<PAGE> 1
As filed with the Securities and Exchange Commission on July 3, 1995
Registration No. 33-59965
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
STANDARD BRANDS PAINT COMPANY
(Exact name of registrant as specified in its charter)
Delaware 4300 West 190th Street 95-6029682
(State or other Torrance, California 90509 (I.R.S. Employer
jurisdiction of (310) 214-2411 Identification Number)
incorporation
or organization)
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
HOWARD S. SCHWARTZ
STANDARD BRANDS PAINT COMPANY
4300 West 190th Street
Torrance, California 90509
(310) 214-2411
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
Copy to:
FRANK H. GOLAY, JR.
Sullivan & Cromwell
444 South Flower Street
Los Angeles, California 90071
(213) 955-8000
Approximate date of commencement of proposed sale to the
public: From time to time after the effective date of this Registration
Statement, as determined by market conditions.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box. [ ]
If any of the securities being registered on this form are to
be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or reinvestment plans, please check the following box. [x]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. [ ]
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective date or until
the registrant shall file a further amendment which specifically states
that this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until this
registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.<PAGE>
<PAGE> 2
PROSPECTUS
SUBJECT TO COMPLETION, DATED JULY 3, 1995
Standard Brands Paint Company
Common Stock
Series A Preferred Stock
This Prospectus relates to 13,051,877 shares of Common Stock and
367,980 shares of Series A Preferred Stock (and 2,957,101 shares of Common
Stock issuable upon conversion of the Series A Preferred Stock) offered by
the Selling Stockholders named herein (the "Selling Stockholders"). See
"Selling Stockholders." Standard Brands Paint Company (the "Company") will
not receive any of the proceeds from the sale of the Common Stock or
Series A Preferred Stock offered hereby. The Common Stock and the Series A
Preferred Stock are referred to herein as the "Offered Securities."
The Series A Preferred Stock is entitled to cumulative cash dividends
at the annual rate of $0.71 per share, payable quarterly, commencing in
January 1997. The Series A Preferred Stock is convertible into the
Company's Common Stock at a conversion price of $1.11 per share of Common
Stock, the Series A Preferred Stock being credited at $8.92 per share for
this purpose. The Series A Preferred Stock is redeemable mandatorily in
May 2005, and may be subject to prior optional purchase or redemption by
the Company or Corimon, S.A.C.A. The applicable redemption prices are
stated elsewhere herein.
The sale or distribution of the Offered Securities may be effected
directly to purchasers by the Selling Stockholders as principals or through
one or more underwriters, brokers, dealers or agents from time to time in
one or more transactions. See "Plan of Distribution."
The number of shares of Offered Securities and the offering price of
the shares of Offered Securities in respect of which this Prospectus is
being delivered ("Offered Shares") are set forth in the accompanying
Prospectus Supplement ("Prospectus Supplement"). The Prospectus Supplement
also sets forth the names of any agents, dealers or underwriters acting in
connection with the sale of the Offered Shares, the compensation of such
agents, dealers and underwriters and the other terms of offering of the
Offered Shares. The Company estimates that the expenses of the offering to
be borne by it will be approximately $125,000.
The Company's Common Stock is listed on the New York Stock Exchange
under the symbol "SBP." On June 30, 1995, the last reported sale price for
the Common Stock on the New York Stock Exchange Composite Tape was $2.75
per share. The Company's Series A Preferred Stock is not listed on any
securities exchange.
The Offered Securities involve a high degree of risk. See "Risk Factors"
beginning on page 3.
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 COMMIS-
SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is July 3, 1995
****************************************************************************
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 STAEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
****************************************************************************
<PAGE>
<PAGE> 2
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). This
Prospectus does not contain all of the information set forth in the
Registration Statement on Form S-3 and exhibits thereto which the Company
has filed with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). Such reports, proxy statements and other informa-
tion concerning the Company and the Registration Statement can be inspected
and copied at the public reference facilities of the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C., and at the following
regional offices of the Commission: 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511 and 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of such material can also be obtained at
prescribed rates from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549. In addition, reports,
proxy statements and other information concerning the Company may be
inspected at the offices of the New York Stock Exchange, Room 401, 20 Broad
Street, New York, New York 10005.
The Company has a fiscal year that ends on the last Sunday in January
of each year. The convention followed by the Company is to designate each
fiscal year by reference to the calendar year most recently ended prior to
the end of its fiscal year. For example, the Company's Fiscal Year 1994
ended on January 29, 1995, and Fiscal Year 1995 will end on January 28,
1996.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the
fiscal year ended January 29, 1995 (the "Form 10-K").
2. The Company's Proxy Statement, dated April 25, 1995,
relating to the special meeting of stockholders held on May 16, 1995
at which the stockholders approved a financial restructuring of the
Company (the "April Proxy Statement").
3. The Company's Current Report on Form 8-K dated May 16,
1995, as amended by Form 8-K/A dated May 23, 1995.
4. The Company's Quarterly Report on Form 10-Q for the quarter
ended April 30, 1995.
5. The Company's Proxy Statement, dated July 3, 1995, relating
to the annual meeting of stockholders to be held on August 16, 1995.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior
to the termination of the offering made hereby shall be deemed to be
incorporated by reference in this Prospectus.
