As filed with the Securities and Exchange Commission on June 10, 1996
Registration No. 333-____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
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GREENFIELD INDUSTRIES, INC. Delaware 04-2917072
GREENFIELD CAPITAL TRUST Delaware 58-6322400
(Exact name of Registrant as (State or other (I.R.S. Employer
specified in its charter) jurisdiction of Identification No.)
incorporation or
organization)
2743 Perimeter Parkway
Building 100, Suite 100
Augusta, Georgia 30909
(706) 863-7708
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
------------------
Paul W. Jones
President and Chief Executive Officer
Greenfield Industries, Inc.
2743 Perimeter Parkway
Building 100, Suite 100
Augusta, Georgia 30909
(706) 863-7708
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------
Copy to:
MATTHEW G. MALONEY, ESQ.
Dickstein, Shapiro & Morin, L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037
(202) 785-9700
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |X|
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------ -------------------- -------------------- --------------------- ---------------------
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Per Aggregate Offering Amount of
Securities to be Registered Registered Share(1)(2) Price(1)(2) Registration Fee(1)
- ------------------------------ -------------------- -------------------- --------------------- ---------------------
- ------------------------------ -------------------- -------------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
Convertible Preferred
Securities of
Greenfield
Capital Trust 2,300,000 $56.50 $129,950,000 $44,810.34
- ------------------------------ -------------------- -------------------- --------------------- ---------------------
- ------------------------------ -------------------- -------------------- --------------------- ---------------------
6% Convertible Junior
Subordinated
Deferrable Interest
Debentures Due 2016
of Greenfield
Industries, Inc. (3) -- -- --
- ------------------------------ -------------------- -------------------- --------------------- ---------------------
- ------------------------------ -------------------- -------------------- --------------------- ---------------------
Common Stock of
Greenfield Industries,
Inc.(4) (5) -- -- --
- ------------------------------ -------------------- -------------------- --------------------- ---------------------
- ------------------------------ -------------------- -------------------- --------------------- ---------------------
Preferred Securities
Guarantee(6) (7) -- -- --
- ------------------------------ -------------------- -------------------- --------------------- ---------------------
- ------------------------------ -------------------- -------------------- --------------------- ---------------------
Total 2,300,000 100% $129,950,000 $44,810.34
- ------------------------------ -------------------- -------------------- --------------------- ---------------------
<FN>
(1) Estimated solely for the purpose of computing the registration fee in accordance with Rule 457(c) of the
Securities Act based on the average of the bid and asked price on June 5, 1996.
(2) Exclusive of accrued interest and distributions, if any.
(3) $115,000,000 in aggregate principal amount of 6% Convertible Junior Subordinated Deferrable Interest Debentures
Due 2016 (the "Convertible Junior Subordinated Debentures") of Greenfield Industries, Inc. (the "Company") were
issued and sold to Greenfield Capital Trust (the "Trust") in connection with the issuance by the Trust of 2,300,000
of its 6% Convertible Preferred Securities (the "Convertible Preferred Securities"). The Convertible Junior
Subordinated Debentures may be distributed, under certain circumstances, to holders of Convertible Preferred
Securities for no additional consideration.
(4) Includes the Company's preferred stock purchase rights (the "Rights"). Prior to the occurrence of certain
events, the Rights will not be exercisable or evidenced separately from the Company's Common Stock. No separate
consideration will be received for the Rights.
(5) Such indeterminable number of shares of the Company's Common Stock as may be issuable upon conversion of the
Convertible Preferred Securities registered hereunder, including such shares as may be issuable pursuant to
anti-dilution adjustments.
(6) Includes the rights of holders of the Convertible Preferred Securities under the Preferred Securities Guarantee
and certain back-up undertakings as described in the Registration Statement.
(7) No separate consideration will be received for the Preferred Securities Guarantee and the back-up undertakings.
</FN>
- -------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH 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 SECURITIES AND EXCHANGE
COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
</TABLE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
<PAGE>
PROSPECTUS (Subject to Completion)
Dated June 10, 1996
2,300,000 (TIDES) SM*
GREENFIELD CAPITAL TRUST
6% Convertible Preferred Securities
Term Income Deferrable Equity Securities (TIDES) SM*
(liquidation preference $50 per Convertible Preferred Security)
guaranteed to the extent set forth herein by,
and convertible into Common Stock of,
GREENFIELD INDUSTRIES, INC.
Distributions payable March 31, June 30, September 30 and December 31
This Prospectus relates to the 6% Convertible Preferred Securities,
Term Income Deferrable Equity Securities (TIDES)SM* or (TIDES)SM* (the
"Convertible Preferred Securities"), liquidation preference $50 per Convertible
Preferred Security, which represent undivided beneficial ownership interests in
the assets of Greenfield Capital Trust, a statutory business trust formed under
the laws of the State of Delaware (the "Trust" or the "Issuer"), and the shares
of the common stock, par value $0.01 per share, including the accompanying
preferred stock purchase rights as described herein ("Greenfield Common Stock")
of Greenfield Industries, Inc., a Delaware corporation ("Greenfield" or the
"Company"), issuable upon conversion of the Convertible Preferred Securities.
The Convertible Preferred Securities were issued and sold (the "Original
Offering") on April 24, 1996 (the "Original Offering Date") to the Initial
Purchasers (as defined herein, see "Selling Holders") and were simultaneously
sold by the Initial Purchasers in transactions exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
in the United States to persons reasonably believed by the Initial Purchasers of
the Convertible Preferred Securities to be "qualified institutional buyers" (as
defined in Rule 144A under the Securities Act), to certain qualified
institutional buyers acting on behalf of institutional "accredited investors"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and
outside the United States to non-U.S. persons in offshore transactions in
reliance on Regulation S under the Securities Act. Greenfield directly or
indirectly owns all the common securities issued by the Trust (the "Common
Securities" and, together with the Convertible Preferred Securities, the "Trust
Securities"). The Issuer exists for the sole purpose of issuing the Trust
Securities and using the proceeds thereof to purchase from Greenfield its 6%
Convertible Junior Subordinated Deferrable Interest Debentures Due 2016 (the
"Convertible Junior Subordinated Debentures") having the terms described herein.
The holders of the Convertible Preferred Securities will have a preference with
respect to cash distributions and amounts payable upon liquidation, redemption
or otherwise over the holders of the Common Securities of the Issuer.
*CS First Boston Corporation has filed an application with the United
States Patent and Trademark offices for the registration of Term Income
Deferrable Equity Securities (TIDES)SM* and TIDES SM* service marks.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH
AN INVESTMENT IN THE CONVERTIBLE PREFERRED SECURITIES, SEE "RISK FACTORS"
BEGINNING ON PAGE 5.
(Continued on following page)
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. AN
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1996.
<PAGE>
(continued from front cover)
The Convertible Preferred Securities and the Greenfield Common Stock
issuable upon conversion thereof (the "Offered Securities") may be offered and
sold from time to time by the holders named herein or by their transferees,
pledgees, donees or their successors (collectively, the "Selling Holders")
pursuant to this Prospectus. The Offered Securities may be sold by the Selling
Holders from time to time directly to purchasers or through agents, underwriters
or dealers. See "Plan of Distribution" and "Selling Holders." If required, the
names of any such agents or underwriters involved in the sale of the Offered
Securities and the applicable agent's commission, dealer's purchase price or
underwriter's discount, if any, will be set forth in an accompanying supplement
to this Prospectus (the "Prospectus Supplement"). The Selling Holders will
receive all of the net proceeds from the sale of the Offered Securities and will
pay all underwriting discounts and selling commissions, if any, applicable to
any such sale. The Company is responsible for payment of all other expenses
incident to the offer and sale of the Offered Securities. The Selling Holders
and any broker/dealers, agents or underwriters which participate in the
distribution of the Offered Securities may be deemed to be "underwriters" within
the meaning of the Securities Act, and any commission received by them and any
profit on the resale of the Offered Securities purchased by them may be deemed
to be underwriting commissions or discounts under the Securities Act. See "Plan
of Distribution" for a description of indemnification arrangements.
Holders of the Convertible Preferred Securities are entitled to receive
cumulative cash distributions at an annual rate of 6% of the liquidation
preference of $50 per Convertible Preferred Security, accruing from the Original
Offering date and payable quarterly in arrears on each March 31, June 30,
September 30 and December 31, commencing June 30, 1996. See "Description of the
Convertible Preferred Securities--Distributions". Pursuant to a guarantee (the
"Guarantee") by Greenfield, the payment of distributions and payments on
liquidation of the Issuer or the redemption of Convertible Preferred Securities,
as described below, but only to the extent of funds of the Trust available
therefor, are guaranteed by Greenfield to the extent described herein.
Greenfield's obligations under the Guarantee are subordinate and junior to all
other liabilities of Greenfield, except any liabilities that may be made PARI
PASSU expressly by their terms, but are PARI PASSU with the most senior
preferred stock issued from time to time, if any, by Greenfield and certain
other related guarantees. See "Description of the Guarantee". If Greenfield
fails to make interest payments on the Convertible Junior Subordinated
Debentures, the Issuer will have insufficient funds to pay distributions on the
Convertible Preferred Securities. The Guarantee does not cover payment of
distributions when the Issuer does not have sufficient funds to pay such
distributions. In such event, the remedy of a holder of Convertible Preferred
Securities is to enforce the rights of the Issuer under the Convertible Junior
Subordinated Debentures held by the Issuer. Effectively, however, Greenfield
has, through the Guarantee, the Convertible Junior Subordinated Debentures, the
Indenture and the Declaration (each as defined herein), taken together, fully,
irrevocably and unconditionally guaranteed all of the Issuer's obligations under
the Convertible Preferred Securities. The obligations of Greenfield under the
Convertible Junior Subordinated Debentures are subordinate and junior in right
of payment to Senior Indebtedness (as defined herein) of Greenfield. At March
31, 1996, Senior Indebtedness of Greenfield aggregated approximately $234.6
million (or $123.6 million of Senior Indebtedness after giving pro forma effect
to the Original Offering). See "Capitalization". The terms of the Convertible
Junior Subordinated Debentures place no limitation on the amount of Senior
Indebtedness that may be incurred by Greenfield.
Greenfield has the right under the Indenture (as defined herein) for the
Convertible Junior Subordinated Debentures to defer the interest payments due
from time to time on the Convertible Junior Subordinated Debentures for
successive periods not exceeding 20 consecutive quarters for each such period,
and, as a consequence, quarterly distributions on the Convertible Preferred
Securities would be deferred by the Issuer (but would continue to accumulate
quarterly and accrue interest) until the end of any such interest deferral
period. See "Risk Factors--Option to Extend Interest Payment Period; Tax
Consequences", "Description of the Convertible Preferred
Securities--Distributions" and "Description of the Convertible Junior
Subordinated Debentures--Option to Extend Interest Payment Period".
2
<PAGE>
Each Convertible Preferred Security is convertible in the manner described
herein at the option of the holder into shares of Greenfield Common Stock, at
the rate of 1.2121 shares of Greenfield Common Stock for each Convertible
Preferred Security (equivalent to a conversion price of $41.25 per share of
Greenfield Common Stock), subject to adjustment in certain circumstances. See
"Description of the Convertible Preferred Securities--Conversion Rights". The
last reported sale price of Greenfield Common Stock, which is quoted under the
symbol "GFII" on The Nasdaq Stock Market's National Market ("NNM"), on June 5,
1996, was $37.50 per share. Whenever Greenfield issues shares of Greenfield
Common Stock upon conversion of the Convertible Preferred Securities, Greenfield
will, subject to certain conditions, issue, together with each share of
Greenfield Common Stock, one Right (as defined herein) entitling the holder
thereof, under certain circumstances, to purchase one one-hundredth of a share
of Series A Preferred Stock. See "Description of the Convertible Preferred
Securities--Conversion Rights".
The Convertible Preferred Securities are effectively redeemable at the
option of the Company, in whole or in part, from time to time, after April 15,
1999, at the prices set forth herein, plus accrued and unpaid distributions
thereon to the date fixed for redemption (the "Redemption Price"). See
"Description of the Convertible Preferred Securities--Optional Redemption". Upon
the repayment of the Convertible Junior Subordinated Debentures at maturity or
upon any acceleration, earlier redemption or otherwise, the proceeds from such
repayment will be applied to redeem the Convertible Preferred Securities and
Common Securities on a PRO RATA basis. In addition, upon the occurrence of
certain events arising from a change in law or a change in legal interpretation,
Greenfield will liquidate the Trust and cause to be distributed to the holders
of the Convertible Preferred Securities, on a PRO RATA basis, Convertible Junior
Subordinated Debentures or, in certain limited circumstances, will cause the
redemption of the Convertible Preferred Securities in whole at the liquidation
preference of $50 per security plus accrued and unpaid distributions. See
"Description of the Convertible Preferred Securities--Tax Event or Investment
Company Event Redemption or Distribution" and "Description of the Convertible
Junior Subordinated Debentures".
In the event of the liquidation of the Trust, the holders of the
Convertible Preferred Securities will be entitled to receive for each
Convertible Preferred Security a liquidation preference of $50 plus accrued and
unpaid distributions thereon to the date of payment, unless, in connection with
such liquidation, Convertible Junior Subordinated Debentures are distributed to
the holders of the Convertible Preferred Securities. See "Description of the
Convertible Preferred Securities--Liquidation Distribution Upon Dissolution".
AVAILABLE INFORMATION
Greenfield is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "SEC" or the "Commission"). Such reports, proxy statements, and
other information filed by Greenfield can be inspected and copied at the public
reference facilities of the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, DC 20549, and at the following Regional Offices of the
Commission: 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511;
and Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of
such material may also be obtained from the Public Reference Section of the SEC
at Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549, at prescribed
rates.
Greenfield has filed with the Commission a Registration Statement on Form
S-3 (herein together with all amendments and exhibits thereto, called the
"Registration Statement") under the Securities Act with respect to the
securities offered by this Prospectus. This Prospectus does not contain all of
the information set forth or incorporated by reference in the Registration
Statement and the exhibits and schedules relating thereto, certain portions of
which have been omitted as permitted by the rules and regulations of the
Commission. For further information with respect to Greenfield and the
securities offered by this Prospectus, reference is made to the Registration
Statement and the exhibits filed or incorporated as a part thereof, which are on
file at the offices of the Commission and may be obtained upon payment of the
fee prescribed by the Commission, or may be examined without charge at the
offices of the Commission. Statements contained in this Prospectus as to the
contents of any documents referred to are not necessarily complete, and, in each
such instance, are qualified in all respects by reference to the applicable
documents filed with the Commission.
3
<PAGE>
No separate financial statements of the Issuer have been included herein.
Greenfield does not consider that such financial statements would be material to
holders of the Convertible Preferred Securities because (i) all of the voting
securities of the Issuer will be owned, directly or indirectly, by Greenfield, a
reporting company under the Exchange Act, (ii) the Issuer has no independent
operations but exists for the sole purpose of issuing securities representing
undivided beneficial interests in the assets of the Issuer and investing the
proceeds thereof in Convertible Junior Subordinated Debentures issued by
Greenfield and (iii) the obligations of the Issuer under the Trust Securities
are fully and unconditionally guaranteed by Greenfield to the extent that the
Issuer has funds available to meet such obligations. See "Description of the
Convertible Junior Subordinated Debentures" and "Description of the Guarantee".
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Greenfield pursuant to the Exchange Act
(File No. 0-21828) are incorporated in this Prospectus by reference: (a) Annual
Report on Form 10-K for the year ended December 31, 1995; (b) Quarterly Report
on Form 10-Q for the quarter ended March 31, 1996; (c) the description of
Greenfield's capital stock which is contained in Greenfield's Registration
Statement on Form S-1, as amended (File No. 33-74196); (c) Greenfield's
Registration Statement on Form 8-A, dated February 7, 1996 (relating to the
Rights), and the related Current Report on Form 8-K, dated as of February 6,
1996; (d) Current Report on Form 8-K dated as of January 12, 1996, as amended by
Form 8-K/A dated as of January 12, 1996 (relating to the acquisition of Rule (as
defined herein)); and (e) Current Reports on Form 8-K dated as of April 8, 1996
and April 24, 1996 (relating to the Original Offering).
All documents filed by Greenfield with the SEC pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of this offering shall be deemed to be incorporated
by reference in this Prospectus and to be a part of this Prospectus from the
date of filing of such documents.
Any statement contained in a document, all or a portion of which is
incorporated or deemed to be incorporated by reference herein, or contained in
this Prospectus, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
Greenfield will provide without charge to each person to whom a copy of
this Prospectus is delivered, on the written or oral request of such person, a
copy of any or all of the documents referred to above which have been or may
be incorporated by reference in this Prospectus and any other information
requested thereby as described above under "Available Information". Such
written or oral request should be directed to Greenfield Industries, Inc.,
2743 Perimeter Parkway, Building 100, Suite 100, Augusta, Georgia 30909,
Attention: C. Dianne Steele ((706) 863-7708).
4
<PAGE>
RISK FACTORS
PROSPECTIVE PURCHASERS OF THE CONVERTIBLE PREFERRED SECURITIES SHOULD
CAREFULLY REVIEW THE INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS AND
SHOULD PARTICULARLY CONSIDER THE FOLLOWING MATTERS:
FACTORS RELATING TO THE COMPANY AND THE BUSINESS
RAPID GROWTH. The Company has experienced rapid growth in recent years,
with net sales and net income increasing from $228.8 million and $13.8 million,
respectively, for the fiscal year ended December 31, 1993 to net sales and net
income of $420.2 million and $31.5 million, respectively, for the fiscal year
ended December 31, 1995. This growth has been attributable to acquisitions
completed by the Company in recent years, as well as to increased demand for the
Company's products associated with an economic expansion. There can be no
assurance that the Company will continue to grow or that the rapid growth
experienced by the Company in recent years will not divert management resources,
cause disruptions in the management of the Company's business or otherwise have
an adverse effect on the Company.
RELIANCE ON KEY PERSONNEL. The Company is substantially dependent upon the
continued services of a limited number of key personnel, including Paul W.
Jones, President and Chief Executive Officer, Peter K. Hunt, Senior Vice
President--Industrial Products Group, and Gary L. Weller, Senior Vice President,
Chief Financial Officer and Secretary. The Company does not have employment
agreements with key personnel, including Messrs. Jones, Hunt and Weller. The
loss of the services of key personnel, including Messrs. Jones, Hunt and/or
Weller, could have a material adverse effect on the Company's business and
results of operations. Additionally, the future success of the Company will
depend, among other factors, on the Company's ability to continue to attract and
retain the necessary qualified managerial personnel.
CYCLICAL INDUSTRY. The markets for the Company's products are cyclical.
During periods of economic expansion, particularly when industrial production is
increasing, the Company generally benefits from increased demand for its
products. Conversely, during recessionary times, the Company is adversely
affected by declines in demand for its products. Although the Company has taken
steps in recent years to reduce the effect on the Company's business of economic
cycles, there can be no assurance that such steps will be successful to prevent
a cyclical decline in demand for the Company's products during periods of
economic slow-downs or recession. See "The Company--General" and "The
Company--Markets and Products".
AVAILABILITY OF SUITABLE FUTURE ACQUISITIONS. Since 1986, the Company and
its predecessors have expanded in large part through complementary acquisitions
and have benefited from operating efficiencies achieved through rationalizations
of excess capacity and consolidations of the acquired operations into existing
facilities. There can be no assurance that the Company will be able to identify
suitable new acquisition candidates, to consummate any future acquisitions on
favorable terms or to realize operating efficiencies from completed
acquisitions.
EFFECTS OF RECHARACTERIZATION OF THE CONVERTIBLE PREFERRED SECURITIES ON
EXISTING CAPITAL RESOURCES. Under the Company's existing senior unsecured
domestic credit facility, the Convertible Preferred Securities are deemed to be
equity for purposes of calculating compliance with certain financial covenants,
including a debt-to-capitalization ratio test. However, if the Convertible
Preferred Securities were to be accounted for as debt, or if Convertible Junior
Subordinated Debentures were distributed to holders of the Convertible Preferred
Securities upon the occurrence of a Tax Event or an Investment Company Event
(each such term as defined herein) or otherwise, the Company could be in
violation of such financial covenants (depending upon the aggregate amount of
indebtedness then outstanding) and in default under such senior unsecured
domestic credit facility, which default, if not cured or waived, could have a
material adverse effect on the Company. See "Description of the Convertible
Preferred Securities--Tax Event or Investment Company Event Redemption or
Distribution".
5
<PAGE>
FACTORS RELATING TO THE CONVERTIBLE PREFERRED SECURITIES
SUBORDINATION OF GUARANTEE AND CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES.
Greenfield's obligations under the Guarantee are unsecured, subordinate and
junior in right of payment to all other liabilities of Greenfield, with certain
limited exceptions. The obligations of Greenfield under the Convertible Junior
Subordinated Debentures are subordinate and junior in right of payment to Senior
Indebtedness (as defined herein) of Greenfield. As of March 31, 1996, Greenfield
had approximately $234.6 million principal amount of Senior Indebtedness (or
$123.6 million of Senior Indebtedness after giving pro forma effect to the
Original Offering). See "Capitalization". There are no terms of the Convertible
Preferred Securities, the Convertible Junior Subordinated Debentures or the
Guarantee that limit Greenfield's ability to incur additional unsecured or
secured indebtedness or liabilities, including indebtedness or liabilities that
would rank senior to the Convertible Junior Subordinated Debentures and the
Guarantee. See "Description of the Guarantee--Status of the Guarantee;
Subordination" and "Description of the Convertible Junior Subordinated
Debentures--Subordination".
The ability of the Issuer to pay amounts due on the Convertible Preferred
Securities is wholly dependent upon Greenfield's making payments on the
Convertible Junior Subordinated Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES. Greenfield has
the right under the Indenture to defer interest payments from time to time on
the Convertible Junior Subordinated Debentures for successive periods (a
"Deferral Period") not exceeding 20 consecutive quarters for each such period.
Upon the termination of any Deferral Period and the payment of all amounts then
due, Greenfield may select a new Deferral Period, subject to the requirements
described herein. As a consequence, during any such Deferral Period, quarterly
distributions on the Convertible Preferred Securities would be deferred (but
would continue to accrue with interest thereon) by the Issuer. In the event that
Greenfield exercises this right, during such period Greenfield (i) shall not
declare or pay dividends on, make distributions with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to, any of its
capital stock (other than stock dividends paid by Greenfield which consist of
stock of the same class as that on which the dividend is being paid and other
than redemptions or purchases of any Rights and the declaration of a dividend of
such Rights in the future), (ii) shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by Greenfield that rank PARI PASSU with or junior to the
Convertible Junior Subordinated Debentures, and (iii) shall not make any
guarantee payments with respect to the foregoing (other than pursuant to the
Guarantee). Prior to the termination of any such Deferral Period, Greenfield may
further extend the Deferral Period; PROVIDED that such Deferral Period, together
with all previous and further extensions thereof, may not exceed 20 consecutive
quarters and that such Deferral Period may not extend beyond the maturity date
of the Convertible Junior Subordinated Debentures. See "Description of the
Convertible Preferred Securities--Distributions" and "Description of the
Convertible Junior Subordinated Debentures--Option to Extend Interest Payment
Period".
Should a Deferral Period occur, a holder of a Convertible Preferred
Security will continue to accrue interest income for United States Federal
income tax purposes. As a result, such a holder will be required to include such
interest in gross income for United States Federal income tax purposes in
advance of the receipt of cash, and such holder will not receive the cash from
the Issuer related to such income if such holder disposes of or converts its
Convertible Preferred Securities prior to the record date for payment of
distributions. See "United States Taxation--Potential Extension of Interest
Payment Period and Original Issue Discount".
Greenfield has no current intention of exercising its right to defer
payments of interest. However, should Greenfield elect to exercise such right in
the future, the market price of the Convertible Preferred Securities is likely
to be adversely affected. A holder that disposes of its Convertible Preferred
Securities during a Deferral Period, therefore, might not receive the same
return on its investment as a holder that continues to hold its Convertible
Preferred Securities. In addition, as a result of the existence of Greenfield's
right to defer interest payments, the market price of the Convertible Preferred
Securities (which represent a preferred undivided beneficial interest in the
Convertible Junior Subordinated Debentures) may be more volatile than other
securities on which original issue discount accrues that do not have such
rights.
6
<PAGE>
RIGHTS UNDER THE GUARANTEE. The Guarantee Trustee (as defined herein) holds
the Guarantee for the benefit of the holders of the Convertible Preferred
Securities. The Guarantee guarantees to the holders of the Convertible Preferred
Securities the payment (but not the collection) of (i) any accrued and unpaid
distributions on the Convertible Preferred Securities to the extent of funds of
the Trust available therefor, (ii) the amount payable upon redemption, including
all accrued and unpaid distributions, of the Convertible Preferred Securities
called for redemption by the Issuer, to the extent of funds of the Trust
available therefor and (iii) upon a voluntary or involuntary dissolution,
winding up or termination of the Issuer (other than in connection with a
redemption of all of the Convertible Preferred Securities), the lesser of (a)
the aggregate of the liquidation amount and all accrued and unpaid distributions
on the Convertible Preferred Securities to the date of payment to the extent of
funds of the Trust available therefor and (b) the amount of assets of the Issuer
remaining available for distribution to holders of the Convertible Preferred
Securities upon the liquidation of the Issuer. The holders of a majority in
liquidation amount of the Convertible Preferred Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under the Guarantee. Any holder of
the Convertible Preferred Securities may institute a legal proceeding directly
against Greenfield to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Issuer, the Guarantee Trustee or any
other person or entity. If Greenfield were to default on its obligations under
the Convertible Junior Subordinated Debentures, the Issuer would lack available
funds for the payment of distributions or amounts payable on redemption of the
Convertible Preferred Securities or otherwise, and, in each such event, holders
of the Convertible Preferred Securities would not be able to rely upon the
Guarantee for payment of such amounts. Instead, the remedy of holders of the
Convertible Preferred Securities is to enforce the rights of the Issuer under
the Convertible Junior Subordinated Debentures held by the Issuer against
Greenfield pursuant to the terms of the Convertible Junior Subordinated
Debentures. Such holders may also vote to appoint a Special Trustee who shall
have the same rights, powers and privileges of the GFII Trustees (each as
defined herein). See "Description of the Guarantee--Status of the Guarantee;
Subordination" and "Description of the Convertible Junior Subordinated
Debentures--Subordination" herein. The Declaration provides that each holder of
Convertible Preferred Securities by acceptance thereof agrees to the provisions
of the Guarantee (including the subordination provisions thereof) and the
Indenture.
TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION OR DISTRIBUTION. Upon the
occurrence of a Tax Event or Investment Company Event, Greenfield will, except
in certain limited circumstances, cause the GFII Trustees to liquidate the
Issuer and cause Convertible Junior Subordinated Debentures to be distributed
PRO RATA to the holders of the Convertible Preferred Securities. In certain
circumstances, Greenfield will have the right to redeem the Convertible Junior
Subordinated Debentures, in whole (but not in part), at par plus accrued and
unpaid interest, in lieu of a distribution of the Convertible Junior
Subordinated Debentures, in which event the Convertible Preferred Securities
will be redeemed in whole at the liquidation preference of $50 per Convertible
Preferred Security plus accrued and unpaid distributions. In the case of a Tax
Event, Greenfield may also elect to cause the Convertible Preferred Securities
to remain outstanding and pay Additional Interest (as defined herein) on the
Convertible Junior Subordinated Debentures. See "Description of the Convertible
Preferred Securities--Tax Event or Investment Company Event Redemption or
Distribution" and "Description of the Convertible Junior Subordinated
Debentures--General".
Under current United States Federal income tax law, a distribution of the
Convertible Junior Subordinated Debentures would not be a taxable event to
holders of the Convertible Preferred Securities. However, if the relevant
Special Event (as defined herein) is a Tax Event which results in the Issuer
being treated as an association taxable as a corporation, the distribution would
likely constitute a taxable event to holders of the Convertible Preferred
Securities. See "United States Taxation--Receipt of Convertible Junior
Subordinated Debentures or Cash Upon Liquidation of the Issuer".
On March 19, 1996, President Clinton proposed certain tax law changes that
would, among other things, deny interest deductions to corporate issuers of debt
instruments under certain circumstances. These proposals, were they to become
effective, would not deny Greenfield a deduction otherwise available for
interest paid in cash on the Convertible Junior Subordinated
7
<PAGE>
Debentures, and thus would not give rise to a Tax Event. However, there can be
no assurance that subsequent proposals or final legislation will not deny
Greenfield a deduction otherwise available for such interest payments, which in
turn could give rise to a Tax Event, which would permit Greenfield to
cause a redemption of the Convertible Junior Subordinated Debentures or a
distribution of the Convertible Junior Subordinated Debentures in liquidation
of the Trust, as described more fully under the caption "Description of the
Convertible Preferred Securities--Tax Event or Investment Company Event
Redemption or Distribution".
There can be no assurance as to the market prices for Convertible Preferred
Securities or Convertible Junior Subordinated Debentures that may be distributed
in exchange for Convertible Preferred Securities if a dissolution or liquidation
of the Issuer were to occur. Accordingly, the Convertible Preferred Securities
that an investor may purchase or the Convertible Junior Subordinated Debentures
that a holder of the Convertible Preferred Securities may receive on dissolution
and liquidation of the Issuer, may trade at a discount to the price that the
investor paid to purchase the Convertible Preferred Securities offered hereby.
Because holders of Convertible Preferred Securities may receive Convertible
Junior Subordinated Debentures upon the occurrence of a Tax Event or an
Investment Company Event, prospective purchasers of Convertible Preferred
Securities are also making an investment decision with regard to the Convertible
Junior Subordinated Debentures and should carefully review all the information
regarding the Convertible Junior Subordinated Debentures contained herein. See
"Description of Convertible Preferred Securities--Tax Event or Investment
Company Event Redemption or Distribution" and "Description of Convertible Junior
Subordinated Securities--General".
LIMITED VOTING RIGHTS. Holders of Convertible Preferred Securities will
generally have limited voting rights and, except upon the occurrence of certain
events described herein, will not be entitled to vote to appoint, remove or
replace the Issuer Trustees (as defined herein), the right to which is vested
exclusively in the holder of the Common Securities.
TRADING CHARACTERISTICS OF CONVERTIBLE PREFERRED SECURITIES. The
Convertible Preferred Securities may trade at a price that does not fully
reflect the value of accrued but unpaid distributions. A holder who disposes of
its Convertible Preferred Securities between record dates for payments of
distributions thereon will be required to include accrued but unpaid interest on
the Convertible Junior Subordinated Debentures through the date of disposition
in income as ordinary income (i.e., original issue discount), and to add such
amount to its adjusted tax basis in its PRO RATA share of the underlying
Convertible Junior Subordinated Debentures deemed disposed of. To the extent the
selling price is less than the holder's adjusted tax basis (which will include,
in the form of original issue discount, all accrued but unpaid interest), a
holder will recognize a capital loss. Subject to certain limited exceptions,
capital losses cannot be applied to offset ordinary income for United States
Federal income tax purposes. See "United States Taxation".
