accrued interest or
amortization, if any)
Sinking fund provisions:
Redemption provisions:
Other provisions:
Registration Statements: $ of such Securities are registered under Registration
Statement No. 333- .
Closing Date, Time and Location:
Type of Offering: [Delayed Offering or Non-Delayed
Offering]
Delayed Delivery Arrangements:
Fee:
Minimum Principal Amount of all Contracts: $
Maximum Principal Amount of all Contracts: $
Date referred to in Section 4(f) after which the Company may offer or sell debt
securities issued or guaranteed by the Company without the consent of the
Representative:
<PAGE> 28
2
Modification of items to be covered by the letter from Ernst & Young LLP
delivered pursuant to Section 5(e) at the Execution Time.
<PAGE> 29
SCHEDULE II
Principal Amount
of Securities
UNDERWRITERS TO BE PURCHASED
--------------------------- --------------------
---------------
Total............................................... $
===============
<PAGE> 30
SCHEDULE III
Delayed Delivery Contract
, 19
Salomon Brothers Inc.
Seven World Trade Center
New York, NY 10048
Merrill Lynch & Co.
Word Financial Center
North Tower
New York, NY 10281
Dear Sirs:
The undersigned hereby agrees to purchase from The Sherwin-Williams
Company (the "Company"), and the Company agrees to sell to the undersigned, on ,
19 , (the "Delivery Date"), $ principal amount of the Company's (the
"Securities") offered by the Company's Prospectus dated , 19 , and related
Prospectus Supplement dated , 19 , receipt of a copy of which is hereby
acknowledged, at a purchase price of % of the principal amount thereof, plus
[accrued interest] [amortization of original issue discount], if any, thereon
from , 19 , to the date of payment and delivery, and on the further terms and
conditions set forth in this contract.
Payment for the Securities to be purchased by the undersigned shall be
made on or before 11:00 a.m., New York City time, on the Delivery Date to or
upon the order of the Company in New York Clearing House (next day) funds, at
your office or at such other place as shall be agreed between the Company and
the undersigned, upon delivery to the undersigned of the Securities in
definitive fully registered form and in such authorized denominations and
registered in such names as the undersigned may request by written or telecopy
communication addressed to the Company not less than five full business days
prior to the Delivery Date. If no request is received, the Securities will be
registered in the name of the undersigned and issued in a denomination equal to
the aggregate principal amount of Securities to be purchased by the undersigned
on the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for Securities on the Delivery Date, and the obligation of the Company to sell
and deliver Securities
<PAGE> 31
2
on the Delivery Date, shall be subject to the conditions (and neither party
shall incur any liability by reason of the failure thereof) that (1) the
purchase of Securities to be made by the undersigned, which purchase the
undersigned represents is not prohibited on the date hereof, shall not on the
Delivery Date be prohibited under the laws of the jurisdiction to which the
undersigned is subject, and (2) the Company, on or before the Delivery Date,
shall have sold to certain underwriters (the "Underwriters") such principal
amount of the Securities as is to be sold to them pursuant to the Underwriting
Agreement referred to in the Prospectus and Prospectus Supplement mentioned
above. Promptly after completion of such sale to the Underwriters, the Company
will mail or deliver to the undersigned at its address set forth below notice to
such effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith. The obligation of the
undersigned to take delivery of and make payment for the Securities, and the
obligation of the Company to cause the Securities to be sold and delivered,
shall not be affected by the failure of any purchaser to take delivery of and
make payment for the Securities pursuant to other contracts similar to this
contract.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that acceptance of this contract and other similar
contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first come, first served basis. If this contract is
acceptable to the Company, it is required that the Company sign the form of
acceptance below and mail or deliver one of the counterparts hereof to the
undersigned at its address set forth below. This will become a binding contract
between the Company and the undersigned, as of the date first above written,
when such counterpart is so mailed or delivered.
<PAGE> 32
3
This agreement shall be governed by and construed in accordance with
the laws of the State of New York.
Very truly yours,
-----------------------------
(Name of Purchaser)
by
---------------------------
(Signature and Title
of Officer)
------------------------------
(Address)
Accepted:
The Sherwin-Williams Company,
by
-----------------------------
(Authorized Signature)
<PAGE> 1
Exhibit 1(b)
The Sherwin-Williams Company
Medium-Term Notes, Series B
Due Nine Months or More
From Date of Issue
Selling Agency Agreement
, 1997
New York, New York
Salomon Brothers Inc
Seven World Trade Center
New York, N.Y. 10048
Merrill Lynch & Co.
World Financial Center, North Tower
New York, NY 10281
Dear Sirs:
The Sherwin-Williams Company, an Ohio corporation (the "Company"),
confirms its agreement with each of you with respect to the issue and sale by
the Company of up to the aggregate principal amount set forth in Schedule I
hereto of its Medium-Term Notes, Series B, Due Nine Months or More from Date of
Issue (the "Notes"). The Notes will be issued under an indenture dated as of
February 1, 1996 between the Company and The Chase Manhattan Bank (formerly
Chemical Bank), as trustee (the "Trustee") (the "Indenture"). Unless otherwise
specifically provided for and set forth in a supplement to the Prospectus
referred to below, the Notes in minimum denominations of $1,000 and in
denominations exceeding such amount by integral multiples of $1,000, will be
issued only in fully registered form and will have the maturities, annual
interest rates and, if appropriate, other terms set forth in such supplement to
the Prospectus. The Notes will be issued, and the terms thereof established, in
accordance with the Indenture and the Medium-Term Notes Administrative
Procedures attached hereto as Exhibit A (the "Procedures"). The Procedures may
only be amended by written agreement of the Company and each of you after notice
to, and with the approval of, the Trustee. For the purposes of this Agreement,
the term "Agent" shall refer to any of you acting solely in the capacity as
agent for the Company pursuant to Section 2(a) and not as principal
(collectively, the "Agents"), the term the "Purchaser" shall refer to one of you
acting solely as principal pursuant to Section 2(b) and not as agent, and the
term "you" shall
<PAGE> 2
2
refer to collectively whether at any time any of you is acting in both such
capacities or in either such capacity. In acting under this Agreement, in
whatever capacity, each of you is acting individually and not jointly.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to, and agrees with, each of you as set forth below in this Section 1. Certain
terms used in this Section 1 are defined in paragraph (c) hereof.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on such Form (File Number: 333- ), including the same basic prospectus, which
has become effective, for the registration under the Act of $150,000,000
aggregate principal amount of debt securities (the "Securities"), including the
Notes. The Terms Agreement referred to in Section 2 for any offering of
Securities will specify the registration statement under which such Securities
are registered or, if portions of such Securities are registered under each of
such registration statements, the respective portions thereof. Such registration
statements, as amended as of the Execution Time, meet the requirements set forth
in Rule 415(a)(1)(ix) or (x) under the Act and comply in all other material
respects with said Rule. The Company has included in such registration
statements, or has filed or will file with the Commission pursuant to the
applicable paragraph of Rule 424(b) under the Act, a supplement to the form of
prospectus included in such registration statement relating to the Notes and
the plan of distribution thereof (the "Prospectus Supplement"). In connection
with the sale of Notes the Company proposes to file with the Commission pursuant
to the applicable paragraph of Rule 424(b) under the Act further supplements to
the Prospectus Supplement (each a "Pricing Supplement"), specifying the interest
rates, maturity dates and, if appropriate, other similar terms of the Notes sold
pursuant hereto or the offering thereof. If the Rule 434 Delivery Alternative is
used, the Company will also file the Rule 434 Term Sheet in accordance with Rule
434. As filed, such Rule 434 Term Sheet shall contain all the information
required by Rule 434, and except to the extent the Representatives shall agree
in writing to a modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not completed at
the Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the latest Preliminary Prospectus) as
the Company has advised you, prior to the Execution Time, will be included or
made therein. Upon your request, but
<PAGE> 3
3
not without your agreement, the Company will also file a Rule 462(b)
Registration Statement in accordance with Rule 462(b).
(b) As of the Execution Time, on the respective Effective Date of the
registration statement referred to in paragraph (a) above, on the date of any
post-effective amendment thereto, when any supplement to the Prospectus is filed
with the Commission, as of the date of a Terms Agreement and at the date of
delivery by the Company of any Notes sold hereunder (a "Closing Date"), (i) the
registration statement, as amended as of any such time, and the Prospectus, as
supplemented as of any such time, and the Indenture will comply in all material
respects with the applicable requirements of the Act, the Trust Indenture Act of
1939 (the "Trust Indenture Act"), as amended and the Securities Exchange Act of
1934 (the "Exchange Act") and the respective rules thereunder; (ii) the
registration statement, as amended as of any such time, does not or will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; and (iii) the Prospectus, as supplemented as of any such
time, will not contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company makes no representations or warranties as to (i) that
part of the Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of the
Trustee or (ii) the information contained in or omitted from the Registration
Statement or the Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any or all of you specifically for use in connection with the preparation of
the Registration Statement or the Prospectus (or any supplement thereto).
(c) As of the time any Notes are issued and sold hereunder, the
Indenture will constitute a legal, valid and binding instrument enforceable
against the Company in accordance with its terms and such Notes will have been
duly authorized, and, when issued to and paid for by the purchasers thereof,
will constitute legal, valid and binding obligations of the Company entitled to
the benefits of the Indenture.
<PAGE> 4
4
(d) The Company has complied with the provisions of the Laws of
Florida, Chapter 92-198 Securities Business with Cuba.
(e) The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean, with respect to
the registration statement referred to in paragraph (a) above, the date that
such registration statement, any post-effective amendment or amendments thereto
and any Rule 462(b) Registration Statement became or become effective.
"Execution Time" shall mean the date and time that this Agreement is executed
and delivered by the parties hereto. "Basic Prospectus" shall mean the form of
basic prospectus relating to the Securities contained in the Registration
Statement at the Effective Date. "Prospectus" shall mean the Basic Prospectus as
supplemented by the Prospectus Supplement. If the Rule 434 Delivery Alternative
is used, such term shall also include the Basic Prospectus and the Rule 434 Term
Sheet, taken together. "Registration Statement" shall mean, collectively, the
registration statement referred to in paragraph (a) above, including
incorporated documents, exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form in which
it shall become effective) and, in the event any post-effective amendment
thereto or any Rule 462(b) Registration Statement becomes effective prior to the
Closing Date, shall also mean such registration statement as so amended. Such
term shall include any Rule 430A Information and Rule 434 Information deemed to
be included therein at the Effective Date as provided by Rule 430A and Rule 434,
respectively. "Rule 415", "Rule 424", "Rule 430A", "Rule 434", "Rule 462(b)" and
"Regulation S-K" refer to such rules under the Act. "Rule 430A Information"
means information with respect to the Securities and the offering thereof
permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A. "Rule 434 Delivery Alternative" shall mean the
delivery alternative permitted by Rule 434. "Rule 434 Information" shall mean
any information to be included in a Rule 434 Term Sheet. "Rule 434 Term Sheet"
shall mean the term sheet or abbreviated term sheet delivered by the
Underwriters to investors and filed by the Company with the Commission pursuant
to Rule 434. "Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating to
the final Delayed Offering covered by the initial Registration Statement (file
number 333- ). Any reference herein to the Registration Statement, the Basic
Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to
<PAGE> 5
5
refer to and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, the Prospectus Supplement or the Prospectus, as the case may be; and
any reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be, deemed to be incorporated
therein by reference.
2. APPOINTMENT OF AGENTS; SOLICITATION BY THE AGENTS OF OFFERS TO
PURCHASE; SALES OF NOTES TO PURCHASER. (a) Subject to the terms and conditions
set forth herein, the Company hereby authorizes each of the Agents to act as its
agent to solicit offers for the purchase of all or part of the Notes from the
Company.
On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, each of the Agents agrees, as agent of
the Company, to use its best efforts to solicit offers to purchase the Notes
from the Company upon the terms and conditions set forth in the Prospectus (and
any supplement thereto) and in the Procedures. Each Agent shall make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Notes has been solicited by such Agent and accepted by the
Company, but such Agent shall not, except as otherwise provided in this
Agreement, have any liability to the Company in the event any such purchase is
not consummated for any reason. Except as provided in Section 2(b), under no
circumstances will any Agent be obligated to purchase any Notes for its own
account. It is understood and agreed, however, that any Agent may purchase Notes
as principal pursuant to Section 2(b).
The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Notes. Upon receipt of instructions from
the Company, the Agents will forthwith suspend solicitation of offers to
purchase Notes from the Company until such time as the Company has advised them
that such solicitation may be resumed.
<PAGE> 6
6
The Company agrees to pay each Agent a commission, on the Closing Date
with respect to each sale of Notes by the Company as a result of a solicitation
made by such Agent, in an amount equal to that percentage specified in Schedule
I hereto of the aggregate principal amount of the Notes sold by the Company.
Such commission shall be payable as specified in the Procedures.
Subject to the provisions of this Section and to the Procedures, offers
for the purchase of Notes may be solicited by an agent as agent for the Company
at such time and in such amounts as such Agent deems advisable. The Company may
from time to time offer Notes for sale otherwise than through an Agent;
PROVIDED, HOWEVER, that so long as this Agreement shall be in effect the Company
shall not solicit or accept offers to purchase Notes through any agent
(excluding the Company's or its subsidiaries' employees) other than an Agent.
(b) Subject to the terms and conditions set forth herein, whenever the
Company and any of you determines that the Company shall sell Notes directly to
any of you as principal, each such sale of Notes shall be made in accordance
with the terms of this Agreement and, a supplemental agreement relating to such
sale. Each such supplemental agreement (which may be either an oral agreement
confirmed in writing or a written agreement) is herein referred to as a "Terms
Agreement". Each Terms Agreement shall describe the Notes to be purchased by the
Purchaser pursuant thereto and shall specify the principal amount of each such
Note, the aggregate principal amount of all such Notes, the maturity date of
such Notes, the rate at which interest will be paid on such Notes, the dates on
which interest will be paid on such Notes and the record date with respect to
each such payment of interest, the Closing Date for such Notes, the place of
delivery of the Notes and payment therefor, the method of payment and any
requirements for the delivery of opinions of counsel, certificates from the
Company or its officers or a letter from the Company's independent public
accountants, as described in Section 6(b). Any such Terms Agreement may also
specify the period of time referred to in Section 4(m). Any written Terms
Agreement may be in the form attached hereto as Exhibit B. The Purchaser's
commitment to purchase Notes shall be deemed to have been made on the basis of
the representation and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth.
Delivery of the certificates for Notes sold to the Purchaser pursuant
to a Terms Agreement shall be made not
<PAGE> 7
7
later than the Closing Date agreed to in such Terms Agreement, against payment
of funds to the Company in the net amount due to the Company for such Notes by
the method and in the form set forth in the Procedures unless otherwise agreed
to between the Company and the Purchaser in such Terms Agreement.
Unless otherwise agreed to between the Company and the Purchaser in a
Terms Agreement, any Note sold to a Purchaser (i) shall be purchased by such
Purchaser at a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of a Note of
identical maturity and (ii) may be resold by such Agent at varying prices from
time to time or, if set forth in the applicable Terms Agreement and Pricing
Supplement, at a fixed public offering price. In connection with any resale of
Notes purchased, a Purchaser may use a selling or dealer group and may reallow
any portion of the discount or commission payable pursuant hereto to dealers or
purchasers.
3. OFFERING AND SALE OF NOTES. Each Agent shall communicate to the
Company, orally or in writing, each offer (unless previously rejected by such
Agent as provided below) to purchase Notes on terms previously communicated by
the Company to such Agent, and the Company shall have the sole right to accept
such offers to purchase Notes and may refuse any proposed purchase of Notes in
whole or in part for any reason. Each Agent shall have the right, in its
discretion reasonably exercised, to reject any such offer received by it in
whole or in part. Each Agent and the Company agree to perform the respective
duties and obligations specifically provided to be performed by them in the
Procedures.
4. AGREEMENTS. The Company agrees with each of you that:
(a) Prior to the termination of the offering of the Notes (including by
way of resale by a Purchaser of Notes), the Company will not file any amendment
of the Registration Statement or supplement to the Prospectus (except for (i) a
periodic or current report filed under the Exchange Act, (ii) a Supplement
relating to any offering of, or a change in the maturity dates, interest rates,
issuance prices or other similar terms of, any Notes or (iii) a supplement
relating to an offering of Securities other than the Notes) or any Rule 462(b)
Registration Statement unless the Company has furnished each of you a copy for
your review prior to filing and given each of you a reasonable opportunity to
comment on any such proposed amendment or supplement or Rule 462(b) Registration
Statement. Subject
<PAGE> 8
8
to the foregoing sentence, the Company will cause each supplement to the
Prospectus to be filed with the Commission pursuant to the applicable paragraph
of Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to you of such filing. If the Rule 434 Delivery Alternative is
used, the Company will also cause the Rule 434 Term Sheet, properly completed,
to be filed with the Commission pursuant to Rule 434 within the time period
prescribed and will provide evidence satisfactory to the Agents of such timely
filing. Upon your request, the Company will cause the Rule 462(b) Registration
Statement, properly completed, to be filed with the Commission pursuant to Rule
462(b) and will provide evidence satisfactory to the Agents of such filing. The
Company will promptly advise each of you (i) when the Prospectus, any supplement
thereto (except for a supplement relating to an offering of Securities other
than the Notes), any Rule 434 Term Sheet or any Rule 462(b) Registration
Statement, shall have been filed with the Commission pursuant to Rule 424(b),
(ii) when, prior to the termination of the offering of the Notes, any amendment
of the Registration Statement shall have been filed or become effective, (iii)
of any request by the Commission for any amendment of the Registration Statement
or supplement to the Prospectus or for any additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that purpose and (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threatening of any reasonable proceeding for
such purpose. The Company will use its best efforts to prevent the issuance of
any such stop order and, if issued, to obtain as soon as possible the withdrawal
thereof;
(b) If, at any time when a prospectus relating to the Notes is required
to be delivered under the Act, any event occurs as a result of which the
Prospectus as then supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it shall be necessary to amend the Registration Statement or
to supplement the Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (i) notify each of you to
suspend solicitation of offers to purchase Notes (and, if so notified by the
Company, each of you shall forthwith suspend such solicitation and cease using
the Prospectus as then supplemented), (ii) prepare and file with the Commission,
<PAGE> 9
9
subject to the first sentence of paragraph (a) of this Section 4, an amendment
or supplement which will correct such statement or omission or effect such
compliance and (iii) supply any supplemented Prospectus to each of you in such
quantities as you may reasonably request. If such amendment or supplement, and
any documents, certificates and opinions furnished to each of you pursuant to
paragraph (g) of this Section 4 in connection with the preparation or filing of
such amendment or supplement are reasonably satisfactory in all respects to you,
you will, upon the filing of such amendment or supplement with the Commission
and upon the effectiveness of an amendment to the Registration Statement, if
such an amendment is required, resume your obligation to solicit offers to
purchase Notes hereunder.
(c) The Company, during the period when a prospectus relating to the
Notes is required to be delivered under the Act, will file promptly all
documents required to be filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act and will furnish to each of you copies of
such documents. In addition, on or prior to the date on which the Company makes
any announcement to the general public concerning earnings or concerning any
other event which is required to be described, or which the Company proposes to
describe, in a document filed pursuant to the Exchange Act, the Company will
furnish to each of you the information contained or to be contained in such
announcement. The Company also will furnish to each of you copies of all
material press releases or material announcements furnished to news or wire
services. The Company will promptly notify each of you by telephone or telecopy
of (i) any decrease in the rating of the Notes or any other debt securities of
the Company by Moody's Investors Service Inc. ("Moody's") or Standard & Poor's
Corporation ("S&P") or (ii) any written notice received from S&P or Moody's of
any intended or contemplated decrease in any such rating or of a possible change
in any such rating that does not indicate the direction of the possible change;
(d) As soon as practicable, the Company will make generally available
to its security holders and to each of you an earnings statement or statements
of the Company and its subsidiaries which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act;
(e) The Company will furnish to each of you and your counsel, without
charge, copies of the Registration Statement (including exhibits thereto) and,
so long as delivery of a prospectus may be required by the Act, as many
<PAGE> 10
10
copies of the Prospectus and any supplement thereto as you
may reasonably request;
(f) The Company will use its best efforts to arrange for the
qualification of the Notes for sale under the laws of such jurisdictions as any
of you may designate, and to maintain such qualifications in effect so long as
required for the distribution of the Notes and, if requested by you, will
arrange for the determination of the legality of the Notes for purchase by
institutional investors;
(g) The Company shall furnish to each of you such documents,
certificates of officers of the Company and opinions of counsel for the Company
relating to the business, operations and affairs of the Company, the
Registration Statement, the Prospectus, and any amendments thereof or
supplements thereto, the Indenture, the Notes, this Agreement, the Procedures
and the performance by the Company and you of its and your respective
obligations hereunder and thereunder as any of you may from time to time and at
any time prior to the termination of this Agreement reasonably request;
(h) The Company shall, whether or not any sale of the Notes is
consummated, (i) pay all expense incident to the performance of its obligations
under this Agreement, including the fees and disbursements of its accountants
and counsel, the cost of printing or other production and delivery of the
Registration Statement, the Prospectus, all amendments thereof and supplements
thereto, the Indenture, this Agreement and all other documents relating to the
offering, the cost of preparing, printing, packaging and delivering the Notes,
the reasonable fees and disbursements, including fees of counsel, incurred in
compliance with Section 4(f), the fees and disbursements of the Trustee and the
fees of any agency that rates the Notes, (ii) reimburse each of you, upon
request, on a monthly basis for all out-of-pocket expenses, if any, incurred by
you and approved by the Company in advance, in connection with this Agreement
and (iii) pay the reasonable fees and expenses of your counsel incurred in
connection with this Agreement and approved by the Company in advance (which
approval may be oral);
(i) Each acceptance by the Company of an offer to purchase Notes will
be deemed to be an affirmation that its representations and warranties contained
in Section 1 of this Agreement are true and correct at the time of such
acceptance, as though made at and as of such time, and a covenant that such
representations and warranties will be true and correct at the time of delivery
to the purchaser of
<PAGE> 11
11
the Notes relating to such acceptance, as though made at and as of such time (it
being understood that for purposes of the foregoing affirmation and covenant
such representations and warranties shall relate to the Registration Statement
and Prospectus as amended or supplemented at each such time). Each such
acceptance by the Company of an offer for the purchase of Notes shall be deemed
to constitute an additional representation, warranty and agreement by the
Company that, as of the settlement date for the sale of such Notes, after giving
effect to the issuance of such Notes, of any other Notes to be issued on or
prior to such settlement date and of any other Securities to be issued and sold
by the Company on or prior to such settlement date, the aggregate amount of
Securities (including any Notes) which have been issued and sold by the Company
will not exceed the amount of Securities registered pursuant to the Registration
Statement. The Company will inform you promptly upon your inquiry of the
aggregate amount of Securities registered under the Registration Statement which
remain unsold;
(j) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement (i) relating
to any offering of Securities other than the Notes or (ii) providing solely for
the specification of or a change in the maturity dates, the interest rates, the
issuance prices, the redemption dates (whether pursuant to a sinking fund or
otherwise) or other similar terms of any Notes sold pursuant hereto), the
Company will deliver or cause to be delivered promptly to each of you a
certificate of the Company, signed by the Senior Vice President - Finance,
Treasurer and Chief Financial Officer and Vice President and Assistant Treasurer
or other vice president of the Company, dated the date of the effectiveness of
such amendment or the date of the filing of such supplement, in form reasonably
satisfactory to you, of the same tenor as the certificate referred to in Section
5(d) but modified to relate to the last day of the fiscal quarter for which
financial statements of the Company were last filed with the Commission and to
the Registration Statement and the Prospectus as amended and supplemented to the
time of the effectiveness of such amendment or the filing of such supplement;
(k) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement (i) relating
to any offering of Securities other than the Notes or (ii) providing solely for
the specification of or a change in the maturity dates, the interest rates, the
issuance prices, the redemption dates or other similar terms of any Notes sold
pursuant hereto), the Company shall furnish or cause to be furnished promptly to
<PAGE> 12
12
each of you a written opinion of counsel of the Company in form reasonably
satisfactory to each of you, dated the date of the effectiveness of such
amendment or the date of the filing of such supplement, of the same tenor as the
opinion referred to in Section 5(b) but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of the
effectiveness of such amendment or the filing of such supplement or, in lieu of
such opinion, counsel last furnishing such an opinion to you may furnish each of
you with a letter to the effect that you may rely on such last opinion to the
same extent as though it were dated the date of such letter authorizing reliance
(except that statements in such last opinion will be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of the effectiveness of such amendment or the filing of such supplement);
(1) Each time that the Registration Statement or the Prospectus is
amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is incorporated by
reference in the Registration Statement or the Prospectus, the Company shall
cause Ernst & Young LLP, its independent public accountants, promptly to furnish
each of you a letter, dated the date of the effectiveness of such amendment or
the date of the filing of such supplement, in form reasonably satisfactory to
each of you, of the same tenor as the letter referred to in Section 5(e) with
such changes as may be necessary to reflect the amended and supplemental
financial information included or incorporated by reference in the Registration
Statement and the Prospectus, as amended or supplemented to the date of such
letter; PROVIDED, HOWEVER, that, if the Registration Statement or the Prospectus
is amended or supplemented solely to include or incorporate by reference
financial information as of and for a fiscal quarter, Ernst & Young LLP may
limit the scope of such letter, which shall be reasonably satisfactory in form
to each of you, to the unaudited financial statements, the related "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
any other information of an accounting, financial or statistical nature included
in such amendment or supplement, unless, in the reasonable judgment of any of
you, such letter should cover other information; and
(m) During the period, if any, specified in any Terms Agreement, the
Company shall not, without the prior consent of the Purchaser, issue or announce
the proposed issuance of any of its debt securities, including Notes, with terms
substantially similar to the Notes being purchased pursuant to such Terms
Agreement, other than
<PAGE> 13
13
borrowings under its revolving credit agreements and lines of credit and
issuances of its commercial paper.