Any statement in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this prospectus.
The Company will provide without charge to each person to whom a
Prospectus is delivered, on the written or oral request of any such person,
a copy of any or all of the documents incorporated by reference herein
other than exhibits to such documents. Such requests should be addressed
to: Investor Relations Department, Standard Brands Paint Company,
4300 West 190th Street, Torrance, California 90509; (310) 214-2411.
No person has been authorized to give any information or to make any
representation not contained in this Prospectus or the Prospectus
Supplement in connection with the offering made hereby, and if given or
made, such information or representation must not be relied upon as having
been authorized by the Company or any dealer. 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 <PAGE>
<PAGE> 3
offer or solicitation in such jurisdiction. Neither the delivery of this
Prospectus nor any sale hereunder shall under any circumstances create any
implication that there has been no change in the affairs of the Company
since the date hereof.
THE COMPANY
The Company, a Delaware corporation whose predecessor was founded in
1939, is an integrated supplier of paint and related products. As of April
30, 1995, the end of the first quarter of the 1995 fiscal year, the Company
operated 58 retail stores in six western states. The Company's wholly-
owned subsidiary, Major Paint Company, manufactures high quality paint and
related products. Such paint and products are distributed primarily
through the Company's retail stores. The Company's principal executive
offices are located at 4300 West 190th Street, Torrance, California 90509;
(310) 214-2411.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Offered Securities.
RISK FACTORS
In addition to the other information in this Prospectus, the
following risk factors should be considered carefully in evaluating whether
to make an investment in the Offered Securities.
No Assurances as to Success in Restructuring
On May 16, 1995, the Company underwent a financial restructuring (the
"Restructuring") designed to provide new capital for the Company and
substantially reduce its outstanding indebtedness. However, additional
lease payments in part offset reductions in interest payments. Following
the Restructuring, the Company is under new management appointed by Corimon
Corporation, a wholly-owned subsidiary of Corimon, S.A.C.A. (collectively,
"CRM"). The Company will not, however, be consolidated or merged with CRM,
but will remain a separate company. CRM intends to propose from time to
time, and management intends to implement, various strategic changes to the
operations of the Company. Such changes will include increasing inventory
levels in the stores, refocusing sale strategies and increasing advertising
and other marketing efforts. Any such operational changes will be proposed
by CRM and implemented by the Company with the intention of returning the
Company to profitability. However, there can be no assurances that the
Company will be successful in the Restructuring or in effecting any such
operational changes or that it will be able to improve its sales or reduce
its operating expenses in order to return to profitability.
Previously, the Company has not been successful in its prior
restructuring efforts. The three principal restructuring efforts were
(i) the recapitalization in 1987, (ii) the bankruptcy in 1993 and (iii) the
establishment of a liquidating property trust in 1994. The Restructuring
was different from these three prior restructuring efforts in that it
involved a substantial equity investment by CRM, a multinational retailer
and producer of paint and related products.
Operating Losses and Declining Sales
The Company has incurred significant losses for each of the fiscal
years ended January 31, 1993, January 30, 1994 and January 29, 1995.
During these periods, sales have declined from $226.7 million for the
fiscal year ended January 31, 1993 to $112.2 million for the fiscal year
ended January 29, 1995. For the fiscal year ended January 29, 1995 and the
quarter ended April 30, 1995, the Company reported consolidated losses of
$48.0 million and $3.9 million, respectively. The improved performance of
the Company will depend upon its ability to (i) increase sales at core
stores and outside sales, (ii) reduce debt levels, and (iii) improve cash
flow. There is no assurance that the Company will be able to accomplish
these objectives significantly enough to curtail its continuing sales
decline and net losses. Failure to effect substantial positive changes in
the operations of the Company could have a material adverse effect on the
Company and its stockholders.
<PAGE>
<PAGE> 4
Substantial Leverage
Even after giving effect to the reduction in outstanding debt
pursuant to the Restructuring, the Company has a substantial amount of
debt. On a consolidated basis as of May 31, 1995, the Company has
outstanding senior secured debt of approximately $16.0 million principal
amount owing to Transamerica Occidental Life Insurance Company ("TOLIC"),
Transamerica Life Insurance and Annuity Company ("TLIAC"), Sun Life
Insurance Company of America ("SAFI") and Anchor National Life Insurance
Company ("ANLIC" and, together with TOLIC, TLIAC and SAFI, the "Insurance
Company Lenders"), approximately $5.5 million under a working capital
facility with Foothill Capital Corp. ("Foothill") and approximately
$5.0 million under a working capital facility with Fidelity Capital &
Income Fund ("FCI"). The Company's high degree of leverage may pose
substantial risks to holders of its Common Stock and Series A Preferred
Stock and may have materially adverse effects on the marketability, price
and future value of the Common Stock and Series A Preferred Stock. Among
other consequences, the high degree of leverage of the Company may result
in impairment of its ability to obtain additional financing in the future,
to make acquisitions, or to take advantage of significant business
opportunities that may arise. In addition, this high degree of leverage
may increase the vulnerability of the Company to adverse general economic
and retailing industry conditions and to increased competitive pressures,
including price pressures from less highly leveraged competitors. The
Company believes, although there can be no assurance, that after giving
effect to the operational restructuring that is being made in conjunction
with the Restructuring, the Company's cash flow from operations,
borrowings, and asset sales will be adequate to make required payments of
principal and interest on its debt, to permit anticipated capital
expenditures, and to fund working capital requirements. However, if the
Company is unable to generate sufficient cash flow from operations,
borrowings, and asset sales in the future, it could default on its
outstanding debt obligations.