LACK OF PUBLIC MARKET FOR THE CONVERTIBLE PREFERRED SECURITIES. There is no
existing trading market for the Convertible Preferred Securities, and there can
be no assurance regarding the future development of a market for the Convertible
Preferred Securities, or the ability of holders of the Convertible Preferred
Securities to sell their Convertible Preferred Securities or the price at which
such holders may be able to sell their Convertible Preferred Securities. If such
a market were to develop, the Convertible Preferred Securities could trade at
prices that may be higher or lower than the initial offering price depending on
many factors, including prevailing interest rates, the price of the Greenfield
Common Stock, the Company's operating results and the market for similar
securities. The Initial Purchasers currently make a market in the Convertible
Preferred Securities. The Initial Purchasers are not obligated to do so,
however, and any market making with respect to the Convertible Preferred
Securities may be discontinued at any time without notice. Therefore, there can
be no assurance as to the liquidity of any trading market for the Convertible
Preferred Securities or that an active public market for the Convertible
Preferred Securities will develop. The Company does not intend to apply for
listing or quotation of the Convertible Preferred Securities on any securities
exchange or stock market; however, the Convertible Preferred Securities are
eligible for trading in the Private Offerings, Resale and Trading through
Automated Linkages (PORTAL) Market of the National Association of Securities
Dealers, Inc.
GREENFIELD CAPITAL TRUST
Greenfield Capital Trust is a statutory business trust that was formed
under the Delaware Business Trust Act on December 7, 1995. The Trust's original
declaration of trust was amended and restated in its entirety as of April 1,
1996 by Greenfield, as sponsor of the Trust, and the trustees of the Issuer (the
"Issuer Trustees")
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<PAGE>
(as so amended and restated, the "Declaration"). Greenfield
directly or indirectly owns Common Securities in an aggregate liquidation amount
equal to 3% of the total capital of the Issuer. The Common Securities rank PARI
PASSU, and payment will be made thereon PRO RATA, with the Convertible Preferred
Securities, except that, upon the occurrence and during the continuance of an
event of default under the Declaration, the rights of the holders of the Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Convertible Preferred Securities. The assets of the Trust consist
principally of the Convertible Junior Subordinated Debentures, and payments
under the Convertible Junior Subordinated Debentures will be the sole revenue of
the Issuer. The Issuer exists for the exclusive purposes of (i) issuing the
Trust Securities representing undivided beneficial interests in the assets of
the Trust, (ii) investing the gross proceeds of the Trust Securities in the
Convertible Junior Subordinated Debentures and (iii) engaging in only those
other activities necessary or incidental thereto.
Pursuant to the Declaration, the number of Issuer Trustees initially is
five. Three of the Issuer Trustees (the "GFII Trustees") are individuals who are
employees or officers of or who are affiliated with Greenfield. The fourth
trustee is a financial institution that is unaffiliated with Greenfield (the
"Trustee"). The fifth trustee is an entity which maintains its principal place
of business in the State of Delaware (the "Delaware Trustee"). Initially, The
Bank of New York, a New York banking corporation, acts as Trustee and its
affiliate, The Bank of New York (Delaware), a Delaware banking corporation, acts
as Delaware Trustee until, in each case, removed or replaced by the holder of
the Common Securities. The Bank of New York also acts as indenture trustee under
the Guarantee (the "Guarantee Trustee") and under the Indenture (the "Indenture
Trustee"). See "Description of the Guarantee" and "Description of the
Convertible Preferred Securities". In certain circumstances, the holders of a
majority of the Convertible Preferred Securities will be entitled to appoint one
additional trustee (a "Special Trustee"), who need not be an officer or employee
of or otherwise affiliated with Greenfield, who will have the same rights,
powers and privileges as the GFII Trustees. See "Description of the Convertible
Preferred Securities--Voting Rights".
The Trustee holds title to the Convertible Junior Subordinated Debentures
for the benefit of the holders of the Trust Securities and the Trustee has the
power to exercise all rights, powers and privileges under the Indenture (as
defined herein) as the holder of the Convertible Junior Subordinated Debentures.
In addition, the Trustee maintains exclusive control of a segregated
non-interest bearing bank account (the "Property Account") to hold all payments
made in respect of the Convertible Junior Subordinated Debentures for the
benefit of the holders of the Trust Securities. The Guarantee Trustee holds the
Guarantee for the benefit of the holders of the Convertible Preferred
Securities. Subject to the right of the holders of the Convertible Preferred
Securities to appoint a Special Trustee, Greenfield, as the direct or indirect
holder of all the Common Securities, has the right to appoint, remove or replace
any of the Issuer Trustees and to increase or decrease the number of trustees,
provided that the number of trustees shall be at least three, a majority of
which shall be GFII Trustees. Greenfield will pay all fees and expenses related
to the Trust and the offering of the Convertible Preferred Securities. See
"Description of the Convertible Junior Subordinated Debentures".
The rights of the holders of the Convertible Preferred Securities,
including economic rights, rights to information and voting rights, are as set
forth in the Declaration and the Delaware Business Trust Act, as amended (the
"Trust Act"). See "Description of the Convertible Preferred Securities". The
Declaration, the Indenture and the Guarantee also incorporate by reference the
terms of the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and each will be qualified thereunder.
The place of business and the telephone number of the Trust are the
principal executive offices and telephone number of Greenfield. See "The
Company".
THE COMPANY
GENERAL
Greenfield is a leading manufacturer of expendable cutting tools and
related products used primarily in industrial applications. The Company believes
that it is a leading North American producer of rotary cutting tools, which
constituted the majority of the Company's fiscal 1995 sales. Rotary cutting
tools are consumable
9
<PAGE>
cylindrical fluted tools used to cut, bore, shape, mill and
thread industrial materials. The Company's products are consumed during use and
are replaced by purchasers on a periodic basis.
The Company's products are sold in five principal markets: industrial,
electronics, oilfield equipment, mining and wear parts and consumer. The Company
is a leading producer of industrial products used by manufacturers in a broad
cross-section of industries to cut metal and other industrial materials. The
Company is also a leading manufacturer of small diameter drills and routers used
in the manufacture of circuit boards; carbide products used in oilfield and
mining equipment and wear parts applications; and consumer drill bits marketed
under private label and proprietary brands, including Sears' line of
Craftsman(R) drill bits which the Company has supplied for more than 66 years.
The Company's presence in the consumer market was substantially expanded in
January 1996 as a result of the acquisition of Rule Industries, Inc. ("Rule"), a
leading manufacturer of consumer saws and other hardware products. The Company's
consumer products are sold primarily to consumers and tradesmen through major
do-it-yourself hardware suppliers, such as Home Depot, retail chains and buying
cooperatives, among whom the Company has not historically had significant market
penetration. The Company offers products made from high-speed steel and tungsten
carbide materials; each accounts for approximately half of the Company's
revenues. In addition, the Company also manufactures and markets a line of
marine products.
The Company has grown through complementary acquisitions and has benefited
from operating efficiencies achieved through consolidations of operations and
rationalizations of excess capacity. The Company is the successor to a group of
complementary cutting tool businesses acquired since 1986. Greenfield was
organized in 1986 in connection with the acquisition of the Cutting Tools
Division of TRW, Inc. ("TRW"). Concurrently, Rogers Tool Works, Inc. ("RTW") was
organized for the purpose of acquiring TRW's Carbide Division. These acquired
businesses had net sales of approximately $89 million for the twelve months
ended May 31, 1987. The Company has grown to 1995 consolidated net sales of
approximately $420.2 million. Since 1986, more than 20 additional complementary
businesses have been acquired by the Company. The following acquisitions have
been made since the Company's initial public offering in 1993:
<TABLE>
<CAPTION>
TOTAL ASSETS AT
DATE ACQUISITION PRODUCTS ACQUISITION DATE
(DOLLARS IN
MILLIONS)
<S> <C> <C> <C>
1993 A-1 Carbide Corporation Wear parts $ 16.0
1994 Progressive Carbide, a Division of Dresser Compacts 1.3
Industries, Inc.
1994 Threads, Inc. Gages 3.0
1994 Hendersonville Industrial Tool Co., Inc. Gages 2.7
1994 The Cleveland Twist Drill Company Drills, reamers, end mills, taps 84.4
and dies, counterbores and
countersinks
1994 Carbidie Corporation Wear parts 27.3
1995 American Mine Tool, a Division of Valenite, Mining and wear parts 17.6
Inc.
1995 Van Keuren, Inc. Gages 2.5
1995 Cleveland Europe Limited Industrial drills 12.1
1996 Rule Industries, Inc. Industrial and consumer saws and 95.8
related products; marine products
1996 Kentucky Carbide, a Division of Osram Carbide inserts 1.5
Sylvania Inc.
</TABLE>
The Company's principal executive offices are located at 2743 Perimeter
Parkway, Building 100, Suite 100, Augusta, Georgia 30909, and its telephone
number is (706) 863-7708.
10
<PAGE>
BUSINESS STRATEGY
GENERAL. Greenfield's business strategies include obtaining and maintaining
leading market positions and broadening its product lines; reducing operating
costs and improving productivity through capital investment and reorganization
of production processes; and emphasizing quality and customer service. The
Company seeks to implement its strategies through additional complementary
acquisitions and rationalizing and integrating acquired operations.
MARKET POSITION AND PRODUCT LINES. The Company seeks to obtain and maintain
leading market positions in each of its markets. Most of the markets in which
the Company operates are fragmented and are undergoing consolidation, which is
expected to benefit larger, more efficient producers such as the Company.
Accordingly, the Company seeks to broaden its product lines through
acquisitions, such as Rule. Management believes that the expansion of its
product lines will enable the Company to reduce the effects of cyclicality on
its business.
REDUCING OPERATING COSTS AND IMPROVING PRODUCTIVITY. Operating costs have
been lowered through an active program of capital investment, rationalizations
and plant consolidations intended to streamline operations, improve productivity
and reduce costs. For example, during 1994, Greenfield consolidated its
electronic circuit board drill operations in Switzerland into its German
operations. The consolidation resulted in increased production and lower
employment levels. Similarly, the Company, in connection with the acquisition of
The Cleveland Twist Drill Company ("CTD"), is currently restructuring and
consolidating certain of the CTD facilities into other Company facilities and,
as part of an 18-month plan commenced in January 1995, the Company is
rationalizing operations at 13 of its North American manufacturing facilities.
This plan is expected to result in streamlined operations, improved productivity
and reduced costs.
QUALITY AND CUSTOMER SERVICE. Greenfield seeks to provide high levels of
product quality and customer service in its markets, particularly in technically
demanding applications where the cost of product failure is high, for example in
the case of drilling compacts produced by the Company. The Company has earned
numerous quality awards from its major customers, including Ford, Sears,
Caterpillar, Chrysler and Navistar.
ACQUISITIONS. Greenfield seeks to implement its strategies principally
through acquisitions. The Company has increased its market position in existing
product lines and broadened its product lines through acquisitions. Greenfield
has a history of successfully combining acquired companies with its own
operations and since 1986, it has consolidated or restructured operations at
more than 20 plants. The Company has also reduced operating costs and improved
productivity in connection with its acquisitions through improved raw material
pricing, automation of manual operations, reduction of factory overhead through
plant rationalizations and consolidations and improved management systems.
Although the Company continually evaluates acquisition opportunities, no
material acquisitions are pending or contemplated.
MARKETS AND PRODUCTS
GENERAL. Greenfield manufactures and markets expendable cutting tools and
carbide products to the industrial, electronics, oilfield equipment, mining and
wear parts and consumer markets. The Company also manufactures and markets a
line of marine products. Although the products sold in these markets are similar
and overlap to some degree, the markets generally are affected by different
economic forces, resulting in different demand cycles.
The Company manufactures a wide variety of cutting tools. High-speed steel
is the predominant material for rotary cutting tools, offering high performance
in a broad range of applications. Tungsten carbide materials are costlier and
more durable and are preferred in certain applications.
Greenfield's brand names enjoy a high degree of recognition in their
respective markets. The Company differentiates its brands primarily on the basis
of products, channels of distribution, geography and service. The Company also
continually seeks to improve its products through research into additional
carbide grades and coatings which will prolong tool life. In addition to the
Company's branded products, the Company supplies a number of industrial and
consumer private label customers with its products, including Sears' line of
Craftsman(R) drill bits.
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<PAGE>
INDUSTRIAL MARKET. Greenfield is a leading producer in North America of
rotary cutting tools for industrial applications. Customers in the industrial
market use expendable cutting tools in their manufacturing operations. Demand in
the industrial market tracks industrial production, and in 1995 the Company
benefited from a relatively strong economy. The Company believes that it has
improved its competitive position in this market through marketing programs
designed to increase sales to distributors. The Company's marketing programs,
which have generally focused on the customer, now include a compensation program
for Greenfield sales employees which is based upon productivity improvements
substantiated by the customer. In 1995, the industrial market accounted for
approximately 56% of consolidated net sales.
Products sold in the industrial market include rotary cutting tools and
related products. Rotary cutting tools are consumable cylindrical fluted tools
used to cut, bore, shape, mill and thread industrial materials. Rotary cutting
tools manufactured by the Company include drills, reamers, taps, end mills,
burrs, routers, counterbores and countersinks. Drills bore holes in steel and
other materials. Reamers make hole diameters precise within given tolerances.
Taps machine internal screw threads in drilled or reamed holes. End mills are
used in milling machines to shape industrial materials. Burrs remove excess
material. Routers are used to profile materials. Counterbores and countersinks
shape recesses for fastener heads and other uses. Related products include
toolholders and inserts used in turning and milling operations; dies, dieheads
and chasers used in industrial thread fastening applications; and certain
industrial carbide wear parts used in applications where a high degree of wear
resistance is desirable. As a result of the Rule acquisition, the Company also
manufactures and markets an extensive line of hardware products, primarily
stationary and portable power tool accessories, for use in the industrial and
consumer markets. Power tool accessories consist of a broad line of bandsaws,
holesaws, circular saws and reciprocating blades used in power tool
applications, including products which have tungsten-carbide grit cutting edges.
The industrial market's rate of growth generally reflects the growth of the
manufacturing economy. The industrial market has been cyclical, experiencing
higher growth rates during periods of economic expansion. While demand for steel
and carbide cutting tools has continued to grow, certain segments of the market
have experienced some erosion in the past ten years. In particular, improvements
in production processes, such as more precise casting and alternate materials
technology, have reduced the overall amount of machining required in some
applications. Also, materials such as diamond and ceramic products have offered
alternatives to carbide inserts, and, to a lesser degree, rotary cutting tools.
ELECTRONICS MARKET. Greenfield manufactures and markets circuit board
drills for the electronics market. Circuit board drills are extremely small
carbide drills which make small diameter holes in printed circuit boards. The
Company serves customers globally out of its plants located in the United
States, Germany and the United Kingdom. The Company believes that it is the
largest worldwide manufacturer of circuit board drills and routers. As printed
circuit boards are becoming increasingly complex and costly to manufacture,
quality and, therefore, drilling demands are increasing. Multi-layer circuit
board construction requires very accurate drills to establish inter-layer
connections. Growth in the use of surface mount technology to affix components
to printed circuit boards has increased demand for smaller, more precise holes
which establish connections between layers in printed circuit boards. Currently,
the Company produces drill bits as small as 1/400th of an inch in diameter, one
of the smallest commercially available drill bits in the world. In 1995, the
electronics market accounted for approximately 15% of consolidated net sales.
As the only vertically-integrated producer in the United States of carbide
blanks and circuit board drills, the Company is in a position to ensure control
over a greater number of variables which affect the quality of the product. The
Company supports this capability with a metallurgical and applications
laboratory and has expanded its technical selling capability. To maintain its
competitive position, the Company is assisting in the development of new
metallurgical and coating techniques, primarily through a consortium of
universities, which may allow for even smaller circuit board drill bits.
Demand for these products is related to growth in demand for electronic
components and electronically-controlled equipment. The circuit board drill
market is generally cyclical, but with a long-term growth rate higher than the
Company's other markets, as electronic components and controls continue to
proliferate in manufactured goods, including cellular telephones, appliances,
telecommunications equipment, computers and automobiles. Both domestic and
international markets showed improvements in 1995 over 1994.
12
<PAGE>
OILFIELD EQUIPMENT MARKET. Greenfield believes that it is the largest
independent supplier of oilfield compacts in the world. Compacts are the cutting
edges of oil well drilling bits, which are commonly referred to as "rock bits."
Oilfield equipment products must be very high in quality because the cost of
product failure can be substantial, particularly when defective products require
rock bits to be replaced in wells which are sometimes miles underground. The
Company's compacts are used both for oil and natural gas drilling. Natural gas
reserves tend to be found deeper than oil, thereby increasing the utilization of
rock bits. In 1994, the Company enhanced its position as the leading provider of
oilfield compacts when it acquired the assets of Progressive Carbide from
Dresser Industries, Inc. In connection with the acquisition, the Company
expanded its supply of compacts to Dresser Industries, Inc. Previously,
Progressive Carbide manufactured a certain portion of its oilfield compacts
while purchasing the rest from the Company.
The Company also manufactures carbide balls and seats which are components
in the check valves used in oil producing pumps. Balls and seats made from
carbide are more durable than those made from competing materials such as cobalt
alloy or stainless steel, and result in less oil well downtime. The Company
expects carbide products to become increasingly important as the population of
domestic oil wells continues to age and operators of oil wells emphasize the use
of recovery techniques which cause greater wear on balls and seats. The Company
also supplies tungsten carbide trim parts used in high pressure oil field
chokes, which are part of the blowout prevention system on oil and gas drilling
rigs, and mechanical face seals, which are used in rotating equipment such as
pumps and mixers. In 1995, the oilfield equipment market accounted for
approximately 12% of consolidated net sales.
Demand for oilfield compacts and related products has been cyclical,
tracking domestic and international drilling rig and oilfield production
activities.
MINING AND WEAR PARTS MARKET. In November 1994, Greenfield purchased
Carbidie Corporation ("Carbidie"), a leading on-demand producer of custom-made
tungsten carbide preform wear parts for use in the tool and die industry.
Carbidie's product line encompasses a wide range of die and wear components,
including stamping dies, powder metal tooling, container and impact tooling,
seal rings, extruded rods, wear parts and steel processing parts. Carbidie's
customers are toolmakers, diemakers and finishers who produce high precision
wear parts and tools. Wear parts are made of tungsten carbide and are often used
as replacement parts for other materials, such as stainless steel, which are
consumed during use and replaced. The tungsten carbide preforms made by the
Company must meet extreme strength, abrasion and wear requirements. The carbide
materials are particularly well suited for such applications, lasting
substantially longer than hardened steel. The Company expects carbide products
to become increasingly important as manufacturing and production companies
continue to look for higher wear life and lower production costs. During January
1995, the Company acquired the net assets of the American Mine Tool division of
Valenite, Inc. ("AMT"). AMT is believed to be the leading producer of tungsten
carbide-tipped mining bits for the United States coal mining industry. It is
also a leading producer of mining bit accessories and of carbide-tipped bits
used in highway road resurfacing. AMT's standard line of mining and road
resurfacing tools is designed to meet a wide variety of customer applications.
It relies on the high quality of its products and excellent customer service
along with a well trained salesforce and network of distribution centers near
its customers to support its customer base. In February 1996, the Company
acquired the Kentucky Carbide Division of Osram Sylvania Inc., the manufacturer
of the carbide inserts which are used exclusively by AMT in the production of
its products. In 1995, the mining and wear parts market accounted for
approximately 13% of consolidated net sales.
CONSUMER MARKET. Greenfield is an active supplier of consumer drill bits,
saws, hand tools and other products to the do-it-yourself market, which includes
Sears, Home Depot and other major retailers. These products are sold under
private label brands such as the Sears Craftsman(R) drill line, which the
Company has supplied for more than 66 years, and are marketed under brand names
such as the Disston(R) line. In 1995, the consumer market accounted for
approximately 4% of consolidated sales. The Company expects its sales in the
consumer market to increase appreciably as a result of the Rule acquisition,
completed in January 1996. Rule is a leading manufacturer of consumer and
industrial cutting tools, including a broad line of bandsaws, holesaws, circular
saws and reciprocating blades used in power tool applications. The product line
also includes hand saws and hand tools, certain lawn and garden products,
wood-boring bits, drills, counterbores, wire brushes, grinding wheels and stones
and other accessory items. Rule's major product lines, including Disston(R), are
sold primarily to consumers and tradesmen through major do-it-yourself hardware
suppliers,
13
<PAGE>
such as Home Depot, retail chains and buying cooperatives, among whom the
Company has not historically had significant market penetration.
Certain pro forma financial information reflecting the Rule acquisition is
attached hereto as Annex A.
MARINE MARKET. With the January 1996 acquisition of Rule, Greenfield also
acquired a line of marine products. The Company's marine products include
submersible pumps, activating switches, marine paints, coatings, sealants,
magnetic compasses, DC-powered winches and various electronic instruments and
gauges.
MARKETING AND DISTRIBUTION
Greenfield's cutting tool products are sold primarily through selected
distributors by the Company's technical sales personnel. Products are also sold
directly to private label, catalog, large industrial and other customers having
special technical or other requirements. Generally, the Company's major brands
are represented by distinct sales forces. The Company's sales force numbers
approximately 150 and sells to over 2,500 independent distributors in North
America and worldwide.
INDUSTRIAL MARKET. Greenfield's high-speed steel cutting tool brands are
sold in the industrial market through a network of selected independent
industrial distributors throughout North America. In addition, the Company has
agents to promote its products in Latin America and Asia. The Company's Putnam,
Chicago-Latrobe, GTD and Geometric brands have been marketed since 1991 on a
full-line basis to selected distributors. These distributors are supported by
the Company's factory-trained sales force and by an extensive program of product
information, sales and technical support. An internal sales force sells the
Company's full-line brands to these selected distributors and an external sales
force sells the VTD brand to a broader group of distributors that is offered
less intensive sales and technical support. Customer technical support and
education programs are also utilized to increase market awareness. The Company's
high-speed cutting tool brands which were acquired in the acquisition of CTD are
also sold in the industrial market through a network of selected independent
distributors throughout North America and through its subsidiary, Cleveland
Europe Limited, into the United Kingdom, Western Europe and certain other parts
of the world. These distributors are supported by separate sales, marketing and
technical forces. The products sold under the Cleveland Twist Drill brand name
are differentiated from the Company's other industrial brand names through an
emphasis on special applications and aerospace technology, and a larger sales
force in both Canada and Mexico. Certain of the industrial drills, taps and
dies, end mills, reamers, bandsaws and certain other products are also available
through selected national catalog distributors and independent stocking agents.
Tungsten carbide rotary cutting tools, tool holders and inserts are sold
through selected independent industrial distributors and directly to a few large
end-users. In the case of tungsten carbide tools and specialized drilling,
reaming and counterboring tools, the Company's technical sales personnel
directly assist the end-users with product selection and application of the
Company's tungsten carbide products purchased through distributors. The Company
provides assistance to end-users of carbide cutting tools through product
application assistance and education.
The Company believes that it has improved its competitive position through
marketing programs designed to increase sales to distributors. Marketing
programs, which have generally focused on the customer, now include a
compensation program for Greenfield sales employees which is based upon
productivity improvements realized and substantiated by the customer as a result
of Greenfield's products and technical service. Other marketing/customer service
programs include product information seminars, technical support sessions and
week-long training classes and meetings with applications specialists at plant
locations across the country.
ELECTRONICS MARKET. Greenfield sells its circuit board drill and router
brands through a worldwide network of distributors and the Company's technical
sales force. The Company markets its products under multiple brand names through
sales forces based in the United States, Germany, the United Kingdom and Asia.
The majority of sales are made through distributors; the balance is direct.
Approximately 80% of the Company's sales of circuit board drills and routers are
made to customers outside North America. The Company supplies circuit board
drills to Asian markets through distributors and agents. The Company believes
that it is a leading
14
<PAGE>
supplier of these drills in Hong Kong and other Asianmarkets, including the
People's Republic of China, Taiwan, Korea and Singapore. The Company's
technical sales force includes applications experts who assist customers on-site
by evaluating drill room applications and suggesting improvements. The
Company also utilizes a dedicated drilling test lab at the Company's Rogers,
Arkansas facility to improve customers' drilling results.
OILFIELD EQUIPMENT MARKET. Greenfield's sales to the oilfield equipment
market are made directly to oilfield equipment manufacturers and other
customers. The products are used by large multinational corporations throughout
the world as well as small independently-owned oilfield maintenance companies.
MINING AND WEAR PARTS MARKET. Greenfield's sales to the mining and wear
parts market are made both directly and through manufacturer's representatives.
The Company's customer base is both large and diverse, covering approximately
1,500 customers in any given year. The Company's sales are primarily in North
America with some international exposure. The Company's sales force and
independent representative network are supported through an internal technical
staff, direct marketing programs, participation in industry trade shows and
exhibitions and advertising in tool and die industry trade journals.
CONSUMER MARKET. Sales of products for the consumer market, including the
Sears' line of Craftsman(R) drill bits, are made directly by Greenfield to
purchasers of its private label tools. Sales of products for its Disston(R)
brand are primarily sold to major do-it-yourself hardware suppliers, retail
chains and buying cooperatives. The Company assists its customers through
merchandising, packaging and advertising.
MARINE MARKET. Marine products are sold to boat manufacturers and
distributors throughout the United States and the world by independent
manufacturers' representatives and direct sales personnel.
FACILITIES AND MANUFACTURING
The Company's headquarters are located in Augusta, Georgia. The Company
owns significant manufacturing facilities in Arkansas, Georgia, Massachusetts,
North Carolina, Ohio, Pennsylvania, South Carolina and Virginia, and leases
significant facilities in Illinois, Massachusetts and Vermont. The Company also
maintains, through ownership or leases, smaller manufacturing, office, warehouse
and research facilities, as well as property held for sale, in seven other
states and five other countries. In the event of a cancellation or termination
of a lease relating to any of the Company's leased properties, the Company
anticipates no difficulty in connection with leasing alternate space at
reasonable rates.
MANUFACTURING
Greenfield's principal raw materials are high-speed steel and tungsten
carbide. High-speed steel is purchased in wire and rod form from multiple
sources. Although the Company purchases most of its high-speed steel
requirements from a single supplier, the Company believes that alternative
sources are available. Tungsten carbide materials are purchased in powder form
from multiple sources, for which alternative suppliers also exist and are
currently adequate. Historically, raw material prices have not been volatile. In
1995, however, tungsten carbide materials were in short supply throughout the
world as China, which produces a majority of the world's tungsten carbide,
limited sales, resulting in higher prices. To date, Greenfield has been able to
obtain adequate supplies and price increases experienced generally have been
passed on to customers.
Tungsten carbide powders are mixed, pressed and sintered in the Company's
Rogers, Arkansas, Irwin, Pennsylvania, Placentia, California and Madisonville,
Kentucky facilities. Finished products are precision ground from steel or
carbide blanks in various of the Company's manufacturing facilities. The Company
also maintains coating capabilities in its Augusta, Georgia, Lyndonville,
Vermont and Rogers, Arkansas operations; assembly capabilities for dieheads,
rachet tap wrenches and solid tap and die wrenches in its Augusta, Georgia
operation; and brazing capabilities for carbide tipping in its Bentonville,
Arkansas, Solon, Ohio and Rockford, Illinois facilities. The Company maintains
metallurgy laboratories and drilling rooms in its Augusta, Georgia and Rogers,
Arkansas facilities for quality control, product development and customer
applications testing purposes. The majority of the Company's bandsaws, hand saws
and related hardware products are
15
<PAGE>
manufactured in its Deerfield, Massachusettsfacility. The Company's marine
products are manufactured in its Gloucester, Massachusetts facility.
Since 1986, Greenfield has invested over $98 million in capital equipment,
including capital investments of $26.8 million, $13.1 million and $8.0 million
in 1995, 1994, and 1993, respectively. The Company expects that capital
expenditures for 1996 will be approximately $25 million for ongoing capital
development projects. This investment in capital equipment has been a
significant element of the Company's cost reduction efforts. The Company has
extensive process engineering capability, and has designed and manufactured a
significant amount of its capital equipment. The Company believes that its
production facilities and equipment are in good condition and, together with
planned equipment spending, sufficient to meet planned increases in volume over
the next five years.
COMPETITION
The markets for Greenfield's products are highly competitive. The principal
competitive factors in the cutting tool industry are product quality, timely
delivery, technical service and price.
Generally, the cutting tool market is fragmented with a large number of
competitors and is characterized by excess capacity. The Company's competitors
vary in size and resources; some are larger than the Company and others are
smaller, and none competes with the Company in all product lines in the same
geographic markets. The Company's larger competitors have significantly greater
financial, marketing and technical resources. There can be no assurance that
competitors will not take actions, including introducing new products, which
could adversely affect the Company's sales and operating results.
In North America, the market for high-speed steel rotary cutting tools is
fragmented and the Company's competitors consist of smaller privately held
companies and smaller divisions of larger companies. The Company's competitors
in the North American market for tungsten carbide cutting tools, primarily
inserts and toolholders, are Kennametal, Inc., the Valenite division of
Cincinnati Milacron and Sandvik AB, a Swedish company.
Outside the United States, the largest cutting tool company worldwide is
Sandvik AB. Sandvik AB produces a full range of carbide products and is the
market leader in Europe for rotary cutting tools.
EMPLOYEES
At March 31, 1996, Greenfield had approximately 4,975 employees worldwide.
Approximately 900 employees at six of the Company's facilities are covered under
collective bargaining agreements which expire from June 1996 through March 1999.
The Company has not experienced any work stoppages in the last five years and
considers its relations with employees generally to be good.
16
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
The following table sets forth Greenfield's ratio of earnings to fixed
charges (i) on an historical basis for each of the five years in the period
ended December 31, 1995; (ii) on an historical basis for the three-month periods
ended March 31, 1995 and March 31, 1996; (iii) on a pro forma basis after giving
effect to the Original Offering and the acquisition of Rule (including the
financing thereof) for the year ended December 31, 1995; and (iv) on a pro forma
basis after giving effect to the Original Offering for the three months ended
March 31, 1996.
<TABLE>
<CAPTION>
Historical Pro Forma
--------------------------------------------------------------- -------------------------------------
Three Months Year ended Three Months
Year Ended December 31, Ended March 31, December 31, ended March 31,
----------------------------------------- ---------------------
1991(1) 1992 1993 1994 1995 1995 1996 1995 1996
---- ---- ---- ---- ---- ---- ---- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges * 1.20 3.46 10.18 6.76 6.08 4.76 4.56 5.21
<FN>
- ------------------
1 For the year ended December 31, 1991, earnings as defined below were inadequate to cover fixed charges. The
coverage deficiency was $11,833,000.
</FN>
</TABLE>
For purposes of computing the historical ratio of earnings to fixed
charges, earnings include pre-tax earnings before an extraordinary charge,
interest expense and the interest portion of rent expense, which the Company
estimates is equivalent to one-third of total rent expense. Fixed charges
include interest expense and the interest portion of rent expense. For purposes
of computing the pro forma ratio of earnings to fixed charges, earnings include
pre-tax earnings, interest expense, dividends on the Convertible Preferred
Securities and the interest portion of rent expense, which the Company estimates
is equivalent to one-third of total rent expense. Fixed charges include
interest expense, dividends on the Convertible Preferred Securities and the
interest portion of rent expense.
