S-3 1 EATON CORP. S-3 1 As filed with the Securities and Exchange Commission on March 29, 1995. Registration No. 33- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ______________________ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ______________________ EATON CORPORATION (Exact Name of Registrant as Specified in its Charter) OHIO 34-0196300 (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) EATON CENTER 1111 SUPERIOR AVENUE CLEVELAND, OHIO 44114-2584 (216) 523-5000 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) E. R. FRANKLIN, SECRETARY EATON CENTER 1111 SUPERIOR AVENUE CLEVELAND, OHIO 44114-2584 (216) 523-5000 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service) COPIES TO: Raymond T. Sawyer, Esq. Thompson, Hine and Flory 1100 National City Bank Building Cleveland, Ohio 44114-3070 (216) 566-5500 Approximate date of commencement of proposed sale to the public: As soon as practicable after the Registration Statement becomes effective. 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] 2 CALCULATION OF REGISTRATION FEE ========================================================================================================== | | | Proposed Maximum | Proposed Maximum | | | | | Aggregate Price | Aggregate Offering | Amount of | | Title of Shares to | Amount to be | Per Unit(1) | Price(1) | Registration| | be Registered | Registered | | | Fee(1) | |----------------------|------------------|----------------------|----------------------|----------------| | Common Shares, | 1,599,988 | $50.07 | $80,111,399.00 | $27,622.41 | | $.50 par value per | | | | | | share | | | | | ==========================================================================================================
(1) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457, based on the average of the high and low prices reported for Eaton Common Shares on the New York Stock Exchange, on March 23, 1995. ============================================================================== The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine. 3 PROSPECTUS EATON CORPORATION 1,599,988 COMMON SHARES This Prospectus relates to 1,599,988 Common Shares, $.50 par value per share (the "Shares"), of Eaton Corporation, an Ohio corporation ("Eaton" or the "Company"), which are owned by the former shareholders of Lectron Products, Inc. (the "Selling Shareholders"). See "The Selling Shareholders." The Shares may be offered for sale from time to time by the Selling Shareholders in open market ordinary brokerage transactions on the New York Stock Exchange, the Chicago Stock Exchange, the Pacific Stock Exchange, or the London Stock Exchange, in privately negotiated transactions at market prices prevailing at the time of sale or, in the case of private transactions, at negotiated prices. Whether or not any such sales will be made and the timing and amount of any sale is within the sole discretion of the Selling Shareholders. The Company will not receive any of the proceeds from the sale of the Shares. See "Plan of Distribution." The Shares were acquired by the Selling Shareholders pursuant to an Agreement and Plan of Merger dated as of November 4, 1994 (the "Merger Agreement") among the Company, Eaton Michigan Corporation, a Michigan corporation wholly-owned by the Company ("Merger Sub"), and Lectron Products, Inc., a Michigan corporation ("Lectron"), providing for the merger (the "Merger") of Merger Sub with and into Lectron and Lectron being the surviving corporation of the Merger. As of the closing of the transactions contemplated by the Merger Agreement, each common share of Lectron, par value $1.00 per share, issued and outstanding immediately prior to the Merger (other than common shares held in the treasury of Lectron or owned by any subsidiary of Lectron), was converted into the right to receive 1.7506715 Eaton Common Shares. The Shares are being registered pursuant to the terms of the Merger Agreement. Eaton Common Shares are listed on the New York Stock Exchange. On March 23, 1995, the average of the high and low prices of Eaton's Common Shares on the New York Stock Exchange was $50.07. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is March 29, 1995 4 No dealer, salesman, or any other person has been authorized to give any information or to make any representations other than those contained in this Prospectus in connection with the offering contained herein, and, if given or made, such information or representations must not be relied upon as having been authorized by the Company or the Selling Shareholders. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby to any person to whom it is unlawful to make such offer or solicitation. 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. 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 material, and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy material, and other information concerning the Company and the Registration Statement (as defined herein) can be inspected and copied at the public reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549-1004, and at the following Regional Offices of the Commission: Midwest Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and Northeast Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549-1004, at prescribed rates. Such reports, proxy material, and other information concerning the Company and the Registration Statement can also be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005, the Chicago Stock Exchange, 440 South LaSalle Street, Chicago, Illinois 60605, and the Pacific Stock Exchange, 301 Pine Street, San Francisco, California 94104. This Prospectus constitutes part of a Registration Statement on Form S-3 (together with all amendments and