Management expects that the Company will need additional capital
during the third or fourth quarter to sustain its operations through the
end of the 1995 fiscal year. CRM has confirmed to the Company that it will
make funds available to the Company, as necessary, to meet its operating
requirements and discharge its obligations through the end of the 1995
fiscal year.
Debt Service Requirements
Although the Company expects to meet the interest and principal
payment requirements on its secured debt and pay its other indebtedness,
there can be no assurance that actual operating results will in fact
generate sufficient cash to pay such obligations. If they do not, cash
will have to be generated from alternative sources such as asset sales,
additional financings or refinancings, or reductions in operating
expenditures. Unfavorable conditions in the Southern California economy
and the retailing industry, the high degree of leverage of the Company,
restrictive covenants contained in the Company's senior secured debt and
working capital facilities, liens granted on assets, and various other
factors may limit the ability of the Company to successfully undertake any
such actions. No assurance can be given as to the availability of
alternative sources of funds if such funds are needed by the Company. Any
utilization of alterative sources of funds may impair the competitive
position of the Company, reduce its cash flow, or have other adverse
consequences, including imposition of burdensome covenants, security
interests, or other obligations, thereby possibly increasing the risk of
defaults under applicable debt instruments or causing other consequences
that could be adverse to the Company and holders of its Common Stock and
Series A Preferred Stock. There can be no assurance as to when, or to what
extent, the business environment will improve. As a result, the Company
may continue to experience difficulty in improving its operating and
financial results for an indefinite period.
The Competitive Retail Industry
The retail industry generally, and the home improvement industry in
particular, is intensively competitive. The Company not only competes with
home improvement stores in the geographic areas in which it operates, but
also with home centers and warehouse-type distributors of home improvement
and related products that emphasize wide selection and everyday low prices.
Some of the retailers with which the Company competes have substantially
greater financing resources than the Company and may have greater
competitive advantages over the Company. The Company believes that it can
compete successfully with these and other distributors of home improvement
and related products in terms of price, quality, service and selection, by
concentrating on inner city markets largely ignored by the warehouse-type
stores or where barriers to entry may exist, and by implementing a
marketing strategy that characterizes the Company's retail units as the low
price "neighborhood store" offering a wide selection of paint and home
improvement products and first class service.
<PAGE>
<PAGE> 5
Economic Recession
The economy in the Company's primary geographical markets in Southern
California continues to experience an economic recession. As a result, the
Company's sales are very sensitive to fluctuations in the level of economic
activity in California. The California economy has remained in a recession
longer than many other portions of the United States. The current
recession has had an adverse effect on the Company's revenues and operating
results and there can be no assurance that it will not continue to do so.
Fluctuation of the Public Market for the Company's Common Stock and
Series A Preferred Stock
The market for the Company's Common Stock may be affected by the fact
that, as of June 30, 1995, approximately 57.8% of the Company's issued and
outstanding Common Stock was held by CRM, approximately 28.3% was held by
FCI, approximately 5.3% was held by Kodak Retirement Income Plan Trust Fund
("KRI"), approximately 1.2% was held by Libra Investments, Inc. ("Libra")
and approximately 2.3% was held by the Insurance Company Lenders. Thus, as
of that date, only approximately 5% (or 4% on a fully diluted basis) of the
total outstanding shares of Common Stock was held by other stockholders.
Prior to effectiveness of the Registration Statement of which this
Prospectus is a part, only a limited amount of Common Stock was available
for public trading. These factors will affect the liquidity of the market
for the Common Stock. Depending upon how and when the Selling Stockholders
sell their shares, the market for Common Stock may be volatile and indeed
may be depressed for a period of time until the market has had time to
absorb these sales. Other factors, such as the likelihood that the Company
will not declare dividends for the foreseeable future, may further depress
the market for the Common Stock.
There is currently no public market for the Company's Series A
Preferred Stock nor does the Company expect one to develop. The Company's
Series A Preferred Stock is not listed on any securities exchange and all
shares of such stock are held by the Selling Stockholders.
No Dividends
The Company anticipates that no dividends on its Common Stock will be
declared in the foreseeable future. In addition, covenants in the
Company's senior secured debt and working capital facilities currently
prohibit the Company from paying dividends on its Common Stock. Certain
institutional investors may invest only in dividend-paying equity
securities or may operate under other restrictions that prohibit or limit
their ability to invest in the Company's Common Stock. These prohibitions
or limitations may depress the market for the Common Stock.