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<PAGE>
CAPITALIZATION
(UNAUDITED)
The following table sets forth the capitalization of Greenfield and its
consolidated subsidiaries as of March 31, 1996, on an historical basis and as
adjusted to give effect to the Original Offering of the Convertible Preferred
Securities and the application of the estimated gross proceeds from such sale to
repay indebtedness of the Company. The table should be read in conjunction with
the consolidated financial statements and notes thereto and other financial data
of Greenfield incorporated herein by reference.
<TABLE>
<CAPTION>
March 31, 1996
--------------------------------------
Actual As Adjusted1
------ ------------
Indebtedness:
<S> <C> <C>
Current maturities of long-term indebtedness ........... $ 697 $ 697
Long-term indebtedness (excluding current
maturities)
Bank loans ........................................... 147,884 36,884
Senior notes2 ........................................ 75,000 75,000
Other long-term indebtedness ......................... 10,991 10,991
------- -------
Total long-term indebtedness ....................... 233,875 122,875
------- -------
Total indebtedness ............................... 234,572 123,572
Company-obligated mandatorily redeemable
convertible preferred securities of Greenfield
Capital Trust3 ....................................... --- 115,000
Preferred stock, common stock and other
stockholders' equity:
Preferred stock; $0.01 par value; 1,500,000
shares authorized; none outstanding .................. --- ---
Common stock; $0.01 par value; 100,000,000
shares authorized; 16,281,377 shares issued
and outstanding ...................................... 163 163
Additional paid-in capital and other ................... 112,105 108,105
Retained earnings ...................................... 76,932 76,932
Cumulative translation adjustment ...................... (1,694) (1,694)
------- -------
Total common stock and other
stockholders' equity ......................... 187,506 183,506
------- -------
Total capitalization ........................... $422,078 $422,078
======== ========
Debt to capitalization ratio4........................... 55.6% 29.0%
<FN>
- ------------------
1 Assumes the sale of the Convertible Preferred Securities and the application of the estimated net
proceeds therefrom to repay indebtedness of the Company.
2 $75 million unsecured senior notes bearing interest payable semi-annually at 7.31%, are due in
2005 with equal annual payments beginning in 1999.
3 As described herein, the sole assets of the Trust will be the 6% Convertible Junior Subordinated
Debentures due March 31, 2016 with a principal amount of $118,556,700, and upon redemption of
such debt, the Convertible Preferred Securities will be mandatorily redeemable.
4 Debt to capitalization ratio equals total indebtedness divided by total capitalization.
</FN>
</TABLE>
18
<PAGE>
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a subsidiary
of Greenfield and, accordingly, the accounts of the Trust will be included in
the consolidated financial statements of Greenfield. The Convertible Preferred
Securities will be presented as a separate line item in the consolidated balance
sheet of Greenfield entitled "Company-obligated mandatorily redeemable
convertible preferred securities of Greenfield Capital Trust", and appropriate
disclosures about the Convertible Preferred Securities, the Guarantee and the
Convertible Junior Subordinated Debentures will be included in the notes to the
Company's consolidated financial statements. For financial reporting purposes,
Greenfield will record distributions payable on the Convertible Preferred
Securities as a financing charge to earnings in Greenfield's consolidated
statement of operations.
USE OF PROCEEDS
The Selling Holders will receive all of the proceeds from the sale of the
Offered Securities. Neither Greenfield nor the Trust will receive any proceeds
from the sale of the Offered Securities.
DESCRIPTION OF THE CONVERTIBLE PREFERRED SECURITIES
THE FOLLOWING SUMMARY OF CERTAIN MATERIAL TERMS AND PROVISIONS OF THE
CONVERTIBLE PREFERRED SECURITIES DOES NOT PURPORT TO BE COMPLETE AND IS SUBJECT
TO, AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO, THE DECLARATION. THE
CONVERTIBLE PREFERRED SECURITIES WERE ISSUED PURSUANT TO THE TERMS OF THE
DECLARATION. THE DECLARATION INCORPORATES BY REFERENCE TERMS OF THE TRUST
INDENTURE ACT AND WILL BE QUALIFIED THEREUNDER. THE BANK OF NEW YORK, AS
TRUSTEE, ACTS AS INDENTURE TRUSTEE FOR THE DECLARATION FOR PURPOSES OF
COMPLIANCE WITH THE TRUST INDENTURE ACT. CAPITALIZED TERMS NOT OTHERWISE DEFINED
HEREIN HAVE THE MEANINGS ASSIGNED TO THEM IN THE DECLARATION.
GENERAL
The Convertible Preferred Securities were issued in fully registered form
without interest coupons.
The Convertible Preferred Securities represent undivided beneficial
ownership interests in the assets of the Issuer and entitle the holders thereof
to a preference in certain circumstances with respect to distributions and
amounts payable on redemption or liquidation over the Common Securities, as well
as other benefits as described in the Declaration.
All of the Common Securities are owned, directly or indirectly, by
Greenfield. The Common Securities rank PARI PASSU, and payments are made thereon
PRO RATA, with the Convertible Preferred Securities except as described under
"--Subordination of Common Securities". The Convertible Junior Subordinated
Debentures are owned by the Trustee and held for the benefit of the holders of
the Trust Securities. The Guarantee is a full and unconditional guarantee with
respect to the Convertible Preferred Securities, but does not guarantee payment
of distributions or amounts payable on redemption or liquidation of the
Convertible Preferred Securities when the Issuer does not have funds available
to make such payments.
Effectively, Greenfield has, through the Guarantee, the Convertible Junior
Subordinated Debentures, the Indenture and the Declaration, taken together,
fully, irrevocably and unconditionally guaranteed all of the Issuer's
obligations under the Convertible Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all of the other
documents constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and unconditional
guarantee of the Issuer's obligations under the Convertible Preferred
Securities. See "Effect of Obligations Under the Convertible Junior Subordinated
Debentures and the Guarantee".
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<PAGE>
DISTRIBUTIONS
The distributions payable on each Convertible Preferred Security are fixed
at a rate per annum of 6% of the stated liquidation preference of $50 per
Convertible Preferred Security. Deferred distributions (and interest thereon)
will accrue interest (compounded quarterly) at the same rate. The term
"distributions" as used herein includes any such distributions payable unless
otherwise stated. The amount of distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months.
Distributions on the Convertible Preferred Securities are cumulative,
accruing from the Original Offering Date and are payable quarterly in arrears on
each March 31, June 30, September 30 and December 31, commencing June 30, 1996,
when, as and if available. Greenfield has the right under the Indenture to defer
interest payments from time to time on the Convertible Junior Subordinated
Debentures for successive periods not exceeding 20 consecutive quarters for each
such period, and, as a consequence, quarterly distributions on the Convertible
Preferred Securities would be deferred by the Issuer (but would continue to
accrue with interest) during any such Deferral Period. In the event that
Greenfield exercises this right, during such period Greenfield (i) shall not
declare or pay dividends on, make distributions with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to, any of its
capital stock (other than stock dividends paid by Greenfield which consist of
stock of the same class as that on which the dividend is being paid and other
than redemptions or purchases of any Rights and the declaration of a dividend of
such Rights in the future), (ii) shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by Greenfield that rank PARI PASSU with or junior to the
Convertible Junior Subordinated Debentures, and (iii) shall not make any
guarantee payments with respect to the foregoing (other than pursuant to the
Guarantee). Prior to the termination of any Deferral Period, Greenfield may
further extend such Deferral Period; PROVIDED that such Deferral Period together
with all previous and further deferrals thereof may not exceed 20 consecutive
quarters. Upon the termination of any Deferral Period, Greenfield is required to
pay all amounts then due and, upon such payment, Greenfield may select a new
Deferral Period, subject to the above requirements. In no event shall any
Deferral Period extend beyond the maturity of the Convertible Junior
Subordinated Debentures. See "Description of the Convertible Junior Subordinated
Debentures--Interest" and "--Option to Extend Interest Payment Period".
Distributions on the Convertible Preferred Securities must be paid
quarterly on the dates payable to the extent of funds of the Trust available for
the payment of such distributions. Amounts available to the Trust for
distribution to the holders of the Convertible Preferred Securities will be
limited to payments under the Convertible Junior Subordinated Debentures. See
"Description of the Convertible Junior Subordinated Debentures". The payment of
distributions, to the extent of funds of the Trust available therefor, is
guaranteed by Greenfield on a limited basis, as set forth under "Description of
the Guarantee".
Distributions on the Convertible Preferred Securities are payable to the
holders thereof as they appear on the books and records of the Issuer on the
relevant record dates, which will be one day prior to the relevant payment
dates. Subject to any applicable laws and regulations and the provisions of the
Declaration, each such payment will be made as described under
"--Book-Entry-Only Issuance--The Depository Trust Company" below. In the event
that any date on which distributions are payable on the Convertible Preferred
Securities is not a Business Day, payment of the distribution payable on such
date will be made on the next succeeding day which is a Business Day (without
any distribution or other payment in respect of any such delay) except that, if
such Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date. A "Business Day" shall mean any day other
than a day on which banking institutions in The City of New York are authorized
or required by law to close.
CONVERSION RIGHTS
GENERAL. Convertible Preferred Securities are convertible at any time
(except in the case of Convertible Preferred Securities called for redemption
which shall be convertible at any time prior to the close of business on the
Business Day prior to the Redemption Date), at the option of the holder thereof
and in the manner described below, into shares of Greenfield Common Stock at an
initial conversion rate of 1.2121 shares of Greenfield Common Stock for each
Convertible Preferred Security (equivalent to a conversion price of $41.25 per
share of Greenfield Common Stock), subject to adjustment as described under
"--Conversion Price
20
<PAGE>
Adjustments" below. The Issuer has agreed in the Declaration not to convert
Convertible Junior Subordinated Debentures held by it exceptpursuant to a
notice of conversion delivered to the Conversion Agent by a holder of
Convertible Preferred Securities. A holder of a Convertible Preferred
Security wishing to exercise its conversion right shall deliver an irrevocable
conversion notice, together, if the Convertible Preferred Security is a
Certificated Security (as defined herein), with such Certificated Security, to
the Conversion Agent which shall, on behalf of such holder, exchange such
Convertible Preferred Security for a portion of the Convertible Junior
Subordinated Debentures and immediately convert such Convertible Junior
Subordinated Debentures into Greenfield Common Stock. Holders may obtain copies
of the required form of the conversion notice from the Conversion Agent.
Whenever Greenfield issues shares of Greenfield Common Stock upon
conversion of Convertible Preferred Securities, Greenfield will issue, together
with each such share of Greenfield Common Stock, one right entitling the holder
thereof, under certain circumstances, to purchase one one-hundredth of a share
of Greenfield's Series A Preferred Stock ("Series A Preferred Stock") pursuant
to, and upon the terms indicated in, the Restated Rights Agreement dated as of
February 6, 1996 (the "Rights Agreement"), between Greenfield and First Chicago
Trust Company of New York, as Rights Agent, or any similar rights issued to
holders of Greenfield Common Stock in addition thereto or in replacement thereof
(such rights, together with any additional or replacement rights, being
collectively referred to as the "Rights"), whether or not such Rights shall be
exercisable at such time, but only if such Rights are issued and outstanding and
held by holders of Greenfield Common Stock (or are evidenced by outstanding
share certificates representing Greenfield Common Stock) at such time and have
not expired or been redeemed. As distributed, the Rights trade together with
Greenfield Common Stock. The Rights may be exercised or traded separately only
after the earlier to occur of: (i) the tenth business day after the commencement
of a tender or exchange offer by a person or group other than Greenfield or any
subsidiary or employee benefit plan of Greenfield or any subsidiary if, upon
consummation of the offer, such person or group would acquire beneficial
ownership of 15% or more of the outstanding Greenfield Common Stock or (ii) the
tenth day after the first public announcement that an Acquiring Person (as such
term is defined in the Rights Agreement) has acquired the beneficial ownership
of 15% or more of the shares of Greenfield Common Stock outstanding. The Rights
will expire on February 20, 2006, unless earlier redeemed by Greenfield as
provided in the Rights Agreement. Until a Right is exercised, the holder thereof
will have no additional rights as a shareholder of Greenfield, including,
without limitation, the right to vote or receive dividends on shares of
Greenfield Common Stock subject to the Rights. The foregoing description of the
Rights is qualified in its entirety by reference to the Rights Agreement, which
is an exhibit to Greenfield's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996, incorporated by reference herein.
Holders of Convertible Preferred Securities at the close of business on a
distribution record date will be entitled to receive the distribution payable on
such Convertible Preferred Securities on the corresponding distribution payment
date notwithstanding the conversion of such Convertible Preferred Securities
following such distribution record date but prior to such distribution payment
date. Except as provided in the immediately preceding sentence, neither the
Issuer nor Greenfield will make, or be required to make, any payment, allowance
or adjustment for accumulated and unpaid distributions, whether or not in
arrears, on converted Convertible Preferred Securities. Greenfield will make no
payment or allowance for distributions on the shares of Greenfield Common Stock
issued upon such conversion, except to the extent that such shares of Greenfield
Common Stock are held of record on the record date for any such distributions.
Each conversion will be deemed to have been effected immediately prior to the
close of business on the day on which the related conversion notice was received
by the Issuer.
No fractional shares of Greenfield Common Stock will be issued as a result
of conversion, but in lieu thereof such fractional interest will be paid by
Greenfield in cash.
CONVERSION PRICE ADJUSTMENTS--GENERAL. The conversion price will be subject
to adjustment in certain events including, without duplication: (i) the payment
of dividends (and other distributions) payable in Greenfield Common Stock on any
class of capital stock of Greenfield; (ii) the issuance to all holders of
Greenfield Common Stock of rights or warrants, or the occurrence of an event
under the Company's Rights Agreement, entitling holders of such rights or
warrants to subscribe for or purchase Greenfield Common Stock at less than the
then current market price; (iii) subdivisions and combinations of Greenfield
Common Stock; (iv) the payment of dividends (and other distributions) to all
holders of Greenfield Common Stock consisting
21
<PAGE>
of evidences of indebtedness of Greenfield, securities or capital stock, cash or
assets (including securities, but excluding those rights, warrants, dividends
and distributions referred to in clauses (i) and (ii) and dividends and
distributions paid exclusively in cash); (v) the payment of dividends (and other
distributions) on Greenfield CommonStock paid exclusively in cash, excluding
(A) cash dividends that do not exceed
the per share amount of the immediately preceding regular cash dividend (as
adjusted to reflect any of the events referred to in clauses (i) through (vi) of
this sentence) and (B) cash dividends if the annualized per share amount thereof
does not exceed 15% of the current market price of Greenfield Common Stock as of
the trading day immediately preceding the date of declaration of such dividend;
and (vi) payment to holders of Greenfield Common Stock in respect of a tender or
exchange offer (other than an odd-lot offer) by Greenfield or any subsidiary of
Greenfield for Greenfield Common Stock at a price in excess of 110% of the
current market price of Greenfield Common Stock as of the trading day next
succeeding the last date tenders or exchanges may be made pursuant to such
tender or exchange offer.
Greenfield may, at its option, make such reductions in the conversion price
as the Greenfield Board of Directors deems advisable to avoid or diminish any
income tax to holders of Greenfield Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes. See "United States Taxation--Adjustment of
Conversion Price".
No adjustment of the conversion price will be made upon the issuance of any
shares of Greenfield Common Stock pursuant to any present or future plan
providing for the reinvestment of dividends or interest payable on securities of
Greenfield and the investment of additional optional amounts in shares of
Greenfield Common Stock under any such plan or the issuance of any shares of
Greenfield Common Stock or options or rights to purchase such shares pursuant to
any present or future employee, director or consultant benefit plan or program
of Greenfield or pursuant to any option, warrant, right, or exercisable,
exchangeable or convertible security outstanding as of the date the Convertible
Preferred Securities were first issued. There shall also be no adjustment of the
conversion price in case of the issuance of any Greenfield Common Stock (or
securities convertible into or exchangeable for Greenfield Common Stock), except
as specifically described above. If any action would require adjustment of the
conversion price pursuant to more than one of the anti-dilution provisions, only
one adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value to holders of the Convertible
Preferred Securities. No adjustment in the conversion price will be required
unless such adjustment would require an increase or decrease of at least 1% of
the conversion price, but any adjustment that would otherwise be required to be
made shall be carried forward and taken into account in any subsequent
adjustment.
CONVERSION PRICE ADJUSTMENTS--MERGER, CONSOLIDATION OR SALE OF ASSETS OF
GREENFIELD. In the event that Greenfield is a party to any transaction
(including, without limitation, a merger, consolidation, sale of all or
substantially all of the assets of Greenfield, recapitalization or
reclassification of Greenfield Common Stock or any compulsory share exchange
(each of the foregoing being referred to as a "Greenfield Transaction")), in
each case, as a result of which shares of Greenfield Common Stock shall be
converted into the right (i) in the case of any Greenfield Transaction other
than a Greenfield Transaction involving a Common Stock Fundamental Change (as
defined herein), to receive securities, cash or other property, each Convertible
Preferred Security shall thereafter be convertible into the kind and amount of
securities, cash and other property receivable upon the consummation of such
Greenfield Transaction by a holder of that number of shares of Greenfield Common
Stock into which a Convertible Preferred Security was convertible immediately
prior to such Greenfield Transaction, with such adjustments as provided below,
or (ii) in the case of a Greenfield Transaction involving a Common Stock
Fundamental Change, to receive common stock of the kind received by holders of
Greenfield Common Stock (but in each case after giving effect to any adjustment
discussed below relating to a Fundamental Change if such Greenfield Transaction
constitutes a Fundamental Change). The holders of Convertible Preferred
Securities will have no voting rights with respect to any Greenfield Transaction
described in this section.
If any Fundamental Change (as defined herein) occurs, the conversion price
in effect will be adjusted immediately after such Fundamental Change as
described below. In addition, in the event of a Common Stock Fundamental Change,
each Convertible Preferred Security shall be convertible solely into common
stock of the kind received by holders of Greenfield Common Stock as a result of
such Common Stock Fundamental Change.
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<PAGE>
The conversion price in the case of any Greenfield Transaction involving a
Fundamental Change will be adjusted immediately after such Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change (as defined herein),
the conversion price of the Convertible Preferred Securities will thereupon
become the lower of (A) the conversion price in effect immediately prior to
such Non-Stock Fundamental Change, but after giving effect to any other
prior adjustments, and (B) the result obtained by multiplying the greater
of the Applicable Price (as defined herein) or the then applicable
Reference Market Price (as defined herein) by a fraction of which the
numerator will be $50 and the denominator will be the then current
Redemption Price (as defined herein) or, prior to April 15, 1999, an amount
per Convertible Preferred Security determined by Greenfield in its sole
discretion, after consultation with an investment banking firm, to be the
equivalent of the hypothetical redemption price that would have been
applicable if the Convertible Preferred Securities had been redeemable
during such period; and
(ii) in the case of a Common Stock Fundamental Change, the conversion
price of the Convertible Preferred Securities in effect immediately prior
to such Common Stock Fundamental Change, but after giving effect to any
other prior adjustments, will thereupon be adjusted by multiplying such
conversion price by a fraction of which the numerator will be the Purchaser
Stock Price (as defined herein) and the denominator will be the Applicable
Price; PROVIDED, HOWEVER, that in the event of a Common Stock Fundamental
Change in which (A) 100% of the value of the consideration received by a
holder of Greenfield Common Stock is common stock of the successor,
acquiror or other third party (and cash, if any, is paid only with respect
to any fractional interests in such common stock resulting from such Common
Stock Fundamental Change) and (B) all of the Greenfield Common Stock will
have been exchanged for, converted into, or acquired for common stock (and
cash with respect to fractional interests) of the successor, acquiror or
other third party, the conversion price of the Convertible Preferred
Securities in effect immediately prior to such Common Stock Fundamental
Change will thereupon be adjusted by multiplying such conversion price by a
fraction of which the numerator will be one and the denominator will be the
number of shares of common stock of the successor, acquiror, or other third
party received by a holder of one share of Greenfield Common Stock as a
result of such Common Stock Fundamental Change.
In the absence of the Fundamental Change provisions, in the case of a
Greenfield Transaction each Convertible Preferred Security would become
convertible into the securities, cash, or property receivable by a holder of the
number of shares of Greenfield Common Stock into which such Convertible
Preferred Security was convertible immediately prior to such Greenfield
Transaction. Thus, in the absence of the Fundamental Change provisions, a
Greenfield Transaction could substantially lessen or eliminate the value of the
conversion privilege associated with the Convertible Preferred Securities. For
example, if Greenfield were acquired in a cash merger, each Convertible
Preferred Security would become convertible solely into cash and would no longer
be convertible into securities whose value would vary depending on the future
prospects of Greenfield and other factors.
The foregoing conversion price adjustments are designed, in "Fundamental
Change" transactions where all or substantially all the Greenfield Common Stock
is converted into securities, cash, or property and not more than 50% of the
value received by the holders of Greenfield Common Stock consists of stock
listed or admitted for listing subject to notice of issuance on a national
securities exchange or quoted on the NNM (a "Non-Stock Fundamental Change", as
defined herein), to increase the securities, cash, or property into which each
Convertible Preferred Security is convertible.
In a Non-Stock Fundamental Change transaction in which the initial value
received per share of Greenfield Common Stock (measured as described in the
definition of Applicable Price below) is lower than the then applicable
conversion price of a Convertible Preferred Security but greater than or equal
to the "Reference Market Price" (initially $22.17 but subject to adjustment in
certain events as described below), the conversion price will be adjusted as
described above with the effect that each Convertible Preferred Security will be
convertible into securities, cash or property of the same type received by the
holders of Greenfield Common Stock in such transaction with the conversion price
adjusted as though such initial value had been the Applicable Price.
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In a Non-Stock Fundamental Change transaction in which the initial value
received per share of Greenfield Common Stock (measured as described in the
definition of Applicable Price below) is lower than both the Applicable
Conversion Price of a Convertible Preferred Security and the Reference Market
Price, the conversion price will be adjusted as described above but calculated
as though such initial value had been the Reference Market Price.
In a Fundamental Change transaction in which all or substantially all of
the Greenfield Common Stock is converted into securities, cash, or property and
more than 50% of the value received by the holders of Greenfield Common Stock
consists of listed or NNM traded common stock (a "Common Stock Fundamental
Change", as defined herein), the foregoing adjustments are designed to provide
in effect that (a) where Greenfield Common Stock is converted partly into such
common stock and partly into other securities, cash or property, each
Convertible Preferred Security will be convertible solely into a number of
shares of such common stock determined so that the initial value of such shares
(measured as described in the definition of "Purchaser Stock Price" below)
equals the value of the shares of Greenfield Common Stock into which such
Convertible Preferred Security was convertible immediately before the
transaction (measured as aforesaid) and (b) where Greenfield Common Stock is
converted solely into such common stock, each Convertible Preferred Security
will be convertible into the same number of shares of such common stock
receivable by a holder of the number of shares of Greenfield Common Stock into
which such Convertible Preferred Security was convertible immediately before
such transaction.
The term "Applicable Price" means (i) in the case of a Non-Stock
Fundamental Change in which the holder of the Greenfield Common Stock receives
only cash, the amount of cash received by the holder of one share of Greenfield
Common Stock and (ii) in the event of any other Non-Stock Fundamental Change or
any Common Stock Fundamental Change, the average of the Closing Prices (as
defined herein) for the Greenfield Common Stock during the ten trading days
prior to and including the record date for the determination of the holders of
Greenfield Common Stock entitled to receive such securities, cash, or other
property in connection with such Non-Stock Fundamental Change or Common Stock
Fundamental Change or, if there is no such record date, the date upon which the
holders of the Greenfield Common Stock shall have the right to receive such
securities, cash, or other property (such record date or distribution date being
hereinafter referred as the "Entitlement Date"), in each case as adjusted in
good faith by Greenfield to appropriately reflect any of the events referred to
in clauses (i) through (vi) of the first paragraph under "--Conversion Price
Adjustments--General".
The term "Closing Price" means on any day the last reported sale price on
such day or in case no sale takes place on such day, the average of the reported
closing bid and asked prices in each case on the NNM or, if the stock is not
quoted on such system, on the principal national securities exchange on which
such stock is listed or admitted to trading or if not listed or admitted to
trading on any national securities exchange, the average of the closing bid and
asked prices as furnished by any independent registered broker-dealer firm,
selected by Greenfield for that purpose.
The term "Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of Greenfield) of the consideration received by holders of Greenfield
Common Stock consists of common stock that for each of the ten consecutive
trading days prior to the Entitlement Date has been admitted for listing or
admitted for listing subject to notice of issuance on a national securities
exchange or quoted on the NNM; PROVIDED, HOWEVER, that a Fundamental Change
shall not be a Common Stock Fundamental Change unless Greenfield continues to
exist after the occurrence of such Fundamental Change and the outstanding
Convertible Preferred Securities continue to exist as outstanding Convertible
Preferred Securities.
The term "Fundamental Change" means the occurrence of any transaction or
event in connection with a plan pursuant to which all or substantially all of
the Greenfield Common Stock shall be exchanged for, converted into, acquired for
or constitute solely the right to receive securities, cash or other property
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); PROVIDED that, in the case of a plan involving more than one such
transaction or event, for purposes of adjustment of the conversion price, such
Fundamental Change shall be deemed to have occurred when substantially all of
the Greenfield Common Stock shall be exchanged for, converted into, or acquired
for or constitute solely the right to receive securities, cash, or other
property, but the adjustment
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shall be based upon the highest weighted average
per share consideration that a holder of Greenfield Common Stock could have
received in such transaction or event as a result of which more than 50% of the
Greenfield Common Stock shall have been exchanged for, converted into, or
acquired for or constitute solely the right to receive securities, cash or other
property.
The term "Non-Stock Fundamental Change" means any Fundamental Change other
than a Common Stock Fundamental Change.
The term "Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the Closing Prices for the common stock
received in such Common Stock Fundamental Change for the ten consecutive trading
days prior to and including the Entitlement Date, as adjusted in good faith by
Greenfield to appropriately reflect any of the events referred to in clauses (i)
through (vi) of the first paragraph under "--Conversion Price
Adjustments--General".
The term "Reference Market Price" initially means $22.17 (which is an
amount equal to 662/3% of the last reported sale price for the Greenfield Common
Stock on the NNM on April 18, 1996) and, in the event of any adjustment to the
conversion price other than as a result of a Non-Stock Fundamental Change, the
Reference Market Price shall also be adjusted so that the ratio of the Reference
Market Price to the conversion price after giving effect to any such adjustment
shall always be the same as the ratio of $22.17 to the initial conversion price
of the Convertible Preferred Securities.
OPTIONAL REDEMPTION
Greenfield is permitted to redeem the Convertible Junior Subordinated
Debentures as described herein under "Description of the Convertible Junior
Subordinated Debentures--Optional Redemption", in whole or in part, from time to
time, after April 15, 1999, upon not less than 30 nor more than 60 days' notice.
See "Description of the Convertible Junior Subordinated Debentures--Optional
Redemption". Upon any redemption in whole or in part of the Convertible Junior
Subordinated Debentures at the option of Greenfield, the Issuer will, to the
extent of the proceeds of such redemption, redeem Convertible Preferred
Securities and Common Securities at the Redemption Price. In the event that
fewer than all the outstanding Convertible Preferred Securities are to be so
redeemed, the Convertible Preferred Securities to be redeemed will be selected
as described under "--Book-Entry-Only Issuance--The Depository Trust Company"
below.
In the event of any redemption in part, the Trust shall not be required to
(i) issue, register the transfer of or exchange any Convertible Preferred
Security during a period beginning at the opening of business 15 days before any
selection for redemption of Convertible Preferred Securities and ending at the
close of business on the earliest date in which the relevant notice of
redemption is deemed to have been given to all holders of Convertible Preferred
Securities to be so redeemed and (ii) register the transfer of or exchange any
Convertible Preferred Securities so selected for redemption, in whole or in
part, except for the unredeemed portion of any Convertible Preferred Securities
being redeemed in part.
TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION OR DISTRIBUTION
If a Tax Event (as defined herein) shall occur and be continuing,
Greenfield shall cause the GFII Trustees to liquidate the Issuer and cause
Convertible Junior Subordinated Debentures to be distributed to the holders of
the Convertible Preferred Securities in liquidation of the Issuer within 90 days
following the occurrence of such Tax Event; PROVIDED, HOWEVER, that such
liquidation and distribution shall be conditioned on (i) the GFII Trustees'
receipt of an opinion of nationally recognized independent tax counsel
(reasonably acceptable to the GFII Trustees) experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published revenue rulings of
the Internal Revenue Service, to the effect that the holders of the Convertible
Preferred Securities will not recognize any income, gain or loss for United
States Federal income tax purposes as a result of such liquidation and
distribution of Convertible Junior Subordinated Debentures, and (ii) Greenfield
being unable to avoid such Tax Event within such 90-day period by taking some
ministerial action or pursuing some other reasonable measure that, in the sole
judgment of Greenfield, will have no adverse effect on the Issuer, Greenfield or
the holders of the Convertible Preferred Securities and will involve no material
cost. Furthermore, if (i) Greenfield has received an opinion (a "Redemption Tax
Opinion") of nationally recognized independent tax counsel (reasonably
acceptable to the GFII Trustees) experienced in
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such matters that, as a result
of a Tax Event, there is more than an insubstantial risk that Greenfield would
be precluded from deducting the interest on the Convertible Junior Subordinated
Debentures for United States Federal income tax purposes, even after the
Convertible Junior Subordinated Debentures were distributed to the holders of
the Convertible Preferred Securities upon liquidation of the Issuer as described
above, or (ii) the GFII Trustees shall have been informed by such tax counsel
that it cannot deliver a No Recognition Opinion, Greenfield shall have the
right, upon not less than 30 nor more than 60 days' notice and within 90 days
following the occurrence of the Tax Event, to redeem the Convertible Junior
Subordinated Debentures, in whole (but not in part) for cash, at par plus
accrued and unpaid interest and, following such redemption, all the Convertible
Preferred Securities will be redeemed by the Issuer at the liquidation
preference of $50 per Convertible Preferred Security plus accrued and unpaid
distributions; PROVIDED, HOWEVER, that, if at the time there is available to
Greenfield or the Issuer the opportunity to eliminate, within such 90-day
period, the Tax Event by taking some ministerial action or pursuing some other
reasonable measure that, in the sole judgment of Greenfield, will have no
adverse effect on the Issuer, Greenfield or the holders of the Convertible
Preferred Securities and will involve no material cost, the Issuer or Greenfield
will pursue such measure in lieu of redemption. See "--Mandatory Redemption". In
lieu of the foregoing options, Greenfield will also have the option of causing
the Convertible Preferred Securities to remain outstanding and pay Additional
Interest (as defined herein) on the Convertible Junior Subordinated Debentures.