5. CONDITIONS TO THE OBLIGATIONS OF THE AGENTS. The obligations of each
Agent to solicit offers to purchase the Notes shall be subject to the accuracy
in all material respects of the representations and warranties on the part of
the Company contained in Section 1 hereof as of the Execution Time, on the
Effective Date, as of the date any supplement to the Prospectus is filed with
the Commission and as of each Closing Date, to the accuracy in all material
respects of the statements of the Company made in any certificates pursuant to
the provisions of this Section 5, to the performance in all material respects by
the Company of its obligations hereunder and to satisfaction of the following
additional conditions in all material respects:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus and any such
supplement, shall have been filed in the manner and within the time
period required by Rule 424(b), or if the filing of the Rule 434 Term
Sheet is required pursuant to Rule 434, the Rule 434 Term Sheet will be
filed in the manner and within the time period required by Rule 434;
and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall have been instituted or threatened;
(b) The Company shall have furnished to each Agent the opinion
of the Vice President, General Counsel and Secretary of the Company,
dated the Execution Time, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Ohio, with full corporate power to own
its properties and conduct its business as described in the
Prospectus and is qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns
or leases material properties or conducts material business
except where the failure to so qualify would not have a
material adverse effect on the Company and its subsidiaries
taken as a whole. The Company's significant subsidiaries (as
defined in Rule 405 under the Securities Act) (the
"Subsidiaries") are duly incorporated and validly existing as
<PAGE> 14
14
corporations in good standing under the laws of the
jurisdiction in which it is organized, each with full
corporate power and authority to own its properties and
conduct business as described in the Prospectus, and are duly
qualified to do business as foreign corporations and are in
good standing under the laws of each jurisdiction which
requires such qualification wherein each such Subsidiary owns
or leases material properties or conducts material business
except where the failure to so qualify would not have a
material adverse effect on the operations of the Company and
its subsidiaries taken as a whole;
(ii) all the outstanding shares of capital stock of
the Subsidiaries have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Prospectus, all outstanding shares
of capital stock of the Subsidiaries are owned by the Company
either directly or through wholly owned subsidiaries free and
clear of any perfected security interest and, to the knowledge
of such counsel, after due inquiry, any other security
interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization
is as incorporated in the Prospectus; and the Notes conform to
the description thereof contained in the Prospectus (subject
to the insertion in the Notes of the maturity dates, the
interest rates and other similar terms thereof which will be
described in supplements to the Prospectus as contemplated by
the fourth sentence of Section l(a) of this Agreement);
(iv) the Indenture has been duly authorized, executed
and delivered, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with
its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time
to time in effect); and the Notes have been duly authorized
and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the purchasers thereof, will constitute legal, valid and
binding obligations of
<PAGE> 15
15
the Company entitled to the benefits of the
Indenture;
(v) to the knowledge of such counsel, after due
inquiry, there is no pending or threatened action, suit or
proceeding before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
subsidiaries, of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in
the Prospectus, and there is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an
exhibit, which is not described or filed as required; and the
statements included or incorporated in the Prospectus
describing any legal proceedings or material contracts or
agreements relating to the Company fairly summarize such
matters;
(vi) the Registration Statement has become effective
under the Act; any required filing of the Prospectus pursuant
to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b), or if the Rule 434 Delivery
Alternative was used, the required filing of the Rule 434 Term
Sheet has been made in the manner and time period required by
Rule 434; to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been
instituted or threatened, and the Registration Statement and
the Prospectus (other than the financial statements and other
financial and statistical information contained therein as to
which such counsel need express no opinion) comply as to form
in all material respects with the applicable requirements of
the Act, the Exchange Act and the Trust Indenture Act and the
respective rules thereunder; and nothing has caused such
counsel to believe that the Registration Statement at the
Effective Date or at the Execution Time contained any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus
includes any untrue statement of a material fact or omits to
state a material fact necessary to make the statements
therein, in the light of the
<PAGE> 16
16
circumstances under which they were made, not misleading
(except for the financial statements and other financial and
statistical information contained therein, as to which such
counsel need not express an opinion);
(vii) this Agreement has been duly authorized,
executed and delivered by the Company;
(viii) no consent, approval, authorization or order
of any court or governmental agency or body is required for
the consummation of the transactions contemplated herein
except such as have been obtained under the Act and such as
may be required under the blue sky laws of any jurisdiction in
connection with the sale of the Notes as contemplated by this
Agreement and such other approvals (specified in such opinion)
as have been obtained;
(ix) neither the execution and delivery of the
Indenture, the issue and sale of the Notes, nor the
consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach of, or constitute a default
under the Amended Articles of Incorporation or Code of
Regulations, as amended, of the Company or the terms of any
indenture or other material agreement or instrument known to
such counsel and to which the Company or any of its
subsidiaries is a party or bound, or any judgment, order or
decree known to such counsel to be applicable to the Company
or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries; and
(x) no holders of securities of the Company have
rights to the registration of such securities under the
Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Ohio or the
United States, to the extent deemed proper and specified in such opinion, upon
the opinion of other counsel of good standing believed to be reliable and who
are reasonably satisfactory to counsel for the Agents and (B) as to matters of
fact, to the extent deemed proper, on certificates of responsible officers of
the Company and public officials.
<PAGE> 17
17
(c) The Agents shall have received from Cravath, Swaine &
Moore, counsel for the Agents, such opinion or opinions, dated the
Execution Time, with respect to the issuance and sale of the Notes, the
Indenture, the Registration Statement, the Prospectus and other related
matters as the Agents may reasonably require, and the Company shall
have furnished to such counsel such documents as they reasonably
require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters;
(d) The Company shall have furnished to the Agents a
certificate of the Company, signed by the Senior Vice President -
Finance, Treasurer and Chief Financial Officer and Vice President and
Assistant Treasure or other vice president of the Company, dated the
Execution Time, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Prospectus and this
Agreement and that:
(i) the representations and warranties in Section 1
hereof of the Company in this Agreement are true and correct
in all material respects on and as of the date hereof with the
same effect as if made on the date hereof and the Company has
substantially complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied as
a condition to the obligation of the Agents to solicit offers
to purchase the Notes;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus, there has been no
material adverse change in the condition (financial or other),
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus;
(e) At the Execution Time, Ernst & Young LLP shall have
furnished to the Agents a letter or letters
<PAGE> 18
18
(which may refer to letters previously delivered to the Agents), dated
as of the Execution Time, in form and substance reasonably satisfactory
to the Agents, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective
applicable published rules and regulations thereunder and stating in
effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated in
the Registration Statement and the Prospectus and reported on
by them comply in form in all material respects with the
applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
(ii) on the basis of a reading of the amounts
included or incorporated in the Registration Statement and the
Prospectus in response to Item 301 of Regulation S-K and of
the latest unaudited financial statements made available by
the Company and its subsidiaries; their limited review in
accordance with standards established by the American
Institute of Certified Public Accountants of the unaudited
interim financial information as indicated in their reports
incorporated in the Registration Statement and the Prospectus;
carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders, directors and executive committees of the
Company and the Subsidiaries; and inquiries of certain
officials of the Company who have responsibility for financial
and accounting matters of the Company and its subsidiaries as
to transactions and events subsequent to the date of the most
recent audited financial statements included or incorporated
in the Registration Statement and the Prospectus, nothing came
to their attention which caused them to believe that:
(1) the amounts in the "Selected Financial Data", if
any, included or incorporated in the Registration Statement
and the Prospectus do not agree with the corresponding amounts
in the
<PAGE> 19
19
audited financial statements from which such amounts were
derived;
(2) any unaudited financial statements included or
incorporated in the Registration Statement and the Prospectus
do not comply in form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on
Form 10-Q under the Exchange Act; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included or incorporated in the Registration Statement and the
Prospectus;
(3) with respect to the period subsequent to the date
of the most recent financial statements (other than any
capsule information), audited or unaudited, in or incorporated
in the Registration Statement and the Prospectus, there were
any changes, at a specified date not more than five business
days prior to the date of the letter, in the aggregate
long-term debt due within one year and long-term debt
(exclusive of current portion) of the Company and its
consolidated subsidiaries or common stock of the Company or
decreases in the shareholders' equity of the Company and its
consolidated subsidiaries as compared with the amounts shown
on the most recent consolidated balance sheet included or
incorporated in the Registration Statement and the Prospectus,
or for the period from the date of the most recent financial
statements included or incorporated in the Registration
Statement and the Prospectus to the date of the most recently
available monthly unaudited financial information there were
any decreases relating to continuing operations, as compared
with the corresponding period in the preceding year in total
revenue or earnings before income taxes or in the total or per
share amounts of net earnings of the Company and its
consolidated subsidiaries, except in all instances for changes
or decreases set forth in such letter, in which case the
letter shall be accompanied by an explanation by the Company
as to the significance thereof unless said explanation is not
deemed necessary by the Agents; or
<PAGE> 20
20
(4) the amounts included in any unaudited "capsule"
information included or incorporated in the Registration
Statement and the Prospectus do not agree with the amounts set
forth in the unaudited financial statements for the same
periods or were not determined on a basis substantially
consistent with that of the corresponding amounts in the
audited financial statements included or incorporated in the
Registration Statement and the Prospectus;
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Prospectus and in Exhibit
12 to the Registration Statement, including the information included or
incorporated in Items 1, 2, 5, 6, 7 and 11 of the Company's Annual
Report on Form 10-K, incorporated in the Registration Statement and the
Prospectus, and the information included in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included or incorporated in the Company's Quarterly Reports
on Form 10-Q, incorporated in the Registration Statement and the
Prospectus, agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation; and
(iv) if unaudited pro forma financial statements are included
or incorporated in the Registration Statement and the Prospectus, on
the basis of a reading of the unaudited pro forma financial statements,
carrying out certain specified procedures, inquiries of certain
officials of the Company and the acquired company who have
responsibility for financial and accounting matters, and proving the
arithmetic accuracy of the application of the pro forma adjustments to
the historical amounts in the pro forma financial statements, nothing
came to their attention which caused them to believe that the pro forma
financial statements do not comply in form in all material respects
with the applicable accounting requirements of Rule 11-02 of Regulation
S-X or that the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of such statements; and
<PAGE> 21
21
(f) Prior to the Execution Time, the Company shall have
furnished to each Agent such further information, documents,
certificates and opinions of counsel as the Agents may reasonably
request.
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Agents and their counsel, this agreement and all
obligations of any Agent hereunder may be canceled at any time by such Agent.
Notice of such cancelation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be
delivered at the office of Cravath, Swaine & Moore, counsel for the Agents, at
Worldwide Plaza, 825 Eighth Avenue, New York, New York, on the date hereof.
6. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER. The obligations of
the Purchaser to purchase any Notes will be subject to the accuracy in all
material respects of the representations and warranties on the part of the
Company in Section 1 of this Agreement as of the date of the Terms Agreement and
as of the Closing Date for such Notes, to the performance and observance in all
material respects by the Company of all covenants and agreements herein
contained on its part to be performed and observed and to satisfaction of the
following additional conditions precedent in all material respects:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened;
(b) To the extent agreed to between the Company and the
Purchaser in a Terms Agreement and except to the extent modified by
such Terms Agreement, the Purchaser shall have received, appropriately
updated, (i) a certificate of the Company, dated as of the Closing
Date, to the effect set forth in Section 5(d) (except that references
to the Prospectus shall be to the Prospectus as supplemented at the
time of execution of the Terms Agreement), (ii) the opinion of counsel
for the Company, dated as of the Closing Date, to the effect set forth
in Section 5(b), (iii) the opinion of Cravath, Swaine & Moore, counsel
for the Agents, dated
<PAGE> 22
22
as of the Closing Date, to the effect set forth in Section 5(c), and
(iv) letter of Ernst & Young LLP, dated as of the Closing Date, to the
effect set forth in Section 5(e); and
(c) Prior to the Closing Date, the Company shall have
furnished to the Purchaser such further information, certificates and
documents as the Purchaser may reasonably request, including any
further items specified in Exhibit B.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement
and an applicable Terms Agreement, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement or such Terms Agreement and
required to be delivered to the Purchaser pursuant to the terms hereof and
thereof shall not be in all material respects reasonably satisfactory in form
and substance to the Purchaser and its counsel, such Terms Agreement and all
obligations of the Purchaser thereunder and with respect to the Notes subject
thereto may be canceled at, or at any time prior to, the respective Closing Date
by the Purchaser. Notice of such cancelation shall be given to the Company in
writing or by telephone or telegraph confirmed in writing.
7. RIGHT OF PERSON WHO AGREED TO PURCHASE TO REFUSE TO PURCHASE. (a)
The Company agrees that any person who has agreed to purchase and pay for any
Note, including the Purchaser and any person who purchases pursuant to a
solicitation by any of the Agents, shall have the right to refuse to purchase
such Note if (a) at the Closing Date therefor, any condition set forth in
Section 5 or 6, as applicable, shall not be satisfied.
(b) The Company agrees that any person who has agreed to purchase and
pay for any Note pursuant to a solicitation by any of the Agents shall have the
right to refuse to purchase such note if, subsequent to the agreement to
purchase such Note, any change, condition or development specified in any of
Sections 9(b)(i) through (v) shall have occurred (with the judgment of the Agent
which presented the offer to purchase such Note being substituted for any
judgment of a Purchaser required therein), the effect of which is, in the
judgment of the Agent which presented the offer to purchase such Note, so
material and adverse as to make it impractical to proceed with the sale and
delivery of such Note (it being understood that under no circumstance shall any
such Agent have any duty or obligation under this Agreement to the Company or to
any such person to exercise
<PAGE> 23
23
the judgment permitted to be exercised under this
Section 7(b) and Section 9(b)).
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to indemnify and
hold harmless each of you, the directors, officers and employees of each of you
and each person who controls each of you within the meaning of either the Act or
the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which you, they or any of you or them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement as originally filed or in any amendment thereof, or
in the Prospectus or any preliminary Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
as incurred each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that (i) the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any of you specifically for use in connection
with the preparation thereof, and (ii) such indemnity with respect to the
Prospectus or any preliminary Prospectus shall not inure to the benefit of any
of you (or any person controlling any of you) from whom the person asserting any
such loss, claim, damage or liability purchased the Notes which are the subject
thereof if such person did not receive a copy of the Prospectus (or the
Prospectus as supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of such Notes to such
person in any case where such delivery is required by the Act and the untrue
statement or omission of a material fact contained in the Prospectus or any
preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
supplemented). This indemnity agreement will be in addition to any liability
which the Company may otherwise have. If the Company shall default in its
obligations to deliver Notes to a purchaser whose offer it has accepted, the
Company shall indemnify and
<PAGE> 24
24
hold each of you harmless against any loss, claim or damage arising from or as a
result of such default by the Company.
(b) Each of you agrees to indemnify and hold harmless the Company, each
of its employees and directors, each of its officers who signs the Registration
Statement and each person who controls the Company within the meaning of either
the Act or the Exchange Act, against any and all losses, claims, damages, or
liabilities, joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or other Federal or state statutory
law of regulation, as common law or otherwise insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of material fact in
written information relating to such of you furnished to the Company by or on
behalf of such of you specifically for inclusion in the Registration Statement
as originally filed or in any amendment thereof, or in the Prospectus or any
preliminary Prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state in such
written information a material fact required be to stated therein or necessary
to make the statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action. This indemnity agreement will be in addition
to any liability which you may otherwise have. The Company acknowledges that the
statements set forth in the last paragraph of the cover page and under the
heading "Underwriting" or "Plan of Distribution", of any preliminary Prospectus
and the Prospectus constitute the only information furnished in writing by or on
behalf of any of you for inclusion in the documents referred to in the foregoing
indemnity, and you, as the Agents, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
liability which it may have to any indemnified party otherwise than under this
Section 8. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate
<PAGE> 25
25
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel satisfactory to
such indemnified party; PROVIDED, HOWEVER, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel and an additional
local counsel, if needed, approved by you in the case of paragraph (a) of this
Section 8, representing the indemnified parties under such paragraph (a) who are
parties to such action), (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action, (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party or (iv) the use of counsel chosen
by the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest; and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel referred to
in such clause (i) or (iii). An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or
<PAGE> 26
26
proceeding. Any indemnifying party shall not be liable for any settlement,
compromise or consent of any proceeding effected by the indemnified party
without the written consent of the indemnifying party (which consent shall not
be unreasonably withheld), unless the indemnifying party has waived its right to
appoint counsel to represent the indemnified party in such proceeding in which
case the indemnified party may effect such a settlement, compromise or consent
without the consent of the indemnifying party.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) or (b)
of this Section 8 is due in accordance with its terms, but is held by a court to
be unavailable in whole or in part to hold harmless an indemnified party for any
reason (other than an act or omission or such indemnified party), the Company
and each of you agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively, "Losses") to which the
Company and one or more of you may be subject in such proportion so that each of
you is responsible for that portion as is appropriate to reflect the relative
benefits received by the Company and each of you from the offering of the Notes
from which such Losses arise; PROVIDED, HOWEVER, that in no case shall any of
you be responsible for any amount in excess of the commissions received by such
of you in connection with the Notes from which such Losses arise (or, in the
case of Notes sold pursuant to a Terms Agreement, the aggregate commissions that
would have been received by such of you if such commissions had been payable).
If the allocation provided by the immediately preceding sentence is unavailable
for any reason, the Company and each of you shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of the Company and of each of you in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses) of the Notes from which such Losses arise, and benefits received by
each of you shall be deemed to be equal to the total commissions received by
such of you in connection with the Notes from which such Losses arise (or, in
the case of Notes sold pursuant to a Terms Agreement, the aggregate commissions
that would have been received by such of you if such commissions had been
payable). Relative fault shall be determined by reference to whether any alleged
untrue statement or omission relates to information provided by the
<PAGE> 27
27
Company or any of you. The Company and each of you agree that it would not be
just and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls any of you within the meaning of the
Act or the Exchange Act and each director, officer and employee of any of you
shall have the same rights to contribution as you and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director, officer and employee of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this paragraph (d), notify such
party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from other obligation it or they may have hereunder
or otherwise than under this paragraph (d).
9. TERMINATION. (a) This Agreement will continue in effect until
terminated as provided in this Section 9. This Agreement may be terminated by
either the Company as to any of you insofar as this Agreement relates to such of
you, giving written notice of such termination to such of you or the Company, as
the case may be. This Agreement shall so terminate at the close of business on
the first business day following the receipt of such notice by the party to whom
such notice is given. In the event of such termination, no party shall have any
liability to the other party hereto, except as provided in Section 2(a), Section
4(h), Section 8 and Section 10.
(b) Each Terms Agreement shall be subject to termination in the
absolute discretion of the Purchaser, by notice given to the Company prior to
delivery of any payment for any Note to be purchased thereunder, if prior to
such time (i) there shall have occurred, subsequent to the agreement to purchase
such Note, any change, or any development involving a prospective change, in or
affecting
<PAGE> 28
28
the business or properties of the Company and its subsidiaries, taken as a
whole, the effect of which is, in the judgment of the Purchaser, so material and
adverse as to make it impractical to proceed with the offering or delivery of
such Note, (ii) there shall have been, subsequent to the agreement to purchase
such Note, any decrease in the rating of any of the Company's debt securities by
Moody's or S&P or any formal notice given of any intended or contemplated
decrease in any such rating, (iii) trading in the Company's Common Stock shall
have been suspended by the Commission or the New York Stock Exchange (other than
temporarily pending an announcement or development) or trading in securities
generally on the New York Stock Exchange shall have been suspended or limited or
minimum prices shall have been established on such Exchange, (iv) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (v) there shall have occurred any material outbreak or material
escalation of hostilities, declaration by the United States of war or other
calamity or crisis, the effect of which on financial markets is such as to make
it, in the judgment of the Purchaser, impracticable to proceed with the offering
or delivery of such Notes as contemplated by the Prospectus (exclusive of any
supplement subsequent to such event).
10. SURVIVAL OF CERTAIN PROVISIONS. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of you set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of you or the Company or any of the directors, officers, employees or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Notes. The provisions of Sections 4(h) and 8 hereof shall
survive the termination or cancelation of this Agreement. The provisions of this
Agreement (including without limitation Section 7 hereof) applicable to any
purchase of a Note for which an agreement to purchase exists prior to the
termination hereof shall survive any termination of this Agreement. If at the
time of termination of this Agreement any Purchaser shall own any Notes
purchased pursuant to a Terms Agreement with the intention of selling them, the
provisions of Section 4 shall remain in effect until such Notes are resold.
11. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to any of you, will be mailed, delivered
or telegraphed and confirmed to such of you, at the address specified in
Schedule I hereto; or, if sent to the Company, will be
<PAGE> 29
29
mailed, delivered or telecopied and confirmed to it at
101 Prospect Avenue, N.W., Cleveland, Ohio 44115, attention
Louis E. Stellato, Esq., Vice President, General Counsel and
Secretary.
12. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto, their respective successors, the directors,
officers, employees, and controlling persons referred to in Section 8 hereof
and, to the extent provided in Section 7, any person will have any right or
obligation hereunder.
13. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
14. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which shall together constitute
one and the same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and you.
Very truly yours,
THE SHERWIN-WILLIAMS-COMPANY,
by
-------------------------------
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the date
hereof.
SALOMON BROTHERS INC,
by
-------------------------------
Title:
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
by
<PAGE> 30
30
-------------------------------
Title:
<PAGE> 31
SCHEDULE I
Selling Agency Agreement dated , 1997
Registration Statement No. 333-
Amount of the Securities registered under Registration
Statement: $150,000,000
Aggregate Amount of the Securities Registered: $150,000,000
The Company agrees to pay each Agent a commission equal to the
following percentage of the principal amount of each Note sold by each Agent:
<TABLE>
<CAPTION>
MATURITY RANGE OF NOTES % OF PRINCIPAL AMOUNT
----------------------- ---------------------
<S> <C>
From 9 months to less than 1 year..... .125%
From 1 year to less than 18 months.... .150%
From 18 months to less than 2 years... .200%
From 2 years to less than 3 years..... .250%
From 3 years to less than 4 years..... .350%
From 4 years to less than 5 years..... .450%
From 5 years to less than 6 years..... .500%
From 6 years to less than 7 years..... .550%
From 7 years to less than 10 years.. .600%
From 10 years to less than 15 years... .625%
From 15 years to less than 20 years... .700%
20 years up to and including 30 years. .750%
</TABLE>
Unless otherwise specified in the applicable Terms Agreement, the
discount or commission payable to a Purchaser shall be determined on the basis
of the commission schedule set forth above.
Address for notices:
Notices to Salomon Brothers Inc shall be directed to it at Seven World
Trade Center, New York, New York 10048, Attention: Medium Term Notes Department.
Notices to Merrill Lynch & Co. shall be directed to it at Merrill
Lynch, Pierce, Fenner & Smith Incorporated, World Financial Center, North Tower,
10th Floor, New York, New York 10281-1311, Attention: MTN Product Management.
Notices to The Sherwin-Williams Company shall be directed to it at 101
Prospect Avenue, N.W., Cleveland, Ohio 44115, Attention: Treasurer.