Control by CRM
The consummation of the Restructuring has resulted in a change in
control of the Company. CRM currently owns approximately 57.8% of the
outstanding shares of the Company's Common Stock, and pursuant to a
stockholders' agreement between CRM and the Company, CRM has the power to
designate seven of the ten directors of the Company. CRM has the power to
control the affairs of the Company and to direct all fundamental corporate
transactions.
PRICE RANGE OF COMMON STOCK
The Common Stock of the Company is listed on the New York Stock
Exchange, Inc. (the "NYSE").
The following table shows the high and low sale prices of the Common
Stock for the periods indicated as reported on the NYSE Composite Tape
during each period. Prices through May 16, 1995 are adjusted to reflect
the 1 for 10 reverse stock split effected by the Company on May 16, 1995 in
connection with the Restructuring.
<PAGE>
<PAGE> 6
<TABLE>
<CAPTION>
<S> <C> <C>
Fiscal Year Ending January 28, 1996
First Quarter . . . . . . . . . . . . . . . . . . . . . . . $ 8.75 $ 2.34
Second Quarter (through May 16, 1995) . . . . . . . . . . 3.75 1.87
(through June 30, 1995) . . . . . . . . . 8.00 1.00
Fiscal Year Ended January 29, 1995
First Quarter . . . . . . . . . . . . . . . . . . . . . . . $ 23.75 $ 17.50
Second Quarter . . . . . . . . . . . . . . . . . . . . . 20 13.75
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . 16.25 10
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . 10 2.03
Fiscal Year Ended January 30, 1994
First Quarter . . . . . . . . . . . . . . . . . . . . . . . $ 28.75 $ 15
Second Quarter . . . . . . . . . . . . . . . . . . . . . 48.75 20
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . 36.25 20
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . 22.50 17.50
</TABLE>
For a recent reported price of the Common Stock on the NYSE, see the
cover page of this Prospectus. As of May 31, 1995, the Company had 2,815
holders of record of Common Stock.
Since 1987, the Company has not declared or paid any cash dividends
on its Common Stock. The Company anticipates that no cash dividends on its
Common Stock will be declared in the foreseeable future, and that all
earnings will be retained for the development of the Company's business.
In addition, covenants in the Company's senior secured debt and working
capital facilities currently prohibit the Company from paying dividends on
its Common Stock. Any future dividends would be conditional upon, among
other things, future earnings and the financial condition of the Company.
<PAGE>
<PAGE> 7
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 100,000,000
shares of Common Stock and 5,000,000 shares of Preferred Stock. As of June
30, 1995, the Company had outstanding 30,266,575 shares of Common Stock,
367,980 shares of Series A Preferred Stock and 2,957,101 shares of Common
Stock reserved for issuance upon conversion of the Series A Preferred
Stock. The following summary description relating to the capital stock
does not purport to be complete. Reference is made to the Restated
Certificate of Incorporation of the Company, the By-Laws of the Company and
the Certificate of Designations of Series A Preferred Stock of the Company,
which are filed as exhibits to the Registration Statement of which this
Prospectus is a part.
Common Stock
Holders of Common Stock are entitled to receive such dividends as may
from time to time be declared by the Board of Directors of the Company out
of funds legally available therefor. Holders of Common Stock are entitled
to one vote per share on all matters on which stockholders are entitled to
vote and do not have any cumulative voting rights. Holders of Common Stock
have no preemptive, conversion, redemption or sinking fund rights. In the
event of a liquidation, dissolution or winding-up of the Company, holders
of Common Stock are entitled to share equally and ratably in the net assets
of the Company, if any, remaining after the payment preference of any
outstanding Preferred Stock. The outstanding shares of Common Stock are,
and the shares of Common Stock issuable upon conversion of the Series A
Preferred Stock, when such shares are issued, will be, fully paid and
nonassessable. The rights, preferences and privileges of holders of Common
Stock are subject to the Series A Preferred Stock and any other series of
Preferred Stock which the Company may issue in the future.
The registrar and transfer agent for the Common Stock is Continental
Stock Transfer & Trust Company.
Preferred Stock
Pursuant to the Restructuring, the Company issued 1,570,049 shares of
8% Series A Convertible Mandatory Redeemable Preferred Stock (the "Series A
Preferred Stock"). On or about June 21, 599, holders of 1,202,069 shares
of Series A Preferred Stock converted such shares into 9,659,870 shares of
Common Stock.
Dividend Rights
The holders of shares of the Series A Preferred Stock shall be
entitled to receive, when and as declared by the Company's Board of
Directors, cumulative cash dividends at the annual rate of $0.71 per share,
payable quarterly on the first days of January, April, July and October.
The initial dividend on the Series A Preferred Stock shall be payable on
the first quarterly dividend payment date after the date ("Commencement
Date") that is 18 months after May 16, 1995 ("Issuance Date"). So long as
any share of Series A Preferred Stock remains outstanding, no dividend
shall be paid or declared and no distribution made on any junior stock
other than a dividend payable in junior stock, and no shares of junior
stock shall be purchased, redeemed or otherwise acquired for consideration
by the Company, directly or indirectly (other than as a result of a
reclassification of junior stock, or the exchange or conversion of one
junior stock for or into another junior stock, or other than through the
use of the proceeds of a substantially contemporaneous sale of other junior
stock), unless all dividends on the Series A Preferred Stock accrued for
all past quarter-yearly dividends since the Commencement Date have been
paid or declared or set aside for payment.