See "Description of the Convertible Junior Subordinated Debentures--Additional
Interest".
"Tax Event" means that Greenfield shall have obtained an opinion of
nationally recognized independent tax counsel (reasonably acceptable to the GFII
Trustees) experienced in such matters to the effect that, as a result of (a) any
amendment to or change (including any announced prospective change (which shall
not include a proposed change), provided that a Tax Event shall not occur more
than 90 days before the effective date of any such prospective change) in the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after the Original Offering Date), which
amendment or change is effective or which interpretation or pronouncement is
announced on or after the Original Offering Date, there is more than an
insubstantial risk that (i) the Issuer is or will be subject to United States
Federal income tax with respect to interest received on the Convertible Junior
Subordinated Debentures, (ii) interest paid in cash to the Issuer on the
Convertible Junior Subordinated Debentures is not or will not be deductible for
United States Federal income tax purposes or (iii) the Issuer is or will be
subject to more than a DE MINIMIS amount of other taxes, duties, assessments or
other governmental charges.
If an Investment Company Event (as hereinafter defined) shall occur and be
continuing, Greenfield shall cause the GFII Trustees to liquidate the Issuer and
cause the Convertible Junior Subordinated Debentures to be distributed to the
holders of the Convertible Preferred Securities in liquidation of the Issuer
within 90 days following the occurrence of such Investment Company Event.
The distribution by Greenfield of the Convertible Junior Subordinated
Debentures will effectively result in the cancellation of the Convertible
Preferred Securities.
"Investment Company Event" means the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law") to the effect that the Issuer is or will
be considered an "investment company" which is required to be registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), which Change in
1940 Act Law becomes effective on or after the Orignial Offering Date.
A "Special Event" means either an Investment Company Event or a Tax Event.
After the date fixed for any distribution of Convertible Junior
Subordinated Debentures (i) the Convertible Preferred Securities will no longer
be deemed to be outstanding, (ii) The Depository Trust Company ("DTC") or its
nominee, as the record holder of the Global Certificates, will receive a
registered global certificate or certificates representing the Convertible
Junior Subordinated Debentures to be delivered upon such distribution and (iii)
any certificates representing Convertible Preferred Securities not held by DTC
or its
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nominee will be deemed to represent Convertible Junior Subordinated
Debentures having a principal amount equal to the aggregate of the stated
liquidation preference of such Convertible Preferred Securities, with accrued
and unpaid interest equal to the amount of accrued and unpaid distributions on
such Convertible Preferred Securities, until such certificates are presented to
Greenfield or its agent for transfer or reissuance.
There can be no assurance as to the market prices for the Convertible
Preferred Securities or the Convertible Junior Subordinated Debentures that may
be distributed in exchange for Convertible Preferred Securities if a dissolution
and liquidation of an Issuer were to occur. Accordingly, the Convertible
Preferred Securities that an investor may purchase, or the Convertible Junior
Subordinated Debentures that the investor may receive on dissolution and
liquidation of an Issuer, may trade at a discount to the price that the investor
paid to purchase the Convertible Preferred Securities offered hereby.
MANDATORY REDEMPTION
The Convertible Junior Subordinated Debentures will mature on March 31,
2016, and may be redeemed, in whole or in part, at any time after April 15, 1999
or at any time in certain circumstances upon the occurrence of a Special Event.
Upon the repayment or payment of the Convertible Junior Subordinated Debentures,
whether at maturity or upon redemption or otherwise, the proceeds from such
repayment or redemption shall simultaneously be applied to redeem Trust
Securities having an aggregate liquidation amount equal to the Convertible
Junior Subordinated Debentures so repaid or redeemed at the applicable
redemption price together with accrued and unpaid distributions through the date
of redemption; PROVIDED that holders of the Trust Securities shall be given not
less than 30 nor more than 60 days' notice of such redemption. See "--Tax Event
or Investment Company Event Redemption or Distribution" and "Description of the
Convertible Junior Subordinated Debentures--General" and "Optional Redemption".
Upon the repayment of the Convertible Junior Subordinated Debentures at maturity
or upon any acceleration, earlier redemption or otherwise, the proceeds from
such repayment will be applied to redeem the Convertible Preferred Securities
and Common Securities, in whole, upon not less than 30 nor more than 60 days'
notice.
REDEMPTION PROCEDURES
The Convertible Preferred Securities will not be redeemed unless all
accrued and unpaid distributions have been paid on all Convertible Preferred
Securities for all quarterly distribution periods terminating on or prior to the
date of redemption.
If the Issuer gives a notice of redemption in respect of Convertible
Preferred Securities (which notice will be irrevocable), then, by 12:00 noon,
New York time, on the redemption date, the Issuer will irrevocably deposit with
DTC funds sufficient to pay the amount payable on redemption and will give DTC
irrevocable instructions and authority to pay such amount in respect of
Convertible Preferred Securities represented by the Global Certificates and will
irrevocably deposit with the paying agent for the Convertible Preferred
Securities funds sufficient to pay such amount in respect of any Certificated
Securities and will give such paying agent irrevocable instructions and
authority to pay such amount to the holders of Certificated Securities upon
surrender of their certificates. Notwithstanding the foregoing, distributions
payable on or prior to the redemption date for any Convertible Preferred
Securities called for redemption shall be payable to the holders of such
Convertible Preferred Securities on the relevant record dates for the related
distribution dates. If notice of redemption shall have been given and funds are
deposited as required, then upon the date of such deposit, all rights of holders
of such Convertible Preferred Securities so called for redemption will cease,
except the right of the holders of such Convertible Preferred Securities to
receive the redemption price, but without interest on such redemption price. In
the event that any date fixed for redemption of Convertible Preferred Securities
is not a Business Day, then payment of the amount payable on such date will be
made on the next succeeding day which is a Business Day (without any interest or
other payment in respect of any such delay), except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the redemption price in
respect of Convertible Preferred Securities is improperly withheld or refused
and not paid either by the Issuer or by Greenfield pursuant to the Guarantee
described under "Description of the Guarantee", distributions on such
Convertible Preferred Securities will continue to accrue at the then applicable
rate, from the original redemption date to the date of payment, in which case
the actual payment date will be considered the date
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fixed for redemption for purposes of calculating the amount payable upon
redemption (other than for purposes of calculating any premium).
Subject to the foregoing and applicable law (including, without limitation,
United States Federal securities laws), Greenfield or its subsidiaries may at
any time and from time to time purchase outstanding Convertible Preferred
Securities by tender, in the open market or by private agreement.
SUBORDINATION OF COMMON SECURITIES
Payment of distributions on, and the amount payable upon redemption of, the
Trust Securities, as applicable, shall be made PRO RATA based on the liquidation
preference of the Trust Securities; PROVIDED, HOWEVER, that, if on any
distribution date or redemption date a Declaration Event of Default (as defined
herein under "--Declaration Events of Default") under the Declaration shall have
occurred and be continuing, no payment of any distribution on, or amount payable
upon redemption of, any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common Securities, shall be made
unless payment in full in cash of all accumulated and unpaid distributions on
all outstanding Convertible Preferred Securities for all distribution periods
terminating on or prior thereto, or in the case of payment of the amount payable
upon redemption of the Convertible Preferred Securities, the full amount of such
amount in respect of all outstanding Convertible Preferred Securities shall have
been made or provided for, and all funds available to the Trustee shall first be
applied to the payment in full in cash of all distributions on, or the amount
payable upon redemption of, Convertible Preferred Securities then due and
payable.
In the case of any Declaration Event of Default, the holder of Common
Securities will be deemed to have waived any such Declaration Event of Default
until the effect of all such Declaration Events of Default with respect to the
Convertible Preferred Securities have been cured, waived or otherwise
eliminated. Until any such Declaration Events of Default with respect to the
Convertible Preferred Securities have been so cured, waived or otherwise
eliminated, the Trustee shall act solely on behalf of the holders of the
Convertible Preferred Securities and not the holder of the Common Securities,
and only the holders of the Convertible Preferred Securities will have the right
to direct the Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding up or termination of the Issuer, the holders of the Convertible
Preferred Securities at the time will be entitled to receive out of the assets
of the Issuer available for distribution to holders of Trust Securities after
satisfaction of liabilities of creditors of the Trust, before any distribution
of assets is made to the holders of the Common Securities, an amount equal to
the aggregate of the stated liquidation preference of $50 per Convertible
Preferred Security and accrued and unpaid distributions thereon to the date of
payment (the "Liquidation Distribution"), unless, in connection with such
liquidation, dissolution, winding up or termination, Convertible Junior
Subordinated Debentures in an aggregate principal amount equal to the
Liquidation Distribution have been distributed on a PRO RATA basis to the
holders of the Trust Securities.
Pursuant to the Declaration, the Issuer shall be dissolved and its affairs
shall be wound up upon the earliest to occur of the following: (i) December 7,
2022, the expiration of the term of the Issuer, (ii) the bankruptcy of
Greenfield or the holder of the Common Securities, (iii) the filing of a
certificate of dissolution or its equivalent with respect to Greenfield or such
holder, or the revocation of Greenfield's or such holder's charter and the
expiration of 90 days after the date of notice to Greenfield or such holder of
revocation without a reinstatement of its charter, (iv) the distribution of all
the assets of the Trust, (v) the entry of a decree of a judicial dissolution of
Greenfield, the Trust or such holder, or (vi) the redemption of all the Trust
Securities.
MERGER, CONSOLIDATION OR AMALGAMATION OF THE ISSUER
The Issuer may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other entity or person,
except as described below. The Issuer may, without the consent of the holders of
the Convertible Preferred Securities, consolidate, amalgamate, merge with or
into, or be replaced by, a trust organized as such under the laws of any state
of the United States of America or of the District of Columbia; PROVIDED that
(i) if the
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Issuer is not the survivor, such successor entity either (x)
expressly assumes all of the obligations of the Issuer under the Convertible
Preferred Securities or (y) substitutes for the Convertible Preferred Securities
other securities having substantially the same terms as the Convertible
Preferred Securities (the "Successor Securities") as long as the Successor
Securities rank, with respect to participation in the profits and distributions
or in the assets of the successor entity, at least as high as the Convertible
Preferred Securities rank with respect to participation in the profits and
dividends or in the assets of the Issuer, (ii) Greenfield expressly acknowledges
such successor entity as the holder of the Convertible Junior Subordinated
Debentures, (iii) the Convertible Preferred Securities or any Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Convertible Preferred Securities are then listed, (iv)
such merger, consolidation, amalgamation or replacement does not cause the
Convertible Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation, amalgamation or replacement does not adversely
affect the powers, preferences and other special rights of the holders of the
Convertible Preferred Securities (including any Successor Securities) in any
material respect, (vi) such successor entity has a purpose substantially
identical to that of the Issuer, (vii) Greenfield has provided a guarantee to
the holders of the Successor Securities with respect to such successor entity
having substantially the same terms as the Guarantee and (viii) prior to such
merger, consolidation, amalgamation or replacement, Greenfield has received an
opinion of nationally recognized independent counsel (reasonably acceptable to
the Trustee) to the Issuer experienced in such matters to the effect that (x)
such successor entity will be treated as a grantor trust for United States
Federal income tax purposes, (y) following such merger, consolidation,
amalgamation or replacement, neither Greenfield nor such successor entity will
be required to register as an investment company under the 1940 Act and (z) such
merger, consolidation, amalgamation or replacement will not adversely affect the
limited liability of the holders of the Convertible Preferred Securities.
Notwithstanding the foregoing, the Issuer shall not, except with the consent of
holders of 100% in liquidation amount of the Common Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it, if
such consolidation, amalgamation, merger or replacement would cause the Issuer
or the Successor Entity to be classified as other than a grantor trust for
United States Federal income tax purposes.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Event of Default") or a
default by Greenfield under the Guarantee constitutes an event of default under
the Declaration with respect to the Trust Securities (a "Declaration Event of
Default"); PROVIDED that, pursuant to the Declaration, the holder of the Common
Securities will be deemed to have waived any Declaration Event of Default with
respect to the Common Securities until all Declaration Events of Default with
respect to the Convertible Preferred Securities have been cured, waived or
otherwise eliminated. Until such Declaration Events of Default with respect to
the Convertible Preferred Securities have been so cured, waived or otherwise
eliminated, the Trustee will be deemed to be acting solely on behalf of the
holders of the Convertible Preferred Securities and only the holders of the
Convertible Preferred Securities will have the right to direct the Trustee with
respect to certain matters under the Declaration and, therefore, the Indenture.
As long as the Convertible Preferred Securities are outstanding, upon the
occurrence of a Declaration Event of Default, the Trustee as the sole holder of
the Convertible Junior Subordinated Debentures will have the right under the
Indenture to declare the principal of and interest on the Convertible Junior
Subordinated Debentures to be immediately due and payable. Greenfield and the
Issuer are each required to file annually with the Trustee an officer's
certificate as to its compliance with all conditions and covenants under the
Declaration.
VOTING RIGHTS; AMENDMENT OF DECLARATION
Except as described herein, under the Trust Act and under "Description of
the Guarantee--Amendments and Assignment", and as otherwise required by law and
the Declaration, the holders of the Convertible Preferred Securities will have
no voting rights.
In addition to the rights of the holders of the Convertible Preferred
Securities with respect to the enforcement of payment to the Issuer of principal
of or interest on the Convertible Junior Subordinated
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Debentures as provided
under "Description of Convertible Junior Subordinated Debentures--Events of
Default", if (i) the Issuer fails to pay distributions in full on the
Convertible Preferred Securities for six consecutive quarterly distribution
periods (whether or not a Deferral Period is in effect) or (ii) a Declaration
Event of Default occurs and is continuing (each an "Appointment Event"), then
the holders of the Convertible Preferred Securities, acting as a single class,
will be entitled by the majority vote of such holders to appoint a Special
Trustee. For purposes of determining whether the Issuer has failed to pay
distributions in full for six consecutive quarterly distribution periods,
distributions shall be deemed to remain in arrears, notwithstanding any payments
in respect thereof, until full cumulative distributions have been or
contemporaneously are paid with respect to all quarterly distribution periods
terminating on or prior to the date of payment of such cumulative distributions.
Any holder of Convertible Preferred Securities (other than Greenfield or any of
its affiliates) shall be entitled to nominate any person to be appointed as
Special Trustee. Not later than 30 days after such right to appoint a Special
Trustee arises, the GFII Trustees shall convene a meeting of the holders of
Convertible Preferred Securities for the purpose of appointing a Special
Trustee. If the GFII Trustees fail to convene such meeting within such 30-day
period, the holders of not less than 10% of the aggregate stated liquidation
amount of the outstanding Convertible Preferred Securities will be entitled to
convene such meeting. The provisions of the Declaration relating to the
convening and conduct of the meetings of the holders will apply with respect to
any such meeting. Any Special Trustee so appointed shall cease to be a Special
Trustee if the Appointment Event pursuant to which the Special Trustee was
appointed and all other Appointment Events cease to be continuing.
Notwithstanding the appointment of any such Special Trustee, Greenfield shall
retain all rights under the Indenture, including the right to defer payments of
interest by extending the interest payment period as provided under "Description
of the Convertible Junior Subordinated Debentures--Option to Extend Interest
Payment Period". If such an extension occurs, there will be no Event of Default
under the Indenture and, consequently, no Declaration Event of Default for
failure to make any scheduled interest payment during the Deferral Period on the
date originally scheduled.
Subject to the requirement of the Trustee obtaining a tax opinion in
certain circumstances set forth in the last sentence of this paragraph, the
holders of a majority in aggregate liquidation amount of the Convertible
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or direct the
exercise of any trust or power conferred upon the Trustee under the Declaration
including the right to direct the Trustee, as holder of the Convertible Junior
Subordinated Debentures, to (i) exercise the remedies available under the
Indenture with respect to the Convertible Junior Subordinated Debentures, (ii)
waive any past Event of Default that is waiveable under the Indenture, (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Convertible Junior Subordinated Debentures shall be due and payable; or (iv)
consent to any amendment, modification or termination of the Indenture or such
Convertible Junior Subordinated Debentures, where such consent shall be
required; PROVIDED, HOWEVER, that, where a consent or action under the Indenture
would require the consent or act of the holders of more than a majority of the
aggregate principal amount of Convertible Junior Subordinated Debentures
affected thereby, only the holders of the percentage of the aggregate stated
liquidation preference of the Convertible Preferred Securities which is at least
equal to the percentage required under the Indenture may direct the Trustee to
give such consent or take such action. The Issuer Trustees shall not revoke any
action previously authorized or approved by a vote of the Convertible Preferred
Securities except by subsequent vote of the holders of the Convertible Preferred
Securities. A holder of Convertible Preferred Securities may also directly
institute a proceeding on behalf of the Issuer for enforcement of payment to the
Issuer of the principal of or interest on the Convertible Junior Subordinated
Debentures on or after the respective due dates specified in the Convertible
Junior Subordinated Debentures. The holders of the Convertible Preferred
Securities would not be able to exercise directly any other remedies available
to the holder of the Convertible Junior Subordinated Debentures unless the
Trustee or the Indenture Trustee, acting for the benefit of the Trustee, fails
to do so. In such event, the holders of at least 25% in aggregate liquidation
preference of outstanding Convertible Preferred Securities would have a right to
institute such proceedings. The Trustee shall notify all holders of the
Convertible Preferred Securities of any notice of default received from the
Indenture Trustee with respect to the Convertible Junior Subordinated
Debentures. Such notice shall state that such Event of Default also constitutes
a Declaration Event of Default. Except with respect to directing the time,
method and place of conducting a proceeding for a remedy, the Trustee shall not
take any of the actions described in clause (i), (ii), (iii) or (iv) above
unless the Trustee has obtained an opinion of tax counsel to the effect that, as
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a result of such action, the Issuer will not fail to be classified as a grantor
trust for United States Federal income tax purposes.
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In the event the consent of the Trustee, as the holder of the Convertible
Junior Subordinated Debentures, is required under the Indenture with respect to
any amendment, modification or termination of the Indenture, the Trustee shall
request the direction of the holders of the Trust Securities with respect to
such amendment, modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a majority in liquidation
amount of the Trust Securities voting together as a single class; provided,
however, that, where a consent under the Indenture would require the consent of
the holders of more than a majority of the aggregate principal amount of the
Convertible Junior Subordinated Debentures, the Trustee may only give such
consent at the direction of the holders of at least the same proportion in
aggregate stated liquidation preference of the Trust Securities. The Trustee
shall not take any such action in accordance with the directions of the holders
of the Trust Securities unless the Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States Federal income tax
the Issuer will not be classified as other than a grantor trust.
A waiver of an Event of Default under the Indenture will constitute a
waiver of the corresponding Declaration Event of Default.
The Declaration may be amended from time to time by the Issuer Trustees,
without the consent of the holders of the Convertible Preferred Securities (i)
to cure any ambiguity, correct or supplement any provisions in the Declaration
that may be defective or inconsistent with any other provision, (ii) to add to
the covenants, restrictions or obligations of Greenfield, (iii) to conform to
any change in Rule 3a-5 of the 1940 Act or written change in interpretation or
application of Rule 3a-5 of the 1940 Act by any legislative body, court,
government agency or regulatory authority, (iv) to modify, eliminate or add to
any provisions of the Declaration to such extent as shall be necessary to ensure
that the Issuer will be classified for United States Federal income tax purposes
as a grantor trust at all times that any Convertible Preferred Securities and
Common Securities are outstanding; provided, however, that in the case of (iii)
and (iv), such amendment shall not adversely affect in any material respect the
interests of any holder of Convertible Preferred Securities or Common
Securities. In addition, if any proposed amendment to the Declaration provides
for (i) any action that would adversely affect the powers, preferences or
special rights of the holders of the Convertible Preferred Securities or the
Common Securities, whether by way of amendment to the Declaration or otherwise,
or (ii) the dissolution, winding-up or termination of the Trust, other than as
described in the Declaration, then the holders of outstanding Convertible
Preferred Securities or Common Securities as a class, will be entitled to vote
on such amendment or proposal (but not on any other amendment or proposal) and
such amendment or proposal shall not be effective except with the approval of
the holders of at least 662/3% in liquidation amount of the Convertible
Preferred Securities or Common Securities, voting together as a single class
PROVIDED, HOWEVER, that, the rights of holders of Convertible Preferred
Securities to appoint, remove or replace a Special Trustee shall not be amended
without the consent of each holder of Convertible Preferred Securities;
PROVIDED, HOWEVER, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Convertible Preferred Securities or only the
Common Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of 662/3% in liquidation amount of such class.
Any required approval or direction of holders of Convertible Preferred
Securities may be given at a separate meeting of holders of Convertible
Preferred Securities convened for such purpose, at a meeting of all of the
holders of Trust Securities or pursuant to written consent. The GFII Trustees
will cause a notice of any meeting at which holders of Convertible Preferred
Securities are entitled to vote, or of any matter upon which action by written
consent of such holders is to be taken, to be mailed to each holder of record of
Convertible Preferred Securities. Each such notice will include a statement
setting forth the following information: (i) the date of such meeting or the
date by which such action is to be taken; (ii) a description of any resolution
proposed for adoption at such meeting on which such holders are entitled to vote
or of such matter upon which written consent is sought; and (iii) instructions
for the delivery of proxies or consents. No vote or consent of the holders of
Convertible Preferred Securities will be required for the Issuer to redeem and
cancel Convertible Preferred Securities or distribute Convertible Junior
Subordinated Debentures in accordance with the Declaration.
Notwithstanding that holders of Convertible Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Convertible Preferred Securities that are owned at such time by
Greenfield or any entity directly or indirectly controlling or controlled by, or
under direct or indirect common
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control with, Greenfield, shall not be entitled
to vote or consent and shall, for purposes of such vote or consent, be treated
as if such Convertible Preferred Securities were not outstanding.
The procedures by which holders of Convertible Preferred Securities may
exercise their voting rights are described below. See "--Book-Entry-Only
Issuance--The Depository Trust Company" below.
Except in the limited circumstances described above, in connection with the
appointment of a Special Trustee, holders of the Convertible Preferred
Securities will have no rights to appoint or remove the Issuer Trustees, who may
be appointed, removed or replaced solely by Greenfield as the indirect or direct
holder of all of the Common Securities.
REGISTRATION RIGHTS
In connection with the Original Offering, the Company entered into a
registration rights agreement dated April 24, 1996 (the "Registration Rights
Agreement") with the Initial Purchasers, for the benefit of the holders of the
Convertible Preferred Securities, pursuant to which the Company agreed that it
would, at its cost, (a) file a Registration Statement on Form S-3 (a "Shelf
Registration Statement") covering resales of the Convertible Preferred
Securities (together with the Convertible Junior Subordinated Debentures, the
Guarantee and the related Greenfield Common Stock and Rights) pursuant to Rule
415 under the Securities Act, (b) use its best efforts to cause the Shelf
Registration Statement to be declared effective under the Securities Act and (c)
keep the Shelf Registration Statement effective after its effective date for as
long as shall be required under Rule 144(k) under the Securities Act or any
successor rule or regulation thereto. In addition, the Company agreed that it
would, in the event a Shelf Registration Statement is filed, among other things,
provide to each holder for whom such Shelf Registration Statement was filed
copies of the prospectus which is a part of the Shelf Registration Statement,
notify each such holder when the Shelf Registration Statement has become
effective and take certain other actions as are required to permit unrestricted
resales of such Securities. A holder selling such Securities pursuant to the
Shelf Registration Statement generally would be required to be named as a
selling security holder in the prospectus and to deliver such prospectus to
purchasers, would be subject to certain of the civil liability provisions under
the Securities Act in connection with such sales and would be bound by the
provisions of the Registration Rights Agreement which are applicable to such
holder (including certain indemnification obligations).
If (i) by June 23, 1996, the Shelf Registration Statement had not been
filed with the SEC; (ii) by October 21, 1996, the Shelf Registration Statement
had not been declared effective by the SEC; or (iii) after the Shelf
Registration Statement had been declared effective, such Registration Statement
ceases to be effective or usable (subject to certain exceptions) in connection
with resales of Convertible Preferred Securities in accordance with and during
the periods specified in the Registration Rights Agreement (each such event
referred to in clauses (i) through (iii) a "Registration Default"), the
Convertible Junior Subordinated Debentures would bear interest at the rate per
annum of 6.50% and, therefore, distributions would accrue on the Convertible
Preferred Securities at the rate of 6.50% per annum, from and including the date
on which any such Registration Default shall have occurred to but excluding the
date on which all Registration Defaults have been cured. At all other times,
interest will accrue on the Convertible Junior Subordinated Debentures and
distributions will accrue on the Convertible Preferred Securities at a rate of
6% per annum.
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy of which has been filed with the Commission as an exhibit to
Greenfield's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996
and is incorporated by reference herein.
BOOK-ENTRY-ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY
The description of book-entry procedures in this Prospectus includes
summaries of certain rules and operating procedures of DTC that affect transfers
of interests in the global certificate or certificates issued in connection with
sales of Convertible Preferred Securities made pursuant to this Prospectus. One
or more fully registered global Convertible Preferred Security certificates
(without restrictive legends) (the "Global Certificates") will be issued in the
name of Cede & Co. (as nominee for DTC), representing, in the aggregate,
Convertible Preferred Securities sold pursuant to this Prospectus, and will be
deposited with DTC.
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In the event of a transfer of securities which were issued in fully
registered, certificated form ("Certificated Securities") on the Original
Offering Date, the holder of such certificates will be required to exchange them
for interests in the Global Certificates representing the number of Convertible
Preferred Securities being transferred.
DTC is a limited-purpose trust company organized under the 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 Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Participants in DTC
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of its
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers and banks and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Commission.
Purchases of Convertible Preferred Securities within the DTC system must be
made by or through Participants, which will receive a credit for the Convertible
Preferred Securities on DTC's records. The ownership interest of each actual
purchaser of Convertible Preferred Securities ("Beneficial Owner") is in turn to
be recorded on the Participants' and Indirect Participants' records. Beneficial
Owners will not receive written confirmation from DTC of their purchases, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the Participants or Indirect Participants through which the Beneficial
Owners purchased Convertible Preferred Securities. Transfers of ownership
interests in the Convertible Preferred Securities are to be accomplished by
entries made on the books of Participants and Indirect Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Convertible Preferred Securities,
except in the event that use of the book-entry system for the Convertible
Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Convertible
Preferred Securities; DTC's records reflect only the identity of the
Participants to whose accounts such Convertible Preferred Securities are
credited, which may or may not be the Beneficial Owners. The Participants and
Indirect Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants, and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Redemption notices in respect of the Convertible Preferred Securities held
in book-entry form shall be sent to Cede & Co. If less than all of the
Convertible Preferred Securities are being redeemed, DTC will determine the
amount of the interest of each Participant to be redeemed in accordance with its
procedures.
Although voting with respect to the Convertible Preferred Securities is
limited, in those cases where a vote is required, neither DTC nor Cede & Co.
will itself consent or vote with respect to Convertible Preferred Securities.
Under its usual procedures, DTC would mail an Omnibus Proxy to the Issuer as
soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Participants to whose accounts the
Convertible Preferred Securities are credited on the record date (identified in
a listing attached to the Omnibus Proxy).
Distributions on the Convertible Preferred Securities held in book-entry
form will be made to DTC in immediately available funds. DTC's practice is to
credit Direct Participants' accounts on the relevant payment date in accordance
with their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payments on such payment date. Payments by
Participants and Indirect Participants
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to Beneficial Owners will be governed by
standing instructions and customary practices and will be the responsibility of
such Participants and Indirect Participants and not of DTC, the Issuer or
Greenfield, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of distributions to DTC is the responsibility
of the Issuer, disbursement of such payments to Participants is the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Participants and Indirect Participants.
Except as provided herein, a Beneficial Owner of an interest in a global
Convertible Preferred Security will not be entitled to receive physical delivery
of Convertible Preferred Securities. Accordingly, each Beneficial Owner must
rely on the procedures of DTC to exercise any rights under the Convertible
Preferred Securities.
DTC may discontinue providing its services as securities depository with
respect to the Convertible Preferred Securities at any time by giving notice to
the Issuer. Under such circumstances, in the event that a successor securities
depository is not obtained, Convertible Preferred Security certificates are
required to be printed and delivered. Additionally, the Issuer (with the consent
of Greenfield) may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor depository). In that event, certificates
for the Convertible Preferred Securities will be printed and delivered. In each
of the above circumstances, Greenfield will appoint a paying agent with respect
to the Convertible Preferred Securities.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Greenfield and the Issuer believe to be
reliable, but none of Greenfield, the Issuer or the Issuer Trustees takes
responsibility for the accuracy thereof.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the global
Convertible Preferred Securities as represented by a Global Certificate.
PAYMENT AND PAYING AGENCY
Payments in respect of the Convertible Preferred Securities shall be made
to DTC, which shall credit the relevant accounts at DTC on the applicable
distribution dates or, in the case of Certificated Securities, such payments
shall be made by check mailed to the address of the holder entitled thereto as
such address shall appear on the Register. The Paying Agent shall initially be
The Bank of New York. The Paying Agent shall be permitted to resign as Paying
Agent upon 30 days' written notice to the Issuer Trustees. In the event that The
Bank of New York shall no longer be the Paying Agent, the Trustee shall appoint
a successor to act as Paying Agent (which shall be a bank or trust company).
REGISTRAR, TRANSFER AGENT, PAYING AGENT AND CONVERSION AGENT
The Bank of New York acts as registrar, transfer agent, paying agent and
Conversion Agent for the Convertible Preferred Securities.
Registration of transfers of Convertible Preferred Securities will be
effected without charge by or on behalf of the Issuer, but upon payment (with
the giving of such indemnity as the Issuer or Greenfield may require) in respect
of any tax or other government charges which may be imposed in relation to it.
The Issuer will not be required to register or cause to be registered the
transfer of Convertible Preferred Securities after such Convertible Preferred
Securities have been called for redemption.
INFORMATION CONCERNING THE TRUSTEE
The Trustee, prior to the occurrence of a default with respect to the Trust
Securities, undertakes to perform only such duties as are specifically set forth
in the Declaration and, after default, shall exercise the same degree of care as
a prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provisions, the Trustee is under no obligation to exercise any
of the powers vested in it by the Declaration at the request of any holder of
Convertible Preferred Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The
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holders of Convertible Preferred Securities will not be required to
offer such indemnity in the event such holders, by exercising their voting
rights, direct the Trustee to take any action following a Declaration Event of
Default.
GOVERNING LAW
The Declaration and the Convertible Preferred Securities will be governed
by, and construed in accordance with, the internal laws of the State of
Delaware.
MISCELLANEOUS
The Issuer Trustees are authorized and directed to conduct the affairs of
and to operate the Issuer in such a way that the Issuer will not be deemed to be
an "investment company" required to be registered under the 1940 Act or
characterized as other than a grantor trust for Federal income tax purposes and
so that the Convertible Junior Subordinated Debentures will be treated as
indebtedness of Greenfield for United States Federal income tax purposes. In
this connection, the Issuer Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust or the Declaration
that the Issuer Trustees determine in their discretion to be necessary or
desirable for such purposes as long as such action does not adversely affect the
interests of the holders of the Convertible Preferred Securities.