exhibits thereto, the "Registration Statement") filed by the Company with the Commission under the Securities Act of 1933, as amended (the "Securities Act"). As permitted by the rules and regulations of the Commission, this Prospectus omits certain information contained in the Registration Statement. Statements contained in this Prospectus or in any document incorporated by reference in this Prospectus are summaries that are not necessarily complete and, in each instance, reference is made to the copy of such document as filed. Each such statement is qualified in its entirety by such reference. The Registration Statement, including exhibits and schedules thereto, and documents or information incorporated by reference may be inspected without charge at the offices of the Commission, and copies of such materials may be obtained therefrom at prescribed rates. - 2 - 5 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE ------------------------------------------------- The Company incorporates by reference into this Prospectus the following documents: 1. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994; and 2. All documents filed by the Company pursuant to Sections 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 the offering of the Shares. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for all purposes to the extent that a statement contained herein or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein, modifies or replaces such statement. Any 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 receiving a copy of this Prospectus, upon that person's written or oral request, a copy (without exhibits, unless those exhibits are specifically incorporated by reference into the documents that this Prospectus incorporates) of any documents incorporated by reference in this Prospectus. Requests for copies should be directed to Eaton Corporation, Shareholder Relations, Eaton Center, 1111 Superior Avenue, Cleveland, Ohio 44114-2584 (telephone (216) 523-5000). THE COMPANY ----------- Eaton Corporation ("Eaton" or the "Company") is a leading global manufacturer of highly engineered products which serve the automotive, industrial, construction, commercial, aerospace and marine markets. The Company offers high-quality products worldwide and derives a significant majority of its net sales from products that are number one or number two in the markets that they serve. Principal products include truck transmissions and axles, engine components, hydraulic products, electrical power distribution and control equipment, ion implanters and a wide variety of controls. Eaton's products are often essential components of products ranging from heavy duty trucks and home appliances to the Space Shuttle. Eaton maintains and expands its market positions by focusing on the development and production of high- quality, higher value-added products and by investing in superior product and process technologies. The Company currently has approximately 150 manufacturing facilities in 18 countries. On January 31, 1994, the Company completed the acquisition of Westinghouse Electric Corporation's Distribution and Control Business Unit ("DCBU") for an adjusted purchase price of $1.050 billion. DCBU is a - 3 - 6 leader in the U.S. electrical distribution industry and in niche industrial control market segments. The combination of DCBU with the Company's existing industrial control and power distribution business will strengthen Eaton's competitive position and provide the opportunity for significant cost savings resulting from the complementary fit of the two businesses. In 1993, DCBU had total sales of $1.1 billion. This addition to the electrical and electronic controls segment of Eaton's business increased that segment's share to more than one-half of Eaton's consolidated net sales in 1994, thereby expanding the end-market diversification of Eaton's sales and lessening its dependence on the truck and automotive markets. VEHICLE COMPONENTS Eaton occupies a strong competitive position in the vehicle components market and is considered a market leader in many of its product lines. Eaton's vehicle component product lines include truck components, passenger car components and off-highway vehicle components. Major customers for Eaton's vehicle components are original equipment manufacturers ("OEMs") of trucks, passenger cars and off-highway vehicles. Truck Components -- The Company manufactures over 100 models of medium- and heavy-duty truck transmissions. The Company is the leading manufacturer of transmissions for heavy-duty trucks. The market for heavy-duty truck transmissions is affected significantly by the overall level of economic activity. The Company also manufactures axles, brakes and engine valves for trucks, leaf springs for light trucks, sport utility vehicles and vans, and other truck components. Passenger Car Components -- The Company manufactures engine valves, hydraulic valve lifters, viscous fan drives, fans and fan shrouds, locking differentials, superchargers, tire valves and other passenger car components. Off-Highway Vehicle Components -- Eaton products are also used on farm tractors, backhoes, pavers, excavators, grain combines, drill rigs, garden tractors and riding mowers. These products include low-speed, high-torque motors, light-, medium- and heavy-duty hydrostatic transmissions, hydrostatic power steering units, a variety of hydraulic pumps, motors, valves and cylinders and a family of hydrostatic transaxles. ELECTRICAL AND ELECTRONIC CONTROLS Eaton is a market leader in the manufacture of electrical and electronic controls, holding number one or number two domestic market positions with the majority of its core products. The Company's product