Liquidation Rights
In the event of any voluntary liquidation, dissolution or winding up
of the affairs of the Company, the holders of shares of Series A Preferred
Stock shall be entitled, before any distribution or payment is made to the
holders of any junior stock, to be paid in full the Redemption Price in
effect at the time of such distribution, together with accrued dividends to
such date whether or not earned or declared. The Redemption Price shall be
$6.69 per share for the period from the Issuance Date to the first
anniversary thereof, $7.14 per share thereafter to the second anniversary
of the Issuance Date, $7.60 per share thereafter for the next six-month
period, $8.03 per share thereafter for the next six-month period, $8.47 per
share thereafter for the next six-month period and $8.92 per share
thereafter.
<PAGE>
<PAGE> 8
In the event of an involuntary liquidation, dissolution or winding up
of the affairs of the Company, then, before any distribution or payment to
holders of any junior stock, the holders of Series A Preferred Stock shall
be entitled to be paid in full an amount equal to $8.92 per share, together
with accrued dividends to such date whether or not earned or declared.
Optional Purchase and Redemption Rights
CRM or the Company may purchase or redeem up to 785,025 shares (i.e.
50% of the number of shares originally issued) of Series A Preferred Stock,
at any time or from time to time, at the Redemption Price in effect at the
redemption date, together with accrued dividends to the redemption date.
Such dividends shall be deemed to have been cumulative from the Issuance
Date.
Advance notice of every redemption is required at least 30 and not
more than 60 days prior to the redemption date. Any partial redemption
must be effected on a pro rata basis.
Mandatory Redemption
The Company will redeem the whole of the shares of Series A Preferred
Stock at the time outstanding at the tenth anniversary of the Issuance
Date, at a price of $8.92 per share, together with accrued dividends to the
redemption date.
Conversion Rights
The holders of shares of Series A Preferred Stock shall have the
right, at their option, to convert such shares into Company Common Stock at
any time after the Commencement Date, and prior to such date if and only if
the price of the Company's Common Stock trades at a twenty day average
price at or above the Conversion Price (as hereafter defined). This
condition has been met and therefore the Series A Preferred Stock is
presently convertible. The price at which Common Stock shall be delivered
upon conversion (the "Conversion Price") shall initially be $1.11 per share
of Common Stock. Each share of Series A Preferred Stock shall be valued at
$8.92 for the purpose of conversion. In lieu of issuing any fractional
share of Common Stock upon conversion, the Company shall pay the cash
equivalent thereof based on the then current market price of such shares.
The Conversion Price is subject to adjustment under formulas designed
to protect against dilution of the conversion right, including adjustments
upon stock dividends, subdivisions of Common Stock, combinations of Common
Stock, reclassifications of Common Stock (including reclassification by a
merger or consolidation or otherwise), certain extraordinary distributions
of evidences of indebtedness or assets, and certain rights offerings. In
case shares of the Series A Preferred Stock are called for redemption, the
right to convert such shares will terminate at the close of business on the
redemption date, unless default is made in payment of the redemption price.
In case of any conversion, the Company shall always have the option, in
lieu of delivering shares of its Common Stock upon conversion, of paying to
the converting holder a cash amount equal to the current market price per
share of the Common Stock, multiplied by the number of shares of Common
Stock that would otherwise be issuable upon such conversion.
Voting Rights
The holders of Series A Preferred Stock shall be entitled to the
following voting rights. After the Commencement Date, if and whenever six
quarterly dividends payable on any shares of Series A Preferred Stock shall
be in arrears in whole or in part whether or not earned or declared, the
number of directors then constituting the Board of Directors shall be
increased by two and the holders of shares of Series A Preferred Stock,
together with the holders of shares of every other series of Preferred
Stock similarly entitled to vote for the election of two additional
directors, voting separately as a class, shall be entitled to elect the two
additional directors. When all dividends in arrears on the shares of
Series A Preferred Stock then outstanding shall have been paid the right of
the holders of the shares of Series A Preferred Stock to elect such two
additional directors shall cease, and the terms of office of all persons so
elected as directors shall terminate.
The consent of the holders of at least 66-2/3% of the shares of
Series A Preferred Stock shall be necessary to effect or validate, any of
the following: (i) any amendment, alteration or repeal of any of the
provisions of the certificate of incorporation or bylaws of the Company
which adversely affect the voting powers, rights or preferences of the
holders of shares of Series A Preferred Stock; (ii) the authorization or
creation of, or the increase in the authorized amount of, any shares of any
class or any security convertible into share of
<PAGE>
<PAGE> 9
any class ranking prior to the Series A Preferred Stock in the distribution
of assets on any liquidation, dissolution or winding up of the Company or
in the payment of dividends; or (iii) the merger or consolidation of the
Company with or into any other corporation, unless the resulting
corporation will thereafter have no class of shares and no other securities
either authorized or outstanding ranking prior to the Series A Preferred
Stock in the distribution of its assets on liquidation, dissolution or
winding up or in the payment of dividends, subject to limited exceptions.