The Company may satisfy its obligation under subsection (c) of Section
4 of the Selling Agency Agreement to furnish to each of the Agents copies of all
documents
<PAGE> 32
2
filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act by promptly furnishing such documents to Cravath,
Swaine & Moore, 825 Eighth Avenue, New York, New York, 10019, Attention: Timothy
G. Massad, Esq.
<PAGE> 33
EXHIBIT A
THE SHERWIN-WILLIAMS COMPANY
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
------------------------------------------
, 1997
----------------------------
Medium-Term Notes, Series B, Due Nine Months or More from Date of Issue
(the "Notes") are to be offered on a continuing basis by The Sherwin-Williams
Company (the "Company"). Salomon Brothers Inc and Merrill Lynch & Co., as agents
(individually, an "Agent" and collectively, the "Agents"), have agreed to
solicit purchases of Notes issued in fully registered form. The Agents will not
be obligated to purchase Notes for their own accounts. The Notes are being sold
pursuant to a Selling Agency Agreement among the Company and the Agents dated
, 1997 (the "Agency Agreement"). The Notes will rank equally with all
other unsecured and unsubordinated debt of the Company and have been registered
with the Securities and Exchange Commission (the "Commission"). The Chase
Manhattan Bank (formerly Chemical Bank) (the "Trustee") is the trustee under the
Indenture dated as of February 1, 1996 (the "Indenture").
The Agency Agreement provides that Notes may also be purchased by an
Agent acting solely as principal and not as agent. In the event of any such
purchase, the functions of both the Agent and the beneficial owner under the
administrative procedures set forth below shall be performed by such Agent
acting solely as principal, unless otherwise agreed to between the Company and
such Agent acting as principal.
Each Note will be represented by either a Global Security (as defined
hereinafter) delivered to The Chase Manhattan Bank ("Chase"), as agent for The
Depository Trust Company ("DTC"), and recorded in the book-entry system
maintained by DTC (a "Book-Entry Note") or a certificate delivered to the Holder
thereof or a Person designated by such Holder (a "Certificated Note"). Only
Notes denominated and payable in U.S. dollars may be issued as Book-Entry Notes.
An owner of a Book-Entry Note will not be entitled to receive a certificate
representing such Note, except in the event that use of the book-entry system
for the Notes is discontinued.
The procedures to be followed during, and the specific terms of, the
solicitation of offers by the Agents and the sale as a result thereof by the
Company are explained below. Administrative and record-keeping responsibilities
will be handled for the Company by its
<PAGE> 34
2
Treasury Department. The Company will advise the Agents and the Trustee in
writing of those persons handling administrative responsibilities with whom the
Agents and the Trustee are to communicate regarding offers to purchase Notes and
the details of their delivery.
Administrative procedures and specific terms of the offering are
explained below. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, as adjusted in accordance
with changes in DTC's operating requirements, and Certificated Notes will be
issued in accordance with the administrative procedures set forth in Part II
hereof. Unless otherwise defined herein, terms defined in the indenture and the
Notes shall be used herein as therein defined. Notes for which interest is
calculated on the basis of a fixed interest rate, which may be zero, are
referred to herein as "Fixed Rate Notes". Notes for which interest is calculated
on the basis of a floating interest rate are referred to herein as "Floating
Rate Notes". To the extent the procedures set forth below conflict with the
provisions of the Notes, the Indenture, DTC's operating requirements or the
Agency Agreement, the relevant provisions of the Notes, the Indenture, DTC's
operating requirements and the Agency Agreement shall control.
PART I
ADMINISTRATIVE PROCEDURES FOR
-----------------------------
BOOK-ENTRY NOTES
----------------
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, Chase will perform the
custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representations
from the Company and Chase to DTC dated as of the date hereof and a Medium-Term
Note Certificate Agreement between Chase and DTC and its obligations as a
participant in DTC, including DTC's Same Day Funds Settlement System ("SDFS").
ISSUANCE: On any date of settlement (as defined under "Settlement"
below) for one or more Book-Entry Notes, the Company will
issue a single global security in fully registered form
without coupons (a "Global Security") representing up to
$150,000,000 principal amount of all such Book-
<PAGE> 35
3
Entry Notes that have the same original issue date, original
issue discount provisions, if any, Interest Payment Dates,
Record Dates, reset, extension, repayment, sinking fund and
redemption provisions, if any, Maturity Date and, in the
case of Fixed Rate Notes, interest rate, or, in the case of
Floating Rate Notes, initial interest rate, Base Rate, Index
Maturity, Interest Reset Period, Interest Reset Dates,
Spread or Spread Multiplier, if any, minimum interest rate,
if any, and maximum interest rate, if any (all of the
foregoing are collectively referred to as the "Terms"). Each
Global Security will be dated and issued as of the date of
settlement and authenticated by the Trustee. Each Global
Security will bear an original issue date, which will be (i)
with respect to an original Global Security (or any portion
thereof), the original issue date specified in such Global
Security and (ii) following a consolidation of Global
Securities, with respect to the Global Security resulting
from such consolidation, the most recent Interest Payment
Date to which interest has been paid or duly provided for on
the predecessor Global Securities, regardless of the date of
authentication of such resulting Global Security. No Global
Security will represent (i) both Fixed Rate and Floating
Rate Book-Entry Notes or (ii) any Certificated Note.
IDENTIFICATION The Company has arranged with the CUSIP Service
NUMBERS: Bureau of Standard & Poor's Corporation (the "CUSIP Service
Bureau") for the reservation of a series of CUSIP numbers,
which series consists of approximately 900 CUSIP numbers and
relates to Global Securities representing Book-Entry Notes
and book-entry medium-term notes issued by the Company with
<PAGE> 36
4
other series designations. Chase, the Company and DTC have
obtained from the CUSIP Service Bureau a written list of
such reserved CUSIP numbers. The Company will assign CUSIP
numbers to Global Securities as described below under
Settlement Procedure "B". DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that the Company
has assigned to Global Securities. Chase will notify the
Company at any time when fewer than 100 of the reserved
CUSIP numbers remain unassigned to Global Securities, and,
if it deems necessary, the Company will reserve additional
CUSIP numbers for assignment to Global Securities. Upon
obtaining such additional CUSIP numbers, the Company shall
deliver a list of such additional CUSIP numbers to Chase and
DTC.
REGISTRATION: Global Securities will be issued only in fully registered
form without coupons. Each Global Security will be
registered in the name of Cede & Co., as nominee for DTC, on
the securities register for the Notes maintained under the
Indenture. The beneficial owner of a Book-Entry Note (or one
or more indirect participants in DTC designated by such
owner) will designate one or more participants in DTC (with
respect to such Book-Entry Note, the "Participants") to act
as agent or agents for such owner in connection with the
book-entry system maintained by DTC, and DTC will record in
book-entry form, in accordance with instructions provided by
such Participants, a credit balance with respect to such
beneficial owner of such Book-Entry Note in the account of
such Participants. The ownership interest of such beneficial
owner (or such participant) in such Book-Entry Note will be
recorded through the records of such Participants or through
the separate records of such Participants
<PAGE> 37
5
and one or more indirect participants in DTC.
TRANSFERS: Transfers of a Book-Entry Note will be accomplished by book
entries made by DTC and, in turn, by Participants (and in
certain cases, one or more indirect participants in DTC)
acting on behalf of beneficial transferors and transferees
of such Note.
EXCHANGES: Chase may deliver to DTC and the CUSIP Service Bureau at any
time a written notice of consolidation (a copy of which
shall be attached to the resulting Global Security described
below) specifying (i) the CUSIP numbers of two or more
Outstanding Global Securities that represent (A) Fixed-Rate
Book-Entry Notes having the same Terms and for which
interest has been paid to the same date, or (B) Floating
Rate Book-Entry Notes having the same terms and for which
interest has been paid to the same date, (ii) a date,
occurring at least thirty days after such written notice is
delivered and at least thirty days before the next Interest
Payment Date for such Book-Entry Notes, on which such
Global Securities shall be exchanged for a single
replacement Global Security and (iii) a new CUSIP number,
obtained from the Company, to be assigned to such
replacement Global Security. Upon receipt of such a notice,
DTC will send to its participants (including Chase) a
written reorganization notice to the effect that such
exchange will occur on such date. Prior to the specified
exchange date, Chase will deliver to the CUSIP Service
Bureau a written notice setting forth such exchange date and
such new CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the specified exchange
date, Chase will exchange
<PAGE> 38
6
such Global Securities for a single Global Security bearing
the new CUSIP number and the CUSIP numbers of the exchanged
Global Securities will, in accordance with CUSIP Service
Bureau procedures, be canceled and not immediately
reassigned. Notwithstanding the foregoing, if the Global
Securities to be exchanged exceed $150,000,000 in aggregate
principal amount, one Global Security will be authenticated
and issued to represent each $150,000,000 of principal
amount of the exchanged Global Securities and an additional
Global Security will be authenticated and issued to
represent any remaining principal amount of such Global
Securities (see "Denominations" below).
MATURITIES: Each Book-Entry Note will mature on a date (the "Maturity
Date") not less than 9 months after the Original Issue Date
for such Note.
PRICE TO PUBLIC: Each Book-Entry Note will be issued at the
percentage of principal amount specified in the Prospectus
Supplement (as defined in Section l(c) of the Agency
Agreement) or in a Pricing Supplement as defined in the
Prospectus Supplement relating to such Note.
DENOMINATIONS: The denomination of any Book-Entry Note will be a minimum of
$1,000 or any amount in excess thereof that is an integral
multiple of $1,000. Global Securities will be denominated in
principal amounts not in excess of $150,000,000. If one or
more Book-Entry Notes having an aggregate principal amount
in excess of $150,000,000 would, but for the preceding
sentence, be represented by a single Global Security, then
one Global Security will be authenticated and issued to
represent each $150,000,000 principal amount of such
Book-Entry Note or Notes and an
<PAGE> 39
7
additional Global Security will be authenticated and issued
to represent any remaining principal amount of such
Book-Entry Note or Notes. In such a case, each of the Global
Securities representing such Book-Entry Note or Notes shall
be assigned the same CUSIP number.
INTEREST: GENERAL. Except as set forth in the Book-Entry Note,
interest, if any, on each Book-Entry Note will accrue from
the original issue date for the first interest period or the
last date to which interest has been paid, if any, for each
subsequent interest period, on the Global Security
representing such Book-Entry Note, and will be calculated
and paid in the manner described in such Book-Entry Note and
in the Prospectus, as supplemented by the applicable Pricing
Supplement. Unless otherwise specified therein, each payment
of interest on a Book-Entry Note will include interest
accrued to but excluding the Interest Payment Date or to but
excluding the maturity of any payment of principal
(hereinafter referred to as "Maturity"), other than a
Maturity of a Fixed Rate Book-Entry Note occurring on the
31st day of a month, in which case such payment of interest
will include interest accrued to but excluding the 30th day
of such month, or to but excluding the date of redemption or
repayment in full of such Book-Entry Note (hereinafter
referred to as "Redemption"). Interest payable at the
Maturity or upon Redemption of a Book-Entry Note will be
payable to the person to whom the principal of such Note is
payable. Standard & Poor's Corporation will use the
information received in the pending deposit message
described under Settlement Procedure "C" below in order to
include the amount of any interest payable and certain other
information regarding the related
<PAGE> 40
8
Global Security in the appropriate (daily or weekly) bond
report published by Standard & Poor's Corporation.
RECORD DATES. The Record Date with respect to any Interest
Payment Date shall be the date 15 calendar days immediately
preceding such Interest Payment Date (whether or not a
Business Day).
INTEREST PAYMENT DATES ON FIXED RATE BOOK-ENTRY NOTES.
Unless otherwise specified pursuant to Settlement Procedure
"A" below, interest payments on Fixed Rate Book-Entry Notes
will be made semi-annually on May 1 and November 1 of each
year and at Maturity or upon Redemption; PROVIDED, HOWEVER,
that in the case of a Fixed Rate Book-Entry Note issued
between a Record Date and an Interest Payment Date, the
first interest payment will be made on the Interest Payment
Date following the next succeeding Record Date. If any
Interest Payment Date for a Fixed Rate Book-Entry Note is
not a Business Day, the payment due on such day shall be
made on the next succeeding Business Day and no interest
shall accrue on such payment for the period from and after
such Interest Payment Date.
INTEREST PAYMENT DATES ON FLOATING RATE BOOK-ENTRY NOTES.
Interest Payments will be made on Floating Rate Book-Entry
Notes monthly, quarterly, semi-annually or annually, or as
specified in the applicable Pricing Supplement. Unless
otherwise set forth in the Note, interest will be payable,
in the case of Floating Rate Book-Entry Notes with a monthly
Interest Payment Period, on the third Wednesday of each
month; with a quarterly Interest Payment Period, on the
third Wednesday of March, June, September and December of
each year;
<PAGE> 41
9
with a semi-annual Interest Payment Period, on the third
Wednesday of the two months specified pursuant to Settlement
Procedure "A" below; and with an annual Interest Payment
Period, on the third Wednesday of the month specified
pursuant to Settlement Procedure "A" below; PROVIDED,
HOWEVER, that if an Interest Payment Date for a Floating
Rate Book-Entry Note would otherwise be a day that is not a
Business Day with respect to such Floating Rate Book-Entry
Notes, such Interest Payment Date will be the next
succeeding Business Day with respect to such Floating Rate
Book-Entry Note, except in the case of a Floating Book-Entry
Note for which the Base Rate is LIBOR, if such Business Day
is in the next succeeding calendar month, such Interest
Payment Date will be the immediately preceding Business Day;
and PROVIDED FURTHER that in the case of a Floating Rate
Book-Entry Note issued between a Record Date and an Interest
Payment Date, the first interest payment will be made on the
Interest Payment Date following the next succeeding Record
Date.
NOTICE OF INTEREST PAYMENT AND RECORD DATES. At the written
request of the Company, Chase will deliver to the Company
and DTC a written list of Record Dates and Interest Payment
Dates that will occur with respect to Book-Entry Notes.
Promptly after each Interest Determination Date for Floating
Rate Book-Entry Notes, Chase, as Calculation Agent, will
notify Standard & Poor's Corporation of the interest rates
determined on such Interest Determination Date.
CALCULATION FIXED RATE BOOK-ENTRY NOTES. Interest on Fixed
OF INTEREST: Rate Book-Entry Notes (including interest for partial
periods) will be calculated on the
<PAGE> 42
10
basis of a 360-day year of twelve 30-day months.
FLOATING RATE BOOK-ENTRY NOTES. Interest rates on Floating
Rate Book-Entry Notes will be determined as set forth in
the form of Notes. Interest on Floating Rate Book-Entry
Notes, except as otherwise set forth therein, will be
calculated on the basis of actual days elapsed and a year of
360 days, except that in the case of a Floating Rate
Book-Entry Note for which the Base Rate is the Treasury
Rate, interest will be calculated on the basis of the actual
number of days in the year.
PAYMENT OF PAYMENT OF INTEREST ONLY. Promptly after each Record Date,
PRINCIPAL AND Chase will deliver to the Company and DTC a written notice
INTEREST: setting forth, by CUSIP number, to the extent then
ascertainable, the amount of interest to be paid on each
Global Security on the following Interest Payment Date
(other than an Interest Payment Date coinciding with
Maturity or Redemption) and the total of such amounts. DTC
will confirm the amount payable on each Global Security on
such Interest Payment Date by reference to the appropriate
bond reports published by Standard & Poor's Corporation. The
Company will pay to Chase, as paying agent, the total amount
of interest due on such Interest Payment Date (other than at
Maturity or upon Redemption), and Chase will pay such amount
to DTC, at the times and in the manner set forth below under
"Manner of Payment".
PAYMENTS AT MATURITY OR UPON REDEMPTION. On or about the
first Business Day of each month, Chase will deliver to the
Company, DTC and the Trustee a written list of principal and
to the extent then ascertainable, interest to be paid on
each Global Security maturing (at
<PAGE> 43
11
Maturity or upon Redemption or otherwise) in such month.
Chase, the Company and DTC will confirm the amounts of such
principal and interest payments with respect to each such
Global Security on or about the fifth Business Day preceding
the Maturity Date or Redemption Date, as the case may be, of
such Global Security. On or before the Maturity Date or
Redemption Date, as the case may be, the Company will pay to
Chase, as paying agent, the principal amount of such Global
Security, together with interest due at such Maturity Date
or Redemption Date, as the case may be. Chase will pay such
amount to DTC at the times and in the manner set forth below
under "Manner of Payment". If any Maturity Date or
Redemption Date of a Global Security representing Book-Entry
Notes is not a Business Day, the payment due on such day
shall be made on the next succeeding Business Day and no
interest shall accrue on such payment for the period from
and after such Maturity Date or Redemption Date. Promptly
after payment to DTC of the principal and interest due at
Maturity or upon Redemption of such Global Security, the
Trustee will cancel such Global Security in accordance with
the Indenture and so advise the Company. On the first
Business Day of each month, if Chase is not the Trustee,
then Chase will deliver to the Trustee a written statement
indicating the total principal amount of Outstanding Global
Securities as of the immediately preceding Business Day.
MANNER OF PAYMENT. The total amount of any principal and
interest due on Global Securities on any Interest Payment
Date or at Maturity or upon Redemption shall be paid by the
Company to Chase in immediately available funds no later
than 9:30 A.M. (New York City time) on
<PAGE> 44
12
such date, or as soon as possible thereafter. The Company
will make such payment on such Global Securities by
instructing Chase to withdraw funds from an account
maintained by the Company at Chase or by wire transfer to
Chase. The Company will confirm any such instructions in
writing to Chase. Prior to 10 A.M. (New York City time) on
the Maturity Date or Redemption Date or as soon as possible
thereafter, Chase will pay by separate wire transfer (using
Fedwire message entry instructions in a form previously
specified by DTC) to an account at the Federal Reserve Bank
of New York previously specified by DTC, in funds available
for immediate use by DTC, each payment of principal
(together with interest thereon) due on a Global Security on
such date. On each Interest Payment Date (other than at
Maturity or upon Redemption), interest payments shall be
made to DTC, in funds available for immediate use by DTC, in
accordance with existing arrangements between Chase and DTC.
On each such date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in funds
available for immediate use to the respective Participants
in whose names the Book-Entry Notes represented by such
Global Securities are recorded in the book-entry system
maintained by DTC. None of the Company (as issuer or as
paying agent), the Trustee or Chase shall have any direct
responsibility or liability for the payment by DTC to such
Participants of the principal of and interest on the
Book-Entry Notes.
WITHHOLDING TAXES. The amount of any taxes required under
applicable law to be withheld from any interest payment on a
Book-Entry Note will be determined and withheld by the
Participant, indirect participant in
<PAGE> 45
13
DTC or other Person responsible for forwarding payments and
materials directly to the beneficial owner of such Note.
PROCEDURES UPON COMPANY NOTICE TO TRUSTEE REGARDING EXERCISE OF OPTIONAL
COMPANY'S RESET. Not less than 50 or more than 60 days before an
EXERCISE OF Optional Reset Date as set forth in a Book-Entry Note, the
OPTIONAL RESET OR Company will notify the Trustee whether it is exercising its
OPTIONAL option to reset the Interest Rate or Spread or Spread
EXTENSION OF Multiplier, as the case may be, for such Book-Entry Note,
MATURITY: and if so, (i) the new Interest Rate or Spread or Spread
Multiplier, as the case may be, for such Book-Entry Note
during the period from such Optional Reset Date to the next
Optional Reset Date as set forth in such Book-Entry Note or,
if there is no such next Optional Reset Date, to the Stated
Maturity of such Book-Entry Note (the "Subsequent Interest
Period"); and (ii) the provisions, if any, for redemption of
such Book-Entry Note during such Subsequent Interest Period,
including the date or dates on which or the period or
periods during which such redemption may occur during such
Subsequent Interest Period.
COMPANY NOTICE TO TRUSTEE REGARDING EXERCISE OF OPTIONAL
EXTENSION OF MATURITY. If the Company elects to exercise an
option, as set forth in a Book-Entry Note, to extend the
Stated Maturity of such Note, it will so notify the Trustee
no less than 50 or more than 60 days before the Stated
Maturity of such Book-Entry Note, and will further indicate
(i) the new Stated Maturity; (ii) the Interest Rate or
Spread or Spread Multiplier, as the case may be, applicable
to such extension period and (iii) the provisions, if any,
for redemption of such Book-Entry Note during such extension
period, including the date or dates on which or the period
or
<PAGE> 46
14
periods during which such redemption may occur during such
extension period.
TRUSTEE NOTICE TO DTC REGARDING COMPANY'S EXERCISE OF
OPTIONAL EXTENSION OR RESET. Upon receipt of notice from the
Company regarding the Company's exercise of either an
optional extension of maturity or an optional reset, the
Trustee will hand-deliver a notice to DTC not less than 40
days before the Optional Reset Date (in which case a "Reset
Notice") or the old Stated Maturity (in which case an
"Extension Notice"), as the case may be, which Reset Notice
or Extension Notice shall identify such Book-Entry Note by
CUSIP number and shall contain the information required by
the terms of the Book-Entry Note.
TRUSTEE NOTICE TO COMPANY REGARDING OPTION TO BE REPAID. If,
after receipt of either a Reset Notice or an Extension
Notice, DTC exercises the option for repayment by tendering
the Global Security representing the Book-Entry Note to be
repaid as set forth in such Note, the Trustee shall give
notice to the Company not less than 22 days before the
Optional Reset Date or the old Stated Maturity, as the case
may be, of the principal amount of Book-Entry Notes to be
repaid on such Optional Reset Date or old Stated Maturity,
as the case may be.
COMPANY NOTICE REGARDING NEW INTEREST RATE OR NEW SPREAD OR
SPREAD MULTIPLIER. If the Company elects to revoke the
Interest Rate or Spread or Spread Multiplier and establish a
higher interest rate or Spread or Spread Multiplier for an
Optional Reset Period or extension period, as the case may
be, it shall, not less than 20 days before such Optional
Reset Date or old Stated Maturity, so
<PAGE> 47
15
notify the Trustee. The Trustee will immediately thereafter
notify DTC of the new Interest Rate or Spread or Spread
Multiplier applicable to such Book-Entry Note.
TRUSTEE NOTICE TO COMPANY REGARDING DTC REVOCATION OF OPTION
TO BE REPAID. If, after DTC has tendered any Book-Entry
Notes for repayment pursuant to an Extension Notice or an
Optional Reset Notice, DTC then revokes such tender for
repayment, the Trustee shall give notice to the Company not
less than five days prior to the old Stated Maturity or
Optional Reset Date, as the case may be, of such revocation
and of the principal amount of Book-Entry Notes for which
tender for repayment has been revoked.
DEPOSIT OF REPAYMENT PRICE. On or before any old Stated
Maturity where the Maturity has been extended, and on or
before an Optional Reset Date, the Company shall deposit
with the Trustee an amount of money sufficient to pay the
principal amount, plus interest accrued to such old Stated
Maturity or Optional Reset Date, as the case may be, for all
the Book-Entry Notes or portions thereof which are to be
repaid on such old Stated Maturity or Optional Reset Date,
as the case may be. Such Trustee will use such money to
repay such Book-Entry Notes pursuant to the terms set forth
in such Notes.
PROCEDURES UPON COMPANY NOTICE TO TRUSTEE REGARDING EXERCISE OF OPTIONAL
TRUSTEE REGARDING REDEMPTION. At least 45 days prior to the date on which it
COMPANY'S intends to redeem a Book-Entry Note, the Company will
EXERCISE notify the Trustee that it is exercising such option with
REDEMPTION: respect to such Book-Entry Note on such date.
TRUSTEE NOTICE TO DTC REGARDING COMPANY'S EXERCISE OF
OPTIONAL
<PAGE> 48
16
REDEMPTION. After receipt of notice that the Company is
exercising its option to redeem a Book-Entry Note, the
Trustee will, at least 30 days before the redemption date
for such Book-Entry Note, hand deliver to DTC a notice
identifying such Book-Entry Note by CUSIP number and
informing DTC of the Company's exercise of such option with
respect to such Book-Entry Note.
DEPOSIT OF REDEMPTION PRICE. On or before any redemption
date, the Company shall deposit with such Trustee an amount
of money sufficient to pay the redemption price, plus
interest accrued to such redemption date, for all the
Book-Entry Notes or portions thereof which are to be repaid
on such redemption date. Such Trustee will use such money to
repay such Book-Entry Notes pursuant to the terms set forth
in such Notes.