lines include industrial and commercial controls, automotive and appliance controls and specialty controls. Eaton markets its electrical and - 4 - 7 electronic control products to commercial, industrial, automotive, appliance, aerospace and government customers. Industrial and Commercial Controls -- Eaton offers a wide range of products under the Cutler-Hammer, Westinghouse and Challenger brand names to control the distribution of electric power and to protect and govern electric motors. As a consequence of the DCBU acquisition, Eaton now holds a leadership position in the power distribution industry. Eaton's power distribution products include circuit breakers, loadcenters, safety switches, panelboards and switchboards. These products serve residential, light commercial and industrial construction markets. For industrial control markets, Eaton products include contactors, overload relays, pushbuttons, sensors, variable speed drives, electronic operator interface devices, industrial workstations, count controls and logic products. Switches and controls are used on portable power tools, communication equipment, medical tools, computer equipment and construction and agricultural machinery. Eaton also supplies switches, controls and other products used on commercial and military aircraft and ships. These control products are sold through a network of over 1,500 independent distributors. The acquisition of DCBU has broadened significantly Eaton's electrical and electronic control product lines and distribution network. Automotive and Appliance Controls -- Eaton is a supplier of control products for two large markets -- vehicle manufacturers and appliance makers. Eaton has a comprehensive line of switches which are sold to major global automobile manufacturers. Other vehicle products include speed controls and climate control components. Appliance controls include electronic and electro-mechanical control products, including timers, water valves, and pressure switches. Timers control cycles on clothes washers, dryers and dishwashers; water valves regulate flow into clothes washers, dishwashers, refrigerator water dispensers and icemakers; and pressure switches govern water levels in clothes washers. Eaton also offers controls for ranges and other cooking appliances. Specialty Controls -- The major product of this business unit is semiconductor manufacturing equipment, primarily ion implanters. Eaton offers a complete line of ion implanters which are used by major semiconductor manufacturers to make microprocessors for a wide variety of products. Other products included within this business unit are golf grips, engineered fasteners and industrial clutches and brakes. DEFENSE SYSTEMS Eaton manufactures defense electronics systems. Eaton's defense product line includes strategic countermeasures, tactical jamming systems, electronic intelligence systems and electronic support measures. - 5 - 8 The Company's principal executive office is located at Eaton Center, 1111 Superior Avenue, Cleveland, Ohio 44114-2584; telephone (216) 523-5000. THE SELLING SHAREHOLDERS ------------------------ On November 16, 1994, Merger Sub merged with and into Lectron, with Lectron as the surviving corporation becoming a wholly-owned subsidiary of the Company. As of the closing of the transactions contemplated by the Merger Agreement, each Lectron common share, par value $1.00 per share, issued and outstanding immediately prior to the Merger (other than common shares held in the treasury of Lectron or owned by any subsidiary of Lectron) was converted into a right to receive 1.7506715 common shares, par value $.50 per share, of Eaton Corporation (the "Shares"). The Company issued a total of 1,599,988 Shares, of which 1,520,008 shares were issued and delivered directly to the Selling Shareholders and 79,980 shares (the "Escrow Shares") were issued to the Selling Shareholders and delivered into an escrow account (the "Escrow Account"). The purpose of the Escrow Account is to provide security for, and funds to satisfy, certain indemnification obligations of Lectron under the Merger Agreement. Any dividend or other distribution on the Escrow Shares will be paid or made, as the case may be, directly to the Selling Shareholders and will not be added to the Escrow Account. Subject to prior distribution to the Company to satisfy indemnification obligations, the Escrow Shares may be sold pursuant to the Registration Statement. The net cash proceeds realized from the sale of the Escrow Shares shall immediately be deposited to the Escrow Account. The Company shall distribute quarterly to the Selling Shareholders any and all interest that accrues on the cash held in the Escrow Account. Subject to (i) prior termination of the Escrow Account in satisfaction of indemnification obligations, or (ii) an extended escrow term in respect of asserted indemnification claims and certain potential indemnification claims, the term of the Escrow Account will continue until November 16, 1995. Pursuant to the Merger Agreement, the Company agreed to register the Shares under the Securities Act, and in connection therewith agreed to indemnify the Selling Shareholders against certain liabilities, including liabilities under the Securities Act. As of January 31, 1995, the Shares represented approximately 2% of the outstanding Eaton Common Shares. Prior to the issuance of the Shares in connection with the closing of the transaction contemplated by the Merger Agreement, the Selling Shareholders did not hold any Eaton Common Shares, except a single Selling Shareholder who held less than 1% of the outstanding Eaton Common Shares. - 6 - 9 The Shares (including the Escrow Shares) are held by the Selling Shareholders as follows:
Number Name Address of Shares ----------------------------------------------------------------------------------------------- Donald C. Briedrick Corporation 5211 Elmgate 41,228 Profit Sharing Plan Orchard Lake, MI 48324 John W. Curnow TR of The John W. 7000 Gunlock Bay 4,376 Curnow Trust UA, dated 12/31/91 Utica, MI 48317 Roney & Company Cust FBO Jerome 14157 Drumright 4,376 E. Deska IRA UA, dated 5/28/95 Sterling Heights, MI 48078 Charles A. Detweiler & Tracy L. 7712 South Durand Road 4,376 McBride Detweiler JT TEN WROS Durand, MI 48429 Erich Faber & Hermine Faber JT Unterer Lohweg 3 4,376 TEN WROS 86500 Kutzenhausen-Maingrundel Federal Republic of Germany Robert John Withrow TR of The c/o John D. Withrow 5,252 John D. Withrow Trust UA, dated 2726 Birch Harbor Lane 11/12/92 FBO Monica Sue Fox West Bloomfield, MI 48324 Raymon L. Goff & Martha Goff JT 3265 Parkwood Drive 31,512 TEN WROS Rochester Hills, MI 48306 John K. Hicks & Sharon S. Hicks 1081 Woodbridge Lane 31,512 JT TEN Rochester, MI 48306 Ronald M. Johnson & Patricia A. 527 Fieldstone Drive S. 2,188 Johnson JT TEN WROS Rochester Hills, MI 48309
- 7 - 10 Roney & Company Cust FBO Ronald 527 Fieldstone Drive S. 2,188 M. Johnson IRA UA, dated 5/28/92 Rochester Hills, MI 48309 Amber L. Keene c/o Howell H. Ridley 1,663 22332 Worcester Novi, MI 48374 Walter S. McPhail 5600 Pontiac Trail 922,166 Orchard Lake, MI 48323 Frank A. Scerbo & Marvin I. c/o Frank A. Scerbo and Marvin I. Bannon, Co- 131,300 Bannon TR of The James Hamilton Trustees McPhail IV Trust UA, dated 1420 South Livernois 9/14/82 Rochester Hills, MI 48307 Frank A. Scerbo & Marvin I. c/o Frank A. Scerbo and Marvin I. Bannon, Co- 131,300 Bannon TR of The Melinda M. Trustees McPhail Trust UA, dated 9/14/82 1420 South Livernois Rochester Hills, MI 48307 Walter S. McPhail TR of The 1420 South Livernois 43,329 McPhail Corp Emp Profit Sharing Rochester Hills, MI 48307 Trust UA, dated 11/1/84 Paul A. Michaels 27734 Lyndon 411 Livonia, MI 48154 Howell H. Ridley TR of The Howell 22332 Worcester 37,902 H. Ridley Trust UA, dated 2/10/84 Novi, MI 48374 Craig H. Ridley c/o Howell H. Ridley 1,663 22332 Worchester Novi, MI 48374 Tracey L. Ridley c/o Howell H. Ridley 1,663 22332 Worchester Novi, MI 48374
- 8 - 11 Frank A. Scerbo 1122 Brookwood 62,761 Birmingham, MI 48009 Frank A. Scerbo TR UA, dated 1122 Brookwood 2,188 4/3/85 FBO Jennifer A. Scerbo Birmingham, MI 48009 Frank A. Scerbo TR UA, dated 1122 Brookwood 2,188 4/3/85 FBO James A. Scerbo Birmingham, MI 48009 Frank A. Scerbo TR UA, dated 1122 Brookwood 2,188 4/3/85 FBO Holly J. Scerbo Birmingham, MI 48009 Frank A. Scerbo TR UA, dated 1122 Brookwood 2,188 4/3/85 FBO J. Jordan Scerbo Birmingham, MI 48009 Frank A. Scerbo TR UA, dated 1122 Brookwood 2,188 4/3/85 FBO Heidi E. Wysong Birmingham, MI 48009 MLPF&S Cust FBO Richard N. 1224 Oakwood Court 8,753 Sorenson IRA UA, dated 10/3/91 Rochester Hills, MI 48307 Thomas L. Steiner 67601 Sisson Street 8,753 Romeo, MI 48095 George S. Todd 6580 Old Coach Trail 12,254 Washington, MI 48094 Lawrence W. Tomczak TR of The 1145 Hickory Hill 8,753 Tomczak Trust UA, dated 11/5/85 Rochester Hills, MI 48309 with Lawrence W. Tomczak & Sandra M. Tomczak
- 9 - 12 Earnest E. Votaw 80 Lane 217 4,376 Hamilton Lake Hamilton, IN 46742 Ronald G. Wagner TR of The Ronald 7500 Deer Park Trail 41,228 G. Wagner Corporation Profit Clarkston, MI 48346 Sharing Plan Alan B. Waites 3380 John R. Road 8,753 Rochester Hills, MI 48307 Thomas J. Waraksa 612 Hawksmoore Court 1,094 Clarkston, MI 48348 Thomas J. Waraksa as Custodian 612 Hawksmoore Court 1,094 for Jeffrey T. Waraksa under Clarkston, MI 48348 Michigan Uniform Gifts to Minors Act Thomas J. Waraksa as Custodian 612 Hawksmoore Court 1,094 for Michael J. Waraksa under Clarkston, MI 48348 Michigan Uniform Gifts to Minors Act Roney & Company Cust FBO Thomas 612 Hawksmoore Court 1,094 J. Waraksa IRA UA, dated 5/28/92 Clarkston, MI 48348 John D. Withrow & Dortha J. 2726 Birch Harbor Lane 15,756 Withrow JT TEN WROS West Bloomfield, MI 48324 Jack David Withrow c/o 2726 Birch Harbor Lane 5,252 West Bloomfield, MI 48324 Robert John Withrow c/o 2726 Birch Harbor Lane 5,252 West Bloomfield, MI 48324
- 10 - 13 USE OF PROCEEDS --------------- The Selling Shareholders will offer the Shares as principals for their own accounts. The Company will receive none of the proceeds of any such sale. DESCRIPTION OF EATON COMMON SHARES ---------------------------------- The following is a summary of certain of the provisions concerning the Eaton Common Shares contained in the Company's Amended Articles of Incorporation (the "Articles") and its Amended Regulations (the "Regulations"), as affected by debt agreements with certain lenders. Reference is made to such Articles and Regulations, which are exhibits to the Registration Statement, for a full and complete statement of such provisions and rights, and the following statements are qualified in their entirety by such reference. AUTHORIZED NUMBER The Articles authorize the issuance of up to 300,000,000 Eaton Common Shares. As of January 31, 1995, there were 77,997,469 Eaton Common Shares issued and outstanding. The outstanding Eaton Common Shares are fully paid and non-assessable, and shareholders are not subject to any liability for calls and assessments. Eaton does not have any current plans to issue any additional Eaton Common Shares other than in connection with exercises of outstanding options to acquire Eaton Common Shares which have been issued under benefit plans of the Company. The Articles also authorize the issuance of up to 14,106,394 shares of preferred stock ("Preferred Shares"). Eaton has been authorized by its Board of Directors to purchase up to five million Eaton Common Shares over a