The consent of the holders of at least a majority of the shares of
Series A Preferred Stock shall be necessary to effect or validate any
increase in the authorized amount of the Series A Preferred Stock, or the
authorization or creation of, or the increase in the authorized amount of
any shares or security convertible into shares ranking on a parity with the
Series A Preferred Stock in the distribution of assets on any liquidation,
dissolution or winding up of the Company or in the payment of dividends.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
The Company's consolidated ratios of earnings to combined fixed
charges and preferred stock dividend requirements are shown in the table
below. For purposes of the following ratios: (i) "earnings" consist of
loss before reorganization items, income taxes and extraordinary items plus
fixed charges; and (ii) "fixed charges" consist of interest (including debt
amortization) and the estimated interest portion of lease payments.
In calculating the ratio of earnings to combined fixed charges and
preferred stock dividend requirements, the preferred stock dividend
requirements were assumed to be equal to the pretax earnings required to
cover such dividend requirements. The amount of such pretax earnings
required to cover preferred stock dividend requirements was computed using
tax rates for the applicable year.
<TABLE>
<CAPTION>
Fiscal
Fiscal Year Fiscal Year 1993 Year
Six Six
Months Months
Ended Ended
August 1, January 30,
1990 1991 1992 1993 1994 1994
(Predecessor Company) (Successor Company)
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to combined
fixed charges and preferred
stock dividend requirements . . . 0.47x (0.31x) (0.05x) 0.01x (4.68x) (2.78x)
</TABLE>
The earnings coverage deficiencies (in thousands) were $11,683,
$28,645, $18,141, $8,022, $32,216 and $47,789 for fiscal years 1990, 1991
and 1992, the six months ended August 1, 1993, the six months ended
January 30, 1994 and fiscal year 1994, respectively.
The ratios of earnings to combined fixed charges and preferred stock
dividend requirements for the following interim periods were:
<TABLE>
<CAPTION>
Three months ended
April 30, 1995 May 1, 1994
<S> <C> <C>
Ratio of earnings to combined fixed charges and preferred stock
dividend requirements . . . . . . . . . . . . . . . . . . . . . . . . . (1.02x) (0.05x)
</TABLE>
The earnings coverage deficiencies (in thousands) were $3,872 and
$3,292 for the three months ended April 30, 1995 and May 1, 1994,
respectively.
<PAGE>
<PAGE> 10
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to
the Selling Stockholders and reflects their ownership of the Company's
capital stock as of May 31, 1995 (but after giving effect to conversions of
Series A Preferred Stock on or about June 21, 1995). Such persons,
pursuant to registration rights, may sell all of the shares of the Common
Stock and the Series A Preferred Stock (or shares of Common Stock issuable
upon conversion of the Series A Preferred Stock) owned by them as of such
date, or any lesser portion thereof. Information as to beneficial
ownership reflects information currently available to the Company. In
addition to the 2,501,493 shares of Common Stock registered for sale by
Corimon Corporation as shown in the table below, Corimon Corporation is
entitled to have an additional 15,000,000 shares of Common Stock registered
for sale but has not elected to do so at this time. The shares of Series A
Preferred Stock shown in the table below represent all of the Series A
Preferred Stock.
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Before Offering Number of Shares Offered After Offering
Series A
Common Common Preferred Common Common
Stock Percentage Stock Stock Stock(1) Stock(2) Percentage
<S> <C> <C> <C> <C> <C> <C> <C>
Corimon Corporation(3) 17,613,853 58.1% 2,501,493 0 0 15,112,360 49.9%
c/o Corimon, S.A.C.A.
Calle Hans Neumann
Edificio Corimon
Los Cortijos de Lourdes
Caracas, Venezuela 0171
Fidelity Capital & 8,562,044 28.3% 8,060,212 0 0 501,832 1.7%
Income Fund(4)
82 Devonshire Street, F7E
Boston, Massachusetts 02109
Kodak Retirement Income Plan 1,610,141 5.3% 1,515,899 0 0 94,242 *
Trust Fund(4)
c/o Fidelity Investments
82 Devonshire Street, F7E
Boston, Massachusetts 02109
Transamerica Life Insurance 870,697 2.8% 131,422 91,995 739,275 0 *
and Annuity Company(5)
1150 South Olive Street
Los Angeles, CA 90015
Transamerica Occidental Life 1,084,691 3.5% 131,422 91,995 739,275 213,994 *
Insurance Company(5)
1150 South Olive Street
Los Angeles, CA 90015
Sun Life Insurance(6) 131,422 * 131,422 91,995 739,275 0 *
Company of America
1 SunAmerica Center
Los Angeles, CA 90067
Anchor National Life 131,486 * 131,422 91,995 739,275 64 *
Insurance Company (6)
1 SunAmerica Center
Los Angeles, CA 90067
Libra Investments, Inc. 348,586 1.2% 348,586 0 0 0 *
11766 Wilshire Blvd.
Los Angeles, CA 90025
Everest Capital Fund LP 43,500 * 43,500 0 0 0 *
P.O. Box 2458
20 Parliament Street
Corner House
Hamilton, BERMUDA
</TABLE>
<PAGE>
<PAGE> 11
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Before Offering Number of Shares Offered After Offering
Series A
Common Common Preferred Common Common
Stock Percentage Stock Stock Stock(1) Stock(2) Percentage
<S> <C> <C> <C> <C> <C> <C> <C>
Everest Capital
International, Ltd.