PAYMENTS OF TRUSTEE NOTICE TO COMPANY OF OPTION TO BE REPAID. Upon
PRINCIPAL AND receipt of notice of exercise of the option for repayment
INTEREST UPON and the Global Securities representing the Book-Entry Notes
EXERCISE OF so to be repaid as set forth in such Notes, the Trustee
OPTIONAL shall (unless such notice was received pursuant to the
REPAYMENT (EXCEPT Company's exercise of an optional reset or an optional
PURSUANT TO extension of maturity, in each of which cases the relevant
COMPANY'S procedures set forth above are to be followed) give notice
EXERCISE OF to the Company not less than 20 days prior to each Optional
OPTIONAL RESET OR Repayment Date of such Optional Repayment Date and of the
OPTIONAL principal amount of Book-Entry Notes to be repaid on such
EXTENSION): Optional Repayment Date.
DEPOSIT OF REPAYMENT PRICE. On or prior to any Optional
Repayment Date, the Company shall deposit with such Trustee
an amount of money sufficient to pay the optional repayment
price, and accrued interest thereon to such
<PAGE> 49
17
date, of all the Book-Entry Notes or portions thereof which
are to be repaid on such date. Such Trustee will use such
money to repay such Book-Entry Notes pursuant to the terms
set forth in such Notes.
PROCEDURE FOR The Company and the Agents will discuss from time to time
RATE SETTING AND the aggregate principal amount of, the issuance price of,
POSTING: and the interest rates to be borne by, Book-Entry Notes that
may be sold as a result of the solicitation of orders by the
Agents. If the Company decides to set prices of, and rates
borne by, any Book-Entry Notes in respect of which the
Agents are to solicit orders (the setting of such prices and
rates to be referred to herein as "posting") or if the
Company decides to change prices or rates previously posted
by it, it will promptly advise the Agents of the prices and
rates to be posted.
ACCEPTANCE AND Each Agent will promptly advise the Company by telephone of
REJECTION OF any offers to purchase Book-Entry Notes received by such
OFFERS: Agent. The Company will have the sole right to accept any
such offer to purchase Book-Entry Notes. The Company may
reject any such orders in whole or in part.
Each Agent may, in its discretion reasonably exercised,
reject an offer to purchase Book-Entry Notes received by it
in whole or in part.
PREPARATION OF If an offer to purchase a Book-Entry Note is accepted by or
PRICING on behalf of the Company, the Company, with the approval of
SUPPLEMENT: the Agent that presented such offer (the "Presenting
Agent"), will prepare a pricing supplement (a "Pricing
Supplement") reflecting the terms of such Book-Entry Note
and will arrange to have 10 copies thereof filed with the
Commission in
<PAGE> 50
18
accordance with the applicable paragraph of Rule 424(b)
under the Act and will supply at least 10 copies thereof
(and additional copies if requested) to the Presenting Agent
and one copy to the Trustee. The Presenting Agent will cause
a Pricing Supplement to be delivered to the purchaser of the
Book-Entry Note.
The copies of the Pricing Supplement to be sent to the
Presenting Agent shall be sent by telecopy or overnight
courier to arrive no later than 11:00 a.m., New York City
time, on the second business day following the sale date and
shall be sent:
(a) if to Salomon Brothers Inc, to it at:
Salomon Brothers Inc
8800 Hidden River Parkway
Tampa, Florida 33167
Attn: Enrique Castro
Tel: 813-558-7165
Telecopy: 813-558-4123
(b) if to Merrill Lynch & Co., to it at:
(i) for overnight, express or
special delivery packages:
Tritech Services
40 Colonial Drive
Piscataway, NJ 08854
Attn: Prospectus Operations/
Nachman Kimerling
Tel: 908-885-2769
(ii) for all other types of
deliveries:
Tritech Services
#4 Corporate Place
Corporate Park 287
Piscataway, NJ 08854
<PAGE> 51
19
Attn: Prospectus Operations/
Nachman Kimerling
Tel: 908-885-2769
Telecopy: 908-885-2775/2776
and, in each case, please send a
copy to:
Merrill Lynch & Co.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
World Financial Center
North Tower
10th Floor
New York, NY 10281
Attn: MTN Product Management
Tel: 212-449-7476
Telecopy: 212-449-2234
or to such other address as the Presenting Agent may
specify. Receipt of all telecopy transmissions shall be
confirmed by telephone.
In each instance that a Pricing Supplement is prepared, the
Presenting Agent will affix the Pricing Supplement to
Prospectuses prior to their use. Out-dated Pricing
Supplements and the Prospectuses to which they are attached
(other than those retained for files) will be destroyed.
SUSPENSION OF The Company reserves the right, in its sole discretion, to
SOLICITATION instruct the Agents to suspend at any time, for any period
AMENDMENT OR of time or permanently, the solicitation of orders to
SUPPLEMENT: purchase Book-Entry Notes. Upon receipt of such
instructions, the Agents will forthwith suspend solicitation
until such time as the Company has advised them that such
solicitation may be resumed.
If the Company decides to amend or supplement the
Registration Statement (as defined in Section l(c) of the
Agency Agreement) or the Prospectus (except for a supplement
relating to
<PAGE> 52
20
an offering of securities other than the Notes), it will
promptly advise the Agents and furnish the Agents with the
proposed amendment or supplement and with such certificates
and opinions as are required, all to the extent required by
and in accordance with the terms of the Agency Agreement.
Subject to the provisions of the Agency Agreement, the
Company may file with the Commission any supplement to the
Prospectus relating to the Notes. The Company will provide
the Agents, the Trustee and Chase with copies of any
supplement and confirm to the Agents that such supplement
has been filed with the Commission pursuant to the
applicable paragraph of Rule 424(b).
In the event that at the time the Company suspends
solicitation of offers to purchase Book-Entry Notes there
shall be any outstanding offers to purchase Book-Entry Notes
that have been accepted by the Company but for which
settlement has not yet occurred, the Company will promptly
advise the Agents, the Trustee and Chase whether such orders
may be settled and whether copies of the Prospectus as
supplemented to the time of the suspension may be delivered
in connection with the settlement of such sales. The Company
will have the sole responsibility for such decision and for
any arrangements that may be made in the event that the
Company determines that such orders may not be settled or
that copies of such Prospectus may not be so delivered.
PROCEDURE FOR When the Company has determined to change the interest rates
RATE CHANGES: of Book-Entry Notes being offered, it will promptly advise
the Agents and the Agents will forthwith suspend
solicitation of orders. The Agents will telephone the
Company with
<PAGE> 53
21
recommendations as to the changed interest rates. At such
time as the Company has advised the Agents of the new
interest rates, the Agents may resume solicitation of
orders. Until such time, only "indications of interest" may
be recorded.
DELIVERY OF A copy of the Prospectus and a Pricing Supplement relating
PROSPECTUS: to a Book-Entry Note must accompany or precede the earliest
of any written offer of such Book-Entry Note, confirmation
of the purchase of such Book-Entry Note and payment for such
Book-Entry Note by its purchaser. If notice of a change in
the terms of the Book-Entry Notes is received by the Agents
between the time an order for a Book-Entry Note is placed
and the time written confirmation thereof is sent by the
Presenting Agent to a customer or his agent, such
confirmation shall be accompanied by a Prospectus and
Pricing Supplement setting forth the terms in effect when
the order was placed. Subject to "Suspension of
Solicitation; Amendment or Supplement" above, the Presenting
Agent will deliver a Prospectus and Pricing Supplement as
herein described with respect to each Book-Entry Note sold
by it. The Company will make such delivery if such
Book-Entry Note is sold directly by the Company to a
purchaser (other than an Agent).
CONFIRMATION: For each offer to purchase a Book-Entry Note solicited by
an Agent and accepted by the Company, the Presenting Agent
will issue a confirmation to the purchaser, with a copy to
the Company, setting forth the details set forth below and
delivery and payment instructions.
SETTLEMENT: The receipt by the Company of immediately available funds in
payment for a Book-Entry Note and the authentication and
issuance of the
<PAGE> 54
22
Global Security representing such Book-Entry Note shall
constitute "settlement" with respect to such Book-Entry
Note. All orders accepted by the Company will be settled on
the third Business Day following the date of sale of such
Book-Entry Note pursuant to the timetable for settlement set
forth below unless the Company and the purchaser agree to
settlement on another day which shall be no earlier than the
next Business Day following the date of sale.
DETAILS FOR Settlement Procedures with regard to each Book-Entry Note
SETTLEMENT: sold by the Company through any Agent, as agent, shall be as
follows:
A. The Presenting Agent will advise the Company by
telephone of the following settlement information:
1. Principal amount of the Book-Entry Note.
2. In the case of a Fixed Rate Book-Entry Note, the
interest rate or, in the case of a Floating Rate
Book-Entry Note, the Base Rate, initial interest
rate (if known at such time), Index Maturity,
Interest Reset Period, Interest Reset Dates,
Spread or Spread Multiplier (if any), minimum
interest rate (if any).
3. Issuance price of the Book-Entry Note.
4. Trade and Settlement dates.
5. Maturity Date and, if applicable, the Extension
Period and Final Maturity Date.
<PAGE> 55
23
6. Record Dates, Interest Payment Dates and
the Interest Payment Period.
7. Optional Reset Dates, if any.
8. Redemption provisions, if any.
9. Repayment or sinking fund provisions, if
any.
10. Presenting Agent's DTC participant
account number and commission, to be
paid in the form of a discount upon
settlement.
11. Whether such Book-Entry Note is issued
at an original issue discount and, if
so, the total amount of OID, the yield
to maturity and the initial accrual
period OID.
12. Taxpayer identification number of the
purchaser.
13. Net proceeds to the Company.
14. Any other applicable terms.
B. The Company will assign a CUSIP number to the Global
Security representing such Book-Entry Note, assign an
order number to such Book-Entry Note and then advise
Chase by telephone (confirmed in writing at any time on
the same date) or electronic transmission of the
information set forth in Settlement Procedure "A"
above, such CUSIP number, such order number, the name
of the Presenting Agent and any other applicable
information. The Company will also notify the
<PAGE> 56
24
Presenting Agent by telephone or electronic
transmission of such CUSIP number as soon as
practicable. The Company will provide Chase with
registration instructions and Taxpayer
Identification Number (if the Note is not to be
registered to DTC or its nominee).
C. Chase will enter a pending deposit message through
DTC's Participant Terminal System providing the
following settlement information to DTC (which shall
route such information to Standard & Poor's Corporation
and Interactive Data Corporation), the Presenting Agent
and, upon request, the Trustee:
1. The information set forth in Settlement
Procedure "A".
2. Identification as a Fixed Rate
Book-Entry Note or a Floating Rate
Book-Entry Note.
3. Initial Interest Payment Date for such
Book-Entry Note, number of days by which
such date succeeds the related Record
Date (which, in the case of Floating
Rate Book-Entry Notes that reset daily
or weekly, shall be the DTC Record Date,
which is the date five calendar days
immediately preceding the applicable
Interest Payment Date and, in the case
of all other Book-Entry Notes, shall be
the Record Date as defined in such
Notes) and amount of interest payable on
such Interest Payment Date.
<PAGE> 57
25
4. The Interest Payment Period.
5. CUSIP number of the Global Security
representing such Book-Entry Note.
6. Whether such Global Security will
represent any other Book-Entry Note (to
the extent known at such time).
7. Account numbers of participant accounts
maintained by DTC on behalf of the
Presenting Agent and the Trustee.
D. To the extent the Company has not already done so, the
Company will deliver to the Trustee a Global Security
in a form that has been approved by the Company, the
Agents and the Trustee.
E. The Trustee will complete such Book-Entry Note, stamp
the appropriate legend, as instructed by DTC, if not
already set forth thereon, and authenticate the Global
Security representing such Book-Entry Note in
accordance with the terms of the written order of the
Company then in effect.
F. DTC will credit such Book-Entry Note to Chase's
participant account at DTC.
G. Chase will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC to (i)
debit such Book-Entry Note to Chase's participant
account and credit such Book-Entry Note to the
Presenting Agent's participant account and (ii) debit
the Presenting
<PAGE> 58
26
Agent's settlement account and credit Chase's
settlement account for an amount equal to the
price of such Book-Entry Note less the Presenting
Agent's commission. The entry of such a deliver
order shall constitute a representation and
warranty by Chase to DTC that (i) the Global
Security representing such Book-Entry Note has
been issued and authenticated and (ii) Chase is
holding such Global Security pursuant to the
Medium-Term Note Certificate Agreement between
Chase and DTC.
H. The Presenting Agent will enter an SDFS deliver order
through DTC's Participant Terminal System instructing
DTC (i) to debit such Book-Entry Note to the Presenting
Agent's participant account and credit such Book-Entry
Note to the participant accounts of the Participants
with respect to such Book-Entry Note and (ii) to debit
the settlement accounts of such Participants and credit
the settlement account of the Presenting Agent for an
amount equal to the price of such Book-Entry Note.
I. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures "G" and "H"
will be settled in accordance with SDFS operating
procedures in effect on the settlement date.
J. Chase will, upon receipt of funds from the Presenting
Agent in accordance with Settlement Procedure "G",
credit or wire transfer to an account specified by the
Company funds available for immediate use in the amount
transferred to Chase in
<PAGE> 59
27
accordance with Settlement Procedure "G".
K. The Presenting Agent will confirm the purchase of such
Book-Entry Note to the purchaser either by transmitting
to the Participants with respect to such Book-Entry
Note a confirmation order or orders through DTC's
institutional delivery system or by mailing a written
confirmation to such purchaser.
SETTLEMENT For orders of Book-Entry Notes solicited by an Agent and
PROCEDURES accepted by the Company for settlement on the first Business
TIMETABLE: Day after the sale date, Settlement Procedures "A" through
"K" set forth above shall be completed as soon as possible
but not later than the respective times (New York City time)
set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on the day
before settlement
E 9:00 A.M. on settlement date
F 10:00 A.M. on settlement date
G-H 2:00 P.M. on settlement date
I 4:45 P.M. on settlement date
J-K 5:00 P.M. on settlement date
If a sale is to be settled more than one Business Day after
the sale date, Settlement Procedures "A", "B" and "C" shall
be completed as soon as practicable but no later than 11:00
A.M. and 12:00 Noon on the first Business Day after the sale
date and no later than 2:00 P.M. on the Business Day before
the settlement date, respectively. If the initial interest
rate for a Floating Rate Book-Entry Note has not
<PAGE> 60
28
been determined at the time that Settlement Procedure "A" is
completed, Settlement Procedures "B" and "C" shall be
completed as soon as such rate has been determined but no
later than 12:00 Noon and 2:00 P.M., respectively, on the
Business Day before the settlement date. Settlement
Procedure "I" is subject to extension in accordance with any
extension of Fedwire closing deadlines and in the other
events specified in SDFS operating procedures in effect on
the settlement date.
If settlement of a Book-Entry Note is rescheduled or
canceled, Chase will, assuming timely notice thereof,
deliver to DTC, through DTC's Participant Terminal System, a
cancelation message to such effect by no later than 2:00
P.M. on the Business Day immediately preceding the scheduled
settlement date.
FAILURE TO If Chase fails to enter an SDFS deliver order with respect
SETTLE: to a Book-Entry Note pursuant to Settlement Procedure "G",
then, upon written request of the Company (which may be by
telecopy) Chase shall deliver to DTC, through DTC's
Participant Terminal System, as soon as practicable, a
withdrawal message instructing DTC to debit such Book-Entry
Note to Chase's participant account. DTC will process the
withdrawal message, provided that Chase's participant
account contains a principal amount of the Global Security
representing such Book-Entry Note that is at least equal to
the principal amount to be debited. If a withdrawal message
is processed with respect to all the Book-Entry Notes
represented by a Global Security, the Trustee will cancel
such Global Security in accordance with the Indenture and so
advise the Company and Chase, and Chase will make
<PAGE> 61
29
appropriate entries in its records. The CUSIP number
assigned to such Global Security shall, in accordance with
CUSIP Service Bureau procedures, be canceled and not
immediately reassigned. If a withdrawal message is processed
with respect to one or more, but not all, of the Book-Entry
Notes represented by a Global Security, Chase will exchange
such Book-Entry Note for two Global Securities, one of which
shall represent such Book-Entry Notes and shall be canceled
immediately after issuance and the other of which shall
represent the other Book-Entry Notes previously represented
by the surrendered Global Security and shall bear the CUSIP
number of the surrendered Global Security.
If the purchase price for any Book-Entry Note is not timely
paid to the Participants with respect to such Note by the
beneficial purchaser thereof (or a Person, including an
indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the Presenting
Agent may enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders entered
pursuant to Settlement Procedures "H" and "G" respectively.
Thereafter Chase will deliver the withdrawal message and
take the related actions described in the preceding
paragraph. If such failure shall have occurred for any
reason other than a default by the Presenting Agent in the
performance of its obligations hereunder and under the
Agency Agreement, then the Company will reimburse the
Presenting Agent or Chase, as applicable, on an equitable
basis for the loss of the use of funds during the period
when they were credited to the account of the Company.
<PAGE> 62
30
Notwithstanding the foregoing, upon any failure to settle
with respect to a Book-Entry Note, DTC may take any actions
in accordance with its SDFS operating procedures then in
effect. In the event of a failure to settle with respect to
one or more, but not all, of the Book-Entry Notes to have
been represented by a Global Security, Chase will provide,
in accordance with Settlement Procedure "E", for the
authentication and issuance of a Global Security
representing the other Book-Entry Notes to have been
represented by such Global Security and will make
appropriate entries in its records.
TRUSTEE AND CHASE Nothing herein shall be deemed to require the Trustee or
NOT TO RISK Chase to risk or expend its own funds in connection with any
FUNDS: payment to the Company, DTC, the Agents or the purchaser, it
being understood by all parties that payments made by the
Trustee or Chase to the Company, DTC, the Agents or the
purchaser shall be made only to the extent that funds are
provided to the Trustee or Chase for such purpose.
AUTHENTICITY OF The Company will cause the Trustee to furnish the Agents
SIGNATURES: from time to time with the specimen signatures of each of
the Trustee's officers, employees or agents who has been
authorized by the Trustee to authenticate Book-Entry Notes,
but neither Chase nor any Agent will have any obligation or
liability to the Company or the Trustee in respect of the
authenticity of the signature of any officer, employee or
agent of the Company or the Trustee on any Book-Entry Note.
PAYMENT OF Each Agent shall forward to the Company, on a monthly basis,
EXPENSES: a statement of the out-of-pocket expenses incurred by such
Agent during that month that are
<PAGE> 63
31
reimbursable to it pursuant to the terms of the Agency
Agreement. The Company will remit payment to the Agents
currently on a monthly basis.
PERIODIC Upon the request of the Company, Chase will send to the
STATEMENTS FROM Company a statement setting forth the principal amount of
CHASE: Book-Entry Notes Outstanding as of that date and setting
forth a brief description of any sales of Book-Entry Notes
of which the Company has advised Chase but which have not
yet been settled.
PART II
ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
------------------------------------------------
The Trustee will serve as registrar and transfer agent and
authenticating and paying agent in connection with the Certificated Notes.
ISSUANCE: Each Certificated Note will be dated and issued as of the
date of settlement and authenticated by the Trustee. Each
Certificated Note will bear an Original Issue Date, which
will be (i) with respect to an original Certificated Note
(or any portion thereof), its original issuance date (which
will be the settlement date) and (ii) with respect to any
Certificated Note (or portion thereof) issued subsequently
upon transfer or exchange of a Certificated Note or in lieu
of a destroyed, lost or stolen Certificated Note, the
Original Issue Date of the predecessor Certificated Note,
regardless of the date of authentication of such
subsequently issued Certificated Note.
REGISTRATION: Certificated Notes will be issued only in fully registered
form without coupons.
TRANSFER AND A Certificated Note may be presented for transfer or
EXCHANGES: exchange at the
<PAGE> 64
32
office of the Trustee at Attn:
The Chase Manhattan Bank
55 Water Street
North Building
2nd Floor, Room 234
New York, NY 10041
Certificated Notes will be exchangeable for other
Certificated Notes having identical terms but different
authorized denominations without service charge.
Certificated Notes will not be exchangeable for Book-Entry
Notes.
MATURITIES: Each Certificated Note will mature on a date not less than 9
months after the date of delivery by the Company of such
Certificated Note (the "Closing Date").
DENOMINATIONS: The denomination of any Certificated Note denominated in
U.S. dollars will be a minimum of $1,000 or any amount in
excess thereof that is an integral multiple of $1,000.
INTEREST: GENERAL. Interest, if any, on each Certificated Note will
accrue from the original issue date for the first interest
period or the last date to which interest has been paid, if
any, for each subsequent interest period, and will be
calculated and paid in the manner described in such Note and
in the Prospectus, as supplemented by the applicable Pricing
Supplement. Unless otherwise specified therein, each payment
of interest on a Certificated Note will include interest
accrued to but excluding the Interest Payment Date or to but
excluding Maturity, other than a Maturity of a Fixed Rate
Certificated Note occurring on the 31st day of a month, in
which case such payment of interest will include interest
accrued to but excluding the 30th day of such month, or to
but excluding the date of Redemption.
<PAGE> 65
33
RECORD DATES. The Record Date with respect to any Interest
Payment Date shall be the date 15 calendar days immediately
preceding such Interest Payment Date whether or not such
date shall be a Business Day.
FIXED RATE CERTIFICATED NOTES. Unless otherwise specified
pursuant to Settlement Procedure "A" below, interest
payments on Fixed Rate Certificated Notes will be made
semiannually on May 1 and November 1 of each year and at
Maturity or upon Redemption; PROVIDED, HOWEVER, that in the
case of a Fixed Rate Certificated Note issued between a
Record Date and an Interest Payment Date, the first interest
payment will be made on the Interest Payment Date following
the next succeeding Record Date. If any Interest Payment
Date for or the date of Maturity or Redemption of a Fixed
Rate Certificated Note is not a Business Day, the payment
due on such day shall be made on the next succeeding
Business Day and no interest shall accrue on such payment
for the period from and after such Interest Payment Date or
Maturity or Redemption, as the case may be.
FLOATING RATE CERTIFICATED NOTES. Interest payments will be
made on Floating Rate Certificated Notes monthly, quarterly,
semi-annually or annually or as specified in the applicable
Pricing Supplement. Interest will be payable, in the case of
Floating Rate Certificated Notes with a monthly Interest
Payment Period, on the third Wednesday of each month; with a
quarterly interest Payment Period, on the third Wednesday of
March, June, September and December of each year; with a
semiannual Interest Payment Period, on the third Wednesday
of the two months specified pursuant to Settlement Procedure
"A" below; and
<PAGE> 66
34
with an annual Interest Payment Period, on the third
Wednesday of the month specified pursuant to Settlement
Procedure "A" below; PROVIDED, HOWEVER, that if any Interest
Payment Date for a Floating Rate Certificated Note would
otherwise be a day that is not a Business Day with respect
to such Floating Rate Certificated Note, such Interest
Payment Date will be the next succeeding Business Day with
respect to such Floating Rate Certificated Note, except in
the case of a Floating Rate Certificated Note for which the
Base Rate is LIBOR, if such Business Day is in the next
succeeding calendar month, such Interest Payment Date will
be the immediately preceding Business Day; and PROVIDED
FURTHER, that in the case of a Floating Rate Certificated
Note issued between a Record Date and an Interest Payment
Date, the first interest payment will be made on the
Interest Payment Date following the next succeeding Record
Date.
CALCULATION OF FIXED RATE CERTIFICATED NOTES. Interest on Fixed Rate
INTEREST: Certificated Notes (including interest for partial periods)
will be calculated on the basis of a 360-day year or twelve
30-day months.
FLOATING RATE CERTIFICATED NOTES. Interest rates on Floating
Rate Certificated Notes will be determined as set forth in
the form of Notes. Interest on Floating Rate Certificated
Notes, except as otherwise set forth therein, will be
calculated on the basis of actual days elapsed and a year of
360 days, except that in the case of a Floating Rate
Certificated Note for which the Base Rate is the Treasury
Rate, interest will be calculated on the basis of the actual
number of days in the year.
