-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D2sIhLuVRe1RptYAcoyHlz+O+IO48evonV6DUi0Q4CvHyeuLckTUwWMEyhw29uqA vFfHjUoh6ND3vETBi5+n6A== 0000950152-99-003624.txt : 19990429 0000950152-99-003624.hdr.sgml : 19990429 ACCESSION NUMBER: 0000950152-99-003624 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 10 REFERENCES 429: 333-48775 FILED AS OF DATE: 19990428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOODRICH B F CO CENTRAL INDEX KEY: 0000042542 STANDARD INDUSTRIAL CLASSIFICATION: GUIDED MISSILES & SPACE VEHICLES & PARTS [3760] IRS NUMBER: 340252680 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-77199 FILM NUMBER: 99602936 BUSINESS ADDRESS: STREET 1: 4020 KINROSS LAKES PKWY CITY: RICHFIELD STATE: OH ZIP: 44286-9368 BUSINESS PHONE: 3306597600 MAIL ADDRESS: STREET 1: 4020 KINROSS LAKES PARKWAY CITY: RICHFIELD STATE: OH ZIP: 44286-9368 S-3 1 THE BF GOODRICH COMPANY S-3 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 28, 1999 POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 333-48775 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------------ Form S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------------------ THE B.F.GOODRICH COMPANY (Exact Name of Registrant as Specified in Its Charter) NEW YORK 34-0252680 (State or Other Jurisdiction of Incorporation or (I.R.S. Employer Identification Number) Organization)
4020 KINROSS LAKES PARKWAY RICHFIELD, OHIO 44286-9368 (330) 659-7600 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) ------------------------------------ NICHOLAS J. CALISE, SECRETARY THE B.F.GOODRICH COMPANY 4020 KINROSS LAKES PARKWAY RICHFIELD, OHIO 44286-9368 (330) 659-7600 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service) ------------------------------------ Copy to: FRANK L. SCHIFF WHITE & CASE LLP 1155 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10036 (212) 819-8200 ------------------------------------ Approximate date of commencement of proposed sale to the public: From time to time after this 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] 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. [X] 333-48775 If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] ------------------------------------ CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------------- PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF TITLE OF EACH CLASS AMOUNT TO BE AGGREGATE PRICE AGGREGATE REGISTRATION OF SECURITIES TO BE REGISTERED REGISTERED (1) PER UNIT (2) OFFERING PRICE (1)(2) FEE - --------------------------------------------------------------------------------------------------------------------------------- Debt Securities.............................. $200,000,000 100% $200,000,000 $.00 (3) - ---------------------------------------------------------------------------------------------------------------------------------
(1) Or the equivalent in foreign denominated currency or units based on or relating to currencies, or if debt securities are issued at original issue discount, such higher principal amount as shall result in an aggregate initial public offering price of $200,000,000 at the time of initial offering. (2) Estimated solely for the purpose of determining the registration fee. (3) Pursuant to Rule 429(b): All of the securities being registered hereby represent the unsold portion of debt securities previously registered pursuant to Registration Statement on Form S-1, Commission File No. 333-48775, for which all registration fees have been paid. ------------------------------------ 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 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. This Registration Statement constitutes Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-1, Commission File No. 333-48775. Such post-effective amendment shall become effective in accordance with Section 8(c) of the Securities Act of 1933 concurrently with the effectiveness of this Registration Statement. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 PROSPECTUS SUPPLEMENT (SUBJECT TO COMPLETION, ISSUED APRIL , 1999) (TO PROSPECTUS DATED APRIL , 1999) $200,000,000 THE B.F.GOODRICH COMPANY % NOTES DUE 2009 ------------------------ INTEREST PAYABLE ON AND . ------------------------ We may redeem the notes in whole or in part, at any time prior to maturity at the redemption prices set forth in this prospectus supplement ------------------------ INVESTING IN THE NOTES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THE ACCOMPANYING PROSPECTUS. ------------------------ PRICE % AND ACCRUED INTEREST, IF ANY ------------------------
UNDERWRITING PRICE TO DISCOUNTS PROCEEDS TO PUBLIC (1) AND COMMISSIONS COMPANY ---------- --------------- ----------- Per Note................................ % % % Total................................... $ $ $
The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Morgan Stanley & Co. Incorporated expects to deliver the notes to purchasers on April , 1999. ------------------------ MORGAN STANLEY DEAN WITTER April , 1999 3 ------------------------ TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PAGE ---- BFGoodrich.................................................. S-3 Corporate Developments...................................... S-3 Use of Proceeds............................................. S-3 Description of the Notes.................................... S-3 Underwriter[s].............................................. S-6 Validity of the Notes....................................... S-7
PROSPECTUS
PAGE ---- About This Prospectus....................................... 4 Where You Can Find More Information......................... 4 Forward-Looking Statements.................................. 5 Recent Developments......................................... 5 Risk Factors................................................ 6 The Company................................................. 8 Use of Proceeds............................................. 9 Ratio of Earnings to Fixed Charges.......................... 9 Description of Debt Securities.............................. 9 Plan of Distribution........................................ 17 Legal Opinions.............................................. 19 Experts..................................................... 19 Unaudited Pro Forma Condensed Combined Financial Statements................................................ F-1