P.O. Box 2458
20 Parliament Street
Corner House
Hamilton, BERMUDA 56,500 * 56,500 0 0 0 *
<FN>
__________________
* Less than 1%
(1) Represents shares of Common Stock issuable upon conversion of the
Series A Preferred Stock.
(2) Assumes the Selling Stockholder does not sell any other shares of
Common Stock. The Selling Stockholders may purchase and sell shares
of Common Stock not covered by this Prospectus from time to time.
(3) As reported on Schedule 13D filed with the Securities and Exchange
Commission on June 27, 1995. CRM beneficial ownership includes
17,501,493 shares and 112,360 shares under a Put Agreement with Libra
Investments, Inc. Corimon Corporation is a wholly-owned subsidiary
of Corimon, S.A.C.A., a Venezuelan multinational retailer and
producer of paint and related products.
(4) FCI is a portfolio of an investment company registered under
Section 8 of the Investment Company Act of 1940, as amended.
Fidelity Management & Research Company, a Massachusetts corporation
and an investment adviser registered under Section 203 of the
Investment Advisers Act of 1940 ("FMRC"), provides investment
advisory services to FCI, to certain other registered investment
companies and to certain other funds which are generally offered to
limited groups of investors. KRI is an account managed by Fidelity
Management Trust Company, a Massachusetts corporation and a bank as
defined in Section 3(a)(6) of the Securities Exchange Act of 1934, as
amended ("FMTC"). FMRC and FMTC are wholly owned subsidiaries of FMR
Corp., a Massachusetts corporation.
(5) TLIAC beneficial ownership includes 131,422 shares and 739,275 shares
issuable upon conversion of Series A Preferred Stock. TOLIC
beneficial ownership includes 345,416 shares and 739,275 shares
issuable upon conversion of Series A Preferred Stock. TOLIC is a
subsidiary of Transamerica Insurance Corporation of California which
is a subsidiary of Transamerica Corporation and is an affiliate of
TLIAC.
(6) As reported on Schedule 13D filed with the Securities and Exchange
Commission on May 26, 1995. SAFI beneficial ownership includes
131,422 shares and does not include 739,275 shares issuable upon
conversion of Series A Preferred Stock. ANLIC beneficial ownership
includes 131,486 shares and does not include 739,275 shares issuable
upon conversion of Series A Preferred Stock. SAFI and ANLIC
beneficial ownership do not include 129,936 shares owned by
SunAmerica Inc. ANLIC is a subsidiary of SAFI, which is a subsidiary
of SunAmerica Inc.
</FN>
</TABLE>
<PAGE>
<PAGE> 12
PLAN OF DISTRIBUTION
The sale or distribution of the Offered Securities may be effected
directly to purchasers by the Selling Stockholders as principals or through
one or more underwriters, brokers, dealers or agents from time to time in
one or more transactions (which may involve crosses or block transactions)
(i) on any stock exchange or in the over-the-counter market, (ii) in
transactions otherwise than on any stock exchange or in the over-the-
counter market or (iii) through the writing of options (whether such
options are listed on an options exchange or otherwise) on, or settlement
of short sales of, the Offered Securities. Any of such transactions may be
effected at market prices prevailing at the time of sale, at prices related
to such prevailing market prices, at varying prices determined at the time
of sale or at negotiated or fixed prices, in each case as determined by the
Selling Stockholder or by agreement between the Selling Stockholder and
underwriters, brokers, dealers or agents, or purchasers. If the Selling
Stockholders effect such transactions by selling Offered Securities to or
through underwriters, brokers, dealers or agents, such underwriters,
brokers, dealers or agents may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders or
commissions from purchasers of Offered Securities for whom they may act as
agent (which discounts, concessions or commissions as to particular
underwriters, brokers, dealers or agents may be in excess of those
customary in the types of transactions involved). The Selling Stockholders
and any brokers, dealers or agents that participate in the distribution of
the Offered Securities may be deemed to be underwriters, and any profit on
the sale of Offered Securities by them and any discounts, concessions or
commissions received by any such underwriters, brokers, dealers or agents
may be deemed to be underwriting discounts and commissions under the
Securities Act.
Under the securities laws of certain states, the Offered Securities
may be sold in such states only through registered or licensed brokers or
dealers. In addition, in certain states the Offered Securities may not be
sold unless the Offered Securities have been registered or qualified for
sale in such state or an exemption from registration or qualification is
available and is complied with.
The Company will pay all of the expenses incident to the
registration, offering and sale of the Offered Securities to the public
hereunder other than commissions, fees and discounts of underwriters,
brokers, dealers and agents. The Company has agreed to indemnify the
Selling Stockholders and their agents and controlling persons against
certain liabilities, including liabilities under the Securities Act. The
Company estimates that the expenses of the offering to be borne by it will
be approximately $125,000.