<PAGE> 67
35
PAYMENTS OF The Trustee or Paying Agent, as the case may be, will pay
PRINCIPAL AND the principal amount of each Certificated Note at Maturity
INTEREST: upon presentation of such Certificated Note to the Trustee
or Paying Agent, as the case may be. Such payment, together
with payment of interest due at Maturity of such
Certificated Note, will be made in funds available for
immediate use by the Trustee and in turn by the Holder of
such Certificated Note. Certificated Notes presented to the
Trustee at Maturity for payment will be canceled by the
Trustee in accordance with the Indenture. All interest
payments on a Certificated Note (other than interest due at
Maturity) will be made by check drawn on the Trustee, the
Paying Agent, as the case may be, or another Person
appointed by the Trustee, mailed by the Trustee to the
Person entitled thereto as provided in such Note and the
Indenture; PROVIDED, HOWEVER, that the holder of $10,000,000
or more of the Certificated Notes with similar tenor and
terms will be entitled to receive such payment by wire
transfer in U.S. dollars, but only if the Trustee, or the
Paying Agent, as the case may be, shall have received
appropriate payment instructions in writing fifteen calendar
days prior to any Interest Payment Date. Within 10 days
after each Record Date, the Trustee will furnish the Company
with a list of interest payments to be made on the following
Interest Payment Date for each Certificated Note and in
total for all Certificated Notes to the extent
ascertainable. The Trustee will provide monthly to the
Company lists of principal and interest, to the extent
ascertainable, to be paid on Certificated Notes maturing in
the next month. The Company will provide to the Trustee not
later than any payment date sufficient moneys to pay in full
all principal and interest
<PAGE> 68
36
payments due on the payment date. The Trustee shall make all
such payments in accordance with the terms of the Notes.
The Trustee will be responsible for withholding taxes on
interest paid on Certificated Notes as required by
applicable law.
If the Maturity or Redemption of a Certificated Note is not
a Business Day, the payment due on such day shall be made on
the next succeeding Business Day and no interest shall
accrue on such payment date for the period from and after
such Maturity or date of Redemption, as the case may be.
PROCEDURES UPON COMPANY NOTICE TO TRUSTEE REGARDING EXERCISE OF OPTIONAL
COMPANY'S RESET. Not less than 50 or more than 60 days before an
EXERCISE OF Optional Reset Date as set forth in a Certificated Note, the
OPTIONAL RESET OR Company will notify the Trustee whether it is exercising its
OPTIONAL option to reset the Interest Rate or Spread or Spread
EXTENSION OF Multiplier, as the case may be, for such Certificated Note,
MATURITY: and if so, (i) the new Interest Rate or Spread or Spread
Multiplier, as the case may be, for such Certificated Note
during the period from such Optional Reset Date to the next
Optional Reset Date as set forth in such Certificated Note
or, if there is no such next Optional Reset Date, to the
Maturity Date of such Certificated Note (the "Subsequent
Interest Period"); and (ii) the provisions, if any, for
redemption of such Certificated Note during such Subsequent
Interest Period, including the date or dates on which or the
period or periods during which such redemption may occur
during such Subsequent Interest Period.
COMPANY NOTICE TO TRUSTEE REGARDING EXERCISE OF OPTIONAL
EXTENSION OF
<PAGE> 69
37
MATURITY. If the Company elects to exercise an option, as
set forth in a Certificated Note, to extend the Maturity
Date of such Note, it will so notify the Trustee no less
than 50 or more than 60 days before the Maturity Date of
such Certificated Note, and will further indicate (i) the
new Maturity Date; (ii) the Interest Rate or Spread or
Spread Multiplier, as the case may be applicable to such
extension period, and (iii) the provisions, if any, for
redemption of such Certificated Note during such extension
period, including the date or dates on which or the period
or periods during which such redemption may occur during
such extension period.
TRUSTEE NOTICE TO HOLDERS REGARDING COMPANY'S EXERCISE OF
OPTIONAL EXTENSION OR RESET. Upon receipt of notice from the
Company regarding the Company's exercise of either an
optional extension of maturity or an optional reset, the
Trustee will mail a notice, first class, postage prepaid, to
the Holder not less than 40 days before the Optional Reset
Date (in which case a "Reset Notice") or the old Maturity
Date (in which case an "Extension Notice"), as the case may
be, which Reset Notice or Extension Notice shall contain the
information required by the terms of the Certificated Note.
TRUSTEE NOTICE TO COMPANY REGARDING OPTION TO BE REPAID. If,
after receipt of either a Reset Notice or an Extension
Notice, any Holder of a Certificated Note exercises the
option for repayment by tendering the Certificated Note to
be repaid as set forth in the Certificated Note, the Trustee
shall give notice to the Company not less than 22 days
before the Optional Reset Date or the old Maturity Date, as
the case may be, of the principal amount of Certificated
<PAGE> 70
38
Notes to be repaid on such Optional Reset Date or old
Maturity Date, as the case may be.
COMPANY NOTICE REGARDING NEW INTEREST RATE OR NEW SPREAD OR
SPREAD MULTIPLIER. If the Company elects to revoke the
Interest Rate or Spread or Spread Multiplier and establish a
higher interest rate or Spread or Spread Multiplier for an
Optional Reset Period or extension period, as the case may
be, it shall, not less than 20 days before such Optional
Reset Date or old Maturity Date, so notify the Trustee. The
Trustee will immediately thereafter notify the Holder of
such Certificated Note, by first class mail, postage prepaid
of the new Interest Rate or Spread or Spread Multiplier
applicable to such Certificated Note.
TRUSTEE NOTICE TO COMPANY REGARDING HOLDERS REVOCATION OF
OPTION TO BE REPAID. If, after the Holder has tendered any
Certificated Notes for repayment pursuant to an Extension
Notice or an Optional Reset Notice, such Holder then revokes
such tender for repayment, the Trustee shall give notice to
the Company not less than five days prior to the old
Maturity Date or Optional Reset Date, as the case may be, of
such revocation and of the principal amount of Certificated
Notes for which tender for repayment has been revoked.
DEPOSIT OF REPAYMENT PRICE. On or before any old Maturity
Date where the Maturity has been extended, and on or before
an Optional Reset Date, the Company shall deposit with the
Trustee an amount of money sufficient to pay the principal
amount, plus interest accrued to such old Maturity Date or
Optional Reset Date, as the case may be, for all the
Certificated Notes or portions thereof which are to be
repaid on such old Maturity
<PAGE> 71
39
Date or Optional Reset Date, as the case may be. Such
Trustee will use such money to repay such Certificated Notes
pursuant to the terms set forth in such Notes.
PROCEDURES UPON COMPANY NOTICE TO TRUSTEE REGARDING EXERCISE OF OPTIONAL
COMPANY'S REDEMPTION. At least 45 days prior to the date on which it
EXERCISE OF intends to redeem a Certificated Note, the Company will
OPTIONAL notify the Trustee that it is exercising such option with
REDEMPTION: respect to such Certificated Note on such date.
TRUSTEE NOTICE TO HOLDERS REGARDING COMPANY'S EXERCISE OF
OPTIONAL REDEMPTION. After receipt of notice that the
Company is exercising its option to redeem a Certificated
Note, the Trustee will, at least 30 days before the
redemption date for such Certificated Note, mail a notice,
first class, postage prepaid, to the Holder of such
Certificated Note informing such Holder of the Company's
exercise of such option with respect to such Certificated
Note.
DEPOSIT OF REDEMPTION PRICE. On or before any redemption
date, the Company shall deposit with such Trustee an amount
of money sufficient to pay the redemption price, plus
interest accrued to such redemption date, for all the
Certificated Notes or portions thereof which are to be
repaid on such redemption date. Such Trustee will use such
money to repay such Certificated Notes pursuant to the terms
set forth in such Notes.
PAYMENTS OF TRUSTEE NOTICE TO COMPANY OF OPTION TO BE REPAID. Upon
PRINCIPAL AND receipt of notice of exercise of the option for repayment
INTEREST UPON and the Certificated Notes so to be repaid as set forth in
EXERCISE OF such Notes, the Trustee shall (unless such notice was
OPTIONAL received pursuant to the
REPAYMENT (EXCEPT
PURSUANT TO
<PAGE> 72
40
COMPANY'S Company's exercise of an optional reset or an optional
EXERCISE OF extension of maturity, in each of which cases the relevant
OPTIONAL RESET OF procedures set forth above are to be followed) give notice
OPTIONAL to the Company not less than 20 days prior to each Optional
EXTENSION): Repayment Date of such Optional Repayment Date and of the
principal amount of Certificated Notes to be repaid on such
Optional Repayment Date.
DEPOSIT OF REPAYMENT PRICE. On or prior to any Optional
Repayment Date, the Company shall deposit with such Trustee
an amount of money sufficient to pay the optional repayment
price, and accrued interest thereon to such date, of all the
Certificated Notes or portions thereof which are to be
repaid on such date. Such Trustee will use such money to
repay such Certificated Notes pursuant to the terms set
forth in such Notes.
PROCEDURE FOR The Company and the Agents will discuss from time to time
RATE SETTING AND the aggregate principal amount of, the issuance price of,
POSTING: and the interest rates to be borne by Certificated Notes
that may be sold as a result of the solicitation of offers
by the Agents. If the Company decides to set prices of, and
rates borne by, any Notes in respect of which the Agents are
to solicit orders (the setting of such prices and rates to
be referred to herein as "posting") or if the Company
decides to change prices or rates previously posted by it,
it will promptly advise the Agents of the prices and rates
to be posted.
ACCEPTANCE AND Each Agent will promptly advise the Company of any offers to
REJECTION OF purchase Certificated Notes received by such Agent.
OFFERS:
The Company will have the sole right to accept any such
offer to purchase
<PAGE> 73
41
Certificated Notes. The Company may reject any such offer in
whole or in part.
Each Agent may, in its discretion reasonably exercised,
reject any offer to purchase Certificated Notes received by
it in whole or in part.
PREPARATION OF If any offer to purchase a Certificated Note is accepted by
PRICING the Company, the Company, with the approval of the
SUPPLEMENT: Presenting Agent, will prepare a Pricing Supplement
reflecting the terms of such Certificated Note and will
arrange to have 10 copies thereof filed with the Commission
in accordance with the applicable paragraph of Rule 424(b)
under the Act and will supply at least 10 copies thereof (or
additional copies if requested) to the Presenting Agent and
one copy to the Trustee. The Presenting Agent will cause a
Pricing Supplement to be delivered to the purchaser of the
Certificated Note.
The copies of the Pricing Supplement to be sent to the
Presenting Agent shall be sent by telecopy or overnight
courier to arrive no later than 11:00 a.m., New York City
time, on the business day following the sale date and shall
be sent to:
(a) if to Salomon Brothers Inc, to it at:
Salomon Brothers Inc
8800 Hidden River Parkway
Tampa, Florida 33167
Attn: Enrique Castro
Tel: 813-558-7165
Telecopy: 813-558-4123
<PAGE> 74
42
(b) if to Merrill Lynch & Co., to it at:
(i) for overnight, express or
special delivery packages:
Tritech Services
40 Colonial Drive
Piscataway, NJ 08854
Attn: Prospectus Operations/
Nachman Kimerling
Tel: 908-885-2769
(ii) for all other types of
deliveries:
Tritech Services
#4 Corporate Place
Corporate Park 287
Piscataway, NJ 08854
Attn: Prospectus Operations/
Nachman Kimerling
Tel: 908-885-2769
Telecopy: 908-885-2775/2776
and, in each case, please send a
copy to:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
World Financial Center
North Tower
10th Floor
New York, NY 10281
Attn: MTN Product Management
Tel: 212-449-7476
Telecopy: 212-449-2234
or to such other address as the Presenting Agent may
specify. Receipt of all telecopy transmissions shall be
confirmed by telephone.
In each instance that a Pricing Supplement is prepared, the
Presenting Agent will affix the Pricing Supplement to
Prospectuses prior to their use. Outdated Pricing
Supplements and the Prospectuses to which they are attached
(other than
<PAGE> 75
43
those retained for files) will be destroyed.
SUSPENSION OF The Company reserves the right, in its sole discretion, to
SOLICITATION; instruct the Agents to suspend at any time, for any period
AMENDMENT OR of time or permanently, the solicitation of offers to
SUPPLEMENT OF purchase Certificated Notes. Upon receipt of such
PROSPECTUS: instructions from the Company, the Agents will forthwith
suspend solicitation of offers to purchase Certificated
Notes from the Company until such time as the Company has
advised them that such solicitation may be resumed.
If the Company decides to amend or supplement the
Registration Statement or the Prospectus (except for a
supplement relating to an offering of securities other than
the Notes), it will promptly advise the Agents and the
Trustee and will furnish the Agents and the Trustee with the
proposed amendment or supplement and with such certificates
and opinions as are required, all to the extent required by
and in accordance with the terms of the Agency Agreement.
Subject to the provisions of the Agency Agreement, the
Company will mail to the Commission for filing therewith any
supplement to the Prospectus relating to the Notes, provide
the Agents and the Trustee with copies of any such
supplement and confirm to the Agents that such supplement
has been filed with the Commission pursuant to the
applicable paragraph of Rule 424(b).
In the event that at the time the Company suspends
solicitation of offers to purchase Certificated Notes there
shall be any outstanding offers to purchase Certificated
Notes that have been accepted by the Company but for which
settlement has not yet occurred, the Company will promptly
advise the Agents and the Trustee
<PAGE> 76
44
whether such sales may be settled and whether copies of the
Prospectus as supplemented to the time of the suspension may
be delivered in connection with the settlement of such
sales. The Company will have the sole responsibility for
such decision and for any arrangements which may be made in
the event that the Company determines that such sales may
not be settled or that copies of such Prospectus may not be
so delivered.
PROCEDURE FOR When the Company has determined to change the interest rates
RATE CHANGES: of Certificated Notes being offered, it will promptly advise
the Agents and the Agents will forthwith suspend
solicitation of orders. The Agents will telephone the
Company with recommendations as to the changed interest
rates. At such time as the Company has advised the Agents of
the new interest rates, the Agents may resume solicitation
of orders. Until such time, only "indication of interest"
may be recorded.
DELIVERY OF A copy of the Prospectus and Pricing Supplement relating to
PROSPECTUS: a Certificated Note must accompany or precede the earliest
of any written offer of such Certificated Note, confirmation
of the purchase of such Certificated Note and payment for
such Certificated Note by its purchaser. If notice of a
change in the terms of the Certificated Notes is received by
the Agents between the time an order for a Certificated Note
is placed and the time written confirmation thereof is sent
by the Presenting Agent to a customer or his agent, such
confirmation shall be accompanied by a Prospectus and
Pricing Supplement setting forth the terms in effect when
the order was placed. Subject to "Suspension of
Solicitation; Amendment or Supplement" above, the
<PAGE> 77
45
Presenting Agent will deliver a Prospectus and Pricing
Supplement as herein described with respect to each
Certificated Note sold by it. The Company will make such
delivery of such Certificated Note if sold directly by the
Company to a purchaser (other than an Agent).
CONFIRMATION: For each offer to purchase a Certificated Note solicited by
an Agent and accepted by the Company, the Presenting Agent
will issue a confirmation to the purchaser, with a copy to
the Company, setting forth the details set forth below and
delivery and payment instructions.
SETTLEMENT: The receipt by the Company of immediately available funds in
exchange for an authenticated Certificated Note delivered to
the Presenting Agent and the Presenting Agent's delivery of
such Certificated Note against receipt of immediately
available funds shall, with respect to such Certificated
Note, constitute "settlement". The Closing Date with respect
to any offer to purchase Certificated Notes accepted by the
Company will be a date on or before the third Business Day
next succeeding the date of acceptance unless otherwise
agreed by the purchaser and the Company and shall be
specified upon acceptance of such offer (but shall be no
earlier than the next Business Day following the date of
acceptance). The Company will instruct the Trustee to effect
delivery of each Certificated Note no later than 1:00 P.M.,
New York City time, on the Closing Date to the Presenting
Agent for delivery to the purchaser.
DETAILS FOR For each offer to purchase a Certificated Note that is
SETTLEMENT: accepted by the Company, the Presenting Agent will provide
(unless provided by the purchaser directly to the Company)
by
<PAGE> 78
46
telephone the following information
to the Company:
1. Exact name of registered
owner.
2. Exact address of registered owner
and address for payment of
principal and interest.
3. Taxpayer identification number
of registered owner.
4. Principal amount of the
Certificated Note.
5. In the case of a Fixed Rate
Certificated Note, the
interest rate or, in the
case of a Floating Rate
Certificated Note, the
initial interest rate (if
known at such time), Base
Rate, Index Maturity,
Interest Reset Period,
Interest Reset Dates,
Spread or Spread Multiplier
(if any), minimum interest
rate (if any) and maximum
interest rate (if any).
6. Issuance price (including
currency) of the Certificated Note.
7. Trade or Settlement dates.
8. Maturity Date and, if
applicable, the Extension
Period and Final Maturity
Date.
9. Interest Payment Dates and
the Interest Payment
Period.
10. Whether such Certificated
Note is issued at an original
issue discount and, if so, the
total amount of OID, the yield
to maturity and the initial
accrual period OID.
11. Optional Reset Dates, if
any.
12. Redemption provisions, if any.
13. Repayment or sinking fund
provisions, if any.
<PAGE> 79
47
14. Presenting Agent's commission,
determined as provided in
Section 2 of the Agency Agreement,
to be paid in the form of a
discount upon settlement.
15. Any other applicable terms.
The Presenting Agent will advise the Company by telephone,
confirmed in writing of the foregoing information (unless
provided by the purchaser directly to the Company) for each
offer to purchase a Certificated Note solicited by such
Agent and accepted by the Company in time for the Trustee to
prepare and authenticate the required Certificated Note.
Before accepting any offer to purchase a Certificated Note
to be settled in less than three Business Days, the Company
shall verify that the Trustee will have adequate time to
prepare and authenticate such Certificated Note.
After receiving from the Presenting Agent the detail for
each offer to purchase a Certificated Note that has been
accepted by the Company, the Company will, after recording
the details and any necessary calculations, provide
appropriate documentation to the Trustee, including the
information provided by the Presenting Agent necessary for
the preparation and authentication of such Certificated Note
by no later than 10:00 A.M. on the Business Day next
preceding the Closing Date. Prior to preparing the
Certificated Note for delivery (but in any case no later
than 10:00 A.M. on the Business Day next preceding the
Closing Date therefor), the Trustee will confirm the details
of such issue with the Presenting Agent by telephone.
NOTE DELIVERIES Upon receipt of appropriate documentation and instructions,
AND CASH PAYMENT: the
<PAGE> 80
48
Company will cause the Trustee to prepare and authenticate
the pre-printed 4-ply Certificated Note packet containing
the following documents in forms approved by the Company,
the Presenting Agent and the Trustee:
1. Certificated Note with customer
receipt.
2. Stub 1 - For the Presenting
Agent.
3. Stub 2 - For the Company.
4. Stub 3 - For the Trustee.
Each Certificated Note shall be authenticated on the Closing
Date therefor. The Trustee will authenticate each
Certificated Note and deliver it to the Presenting Agent
(and deliver the stubs as indicated above), all in
accordance with written instructions (or oral instructions
confirmed in writing (which may be given by telex or
telecopy) on the next Business Day) from the Company.
Delivery by the Trustee of each Certificated Note will be
made upon confirmation from the Company that it has received
payment therefor (provided that the Company shall have
previously notified the Presenting Agent that delivery will
not occur until such confirmation).
Upon verification ("Verification") by the Presenting Agent
that a Note has been prepared and properly authenticated by
the Trustee and registered in the name of the purchaser in
the proper principal amount and other terms in accordance
with the aforementioned written instructions or
confirmation, payment will be made to the Company by the
Presenting Agent the same day as the Presenting Agent's
receipt of the Certificated Note in immediately available
funds. Such payment shall be made by the Presenting Agent
<PAGE> 81
49
(i) only upon prior receipt by the Presenting Agent of
immediately available funds from or on behalf of the
purchaser unless the Presenting Agent decides, at its
option, to advance its own funds for such payment against
subsequent receipt of funds from the purchaser and (ii) only
after the Trustee has made the Certificated Note available
for inspection by the Presenting Agent.
Upon delivery of a Certificated Note to the Presenting
Agent, Verification by the Presenting Agent and the giving
of instructions for payment, the Presenting Agent shall
promptly deliver such Note to the purchaser.
In the event any Certificated Note is incorrectly prepared,
the Trustee shall promptly issue a replacement Certificated
Note in exchange for the incorrectly prepared Certificated
Note.
FAILURE If the Presenting Agent, at its own option, has
TO SETTLE: advanced its own funds for payment against subsequent
receipt of funds from the purchaser, and if the purchaser
shall fail to make payment for the Certificated Note on the
Closing Date therefor, the Presenting Agent will promptly
notify the Trustee and the Company by telephone, promptly
confirmed in writing (but no later than the next Business
Day). In such event, the Company shall promptly provide the
Trustee with appropriate documentation and instructions
consistent with these procedures for the return of the
Certificated Note to the Trustee and the Presenting Agent
will promptly return such Note to the Trustee. Upon (i)
confirmation from the Trustee in writing (which may be given
by telex or telecopy) that the Trustee has received such
Note and (ii) confirmation from the Presenting
<PAGE> 82
50
Agent in writing (which may be given by telex or telecopy)
that the Presenting Agent has not received payment from the
purchaser (the matters referred to in clauses (i) and (ii)
are referred to hereinafter as the "Confirmations"), the
Company will promptly pay to the Presenting Agent an amount
in immediately available funds equal to the amount
previously paid by the Presenting Agent in respect of such
Certificated Note. Assuming receipt of the Certificated Note
by the Trustee and of the Confirmations by the Company, such
payment will be made on the Closing Date, if reasonably
practical, and in any event not later than the Business Day
following the date of receipt of the Certificated Note and
Confirmations. If a purchaser shall fail to make payment for
the Certificated Note for any reason other than the failure
of the Presenting Agent to provide the necessary information
to the Company as described above for settlement or to
provide a confirmation to the purchaser within a reasonable
period of time as described above or otherwise to satisfy
its obligation hereunder or in the Agency Agreement, and if
the Presenting Agent shall have otherwise complied with its
obligations hereunder and in the Agency Agreement, the
Company will reimburse the Presenting Agent on an equitable
basis for its loss of the use of funds during the period
when they were credited to the account of the Company.
Immediately upon receipt of the Certificated Note in respect
of which the failure occurred, the Trustee will cancel such
Certificated Note, make appropriate entries in its records
and dispose of the Certificated Note in accordance with its
customary procedures; and upon such action, the Certificated
Note
<PAGE> 83
51
will be deemed not to have been issued, authenticated and
delivered.
TRUSTEE NOT TO Nothing herein shall be deemed to require the Trustee to
RISK FUNDS: risk or expend its own funds in connection with any payment
to the Company, the Agents or the purchaser, it being
understood by all parties that payments made by the Trustee
to either the Company or the Agents shall be made only to
the extent that funds are provided to the Trustee for such
purpose.
AUTHENTICITY OF The Company will cause the Trustee to furnish the Agents
SIGNATURES: from time to time with the specimen signatures of each of
the Trustee's officers, employees or agents who has been
authorized by the Trustee to authenticate Certificated Notes
but the Agents will have no obligation or liability to the
Company or the Trustee in respect of the authenticity of the
signature of any officer, employee or agent of the Company
or the Trustee on any Certificated Note.
PAYMENT OF Each Agent shall forward to the Company, on a monthly basis,
EXPENSES: a statement of the out-of-pocket expenses incurred by such
Agent during that month which are reimbursable to it
pursuant to the terms of the Agency Agreement. The Company
will remit payment to the Agents currently on a monthly
basis.
PERIODIC Upon the request of the Company, the Trustee will send to
STATEMENTS FROM the Company a statement setting forth the principal amount
CHASE: of Certificated Notes Outstanding as of that date and
setting forth a brief description of any sales of
Certificated Notes of which the Company has advised the
Trustee but which have not yet been settled.
<PAGE> 84
52
<PAGE> 85
EXHIBIT B
The Sherwin-Williams Company
Medium Term Notes, Series B
Due 9 Months or More From Date of Issue
TERMS AGREEMENT
, 199
The Sherwin-Williams Company
101 Prospect Avenue, N.W.
Cleveland, Ohio 44115
Attention:
Subject in all respects to the terms and conditions of the Selling
Agency Agreement (the "Agreement") dated , 1997, among Salomon Brothers Inc,
Merrill Lynch & Co. and you, the undersigned agrees to purchase the following
Notes of The Sherwin-Williams Company:
Principal Amount of each Note:
Aggregate Principal Amount of all Notes:
Specified Currency and Minimum Denominations (if Specified
Currency is other than U.S. dollars):
Maturity Date:
Interest Payment Dates:
Interest Rate or Method of Determining:
Record Date:
Interest Reset Dates:
Total Amount of OID:
Initial Redemption Date:
Purchase Price: % of Principal Amount [plus accrued
interest from , 19 ]
<PAGE> 86
2
Closing Date and Time:
Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
Modification, if any, in the
requirements to deliver the documents
specified in Section 6(b) of the
Agreement:
Period during which additional Notes may
not be sold pursuant to Section 4(m) of
the Agreement:
Registration Statements:
$_______ of such Notes are
registered under
Registration Statement
No. 333-
Salomon Brothers Inc,
By:
------------------------------------
Merrill Lynch, Pierce, Fenner &
Smith Incorporated,
By:
------------------------------------
Accepted:
The Sherwin-Williams Company
By:
------------------------------------
<PAGE> 1
Exhibit 4(b)-1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Registered THE SHERWIN-WILLIAMS COMPANY Registered
- ---------- MEDIUM-TERM NOTE, Series B ----------
No. (Fixed Rate Note) CUSIP
- --- -----
Original Issue Date: Total Amount of OID:
Principal Amount: Yield to Maturity:
Issue Price: Initial Accrual Period OID:
Maturity Date:
Optional Extension
of Maturity Date:
Manner in which Interest Specified Currency:
Rate may be changed prior to
Maturity Date:
Interest Rate: Interest Payment Dates:
Regular Record Date:
Repayment at Option of Redemption at Option of the
Holders: Company:
Repayment Date(s) Redemption Date(s)
----------------- ------------------
Repayment Price(s) Redemption Price(s)
------------------ -------------------
Other Provisions:
If applicable, the "Total Amount of OID", "Yield to Maturity"
and "Initial Accrual Period OID" (computed under the appropriate method) below
will be completed solely for the purposes of applying the United States Federal
income tax original issue discount ("OID") rules.