S-2 4 BF GOODRICH We manufacture and supply a wide variety of systems and component parts for the aerospace industry and provide maintenance, repair and overhaul services on commercial, regional, business and general aviation aircraft. We also manufacture specialty plastics and specialty additives products for a variety of end-user applications. In 1998, we had sales of $4.0 billion. We are organized into two principal business segments: Aerospace and Performance Materials. We maintain patent and technical assistance agreements, licenses and trademarks on our products, process technologies and expertise in most of the countries in which we operate. Our principal executive offices are located at 4020 Kinross Lakes Parkway, Richfield, Ohio 44286-9368 (telephone (330) 659-7600). We were incorporated under the laws of the State of New York on May 2, 1912 as the successor to a business founded in 1870. CORPORATE DEVELOPMENTS Our net income for the first quarter of 1999 was $65.8 million (excluding special items), or 88 cents per diluted share, representing a 21% increase over our first quarter 1998 net income of $54.2 million, or 77 cents per diluted share. In addition, sales in the first quarter of 1999 increased to $1,035.6 million from $937.7 million in the first quarter of 1998. On April 9, 1999, our shareholders and the shareholders of Coltec Industries overwhelmingly approved the merger of the two companies. You should see the discussions under "Recent Developments" and "Risk Factors" in the accompanying prospectus, as well as the documents referred to in "Where You Can Find More Information" in the accompanying prospectus for further information regarding us and the merger. USE OF PROCEEDS We intend to use the net proceeds from the sale of the Notes (estimated to be approximately $ after deduction of the underwriting discounts and commissions and expenses payable by us) primarily to retire short-term debt which we borrow on an overnight revolving basis. The debt bears interest at a floating rate, currently approximately 5.2%. The amount of these borrowings fluctuates from day to day. As of April 28, 1999, these borrowings totalled approximately $147,600,000. Any proceeds not used to retire this indebtedness will be used for general corporate purposes. DESCRIPTION OF THE NOTES The % Notes due 2009 (the "Notes") are a series of the "Debt Securities" described in the accompanying prospectus. The following is a description of the particular terms of the Notes. It should be read together with the description of the general terms and provisions of the Debt Securities set forth in the prospectus. If the description in this prospectus supplement differs from the description in the prospectus, the description in this prospectus supplement will control. The Notes will be issued under an Indenture, dated as of May 1, 1991, between the Company and Harris Trust and Savings Bank (the "Trustee"), as amended or supplemented (the "Indenture"). S-3 5 PRINCIPAL The Notes will have a total principal amount of $200,000,000. The maturity date for the Notes will be , 2009. INTEREST The Notes will bear interest at % per year, initially accruing from , 1999. We will pay interest on the Notes every and , beginning , 1999 to the persons in whose names the Notes are registered as of the close of business on the preceding or . OPTIONAL REDEMPTION We may redeem the Notes at our option at any time, as a whole or in part, at a redemption price equal to the greater of (1) 100% of their principal amount or (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus basis points, plus, in either case, accrued and unpaid interest on the principal amount being redeemed to such redemption date. "Treasury Rate" means, with respect to any redemption date, (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (2) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury price for such redemption date. The Treasury Rate shall be calculated on the third Business Day preceding the redemption date. "Comparable Treasury Issue" means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (the "Remaining Life") of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Notes. "Independent Investment Banker" means Morgan Stanley & Co. Incorporated or, if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Trustee. "Comparable Treasury Price" means (1) the average of five Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations. "Reference Treasury Dealer" means (1) Morgan Stanley & Co. Incorporated, and and their respective successors, provided, however, that if S-4 6 any of the foregoing shall cease to be a U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the BFGoodrich shall substitute another Primary Treasury Dealer and (2) any other Primary Treasury Dealer selected by the Independent Investment Banker after consultation with BFGoodrich. "Reference Treasury Dealer Quotation" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City time, on the third Business Day preceding such redemption date. ADDITIONAL TERMS The Notes will be issued only in registered form in multiples of $1,000. The Notes will not be subject to any sinking fund. Any payment required to be made with respect to the Notes on a day that is not a Business Day will be made on the next succeeding Business Day as if it had been made on such day, and no interest shall accrue from and after that day to the date of payment. "Business Day" means any day that is not a Saturday or Sunday and that is not a day on which banking institutions are generally authorized or obligated by law to close in The City of New York. So long as the Notes are represented by one or more global certificates, the interest payable on the Notes will be paid to Cede & Co., the nominee of The Depository Trust Company, or DTC, as Depositary, or its registered assigns. These payments will be made by wire transfer of immediately available funds on each of the applicable interest payment dates, before 2:30 p.m. (New York City time). If the Notes are no longer represented by global certificates, payment of interest may, at our option, be made by check mailed to the address of the person entitled to payment. No service charge will be made for any transfer or exchange of Notes, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the a transfer or exchange. BOOK-ENTRY SYSTEM The Notes will initially be issued in the form of one or more fully registered global certificates (each, a "Book-Entry Note") that will be deposited with the Depositary or its nominee. A Book-Entry Note may not be transferred except as a whole between the Depositary and its nominee or to one of their successors. Upon the issuance of a Book-Entry Note, the Depositary will credit, on its book-entry registration and transfer system, the respective principal amounts of the Notes represented by that Book-Entry Note to the accounts of persons that have accounts with the Depositary ("participants"). The underwriter[s] participating in the distribution of the Notes will designate the accounts to be credited. Only participants or persons that may hold interests through participants can own beneficial interests in a Book-Entry Note. Ownership of beneficial interests in Book-Entry Note will be shown on, and the transfer of that ownership will be effected only through, records maintained by the Depositary for the Book-Entry Note (with respect to interests of participants) or by participants or persons that hold through participants (with respect to interests of persons other than participants). So long as the Depositary, or its nominee, is the registered owner of a Book-Entry Note, the Depositary or such nominee, as the case may be, will be considered the sole owner or holder of S-5 7 the Notes represented by that Book-Entry Note for all purposes under the Indenture. Except as set forth below, owners of beneficial interests in a Book-Entry Note will not be entitled to have the Notes represented by that Book-Entry Note registered in their names, will not receive or be entitled to receive physical delivery of their Notes in definitive form and will not be considered the owners or holders of the Notes under the Indenture. All payments on Notes represented by a Book-Entry Note will be made to the Depositary or its nominee, as the case may be, as the registered owner of that Book-Entry Note. The Company, the Trustee and any paying agent for such Notes will not have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Book-Entry Note or