five year period. No more than 1.5 million shares may be purchased in any one year. Currently, there are no Preferred Shares issued and outstanding. DIVIDEND RIGHTS Holders of Eaton Common Shares are entitled to receive such dividends as may be declared by Eaton's Board of Directors subject to provisions of law. VOTING RIGHTS Each Eaton Common Share entitles the holder to one vote, with the right of cumulative voting in the election of directors. Notwithstanding any provision of law requiring the vote of a designated proportion of the voting power of Eaton for any action, the Articles provide that such action may be taken by the vote of the holders of shares entitling them to exercise a majority of the voting power of Eaton, except in each case as is otherwise provided in the Articles or Regulations. The - 11 - 14 Articles and the Regulations provide for a voting proportion which is different from that provided by statutory law in order for shareholders to take action in certain circumstances, including the following: (1) Two-thirds vote required to fix or change the number of directors. (2) Two-thirds vote required for removal of directors. (3) Fifty percent of the outstanding Eaton Common Shares required to call a special meeting of shareholders. (4) Two-thirds vote required to amend the Regulations without a meeting. (5) Two-thirds vote required to amend the provisions described in items (1) through (4) above and this provision, unless such action is recommended by two-thirds of the members of the Board of Directors. (6) Two-thirds vote required to approve certain transactions, such as the sale, exchange, lease, transfer or other disposition by Eaton of all, or substantially all, of its assets or business, or the consolidation of Eaton or its merger into another corporation, or certain other mergers and majority share acquisitions. (7) Two-thirds vote required to amend the provisions described in item (6) above, or this provision. The requirement of a two-thirds vote in certain circumstances may have the effect of delaying, deferring, or preventing a change in control of Eaton. LIQUIDATION RIGHTS In the event of any voluntary or involuntary liquidation, dissolution or winding up of Eaton, after the payment or provision for payment of the debts and other liabilities of Eaton and the preferential amounts to which holders of Eaton's Preferred Shares are entitled (if any such Preferred Shares are then outstanding), the holders of the Eaton Common Shares are entitled to share pro rata in the assets of Eaton remaining for distribution to shareholders. MISCELLANEOUS RIGHTS, LISTING AND TRANSFER AGENT The Eaton Common Shares have no preemptive or conversion rights and there are no redemption or sinking fund provisions applicable thereto. - 12 - 15 The outstanding Eaton Common Shares are listed on the New York, Chicago, Pacific, and London Stock Exchanges. KeyCorp Shareholder Services, Inc., headquartered in Cleveland, Ohio, is the transfer agent and registrar for the Eaton Common Shares. CLASSIFICATION OF BOARD OF DIRECTORS The Board of Directors of Eaton is divided into three approximately equal classes, having staggered terms of office of three years each. The effect of a classified Board of Directors, where cumulative voting is in effect, is to require the votes of more shares to elect one or more members of the Board of Directors than would be required if the Board of Directors were not classified. Additionally, the effect of a classified Board of Directors may be to make it more difficult to acquire control of Eaton. CERTAIN OHIO STATUTES Various laws may affect the legal or practical ability of shareholders to dispose of shares of the Company. Such laws include the Ohio statutory provisions described below. Chapter 1704 of the Ohio Revised Code prohibits an interested shareholder (defined as a beneficial owner, directly or indirectly, of ten percent (10%) or more of the voting power of any issuing public Ohio corporation) or any affiliate or associate of an interested shareholder (as defined in Section 1704.01 of the Ohio Revised Code) from engaging in certain transactions with the corporation during the three-year period after the interested shareholder's share acquisition date. The prohibited transactions include mergers, consolidations, majority share acquisitions, certain asset sales, loans, certain sales of shares, dissolution, and certain reclassifications, recapitalizations, or other transactions that would increase the proportion of shares held by the interested shareholder. After expiration of the three-year period, the corporation may participate in such a transaction with an interested shareholder only if, among other things, (i) the transaction receives the approval of the holders of two-thirds of all the voting shares and the approval of the holders of a majority of the disinterested voting shares (shares not held by the interested shareholder) or (ii) the transaction meets certain criteria designed to ensure that the remaining shareholders receive fair consideration for their shares. The prohibitions do not apply if, before the interested shareholder becomes an interested shareholder, the board of directors of the corporation approves either the interested shareholder's acquisition of shares or the otherwise prohibited transaction. The restrictions also do not apply if a person inadvertently becomes an interested shareholder or was an interested shareholder prior to the adoption of the statute on April 11, 1990, unless, subject to certain exceptions, the interested shareholder increases his, her or its proportionate share interest on or after April 11, 1990. - 13 - 16 Pursuant to Ohio Revised Code Section 1707.043, a public corporation