Holders of the Convertible Preferred Securities have no preemptive rights.
The Issuer may not borrow money or issue debt or mortgage or pledge any of
its assets.
DESCRIPTION OF THE GUARANTEE
SET FORTH BELOW IS A SUMMARY OF INFORMATION CONCERNING THE GUARANTEE WHICH
WAS EXECUTED AND DELIVERED BY GREENFIELD FOR THE BENEFIT OF THE HOLDERS FROM
TIME TO TIME OF CONVERTIBLE PREFERRED SECURITIES. THE SUMMARY DOES NOT PURPORT
TO BE COMPLETE AND IS SUBJECT IN ALL RESPECTS TO THE PROVISIONS OF, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO, THE GUARANTEE. THE GUARANTEE
INCORPORATES BY REFERENCE THE TERMS OF THE TRUST INDENTURE ACT AND WILL BE
QUALIFIED THEREUNDER. THE BANK OF NEW YORK ACTS AS TRUSTEE UNDER THE GUARANTEE.
THE BANK OF NEW YORK, AS THE GUARANTEE TRUSTEE, HOLDS THE GUARANTEE FOR THE
BENEFIT OF THE HOLDERS OF THE CONVERTIBLE PREFERRED SECURITIES.
GENERAL
Pursuant to the Guarantee, Greenfield has irrevocably agreed, to the extent
set forth herein, to pay in full on a subordinated basis, to the holders of the
Convertible Preferred Securities, the Guarantee Payments (as defined herein), as
and when due, regardless of any defense, right of set off or counterclaim that
the Issuer may have or assert. The following payments with respect to the
Convertible Preferred Securities, to the extent not paid by or on behalf of the
Issuer (the "Guarantee Payments"), are subject to the Guarantee (without
duplication): (i) any accrued and unpaid distributions which are required to be
paid on the Convertible Preferred Securities to the extent of funds of the Trust
available therefor, (ii) the amount payable upon redemption of the Convertible
Preferred Securities, to the extent of funds of the Trust available therefor,
with respect to any Convertible Preferred Securities called for redemption by
the Issuer and (iii) upon a voluntary or involuntary dissolution, winding up or
termination of the Issuer (other than in connection with the distribution of
Convertible Junior Subordinated Debentures to the holders of the Convertible
Preferred Securities in exchange for Convertible Preferred Securities as
provided in the Declaration), the lesser of (a) the aggregate of the liquidation
preference and all accrued and unpaid dividends on the Convertible Preferred
Securities to the date of payment, to the extent of funds of the Trust available
therefor, and (b) the amount of assets of the Issuer remaining available for
distribution to holders of Convertible Preferred Securities upon the liquidation
of the Issuer. Greenfield's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by Greenfield to the holders
of Convertible Preferred Securities or by causing the Issuer to pay such amounts
to such holders.
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Because the Guarantee is a guarantee of payment and not of collection,
holders of the Convertible Preferred Securities may proceed directly against
Greenfield as guarantor, rather than having to proceed against the Issuer before
attempting to collect from Greenfield, and Greenfield waives any right or remedy
to require that any action be brought against the Issuer or any other person or
entity before proceeding against Greenfield. Such obligations will not be
discharged except by payment of the Guarantee Payments in full.
If Greenfield fails to make interest payments on the Convertible Junior
Subordinated Debentures or pay amounts payable upon the redemption, acceleration
or maturity of the Convertible Junior Subordinated Debentures, the Issuer will
have insufficient funds to pay distributions on or to pay amounts payable upon
the redemption or repayment of the Convertible Preferred Securities. The
Guarantee does not cover payment of distributions or the amount payable upon
redemption or repayment in respect of the Convertible Preferred Securities when
the Issuer does not have sufficient funds to pay such distributions or such
amount. However, effectively, Greenfield has, through the Guarantee, the
Convertible Junior Subordinated Debentures, the Indenture and the Declaration,
taken together, fully, irrevocably and unconditionally guaranteed all of the
Issuer's obligations under the Convertible Preferred Securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Issuer's obligations under the Convertible
Preferred Securities. See "Effect of Obligations Under the Convertible Junior
Subordinated Debentures and the Guarantee".
CERTAIN COVENANTS OF GREENFIELD
In the Guarantee, Greenfield has covenanted that, so long as any
Convertible Preferred Securities remain outstanding, if at such time (i)
Greenfield has exercised its option to defer interest payments on the
Convertible Junior Subordinated Debentures and such deferral is continuing, (ii)
Greenfield shall be in default with respect to its payment or other obligations
under the Guarantee or (iii) there shall have occurred any event that, with the
giving of notice or the lapse of time or both, would constitute an Event of
Default under the Indenture, then Greenfield (a) shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
(other than stock dividends paid by Greenfield which consist of the stock of the
same class as that on which the dividend is being paid and other than
redemptions or purchases of any Rights and the declaration of a dividend of such
Rights in the future), (b) shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
Greenfield that rank PARI PASSU with or junior to the Convertible Junior
Subordinated Debentures, and (c) shall not make any guarantee payments with
respect to the foregoing (other than pursuant to the Guarantee).
As part of the Guarantee, Greenfield has agreed that it will honor all
obligations described therein relating to the conversion of the Convertible
Preferred Securities into Greenfield Common Stock as described in "Description
of the Convertible Preferred Securities--Conversion Rights".
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of Convertible Preferred Securities (in which case no consent of the
holders of the Convertible Preferred Securities will be required), the Guarantee
may be changed only with the prior approval of the holders of not less than
662/3% in aggregate stated liquidation preference of the outstanding Convertible
Preferred Securities. The manner of obtaining any such approval of holders of
the Convertible Preferred Securities is as set forth under "Description of the
Convertible Preferred Securities--Voting Rights; Amendment of Declaration". All
guarantees and agreements contained in the Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of Greenfield and shall inure
to the benefit of the holders of the Convertible Preferred Securities then
outstanding. Except in connection with any permitted merger or consolidation of
Greenfield with or into another entity or any permitted sale, transfer or lease
of Greenfield's assets to another entity as described below under "Description
of the Convertible Junior Subordinated Debentures--Restrictions", Greenfield may
not assign its rights or delegate its obligations under the Guarantee without
the prior approval of the holders of at least 662/3% of the aggregate stated
liquidation preference of the Convertible Preferred Securities then outstanding.
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TERMINATION OF THE GUARANTEE
The Guarantee will terminate as to each holder of Convertible Preferred
Securities and be of no further force and effect upon (a) full payment of the
applicable redemption price of such holder's Convertible Preferred Securities or
(b) the distribution of Greenfield Common Stock to such holder in respect of the
conversion of such holder's Convertible Preferred Securities into Greenfield
Common Stock or the distribution of the Convertible Junior Subordinated
Debentures to all holders of the Convertible Preferred Securities and will
terminate completely upon full payment of the amounts payable upon liquidation
of the Issuer. The Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of Convertible
Preferred Securities must restore payment of any sums paid under such
Convertible Preferred Securities or the Guarantee.
STATUS OF THE GUARANTEE; SUBORDINATION
The Guarantee constitutes an unsecured obligation of Greenfield and ranks
(i) subordinate and junior in right of payment to all liabilities of Greenfield,
except any liabilities that may be made PARI PASSU expressly by their terms,
(ii) PARI PASSU with the most senior preferred or preference stock now or
hereafter issued by Greenfield and with any guarantee now or hereafter entered
into by Greenfield in respect of any preferred or preference stock or preferred
securities of any affiliate of Greenfield and (iii) senior to Greenfield Common
Stock. Upon the bankruptcy, liquidation or winding up of Greenfield, its
obligations under the Guarantee will rank junior to all its other liabilities
(except as aforesaid) and, therefore, funds may not be available for payment
under the Guarantee.
The Declaration provides that each holder of Convertible Preferred
Securities by acceptance thereof agrees to the subordination provisions and
other terms of the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default, has undertaken
to perform only such duties as are specifically set forth in the Guarantee and,
after default with respect to the Guarantee, shall exercise the same degree of
care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provision, the Guarantee Trustee is under no obligation
to exercise any of the powers vested in it by the Guarantee at the request of
any holder of Convertible Preferred Securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might be incurred
thereby.
GOVERNING LAW
The Guarantee is governed by and construed in accordance with the laws of
the State of New York.
DESCRIPTION OF THE CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
SET FORTH BELOW IS A DESCRIPTION OF THE SPECIFIC TERMS OF THE CONVERTIBLE
JUNIOR SUBORDINATED DEBENTURES IN WHICH THE ISSUER INVESTED THE PROCEEDS OF THE
ISSUANCE AND SALE OF (i) THE CONVERTIBLE PREFERRED SECURITIES AND (ii) THE
COMMON SECURITIES. THE FOLLOWING DESCRIPTION DOES NOT PURPORT TO BE COMPLETE AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE INDENTURE DATED AS OF APRIL 1,
1996 (THE "INDENTURE"), BETWEEN GREENFIELD AND THE BANK OF NEW YORK, AS
INDENTURE TRUSTEE. THE INDENTURE WILL BE QUALIFIED UNDER THE TRUST INDENTURE
ACT. WHENEVER PARTICULAR PROVISIONS OR DEFINED TERMS IN THE INDENTURE ARE
REFERRED TO HEREIN, SUCH PROVISIONS OR DEFINED TERMS ARE INCORPORATED BY
REFERENCE HEREIN.
Under certain circumstances involving the dissolution of the Issuer
following the occurrence of a Tax Event or Investment Company Event, Convertible
Junior Subordinated Debentures may be distributed to the holders of the
Convertible Preferred Securities in liquidation of the Issuer. See "Description
of the Convertible Preferred Securities--Tax Event or Investment Company Event
Redemption or Distribution".
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GENERAL
The Convertible Junior Subordinated Debentures were issued as a series of
Convertible Junior Subordinated Debentures under the Indenture. The Trustee is
the initial holder of the Convertible Junior Subordinated Debentures. The
Convertible Junior Subordinated Debentures are limited in aggregate principal
amount to approximately 103.092784% of the aggregate stated liquidation
preference of the Convertible Preferred Securities, such amount being the sum of
the aggregate stated liquidation preference of the Convertible Preferred
Securities and the Common Securities. The Indenture does not limit the aggregate
principal amount of Convertible Junior Subordinated Debentures which may be
issued thereunder and provides that the Convertible Junior Subordinated
Debentures may be issued thereunder from time to time in one or more series.
The entire principal amount of the Convertible Junior Subordinated
Debentures will become due and payable, together with any accrued and unpaid
interest thereon, including Additional Interest, if any, on March 31, 2016.
The Convertible Junior Subordinated Debentures are unsecured and rank
junior and are subordinate in right of payment to all Senior Indebtedness of
Greenfield. See "--Subordination".
The Convertible Junior Subordinated Debentures, if distributed to holders
of Convertible Preferred Securities in a dissolution of the Issuer, will
initially be issued as a global security to the extent of any Global
Certificates at the time representing any Convertible Preferred Securities and
otherwise in fully registered, certificated form. In the event that Convertible
Junior Subordinated Debentures are issued in certificated form, such Convertible
Junior Subordinated Debentures will be in denominations of $50 and integral
multiples thereof and may be transferred or exchanged at the offices described
below.
Payments on Convertible Junior Subordinated Debentures issued as a global
security will be made to DTC, as the depository for the Convertible Junior
Subordinated Debentures. In the event Convertible Junior Subordinated Debentures
are issued in certificated form, principal and interest will be payable, the
transfer of the Convertible Junior Subordinated Debentures will be registrable
and Convertible Junior Subordinated Debentures will be exchangeable for
Convertible Junior Subordinated Debentures of other denominations of a like
aggregate principal amount at the corporate trust office of the Indenture
Trustee in The City of New York; PROVIDED that, unless the Convertible Junior
Subordinated Debentures are held by the Issuer or any successor permissible
under "Description of the Convertible Preferred Securities--Merger,
Consolidation or Amalgamation of the Issuer", payment of interest may be made at
the option of Greenfield by check mailed to the address of the persons entitled
thereto.
The Indenture does not contain any provisions that afford holders of
Convertible Junior Subordinated Debentures protection in the event of a highly
leveraged transaction involving Greenfield. The Convertible Junior
Subordinated Debentures are not entitled to the benefit of any sinking fund.
INTEREST
Each Convertible Junior Subordinated Debenture bears interest at the rate
of 6% per annum from the Original Offering Date, payable quarterly in arrears on
March 31, June 30, September 30 and December 31 (each, an "Interest Payment
Date"), commencing June 30, 1996, to the person in whose name such Convertible
Junior Subordinated Debenture is registered at the close of business on the day
immediately preceding such Interest Payment Date. Interest compounds quarterly
and accrues at the annual rate of 6% on any interest installment not paid when
due.
The amount of interest payable for any period is computed on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Convertible Junior Subordinated Debentures is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day which is a Business Day (without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
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OPTION TO EXTEND INTEREST PAYMENT PERIOD
Greenfield shall have the right at any time during the term of the
Convertible Junior Subordinated Debentures to defer interest payments from time
to time for successive periods not exceeding 20 consecutive quarters for each
such period. At the end of each Deferral Period, Greenfield shall pay all
interest then accrued and unpaid (together with interest thereon at the rate
specified for the Convertible Junior Subordinated Debentures to the extent
permitted by applicable law). In no event shall any Deferral Period extend
beyond the maturity of the Convertible Junior Subordinated Debentures. During
any Deferral Period, Greenfield (i) shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than stock
dividends paid by Greenfield which consist of stock of the same class as that on
which the dividend is being paid and other than redemptions or purchases of any
Rights and the declaration of a dividend of such Rights in the future), (ii)
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by Greenfield that rank
PARI PASSU with or junior to the Convertible Junior Subordinated Debentures, and
(iii) shall not make any guarantee payments with respect to the foregoing (other
than pursuant to the Guarantee). Prior to the termination of any such Deferral
Period, Greenfield may further extend such Deferral Period; PROVIDED that such
Deferral Period together with all previous and further extensions thereof may
not exceed 20 consecutive quarters. Upon the termination of any Deferral Period
and the payment of all amounts then due, Greenfield may select a new Deferral
Period, subject to the above requirements. No interest during a Deferral Period,
except at the end thereof, shall be due and payable. If the Issuer shall be the
sole holder of the Convertible Junior Subordinated Debentures, Greenfield shall
give the Issuer notice of its selection of such Deferral Period at least one
Business Day prior to the earlier of (i) the date the distributions on the
Convertible Preferred Securities are payable or (ii) the date the Issuer is
required to give notice to any applicable self-regulatory organization or to
holders of the Convertible Preferred Securities on the record date or the date
such distribution is payable, but in any event not less than ten Business Days
prior to such record date. Greenfield shall cause the Issuer to give notice of
Greenfield's selection of such Deferral Period to the holders of the Convertible
Preferred Securities. If the Issuer shall not be the sole holder of the
Convertible Junior Subordinated Debentures, Greenfield shall give the holders of
the Convertible Junior Subordinated Debentures notice of its selection of such
Deferral Period at least ten Business Days prior to the earlier of (i) the
Interest Payment Date or (ii) the date Greenfield is required to give notice to
any applicable self-regulatory organization or to holders of the Convertible
Junior Subordinated Debentures on the record or payment date of such related
interest payment, but in any event not less than two Business Days prior to such
record date.
ADDITIONAL INTEREST
If the Issuer would be required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed
by the United States, or any other taxing authority, then, in any such case,
Greenfield will pay as additional interest ("Additional Interest") such amounts
as shall be required so that the net amounts received and retained by the Issuer
after paying any such taxes, duties, assessments or governmental charges will be
not less than the amounts the Issuer would have received had no such taxes,
duties, assessments or governmental charges been imposed.
CONVERSION OF THE CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
The Convertible Junior Subordinated Debentures are convertible into
Greenfield Common Stock at the option of the holders of the Convertible Junior
Subordinated Debentures at any time at the initial conversion price set forth in
this Prospectus subject to the conversion price adjustments described under
"Description of the Convertible Preferred Securities--Conversion Rights". The
Issuer has agreed not to convert Convertible Junior Subordinated Debentures held
by it except pursuant to a notice of conversion delivered to the Conversion
Agent by a holder of Convertible Preferred Securities. Upon surrender of a
Convertible Preferred Security to the Conversion Agent for conversion, the
Issuer will distribute $50 principal amount of the Convertible Junior
Subordinated Debentures to the Conversion Agent on behalf of the holder of the
Convertible Preferred Securities so converted, whereupon the Conversion Agent
will convert such Convertible Junior Subordinated Debentures into Greenfield
Common Stock on behalf of such holder. Greenfield's delivery to the holders of
the Convertible Junior Subordinated Debentures (through the Conversion Agent) of
the fixed number of shares of Greenfield Common Stock into which the Convertible
Junior Subordinated Debentures
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are convertible (together with the cash payment,
if any, in lieu of fractional shares) will be deemed to satisfy Greenfield's
obligation to pay the principal amount of the Convertible Junior Subordinated
Debentures so converted, and the accrued and unpaid interest thereon
attributable to the period from the last date to which interest has been paid or
duly provided for; PROVIDED, HOWEVER, that if any Convertible Junior
Subordinated Debenture is converted after a record date for payment of interest,
the interest payable on the related interest payment date with respect to such
Convertible Junior Subordinated Debenture shall be paid to the Issuer (which
will distribute such interest to the converting holder) or other holder of
Convertible Junior Subordinated Debentures, as the case may be, despite such
conversion.
OPTIONAL REDEMPTION
Greenfield shall have the right to redeem the Convertible Junior
Subordinated Debentures, in whole or in part, at any time or from time to time
after April 15, 1999, upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to $52.10 per $50 principal amount of the Convertible
Junior Subordinated Debentures to be redeemed plus any accrued and unpaid
interest, including Additional Interest, if any, to the redemption date, if
redeemed on or before April 15, 2000, and at the following redemption prices per
$50 principal amount of Convertible Junior Subordinated Debentures, if redeemed
during the 12-month period ending April 15:
Price per $50
Principal
Year Amount
---- -------------
2001 ........................... $51.80
2002 ........................... 51.50
2003 ........................... 51.20
2004 ........................... 50.90
2005 ........................... 50.60
2006 ........................... 50.30
and thereafter at $50 per $50 principal amount of Convertible Junior
Subordinated Debentures plus, in each case, accrued and unpaid interest,
including Additional Interest, if any, to the redemption date.
In the event of any redemption in part, Greenfield shall not be required to
(i) issue, register the transfer of or exchange any Convertible Junior
Subordinated Debenture during a period beginning at the opening of business 15
days before any selection for redemption of Convertible Junior Subordinated
Debentures and ending at the close of business on the earliest date on which the
relevant notice of redemption is deemed to have been given to all holders of
Convertible Junior Subordinated Debentures to be so redeemed and (ii) register
the transfer of or exchange any Convertible Junior Subordinated Debentures so
selected for redemption, in whole or in part, except the unredeemed portion of
any Convertible Junior Subordinated Debenture being redeemed in part.
SUBORDINATION
The Indenture provides that the Convertible Junior Subordinated Debentures
are subordinate and junior in right of payment to all Senior Indebtedness of
Greenfield as provided in the Indenture. No payment of principal of (including
redemption payments), or interest on, the Convertible Junior Subordinated
Debentures may be made (i) if any Senior Indebtedness is not paid when due, any
applicable grace period with respect to such default has ended and such default
has not been cured or waived, or (ii) if the maturity of any Senior Indebtedness
has been accelerated because of a default. Upon any distribution of assets of
Greenfield to creditors upon any dissolution, winding up, liquidation or
reorganization, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all principal of, and premium, if any, and
interest due or to become due on, all Senior Indebtedness must be paid in full
before the holders of the Convertible Junior Subordinated Debentures are
entitled to receive or retain any payment. In the event that, notwithstanding
the foregoing, any payment or distribution of cash, property or securities shall
be received or collected by a holder of the Convertible Junior Subordinated
Debentures in contravention of the foregoing provisions, such payment or
distribution shall be held for the benefit of and shall be paid over to the
holders of Senior Indebtedness or their representative or representatives or to
the trustee or trustees under any indenture under which any instrument
evidencing Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay in full all Senior
Indebtedness then due, after giving effect to any concurrent payment to the
holders
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of Senior Indebtedness. Subject to the payment in full of all Senior
Indebtedness, the rights of the holders of the Convertible Junior Subordinated
Debentures will be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions applicable to Senior
Indebtedness until all amounts owing on the Convertible Junior Subordinated
Debentures are paid in full.
The term "Senior Indebtedness" shall mean in respect of Greenfield (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of such
obligor for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by such obligor, (ii) all
capital lease obligations of such obligor, (iii) all obligations of such obligor
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of such obligor and all obligations of such obligor under any
title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction, (v) all obligations of the type referred
to in clauses (i) through (iv) above of other persons for the payment of which
such obligor is responsible or liable as obligor, guarantor or otherwise, and
(vi) all obligations of the type referred to in clauses (i) through (v) above of
other persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), except for (1) any
such indebtedness that is by its terms subordinated to or PARI PASSU with the
Convertible Junior Subordinated Debentures and (2) any indebtedness (including
all other debt securities and guarantees in respect of those debt securities)
initially issued to any other trust, or a trustee of such trust, partnership or
other entity affiliated with Greenfield that is, directly or indirectly, a
financing vehicle of Greenfield (a "Financing Entity") in connection with the
issuance by such Financing Entity of preferred securities or other similar
securities. Senior Indebtedness will also include interest accruing subsequent
to events of bankruptcy of Greenfield and its subsidiaries at the rate provided
for in the documentation governing such Senior Indebtedness, whether or not such
interest is an allowed claim enforceable against the debtor in a bankruptcy case
under relevant bankruptcy law. Such Senior Indebtedness shall continue to be
Senior Indebtedness and entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness.
The Indenture does not limit the aggregate amount of Senior Indebtedness
Greenfield may issue. At March 31, 1996, Senior Indebtedness of Greenfield
aggregated approximately $234.6 million (or $123.6 million of Senior
Indebtedness after giving pro forma effect to the Original Offering). See
"Capitalization".
CERTAIN COVENANTS
If (i) there shall have occurred any event that would constitute an Event
of Default, (ii) Greenfield shall be in default with respect to its payment of
any obligations under the Guarantee, or (iii) Greenfield shall have given notice
of its election to defer payments of interest on the Convertible Junior
Subordinated Debentures by extending the interest payment period as provided in
the Indenture and such period, or any extension thereof, shall be continuing,
then Greenfield (a) shall not declare or pay dividends on, make distributions
with respect to, or redeem, purchase or acquire, or make a liquidation payment
with respect to, any of its capital stock (other than stock dividends paid by
Greenfield which consist of stock of the same class as that on which the
dividend is being paid and other than redemptions or purchases of any Rights and
the declaration of a dividend of such Rights in the future), (b) shall not make
any payment of interest, principal or premium, if any, on or repay, repurchase
or redeem any debt securities issued by Greenfield that rank PARI PASSU with or
junior to the Convertible Junior Subordinated Debentures, and (c) shall not make
any guarantee payments with respect to the foregoing (other than pursuant to the
Guarantee).
Greenfield has agreed (i) to directly or indirectly maintain 100% ownership
of the Common Securities of the Trust; PROVIDED, HOWEVER, that any permitted
successor of Greenfield under the Indenture may succeed to Greenfield's
ownership of such Common Securities and (ii) to use its reasonable efforts to
cause the Trust (x) to remain a statutory business trust, except in connection
with the distribution of Convertible Junior Subordinated Debentures to the
holders of Trust Securities in liquidation of the Trust, the redemption of all
of the Trust Securities of the Trust, or certain mergers, consolidations or
amalgamations, each as permitted
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by the Declaration, and (y) to otherwise continue to be classified as a
grantor trust for United States Federal income tax purposes.
RESTRICTIONS
The Indenture provides that Greenfield shall not consolidate with or merge
with or into any other corporation, or, directly or indirectly, convey, transfer
or lease all or substantially all of the properties and assets of Greenfield on
a consolidated basis to any Person, unless either Greenfield is the continuing
corporation or such corporation or Person assumes by supplemental indenture all
the obligations of Greenfield under the Indenture and the Convertible Junior
Subordinated Debentures, no default or Event of Default shall exist immediately
after the transaction, and the surviving corporation or such Person is a
corporation, partnership or trust organized and validly existing under the laws
of the United States of America, any state thereof or the District of Columbia.
EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Event of Default"
with respect to the Convertible Junior Subordinated Debentures: (i) failure for
30 days to pay interest on the Convertible Junior Subordinated Debentures,
including any Additional Interest in respect thereof, when due; or (ii) failure
to pay principal of or premium, if any, on the Convertible Junior Subordinated
Debentures when due whether at maturity, upon redemption, by declaration or
otherwise; or (iii) failure by Greenfield to issue and deliver shares of
Greenfield Common Stock upon an election by a holder of Convertible Preferred
Securities to convert such Convertible Preferred Securities; or (iv) failure to
observe or perform any other covenant contained in the Indenture for 90 days
after notice; or (v) the dissolution, winding up or termination of the Issuer,
except in connection with the distribution of Convertible Junior Subordinated
Debentures to the holders of Convertible Preferred Securities in liquidation of
the Issuer, the redemption of all of the outstanding Convertible Preferred
Securities of the Issuer or in connection with certain mergers, consolidations
or amalgamations permitted by the Declaration; or (vi) certain events in
bankruptcy, insolvency or reorganization of Greenfield. A default under any
other indebtedness of Greenfield or the Issuer would not constitute an Event of
Default under the Convertible Junior Subordinated Debentures.
The Indenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Convertible Junior Subordinated Debentures
may declare the principal of and interest (including any Additional Interest) on
the Convertible Junior Subordinated Debentures due and payable immediately on
the occurrence of an Event of Default and, should the Indenture Trustee or such
holders of Convertible Junior Subordinated Debentures fail to make such
declaration, the holders of at least 25% in aggregate liquidation preference of
outstanding Convertible Preferred Securities shall have such right. After such
acceleration, but before a judgment or decree based on acceleration, the holders
of a majority in aggregate principal amount of outstanding Convertible Junior
Subordinated Debentures may, under certain circumstances, rescind and annul such
acceleration if all Events of Default, other than the nonpayment of accelerated
principal, have been cured or waived as provided in the Indenture and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Indenture Trustee.
No holder of any Convertible Junior Subordinated Debenture will have any
right to institute any proceeding with respect to the Indenture or for any
remedy thereunder, unless such holder shall have previously given to the
Indenture Trustee written notice of a continuing Event of Default and, if the
Issuer is not the sole holder of Convertible Junior Subordinated Debentures,
unless the holders of at least 25% in aggregate principal amount of the
Convertible Junior Subordinated Debentures then outstanding shall also have made
written request, and offered reasonable indemnity, to the Indenture Trustee to
institute such proceeding as Indenture Trustee, and the Indenture Trustee shall
not have received from the holders of a majority in aggregate principal amount
of the outstanding Convertible Junior Subordinated Debentures a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days. However, such limitations do not apply to a suit
instituted by a holder of a Convertible Junior Subordinated Debenture or a
holder of a Convertible Preferred Security for enforcement of payment of the
principal of or interest on such Convertible Junior Subordinated Debenture on or
after the respective due dates specified in such Convertible Junior
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Subordinated
Debenture or for the conversion of a Convertible Preferred Security or a
Convertible Junior Subordinated Debenture.
A holder of Convertible Preferred Securities may directly institute a
proceeding on behalf of the Issuer for enforcement of payment to the Issuer of
the principal of or interest on the Convertible Junior Subordinated Debentures
on or after the respective due dates specified in the Convertible Junior
Subordinated Debentures or for the conversion of a Convertible Preferred
Security or Convertible Junior Subordinated Debenture. The holders of the
Convertible Preferred Securities would not be able to exercise directly any
other remedies available to the holder of the Convertible Junior Subordinated
Debentures unless the Trustee or the Indenture Trustee, acting for the benefit
of the Trustee, fails to do so. In such event, the holders of at least 25% in
aggregate liquidation preference of outstanding Convertible Preferred Securities
would have such right to institute proceedings.
Subject to the provisions of the Indenture relating to the duties of the
Indenture Trustee in case an Event of Default shall occur and be continuing, the
Indenture Trustee will be under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any holders of
Convertible Junior Subordinated Debentures, unless such holders shall have
offered to the Indenture Trustee reasonable indemnity. Subject to such
provisions for the indemnification of the Indenture Trustee, the holders of a
majority in aggregate principal amount of the Convertible Junior Subordinated
Debentures then outstanding will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercising any trust or power conferred on the Indenture Trustee
with respect to such series.
The holders of a majority in aggregate outstanding principal amount of all
series of the Convertible Junior Subordinated Debentures affected thereby may,
on behalf of the holders of all the Convertible Junior Subordinated Debentures
of such series, waive any past default, except a default in the payment of
principal, premium, if any, or interest (unless such default has been cured and
a sum sufficient to pay all matured installments of principal, premium, if any,
and interest due otherwise than by acceleration has been deposited with the
Indenture Trustee) or a default in respect of a covenant or provision which
under the Indenture cannot be modified or amended without the consent of the
holder of each Convertible Junior Subordinated Debenture. Greenfield is required
to file annually with the Indenture Trustee and the Trustee a certificate as to
whether or not Greenfield is in compliance with all the conditions and covenants
under the Indenture.
MODIFICATION OF THE INDENTURE
From time to time, Greenfield and the Trustee may, without the consent of
the holders of the Convertible Junior Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies (provided that any such action
does not adversely affect the interests of the holders of the Convertible Junior
Subordinated Debentures). The Indenture contains provisions permitting
Greenfield and the Indenture Trustee, with the consent of the holders of not
less than a majority in principal amount of the Convertible Junior Subordinated
Debentures of each series which are affected by the modification, to modify the
Indenture or any supplemental indenture affecting that series or the rights of
the holders of that series of Convertible Junior Subordinated Debentures;
PROVIDED that no such modification may, without the consent of the holder of
each outstanding Convertible Junior Subordinated Debenture affected thereby, (i)
extend the fixed maturity of any Convertible Junior Subordinated Debentures of
any series, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any premium payable upon the
redemption thereof, or adversely affect the right to convert Convertible Junior
Subordinated Debentures, without the consent of the holder of each Convertible
Junior Subordinated Debenture so affected, or (ii) reduce the percentage of
Convertible Junior Subordinated Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of each Convertible Junior Subordinated Debenture then outstanding and affected
thereby, PROVIDED that, so long as any of the Convertible Preferred Securities
remains outstanding, no such modification may be made that adversely affects the
holders of such Convertible Preferred Securities, and no termination of the
Indenture may occur, and no waiver of any Event of Default or compliance with
any covenant under the Indenture shall be effective, without the prior consent
of the holders of the percentage of the aggregate stated liquidation preference
of the outstanding Convertible Preferred Securities which is at
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least equal to
the percentage of aggregate stated liquidation preference of the outstanding
Convertible Junior Subordinated Debentures required to make such modification.