for maintaining, supervising or reviewing any records relating to those beneficial ownership interests. We expect that the Depositary will upon receiving any payment relating to a Book-Entry Note, immediately credit its participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of that Book-Entry Note as shown on the Depositary's records. We also expect that payments by participants to owners of beneficial interests in a Book-Entry Note held through such participants will be governed by standing instructions and customary practices, as is now the case with the securities held for the accounts of customers registered in "street names" and will be the responsibility of those participants. If the Depositary is at any time unwilling or unable to continue as Depositary and a successor Depositary is not appointed by us within 90 days, we will issue Notes in definitive form in exchange for any Book-Entry Notes. In addition, we may at any time and in our sole discretion decide not to have any of the Notes represented by Book-Entry Notes. If this happens, we will issue Notes in definitive form in exchange for all of the Book-Entry Notes representing such Notes. GOVERNING LAW The Indenture and the Notes will be governed by and construed in accordance with the laws of the State of New York. UNDERWRITER[S] Subject to the terms of the Underwriting Agreement, dated April , 1999 (the "Underwriting Agreement") between [Morgan Stanley & Co. Incorporated (the "Underwriter")] [the underwriters named below (the "Underwriters")] and us, we have agreed to sell to [the][each of the several] Underwriter[s], and [each][the] Underwriter has [severally] agreed to purchase from us [all of the Notes.] [the principal amount of the Notes set forth opposite its name below:
PRINCIPAL AMOUNT NAME OF NOTES - ---- ---------------- Morgan Stanley & Co. Incorporated.......................... $ [Additional Underwriters].................................. Total................................................. $]
The Underwriting Agreement provides that the obligations of the [several] Underwriter[s] to pay for and accept delivery of the Notes are subject to, among other things, the approval of certain legal matters by [their][its] counsel. The Underwriter[s] [is][are] obligated to take and pay for all of the Notes if any Notes are taken. The Underwriter[s] propose[s] to offer the Notes directly to the public at the initial public offering price set forth on the cover page of this prospectus supplement and in part to certain dealers at prices that represent a concession not in excess of . % of the principal amount of S-6 8 the Notes. Any Underwriter[s] may allow, and such dealers may reallow, a concession not in excess of . % of the principal amount of the Notes to certain other dealers. After the initial offering of the Notes, the offering price and other selling terms may from time to time be varied by the Underwriter[s]. We do not intend to apply for listing of the Notes on a national securities exchange, but we have been advised by the Underwriter[s] that [it][they] presently intend[s] to make a market in the Notes, as permitted by applicable laws and regulations. The Underwriter[s] [is][are] not obligated, however, to make a market in the Notes and any such market making may be discontinued at he sole discretion of the Underwriter[s]. Accordingly, no assurance can be given as to the liquidity of, or trading markets for, the Notes. In order to facilitate the offering of the Notes, the Underwriter[s] may engage in transactions that stabilize, maintain or otherwise affect the price of the Notes. Specifically, the Underwriter[s] may over-allot in connection with this offering, creating short positions in the Notes for [its][their] own account. In addition, to cover over-allotments or to stabilize the price of the Notes, the Underwriter[s] may bid for, and purchase, Notes in the open market. Finally, the Underwriter[s] may reclaim selling concessions allowed to an underwriter or dealer for distribution Notes in this offering, if the Underwriters repurchase previously distributed Notes in transactions that cover syndicate short positions, in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the Notes above independent market levels. The Underwriter[s] [is][are] not required to engage in these activities, and may end any of these activities at any time. Settlement for the Notes will be made in immediately available funds and all secondary trading in the Notes will settle in immediately available funds. We have agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. [Each of] the Underwriter[s] has rendered financial advisory services to us from time to time and has received customary fees for its services. From time to time the Underwriter[s] and certain of [its][their] affiliates have engaged, and may in the future engage, in transactions with, and perform services for, us and our affiliates in the ordinary course of business. VALIDITY OF THE NOTES Nicholas J. Calise, Esq., who is our Vice President, Associate General Counsel and Secretary will issue an opinion about the validity of the Notes. Sullivan & Cromwell, New York, New York, will issue an opinion about the validity of the Notes to the Underwriters. As of April 6, 1999, Mr. Calise owned 13,617 shares of the Company's Common Stock; has deferred receipt of 6,079 shares of the Company's Common Stock under the Company's Long Term Incentive Plan; has contingently credited to his account 5,918 phantom shares under the 1998-2000 and 1999-2001 Long Term Incentive Plan, all of which are subject to forfeiture; held options to purchase 87,100 shares of Common Stock; and had credited to his account in the Company's Retirement Plus Savings Plan approximately 5,855 shares of Common Stock. In addition, Mr. Calise's wife owns 1,000 shares, although Mr. Calise disclaims beneficial ownership of these shares. S-7 9 SUBJECT TO COMPLETION, DATED APRIL 28, 1999 PROSPECTUS THE B.F.GOODRICH COMPANY 4020 Kinross Lakes Parkway Richfield, Ohio 44286-9368 (330) 659-7600 $200,000,000 DEBT SECURITIES - -------------------------------------------------------------------------------- WE WILL PROVIDE SPECIFIED TERMS OF THESE SECURITIES IN SUPPLEMENTS TO THIS PROSPECTUS. YOU SHOULD READ THIS PROSPECTUS AND ANY SUPPLEMENT CAREFULLY BEFORE YOU INVEST. - -------------------------------------------------------------------------------- THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. This prospectus is dated April , 1999 2 10 TABLE OF CONTENTS
PAGE ---- About This Prospectus....................................... 4 Where You Can Find More Information......................... 4 Forward-Looking Statements.................................. 5 Recent Developments......................................... 5 Risk Factors................................................ 6 The Company................................................. 8 Use of Proceeds............................................. 9 Ratio of Earnings to Fixed Charges.......................... 9 Description of Debt Securities.............................. 9 Plan of Distribution........................................ 17 Legal Opinions.............................................. 18 Experts..................................................... 19 Unaudited Pro Forma Condensed Combined Financial Statements................................................ F-1