formed in Ohio may recover profits that a shareholder makes from the sale of the corporation's securities within eighteen (18) months after making a proposal to acquire control or publicly disclosing the possibility of a proposal to acquire control. The corporation may not, however, recover from a person who proves in a court of competent jurisdiction either (i) that his, her or its sole purpose in making the proposal was to succeed in acquiring control of the corporation and there were reasonable grounds to believe that such person would acquire control of the corporation or (ii) such person's purpose was not to increase any profit or decrease any loss in the stock and the proposal did not have a material effect on the market price or trading volume of the stock. Also, before the corporation may obtain any recovery, the aggregate amount of the profit realized by such person must exceed $250,000. Any shareholder may bring an action on behalf of the corporation if a corporation fails or refuses to bring an action to recover these profits within sixty (60) days of a written request. The party bringing such an action may recover his, her or its attorneys' fees if the court having jurisdiction over such action orders recovery of any profits. The Company is also subject to Ohio's Control Share Acquisition Act (Ohio Revised Code Section 1701.831). The Control Share Acquisition Act provides that, with certain exceptions, a person may acquire beneficial ownership of shares in certain ranges (one-fifth or more but less than one-third, one-third or more but less than a majority, or a majority or more) of the voting power of the outstanding shares of an Ohio corporation meeting certain criteria, which the Company meets, only if such person has submitted an "acquiring person statement" and the proposed acquisition has been approved by the vote of a majority of the shares of the corporation represented at a special meeting called for such purpose and by a majority of such shares of the corporation excluding "interested shares," as defined in Section 1701.01 of the Ohio Revised Code. PLAN OF DISTRIBUTION -------------------- The purpose of this Prospectus is to permit the Selling Shareholders to offer for sale or to sell their Shares at such time and at such prices as they, in their sole discretion, choose. The Company will not receive any proceeds from these offerings or sales. The distribution of shares by the Selling Shareholders, if any, may be effected from time to time in one or more transactions (which may include block transactions) on the open market in ordinary brokerage transactions on the New York Stock Exchange, the Chicago Stock Exchange, the Pacific Stock Exchange, or the London Stock Exchange (on each of which the Eaton Common Shares are listed), in privately negotiated transactions, or in a combination of such methods of sale, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at prices otherwise negotiated. The Selling Shareholders may effect such transactions by selling shares to or through broker-dealers, and - 14 - 17 such broker-dealers may receive compensation in the form of underwriting discounts, concessions or commissions from the Selling Shareholders and/or the purchasers of Shares for whom such broker-dealers may act as agent. The Selling Shareholders and any broker-dealers that participate in the distribution of the Shares may be deemed to be "underwriters" within the meaning of Section 2(11) of the Securities Act and any commission received by them and any profit on the resale of Shares sold by them may be deemed to be underwriting discounts and commissions. Pursuant to an Agreement Among Shareholders (the "Shareholder Agreement"), dated November 15, 1994 among all of the Selling Shareholders, each Selling Shareholder agreed not to sell, exchange, or otherwise dispose of the Shares before November 16, 1997, if such disposition would reduce the fair market value of the Eaton Common Shares (determined at November 16, 1994) retained by that Selling Shareholder to an amount less than fifty percent (50%) of the fair market value of the Lectron Common Shares held by that Selling Shareholder immediately before the Merger. One or more supplemental prospectuses will be filed pursuant to Rule 424 under the Securities Act to describe any material arrangement for the resale of the Shares, if and when such arrangements are entered into by the Selling Shareholders and any broker-dealers that participate in the distribution of the Shares. To the extent necessary to comply with certain state securities laws, if applicable, the Selling Shareholders have advised the Company that the Shares will be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states the Shares may not be offered for sale or sold unless the Shares have been registered or qualified for sale in such states or an exemption from registration or qualification is available and complied with. LEGAL MATTERS ------------- The validity of the Shares will be passed upon for the Company by G. L. Gherlein, Executive Vice President and General Counsel of the Company. EXPERTS ------- The consolidated financial statements of the Company and its subsidiaries appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 1994, 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. - 15 - 18 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The Company will bear the entire cost of the estimated expenses, as set forth in the following table, in connection with the distribution of the securities covered by this Registration Statement. SEC registration fee . . . . . . . . . . . . $27,622.41 Legal fees and expenses . . . . . . . . . . . 7,000.00 Accounting fees and expenses . . . . . . . . 20,000.00 Miscellaneous . . . . . . . . . . . . . . . . 600.00 ---------- Total . . . . . . . . . . . . . . . . . . $55,222.41 ==========