This Note is a registered Note of THE SHERWIN- WILLIAMS
COMPANY, an Ohio corporation (together with its
<PAGE> 2
2
successors, if any, the "Company"). This Note is one of a series of Securities
(as defined on the reverse hereof) issued under the Indenture referred to on the
reverse hereof designated as Medium-Term Notes, Series B (the "Notes"). Subject
to the provisions hereof, the Company, for value received, hereby promises to
pay to
, or registered assigns, the Principal Amount set forth on the
face hereof on the Maturity Date shown above and to pay the premium, if any, and
interest, if any, thereon, as described on the reverse hereof.
The principal of (and premium, if any) and interest, if any,
on this Note are payable by the Company in such coin or currency specified on
the face hereof as at the time or payment shall be legal tender for the payment
of public and private debts.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been
manually executed by or on behalf of the Trustee under the Indenture, this Note
shall not be entitled to any benefits under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, THE SHERWIN-WILLIAM COMPANY has caused
this Note to be signed in its name by its Chairman of the Board, its Vice
Chairman, its President or a Vice President (or any other officer performing
similar functions), and by its Treasurer, Secretary, an Assistant Treasurer or
an Assistant Secretary (or any other officer performing similar functions), or
by facsimiles of any of their signatures, and its corporate seal, or a facsimile
thereof, to be hereto affixed.
THE SHERWIN-WILLIAMS COMPANY
Dated: By:
------------------------- ---------------------------------
[Seal] By:
---------------------------------
<PAGE> 3
3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
------------------------------------
Authorized Officer
<PAGE> 4
4
[REVERSE OF FIXED RATE MEDIUM-TERM NOTE, Series B]
THE SHERWIN-WILLIAMS COMPANY
Medium-Term Note, Series B
1. This Note is one of the duly authorized issue of
debentures, notes, bonds or other evidences of indebtedness (hereinafter called
the "Securities") of the Company, of the series hereinafter specified, all
issued or to be issued under and pursuant to the Indenture dated as of February
1, 1996 (the "Indenture"), between the Company and The Chase Manhattan Bank
(formerly known as Chemical Bank) (the "Trustee"), to which Indenture and all
other indentures supplemental thereto reference is hereby made for a statement
of the respective rights, limitations of rights, obligations and duties
thereunder of the Trustee and any agent of the Trustee, any Paying Agent for
this Note, the Company and the Holders of the Securities and the terms upon
which the Securities are issued and are to be authenticated and delivered.
The Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may be
subject to different redemption provisions (if any), may be subject to different
sinking, purchase or analogous funds (if any), may be subject to different
covenants and Events of Default and may otherwise vary as provided or permitted
in the Indenture. This Note is one of the series of Securities of the Company
issued pursuant to the Indenture designated as the Medium-Term Notes, Series B
(herein called the "Notes"), limited in aggregate principal amount to
$150,000,000. The Notes of this series may be issued at various times with
different maturity dates and different principal repayment provisions, may bear
interest at different rates, and may otherwise vary, all as provided in the
Indenture.
2. A. The regular record date ("Regular Record Date") with
respect to any Interest Payment Date (as defined below) shall be the applicable
date specified as such on the face hereof (whether or not such date shall be a
Business Day (as defined below)) immediately preceding such Interest Payment
Date. Interest which is payable, and is punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Person in whose name a Note is
registered at the close of business on the Regular Record Date next preceding
such Interest Payment Date; PROVIDED, HOWEVER, that interest payable on the
Maturity Date (as set forth on the face hereof) or upon redemption or repayment
<PAGE> 5
5
will be paid to the Person to whom principal shall be payable; PROVIDED FURTHER
that the first payment of interest on any Note with an Original Issue Date (as
set forth on the face hereof) between a Regular Record Date and an Interest
Payment Date or on an Interest Payment Date will be made on the Interest Payment
Date following the next succeeding Regular Record Date to the registered owner
of said Note on such next succeeding Regular Record Date. "Business Day" means
any day, other than a Saturday or Sunday, that is not a legal holiday or a day
on which banking institutions are authorized or required by law, regulation or
executive order to be closed in (a) The City of New York or (b) if the Specified
Currency (as set forth on the face hereof) is other than U.S. dollars, the
financial center of the country issuing such Specified Currency (which, in the
case of ECU, shall be Brussels, Belgium).
In connection with any calculations of the rate of interest
hereon, all percentages will be rounded, if necessary, to the nearest 1/100,000
of 1% (.0000001) (with five one-millionths of a percentage point being rounded
upward) and all dollar amounts used in or resulting from such calculation will
be rounded to the nearest cent (with one-half cent being rounded upward).
B. The Company promises to pay interest on the principal
amount at the rate per annum shown on the face hereof until the principal amount
hereof is paid or made available for payment or upon earlier redemption or
repayment. The Company will pay interest semiannually on the Interest Payment
Dates set forth on the face hereof (each such date an "Interest Payment Date"),
commencing with the first Interest Payment Date following the original Issue
Date shown on the face hereof and on the Maturity Date; PROVIDED, HOWEVER, that
the first payment of interest on any Note originally issued between a Regular
Record Date and an Interest Payment Date or on an Interest Payment Date will be
made on the Interest Payment Date following the next succeeding Regular Record
Date to the registered owner on such next Regular Record Date. Interest shall
accrue from and including the most recent Interest Payment Date or, if no
interest has been paid or duly provided for, from and including the original
Issue Date shown on the face hereof, to but excluding the Interest Payment Date.
The amount of such interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year of twelve 30-day months. If an Interest
Payment Date with respect to a Note would otherwise be a day that is not a
Business Day, such Interest Payment Date shall not be postponed; PROVIDED,
HOWEVER, that any payment required to be made in respect of such Note on a date
(including the day of Stated Maturity)
<PAGE> 6
6
that is not a Business Day for such Note need not be made on such date, but may
be made on the next succeeding Business Day with the same force and effect as if
made on such date, and no additional interest shall accrue as a result of such
delayed payment.
3. A. The principal of and any premium and interest on a Note
are payable by the Company in the Specified Currency for such Note. If the
Specified Currency for a Note is other than U.S. dollars, the Company will
(unless otherwise specified on the face hereof) arrange to convert all payments
in respect of such Note into U.S. dollars in the manner set forth on the face
hereof.
B. Unless otherwise specified on the face hereof, U.S. dollar
payments of interest on Notes (other than interest payable at Stated Maturity,
on redemption or on repayment) will be made, except as provided below, by check
mailed to the Holders of such Notes (which, in the case of Global Securities,
will be a nominee of the Depositary); PROVIDED, HOWEVER, that, in the case of a
Note issued between a Regular Record Date and the related Interest Payment Date,
unless otherwise specified on the face hereof, interest for the period beginning
on the Original Issue Date for such Note and ending on such Interest Payment
Date shall be paid on the next succeeding Interest Payment Date to the Holder of
such Note on the related Regular Record Date. A Holder of $10,000,000 (or the
equivalent thereof in a Specified Currency other than U.S. dollars) or more in
aggregate principal amount of Notes of like tenor and terms shall be entitled to
receive such U.S. dollar interest payments by wire transfer of immediately
available funds, but only if appropriate wire transfer instructions have been
received in writing by the Paying Agent not later than 15 calendar days prior to
the applicable Interest Payment Date. Simultaneously with the election by any
Holder provided on the face hereof to receive payments in a Specified Currency
other than U.S. dollars, such Holder shall provide appropriate wire transfer
instructions to the Trustee. Unless otherwise specified on the face hereof,
principal and any premium and interest payable at the Stated Maturity, on
redemption or repayment of a Note will be paid in immediately available funds
upon surrender of such Note at the corporate trust office or agency of the
Paying Agent in The City of New York, such interest being paid to the person to
whom principal is payable.
C. Initially, The Chase Manhattan Bank will be the Paying
Agent and the Registrar with respect to the Notes. The Company reserves the
right at any time to vary or terminate the appointment of any Paying Agent or
<PAGE> 7
7
Registrar and to appoint additional or other Paying Agents and additional or
other Registrars and to approve any change in the office through which any
Paying Agent or Registrar acts, provided that there will at all times be a
Paying Agent and Registrar in The City of New York.
4. If specified on the face hereof, this Note may be redeemed,
as a whole or from time to time in part, at the option of the Company, on not
less than 30 nor more than 60 days' notice given as provided in the Indenture,
on any redemption date(s) and at the related redemption price(s) set forth on
the face hereof, together with any accrued interest to the date of redemption.
The redemption price(s) are expressed as a percentage of the principal amount of
this Note. If no such redemption date is set forth on the face hereof, this Note
may not be so redeemed pursuant to this Section 4. If less than all the Notes
are to be redeemed, the Trustee shall select the Notes or portions thereof (in
multiples of $1,000) to be redeemed by lot or by such other method as the
Trustee considers fair and appropriate. In any case where more than one Note is
registered in the same name, the Trustee, in its discretion, may treat the
aggregate principal amount so registered as if it were represented by one Note.
The Trustee shall promptly notify the Company in writing of the Notes selected
for redemption and, in the case of any Notes selected for partial redemption,
the principal amount thereof to be redeemed. If any Note called for redemption
shall not be so paid upon surrender thereof on such redemption date, the
principal, premium, if any, and interest shall bear interest until paid from the
redemption date at the rate borne or provided for by such Notes.
5. If specified on the face hereof, this Note will be subject
to repayment at the option of the Holder hereof on the repayment date(s) and at
the related repayment price(s) set forth on the face hereof. The repayment
price(s) are expressed as a percentage of the principal amount of this Note. If
no such repayment date is set forth on the face hereof, this Note may not be so
repaid. On each repayment date, if any, this Note shall be repayable in whole or
in part at the option of the Holder hereof at the applicable repayment price set
forth on the face hereof, together with interest thereon to the date of
repayment. For this Note to be repaid in whole or in part at the option of the
Holder hereof, the Trustee must receive not less than 30 nor more than 45 days
prior to the repayment date (i) the Note with the form entitled "Option to Elect
Repayment" below duly completed or (ii) a telegram, telex, facsimile
transmission or a letter from a member of a national securities exchange or the
National Association of
<PAGE> 8
8
Securities Dealers, Inc. or a commercial bank or a trust company in the United
States of America setting forth the name of the Holder of the Note, the
principal amount of the Note, the principal amount of the Note to be repaid, the
certificate number of the Note or a description of the tenor and terms of the
Note to be repaid, a statement that the option to elect repayment is being
exercised thereby and a guarantee that the Note to be repaid with the form
entitled "Option to Elect Repayment" on the reverse of the Note duly completed
will be received by the Trustee not later than five Business Days after the date
of such telegram, telex, facsimile transmission or letter and such Note and form
duly completed are received by the Trustee by such fifth Business Day. Exercise
of such repayment option shall be irrevocable. Such option may be exercised by
the Holder for less than the entire principal amount provided that the principal
amount remaining outstanding after repayment is an authorized denomination.
6. If an Event of Default with respect to the Notes shall
occur and be continuing, the principal (or, if the Note is an Original Issue
Discount Note, such portion of the principal amount as may be specified on the
face hereof) and interest thereon of all of the Notes may be declared due and
payable in the manner and with the effect provided in the Indenture.
7. The Indenture permits, with certain exceptions as therein
provided, the Company and the Trustee to enter into supplemental indentures to
the Indenture for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of modifying in
any manner the rights of the Holders of the Securities of each series under the
Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time outstanding of each
series to be affected thereby on behalf of the Holders of all Securities of such
series. In addition, the Indenture permits the Company and the Trustee to enter
into supplemental indentures to the Indenture, without the consent of Holders,
for certain purposes, including to cure any ambiguity or to correct or
supplement any provision contained in the Indenture and to make changes that do
not adversely affect the rights of any Holder. The Indenture also permits the
Holders of a majority in aggregate principal amount of the Securities at the
time outstanding of each series on behalf of the Holders of all Securities of
such series, to waive certain past defaults and their consequences with respect
to such series under the Indenture. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and
<PAGE> 9
9
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not notation of such consent or waiver is made upon this Note or such other
Notes.
8. No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal and any
premium of and any interest on this Note at the place, rate and respective times
and in the coin or currency herein and in the Indenture prescribed.
9. The authorized denominations of Notes are $1,000 and any
larger amount that is an integral multiple of $1,000. As provided in the
Indenture and except as provided therein and herein, the Notes are exchangeable
for a like aggregate principal amount of Notes of a different authorized
denomination, as requested by the Holder surrendering the same.
10. As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of a Note is registerable in the
register, upon surrender of such Note for registration of transfer at the office
of the Registrar for this series or at the offices of any transfer agent
designated by the Company for such purpose. Every Note presented or surrendered
for registration of transfer, exchange or payment shall (if so required by the
Company, the Trustee or the Registrar) be duly endorsed, or be accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company, the Trustee and the Registrar, duly executed by the Holder or its
attorney duly authorized in writing.
Prior to due presentment for registration of transfer, the
Company, the Trustee, any paying agent and any Registrar may treat the Person in
whose name a Note is registered as the absolute owner thereof for all purposes,
whether or not such Note is overdue and notwithstanding any notation of
ownership or other writing thereon, and neither the Company nor the Trustee nor
any paying agent nor any Registrar shall be affected by notice to the contrary.
No service charge shall be made for any exchange or
registration of transfer of any Note, with certain exceptions, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
<PAGE> 10
10
11. This Note is a global security. Accordingly, unless the
terms on the face hereof expressly permit this global security to be exchanged
in whole or in part for definitive Securities in registered form, this Note may
not be transferred except as a whole by The Depository Trust Company (the
"Depositary") to a nominee of such Depositary or by a nominee of such Depositary
to the Depositary or another nominee of the Depositary, or by the Depositary or
any nominee to a successor Depositary selected or approved by the Company or to
any nominee of such successor Depositary. Ownership of beneficial interests in
this Note will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the applicable Depositary or its nominee
(with respect to interest of participants) and the records of 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 limits and such laws may impair the
ability to transfer beneficial interests in this Note. Except as provided below,
owners of beneficial interests in this Note will not be entitled to have any
individual certificates and will not be considered the owners or Holders thereof
under the Indenture.
None of the Company, the Trustee, any Registrar, the paying
agent 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 on
account of beneficial ownership interests in this Note or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests, (b) the payments to the beneficial owners of this Note of amounts
paid to the Depositary or its nominee or (c) any other matter relating to the
actions or practices of the Depositary, its nominee or any of its direct or
indirect participants.
Subject to Section 2.15(c)(i) and (ii) of the Indenture, if
the Depositary is at any time unwilling, unable or ineligible to continue as
depository and a successor depositary is not appointed by the Company within 90
days, the Company will issue individual certificates of such series of like
tenor and terms evidencing the Notes represented hereby in definitive form in an
aggregate principal amount equal to the principal amount of the global Note or
Notes in exchange for this Note. In addition, the Company may at any time and in
its sole discretion determine not to have any Notes represented by one or more
global securities and, in such event, will issue individual certificates of such
series of like tenor and terms evidencing Notes in definitive form in an
aggregate
<PAGE> 11
11
principal amount equal to the principal amount of the global Note or Notes in
exchange for this Note.
12. Unless otherwise defined herein, all terms used in this
Note which are defined in the Indenture shall have the meanings assigned to them
in the Indenture.
13. The Indenture and the Notes shall be construed in
accordance with and governed by the laws of the State of New York.
14. An incorporator or any past, present, or future director,
officer, employee or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under this Note or the Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting this Note, each Holder waives and releases all such
liability and acknowledges that this waiver and release is part of the
consideration for the issue hereof.
<PAGE> 12
12
--------------------------
REGISTRAR AND PAYING AGENT
(subject to change)
BY HAND:
The Chase Manhattan Bank
55 Water Street - North Building
2nd Floor, Room 234
New York, NY 10041
Attention: Money Market Operations
BY MAIL:
The Chase Manhattan Bank
55 Water Street - North Building
2nd Floor, Room 234
New York, NY 10041
Attention: Money Market Operations
--------------------------
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the
Company to repay the within Note (or portion hereof specified below) pursuant to
its terms at a price equal to the applicable Repayment Price thereof together
with interest to the Repayment Date specified below, to the undersigned
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
If less than the entire principal amount of the within Note is
to be repaid, specify the portion thereof which the Holder elects to have repaid
__________; and specify the denomination or denominations (which shall be in
authorized denominations) of the Notes to be issued to the Holder for the
portion of the within Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid);
- --------------------------------------------------------------------------------
Repayment Date:
---------------------------
Date:
------------------------------ ---------------------------------
(Signature)
<PAGE> 1
Exhibit 4(b)-2
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Registered THE SHERWIN-WILLIAMS COMPANY Registered
- ---------- MEDIUM-TERM NOTE, Series B ----------
No. (Floating Rate Note) CUSIP
- --- -----
Original Issue Date: Base Rate:
Initial Interest Rate:
Interest Rate Basis:
Index Maturity:
Spread (plus or minus);
Principal Amount: Spread Multiplier:
Issue Price: Maximum Interest Rate:
Maturity Date: Minimum Interest Rate:
Optional Extension of Total Amount of OID:
Maturity Date:
Interest Payment Dates: Yield to Maturity:
Regular Record Dates:
Redemption at Option of the Initial Accrual Period OID:
Company:
Redemption Redemption Interest Reset Dates:
Date(s) Price(s)
- ------- --------
Interest Payment Period:
Repayment at Option of Calculation Agent:
Holders:
Repayment Repayment Specified Currency:
Date(s) Price(s) Designated CMT Dow Jones
- ------- --------- Market
Page:
Other Designated CMT Maturity
Provisions: Index:
Reporting Service:
LIBOR Reuters
LIBOR Dow Jones Market
<PAGE> 2
2
If applicable, the "Total Amount of OID", "Yield to Maturity"
and "Initial Accrual Period OID" (computed under the appropriate method) below
will be completed solely for the purposes of applying the United States Federal
income tax original issue discount ("OID") rules.
This Note is a registered Note of THE SHERWIN- WILLIAMS
COMPANY, an Ohio corporation (together with its successors, if any, the
"Company"). This Note is one of a series of Securities (as defined on the
reverse hereof) issued under the Indenture referred to on the reverse hereof
designated as Medium-Term Notes, Series B (the "Notes"). Subject to the
provisions hereof, the Company, for value received, hereby promises to pay to
, or registered assigns,
the Principal Amount set forth on the face hereof on the Maturity Date shown
above and to pay the premium, if any, and interest, if any, thereon, as
described on the reverse hereof.
The principal of (and premium, if any) and interest, if any,
on this Note are payable by the Company in such coin or currency specified on
the face hereof as at the time of payment shall be legal tender for the payment
of public and private debts.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been
manually executed by or on behalf of the Trustee under the Indenture, this Note
shall not be entitled to any benefits under the Indenture., or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, THE SHERWIN-WILLIAMS COMPANY has caused
this Note to be signed in its name by its Chairman of the Board, its Vice
Chairman, its President or a Vice President (or any other officer performing
similar functions), and by its Treasurer, Secretary, an Assistant
<PAGE> 3
3
Treasurer or an Assistant Secretary (or any other officer performing similar
functions), or by facsimiles of any of their signatures, and its corporate seal,
or a facsimile thereof, to be hereto affixed.
THE SHERWIN-WILLIAMS COMPANY
Dated: By:
------------------- -----------------------------------
[Seal] By:
-----------------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
Authorized Officer
<PAGE> 4
4
(REVERSE OF FLOATING RATE MEDIUM-TERM NOTE, Series B)
THE SHERWIN-WILLIAMS COMPANY
Medium-Term Note, Series B
1. This Note is one of the duly authorized issue of
debentures, notes, bonds or other evidences of indebtedness (hereinafter called
the "Securities") of the Company, of the series hereinafter specified, all
issued or to be issued under and pursuant to the Indenture dated as of February
1, 1996 (the "Indenture"), between the Company and The Chase Manhattan Bank
(formerly known as Chemical Bank) (the "Trustee"), to which Indenture and all
other indentures supplemental thereto reference is hereby made for a statement
of the respective rights, limitations of rights, obligations and duties
thereunder of the Trustee and any agent of the Trustee, any Paying Agent for
this Note, the Company and the Holders of the Securities and the terms upon
which the Securities are issued and are to be authenticated and delivered.
The Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may be
subject to different redemption provisions (if any), may be subject to different
sinking, purchase or analogous funds (if any), may be subject to different
covenants and Events of Default and may otherwise vary as provided or permitted
in the Indenture. This Note is one of the series of Securities of the Company
issued pursuant to the Indenture designated as the Medium-Term Notes, Series B
(herein called the "Notes"), limited in aggregate principal amount to
$150,000,000. The Notes of this series may be issued at various times with
different maturity dates and different principal repayment provisions, may bear
interest at different rates, and may otherwise vary, all as provided in the
Indenture.
2. A. The regular record date ("Regular Record Date") with
respect to any Interest Payment Date (as defined below) shall be the applicable
date specified as such on the face hereof (whether or not such date shall be a
Business Day (as defined below)) immediately preceding such Interest Payment
Date. Interest which is payable, and is punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Person in whose name a Note is
registered at the close of business on the Regular Record Date next preceding
such Interest Payment Date; PROVIDED, HOWEVER, that interest payable on the
Maturity Date (as set forth on the face hereof) or upon redemption or repayment
<PAGE> 5
5
will be paid to the Person to whom principal shall be payable; PROVIDED FURTHER
that the first payment of interest on any Note with an Original Issue Date (as
set forth on the face hereof) between a Regular Record Date and an Interest
Payment Date or on an Interest Payment Date will be made on the Interest Payment
Date following the next succeeding Regular Record Date to the registered owner
of said Note on such next succeeding Regular Record Date. "Business Day" means
any day, other than a Saturday or Sunday, that is (i) not a legal holiday or a
day on which banking institutions are authorized or required by law, regulation
or executive order to be closed in (a) The City of New York or (b) if the
Specified Currency (as set forth on the face hereof) is other than U.S. dollars,
the financial center of the country issuing such Specified Currency (which, in
the case of ECU, shall be Brussels, Belgium) and (ii) with respect to Notes
having as the Base Rate, LIBOR, a London Banking Day. "London Banking Day"
means, with respect to a Note, any day on which dealings in deposits in the
Specified Currency of such Note are transacted in the London interbank market.
In connection with any calculations of the rate of interest
hereon, all percentages will be rounded, if necessary, to the nearest 1/100,000
of 1% (.0000001) (with five one-millionths of a percentage point being rounded
upward) and all dollar amounts used in or resulting from such calculation will
be rounded to the nearest cent (with one-half cent being rounded upward).