3 11 ABOUT THIS PROSPECTUS This prospectus is part of a registration statement that we filed with the SEC using a "shelf" registration process. Under this shelf process, we may sell the Debt Securities described in this prospectus in one or more offerings up to a total dollar amount of $200,000,000. This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of the securities offered. Each prospectus supplement may also add to or update or change information contained in this prospectus. You should read both this prospectus and any prospectus supplement together with additional information described under the heading WHERE YOU CAN FIND MORE INFORMATION. WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at our website at http://www.bfgoodrich.com or from the SEC's web site at http://www.sec.gov. You may also read and copy any document we file at the SEC's public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms and their copy charges. Certain of our securities are listed on the New York Stock Exchange. You can obtain information about us from the Exchange at 20 Broad Street, New York, New York 10005. The SEC allows us to "incorporate by reference" in this prospectus the information in documents filed with it. This means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be a part of this prospectus, and information in documents that we file later with the SEC will automatically update and supersede information contained in documents filed earlier with the SEC or contained in this prospectus. We incorporate by reference in this prospectus the documents listed below and any future filings that we may make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until we, or our agents, sell all of the securities that may be offered by this prospectus. - BFGoodrich Annual Report on Form 10-K for the year ended December 31, 1998. - BFGoodrich Current Reports on Form 8-K filed on February 19, 1999, February 25, 1999, April 12, 1999 and April 20, 1999. - Coltec Industries Annual Report on Form 10-K for the year ended December 31, 1998 (Item 8 on pages 26-60 and pages S-1 to S-3, only) - Coltec Industries Current Report on Form 8-K filed on April 28, 1999. You may request a copy of these documents at no cost to you, by writing or telephoning us at the following address: The B.F.Goodrich Company 4020 Kinross Lakes Parkway Richfield, Ohio 44286-9368 Attention: Secretary (330) 659-7600 4 12 You should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with different information. We are not making an offer of the securities described in this prospectus in any state where the offer is not permitted. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of those documents. FORWARD-LOOKING STATEMENTS We believe that some of the information presented in or incorporated by reference in this prospectus constitutes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933. These forward-looking statements are based on management's assumptions, expectations and projections about us and the industries in which we operate. Our Annual Report on Form 10-K for the year ended December 31, 1998 explains the nature of a number of these forward-looking statements as well as some of the things that could cause our actual results to differ materially from what we are expecting. You should read that explanation before investing in our debt securities. In addition, this prospectus describes a number of factors, especially with regard to risks we face with respect to the our merger with Coltec Industries Inc, potential environmental and asbestos-related litigation, our vulnerability to economic downturns in the United States and abroad and the "year 2000" problem, which could each cause our actual results to differ materially from our expectations. RECENT DEVELOPMENTS In November 1998, we executed an agreement to merge with Coltec Industries, a producer of aerospace and industrial products, by exchanging each share of common stock of Coltec for 0.56 shares of our common stock. When we complete the merger, Coltec will be a direct wholly-owned subsidiary of BFGoodrich. We expect the merger to be accounted for as a pooling of interests, which means that we will treat BFGoodrich and Coltec as if they always had been one company for accounting and financial reporting purposes. We have received all regulatory approvals necessary to complete the merger and the shareholders of each company have overwhelmingly approved the merger. AlliedSignal Inc. and Crane Co. have filed lawsuits in the U.S. District Court in South Bend, Indiana seeking to block the merger. We have agreed not to consummate the merger until the court rules on certain pending motions. In any event, this agreement to delay the merger expires May 1, 1999. AlliedSignal has filed a motion for a temporary restraining order and preliminary injunction to prevent the merger. We will oppose AlliedSignal's motion. A hearing on this motion is scheduled for 4:00 p.m. on Friday, April 30, 1999. We cannot assure you if or when the merger will be completed. You should see the Unaudited Pro Forma Condensed Combined Financial Statements beginning on page F-1 for certain financial information relating to the merger. 5 13 RISK FACTORS You should carefully consider the following risks before deciding to invest in our debt securities. WE MAY NOT BE ABLE TO ACHIEVE THE EXPECTED INTEGRATION AND COST SAVINGS FROM THE MERGER, AND THAT FAILURE COULD ADVERSELY AFFECT OUR EARNINGS AND FINANCIAL CONDITION. We expect to achieve cost savings from our merger with Coltec. By the year 2001, we believe the cost savings could be $60 million per year. Difficulties may arise, however, in the integration of the business and operation of the combined entity. As a result, we may not be able to achieve the cost savings and synergies that we expect will result from the merger. Achieving cost savings depends on consolidating our corporate and aerospace staffs with Coltec's corporate staff in Charlotte, North Carolina and achieving other synergies in combining our two organizations. Additional operational savings depend upon the integration of our aerospace business and Coltec's aerospace business and the elimination of duplicate facilities and excess capacity. Actual savings in 1999 may be materially less than expected if the merger is delayed beyond May 1, 1999, if the reorganization of both companies' staffs is delayed beyond what we anticipate or if the reductions in personnel are less than we currently envision. We expect material cost savings from the reduction in personnel. WE MAY HAVE LIABILITIES RELATED TO ASBESTOS LITIGATION WHICH COULD ADVERSELY AFFECT OUR EARNINGS AND FINANCIAL CONDITION. The historical business operations of Coltec have resulted in a substantial volume of asbestos litigation. Plaintiffs in these matters have alleged personal injury or death as a result of exposure to asbestos contained in some products that were manufactured or distributed by two of Coltec's subsidiaries. We believe that the funding agreements with Coltec's insurance carriers will provide resources sufficient to meet the vast majority of the currently anticipated costs and expenses associated with known and pending litigation. It is difficult to predict the number of asbestos lawsuits that Coltec's subsidiaries will be party to in the future. These future claims and insurance and other related costs may result in future liabilities that are significant and may be material. WE