In addition, Greenfield and the Indenture Trustee may execute, without the
consent of any holder of Convertible Junior Subordinated Debentures, any
supplemental indenture for certain other usual purposes including the creation
of any new series of Convertible Junior Subordinated Debentures.
SETOFF
Notwithstanding anything contained to the contrary in the Indenture,
Greenfield shall have the right to set off any payment with respect to the
Convertible Junior Subordinated Debentures it is otherwise required to make
thereunder with and to the extent Greenfield has theretofore made, or is
concurrently on the date of such payment making, a payment under the Guarantee.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Indenture Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Indenture and, after default, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Indenture
Trustee is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Convertible Junior Subordinated
Debentures, unless offered reasonable indemnity by such holder against the
costs, expenses and liabilities which might be incurred thereby. The Indenture
Trustee is not required to expend or risk its own funds or otherwise incur
personal financial liability in the performance of its duties if the Indenture
Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
GOVERNING LAW
The Indenture and the Convertible Junior Subordinated Debentures are
governed by, and construed in accordance with, the laws of the State of New
York.
EFFECT OF OBLIGATIONS UNDER THE
CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of the Issuer is to issue
the Trust Securities and use the proceeds thereof to purchase from Greenfield
the Convertible Junior Subordinated Debentures.
As long as payments of interest and other payments are made when due on the
Convertible Junior Subordinated Debentures, such payments will be sufficient to
cover distributions and payments due on the Convertible Preferred Securities
primarily because (i) the aggregate principal amount of Convertible Junior
Subordinated Debentures will be equal to the sum of the aggregate stated
liquidation preference of the Convertible Preferred Securities and the Common
Securities; (ii) the interest rate and interest and other payment dates on the
Convertible Junior Subordinated Debentures will match the distribution rate and
distribution and other payment dates for the Convertible Preferred Securities;
(iii) the Declaration provides that Greenfield, as originator, shall pay for
all, and the Issuer shall not be obligated to pay, directly or indirectly, for
any, costs and expenses of the Issuer; and (iv) the Declaration further provides
that the holders of Common Securities and the Issuer Trustees shall not cause or
permit the Issuer to, among other things, engage in any activity that is not
consistent with the purposes of the Issuer. In addition, Greenfield has also
guaranteed payment of the cost and expenses of the Issuer.
A holder of Convertible Preferred Securities may directly institute a
proceeding on behalf of the Issuer for enforcement of payment to the Issuer of
the principal of or interest on the Convertible Junior Subordinated Debentures
on or after the respective due dates specified in the Convertible Junior
Subordinated Debentures. The holders of the Convertible Preferred Securities
would not be able to exercise directly any other remedies available to the
holder of the Convertible Junior Subordinated Debentures unless the Trustee or
the Indenture Trustee, acting for the benefit of the Trustee, fails to do so. In
such event, the holders of at least 25% in
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aggregate liquidation preference of
outstanding Convertible Preferred Securities would have such right to institute
proceedings. In addition, if Greenfield fails to make interest or other payments
on the Convertible Junior Subordinated Debentures when due, the Declaration
provides a mechanism whereby the holders of the Convertible Preferred Securities
may (i) appoint a Special Trustee and (ii) direct the Trustee to enforce its
rights under the Convertible Junior Subordinated Debentures. If the Trustee
fails to enforce its rights under the Convertible Junior Subordinated
Debentures, the Indenture provides that a holder of Convertible Preferred
Securities may, after a holder makes written request to the Trustee to enforce
such rights, institute a legal proceeding directly against Greenfield to enforce
the Trustee's right under the Convertible Junior Subordinated Debentures without
first instituting any legal proceeding against the Trustee or any other person
or entity.
Payments of distributions and other payments due on the Convertible
Preferred Securities out of moneys held by the Issuer are irrevocably guaranteed
by Greenfield to the extent set forth under "Description of the Guarantee",
although the Guarantee does not cover payment of distributions or the amount
payable upon redemption or repayment in respect of the Convertible Preferred
Securities when the Issuer does not have sufficient funds to pay such
distributions or such amount. Effectively, however, taken together, Greenfield's
obligations under the Convertible Junior Subordinated Debentures, the Indenture,
the Declaration and the Guarantee provide a full, irrevocable and unconditional
guarantee of payments of distributions and other amounts due on the Convertible
Preferred Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Issuer's obligations under the Convertible Preferred Securities. If and to the
extent that Greenfield does not make payments on the Convertible Junior
Subordinated Debentures, the Issuer will not pay distributions or other payments
due on the Convertible Preferred Securities.
If Greenfield fails to make payments under the Guarantee, any holder of a
Convertible Preferred Security may institute a legal proceeding directly against
Greenfield to enforce its rights under the Guarantee without first instituting a
legal proceeding against the Issuer or any other person or entity. If Greenfield
fails to make payments in respect of the Issuer's costs and expenses as required
by the Declaration, a creditor of the Issuer may institute a legal proceeding
directly against Greenfield to enforce such payments.
DESCRIPTION OF GREENFIELD CAPITAL STOCK
GENERAL
The Amended and Restated Certificate of Incorporation of the Company (the
"Certificate") authorizes 1,500,000 shares of Preferred Stock, $.01 par value
("Greenfield Preferred Stock") and 100,000,000 shares of Greenfield Common
Stock. At May 31, 1996, there were outstanding (a) no shares of Greenfield
Preferred Stock, (b) 16,329,600 shares of Greenfield Common Stock (as well as
the same number of Rights to purchase one one-hundredth of a share of Series A
Preferred Stock pursuant to the Rights Agreement) and (c) stock options and
warrants to purchase an aggregate of approximately 823,800 shares of Greenfield
Common Stock. In addition, the Company has made awards of restricted stock,
subject to the satisfaction of certain criteria, covering an aggregate of
191,000 shares of Greenfield Common Stock pursuant to the Company's 1995 Equity
Incentive Plan.
GREENFIELD COMMON STOCK
Subject to the rights, if any, of holders of Greenfield Preferred Stock,
holders of Greenfield Common Stock are entitled to receive dividends out of
funds legally available therefor when, as and if declared by the Board of
Directors of the Company and to receive PRO RATA the net assets of the Company
legally available for distribution upon liquidation or dissolution.
Holders of Greenfield Common Stock are entitled to one vote for each share
of Greenfield Common Stock held on each matter submitted to a vote of
stockholders including the election of directors. Holders of Greenfield Common
Stock are not entitled to cumulative voting, which means that the holders of
more than 50% of the outstanding Greenfield Common Stock can elect all of the
directors if they choose to do so. All shares of outstanding Greenfield Common
Stock of the Company are, and the shares to be issued by the
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Company upon
conversion of the Convertible Junior Subordinated Debentures will be, fully paid
and nonassessable. Holders of Greenfield Common Stock do not have preemptive or
other subscription rights.
The Greenfield Common Stock is quoted on the NNM. First Chicago Trust
Company of New York is the Registrar and Transfer Agent for the Greenfield
Common Stock.
GREENFIELD PREFERRED STOCK
The Board of Directors of the Company is authorized to fix the number of
shares and determine the designation of any series of the authorized shares of
the Greenfield Preferred Stock and to determine or alter the rights,
preferences, privileges and restrictions granted to or imposed upon any unissued
series of Greenfield Preferred Stock.
The Series A Preferred Stock is issuable pursuant to the Rights Agreement
described herein. See "Description of the Convertible Preferred
Securities--Conversion Rights."
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on redemption of the Rights or on a substantial
number of Rights being acquired. The Rights should not interfere with any merger
or other business combination approved by the Board of Directors of the Company
prior to the time that the Rights may not be redeemed since the Board of
Directors may, at its option, at any time until such date redeem all but not
less than all of the then outstanding Rights. The Rights are designed to provide
additional protection against abusive takeover tactics such as offers for all
shares at less than full value, partial tender offers and selective open-market
purchases. The Rights are intended to assure that the Company's Board of
Directors has the ability to protect stockholders and the Company if efforts are
made to gain control of the Company in a manner that is not in the best
interests of the Company and its stockholders.
CERTAIN CERTIFICATE OF INCORPORATION AND BY-LAW PROVISIONS
The Certificate provides that the Company's directors are not liable to the
Company or its stockholders for monetary damages for breach of their fiduciary
duties, except under certain circumstances, including breach of the director's
duty of loyalty, acts or omissions not in good faith or involving intentional
misconduct or a knowing violation of law or any transaction from which the
director derived improper personal benefit. The inclusion of this provision in
the Certificate may have the effect of reducing the likelihood of derivative
litigation against directors and may discourage or deter stockholders or
management from bringing a lawsuit against directors for breach of their duty of
care.
The Certificate grants to the Board of Directors of the Company the power
to amend, adopt or repeal the Company's By-Laws without stockholder vote. The
Company's By-Laws provide that the number of directors shall be as from time to
time fixed by resolution of the Board of Directors of the Company, not less than
5 nor more than 11. These provisions, in addition to the existence of authorized
but unissued capital stock, may have the effect, either alone or in combination
with each other, of discouraging an acquisition of the Company even if such an
acquisition is desired by certain stockholders of the Company.
CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK
At May 31, 1996, there were 83,670,400 shares of Greenfield Common Stock
and 1,500,000 shares of Greenfield Preferred Stock available for future issuance
without stockholder approval. These additional shares may be utilized for a
variety of corporate purposes, including future public offerings to raise
additional capital or to facilitate corporate acquisitions. The Company does not
currently have any plans to issue additional shares of capital stock, other than
shares of Greenfield Common Stock which may be issued upon conversion of the
Convertible Junior Subordinated Debentures or upon the exercise of options or
warrants or pursuant to management incentive compensation plans.
One of the effects of the existence of unissued and unreserved Greenfield
Common Stock and undesignated Greenfield Preferred Stock may be to enable the
Board of Directors of the Company to issue shares to persons friendly to current
management which could render more difficult or discourage an attempt
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to obtain
control of the Company by means of a merger, tender offer, proxy contest or
otherwise, and thereby protect the continuity of the Company's management. The
Board of Directors of the Company can issue Greenfield Preferred Stock with
voting and conversion rights which could adversely affect the voting power of
holders of Greenfield Common Stock.
DELAWARE TAKEOVER STATUTE
Section 203 of the Delaware General Corporation Law, as amended ("Section
203"), provides that, subject to certain exceptions specified therein, an
"interested stockholder" of a Delaware corporation shall not engage in any
business combination, including mergers or consolidations or acquisitions of
additional shares of the corporation with the corporation for a three-year
period following the date that such stockholder becomes an "interested
stockholder" unless (i) prior to such date, the board of directors of the
corporation approved either the business combination or the transaction which
resulted in the stockholder becoming an "interested stockholder", (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
"interested stockholder", the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced (excluding certain shares) or (iii) on or subsequent to such dates,
the business combination is approved by the board of directors of the
corporation and authorized at an annual or special meeting of stockholders by
the affirmative vote of at least 662/3% of the outstanding voting stock which is
not owned by the "interested stockholder". Except as otherwise specified in
Section 203, an "interested stockholder" is defined to include (x) any person
that is the owner of 15% or more of the outstanding voting stock of the
corporation, or is an affiliate or associate of the corporation and was the
owner of 15% or more of the outstanding voting stock of the corporation at any
time within three years immediately prior to the relevant date and (y) the
affiliates and associates of any such person.
These provisions could have the effect of delaying, deferring or preventing
a change of control of the Company. The Company's stockholders, by adopting an
amendment to its Certificate or By-Laws, may elect not to be governed by Section
203, effective twelve months after adoption. Neither the Certificate nor the
By-Laws presently exclude the Company from the restrictions imposed by Section
203.
UNITED STATES TAXATION
GENERAL
The following is a summary of certain of the material United States Federal
income tax consequences of the purchase, ownership, disposition and conversion
of Convertible Preferred Securities. Unless otherwise stated, this summary deals
only with Convertible Preferred Securities held as capital assets by holders who
purchase the Convertible Preferred Securities upon original issuance. It does
not deal with special classes of holders such as banks, thrifts, real estate
investment trusts, regulated investment companies, insurance companies, dealers
in securities or currencies, tax-exempt investors, or persons that will hold the
Convertible Preferred Securities as other than a capital asset. This summary
also does not address the tax consequences to persons that have a functional
currency other than the U.S. Dollar or the tax consequences to shareholders,
partners or beneficiaries of a holder of Convertible Preferred Securities.
Further, it does not include any description of any alternative minimum tax
consequences or the tax laws of any state or local government or of any foreign
government that may be applicable to the Convertible Preferred Securities. This
summary is based on the Internal Revenue Code of 1986, as amended (the "Code"),
Treasury regulations thereunder and administrative and judicial interpretations
thereof, as of the date hereof, all of which are subject to change, possibly on
a retroactive basis.
CLASSIFICATION OF THE CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
In connection with the issuance of the Convertible Junior Subordinated
Debentures, Dickstein, Shapiro & Morin, L.L.P., special counsel to Greenfield
and the Trust, rendered its opinion generally to the effect that, under then
current law and assuming full compliance with the terms of the Convertible
Junior Subordinated Debenture Indenture (and certain other documents), and based
on certain facts and assumptions contained in such opinion, the Convertible
Junior Subordinated Debentures held by the Trust will be classified for United
States Federal income tax purposes as indebtedness of Greenfield.
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CLASSIFICATION OF THE TRUST
In connection with the issuance of the Convertible Preferred Securities,
Dickstein, Shapiro & Morin, L.L.P., special counsel to Greenfield and the Trust,
rendered its opinion generally to the effect that, under then current law and
assuming full compliance with the terms of the Declaration and the Convertible
Junior Subordinated Debenture Indenture (and certain other documents), and based
on certain facts and assumptions contained in such opinion, the Trust will be
classified for United States Federal income tax purposes as a grantor trust and
not as an association taxable as a corporation. Accordingly, for United States
Federal income tax purposes, each holder of Convertible Preferred Securities
generally will be considered the owner of an undivided interest in the
Convertible Junior Subordinated Debentures, and each holder will be required to
include in its gross income any original issue discount ("OID") accrued with
respect to its allocable share of those Convertible Junior Subordinated
Debentures.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT
Because Greenfield has the option, under the terms of the Convertible
Junior Subordinated Debentures, to defer payments of interest by extending
interest payment periods for up to 20 quarters, all of the stated interest
payments on the Convertible Junior Subordinated Debentures will be treated as
"original issue discount". Holders of debt instruments issued with OID must
include that discount in income on an economic accrual basis before the receipt
of cash attributable to the interest, regardless of their method of tax
accounting. Generally, all of a holder's taxable interest income with respect to
the Convertible Junior Subordinated Debentures will be accounted for as OID.
Actual payments and distributions of stated interest will not, however, be
separately reported as taxable income. The amount of OID that accrues in any
quarter will approximately equal the amount of the interest that accrues on the
Convertible Junior Subordinated Debentures in that quarter at the stated
interest rate. In the event that the interest payment period is extended,
holders will continue to accrue OID approximately equal to the amount of the
interest payment due at the end of the extended interest payment period on an
economic accrual basis over the length of the extended interest payment period.
Because income on the Convertible Preferred Securities will constitute OID,
corporate holders of Convertible Preferred Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Convertible Preferred Securities.
MARKET DISCOUNT AND BOND PREMIUM
Holders of Convertible Preferred Securities other than a holder who
purchased the Convertible Preferred Securities upon original issuance may be
considered to have acquired their undivided interests in the Convertible Junior
Subordinated Debentures with market discount or acquisition premium as such
phrases are defined for United States Federal income tax purposes. Such holders
are advised to consult their tax advisors as to the income tax consequences of
the acquisition, ownership and disposition of the Convertible Preferred
Securities.
RECEIPT OF CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION
OF THE ISSUER
Under certain circumstances, as described under the caption "Description of
the Convertible Preferred Securities--Tax Event or Investment Company Event
Redemption or Distribution", Convertible Junior Subordinated Debentures may be
distributed to holders in exchange for the Convertible Preferred Securities and
in liquidation of the Trust. Under current law, such a distribution to holders,
for United States Federal income tax purposes, would be treated as a nontaxable
event to each holder, and each holder would receive an aggregate tax basis in
the Convertible Junior Subordinated Debentures equal to such holder's aggregate
tax basis in its Convertible Preferred Securities. A holder's holding period in
the Convertible Junior Subordinated Debentures so received in liquidation of the
Trust would include the period during which the Convertible Preferred Securities
were held by such holder. If, however, the related Special Event is a Tax Event
which results in the Trust being treated as an association taxable as a
corporation, the distribution would likely constitute a taxable event to holders
of the Convertible Preferred Securities.
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Under certain circumstances described herein (see "Description of the
Convertible Preferred Securities"), the Convertible Junior Subordinated
Debentures may be redeemed for cash and the proceeds of such redemption
distributed to holders in redemption of their Convertible Preferred Securities.
Under current law, such a redemption would, for United States Federal income tax
purposes, constitute a taxable disposition of the redeemed Convertible Preferred
Securities, and a holder would recognize gain or loss as if it sold such
redeemed Convertible Preferred Securities for cash. See "--Disposition of
Convertible Preferred Securities".
DISPOSITION OF CONVERTIBLE PREFERRED SECURITIES
A holder that sells Convertible Preferred Securities will recognize gain or
loss equal to the difference between the amount realized on the sale of the
Convertible Preferred Securities and the holder's adjusted tax basis in such
Convertible Preferred Securities. A holder's adjusted tax basis in the
Convertible Preferred Securities generally will be its initial purchase price
increased by OID previously includible in such holder's gross income to the date
of disposition and decreased by payments received on the Convertible Preferred
Securities to the date of disposition. Such gain or loss will be a capital gain
or loss and will be a long-term capital gain or loss if the Convertible
Preferred Securities have been held for more than one year at the time of sale.
The Convertible Preferred Securities may trade at a price that does not
accurately reflect the value of accrued but unpaid interest with respect to the
underlying Convertible Junior Subordinated Debentures. A holder who disposes of
or converts his Convertible Preferred Securities between record dates for
payments of distributions thereon will be required to include accrued but unpaid
interest on the Convertible Junior Subordinated Debentures through the date of
disposition in income as ordinary income, and to add such amount to his adjusted
tax basis in his PRO RATA share of the underlying Convertible Junior
Subordinated Debentures deemed disposed of. To the extent the selling price is
less than the holder's adjusted tax basis (which basis will include, in the form
of OID, all accrued but unpaid interest), a holder will recognize a capital
loss. Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States Federal income tax purposes.
EXCHANGE OF CONVERTIBLE PREFERRED SECURITIES FOR GREENFIELD COMMON STOCK
A holder of Convertible Preferred Securities will not recognize gain or
loss upon the exchange, through the Conversion Agent, of Convertible Preferred
Securities for a proportionate share of the Convertible Junior Subordinated
Debentures held by the Issuer.
A holder of Convertible Preferred Securities will not recognize income,
gain or loss upon the conversion, through the Conversion Agent, of Convertible
Junior Subordinated Debentures into Greenfield Common Stock. The holder will,
however, recognize gain upon the receipt of cash in lieu of a fractional share
of Greenfield Common Stock equal to the amount of cash received less the
holder's tax basis in such fractional share. A holder's tax basis in the
Greenfield Common Stock received upon exchange and conversion should generally
be equal to such holder's tax basis in the Convertible Preferred Securities
delivered to the Conversion Agent for exchange less the basis allocated to any
fractional share for which cash is received and a holder's holding period in the
Greenfield Common Stock received upon exchange and conversion should generally
begin on the date the holder acquired the Convertible Preferred Securities
delivered to the Conversion Agent for exchange.
ADJUSTMENT OF CONVERSION PRICE
Treasury Regulations promulgated under Section 305 of the Code would treat
holders of Convertible Preferred Securities as having received a constructive
distribution from Greenfield in the event the conversion ratio of the
Convertible Junior Subordinated Debentures were adjusted if (i) as a result of
such adjustment, the proportionate interest (measured by the quantum of
Greenfield Common Stock into or for which the Convertible Junior Subordinated
Debentures are convertible or exchangeable) of the holders of the Convertible
Preferred Securities in the assets or earnings and profits of Greenfield were
increased, and (ii) the adjustment was not made pursuant to a bona fide,
reasonable antidilution formula. An adjustment in the conversion ratio would not
be considered made pursuant to such a formula if the adjustment was made to
compensate for certain taxable distributions with respect to the Greenfield
Common Stock. Thus, under certain
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circumstances, a reduction in the conversion
price for the holders may result in deemed dividend income to holders to the
extent of the current or accumulated earnings and profits of Greenfield. Holders
of the Convertible Preferred Securities would be required to include their
allocable share of such deemed dividend income in gross income but will not
receive any cash related thereto.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, as to the United
States, a foreign corporation, a non-resident alien individual, a foreign
partnership, or a nonresident fiduciary of a foreign estate or trust.
Under present United States Federal income tax law, (i) payments by the
Trust or any of its paying agents to any holder of a Convertible Preferred
Security who or which is a United States Alien Holder will not be subject to
withholding of United States Federal income tax; provided that (a) the
beneficial owner of the Convertible Preferred Security does not actually or
constructively (including by virtue of its interest in the underlying
Convertible Junior Subordinated Debentures) own 10% or more of the total
combined voting power of all classes of stock of Greenfield entitled to vote,
(b) the beneficial owner of the Convertible Preferred Security is not a
controlled foreign corporation that is related to Greenfield through stock
ownership, and (c) either (A) the beneficial owner of the Convertible Preferred
Security certifies to the Trust or its agent, under penalties of perjury, that
it is not a United States holder and provides its name and address or (B) a
securities clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"Financial Institution"), and holds the Convertible Preferred Security in such
capacity, certifies to the Trust or its agent, under penalties of perjury, that
such statement has been received from the beneficial owner by it or by a
Financial Institution between it and the beneficial owner and furnishes the
Trust or its agent with a copy thereof; and (ii) a United States Alien Holder of
a Convertible Preferred Security will not be subject to withholding of United
States Federal income tax on any gain realized upon the sale or other
disposition of a Convertible Preferred Security.
If a United States Alien Holder is treated as receiving a deemed dividend
as a result of an adjustment of the conversion price of the Convertible Junior
Subordinated Debentures, as described above under "Adjustment of Conversion
Price", such deemed dividend will be subject to United States Federal
withholding tax at a 30% (or lower treaty) rate.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Annual information reporting will apply to interest income on the
Convertible Preferred Securities, and payments made on, and proceeds from the
sale of, the Convertible Preferred Securities may be subject to a "backup"
withholding tax of 31% unless the holder complies with certain identification
requirements. Any withheld amounts will be allowed as a credit against the
holder's United States Federal income tax, provided the required information is
provided to the Internal Revenue Service.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, President Clinton proposed certain tax law changes that
would, among other things, deny interest deductions to corporate issuers of debt
instruments under certain circumstances. These proposals, were they to become
effective, would not deny Greenfield a deduction otherwise available for
interest paid in cash on the Convertible Junior Subordinated Debentures, and
thus would not give rise to a Tax Event. However, there can be no assurance that
subsequent proposals or final legislation will not deny Greenfield a deduction
otherwise available for such interest payments, which in turn could give rise to
a Tax Event, which would permit Greenfield to cause a redemption of the
Convertible Junior Subordinated Debentures or a distribution of the Convertible
Junior Subordinated Debentures in liquidation of the Trust, as described more
fully under the caption "Description of the Convertible Preferred
Securities--Tax Event or Investment Company Event Redemption or Distribution".
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THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
CONVERTIBLE PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE,
LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED
STATES FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Code impose certain requirements on employee benefit plans and certain
other retirement plans and arrangements, including individual retirement
accounts and annuities, that are subject to ERISA and the Code (all of which are
hereinafter referred to as "Plans") and on persons who are fiduciaries with
respect to such Plans. In accordance with ERISA's general fiduciary standards,
before investing in Convertible Preferred Securities, a Plan fiduciary should
determine whether such an investment is permitted under the governing Plan
instruments and is appropriate for the Plan in view of its overall investment
policy and the composition and diversification of its portfolio. Other
provisions of ERISA and the Code prohibit certain transactions involving the
assets of a Plan and persons who have certain specified relationships to the
Plan ("parties in interest" within the meaning of ERISA or "disqualified
persons" within the meaning of the Code). Accordingly, any Plan with respect to
which Greenfield or any of its affiliates would be considered a party in
interest or a disqualified person should not purchase Convertible Preferred
Securities.
In addition, under United States Department of Labor Regulation Section
2510.3-101 (the "Regulation"), if immediately after any acquisition of
Convertible Preferred Securities, 25 percent or more of the value of the
Convertible Preferred Securities is held by Plans, employee benefit plans not
subject to ERISA (for example, governmental plans) and entities whose underlying
assets include plan assets by reason of a plan's investment in the entity, then
the assets of the Issuer would be treated as assets of Plans holding Convertible
Preferred Securities, unless another exemption applied.
ANY PLAN PROPOSING TO PURCHASE CONVERTIBLE PREFERRED SECURITIES SHOULD
CONSULT WITH ITS COUNSEL REGARDING THE APPLICATION OF ERISA, THE CODE AND THE
REGULATION WITH RESPECT TO INVESTMENT IN CONVERTIBLE PREFERRED SECURITIES.
SELLING HOLDERS
The Convertible Preferred Securities were originally issued by the Trust
and sold by CS First Boston Corporation, Alex. Brown & Sons Incorporated, Morgan
Stanley & Co. Incorporated and Schroder Wertheim & Co. (the "Initial
Purchasers"), in a transaction exempt from the registration requirements of the
Securities Act, to persons reasonably believed by such Initial Purchasers to be
"qualified institutional buyers" (as defined in Rule 144A under the Securities
Act), to certain qualified institutional buyers acting on behalf of
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act) or outside the United States to non-U.S. persons
in offshore transactions in reliance on Regulation S under the Securities Act.
The Selling Holders may from time to time offer and sell pursuant to this
Prospectus any or all of the Convertible Preferred Securities, any Convertible
Junior Subordinated Debentures and Greenfield Common Stock issued upon
conversion of the Convertible Preferred Securities.
The following table sets forth information with respect to the record
holders of the Convertible Preferred Securities as of May 31, 1996. Such
information has been obtained from the Selling Holders and the Property Trustee.
The term Selling Holder includes the beneficial owners of the Convertible
Preferred Securities and their transferees, pledgees, donees or other
successors.
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NUMBER OF CONVERTIBLE
SELLING HOLDER PREFERRED SECURITIES
- ---------------------------------- -----------------------------
1. Cede & Co. ............................................. 2,214,200
2. State of Connecticut ................................... 42,000
3. BAII ................................................... 10,000
4. TCW Convertible Strategy Fund .......................... 9,800
5. Iselin ................................................. 5,000
6. North Dakota State Land Board .......................... 5,000
7. OCM Convertible Limited
Partnership ............................................ 5,000
8. Ribley Corp. ........................................... 5,000
9. Rockridge Corp. ........................................ 1,000
10. ABJ Societe Anonyme .................................... 500
11. Aneroma Corp. .......................................... 500
12. Cadogen Corp. .......................................... 500
13. Cranberry Rock Investments ............................. 500
14. Tendencia Overseas Fund Ltd. ........................... 500
15. Valley Forge Inc. ...................................... 500
Total ............................................ ---------
2,300,000
=========
No Selling Holder has, or within the past three years has had, any
position, office or other material relationship with the Trust or the Company or
any of their predecessors or affiliates. Because the Selling Holders may,
pursuant to this Prospectus, offer all or some portion of the Convertible
Preferred Securities, the Convertible Junior Subordinated Debentures or the
Greenfield Common Stock issuable upon conversion of the Convertible Preferred
Securities, no estimate can be given as to the amount of the Convertible
Preferred Securities, the Convertible Junior Subordinated Debentures or the
Greenfield Common Stock issuable upon conversion of the Convertible Preferred
Securities that will be held by the Selling Holders upon termination of any such
sales. In addition, the Selling Holders identified above may have sold,
transferred or otherwise disposed of all or a portion of their Convertible
Preferred Securities since the date on which they provided the information
regarding their Convertible Preferred Securities, in transactions exempt from
the registration requirements of the Securities Act.
PLAN OF DISTRIBUTION
The Offered Securities may be sold from time to time to purchasers directly
by the Selling Holders. Alternatively, the Selling Holders may from time to time
offer the Offered Securities to or through underwriters, broker/dealers or
agents, who may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Holders or the purchasers of such
securities for whom they may act as agents. The Selling Holders and any
underwriters, broker/dealers or agents that participate in the distribution of
Offered Securities may be deemed to be "underwriters" within the meaning of the
Securities Act and any
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profit on the sale of such securities and any discounts,
commissions, concessions or other compensation received by any such underwriter,
broker/dealer or agent may be deemed to be underwriting discounts and
commissions under the Securities Act.
The Offered Securities may be sold from time to time in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. The
sale of the Offered Securities may be effected in transactions (which may
involve crosses or block transactions) (i) on any national securities exchange
or quotation service on which the Offered Securities may be listed or quoted at
the time of sale, (ii) in the over-the-counter market, (iii) in transactions
otherwise than on such exchanges or in the over-the-counter market or (iv)
through the writing of options. At the time a particular offering of the Offered
Securities is made, a Prospectus Supplement, if required, will be distributed
which will set forth the aggregate amount and type of Offered Securities being
offered and the terms of the offering, including the name or names of any
underwriters, broker/dealers or agents, any discounts, commissions and other
terms constituting compensation from the Selling Holders and any discounts,
commissions or concessions allowed or reallowed or paid to broker/dealers.
To comply with the securities laws of certain jurisdictions, if applicable,
the Offered Securities will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the Offered Securities may not be offered or sold unless they have
been registered or qualified for sale in such jurisdictions or any exemption
from registration or qualification is available and is complied with.
The Selling Holders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of any of the Offered Securities by the
Selling Holders. The foregoing may affect the marketability of such securities.
Pursuant to the Registration Rights Agreement, all expenses of the
registration of the Offered Securities will be paid by the Company, including,
without limitation, Commission filing fees and expenses of compliance with state
securities or "blue sky" laws; provided, however, that the Selling Holders will
pay all underwriting discounts and selling commissions, if any. The Selling
Holders will be indemnified by the Company and the Trust, jointly and severally
against certain civil liabilities, including certain liabilities under the
Securities Act, or will be entitled to contribution in connection therewith. The
Company and the Trust will be indemnified by the Selling Holders severally
against certain civil liabilities, including certain liabilities under the
Securities Act, or will be entitled to contribution in connection therewith.
LEGAL MATTERS
The validity of the Convertible Preferred Securities will be passed upon
for the Issuer by Morris, Nichols, Arsht & Tunnell, special Delaware counsel to
the Issuer. The validity of the Convertible Junior Subordinated Debentures, the
Guarantee, Greenfield Common Stock issuable upon conversion of such Convertible
Junior Subordinated Debentures and certain United States federal income taxation
matters will be passed upon for Greenfield and the Issuer by Dickstein, Shapiro
& Morin, L.L.P. Sidney Dickstein, a partner of Dickstein, Shapiro & Morin,
L.L.P., serves as a trustee of several trusts which, at May 31, 1996,
collectively owned 100,000 shares of Greenfield Common Stock. Mr. Dickstein
disclaims beneficial ownership of such shares.