B. The Company promises to pay interest on the principal
amount at the rate per annum equal to the Initial Interest Rate shown on the
face hereof until the first Interest Reset Date shown on the face hereof
following the Original Issue Date specified on the face hereof and thereafter at
a rate determined in accordance with the provisions below under the heading "CD
Rate Notes", "Commercial Paper Rate Notes", "Federal Funds Rate Notes", "LIBOR
Notes", "Treasury Rate Notes", "Prime Rate Notes", "CMT Rate Notes" or "Eleventh
District Cost of Fund Rate Notes" depending upon whether the Base Rate specified
on the face hereof is CD Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR,
Treasury Rate, Prime Rate, CMT Rate, Eleventh District Cost of Fund Rate until
the principal hereof is paid or duly made available for payment or upon earlier
redemption or repayment; PROVIDED, HOWEVER, in no event will the interest rate
on this Note be higher than the maximum rate permitted by applicable law, as the
same may be modified by United States law of general application. The Company
will pay interest monthly, quarterly, semiannually or annually as specified on
the face hereof opposite
<PAGE> 6
6
"Interest Payment Period", commencing with the first Interest Payment Date
specified on the face hereof next succeeding the Original Issue Date (except as
provided in the second proviso in paragraph 2.A. hereof), and on the Maturity
Date. Unless otherwise provided on the face hereof, the dates on which interest
will be payable (each an "Interest Payment Date") shall be, in the case of a
Note with a daily, weekly or monthly Interest Reset Date, the third Wednesday of
each month or the third Wednesday of March, June, September and December; in the
case of a Note with a quarterly Interest Reset Date, the third Wednesday of
March, June, September and December; in the case of a Note with a semiannual
Interest Reset Date, the third Wednesday of the two months specified on the face
hereof; and in the case of a Note with an annual Interest Reset Date, the third
Wednesday of the month specified on the face hereof; PROVIDED, HOWEVER, that if
an Interest Payment Date would fall on a day that is not a Business Day, such
Interest Payment Date shall be postponed to the next succeeding Business Day,
except that, if the Base Rate is LIBOR and such Business Day is in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding Business Day.
The interest payable on this Note on each Interest Payment
Date shall be the amount of interest accrued from and including the Original
Issue Date shown on the face hereof or from and including the last date in
respect of which interest has been paid or duly provided for, as the case may
be, to, but excluding, such Interest Payment Date. Such accrued interest will be
calculated by multiplying the principal amount hereof by an accrued interest
factor. Such accrued interest factor shall be computed by adding the interest
factors calculated for each day in the period for which accrued interest is
being calculated. Unless otherwise specified on the face hereof, the interest
factor (expressed as a decimal calculated to seven decimal places without
rounding) for each such day shall be computed by dividing the interest rate
applicable to such day by 360 if the Base Rate specified on the face hereof is
not Treasury Rate or CMT Rate, and by the actual number of days in the year if
the Base Rate specified on the face hereof is Treasury Rate or CMT Rate.
The interest rate in effect on each day will be (a) if such
day is an interest Reset Date, the interest rate with respect to the Interest
Determination Date pertaining to such Interest Reset Date or (b) if such day is
not an Interest Reset Date, the interest rate with respect to the Interest
Determination Date pertaining to the next preceding Interest Reset Date, subject
in either case to any
<PAGE> 7
7
adjustment by a Spread or Spread Multiplier as set forth on the face hereof and
to any Maximum or Minimum Interest Rate limitation as specified on the face
hereof. Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, shown on the face hereof. In addition, the interest rate
hereon shall in no event be higher than the maximum rate, if any, permitted by
New York law as the same may be modified by United States law of general
application. Commencing with the first Interest Reset Date specified on the face
hereof following the Original Issue Date and thereafter upon each succeeding
Interest Reset Date specified on the face hereof, the rate at which interest on
this Note is payable shall be adjusted in accordance with the Base Rate as
specified on the face hereof; PROVIDED, HOWEVER, that if any Interest Reset Date
would otherwise be a day that is not a Business Day, such Interest Reset Date
shall be postponed to the next succeeding Business Day, except that if the Base
Rate is LIBOR and such Business Day is in the next succeeding calendar month,
such Interest Reset Date shall be the immediately preceding Business Day.
The rate of interest in this Note will be reset daily, weekly,
monthly, quarterly, semiannually, annually or otherwise (such period being the
"Interest Reset Period", and the first day of each Interest Reset Period being
an "Interest Reset Date"), as specified on the face hereof, based on certain
facts and circumstances set forth below occurring on a specified date (each an
"Interest Determination Date") shortly prior thereto. Except as provided below
or on the face hereof, the Interest Reset Date will be, if the interest rate on
this Note resets daily, each Business Day; if the interest rate on this Note
(other than Treasury Rate) resets weekly, the Wednesday of each week; if the
Base Rate specified on the face hereof is Treasury Rate and the interest rate on
this Note resets weekly, the Tuesday of each week (except as otherwise provided
herein); if the interest rate on this Note resets monthly, the third Wednesday
of each month; if the interest rate on this Note resets quarterly, the third
Wednesday of March, June, September and December; if the interest rate on this
Note resets semiannually, the third Wednesday of two months of each year, as
specified on the face hereof; and if the interest rate on this Note resets
annually, the third Wednesday of one month of each year, as specified on the
face hereof.
Subject to applicable provisions of law and except as
specified herein, on each Interest Reset Date the rate of
<PAGE> 8
8
interest shall be the rate determined in accordance with the provisions of the
applicable heading below.
CD Rate Notes
Each CD Rate Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the CD Rate and the
Spread or Spread Multiplier, if any, specified on the face hereof.
Unless otherwise specified on the face hereof, the "CD Rate"
for each Interest Reset Period shall be the rate as of the second Business Day
prior to the Interest Reset Date for such Interest Reset Period (a "CD Rate
Determination Date") for negotiable certificates of deposit having the Index
Maturity designated on the face hereof as published in H.15(519) (as defined
below) under the heading "CDs (Secondary Market)". In the event that such rate
is not published prior to 3:00 p.m., New York City time, on the Calculation Date
pertaining to such CD Rate Determination Date, then the "CD Rate" for such
Interest Reset Period will be the rate on such CD Rate Determination Date for
negotiable certificates of deposit of the Index Maturity designated on the face
hereof as published in Composite Quotations (as defined below) under the heading
"Certificates of Deposit". If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not yet published in either H.15(519) or Composite
Quotations, then the "CD Rate" for such Interest Reset Period will be calculated
by the Calculation Agent for such CD Rate Note and will be the arithmetic mean
of the secondary market offered rates as of 10:00 a.m., New York City time, on
such CD Rate Determination Date of three leading nonbank dealers in negotiable
U.S. dollar certificates of deposit in The City of New York selected by the
Calculation Agent for such CD Rate Note for negotiable certificates of deposit
of major United States money center banks of the highest credit standing (in the
market for negotiable certificates of deposit) with a remaining maturity closest
to the Index Maturity designated on the face hereof in a denomination of
$5,000,000; PROVIDED, HOWEVER, that if the dealers selected as aforesaid by such
Calculation Agent are not quoting offered rates as mentioned in this sentence,
the "CD Rate" for such Interest Reset Period will be the same as the CD Rate for
the immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the Initial Interest Rate). "H.15(519)" means the
publication entitled "Statistical Release H.15(519), 'Selected Interest Rates'",
or any successor publication, published by the Board of Governors of the Federal
Reserve System. "Composite
<PAGE> 9
9
Quotations" means the daily statistical release entitled "Composite 3:30 p.m.
Quotations for U.S. Government Securities" published by the Federal Reserve Bank
of New York.
Commercial Paper Rate Notes
Each Commercial Paper Rate Note will bear interest for each
Interest Reset Period at the interest rate calculated with reference to the
Commercial Paper Rate and the Spread or Spread Multiplier, if any, specified on
the face hereof.
Unless otherwise specified on the face hereof, the "Commercial
Paper Rate" for each Interest Reset Period will be determined by the Calculation
Agent for such Commercial Paper Rate Note as of the second Business Day prior to
the Interest Reset Date for such Interest Reset Period (a "Commercial Paper Rate
Determination Date") and shall be the Money Market Yield (as defined below) on
such Commercial Paper Rate Determination Date of the rate for commercial paper
having the Index Maturity specified on the face hereof, as such rate shall be
published in H.15(519) under the heading "Commercial Paper-Nonfinancial". In the
event that such rate is not published prior to 3:00 p.m., New York City time, on
the Calculation Date pertaining to such Commercial Paper Rate Determination
Date, then the "Commercial Paper Rate" for such Interest Reset Period shall be
the Money Market Yield on such Commercial Paper Rate Determination Date of the
rate for commercial paper of the specified Index Maturity as published in
Composite Quotations under the heading "Commercial Paper". If by 3:00 p.m., New
York City time, on such Calculation Date such rate is not yet published in
either H.15(519) or Composite Quotations, then the "Commercial Paper Rate" for
such Interest Reset Period shall be the Money Market Yield of the arithmetic
mean of the offered rates, as of 11:00 a.m., New York City time, on such
Commercial Paper Rate Determination Date of three leading dealers of commercial
paper in The City of New York selected by the Calculation Agent for such
Commercial Paper Rate Note for commercial paper of the specified Index Maturity
placed for an industrial issuer whose bonds are rated "AA" or the equivalent by
a nationally recognized rating agency; PROVIDED, HOWEVER, that if the dealers
selected as aforesaid by such Calculation Agent are not quoting offered rates as
mentioned in this sentence, the "Commercial Paper Rate" for such Interest Reset
Period will be the same as the Commercial Paper Rate for the immediately
preceding Interest Reset Period (or, if there was no such Interest Reset Period,
the Initial Interest Rate).
<PAGE> 10
10
"Money Market Yield" shall be a yield calculated in accordance
with the following formula:
D X 360
-------------
Money Market Yield = 360 - (D X M) X 100
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and I"M" refers to the actual
number of days in the interest period for which interest is being calculated.
Federal Funds Rate Notes
Each Federal Funds Rate Note will bear interest for each
Interest Reset Period at the interest rate calculated with reference to the
Federal Funds Rate and the Spread or Spread Multiplier, if any, specified on the
face hereof.
Unless otherwise specified on the face hereof, the "Federal
Funds Rate" for each Interest Reset Period shall be the effective rate on the
Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate
Determination Date") for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)". In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Federal Funds Rate Determination Date, the "Federal Funds
Rate" for such Interest Reset Period shall be the rate on such Federal Funds
Rate Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate". If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not yet published in either H.15(519) or Composite
Quotations, then the "Federal Funds Rate" for such Interest Reset Period shall
be the rate on such Federal Funds Rate Determination Date made publicly
available by the Federal Reserve Bank of New York which is equivalent to the
rate which appears in H.15(519) under the heading "Federal Funds (Effective)";
PROVIDED, HOWEVER, that if such rate is not made publicly available by the
Federal Reserve Bank of New York by 3:00 p.m., New York City time, on such
Calculation Date, the "Federal Funds Rate" for such Interest Reset Period will
be the same as the Federal Funds Rate in effect for the immediately preceding
Interest Reset Period (or, if there was no such Interest Reset Period, the
Initial Interest Rate).
<PAGE> 11
11
LIBOR Notes
Each LIBOR Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to LIBOR and the Spread or
Spread Multiplier, if any, specified on the face hereof.
"LIBOR" for each Interest Reset Period will be determined by
the Calculation Agent for such LIBOR Notes as follows:
(i) On the second London Banking Day prior to the Interest
Reset Date for such Interest Reset Period (a "LIBOR Determination
Date"), the Calculation Agent for such LIBOR Note will determine (a) in
the case of LIBOR Dow Jones Market (as defined below), the offered
rate, and (b) in the case of LIBOR Reuters (as defined below), the
arithmetic mean of the offered rates, for deposits in the Specified
Currency for the period of the Index Maturity specified on the face
hereof, commencing on such Interest Reset Date, which appear on the
Designated LIBOR Page (as defined below) at approximately 11:00 a.m.,
London time, on such LIBOR Determination Date. "Designated LIBOR Page"
means "LIBOR Dow Jones Market", which shall be the display designated
as page "3750" on the Dow Jones Market service (or such other page as
may replace page "3750" on such service or such other service as may be
nominated by the British Bankers' Association for the purpose of
displaying the London interbank offered rates of major banks), unless
"LIBOR Reuters" is designated on the face hereof, in which case
"Designated LIBOR Page" means the display designated as page "LIBO" on
the Reuters Monitor Money Rates Service (or such other page as may
replace the LIBO page on such service or such other service as may be
nominated by the British Bankers' Association for the purpose of
displaying London interbank offered rates of major banks). In the case
of LIBOR Reuters, if at least two such offered rates appear on the
Designated LIBOR Page, "LIBOR" for such Interest Reset Period will be
the arithmetic mean of such offered rates as determined by the
Calculation Agent for such LIBOR Note.
(ii) In the case of LIBOR Dow Jones Market, if no rate
appears, or in the case of LIBOR Reuters, if fewer than two offered
rates appear on the Designated LIBOR Page on such LIBOR Determination
Date, the Calculation Agent for such LIBOR Note will request the
principal London offices of each of four major banks in the London
interbank market selected by such Calculation
<PAGE> 12
12
Agent to provide such Calculation Agent with its offered quotations for
deposits in U.S. dollars for the period of the specified Index
Maturity, commencing on such Interest Reset Date, to prime banks in the
London interbank market at approximately 11:00 a.m., London time, on
such LIBOR Determination Date and in a principal amount equal to an
amount of not less than $1,000,000 that is representative of a single
transaction in such market at such time. If at least two such
quotations are provided, "LIBOR" for such Interest Reset Period will be
the arithmetic mean of such quotations. If fewer than two such
quotations are provided, "LIBOR" for such Interest Reset Period will be
the arithmetic mean of rates quoted by three major banks in The City of
New York selected by the Calculation Agent for such LIBOR Note at
approximately 11:00 a.m., New York City time, on such LIBOR
Determination Date for loans in U.S. dollars to leading European banks,
for the period of the specified Index Maturity, commencing on such
Interest Reset Date, and in a principal amount equal to an amount of
not less than $1,000,000 that is representative of a single transaction
in such market at such time; PROVIDED, HOWEVER, that if fewer than
three banks selected as aforesaid by such Calculation Agent are quoting
rates as mentioned in this sentence, "LIBOR" for such Interest Reset
Period will be the same as LIBOR for the immediately preceding Interest
Reset Period (or, if there was no such Interest Reset Period, the
Initial Interest Rate).
Treasury Rate Notes
Each Treasury Rate Note will bear interest for each Interest
Reset Period at the interest rate calculated with reference to the Treasury Rate
and the Spread or Spread Multiplier, if any, specified on the face hereof.
Unless otherwise specified on the face hereof, the "Treasury
Rate" for each Interest Reset Period will be the rate for the auction held on
the Treasury Rate Determination Date (as defined below) for such Interest Reset
Period of direct obligations of the United States ("Treasury securities") having
the Index Maturity specified on the face hereof, as such rate shall be published
in H.15(519) under the heading "U.S. Government Securities-Treasury bills-
auction average (investment)" or, in the event that such rate is not published
prior to 3:00 p.m., New York City time, on the Calculation Date pertaining to
such Treasury Rate Determination Date, the auction average rate (expressed
<PAGE> 13
13
as a bond equivalent on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) on such Treasury Rate Determination Date as
otherwise announced by the United States Department of the Treasury. In the
event that the results of the auction of Treasury securities having the
specified Index Maturity are not published or reported as provided above by 3:00
p.m., New York City time, on such Calculation Date, or if no such auction is
held on such Treasury Rate Determination Date, then the "Treasury Rate" for such
Interest Reset Period shall be calculated by the Calculation Agent for such
Treasury Rate Note and shall be a yield to maturity (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) of the arithmetic mean of the secondary market bid rates, as
of approximately 3:30 p.m., New York City time, on such Treasury Rate
Determination Date, of three leading primary United States government securities
dealers selected by such Calculation Agent for the issue of Treasury securities
with a remaining maturity closest to the specified Index Maturity; PROVIDED,
HOWEVER, that if the dealers selected as aforesaid by such Calculation Agent are
not quoting bid rates as mentioned in this sentence, then the "Treasury Rate"
for such Interest Reset Period will be the same as the Treasury Rate for the
immediately preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the Initial Interest Rate).
The "Treasury Rate Determination Date" for each Interest Reset
Period will be the day of the week in which the Interest Reset Date for such
Interest Reset Period falls on which Treasury securities would normally be
auctioned. Treasury securities are normally sold at auction on Monday of each
week, unless that day is a legal holiday, in which case the auction is normally
held on the following Tuesday, except that such auction may be held on the
preceding Friday. If, as the result of a legal holiday, an auction is so held on
the preceding Friday, such Friday will be the Treasury Rate Determination Date
pertaining to the Interest Reset Period commencing in the next succeeding week.
If an auction date shall fall on any day that would otherwise be an Interest
Reset Date for a Treasury Rate Note, then such Interest Reset Date shall instead
be the Business Day immediately following such auction date.
Prime Rate Notes
Each Prime Rate Note will bear interest at the interest rate
calculated with reference to the Prime Rate
<PAGE> 14
14
and the Spread or Spread multiplier, if any specified on the face hereof.
Unless otherwise specified on the face hereof, the "Prime
Rate" for each Interest Reset Period will be determined by the Calculation Agent
for such Prime Rate Note as of the second Business Day prior to the Interest
Reset Date for such Interest Reset Period (a "Prime Rate Determination Date")
and shall be the rate on such date as published in H.15(519) under the heading
"Bank Prime Loan". In the event that such rate is not published by 9:00 a.m.,
New York City time, on the Calculation Date pertaining to such Prime Rate
Determination Date, then the Prime Rate will be determined by the Calculation
Agent and will be the arithmetic mean of the rates of interest publicly
announced by each bank that appears on the Reuters Screen USPRIME1 Page (as
defined below) as such bank's prime rate or base lending rate as in effect for
such Prime Rate Determination Date. "Reuters Screen USPRIME1" means the display
designated as page "USPRIME1" on the Reuters Monitor Money Rates Service (or
such other page as may replace the USPRIME1 page on that service or such other
service as may be nominated by the British Bankers' Association for the purpose
of displaying prime rates or base lending rates of major United States banks).
If fewer than four such rates but more than one such rate appear on the Reuters
Screen USPRIME1 Page for such Prime Rate Determination Date, the Prime Rate
shall be determined by the Calculation Agent and will be the arithmetic mean of
the prime rates quoted on the basis of actual number of days in the year divided
by 360 as of the close of business on such Prime Rate Determination Date by at
least two major money center banks in New York City selected by the Calculation
Agent (after consulting with the Company). If fewer than two such rates appear
on the Reuters Screen USPRIME1 Page, the Prime Rate will be determined by the
Calculation Agent and will be the arithmetic mean of the prime rates furnished
in New York City by three substitute banks or trust companies organized and
doing business under the laws of the United States, or any State thereof, in
each case having total equity capital of at least U.S. $500,000,000 and being
subject to supervision or examination by Federal or State authority, selected by
the Calculation Agent (after consulting with the Company) to provide such rate
or rates; PROVIDED, HOWEVER, that if the banks selected as aforesaid are not
quoting as mentioned in this sentence, the Prime Rate will remain the Prime Rate
in effect on such Prime Rate Determination Date (or, if there is no preceding
Interest Reset Period, the Initial Interest Rate).
<PAGE> 15
15
CMT Rate Notes
Each CMT Rate Note will bear interest at the rate (calculated
with reference to the CMT Rate and the Spread and/or Spread Multiplier, if any)
specified on the face hereof.
Unless otherwise specified on the face hereof, the "CMT Rate"
for each Interest Reset Period will be determined by the Calculation Agent for
such CMT Rate Note as of the second Business Day prior to the Interest Reset
Date for such Interest Reset Period (a "CMT Rate Interest Determination Date")
and shall be the rate displayed on the Designated CMT Dow Jones Market Page (as
defined below) under the caption "...Treasury Constant Maturities...Federal
Reserve Board release H.15... Mondays approximately 3:45 p.m.," under the column
for the Designated CMT Maturity Index (as defined below) for (i) if the
Designated CMT Dow Jones Market Page is 7055, the rate on such CMT Rate Interest
Determination Date and (ii) if the Designated CMT Dow Jones Market Page is 7052,
the week, or the month, as applicable, ended immediately preceding the week in
which the related CMT Rate Interest Determination Date occurs. If such rate is
no longer displayed on the relevant page, or if not displayed BY 3:00 p.m., New
York City time, on the related Calculation Date, then the CMT Rate for such CMT
Rate Interest Determination Date will be such treasury constant maturity rate
for the Designated CMT Maturity Index as published in H.15(519). If such rate is
no longer published, or if not published by 3:00 p.m., New York City time, on
the related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with
respect to the related Interest Reset Date as may then be published by either
the Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Dow Jones Market
Page and published in the relevant H.15(519). If such information is not
provided by 3:00 p.m., New York City time, on the related Calculation Date, then
the CMT Rate for such CMT Rate Interest Determination Date will be calculated by
the Calculation Agent and will be a yield to maturity, based on the arithmetic
mean of the secondary market closing side offer prices as of approximately 3:30
p.m., New York City time, on the CMT Rate Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers (each, a "Reference
<PAGE> 16
16
Dealer") in the City of New York selected by the Calculation Agent (from five
such Reference Dealers selected by the Calculation Agent and eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest), for the most
recently issued direct noncallable fixed rate obligations of the United States
("Treasury Notes") with an original maturity of approximately the Designated CMT
Maturity Index and a remaining term to maturity of not less than such Designated
CMT Maturity Index minus one year. If the Calculation Agent cannot obtain three
such Treasury Note quotations, the CMT Rate for such CMT Rate Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity based on the arithmetic mean of the secondary market offer
side prices as of approximately 3:30 p.m., New York City time, on the CMT Rate
Interest Determination Date of three Reference Dealers in the City of New York
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for such Treasury Notes with an original maturity of the number of
years that is the next highest to the Designated CMT Maturity Index and a
remaining term to maturity closest to the Designated CMT Maturity Index in an
amount of at least U.S. $100 million. If three or four (and not five) of such
Reference Dealers are quoting as described above, then the CMT Rate will be
based on the arithmetic mean of the offer prices obtained and neither the
highest nor the lowest of such quotes will be eliminated; PROVIDED, HOWEVER,
that if fewer than three Reference Dealers selected by the Calculation Agent are
quoting as described herein, the CMT Rate will be the CMT Rate in effect on such
CMT Rate Interest Determination Date (or, if there is no preceding Interest
Reset Period, the Initial Interest Rate). If two Treasury Notes with an original
maturity as described in the third preceding sentence have remaining terms to
maturity equally close to the Designated CMT Maturity Index, the quotes for the
CMT Rate Note with the shorter remaining term to maturity will be used.
"Designated CMT Dow Jones Market Page" means the display on
the Dow Jones Market service designated on the face hereof for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519) (or any other
page as may replace such page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519)). If no such page is
specified on the face hereof, the Designated CMT Dow Jones Market Page shall be
7052 for the most recent week.
<PAGE> 17
17
"Designated CMT Maturity Index" means the original period to
maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified on the face hereof with respect to which the CMT Rate will be
calculated. If no such maturity is specified on the face hereof, the Designated
CMT Maturity Index shall be 2 years.
Eleventh District Cost of Funds Rate Notes
Each Eleventh District Cost of Funds Rate Note will bear
interest at interest rates calculated with reference to the Eleventh District
Cost of Funds Rate and the Spread or Spread Multiplier, if any, specified on the
face hereof.
Unless otherwise specified on the face hereof, "Eleventh
District Cost of Funds Rate" for each Interest Reset Period shall be determined
by the Calculation Agent on the "Eleventh District Cost of Funds Rate
Determination Date" (as defined below) as the rate equal to the monthly weighted
average cost of funds for the calendar month immediately preceding the month in
which such Eleventh District Cost of Funds Rate Determination Date falls, as set
forth under the caption "11th district" on Dow Jones Market Page 7058 (as
defined below)as of 11:00 a.m., San Francisco time, on such Eleventh District
Cost of Funds Rate Determination Date. If such rate does not appear on Dow
Jones Market Page 7058 on such Eleventh District Cost of Funds Rate
Determination Date, then the Eleventh District Cost of Funds Rate on such
Eleventh District Cost of Funds Rate Determination Date will be the monthly
weighted average cost of funds paid by member institutions of the Eleventh
Federal Home Loan Bank District that was most recently announced (the "Index")
by the FHLB of San Francisco as such cost of funds for the calendar month
immediately preceding the date of such announcement. If the FHLB of San
Francisco fails to announce such rate for the calendar month immediately
preceding such Eleventh District Cost of Funds Rate Determination Date, then
the Eleventh District Cost of Funds Rate determined as of such Eleventh
District Cost of Funds Rate Determination Date will be the Eleventh District
Cost of Funds Rate in effect on such Eleventh District Cost of Funds Rate
Determination Date (or, if there is no preceding Interest Reset Period, the
Initial Interest Rate).
The "Eleventh District Cost of Funds Rate Determination Date"
will be the last working day of the month on which the Federal Home Loan Bank of
San Francisco (the "FHLB of San Francisco") publishes the Index (as defined
above) immediately preceding the Interest Reset
<PAGE> 18
18
Date. "Dow Jones Market Page 7058" means the display designated as page "7058"
on the Dow Jones Market service (or such other page as may replace the 7058
page on that service or such other service as may be nominated by the British
Bankers' Association for the purpose of displaying the monthly weighted average
cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank
District).