MAY HAVE LIABILITIES RELATING TO ENVIRONMENTAL LAWS AND REGULATIONS WHICH COULD ADVERSELY AFFECT OUR EARNINGS AND FINANCIAL CONDITION. We and Coltec generate both hazardous and non-hazardous wastes. The treatment, storage, transportation and disposal of these hazardous and non-hazardous wastes are governed by various environmental laws and regulations. We have been notified that we and Coltec have been designated as potentially responsible parties by the U.S. Environmental Protection Agency for the costs of investigating and, in some cases, remediating contamination by hazardous materials at several sites, most of which related to businesses previously discontinued. Liability for these costs may be imposed on present and former owners or operators of the properties or on parties who generated the wastes that contributed to the contamination. THE CYCLICAL NATURE OF OUR BUSINESS COULD ADVERSELY AFFECT OUR EARNINGS AND FINANCIAL CONDITION. The business sectors to which we sell our product are, to varying degrees, cyclical and have historically experienced periodic downturns. These downturns have often had a negative effect on demand for our products resulting in lower net sales, gross margin and net income. Any future material weakness in demand in any of these business sectors could have a material 6 14 adverse effect on our earnings and financial condition. In addition, some of our competitors have greater financial resources than we do and may be better able to withstand the effects of those periodic downturns. THE DOWNTURN IN ASIA COULD CONTINUE TO ADVERSELY AFFECT OUR EARNINGS AND FINANCIAL CONDITION. The current economic downturn in some Asian countries has adversely affected and could continue to aversely affect the worldwide aerospace industry. According to industry analysts, as a result of the recession in Japan, as well as currency fluctuations and other problems in other Asian countries, Asian airlines have slowed purchases of new aircraft. The reduction in demand for new aircraft has led and could continue to lead aircraft manufacturers to build fewer aircraft than they might otherwise have built. As a result, we have experienced and could continue to experience delays or cancellations of orders for our products for aircraft. Those delays or cancellations could seriously harm our earnings and financial condition. OUR DEPENDENCE UPON CURRENT CONDITIONS IN THE AIRLINE INDUSTRY COULD ADVERSELY AFFECT OUR EARNINGS AND FINANCIAL CONDITION. The airline industry is undergoing a process of consolidation and significantly increased competition. This consolidation could result in a reduction of future aircraft orders as overlapping routes are eliminated and airlines seek greater economies through higher aircraft utilization. Increased airline competition may also result in airlines seeking to reduce costs by promoting greater price competition from aerospace suppliers, which could adversely affect our earnings and financial condition. THE FINANCIAL RESULTS OF OUR PERFORMANCE MATERIALS SEGMENT COULD BE ADVERSELY AFFECTED IF GROWTH IN DEMAND FOR PERFORMANCE MATERIALS DOES NOT OCCUR OR COST REDUCTIONS ARE NOT ACHIEVED AS WE EXPECT. Our financial results could be adversely affected if the expected growth in volume demand for performance materials does not occur as we expect. Recent turmoil in the financial markets in the Far East and Latin America could adversely impact sales increases in those regions. Our financial results could also be adversely affected if we do not achieve cost reduction benefits as we integrate recent acquisitions and continue the realignment activities of BFGoodrich and Coltec. COMPUTER SYSTEM FAILURES OR MISCALCULATIONS RESULTING FROM AN INABILITY TO INTERPRET DATES BEYOND 1999 COULD MATERIALLY AND ADVERSELY AFFECT OUR OPERATIONS. Any computer equipment that uses two digits instead of four to specify the year will be unable to interpret dates beyond the year 1999. This "year 2000" issue could result in system failures or miscalculations causing disruptions of operations. The three major areas that could be affected critically are financial and operating systems, manufacturing systems and equipment, and third-party relationships with suppliers and customers. We have developed plans to address this exposure. However, we cannot assure you that these plans are adequate to prevent or minimize such system failures or miscalculations. 7 15 THE COMPANY We manufacture and supply a wide variety of systems and component parts for the aerospace industry and provide maintenance, repair and overhaul services on commercial, regional, business and general aviation aircraft. We also manufacture specialty plastics and specialty additives products for a variety of end-user applications. In 1998, we had sales of $4.0 billion. We are organized into two principal business segments: Aerospace and Performance Materials. We maintain patent and technical assistance agreements, licenses and trademarks on our products, process technologies and expertise in most of the countries in which we operate. AEROSPACE Our Aerospace Segment is conducted through four major business groups. - Our Aerostructures Group primarily designs, develops and integrates aircraft engine nacelle and pylon systems and provides support services. - Our Landing Systems Group manufactures aircraft landing gear; aircraft wheels and brakes; high-temperature composites; aircraft evacuation slides and rafts for commercial, military, regional and business aviation customers, and space programs. - Our Sensors and Integrated Systems Group manufactures sensors and sensor-based systems; fuel measurement and management systems; electromechanical actuators; aircraft windshield wiper systems; health and usage management systems; electronic test equipment; ice protection systems; specialty heated products; collision warning systems; weather detection systems; standby altitude indicators; aircraft lighting components; and polymer and composite products for commercial, military, regional, business and general aviation customers, and for aircraft engine and space programs. - Our Maintenance, Repair and Overhaul Group provides maintenance, repair and overhaul of commercial airframes, components, wheels and brakes, landing gear, instruments and avionics for commercial, regional, business and general aviation customers. PERFORMANCE MATERIALS Our Performance Materials Segment is conducted through three major business groups. - Our Textile and Industrial Coatings Group manufactures acrylic textile coatings and industrial formulations of Carbopol(R) polymers for textile printing. This group also manufactures durable press resins, dyes and softeners, as well as paper saturants and coatings in wood, metal and other surface finishing products and in graphic arts applications. - Our Consumer Specialties Group manufactures thickening, suspension and emulsion polymers for personal care products and for household and pharmaceutical applications. - Our Polymer Additives & Specialty Plastics Group manufactures thermoplastic polyurethane and alloys, high-heat-resistant and low-combustibility plastics, static-dissipating polymers, reaction-injection molding resins, and antioxidants for rubber, plastic and lubricants applications. We market and sell these products to manufacturers for film and sheet applications, wire and cable jacketing, and magnetic media. Specialty plastics are also used in the manufacture of automotive products, recreational vehicles and products, agricultural equipment, industrial equipment, tire and rubber goods, plumbing and industrial pipe, fire sprinkler systems and building material components. 8 16 USE OF PROCEEDS Unless we state otherwise in a prospectus supplement, the net proceeds from the sale of the securities that are offered for sale will be used for general corporate purposes. RATIO OF EARNINGS TO FIXED CHARGES The ratio of earnings to fixed charges for each of the periods indicated is as follows:
TWELVE MONTHS ENDED DEC. 31, - -------------------------------- 1998 1997 1996 1995 1994 - ---- ---- ---- ---- ---- 4.33.. 2.98 2.39 2.16 1.87
For these ratios, "earnings" consists of income from continuing operations before income taxes, fixed charges (excluding capitalized interest and distributions on quarterly income preferred securities), amortization of previously capitalized interest and undistributed earnings (losses) of affiliated companies which are accounted for on the equity method. For this purpose, "fixed charges" consists of (1) interest on all indebtedness (including capitalized interest and interest costs on company-owned life insurance policies), (2) amortization of debt discount or premium, (3) an interest factor attributable to rentals and (4) distributions on quarterly income preferred securities. DESCRIPTION OF DEBT SECURITIES The Debt Securities will be issued under an Indenture between us and Harris Trust and Savings Bank as Trustee dated as of May 1, 1991. We have summarized below selected provisions of the Indenture and the Trust Indenture Act of 1939, as amended. The summary is not complete. The Indenture has been filed as an exhibit to our registration statement on Form S-3, Registration No. 33-65658. The following summary is subject to the detailed provisions of the Indenture and the Trust Indenture Act of 1939. In the summary below, we have included references to section numbers of the Indenture so that you can easily locate these provisions. The referenced sections of the Indenture are incorporated in this prospectus by reference. GENERAL The Debt Securities offered by this prospectus are limited to $200,000,000 in aggregate principal amount. The Indenture does not limit the amount of Debt Securities that we may issue. Unless we state otherwise in a prospectus supplement, the Indenture does not limit the amount of other debt that we can issue. The Indenture allows us to issue Debt Securities in one or more series. The prospectus supplement for a series of Debt Securities being offered will include specific terms of the Debt Securities. These terms will include some or all of the following: - the title of the Debt Securities; - the total principal amount and the permitted denominations of the Debt Securities; - the percentage of principal amount of the Debt Securities at which the Debt Securities will be issued; - the currency or currencies in which the principal of and interest, if any, on the Debt Securities will be payable; 9 17 - the date on which the Debt Securities will be payable; - the interest rate, if any, for the Debt Securities or the method that will be used to determine the interest rate; - the dates on which and places at which interest, if any, will be payable; - any mandatory or optional repayment or redemption provisions; and - any other terms of the Debt Securities. The Indenture allows us to issue Debt Securities of a single series at various times, with different maturity dates and redemption and repayment provisions, if any, and different interest rates. (Section 2.5) The prospectus supplement will specify the persons to whom and the manner in which interest, if any, will be payable. The Debt Securities will be unsecured, unsubordinated indebtedness of BF Goodrich. The Debt Securities will rank equally with all of our other unsecured and unsubordinated indebtedness. The Debt Securities will be issued in fully registered form and in the denominations set forth in the applicable prospectus supplement. We will maintain an office or agency where the Debt Securities may be presented for payment and may be transferred or exchanged. (Section 3.2) There will be no service charge for any transfer or exchange of the Debt Securities, but we may require a payment sufficient to cover any tax or other governmental charge payable on the Debt Securities. (Section 2.10) Some of the Debt Securities may be sold at a substantial discount below their stated principal amount and may provide for the payment of no interest or interest at a rate which at the time of issuance is below market rates. We will describe the U.S. federal income tax consequences and other special considerations applicable to any discounted Debt Securities in the prospectus supplement relating to the discounted Debt Securities. BOOK-ENTRY PROCEDURES The Debt Securities may be issued in the form of one or more global certificates registered in the name of a depositary or a nominee of a depositary. Unless otherwise specified in the applicable prospectus supplement, the depositary will be The Depository Trust Company, or "DTC." DTC has informed us that its nominee will be Cede & Co., who will therefore be the initial registered holder of any series of Debt Securities that are issued in global form. If we use the book-entry only form, we will not issue certificates to individual holders of the Debt Securities, except as set forth in the applicable prospectus supplement. Beneficial interests in global securities will be shown on, and transfers of global securities will be made only through, records maintained by DTC, Cede and their participating organizations. In addition, all actions by holders of Debt Securities issued in global form shall be actions taken by DTC upon instructions from its participating organizations, and all payments and notices to holders shall be to DTC or Cede, as the registered holder of the Debt Securities. DTC has provided us with the following information: DTC is a limited purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the United States Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered under Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participating organizations, or direct participants, deposit with DTC. DTC also facilitates the clearance and settlement of securities transactions among direct 10 18 participants through electronic book-entry, thereby eliminating the need for physical exchange of certificates. Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Other organizations such as banks, brokers, dealers and trust companies that work with a direct participant also use DTC's book-entry system, or indirect participants. The rules that apply to DTC and its direct participants are on file with the SEC. DTC management is aware that some computer applications and systems for processing data that are dependent upon calendar dates, including dates before, on or after January 1, 2000, may encounter "Year 2000 problems." DTC has informed its direct participants and other members of the financial community that it has developed and is implementing a program so that its computer applications and systems, as the same relate to the timely payment of distributions (including principal and interest payments) to security holders, book-entry deliveries and settlement of trades within DTC, continue to function appropriately. This program includes a technical assessment and remediation plan, both of which are complete. Additionally, DTC's plan includes a testing phase, which is expected to be completed within appropriate time frames. However, DTC's ability to perform its services properly is also dependent upon other parties, including but not limited to issuers and their agents, as well as third-party vendors from whom DTC licenses software and hardware, and third-party vendors on whom DTC relies for information or the provision of services, including telecommunication and electric utility service providers, among others. DTC has informed its direct participants and other members of the financial community that it is contacting (and will continue to contact) third-party vendors from whom DTC acquires services to: (1) impress upon them the importance of such services being Year 2000 compliant and (2) determine the extent of their efforts for Year 2000 remediation (and, as appropriate, testing) of their services. In addition, DTC is in the process of developing contingency plans that it deems appropriate. Purchases, sales or other transfers of Debt Securities must be done through a Direct or indirect participant. Under a book-entry format, holders of Debt Securities may experience some delay in their receipt of payments. Holders will not be recognized as registered holders of the Debt Securities and, thus, will be permitted to exercise their rights only indirectly through and subject to the procedures of direct participants and, if applicable, indirect participants. The ability of a holder to pledge Debt Securities to persons or entities that do not participate in the DTC system, or to otherwise act with respect to the Debt Securities, may be limited due to the absence of physical certificates. DTC has advised us that it will only take any action permitted to be taken by a registered holder of any Debt Securities at the direction of a direct participant. Debt Securities represented by a global security will be exchangeable for the Debt Securities in registered form with the same terms only if: - DTC notifies us that it is unwilling or unable to continue as depositary or DTC ceases to be a clearing agency registered under applicable law; - we determine that the global security is now exchangeable; or - an event of default has occurred and is continuing with respect to the Debt Securities. If any of these events occur, DTC will generally notify all direct participants of the availability of definitive Debt Securities. 11 19 Except as described in this section, a global security may not be transferred except as a whole by DTC to its nominee or by its nominee to DTC or another of its nominees or to a successor depositary appointed by us. We have obtained the information regarding DTC and DTC's book-entry system from sources that we believe to be reliable, but we take no responsibility for the accuracy of that information. CERTAIN COVENANTS The Indenture requires us to comply with certain restrictive covenants. Some of the provisions are described below. Definitions "Subsidiary" is defined as any company in which we, or one or more of our subsidiaries, own directly or indirectly at least a majority of outstanding voting stock. (Section 1.1) "Restricted Subsidiary" is defined as any Subsidiary (1) with substantially all of its property located, or carrying on substantially all of its business within, the United States and (2) which owns a Principal Property. "Restricted Subsidiary", however, does not include any Subsidiary whose primary business consists of (1) financing operations in connection with leasing and conditional sales transactions on behalf of us and our Subsidiaries, (2) purchasing accounts receivable or making loans secured by accounts receivable or inventory, or (3) whose primary business is that of a finance company. As of the date of this prospectus, there are no Restricted Subsidiaries. "Principal Property" is defined as any building, structure or other facility, the land upon which it stands and the fixtures that are a part of it, (1) which is used primarily for manufacturing and is located in the United States, and (2) the net book value of which exceeds 3% of Consolidated Net Tangible Assets. Principal Property does not include (1) any building, structure or facility which is not of material importance to our total business or (2) any portion of a particular building, structure or facility which is not of material importance to the use or operation of the building, structure or facility. "Consolidated Net Tangible Assets" is defined as the total amount of assets (minus applicable reserves and deductibles) minus (1) all current liabilities (excluding (a) those which are extendible or renewable to more than 12 months after the time as of which the amount of the liability is being computed, (b) current maturities of long-term indebtedness and (c) capital lease obligations) and (2) all goodwill. "Attributable Debt" with respect to any lease is defined as the lesser of (1) the fair value of the property subject to such lease or (2) the present value of the total net amount of rent we must pay under such lease until it expires, compounded semiannually. The net amount of rent we must pay under any lease for any period is the amount of rent payable for the period, excluding payments for maintenance and repairs, insurance, taxes, assessments, water rates and similar charges. For any lease which we may terminate by paying a penalty, the net amount of rent includes the penalty, but no rent is included after the first date upon which the lease may be terminated. "Funded Debt" is defined as all debt (1) with a maturity of more than 12 months after the date on which the amount of indebtedness is determined or (2) with a maturity that is less than 12 months but which is renewable or extendible at the borrower's option. 12 20 Limitation on Liens The Indenture will prohibit us or our Restricted Subsidiaries from incurring, issuing, assuming or guarantying any debt for money borrowed or any debt evidenced by notes, bonds, debentures or other similar documents ("Debt") (other than guarantees related to the sale, discount, guarantee or pledge of notes, chattel mortgages, leases, accounts receivable, trade acceptances and other paper arising in the ordinary course of business out of installment or conditional sales) without securing all outstanding series of Debt Securities (other than any series of Debt Securities that provide that the Debt Securities of the series are not entitled to the benefit of this covenant) equally and ratably with (or prior to) the secured Debt to be incurred, issued, assumed or guaranteed, unless the aggregate principal amount of such secured Debt together with all secured Debt which would otherwise be prohibited, plus all Attributable Debt of the Company and its Restricted Subsidiaries in respect of sale and leaseback transactions which would otherwise be prohibited by the covenant limiting sale and leaseback transactions described below would not exceed the sum of 10% of Consolidated Net Tangible Assets. The restriction described above will not apply to debt for borrowed money secured by the following: - liens on property, stock or Debt of any corporation existing at the time it becomes a Restricted Subsidiary; - liens to secure indebtedness of a Restricted Subsidiary to us or to another Restricted Subsidiary; - liens for taxes, assessments or governmental