The Company shall be responsible for the payment of any additional expenses in connection with this Registration Statement other than (a) underwriting discounts and commissions and (b) transfer taxes incurred by the Selling Shareholders or their agent, including fees and expenses of counsel and accountants for the Selling Shareholders. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Paragraph (E) of Section 1701.13 of the Ohio Revised Code grants each corporation organized under the laws of the State of Ohio, such as the Company, power to indemnify its directors, officers and other specified persons. Provisions relating to indemnification of directors and officers of the Company and other specified persons have been adopted pursuant to the Ohio law and are contained in Article IV, Section 2 of the Company's Amended Regulations. Under the Amended Regulations, the Company shall indemnify any director, officer or other specified person against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement, actually and reasonably incurred by him by reason of the fact that he is or was such director, officer or other specified person, to the full extent permitted by applicable law. The foregoing statement is subject to, and only part of, the detailed provisions of the Ohio Revised Code and the Company's Amended Regulations referred to herein. The Company has entered into Indemnification Agreements with all of its officers and directors. The Agreements provide that the Company shall indemnify such directors or officers to the full extent permitted by law against expenses actually and reasonably incurred by them in connection with any claim filed against them by reason of anything done or not II-1 19 done by them in such capacity. The Agreements also require the Company to maintain director and officer insurance which is no less favorable to the director and officer than the insurance in effect on the date of the Agreements, and to establish and maintain an escrow account of up to $10 million to fund the Company's obligations under the Agreements, except that the Company is required to fund the escrow only upon the occurrence of a change of control of the Company, as defined under the Agreements. The Company also maintains insurance coverage for the benefit of directors and officers with respect to many types of claims that may be made against them, some of which claims may be in addition to those described in Section 2 of Article IV of the Amended Regulations. ITEM 16. EXHIBITS See Index to Exhibits. 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 or Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the II-2 20 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 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. (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 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. II-3 21 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on March 28, 1995. EATON CORPORATION By: /s/ G.L Gherlein ------------------------ G. L. Gherlein Executive Vice President and General Counsel Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE --------- ----- ---- * Chairman and Chief Executive March 28, 1995 ------------------------ Officer; Principal Executive William E. Butler Officer; Director * President and Chief Operating March 28, 1995 ------------------------ Officer-Vehicle Components; John S. Rodewig Director * Vice Chairman and Chief Financial March 28, 1995 ------------------------ and Administrative Officer; Stephen R. Hardis Principal Financial Officer; Director II-4 22 * Executive Vice President and March 28, 1995 ------------------------ Chief Operating Officer-Controls; Alexander M. Cutler Director * Vice President-Accounting; March 28, 1995 ------------------------ Principal Accounting Officer Ronald L. Leach * Director March 28, 1995 ------------------------ Neil A. Armstrong * Director March 28, 1995 ------------------------ Phyllis B. Davis * Director March 28, 1995 ------------------------ Charles E. Hugel * Director March 28, 1995 ------------------------ John R. Miller * Director March 28, 1995 ------------------------ Furman C. Moseley * Director March 28, 1995 ------------------------ Hooper G. Pattillo * Director March 28, 1995 ------------------------ Victor A. Pelson * Director March 28, 1995 ------------------------ A. William Reynolds * Director March 28, 1995 ------------------------ Gary L. Tooker *By: /s/ David M. O'Loughlin -------------------------------- David M. O'Loughlin Attorney-in-Fact for the officers and directors signing in the capacities indicated
II-5 23 EXHIBIT INDEX ------------- Exhibit Number Description ------- ----------- 4(a) Amended Articles of Incorporation of Eaton Corporation, filed as Exhibit 3(i) to Form 8-K dated May 19, 1994 and incorporated herein by reference. 4(b) Amended Regulations of Eaton Corporation, filed as Exhibit (a)(3)3 to Form 10-K for the year ended December 31, 1994 and incorporated herein by reference. 4(c) Instruments defining rights of security holders, including indentures (pursuant to Regulation S-K Item 601(b)(4), the Company agrees to furnish to the Commission, upon request, a copy of the instruments defining the rights of holders of long-term debt of the Company and its subsidiaries). 5 Opinion of G. L. Gherlein, Executive Vice President and General Counsel, as to the validity of the Common Shares registered. 23(a) Consent of Ernst & Young LLP. 23(b) Consent of G. L. Gherlein, Executive Vice President and General Counsel, contained in his opinion filed as Exhibit 5 to this Registration Statement. 