EXPERTS
The financial statements and schedules incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of Greenfield for the year ended
December 31, 1995, and the audited historical financial statements of Rule
included in Greenfield's Current Report on Form 8-K dated as of January 12,
1996, as amended by Form 8-K/A dated as of January 12, 1996, have been so
incorporated in reliance on the reports of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
53
<PAGE>
<TABLE>
<CAPTION>
INDEX OF DEFINED TERMS
Page Page
---- ----
<C> <C> <C> <C>
1940 Act.............................. 26 Interested Stockholder............ 47
AMT .................................. 13 Investment Company Event ......... 26
accredited investors.................. 1 Issuer............................ 1
Additional Interest................... 39 Issuer Trustees................... 8
Applicable Price...................... 24 Liquidation Distribution.......... 28
Appointment Event..................... 30 Non-Stock Fundamental Change...... 25
Beneficial Owner...................... 33 No Recognition Opinion............ 25
Business Day.......................... 20 NNM............................... 3
CTD .................................. 11 Offered Securities................ 2
Carbidie.............................. 13 OID............................... 48
Certificate........................... 45 Original Offering................. 1
Certificated Securities............... 33 Original Offering Date............ 1
Change in 1940 Act Law................ 26 PORTAL............................ 8
Code.................................. 47 Participants...................... 33
Closing Price......................... 24 Plans............................. 51
Commission............................ 3 Property Account.................. 9
Common Securities..................... 1 Prospectus Supplement............. 2
Common Stock Fundamental Change....... 24 Purchaser Stock Price............. 25
Company............................... 1 Qualified Institutional Buyer .... 1
Convertible Junior Subordinated RTW............................... 10
Debentures.......................... 1 Redemption Price.................. 3
Convertible Preferred Securities...... 1 Redemption Tax Opinion............ 25
DTC .................................. 26 Reference Market Price............ 25
Declaration........................... 9 Registration Default.............. 32
Declaration Event of Default.......... 29 Registration Rights Agreement..... 32
Deferral Period....................... 6 Registration Statement............ 3
Delaware Trustee...................... 9 Regulation........................ 51
Entitlement Date...................... 24 Rights............................ 21
ERISA................................. 51 Rights Agreement.................. 21
Event of Default...................... 29 Rule.............................. 10
Exchange Act.......................... 3 SEC............................... 3
Financial Institution................. 50 Section 203....................... 47
Financing Entity...................... 41 Securities Act.................... 1
Fundamental Change.................... 24 Selling Holders................... 2
GFII Trustees......................... 9 Senior Indebtedness............... 41
Global Certificates................... 32 Series A Preferred Stock.......... 21
Greenfield............................ 1 Shelf Registration Statement...... 32
Greenfield Common Stock............... 1 Special Event..................... 26
Greenfield Preferred Stock............ 45 Special Trustee................... 9
Greenfield Transaction................ 22 Successor Securities.............. 29
Guarantee............................. 2 TRW............................... 10
Guarantee Payments.................... 35 Tax Event......................... 26
Guarantee Trustee..................... 9 Trust............................. 1
Indenture............................. 37 Trust Act......................... 9
Indenture Trustee..................... 9 Trustee........................... 9
Indirect Participants................. 33 Trust Indenture Act............... 9
Initial Purchasers.................... 51 Trust Securities.................. 1
Interest Payment Date................. 38
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
ANNEX A
PRO FORMA UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
Rule Pro Forma
Greenfield Rule Pro Forma Acquisition Offering As
As Reported As Reported(a) Adjustments Pro Forma Adjustments Adjusted
----------- ----------- ----------- ----------- ----------- -----------
(dollars in thousands, except for per share data)
<S> <C> <C> <C> <C> <C> <C>
Net sales ............................. $ 420,188 $ 64,412 $ -- $ 484,600 $ -- $ 484,600
Cost of sales ......................... 288,158 47,302 (2,449)(b) 333,011 -- 333,011
----------- ----------- ----------- ----------- ----------- -----------
132,030 17,110 2,449 151,589 151,589
Selling, general and administrative
expense ............................. 70,952 16,130 (3,540)(c) 83,542 -- 83,542
----------- ----------- ----------- ----------- ----------- -----------
Operating income ...................... 61,078 980 5,989 68,047 -- 68,047
Interest expense and other ............ 8,223 4,449 2,208(d) 14,880 (6,890)(f) 7,990
Dividends on company-obligated -- -- --
mandatorily redeemable convertible
preferred securities of Greenfield
Capital Trust ....................... ----------- ----------- ----------- ----------- ----------- -----------
Income (loss) before taxes ............ 52,855 (3,469) 3,781 53,167 890 54,057
Provision (benefit) for income taxes .. 21,390 (1,518) 1,819(e) 21,691 356(h) 22,047
----------- ----------- ----------- ----------- ----------- -----------
Net income $ 31,465 $ (1,951) $ 1,962 $ 31,476 $ 534 $ 32,010
=========== =========== =========== =========== =========== ===========
Earnings per share - primary .......... $ 1.94 $ 1.94 $ 1.97
Earnings per share - fully diluted .... -- -- $ 1.91(i)
Common shares - outstanding ........... 16,260,377 16,260,377 16,260,377
Common shares - fully diluted ......... -- -- 18,684,619(i)
<FN>
- ------------------
(a) Amounts reflect Rule's unaudited historical operating results for the twelve months ended November 30, 1995.
(b) Cost of sales has been reduced for the following items:
Net personnel ($1,775) and purchasing cost ($276) reductions from restructuring of Rule operations ..... $ 2,051
Cost reductions from purchase of Gloucester plant versus lease ......................................... 398
--------
$ 2,449
========
(c) Selling, general and administrative expenses have been reduced (increased) for the following:
Personnel cost reductions from restructuring of Rule operations ........................................ $ 1,144
Corporate facility cost reductions ..................................................................... 328
Cost reductions from the elimination of redundant corporate expenses ................................... 901
Increase in goodwill amortization ...................................................................... (644)
Decrease in amortization of predecessor intangible assets .............................................. 1,116
Non-recurring divestiture expenses incurred by Rule related to the sale of Rule to Greenfield .......... 695
--------
$ 3,540
========
(d) Interest expense and other has been increased to reflect the addition of acquisition debt and the
refinancing of Rule debt, as follows:
Financing of purchase including acquisition costs and purchase of Gloucester plant ..................... $ 53,810
Assumption of debt to be refinanced .................................................................... 35,241
--------
Total Rule acquisition debt ............................................................................ 89,051
Average Greenfield interest rate for 1995 .............................................................. 7.14%
Pro forma interest expense for 12 months ............................................................... 6,358
Interest recorded on $5,040 Rule investment in historical Greenfield operating results ................. (120)
Interest expense recorded in historical Rule operating results ......................................... (4,030)
--------
Annual increase in interest expense .................................................................... $ 2,208
========
(e) Amount reflects estimated income tax effect of pro forma adjustments (excluding non-deductible goodwill amortization).
(f) Amount represents the interest savings relative to the repayment of debt with the Offering proceeds.
(g) Amount represents the dividends on the company-obligated mandatorily redeemable convertible preferred securities of
Greenfield Capital Trust at a rate per annum of 6%.
(h) Amount reflects estimated income tax effect of the adjustments described under the column entitled "Offering
Adjustments".
(i) Fully diluted earnings per share is calculated on an "as converted" basis for the company-obligated mandatorily
redeemable convertible preferred securities of Greenfield Capital Trust.
</FN>
</TABLE>
A-1
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
THE COMPANY, THE ISSUER OR ANY OF THEIR AGENTS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN
NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THE ISSUER
SINCE SUCH DATE.
TABLE OF CONTENTS
Page
----
Available Information...............................3
Incorporation of Certain
Documents by Reference...........................4
Risk Factors........................................5
Greenfield Capital Trust............................8
The Company.........................................9
Ratio of Earnings to Fixed Charges.................17
Capitalization.....................................18
Accounting Treatment...............................19
Use of Proceeds....................................19
Description of the Convertible Preferred
Securities......................................19
Description of the Guarantee.......................35
Description of the Convertible
Junior Subordinated Debentures..................37
Effect of Obligations Under the
Convertible Junior
Subordinated Debentures and
the Guarantee...................................44
Description of Greenfield Capital Stock............45
United States Taxation.............................47
ERISA Considerations...............................51
Selling Holders....................................51
Plan of Distribution...............................52
Legal Matters......................................53
Experts............................................53
Index of Defined Terms.............................54
Annex A...........................................A-1
<PAGE>
GREENFIELD CAPITAL TRUST
2,300,000 TIDES SM
6 % Convertible Preferred Securities
Term Income Deferrable
Equity Securities (TIDES)SM
guaranteed to the extent set forth herein by,
and convertible into Common Stock of,
GREENFIELD INDUSTRIES, INC.
PROSPECTUS
DATED ______, 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the distribution of the
Offered Securities being registered hereunder (other than underwriting
discounts) are set forth in the following table (all amounts except the SEC
registration fee are estimated):
Payable by
Company
----------
Securities and Exchange Commission registration fee ............... $ 44,810
Accounting fees and expenses....................................... 10,000
Legal fees and expenses............................................ 30,000
Miscellaneous...................................................... 25,190
---------
Total....................................................... $110,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE COMPANY
Section 145 of the General Corporation Law of the State of Delaware
permits the Company, subject to the standards set forth therein, to indemnify
any person in connection with any action, suit or proceeding brought or
threatened by reason of the fact that such person is or was a director, officer,
employee or agent of the Company or is or was serving as such with respect to
another corporation or entity at the request of the Company. Article VII,
Section 8 of the Company's By-laws provides for full indemnification of its
officers, directors and employees to the extent permitted by Section 145. The
officers and directors of Greenfield are also covered by insurance policies
indemnifying them against certain liabilities, including liabilities arising
under the Securities Act, which might be incurred by them in such capacities.
INDEMNIFICATION OF TRUSTEES OF THE TRUST
The Amended and Restated Declaration of Trust (the "Declaration")
provides for full indemnification of any Trustee, affiliate of any Regular
Trustee, or any officers, directors, shareholders, members, partners, employees,
representatives or agents of the Trust or its affiliates (each an "Indemnified
Person") in connection with any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by the Declaration or by law, except that
an Indemnified Person shall be liable for any loss, damage or claim incurred by
reason of such Indemnified Person's gross negligence (or, in the case of the
Trustee, negligence) or willful misconduct with respect to such acts or
omissions. The Declaration also provides that to the fullest extent permitted by
applicable law, Greenfield shall indemnify each Indemnified Person under the
same standard. The Declaration further provides that, to the fullest extent
permitted by applicable law, expenses (including legal fees) incurred by an
Indemnified Person in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by Greenfield prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt by or
an undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified for the underlying cause of action as authorized by the Declaration.
In addition, the Regular Trustees are covered by insurance policies indemnifying
them against certain liabilities, including certain liabilities arising under
the Securities Act, which might be incurred by them in such capacities.
<PAGE>
The Selling Holders will be indemnified by Greenfield and the Trust,
jointly and severally, against certain civil liabilities, including certain
liabilities under the Securities Act, or will be entitled to contribution in
connection therewith. Greenfield and the Trust will be indemnified by the
Selling Holders severally against certain civil liabilities, including certain
liabilities under the Securities Act, or will be entitled to contribution in
connection therewith.
ITEM 16. EXHIBITS.
2.1 Stock Purchase Agreement dated September 13, 1994
between Acme-Cleveland Corporation and Greenfield Industries,
Inc. (filed with the Commission as Exhibit 1 to the Company's
Current Report on Form 8-K, filed with the Commission on
November 15, 1994, as amended on January 13, 1995 (the
"CTD/Carbidie 8-K") and incorporated herein by reference
thereto)
2.2 Amendment to the Stock Purchase Agreement dated November 1,
1994 between Acme-Cleveland Corporation and Greenfield
Industries, Inc. (filed as Exhibit 2 to the CTD/Carbidie 8-K
and incorporated herein by reference thereto)
2.3 Stock Purchase Agreement dated November 4, 1994 between
Greenfield Industries, Inc. and Spreckels Industries, Inc.
(filed as Exhibit 3 to the CTD/Carbidie 8-K and incorporated
herein by reference thereto)
2.4 Stock Purchase Agreement dated January 27, 1995 between
Valenite, Inc. and Greenfield Industries, Inc. (filed with the
Commission as Exhibit 2.4 to the Company's 1994 Annual Report
on Form 10-K, filed with the Commission on March 30, 1995 and
incorporated herein by reference thereto)
2.5 Agreement and Plan of Merger dated August 11, 1995 by and
among Greenfield Industries, Inc., Rule Acquisition
Corporation and Rule Industries, Inc. (filed with the
Commission as Exhibit 7(e) to the Company's Amendment No. 1 to
Schedule 13D, filed with the Commission on August 18, 1995
(the "Schedule 13D") and incorporated herein by reference
thereto)
2.6 Stock Option Agreement dated August 11, 1995 by and between
Rule Industries, Inc. and Greenfield Industries, Inc. (filed
as Exhibit 7(f) to the Schedule 13D and incorporated herein by
reference thereto)
2.7 Amendment No. 1 dated November 21, 1995 to the Agreement and
Plan of Merger by and among Greenfield Industries, Inc., Rule
Acquisition Corporation and Rule Industries, Inc. (filed with
the Commission as Exhibit 7(l) to the Company's Amendment
No. 3 to Schedule 13D, filed with the Commission on November
29, 1995 and incorporated herein by reference thereto)
4.1 Certificate of Designations, Preferences and Rights of
Series A Preferred Stock of Greenfield Industries, Inc. dated
February 6, 1996
4.2 Certificate of Trust of Greenfield Capital Trust
4.3 Amended and Restated Declaration of Trust of Greenfield
Capital Trust dated as of April 1,
II-2
<PAGE>
1996 among Greenfield
Industries, Inc., as Sponsor, The Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware
Trustee, and Roger B. Farley, Paul W. Jones and Gary L.
Weller, as Trustees (filed with the Commission as Exhibit 10.5
to the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996, filed with the Commission on May 3, 1996
(the "Form 10-Q") and incorporated herein by reference
thereto)
4.4 Indenture for the 6% Convertible Junior Subordinated
Deferrable Interest Debentures Due 2016 dated as of April 1,
1996 among Greenfield Industries, Inc. and The Bank of New
York, as Trustee (filed as Exhibit 10.3 to the Form 10-Q and
incorporated herein by reference thereto)
4.5 Form of 6% Convertible Preferred Securities (included in
Exhibit 4.3 above)
4.6 Form of 6% Convertible Junior Subordinated Deferrable Interest
Debentures Due 2016 (included in Exhibit 4.4 above)
4.7 Preferred Securities Guarantee Agreement dated April 24, 1996
between Greenfield Industries, Inc., as Guarantor, and the
Bank of New York, as Preferred Guarantee Trustee (filed as
Exhibit 10.4 to the Form 10-Q and incorporated herein by
reference thereto)
5.1 Opinion of Dickstein, Shapiro & Morin, L.L.P. as to the
legality of the Greenfield Industries, Inc. Common Stock, 6%
Convertible Junior Subordinated Deferrable Interest Debentures
Due 2016 and Preferred Securities Guarantee being registered
hereby
5.2 Opinion of Morris, Nichols, Arsht & Tunnell as to the legality
of the 6% Convertible Preferred Securities being registered
hereby
8.1 Opinion of Dickstein, Shapiro & Morin, L.L.P. as to certain
tax matters
10.1 Registration Rights Agreement dated April 24, 1996 among
Greenfield Capital Trust, Greenfield Industries, Inc. and CS
First Boston Corporation, as Representative of the Several
Purchasers (filed as Exhibit 10.7 to the Form 10-Q and
incorporated herein by reference thereto)
12.1 Statement regarding Computation of Ratio of Earnings to Fixed
Charges
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Dickstein, Shapiro & Morin, L.L.P. (contained in
the Opinions of Counsel filed as Exhibits 5.1 and 8.1 hereto)
23.3 Consent of Morris, Nichols, Arsht & Tunnell (contained in
the Opinion of Counsel filed as Exhibit 5.2 hereto)
24.1 Powers of Attorney
25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as Trustee
under the 6% Convertible Junior Subordinated Debentures
Indenture
II-3
<PAGE>
25.2 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as Property
Trustee under the Amended and Restated Declaration of Trust
25.3 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as Preferred
Guarantee Trustee under the Preferred Securities Guarantee
Agreement
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Augusta, State of Georgia on June 10, 1996.
GREENFIELD INDUSTRIES, INC.
(Registrant)
By: /s/ Gary L. Weller
---------------------------
Gary L. Weller
Senior Vice President
and Chief Financial Officer
Pursuant to the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities indicated on June 10,
1996.
*
- ------------------------------ Director and Chairman of the Board
Donald E. Nickelson
*
- ------------------------------ President, Chief Executive Officer
Paul W. Jones and Director
(Principal executive officer)
/s/ Gary L. Weller
- ------------------------------ Senior Vice President and Chief Financial Officer
Gary L. Weller (Principal financial and accounting officer)
*
- ------------------------------ Director
John W. Burge, Jr.
*
- ------------------------------ Director
Peter S. Finley
*
- ------------------------------ Director
James C. Janning
II-6
<PAGE>
*
- ------------------------------ Director
Robert E. Lefton
*
- ------------------------------ Director
Robert W. Pratt, Jr.
*
- ------------------------------ Director
Julian M. Seeherman
*
- ------------------------------ Director
Dennis W. Sheehan
*By: /s/ Gary L. Weller
--------------------------
Gary L. Weller
Attorney-in-Fact
- ------------------
*Such signature has been affixed pursuant to the following Power of Attorney:
II-7
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Paul W. Jones and Gary L.
Weller, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution, for him and in his name, place and stead, in any
and all capacities, to sign the Registration Statement on Form S-3 of
Greenfield Capital Trust (the "Trust") and Greenfield Industries, Inc., relating
to the proposed public offering of the Convertible Preferred Securities of the
Trust, and to sign any and all amendments (including post-effective amendments)
and supplements thereto, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by undersigned, thereunto duly authorized,
in the City of Augusta, State of Georgia on June 10, 1996.
GREENFIELD CAPITAL TRUST
(Registrant)
By: /s/ Roger B. Farley
------------------------------
Roger B. Farley
Trustee
By: /s/ Paul W. Jones
------------------------------
Paul W. Jones
Trustee
By: /s/ Gary L. Weller
------------------------------
Gary L. Weller
Trustee
II-9
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
Sequentially
Exhibit No. Description Numbered Page
- ----------- ----------- -------------
<C> <C> <C>
2.1 Stock Purchase Agreement dated September 13, 1994 between
Acme-Cleveland Corporation and Greenfield Industries, Inc.
(filed with the Commission as Exhibit 1 to the Company's
Current Report on Form 8-K, filed with the Commission on
November 15, 1994, as amended on January 13, 1995 (the
"CTD/Carbidie 8-K") and incorporated herein by reference
thereto)
2.2 Amendment to the Stock Purchase Agreement dated November 1,
1994 between Acme-Cleveland Corporation and Greenfield
Industries, Inc. (filed as Exhibit 2 to the CTD/Carbidie 8-K
and incorporated herein by reference thereto)
2.3 Stock Purchase Agreement dated November 4, 1994 between
Greenfield Industries, Inc. and Spreckels Industries, Inc.
(filed as Exhibit 3 to the CTD/Carbidie 8-K and incorporated
herein by reference thereto)
2.4 Stock Purchase Agreement dated January 27, 1995 between
Valenite, Inc. and Greenfield Industries, Inc. (filed with
the Commission as Exhibit 2.4 to the Company's 1994 Annual
Report on Form 10-K, filed with the Commission on March 30,
1995 and incorporated herein by reference thereto)
2.5 Agreement and Plan of Merger dated August 11, 1995 by and
among Greenfield Industries, Inc., Rule Acquisition
Corporation and Rule Industries, Inc. (filed with the
Commission as Exhibit 7(e) to the Company's Amendment No. 1
to Schedule 13D, filed with the Commission on August 18,
1995 (the "Schedule 13D") and incorporated herein by
reference thereto)
2.6 Stock Option Agreement dated August 11, 1995 by and between
Rule Industries, Inc. and Greenfield Industries, Inc. (filed
as Exhibit 7(f) to the Schedule 13D and incorporated herein
by reference thereto)
<PAGE>
2.7 Amendment No. 1 dated November 21, 1995 to the Agreement and
Plan of Merger by and among Greenfield Industries, Inc.,
Rule Acquisition Corporation and Rule Industries, Inc.
(filed with the Commission as Exhibit 7(l) to the Company's
Amendment No. 3 to Schedule 13D, filed with the Commission
on November 29, 1995 and incorporated herein by reference
thereto)
4.1 Certificate of Designations, Preferences and Rights of
Series A Preferred Stock of Greenfield Industries, Inc.
dated February 6, 1996
4.2 Certificate of Trust of Greenfield Capital Trust
4.3 Amended and Restated Declaration of Trust of Greenfield
Capital Trust dated as of April 1, 1996 among Greenfield
Industries, Inc., as Sponsor, The Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware
Trustee, and Roger B. Farley, Paul W. Jones and Gary L.
Weller, as Trustees (filed with the Commission as Exhibit 10.5
to the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996, filed with the Commission on May 3, 1996
(the "Form 10-Q") and incorporated herein by reference
thereto)
4.4 Indenture for the 6% Convertible Junior Subordinated
Deferrable Interest Debentures Due 2016 dated as of April 1,
1996 among Greenfield Industries, Inc. and The Bank of New
York, as Trustee (filed as Exhibit 10.3 to the Form 10-Q and
incorporated herein by reference thereto)
4.5 Form of 6% Convertible Preferred Securities (included in
Exhibit 4.3 above)
4.6 Form of 6% Convertible Junior Subordinated Deferrable
Interest Debentures Due 2016 (included in Exhibit 4.4 above)
4.7 Preferred Securities Guarantee Agreement dated April 24, 1996
between Greenfield Industries, Inc., as Guarantor, and the
Bank of New York, as Preferred Guarantee Trustee (filed as
Exhibit 10.4 to the Form 10-Q and incorporated herein by
reference thereto)
<PAGE>
5.1 Opinion of Dickstein, Shapiro & Morin, L.L.P. as to the
legality of the Greenfield Industries, Inc. Common Stock, 6%
Convertible Junior Subordinated Deferrable Interest
Debentures Due 2016 and Preferred Securities Guarantee being
registered hereby
5.2 Opinion of Morris, Nichols, Arsht & Tunnell as to the
legality of the 6% Convertible Preferred Securities being
registered hereby
8.1 Opinion of Dickstein, Shapiro & Morin, L.L.P. as to certain
tax matters
10.1 Registration Rights Agreement dated April 24, 1996 among
Greenfield Capital Trust, Greenfield Industries, Inc. and CS
First Boston Corporation, as Representative of the Several
Purchasers (filed as Exhibit 10.7 to the Form 10-Q and
incorporated herein by reference thereto)
12.1 Statement regarding Computation of Ratio of Earnings to
Fixed Charges
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Dickstein, Shapiro & Morin, L.L.P. (contained in
the Opinions of Counsel filed as Exhibits 5.1 and 8.1 hereto)
23.3 Consent of Morris, Nichols, Arsht & Tunnell (contained in
the Opinion of Counsel filed as Exhibit 5.2 hereto)
24.1 Powers of Attorney
25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as Trustee
under the 6% Convertible Junior Subordinated Debentures
Indenture
25.2 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as
Property Trustee under the Amended and Restated Declaration
of Trust
25.3 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as
Preferred Guarantee Trustee under the Preferred Securities
Guarantee Agreement
</TABLE>
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF SERIES A PREFERRED STOCK
of
GREENFIELD INDUSTRIES, INC.
Pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware.
GREENFIELD INDUSTRIES, INC., a Delaware corporation (the
Corporation"), certifies that pursuant to the authority conferred in Fourth of
its Amended and Restated Certificate of Incorporation, and in accordance with
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, its Board of Directors has adopted the following resolution
establishing and designating a series of shares and fixing and determining the
relative rights and preferences thereof.
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its Amended
and Restated Certificate of Incorporation, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Preferred Stock" and the number of shares
constituting such series shall be 500,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior
and superior to the shares of Series A Preferred Stock
with respect to dividends, the holders of shares of Series
A Preferred Stock in preference to the holders of Common
Stock, par value $0.01 per share (the "Common Stock"),
shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the
first day of March, June, September and December in
each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"),
<PAGE>
commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a
share of Series A
Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or
(b) subject to the provision for adjustment hereinafter
set forth, one hundred (100) times the aggregate per
share amount of all cash dividends, and one hundred (100)
times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at
any time after February 6, 1996 (the "Rights
Declaration Date") (i) declare any dividend on the Common
Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of
shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of
the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock
outstanding immediately after such event and the
denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in Paragraph
(A) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared
on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Preferred Stock shall nevertheless
be payable on such subsequent Quarterly Dividend Payment
Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from
2
<PAGE>
the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the
shares of Series A Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Series A
Preferred Stock entitled to receive payment of a dividend
or distribution declared thereon, which record date shall
be no more than 30 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall
entitle the holder thereof to one hundred (100) votes on
all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any
dividend on the Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the number of
votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of
3
<PAGE>
Common Stock outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders
of shares of Series A Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the
corporation having general voting rights shall vote
together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Preferred
Stock shall be in arrears in an amount equal to six (6)
quarterly dividends thereon, the occurrence of such
contingency shall mark the beginning of a period (herein
called a "default period") which shall extend until such
time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current
quarterly dividend period on all shares of Series A
Preferred Stock then outstanding shall have been declared
and paid or set apart for payment. During each default
period, all holders of Preferred Stock (including holders
of the Series A Preferred Stock) with dividends in arrears
in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the
right to elect two (2) Directors.
(ii) During any default period, such voting rights
of the holders of Series A Preferred Stock may be
exercised initially at a special meeting called pursuant
to subparagraph (iii) of this Section 3(C) or at any
annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that neither such
voting right nor the right of the holders of any other
series of Preferred Stock, if any, to increase, in certain
cases, the authorized number of Directors shall be
exercised unless the holders of ten percent (10%) in
number of shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum of
the holders of Common Stock shall not affect the exercise
by the holders of Preferred Stock of such voting right. At
any meeting at which the holders of Preferred Stock shall
exercise such voting right initially during an existing
default period, they shall have the right, voting as a
class, to elect Directors to fill such vacancies, if any,
in the Board of Directors as may then exist up
4
<PAGE>
to two (2)
Directors or, if such right is exercised at an annual
meeting, to elect two (2) Directors. If the number which
may be so elected at any special meeting does not amount
to the required number, the holders of the Preferred Stock
shall have the right to make such increase in the number
of Directors as shall be necessary to permit the election
by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect
Directors in any default period and during the continuance
of such period, the number of Directors shall not be
increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the
rights of any equity securities ranking senior to or pari
passu with the Series A Preferred Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously
exercised their right to elect Directors, the Board of
Directors may order, or any stockholder or stockholders
owning in the aggregate not less than ten percent (10%) of
the total number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of a
special meeting of the holders of Preferred Stock, which
meeting shall thereupon be called by the President, a
Vice-President or the Secretary of the Corporation. Notice
of such meeting and of any annual meeting at which holders
of Preferred Stock are entitled to vote pursuant to this
Paragraph (C)(iii) shall be given to each holder of record
of Preferred Stock by mailing a copy of such notice to him
at his last address as the same appears on the books of
the Corporation. Such meeting shall be called for a time
not earlier than twenty (20) days and not later than sixty
(60) days after such order or request, such meeting may be
called on similar notice by any stockholder or
stockholders owning in the aggregate not less than ten
percent (10%) of the total number of shares of Preferred
Stock outstanding. Notwithstanding the provisions of this
Paragraph (C)(iii), no such special meeting shall be
called during the period within sixty (60) days
immediately preceding the date fixed for the next annual
meeting of the stockholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the
whole number of Directors until the
5
<PAGE>
holders of Preferred
Stock shall have exercised their right to elect two (2)
Directors voting as a class, after the exercise of which
right (x) the Directors so elected by the holders of
Preferred Stock shall continue in office until their
successors shall have been elected by such holders or
until the expiration of the default period, and (y) any
vacancy in the Board of Directors may (except as provided
in Paragraph (C)(ii) of this Section 3) be filled by vote
of a majority of the remaining Directors theretofore
elected by the holders of the class of stock which elected
the Director whose office shall have become vacant.
References in this Paragraph (C) to Directors elected by
the holders of a particular class of stock shall include
Directors elected by such Directors to fill vacancies as
provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as
a class to elect Directors shall cease, (y) the term of
any Directors elected by the holders of Preferred Stock as
a class shall terminate, and (z) the number of Directors
shall be such number as may be provided for in the
certificate of incorporation or by-laws irrespective of
any increase made pursuant to the provisions of Paragraph
(C)(ii) of this Section 3 (such number being subject,
however, to change thereafter in any manner provided by
law or in the certificate of incorporation or by-laws).
Any vacancies in the Board of Directors effected by the
provisions of clauses (y) and (z) in the preceding
sentence may be filled by a majority of the remaining
Directors.
(D) Except as set forth herein, holders of Series A Preferred
Stock shall have no special voting rights and their
consent shall not be required (except to the extent they
are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
6
<PAGE>
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the
Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise
acquire for consideration any shares of stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution
or winding up) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and
all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution
or winding up) with the Series A Preferred Stock, provided
that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of
stock ranking on a parity with the Series A Preferred
Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms
as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights
and preferences of the respective
7
<PAGE>
series and classes,
shall determine in good faith will result in fair and
equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation
unless the Corporation could, under Paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at
such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new
series of Preferred Stock to be created by resolution or resolutions of the
Board of Directors, subject to the conditions and restrictions on issuance set
forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Corporation, no distribution shall be
made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred
Stock shall have received $100 per share, plus an amount
equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such
payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to
the holders of shares of Series A Preferred Stock unless,
prior thereto, the holders of shares of Common Stock shall
have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing
(i) the Series A Liquidation Preference by (ii) one
hundred (100) (as appropriately adjusted as set forth in
subparagraph (C) below to reflect such events as stock
splits, stock dividends and recapitalizations with respect
to the Common Stock) (such number in clause (ii), the
"Adjustment Number"). Following the payment of the full
amount of the Series A
8
<PAGE>
Liquidation Preference and the
Common Adjustment in respect of all outstanding shares of
Series A Preferred Stock and Common Stock, respectively,
holders of Series A Preferred Stock and holders of shares
of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to one
(1) with respect to such Preferred Stock and Common Stock,
on a per share basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A
Liquidation Preference and the liquidation preferences of
all other series of preferred stock, if any, which rank on
a parity with the Series A Preferred Stock, then such
remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their
respective liquidation preferences. In the event, however,
that there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the
holders of Common Stock.