VALIDITY OF OFFERED SECURITIES
The validity of the Offered Securities will be passed upon for the
Company by Sullivan & Cromwell, Los Angeles, California.
EXPERTS
The consolidated financial statements of the Company appearing in the
Company's Annual Report (Form 10-K) for the fiscal year ended January 29,
1995, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein
by reference in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
<PAGE>
<PAGE> II-1
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The estimated expenses in connection with the issuance and
distribution of the securities being registered, other than underwriting
compensation, are:
Filing Fee for Registration Statement . . . . . $ 18,632
Legal Fees and Expenses . . . . . . . . . . . . 50,000
Accounting Fees and Expenses . . . . . . . . . 15,000
Transfer Agent's Fees and Expenses . . . . . . 5,000
Blue Sky Fees and Expenses . . . . . . . . . . 10,000
Printing and Engraving Fees . . . . . . . . . . 25,000
Miscellaneous . . . . . . . . . . . . . . . . . 1,368
Total . . . . . . . . . . . . . . . . . . $ 125,000
The Company will pay all or substantially all of such expenses.
Item 14. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of Delaware provides, in
summary, that the directors and officers of the Company may, under certain
circumstances, be indemnified by the Company against all expenses incurred
by or imposed upon them as a result of actions, suits or proceedings
brought against them as such directors and officers, or as directors or
officers of any other organization at the request of the Company, if they
act in good faith and in a manner they reasonably believe to be in or not
opposed to the best interests of the Company, and with respect to any
criminal action or proceeding, have no reasonable cause to believe their
conduct was unlawful, except that no indemnification shall be made against
expenses in respect of any claim, issue or matter as to which they shall
have been adjudged to be liable to the Company unless and only to the
extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, they are fairly and
reasonably entitled to indemnify for such expenses which such court shall
deem proper. Section 145 of the Delaware General Corporation Law also
provides that directors and officers of the Company are entitled to such
indemnification by the Company to the extent that such persons are
successful on the merits or otherwise in defending any such action, suit or
proceeding. The Company's Bylaws provide for the indemnification by the
Company of officers and directors to the fullest extent permitted by
Section 145 of the Delaware General Corporation Law.
Section 102 of the Delaware General Corporation Law provides that a
corporation, in its Certificate of Incorporation, may eliminate the
personal liability of its directors to the corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director, other than
liability for (1) any breach of the director's duty of loyalty to the
corporation or its stockholders, (2) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (3) any
transaction from which the director derived an improper personal benefit
and (4) unlawful payment of dividends or unlawful stock purchases or
redemptions. The Company's Certificate of Incorporation provides for the
elimination of personal liability of its directors as permitted by
Section 102 of the Delaware General Corporation Law.
The Company maintains a Director and Officer's Insurance Policy for
the benefit of its directors and officers.
<PAGE>
<PAGE> II-2
Item 15. Exhibits.
4.1 Restated Certificate of Incorporation, as amended.*
4.2 Amended and Restated By-Laws.*
4.3 Certificate of Designations of Series A Preferred
Stock.*
5.1 Opinion of Sullivan & Cromwell.*
12.1 Statement regarding computation of ratio of earnings to
combined fixed charges and preferred stock dividend
requirements.*
23.1 Consent of Ernst & Young LLP.*
23.2 Consent of Sullivan & Cromwell (included in its opinion
filed as Exhibit 5.1).*
24.1 Power of Attorney (included on signature page).*
__________________
*Previously filed.
Item 16. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales of the
securities being registered 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 (1)(i) and (1)(ii) of this
section 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 with or furnished to the Commission 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.
<PAGE>
<PAGE> II-3
(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.
(4) 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 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.
(5) 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
described under Item 14 above, or otherwise, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
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.
<PAGE>
<PAGE> II-4
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 Amendment No. 1 to Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Torrance,
State of California, on the 3rd day of July, 1995.
STANDARD BRANDS PAINT COMPANY
(Registrant)
By:/s/ Juan J. Gramage
Juan J. Gramage
<PAGE>
<PAGE> II-5
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
<S> <C> <C>
/s/ Juan J. Gramage
Juan J. Gramage General Manager, President and Chief Operating
Officer and Director (Principal Executive Officer) July 3, 1995
/s/ Howard S. Schwartz*
Howard S. Schwartz Senior Vice President and Chief Financial Officer
(Principal Financial Officer) July 3, 1995
/s/ Gary Van Wagner*
Gary Van Wagner Controller (Principal Accounting Officer) July 3, 1995
/s/ Roland F. Breault*
Roland F. Breault Director July 3, 1995
/s/ Thomas A. White*
Thomas A. White Director July 3, 1995
/s/ Deborah Hicks Midanek*
Deborah Hicks Midanek Director July 3, 1995
/s/ Gustavo Jose Blanco-Uribe*
Gustavo Jose Blanco-Uribe Director July 3, 1995
/s/ Richard L. Boje*
Richard L. Boje Director July 3, 1995
Robert N. Dangremond Director July 3, 1995
/s/ William E. Yingling, III*
William E. Yingling, III Director July 3, 1995
* By /s/ Juan J. Gramage
Juan J. Gramage
Attorney-in Fact
</TABLE>