24 Power of Attorney. II-6 EX-5 2 EATON CORP. S-3 EXHIBIT 5 1 EXHIBIT 5 March 28, 1995 Eaton Corporation Eaton Center Cleveland, Ohio 44114 Re: Eaton Corporation Form S-3 Registration Statement --1,599,988 Common Shares Ladies and Gentlemen: Eaton Corporation ("Eaton") is filing with the Securities and Exchange Commission a Registration Statement on Form S-3 (the "Registration Statement") for the registration, under the Securities Act of 1933, as amended, of 1,599,988 Eaton common shares with a par value of $.50 each ("Common Shares") owned by certain Eaton shareholders. Item 601 of Regulation S-K requires that an opinion of counsel concerning the legality of the securities to be registered be filed as an exhibit to a Form S-3 registration statement. This opinion is provided in satisfaction of that requirement as it relates to the Registration Statement. I have examined the following: A. A copy of Eaton's Amended Articles of Incorporation and Amended Regulations. B. The records of the proceedings incorporating Eaton under the laws of the State of Ohio, records of other proceedings and public officials concerning the present status of Eaton as a corporation and records of the proceedings of Eaton's Board of Directors and shareholders concerning authorization and issuance of Common Shares. I have examined such other records and documents, and obtained such other information, as I have deemed advisable in order to render this opinion. As a result of the foregoing, I am of the opinion that: (1) Eaton is a corporation validly organized and existing and in good standing under the laws of the State of Ohio. 2 Eaton Corporation March 27, 1995 Page Two (2) Eaton is authorized to issue 300,000,000 Common Shares, of which 77,951,266 Common Shares were issued and outstanding as of February 27, 1995. When issued, the Common Shares which are the subject of the registration statement will be legally issued, fully paid and non-assessable. I hereby consent to the use and filing of this opinion in connection with the Registration Statement. Very truly yours, EATON CORPORATION s/Gerald L. Gherlein Gerald L. Gherlein, Executive Vice President and General Counsel EX-23.A 3 EATON CORP. S-3 EXHIBIT 23(A) 1 EXHIBIT 23(a) CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3) and related Prospectus of Eaton Corporation for the registration of 1,599,988 Common Shares and to the incorporation by reference therein of our report dated January 27, 1995, with respect to the consolidated financial statements of Eaton Corporation included in its Annual Report (Form 10-K) for the year ended December 31, 1994, filed with the Securities and Exchange Commission. ERNST & YOUNG LLP Cleveland, Ohio March 28, 1995 EX-24 4 EATON CORP. S-3 EXHIBIT 24 1 EXHIBIT 24 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: That each person whose name is signed hereto has made, constituted and appointed, and by these presents does hereby make, constitute and appoint, GERALD L. GHERLEIN, EARL R. FRANKLIN, MARK HENNESSEY, DAVID M. O'LOUGHLIN OR JANE W. GRISWOLD his or her true and lawful attorney, for him or her and in his or her name, place and stead to affix, as attorney-in-fact, his or her signature as director or Officer of both, as the case may be, of Eaton Corporation, an Ohio corporation (the "Corporation"), to any and all registration statements and amendments filed with the Securities and Exchange Commission with respect to Common Shares of the Corporation issuable or issued in connection with the acquisition by Eaton Corporation of all or substantially all of the stock or assets and business of Lectron Products, Inc., giving and granting unto each such attorney-in-fact full power and authority to do and perform every act and thing whatsoever necessary to be done in the premises, as fully as he or she might or could do if personally present, hereby ratifying and confirming all that each such attorney-in-fact shall lawfully do or cause to be done by virtue hereof. This Power of Attorney shall not apply to any registration statement or amendment filed after December 31, 1995. IN WITNESS WHEREOF, this Power of Attorney has been signed at Cleveland, Ohio, this 28th day of September, 1994. /s/ William E. Butler /s/ Alexander M. Cutler --------------------------------- -------------------------------- William E. Butler, Chairman Alexander M. Cutler, Executive and Chief Executive Officer; Vice President and Chief Principal Executive Officer; Operating Officer--Controls; Director Director /s/ John S. Rodewig /s/ Ronald L. Leach -------------------------------- --------------------------------- John S. Rodewig, President Ronald L. Leach, Vice and Chief Operating Officer-- President--Accounting; Vehicle Components; Director Principal Accounting Officer /s/ Stephen R. Hardis /s/ Neil A. Armstrong -------------------------------- -------------------------------- Stephen R. Hardis, Neil A. Armstrong, Director Vice Chairman and Chief Financial and Administrative Officer; Principal Financial Officer; Director
Page 1 of 2 2 /s/ Phyllis B. Davis /s/ Hooper G. Pattillo ---------------------------------- ---------------------------------- Phyllis B. Davis, Director Hooper G. Pattillo, Director /s/ Charles E. Hugel /s/ Victor A. Pelson --------------------------------- ---------------------------------- Charles E. Hugel, Director Victor A. Pelson, Director /s/ John R. Miller /s/ A. William Reynolds --------------------------------- ------------------------------- John R. Miller, Director A. William Reynolds, Director /s/ Furman C. Moseley /s/ Gary L. Tooker ------------------------------ ------------------------------ Furman C. Moseley, Director Gary L. Tooker, Director
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