The Calculation Date pertaining to an Interest Determination
Date shall be the first to occur of either (a) the tenth calendar day after such
Interest Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (b) the Business Day preceding the date any payment
is required to be made for any period following the applicable Interest Reset
Date or Maturity Date (or the date of redemption or repayment). Initially, The
Chase Manhattan Bank shall be the Calculation Agent. The Calculation Agent shall
calculate the interest rate hereon in accordance with the foregoing and shall
confirm in writing such calculation to the Trustee and any Paying Agent
immediately after each determination. Neither the Trustee nor any Paying Agent
shall be responsible for any such Calculation. At the request of the Holder
hereof the Calculation Agent shall provide to the Holder hereof the interest
rate hereon then in effect, and if determined, the interest rate that shall
become effective as of the next Interest Reset Date.
3. A. The principal of and any premium and interest on a Note
are payable by the Company in the Specified Currency for such Note. If the
Specified Currency for a Note is other than U.S. dollars, the Company will
(unless otherwise specified on the face hereof) arrange to convert all payments
in respect of such Note into U.S. dollars in the manner set forth on the face
hereof.
B. Unless otherwise specified on the face hereof, U.S. dollar
payments of interest on Notes (other than interest payable at Stated Maturity,
on redemption or on repayment) will be made, except as provided below, by check
mailed to the Holders of such Notes as of the preceding Regular Record Date
(which, in the case of Global Securities, will be a nominee of the Depositary);
PROVIDED, HOWEVER, that, in the case of a Note issued between a Regular Record
Date and the related Interest Payment Date, unless otherwise specified on the
face hereof, interest for the period beginning on the Original Issue Date for
such Note and ending on such Interest Payment Date shall be paid on the next
succeeding Interest Payment Date to the Holder of such Note on the related
Regular Record Date. A Holder of $10,000,000 (or the equivalent thereof in a
Specified
<PAGE> 19
19
Currency other than U.S. dollars) or more in aggregate principal amount of Notes
of like tenor and terms shall be entitled to receive such U.S. dollar interest
payments by wire transfer of immediately available funds, but only if
appropriate wire transfer instructions have been received in writing by the
Paying Agent not later than 15 calendar days prior to the applicable Interest
Payment Date. Simultaneously with the election by any Holder provided on the
face hereof to receive payments in a Specified Currency other than U.S. dollars,
such Holder shall provide appropriate wire transfer instructions to the Trustee.
Unless otherwise specified on the face hereof, principal and any premium and
interest payable at the Stated Maturity, on redemption or repayment of a Note
will be paid in immediately available funds upon surrender of such Note at the
corporate trust office or agency of the Paying Agent in The City of New York,
such interest being paid to the person to whom principal is payable.
C. Initially, The Chase Manhattan Bank will be the Paying
Agent and the Registrar with respect to the Notes. The Company reserves the
right at any time to vary or terminate the appointment of any Paying Agent or
Registrar and to appoint additional or other Paying Agents and additional or
other Registrars and to approve any change in the office through which any
Paying Agent or Registrar acts; PROVIDED that there will at all times be a
Paying Agent and Registrar in The City of New York.
4. If specified on the face hereof, this Note may be redeemed,
as a whole or from time to time in part, at the option of the Company, on not
less than 30 nor more than 60 days' notice given as provided in the Indenture,
on any redemption date(s) and at the related redemption price(s) set forth on
the face hereof, together with any accrued interest to the date of redemption.
The redemption price(s) are expressed as a percentage of the principal amount of
this Note. If no such redemption date is set forth on the face hereof, this Note
may not be so redeemed pursuant to this Section 4. If less than all the Notes
are to be redeemed, the Trustee shall select the Notes or portions thereof (in
multiples of $1,000) to be redeemed by lot or by such other method as the
Trustee considers fair and appropriate. In any case where more than one Note is
registered in the same name, the Trustee, in its discretion, may treat the
aggregate principal amount so registered as if it were represented by one Note.
The Trustee shall promptly notify the Company in writing of the Notes selected
for redemption and, in the case of any Notes selected for partial redemption,
the principal amount thereof to be redeemed. If any Note called for redemption
shall not be so
<PAGE> 20
20
paid upon surrender thereof on such redemption date, the principal, premium, if
any, and interest shall bear interest until paid from the redemption date at the
rate borne or provided for by such Notes.
5. If specified on the face hereof, this Note will be subject
to repayment at the option of the Holder hereof on the repayment date(s) and at
the related repayment price(s) set forth on the face hereof. The repayment
price(s) are expressed as a percentage of the principal amount of this Note. If
no such repayment date is set forth on the face hereof, this Note may not be so
repaid. On each repayment date, if any, this Note shall be repayable in whole or
in part at the option of the Holder hereof at the applicable repayment price set
forth on the face hereof, together with interest thereon to the date of
repayment. For this Note to be repaid in whole or in part at the option of the
Holder hereof, the Trustee must receive not less than 30 nor more than 45 days
prior to the repayment date (i) the Note with the form entitled "Option to Elect
Repayment" below duly completed or (ii) a telegram, telex, facsimile
transmission or a letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a trust
company in the United States of America setting forth the name of the Holder of
the Note, the principal amount of the Note, the principal amount of the Note to
be repaid, the certificate number of the Note or a description of the tenor and
terms of the Note to be repaid, a statement that the option to elect repayment
is being exercised thereby and a guarantee that the Note to he repaid with the
form entitled "Option to Elect Repayment" on the reverse of the Note duly
completed will be received by the Trustee not later than five Business Days
after the date of such telegram, telex, facsimile transmission or letter and
such Note and form duly completed are received by the Trustee by such fifth
Business Day. Exercise of such repayment option shall be irrevocable. Such
option may be exercised by the Holder for less than the entire principal amount
provided that the principal amount remaining outstanding after repayment is an
authorized denomination.
6. If an Event of Default with respect to the Notes shall
occur and be continuing, the principal (or, if the Note is an Original Issue
Discount Note, such portion of the principal amount as may be specified on the
face hereof) and interest thereon of all of the Notes may be declared due and
payable in the manner and with the effect provided in the Indenture.
<PAGE> 21
21
7. The Indenture permits, with certain exceptions as therein
provided, the Company and the Trustee to enter into supplemental indentures to
the Indenture for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of modifying in
any manner the rights of the Holders of the Securities of each series under the
Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time outstanding of each
series to be affected thereby on behalf of the Holders of all Securities of such
series. In addition, the Indenture permits the Company and the Trustee to enter
into supplemental indentures to the Indenture, without the consent of Holders,
for certain purposes, including to cure any ambiguity or to correct or
supplement any provision contained in the Indenture and to make changes that do
not adversely affect the rights of any Holder. The Indenture also permits the
Holders of a majority in aggregate principal amount of the Securities at the
time outstanding of each series on behalf of the Holders of all Securities of
such series, to waive certain past defaults and their consequences with respect
to such series under the Indenture. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note or such other Notes.
8. No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal and any
premium of and any interest on this Note at the place, rates and respective
times and in the coin or currency herein and in the Indenture prescribed.
9. The authorized denominations of Notes are $1,000 and any
larger amount that is an integral multiple of $1,000. As provided in the
Indenture and except as provided therein and herein, the Notes are exchangeable
for a like aggregate principal amount of Notes of a different authorized
denomination, as requested by the Holder surrendering the same.
10. As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of a Note is registerable in the
register, upon surrender of such Note for registration of transfer at the office
of the Registrar for this series or at the offices of any transfer
<PAGE> 22
22
agent designated by the Company for such purpose. Every Note presented or
surrendered for registration of transfer, exchange or payment shall (if so
required by the Company, the Trustee or the Registrar) be duly endorsed, or be
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company, the Trustee and the Registrar, duly executed by the
Holder or its attorney duly authorized in writing.
Prior to due presentment for registration of transfer, the
Company, the Trustee, any paying agent and any Registrar may treat the Person in
whose name a Note is registered as the absolute owner thereof for all purposes,
whether or not such Note is overdue and notwithstanding any notation of
ownership or other writing thereon, and neither the Company nor the Trustee nor
any paying agent nor any Registrar shall be affected by notice to the contrary.
No service charge shall be made for any exchange or
registration of transfer of any Note, with certain exceptions, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
11. This Note is a global security. Accordingly, unless the
terms on the face hereof expressly permit this global security to be exchanged
in whole or in part for definitive Securities in registered form, this Note may
not be transferred except as a whole by The Depository Trust Company (the
"Depositary") to a nominee of such Depositary or by a nominee of such Depositary
to the Depositary or another nominee of the Depositary, or by the Depositary or
any nominee to a successor Depositary selected or approved by the Company or to
any nominee of such successor Depositary. Ownership of beneficial interests in
this Note will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the applicable Depositary or its nominee
(with respect to interest of participants) and the records of 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 limits and such laws may impair the
ability to transfer beneficial interests in this Note. Except as provided below,
owners of beneficial interests in this Note will not be entitled to have any
individual certificates and will not be considered the owners or Holders thereof
under the Indenture.
None of the Company, the Trustee, any Registrar, the paying
agent or any agent of the Company or the Trustee
<PAGE> 23
23
will have any responsibility or liability for (a) any aspect of the records
relating to or payments made on account of beneficial ownership interests in
this Note or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests, (b) the payments to the beneficial owners
of this Note of amounts paid to the Depositary or its nominee or (c) any other
matter relating to the actions or practices of the Depositary, its nominee or
any of its direct or indirect participants.
Subject to Section 2.15(c)(i) and (ii) of the Indenture, if
the Depositary is at any time unwilling, unable or ineligible to continue as
depository and a successor depositary is not appointed by the Company within 90
days, the Company will issue individual certificates of such series of like
tenor and terms evidencing the Notes represented hereby in definitive form in an
aggregate principal amount equal to the principal amount of the global Note or
Notes in exchange for this Note. In addition, the Company may at any time and in
its sole discretion determine not to have any Notes represented by one or more
global securities and, in such event, will issue individual certificates of such
series of like tenor and terms evidencing Notes in definitive form in an
aggregate principal amount equal to the principal amount of the global Note or
Notes in exchange for this Note.
12. Unless otherwise defined herein, all terms used in this
Note which are defined in the Indenture shall have the meanings assigned to them
in the Indenture.
13. The Indenture and the Notes shall be construed in
accordance with and governed by the laws of the State of New York.
14. An incorporator or any past, present or future director,
officer, employee or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under this Note or the Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting this Note, each Holder waives and releases all such
liability and acknowledges that this waiver and release is part of the
consideration for the issue hereof.
<PAGE> 24
24
-----------------------------------
REGISTRAR AND PAYING AGENT
(subject to change)
BY HAND:
The Chase Manhattan Bank
55 Water Street--North Building
2nd Floor, Room 234
New York, NY 10041
Attention: Money Market Operations
BY MAIL:
The Chase Manhattan Bank
55 Water Street--North Building
2nd Floor, Room 234
New York, NY 10041
Attention: Money Market Operations
-----------------------------------
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the
Company to repay the within Note (or portion hereof specified below) pursuant to
its terms at a price equal to the applicable Repayment Price thereof together
with interest to the Repayment Date specified below, to the undersigned
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
If less than the entire principal amount of the within Note is
to be repaid, specify the portion thereof which the Holder elects to have repaid
; and specify the denomination or denominations (which shall be in authorized
denominations) of the Notes to be issued to the Holder for the portion of the
within Note not being repaid (in the absence of any such specification, one such
Note will be issued for the portion not being repaid):
- --------------------------------------------------------------------------------
Repayment Date:
--------------------------
Date:
------------------------ -----------------------------------
(Signature)
<PAGE> 1
Exhibit 5
Louis E. Stellato
Vice President, General
Counsel and Secretary
December 5, 1997
The Sherwin-Williams Company
101 Prospect Avenue, N.W.
Cleveland, Ohio 44115
Gentlemen:
As General Counsel for The Sherwin-Williams Company ("Company"), I am
delivering this opinion for use as an exhibit to Form S-3 Registration
Statement ("Registration Statement") filed with the Securities and Exchange
Commission on December 5, 1997, and relating to the registration of debt
securities ("Securities") under the Securities Act of 1933 in accordance with
the shelf registration rules as outlined in Rule 415.
It is my opinion that the Securities will, upon issuance and sale
thereof in the manner described in the Registration Statement, be legally and
validly issued and binding obligations of the Company.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of my name in such Registration Statement
under the caption "Legal Opinion". In giving this consent, I do not admit that
I am in the category of persons whose consent is required under Section 7 of
the Securities Act of 1933 or the Rules and Regulations of the Securities and
Exchange Commission thereunder.
Sincerely,
/s/ Louis E. Stellato
----------------------------
Louis E. Stellato
<PAGE> 1
Exhibit 12
THE SHERWIN-WILLIAMS COMPANY
CALCULATION OF EARNING TO FIXED CHARGES
(DOLLARS IN MILLIONS)
(HISTORICAL BASIS)
<TABLE>
<CAPTION>
9 Mos. 9 Mos. Year Ended December 31,
Ended Ended --------------------------------
9/30/97 9/30/96 1996 1995 1994 1993 1992
------- ------- ---- ----- ---- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Income before income
taxes and cumulative
effect of accounting
changes 353 312 375 318 299 264 226
Fixed charges 146 97 130 99 97 98 96
---- ---- ---- ----- ---- ----- ----
Earnings (1) 499 409 505 417 396 362 322
==== ==== ==== ===== ==== ===== ====
Fixed charges:
Interest expense 62 19 25 3 3 6 9
Gross rents 84 78 105 96 94 92 87
---- ---- ---- ----- ---- ----- ----
Fixed charges (2) 146 97 130 99 97 98 96
==== ==== ==== ===== ==== ===== ====
Ratio of earnings to
fixed charges (1)/(2) 3.4 4.2 3.9 4.2 4.1 3.7 3.4
==== ==== ==== ===== ==== ===== ====
</TABLE>
<PAGE> 1
Exhibit 23(a)
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of The
Sherwin-Williams Company for the registration of $150,000,000 of Medium-Term
Notes, Series B and to the incorporation by reference therein of our report
dated January 23, 1997 (except for Note 17, as to which the date is January 29,
1997), with respect to the consolidated financial statements and schedule of
The Sherwin-Williams Company included in its Annual Report (Form 10-K) for the
year ended December 31, 1996, filed with the Securities and Exchange
Commission.
Cleveland, Ohio
December 4, 1997
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
<PAGE> 1
Exhibit 23(b)
[DELOITTE & TOUCHE LLP]
_____________________________________________________________
Two Hilton Court Telephone: (201) 683-7000
P.O. Box 319 Facsimile: (201) 683-7459
Parsippany, New Jersey 07054-0319
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in the Registration Statement
(Form S-3) for the registration of $150,000,000 of Medium-Term Notes, Series
B, of The Sherwin-Williams Company of our report dated March 26, 1996 (except
for Notes 11 and 12, as to which the dates are November 22, 1996 and January
3, 1997, respectively) with regard to the consolidated financial statements
of Thompson Minwax Holding Corp. and Subsidiaries for the year ended December
31, 1995 (as restated), included in the Current Report on Form 8-K of The
Sherwin-Williams Company dated January 7, 1997.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/Deloitte & Touche
DELOITTE & TOUCHE LLP
December 4, 1997
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned officer and director of The Sherwin-Williams Company,
an Ohio corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.
A. Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the Company
of up to $150,000,000 aggregate principal amount (at stated maturity) of
debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be filed
with the Securities and Exchange Commission or any national securities exchange
pertaining to such securities or to such registration, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done in the premises, hereby ratifying and approving the acts of
said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
October 31, 1997
/s/ J.G. Breen
-------------------------------
J.G. Breen
Chairman of the Board,
Chief Executive Officer and Director
<PAGE> 2
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned officer and director of The Sherwin-Williams Company,
an Ohio corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.
A. Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the Company
of up to $150,000,000 aggregate principal amount (at stated maturity) of
debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be filed
with the Securities and Exchange Commission or any national securities exchange
pertaining to such securities or to such registration, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done in the premises, hereby ratifying and approving the acts of
said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
October 31, 1997
/s/ T.A. Commes
-------------------------------------
T.A. Commes
President, Chief Operating Officer and
Director
<PAGE> 3
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned officer of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T. A.
Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the Company
of up to $150,000,000 aggregate principal amount (at stated maturity) of
debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be filed
with the Securities and Exchange Commission or any national securities exchange
pertaining to such securities or to such registration, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done in the premises, hereby ratifying and approving the acts of
said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
October 31, 1997
/s/ L.J. Pitorak
----------------------------------------------
L.J. Pitorak
Senior Vice President - Finance, Treasurer and
Chief Financial Officer
<PAGE> 4
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned officer of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T. A.
Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the Company
of up to $150,000,000 aggregate principal amount (at stated maturity) of
debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be filed
with the Securities and Exchange Commission or any national securities exchange
pertaining to such securities or to such registration, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done in the premises, hereby ratifying and approving the acts of
said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
October 31, 1997
/s/ J.L. Ault
--------------------------------------------
J.L. Ault
Vice President - Corporate Controller
<PAGE> 5
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T. A.
Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the Company
of up to $150,000,000 aggregate principal amount (at stated maturity) of
debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be filed
with the Securities and Exchange Commission or any national securities exchange
pertaining to such securities or to such registration, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done in the premises, hereby ratifying and approving the acts of
said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
October 27, 1997
/s/ J.M. Biggar
---------------------------------
J.M. Biggar
Director
<PAGE> 6
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T. A.
Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the Company
of up to $150,000,000 aggregate principal amount (at stated maturity) of
debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be filed
with the Securities and Exchange Commission or any national securities exchange
pertaining to such securities or to such registration, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done in the premises, hereby ratifying and approving the acts of
said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
October 24, 1997
/s/ D.E. Collins
---------------------------------
D.E. Collins
Director
<PAGE> 7
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T. A.
Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the Company
of up to $150,000,000 aggregate principal amount (at stated maturity) of
debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be filed
with the Securities and Exchange Commission or any national securities exchange
pertaining to such securities or to such registration, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done in the premises, hereby ratifying and approving the acts of
said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
October 24, 1997
/s/ D.E. Evans
----------------------------------
D.E. Evans
Director
<PAGE> 8
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T. A.
Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the Company
of up to $150,000,000 aggregate principal amount (at stated maturity) of
debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be filed
with the Securities and Exchange Commission or any national securities exchange
pertaining to such securities or to such registration, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done in the premises, hereby ratifying and approving the acts of
said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
October 24, 1997
/s/ R.W. Mahoney
------------------------------------
R.W. Mahoney
Director
<PAGE> 9
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T. A.
Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the Company
of up to $150,000,000 aggregate principal amount (at stated maturity) of
debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be filed
with the Securities and Exchange Commission or any national securities exchange
pertaining to such securities or to such registration, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done in the premises, hereby ratifying and approving the acts of
said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
October 24, 1997
/s/ W.G. Mitchell
-------------------------------
W.G. Mitchell
Director
<PAGE> 10
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T. A.
Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the Company
of up to $150,000,000 aggregate principal amount (at stated maturity) of
debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be filed
with the Securities and Exchange Commission or any national securities exchange
pertaining to such securities or to such registration, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done in the premises, hereby ratifying and approving the acts of
said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
October 24, 1997
/s/ A.M. Mixon, III
------------------------------------
A.M. Mixon, III
Director
<PAGE> 11
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T. A.
Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the Company
of up to $150,000,000 aggregate principal amount (at stated maturity) of
debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be filed
with the Securities and Exchange Commission or any national securities exchange
pertaining to such securities or to such registration, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done in the premises, hereby ratifying and approving the acts of
said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
October 24, 1997
/s/ C.E. Moll
----------------------------
C.E. Moll
Director
<PAGE> 12
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T. A.
Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the Company
of up to $150,000,000 aggregate principal amount (at stated maturity) of
debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be filed
with the Securities and Exchange Commission or any national securities exchange
pertaining to such securities or to such registration, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done in the premises, hereby ratifying and approving the acts of
said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
October 24, 1997
/s/ H.O. Petrauskas
----------------------------
H.O. Petrauskas
Director
<PAGE> 13
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T. A.
Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the Company
of up to $150,000,000 aggregate principal amount (at stated maturity) of
debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be filed
with the Securities and Exchange Commission or any national securities exchange
pertaining to such securities or to such registration, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done in the premises, hereby ratifying and approving the acts of
said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
October 27, 1997
/s/ R.K. Smucker
----------------------------
R.K. Smucker
Director
<PAGE> 14
CERTIFICATE
-----------
I, the undersigned, Secretary of The Sherwin-Williams Company (the
"Corporation"), hereby certify that attached hereto is a true and complete copy
of a resolution of the Directors of the Corporation, duly adopted at a meeting
held on October 16, 1996, and that such resolution is in full force and effect
and has not been amended, modified, revoked or rescinded as of the date hereof.
IN WITNESS WHEREOF, I have executed this certificate as of this 31st
day of October, 1997.
/s/ L.E. Stellato
----------------------------
L.E. Stellato, Secretary
<PAGE> 15
FURTHER RESOLVED, that the appropriate officers of the Company are each hereby
authorized (i) to execute and deliver a power of attorney appointing J.G. Breen,
T.A. Commes, L.J. Pitorak and L.E. Stellato or any of them to act as
attorneys-in-fact for the Company and for such officers for the purpose of
executing and filing with the SEC, on behalf of the Company, such registration
statement or statements and any and all amendments thereto (including, without
limitation, post-effective amendments) with all supplements and exhibits thereto
and any and all applications or other documents in connection therewith, with
the SEC and any national securities exchange; and (ii) to cause such
registration statement or statements, amendments, supplements, or documents to
be executed by any proper officer, on behalf of the Company, pursuant to such
power of attorney.
<PAGE> 1
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2)
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
THE SHERWIN WILLIAMS COMPANY
(Exact name of obligor as specified in its charter)
OHIO 34-0526850
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
101 PROSPECT AVENUE
CLEVELAND, OHIO 44115
(Address of principal executive offices) (Zip Code)
DEBT SECURITIES
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 30th day of October, 1997.
THE CHASE MANHATTAN BANK
By /s/ FRANCINE SPRINGER
-----------------------------------
Francine Springer
Trust Officer
- 3 -
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1997, in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ............................................... $ 13,892
Interest-bearing balances ....................................... 4,282
Securities:
Held to maturity securities .......................................... 2,857
Available for sale securities ........................................ 34,091
Federal funds sold and securities purchased under
agreements to resell ............................................ 29,970
Loans and lease financing receivables:
Loans and leases, net of unearned income ........................ $124,827
Less: Allowance for loan and lease losses ....................... 2,753
Less: Allocated transfer risk reserve ........................... 13
--------
Loans and leases, net of unearned income,
allowance, and reserve .......................................... 122,061
Trading Assets ....................................................... 56,042
Premises and fixed assets (including capitalized leases) ............. 2,904
Other real estate owned .............................................. 306
Investments in unconsolidated subsidiaries and
associated companies ............................................ 232
Customers' liability to this bank on acceptances
outstanding ..................................................... 2,092
Intangible assets .................................................... 1,532
Other assets ......................................................... 10,448
--------
TOTAL ASSETS ......................................................... $280,709
========
</TABLE>
- 4 -
<PAGE> 5
LIABILITIES
<TABLE>
<S> <C>
Deposits
In domestic offices ............................................................. $ 91,249
Noninterest-bearing ...................................... $38,157
Interest-bearing ......................................... 53,092
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ....................................................................... 70,192
Noninterest-bearing ..................................... $ 3,712
Interest-bearing ......................................... 66,480
Federal funds purchased and securities sold under agree-
ments to repurchase .................................................................. 35,185
Demand notes issued to the U.S. Treasury ............................................. 1,000
Trading liabilities .................................................................. 42,307
Other borrowed money (includes mortgage indebtedness and obligations under
calitalized leases):
With a remaining maturity of one year or less ................................... 4,593
With a remaining maturity of more than one year .
through three years ...................................................... 260
With a remaining maturity of more than three years ............................. 146
Bank's liability on acceptances executed and outstanding ............................. 2,092
Subordinated notes and debentures .................................................... 5,715
Other liabilities .................................................................... 11,373
TOTAL LIABILITIES .................................................................... 264,112
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock ......................................................................... 1,211
Surplus (exclude all surplus related to preferred stock)............................. 10,283
Undivided profits and capital reserves ............................................... 5,280
Net unrealized holding gains (losses)
on available-for-sale securities ..................................................... (193)
Cumulative foreign currency translation adjustments .................................. 16
TOTAL EQUITY CAPITAL ................................................................. 16,597
------
TOTAL LIABILITIES AND EQUITY CAPITAL ................................................. $280,709
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR. )
-5-