(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares,
then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the
denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction
in which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
the shares of Series A Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to one hundred (100) times the aggregate
amount of stock, securities, cash and/or any other property (payable in kind),
as the case may
9
<PAGE>
be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Preferred Stock shall
be adjusted by multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable.
Section 9. Ranking. The Series A Preferred Stock shall rank
junior to all other series of the Corporation's Preferred Stock which may be
created in the future as to the payment of dividends and the distribution of
assets, unless the terms of any such series shall provide otherwise.
Section 10. Amendment. The Amended and Restated Certificate of
Incorporation of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or special
rights of the Series A Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of a majority or more of the outstanding
shares of Series A Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series A Preferred Stock may be
issued in fractions of a share which shall entitled the holder, in proportion to
such holders fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
10
<PAGE>
IN WITNESS WHEREOF, GREENFIELD INDUSTRIES, INC. has caused this
Certificate of Designations, Preferences and Rights of Series A Preferred Stock
to be executed by its President and Chief Executive Officer and attested to by
its Secretary this 6th day of February, 1996.
GREENFIELD INDUSTRIES, INC.
By: /s/ Paul W. Jones
___________________________
Paul W. Jones
President and Chief Executive
Officer
ATTEST:
By: /s/ Gary L. Weller
_____________________________
Gary L. Weller
Secretary
11
CERTIFICATE OF TRUST
OF
GREENFIELD CAPITAL TRUST
This Certificate of Trust is being executed as of December 7, 1995
for the purpose of organizing a business trust pursuant to the Delaware Business
Trust Act, 12 Del. C. ss.ss. 3801 et seq. (the "Act").
The undersigned hereby certify as follows:
1. Name. The name of the business trust is Greenfield Capital
Trust (the "Trust").
2. Delaware Trustee. The name and address of the trustee of the
Trust that has its principal place of business in the State of Delaware is The
Bank of New York (Delaware), White Clay Center, Route 273, Wilmington, Delaware
19711.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of
the Trust, have duly executed this Certificate of Trust as of the day and year
first above written.
TRUSTEES
THE BANK OF NEW YORK,
as Property Trustee
By: /s/ Paul J. Schmalzel
________________________________
Name: Paul J. Schmalzel
Title: Assistant Treasurer
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ Joseph F. Leary
________________________________
Name: Joseph F. Leary
Title: Vice President
/s/ Roger B. Farley
________________________________
Roger B. Farley, as Trustee
/s/ Paul W. Jones
________________________________
Paul W. Jones, as Trustee
/s/ Gary L. Weller
________________________________
Gary L. Weller, as Trustee
2
[LETTERHEAD OF DICKSTEIN, SHAPIRO & MORIN, L.L.P.]
June 10, 1996
Greenfield Capital Trust
Greenfield Industries, Inc.
2743 Perimeter Parkway
Building 100, Suite 100
Augusta, Georgia 30909
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Greenfield Industries, Inc., a
Delaware corporation (the "Company"), and Greenfield Capital Trust, a Delaware
business trust (the "Trust"), in connection with the preparation of a
Registration Statement on Form S-3 (the "Registration Statement") filed by the
Company and the Trust with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, pertaining to the registration under the Act
of (i) 2,300,000 6% Convertible Preferred Securities (liquidation preference $50
per Convertible Preferred Security) (the "Preferred Securities") of the Trust
representing undivided beneficial interests in the assets of the Trust; (ii) 6%
Convertible Junior Subordinated Deferrable Interest Debentures Due 2016 (the
"Convertible Junior Subordinated Debentures") of the Company which may be
distributed under certain circumstances to the holders of the Preferred
Securities; (iii) the shares of common stock, par value $0.01 per share (the
"Common Stock"), of the Company issuable upon conversion of the Preferred
Securities and the Convertible Junior Subordinated Debentures; and (iv) the
Preferred Securities Guarantee of the Company (as defined below).
The Preferred Securities were issued pursuant to the Amended and
Restated Declaration of Trust of the Trust, dated as of April 1, 1996 (the
"Declaration"), among the Company, as sponsor, Roger B. Farley, Paul W. Jones
and Gary L. Weller, as
<PAGE>
Regular Trustees, The Bank of New York (Delaware), as
Delaware trustee, and The Bank of New York, as Property Trustee, and guaranteed
(the "Preferred Securities Guarantee") by the Company as to the payment of
distributions and as to payments on liquidation, redemption and otherwise
pursuant to the Preferred Securities Guarantee Agreement, dated as of April 24,
1996 (the "Preferred Securities Guarantee Agreement"), between the Company and
The Bank of New York, as Trustee. The proceeds from the sale by the Trust of the
Preferred Securities were invested in the Convertible Junior Subordinated
Debentures, which were issued pursuant to an Indenture, dated as of April 1,
1996, between the Company and The Bank of New York.
Capitalized terms used in this opinion and not otherwise defined
herein shall have the meanings ascribed to them in the Registration Statement.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and that such documents constitute valid and binding
obligations of such parties.
For the purposes of giving this opinion, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records and other instruments as we
have deemed necessary or appropriate for purposes of this opinion.
Based upon and subject to the foregoing, we are of the opinion
that:
2
<PAGE>
(i) The shares of Common Stock initially issuable upon
conversion of the Preferred Securities and the
Convertible Junior Subordinated Debentures have been duly
authorized and reserved for issuance upon conversion,
and, when certificates representing the Common Stock in
the form of the specimen certificate examined by us have
been manually signed by an authorized officer of the
transfer agent and registrar for the Common Stock and, if
and when issued upon conversion of the Preferred
Securities and the Convertible Junior Subordinated
Debentures, such Common Stock will be validly issued,
fully paid and nonassessable;
(ii) The Preferred Securities Guarantee is a valid and binding
agreement of the Company, enforceable against the Company
in accordance with its terms, except to the extent that
enforcement thereof may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium, or other similar
laws now or hereafter in effect relating to creditor's
rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a
proceeding at law or in equity);
(iii) The Convertible Junior Subordinated Debentures are valid
and binding obligations of the Company, entitled to the
benefits of the Indenture and enforceable against the
Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights generally and (b) general principles of
equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
We are licensed to practice law in the District of Columbia and
the State of New York, and do not hold ourselves out
3
<PAGE>
as being conversant with
the law of any jurisdiction other than the federal laws of the United States of
America, the District of Columbia, the State of New York and, to the extent
required by the foregoing opinion, the Delaware General Corporation Law. No
other opinion is expressed herein as to the laws of any other jurisdiction.
This opinion is delivered to you in connection with the
Registration Statement, and may not be relied upon by any other person or for
any other purpose.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement. We also consent to the reference to this firm under
the caption "Legal Matters" in the Prospectus contained in the Registration
Statement.
Very truly yours,
/s/ Dickstein, Shapiro & Morin, L.L.P.
4
[LETTERHEAD OF MORRIS, NICHOLS, ARSHT & TUNNELL]
June 10, 1996
Greenfield Capital Trust
c/o Greenfield Industries, Inc.
2743 Perimeter Parkway
Building 100, Suite 100
Augusta, Georgia 30909
Re: Greenfield Capital Trust
Ladies and Gentlemen:
We have acted as special Delaware counsel to Greenfield
Capital Trust, a Delaware statutory business trust (the "Trust"), in connection
with certain matters relating to the preparation of a Registration Statement
(and the Prospectus forming a part thereof) on Form S-3 to be filed with the
Securities and Exchange Commission (the "Commission") by the Trust and
Greenfield Industries, Inc. (the "Company") on or about the date hereof (the
"Registration Statement"), relating to the registration with the Commission of
the Preferred Securities of the Trust.
The Preferred Securities have been issued pursuant to (i) a
Purchase Agreement dated April 18, 1996 (the "Purchase Agreement") among CS
First Boston Corporation, as representative of the several Purchasers (the
"Representative"), the Trust and the Company and (ii) the Amended and Restated
Declaration of Trust of the Trust dated as of April 1, 1996 (the "Governing
Instrument"). Capitalized terms used herein and not otherwise herein defined are
used as defined in the Governing Instrument.
In rendering this opinion, we have examined and relied upon
copies of the following documents in the forms provided to us: the Certificate
of Trust of the Trust as filed in the Office of the Secretary of State of the
State of Delaware (the "State Office") on December 7, 1995 (the "Certificate");
a Declaration of Trust of the Trust dated as of December 7, 1995 (the "Original
Governing Instrument"); the Governing Instrument; the Forms and Specimens of
Preferred Security and Common Security; the Terms of Preferred Securities and
Common Securities; the form of Indenture dated as of April 1, 1996 between the
Company and The Bank of New York, as
<PAGE>
Trustee; the Preferred Securities Guarantee
Agreement by the Company and The Bank of New York, as Trustee, dated as of April
24, 1996; the Common Securities Guarantee Agreement by the Company dated as of
April 24, 1996; the Purchase Agreement; the Trust's Confidential Preliminary
Offering Circular dated April 3, 1996 relating to the Preferred Securities; the
Trust's Confidential Offering Circular dated April 18, 1996 relating to the
Preferred Securities (the "Offering Circular"); the Registration Rights
Agreement dated April 24, 1996 among the Trust, the Company and the
Representative; the Registration Statement; and a certificate of good standing
of the Trust obtained as of a recent date from the State Office. In such
examinations, we have assumed the genuineness of all signatures, the conformity
to original documents of all documents submitted to us as drafts or copies or
forms of documents to be executed and the legal capacity of natural persons to
complete the execution of documents. We have further assumed for purposes of
this opinion: (i) the due formation or organization, valid existence and good
standing of each entity (other than the Trust) that is a party to any of the
documents reviewed by us under the laws of the jurisdiction of its respective
formation or organization; (ii) the due authorization, execution and delivery
by, or on behalf of, each of the parties thereto of the above-referenced
documents (including, without limitation, the due authorization, execution and
delivery of the Governing Instrument and the Purchase Agreement prior to the
first issuance of Preferred Securities); (iii) that no event has occurred
subsequent to the filing of the Certificate that would cause a dissolution or
liquidation of the Trust under the Original Governing Instrument or the
Governing Instrument, as applicable; (iv) that the activities of the Trust have
been and will be conducted in accordance with the Original Governing Instrument
or the Governing Instrument, as applicable, and the Delaware Business Trust Act,
12 Del. C. ss.ss. 3801 et seq. (the "Delaware Act"); (v) that each Holder of
Preferred Securities has made payment of the required consideration therefor and
received a Preferred Securities Certificate in consideration thereof in
accordance with the terms and conditions of the Governing Instrument, the
Offering Circular and the Purchase Agreement; (vi) that the Preferred Securities
have been issued and sold to, and held or transferred by, the Preferred
Securities Holders (and any subsequent transferee), and all transfers have been
made, in accordance with the terms, conditions, requirements and procedures set
forth in the Governing Instrument, the Offering Circular and the Purchase
Agreement; (vii) none of the Preferred Securities have been called for
redemption, redeemed, converted or canceled (except in connection with a
permitted transfer) and all of the Preferred Securities remain outstanding; and
(viii) that the documents examined by us are in full force and effect, express
the entire understanding of the parties thereto with respect to the subject
matter thereof and have not been modified, supplemented or otherwise amended,
except as herein referenced. No opinion is
2
<PAGE>
expressed with respect to the
requirements of, or compliance with, federal or state securities or blue sky
laws. We have not participated in the preparation of the Registration Statement
or any other offering materials relating to the Preferred Securities and we
assume no responsibility for their contents. As to any fact material to our
opinion, other than those assumed, we have relied without independent
investigation on the above-referenced documents and certificates and on the
accuracy, as of the date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all
respects to matters of Delaware law, it is our opinion that:
1. The Trust is a duly organized and validly existing
statutory business trust in good standing under the laws of the State of
Delaware.
2. The Preferred Securities constitute validly issued and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable beneficial interests in the Trust.
3. Under the Delaware Act and the terms of the Governing
Instrument, each Preferred Security Holder of the Trust, in such capacity, will
be entitled to the same limitation of personal liability as that extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware; provided, however, we express no
opinion with respect to the liability of any Preferred Security Holder who is,
was or may become a named Trustee of the Trust. Notwithstanding the foregoing,
we note that pursuant to Section 11.04 of the Governing Instrument, the Trust
may withhold amounts otherwise distributable to a Holder and pay over such
amounts to the applicable jurisdictions in accordance with federal, state and
local law and any amount withheld will be deemed to have been distributed to
such Holder and that, pursuant to the Governing Instrument, Preferred Security
Holders may be obligated to make payments or provide indemnity or security under
the circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the use of our name under the heading
"Legal Matters" in the Prospectus. In giving this consent, we do not thereby
admit that we come within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Commission thereunder. This opinion speaks only as of the
date hereof and is based on our understandings and assumptions as to present
facts, and on our review of the above-referenced documents and the application
of Delaware law as the same exist as of the date hereof, and we undertake no
obligation to update or
3
<PAGE>
supplement this opinion after the date hereof for the
benefit of any person or entity with respect to any facts or circumstances that
may hereafter come to our attention or any changes in facts or law that may
hereafter occur or take effect. This opinion is intended solely for the benefit
of the addressee hereof in connection with the matters contemplated hereby and
may not be relied on by any other person or entity or for any other purpose
without our prior written consent.
Very truly yours,
/s/ MORRIS, NICHOLS, ARSHT & TUNNELL
4
[LETTERHEAD OF DICKSTEIN, SHAPIRO & MORIN, L.L.P.]
June 10, 1996
Greenfield Capital Trust
Greenfield Industries, Inc.
2743 Perimeter Parkway
Building 100, Suite 100
Augusta, Georgia 30909
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as special counsel for Greenfield Industries, Inc.,
a Delaware corporation (the "Company"), and Greenfield Capital Trust, a Delaware
business trust (the "Trust"), in connection with the preparation of a
registration statement on Form S-3 (the "Registration Statement") filed by the
Company and the Trust with the Securities and Exchange Commission under the
Securities Act of 1933 as amended, pertaining to the registration of (i)
2,300,000 6% Convertible Preferred Securities (liquidation preference $50 per
preferred security) (the "Preferred Securities") of the Trust representing
undivided beneficial interests in the assets of the Trust; (ii) 6% Convertible
Junior Subordinated Deferrable Interest Debentures Due 2016 (the "Convertible
Junior Subordinated Debentures") issued by the Company to the Trust in
connection with the sale of the Preferred Securities; (iii) the share of common
stock, par value $0.01 per share (the "Common Stock"), of the Company issuable
upon conversion of the Convertible Junior Subordinated Debentures; and (iv) the
preferred securities guarantee of the Company which guarantees distributions and
payments upon liquidation, redemption and otherwise on the Preferred Securities
pursuant to the Preferred Securities Guarantee Agreement, dated as of April 24,
1996, between the Company and the Bank of New York, a New York banking
corporation, as trustee.
<PAGE>
We hereby confirm that, although the discussion set forth in the
Registration Statement under the heading "UNITED STATES TAXATION" does not
purport to discuss all possible United States federal income tax consequences of
the purchase, ownership and disposition of Preferred Securities, in our opinion
such discussion constitutes, in all material respects, a fair and accurate
summary of the United States federal income tax consequences of the purchase,
ownership and disposition of Preferred Securities, based upon current law. It is
possible that contrary positions may be taken by the Internal Revenue Service
and that a court may agree with such contrary positions.
This opinion is furnished to you solely for your benefit in
connection with the filing of the Registration Statement and is not to be used,
circulated, quoted or otherwise referred to for any other purpose or relied upon
by any other person for any purpose without our prior written consent. We hereby
consent to the filing of this opinion as an exhibit to the Registration
Statement. We also consent to the reference to this firm under the heading
"Legal Matters" in the Prospectus contained in the Registration Statement. This
opinion is expressed as of the date hereof and we disclaim any undertaking to
advise you of any subsequent changes of the facts stated or assumed herein or
any subsequent changes in applicable law.
Very truly yours,
/s/ Dickstein, Shapiro & Morin, L.L.P.
2
<TABLE>
<CAPTION>
Exhibit 12.1
GREENFIELD INDUSTRIES, INC.
RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
(dollars in thousands)
Historical Pro Forma
-------------------------------------------------------------------- ------------------------
Three
Months
Three Months Ended Year Ended Ended
Year Ended December 31, March 31, December 31, March 31,
1991 1992 1993 1994 1995 1995 1996 1995 1996
------------------------------------------------ ------------------- ------------------------
Earnings:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pre tax earnings (loss) ($11,833) $ 2,687 $21,984 $36,115 $52,855 $11,960 $14,431 $54,228 $16,156
Interest expense 13,814 12,764 8,302 3,169 8,223 2,117 3,513 6,919 1,788
Rent (1) 525 631 647 764 947 237 326 1,416 326
Preferred stock dividends -- -- -- -- -- -- -- 6,900 1,725
------------------------------------------------ ------------------- ------------------------
Adjusted earnings (A) $2,506 $16,082 $30,933 $40,048 $62,205 $14,314 $18,270 $69,463 $19,995
================================================ =================== ========================
Fixed charges:
Interest $13,814 $12,764 $8,302 $3,169 $8,223 $2,117 $3,513 $6,919 $1,788
Rent (1) 525 631 647 764 947 237 326 1,416 326
Preferred stock dividends -- -- -- -- -- -- -- 6,900 1,725
------------------------------------------------ ------------------ -------------------------
Adjusted fixed charges (B) $14,339 $13,395 $8,949 $3,933 $9,170 $2,354 $3,839 $15,235 $3,839
================================================ ================== =========================
Ratio of earnings to fixed charges (2) 1.20 3.46 10.18 6.76 6.08 4.76 4.56 5.21
(A/B)
<FN>
(1) The Company estimates that the interest portion of rent expense is equivalent to one-third of total rent expense.
(2) For the year ended December 31, 1991, earnings as calculated above were inadequate to cover fixed charges. The coverage
deficiency was $11,833.
</FN>
</TABLE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 30, 1996 appearing on page 51 of the Annual Report to Shareholders of
Greenfield Industries, Inc., which is incorporated by reference in Greenfield
Industries, Inc.'s Annual Report on Form 10-K for the year ended December 31,
1995. We also consent to the incorporation by reference of our report on the
Financial Statement Schedule, which appears on page S-1 of such Annual Report on
Form 10-K. We also consent to the incorporation by reference of our report dated
October 27, 1995, which appears on page six of the Current Report on Form 8-K
dated January 12, 1996. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
St. Louis, Missouri
June 7, 1996
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Paul W. Jones and Gary L.
Weller, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign the Registration Statement on Form S-3 of Greenfield
Capital Trust (the "Trust") and Greenfield Industries, Inc., relating to the
proposed public offering of the Convertible Preferred Securities of the Trust,
and to sign any and all amendments (including post-effective amendments) and
supplements thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
/s/ Donald E. Nickelson
_______________________
Donald E. Nickelson
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Paul W. Jones and Gary L.
Weller, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign the Registration Statement on Form S-3 of Greenfield
Capital Trust (the "Trust") and Greenfield Industries, Inc., relating to the
proposed public offering of the Convertible Preferred Securities of the Trust,
and to sign any and all amendments (including post-effective amendments) and
supplements thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
/s/ Paul W. Jones
____________________
Paul W. Jones
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Paul W. Jones and Gary L.
Weller, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign the Registration Statement on Form S-3 of Greenfield
Capital Trust (the "Trust") and Greenfield Industries, Inc., relating to the
proposed public offering of the Convertible Preferred Securities of the Trust,
and to sign any and all amendments (including post-effective amendments) and
supplements thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
/s/ John W. Burge, Jr.
_____________________
John W. Burge, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Paul W. Jones and Gary L.
Weller, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign the Registration Statement on Form S-3 of Greenfield
Capital Trust (the "Trust") and Greenfield Industries, Inc., relating to the
proposed public offering of the Convertible Preferred Securities of the Trust,
and to sign any and all amendments (including post-effective amendments) and
supplements thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
/s/ Peter S. Finley
____________________
Peter S. Finley
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Paul W. Jones and Gary L.
Weller, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign the Registration Statement on Form S-3 of Greenfield
Capital Trust (the "Trust") and Greenfield Industries, Inc., relating to the
proposed public offering of the Convertible Preferred Securities of the Trust,
and to sign any and all amendments (including post-effective amendments) and
supplements thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
/s/ James C. Janning
_____________________
James C. Janning
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Paul W. Jones and Gary L.
Weller, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign the Registration Statement on Form S-3 of Greenfield
Capital Trust (the "Trust") and Greenfield Industries, Inc., relating to the
proposed public offering of the Convertible Preferred Securities of the Trust,
and to sign any and all amendments (including post-effective amendments) and
supplements thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
/s/ Robert E. Lefton
_____________________
Robert E. Lefton
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Paul W. Jones and Gary L.
Weller, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign the Registration Statement on Form S-3 of Greenfield
Capital Trust (the "Trust") and Greenfield Industries, Inc., relating to the
proposed public offering of the Convertible Preferred Securities of the Trust,
and to sign any and all amendments (including post-effective amendments) and
supplements thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
/s/ Robert W. Pratt, Jr.
________________________
Robert W. Pratt, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Paul W. Jones and Gary L.
Weller, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign the Registration Statement on Form S-3 of Greenfield
Capital Trust (the "Trust") and Greenfield Industries, Inc., relating to the
proposed public offering of the Convertible Preferred Securities of the Trust,
and to sign any and all amendments (including post-effective amendments) and
supplements thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
/s/ Julian M. Seeherman
_______________________
Julian M. Seeherman
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Paul W. Jones and Gary L.
Weller, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign the Registration Statement on Form S-3 of Greenfield
Capital Trust (the "Trust") and Greenfield Industries, Inc., relating to the
proposed public offering of the Convertible Preferred Securities of the Trust,
and to sign any and all amendments (including post-effective amendments) and
supplements thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
/s/ Dennis W. Sheehan
_____________________
Dennis W. Sheehan
CONFORMED COPY
=======================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
GREENFIELD INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
Delaware 04-2917032
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
470 Old Evans Road
Evans, Georgia 30809
(Address of principal executive offices) (Zip code)
----------------------
Convertible Junior Subordinated Deferrable Interest Debentures
(Title of the indenture securities)
=======================================================================
<PAGE>
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.
-----------------------------------------------------------------------
Name Address
-----------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany,
N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza,
New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an exhibit
hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of
1939 (the "Act") and Rule 24 of the Commission's Rules of
Practice.
1. A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration
Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item
2, the answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
- 3 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of
New York, 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 24th day of May,
1996.
THE BANK OF NEW YORK
By: /S/ PAUL J. SCHMALZEL
__________________________
Name: PAUL J. SCHMALZEL
Title: ASSISTANT TREASURER
-4-
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
December 31, 1995, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions of
the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin .................. $ 4,500,312
Interest-bearing balances .......... 643,938
Securities:
Held-to-maturity securities ........ 806,221
Available-for-sale securities ...... 2,036,768
Federal funds sold and securities
purchased under agreements to resell
in domestic offices of the bank:
Federal funds sold ................... 4,166,720
Securities purchased under agreements
to resell........................... 50,413
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................27,068,535
LESS: Allowance for loan and
lease losses ..............520,024
LESS: Allocated transfer risk
reserve......................1,000
Loans and leases, net of unearned
income and allowance, and
reserve 26,547,511
Assets held in trading accounts ...... 758,462
Premises and fixed assets (including
capitalized leases) ................ 615,330
Other real estate owned .............. 63,769
Investments in unconsolidated
subsidiaries and associated
companies .......................... 223,174
Customers' liability to this bank on
acceptances outstanding ............ 900,795
Intangible assets .................... 212,220
Other assets ......................... 1,186,274
___________
Total assets ......................... $42,711,907
===========
LIABILITIES
Deposits:
In domestic offices ................ $21,248,127
Noninterest-bearing .......9,172,079
Interest-bearing .........12,076,048
In foreign offices, Edge and
Agreement subsidiaries, and IBFs 9,535,088
Noninterest-bearing ..........64,417
<PAGE>
Interest-bearing ..........9,470,671
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 2,095,668
Securities sold under agreements
to repurchase .................... 69,212
Demand notes issued to the U.S.
Treasury ........................... 107,340
Trading liabilities .................. 615,718
Other borrowed money:
With original maturity of one year
or less .......................... 1,638,744
With original maturity of more than
one year ......................... 120,863
Bank's liability on acceptances exe-
cuted and outstanding .............. 909,527
Subordinated notes and debentures .... 1,047,860
Other liabilities .................... 1,836,573
___________
Total liabilities .................... 39,224,720
===========
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 1,995,316
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 29,668
Cumulative foreign currency transla-
tion adjustments .................. ( 5,747)
___________
Total equity capital ................ 3,487,187
___________
Total liabilities and equity
capital ........................... $42,711,907
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued by the Board
of Governors of the Federal Reserve System and is true to the best of
my knowledge and belief.
Robert E. Keilman
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 Board of Governors of the Federal
Reserve System and is true and correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
CONFORMED COPY
=======================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
GREENFIELD CAPITAL TRUST
(Exact name of obligor as specified in its charter)
Delaware 58-6322400
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
470 Old Evans Road
Evans, Georgia 30809
(Address of principal executive offices) (Zip code)
----------------------
Convertible Preferred Securities
(Title of the indenture securities)
=======================================================================
<PAGE>
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.
-----------------------------------------------------------------------
Name Address
-----------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany,
N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza,
New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an exhibit
hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of
1939 (the "Act") and Rule 24 of the Commission's Rules of
Practice.
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in effect,
which contains the authority to commence business and a grant
of powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration
Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item
2, the answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
- 3 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of
New York, 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 24th day of May,
1996.
THE BANK OF NEW YORK
By: /S/ PAUL J. SCHMALZEL
__________________________
Name: PAUL J. SCHMALZEL
Title: ASSISTANT TREASURER
-4-
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
December 31, 1995, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions of
the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin .................. $ 4,500,312
Interest-bearing balances .......... 643,938
Securities:
Held-to-maturity securities ........ 806,221
Available-for-sale securities ...... 2,036,768
Federal funds sold and securities
purchased under agreements to resell
in domestic offices of the bank:
Federal funds sold ................... 4,166,720
Securities purchased under agreements
to resell........................... 50,413
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................27,068,535
LESS: Allowance for loan and
lease losses ..............520,024
LESS: Allocated transfer risk
reserve......................1,000
Loans and leases, net of unearned
income and allowance, and
reserve 26,547,511
Assets held in trading accounts ...... 758,462
Premises and fixed assets (including
capitalized leases) ................ 615,330
Other real estate owned .............. 63,769
Investments in unconsolidated
subsidiaries and associated
companies .......................... 223,174
Customers' liability to this bank on
acceptances outstanding ............ 900,795
Intangible assets .................... 212,220
Other assets ......................... 1,186,274
___________
Total assets ......................... $42,711,907
===========
LIABILITIES
Deposits:
In domestic offices ................ $21,248,127
Noninterest-bearing .......9,172,079
Interest-bearing .........12,076,048
In foreign offices, Edge and
Agreement subsidiaries, and IBFs 9,535,088
Noninterest-bearing ..........64,417
<PAGE>
Interest-bearing ..........9,470,671
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 2,095,668
Securities sold under agreements
to repurchase .................... 69,212
Demand notes issued to the U.S.
Treasury ........................... 107,340
Trading liabilities .................. 615,718
Other borrowed money:
With original maturity of one year
or less .......................... 1,638,744
With original maturity of more than
one year ......................... 120,863
Bank's liability on acceptances exe-
cuted and outstanding .............. 909,527
Subordinated notes and debentures .... 1,047,860
Other liabilities .................... 1,836,573
___________
Total liabilities .................... 39,224,720
===========
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 1,995,316
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 29,668
Cumulative foreign currency transla-
tion adjustments .................. ( 5,747)
___________
Total equity capital ................ 3,487,187
___________
Total liabilities and equity
capital ........................... $42,711,907
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued by the Board
of Governors of the Federal Reserve System and is true to the best of
my knowledge and belief.
Robert E. Keilman
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 Board of Governors of the Federal
Reserve System and is true and correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
CONFORMED COPY
=======================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
GREENFIELD INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
Delaware 04-2917032
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
470 Old Evans Road
Evans, Georgia 30809
(Address of principal executive offices) (Zip code)
----------------------
Preferred Securities Guarantee
(Title of the indenture securities)
=======================================================================
<PAGE>
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.
-----------------------------------------------------------------------
Name Address
-----------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany,
N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza,
New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an exhibit
hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of
1939 (the "Act") and Rule 24 of the Commission's Rules of
Practice.
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in effect,
which contains the authority to commence business and a grant
of powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration
Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item
2, the answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
- 3 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of
New York, 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 24th day of May,
1996.
THE BANK OF NEW YORK
By: /S/ PAUL J. SCHMALZEL
__________________________
Name: PAUL J. SCHMALZEL
Title: ASSISTANT TREASURER
-4-
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
December 31, 1995, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions of
the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin .................. $ 4,500,312
Interest-bearing balances .......... 643,938
Securities:
Held-to-maturity securities ........ 806,221
Available-for-sale securities ...... 2,036,768
Federal funds sold and securities
purchased under agreements to resell
in domestic offices of the bank:
Federal funds sold ................... 4,166,720
Securities purchased under agreements
to resell........................... 50,413
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................27,068,535
LESS: Allowance for loan and
lease losses ..............520,024
LESS: Allocated transfer risk
reserve......................1,000
Loans and leases, net of unearned
income and allowance, and
reserve 26,547,511
Assets held in trading accounts ...... 758,462
Premises and fixed assets (including
capitalized leases) ................ 615,330
Other real estate owned .............. 63,769
Investments in unconsolidated
subsidiaries and associated
companies .......................... 223,174
Customers' liability to this bank on
acceptances outstanding ............ 900,795
Intangible assets .................... 212,220
Other assets ......................... 1,186,274
___________
Total assets ......................... $42,711,907
===========
LIABILITIES
Deposits:
In domestic offices ................ $21,248,127
Noninterest-bearing .......9,172,079
Interest-bearing .........12,076,048
In foreign offices, Edge and
Agreement subsidiaries, and IBFs 9,535,088
Noninterest-bearing ..........64,417
<PAGE>
Interest-bearing ..........9,470,671
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 2,095,668
Securities sold under agreements
to repurchase .................... 69,212
Demand notes issued to the U.S.
Treasury ........................... 107,340
Trading liabilities .................. 615,718
Other borrowed money:
With original maturity of one year
or less .......................... 1,638,744
With original maturity of more than
one year ......................... 120,863
Bank's liability on acceptances exe-
cuted and outstanding .............. 909,527
Subordinated notes and debentures .... 1,047,860
Other liabilities .................... 1,836,573
___________
Total liabilities .................... 39,224,720
===========
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 1,995,316
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 29,668
Cumulative foreign currency transla-
tion adjustments .................. ( 5,747)
___________
Total equity capital ................ 3,487,187
___________
Total liabilities and equity
capital ........................... $42,711,907
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued by the Board
of Governors of the Federal Reserve System and is true to the best of
my knowledge and belief.
Robert E. Keilman
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 Board of Governors of the Federal
Reserve System and is true and correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