charges or levies (a) that are not yet due and delinquent or (b) the validity of which is being contested, or deposits to obtain the release of these mortgages; - liens of materialmen, mechanics, carriers, workmen, repairmen, landlords or other similar mortgages, or deposits to obtain the release of these mortgages; - liens arising under legal process the execution or enforcement of which is stayed and which are being contested in good faith; - liens (a) to secure public or statutory obligations, (b) to secure payment of workmen's compensation, (c) to secure performance in connection with tenders, leases of real property, bids or contracts or (d) to secure (or in lieu of) surety or appeal bonds, and mortgages made in the ordinary course of business for similar purposes; - liens in favor of the United States, any state in the United States, any other country, or any governmental entity or any political subdivision thereof, to secure payments pursuant to any contract or statute or to secure any debt incurred to finance the purchase price or the cost of construction of the property subject to the mortgage; - liens on property, stock or Debt of a corporation (a) existing at the time we acquired the corporation (including corporations with which we merged or consolidated or purchased substantially all the properties of), (b) that secure the payment of purchase price, construction cost or improvement cost thereof or (c) that secure any Debt incurred prior to, at the time of, or within one year after we acquired the property, shares or Debt, completed the construction on or commenced commercial operation of the property for the purpose of financing the purchase price or construction cost; - mortgages existing at the date of the Indenture; and 13 21 - any extension, renewal or replacement of any of these mortgages that does not increase the Debt and that is limited to all or a part of the same property, stock or Debt that secured the original mortgage. (Section 3.4) Limitation on Sales and Leasebacks The Indenture provides that neither we nor any Restricted Subsidiary may enter into most sale and lease-back transactions involving any Principal Property which has been or is to be sold or transferred by us or such Restricted Subsidiary, unless either: - we or any Restricted Subsidiary could create Debt secured by a mortgage on the Principal Property to be leased back in an amount equal to the Attributable Debt with respect to such sale and leaseback transaction without equally and ratably securing the Debt Securities of all series pursuant to the provisions of the covenant on limitation on liens described above; or - we apply within 270 days after the sale or transfer an amount equal to the greater of (1) the net proceeds of the sale of the Principal Property sold and leased back pursuant to the arrangement or (2) the fair market value of the Principal Property so sold and leased back at the time of entering into the arrangement to (a) the purchase of different property, facilities or equipment which has a value at least equal to the net proceeds of the sale or (b) the retirement of Funded Debt of the Company (other than Debt Securities of any series); provided, however, that the amount to be applied to the retirement of Funded Debt of the Company shall be reduced by (1) the principal amount of any Debt Securities of any series (or, if the Debt Securities of any series are original issue discount Debt Securities, the portion of the principal amount that is due and payable with respect to such series pursuant to a declaration in accordance with Section 5.1 of the Indenture) delivered within 270 days after such sale to the Trustee for retirement and cancellation and (2) the principal amount of Funded Debt, other than the Debt Securities of any series, voluntarily retired by the Company within 270 days after such sale. No retirement referred to in this clause may be effected by payment at maturity or pursuant to any mandatory sinking fund payment or any mandatory prepayment provision. (Section 3.5) Absence of Other Restrictions The Indenture does not contain (1) any restrictions on the declaration of dividends; (2) any requirements concerning the maintenance of any asset ratio; or (3) any requirement for the creation or maintenance of reserves. 14 22 CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE The Indenture permits us to consolidate or merge with or into another entity, or to sell, convey or lease all or substantially all of our property to another entity only if certain conditions in the Indenture are met including: - the successor corporation or purchaser expressly assumes our obligations on the Debt Securities and under the Indenture; and - performance and observance of all covenants and conditions in the Indenture. (Article Eight) EVENTS OF DEFAULT, WAIVER AND NOTICE Unless we tell you otherwise in an accompanying prospectus supplement, "Event of Default" when used in an Indenture will mean any of the following: - failure to pay any installment of interest on the Debt Securities for a period of 10 days; - failure to pay the principal and premium, if any, on the Debt Securities; - failure to deposit any sinking fund payment on the Debt Securities; - failure to perform any other covenant or agreement in the Indenture that continues for 90 days after we have been given written notice of such failure; - acceleration of a BFGoodrich debt with a principal amount of more than $50,000,000 that is not rescinded or annulled within 10 days after written notice of such acceleration; - certain events of bankruptcy, insolvency and reorganization of BFGoodrich; and - any other Event of Default established with respect to Debt Securities of that series. (Sections 2.5 and 4.1) Within 90 days after the occurrence of a default (without regard to any grace periods) the Trustee will give all holders of Debt Securities of the affected series notice of all uncured defaults known to it. Except in the case of a default in the payment of principal (and premium, if any) or interest, if any, or in the payment of any sinking fund installment, the Trustee may withhold such notice if it in good faith determines that withholding such notice is in the interest of the holders. (Trust Indenture Act) If an Event of Default occurs and continues, either the Trustee or the holders of at least 25% in aggregate principal amount of the Debt Securities of the series may declare the principal (or, in the case of original issue discount Debt Securities, the portion specified in the applicable prospectus supplement) of the Debt Securities of the series and the accrued interest, if any, to be due and payable immediately. If this happens, subject to certain conditions, the holders of a majority of the aggregate principal amount of the Debt Securities of the series can annul the declaration of acceleration and waive past defaults (except for uncured defaults in the payment of principal (or premium, if any) or interest, if any. (Sections 4.1 and 4.9) We must file with the Trustee annually a written statement regarding the presence or absence of certain defaults (Trust Indenture Act). If a default or an Event of Default occurs and continues, the holders of at least a majority in aggregate principal amount of the Debt Securities of the series may direct the time, method and place of conducting any proceeding or remedy available to the Trustee, or exercising any trust or power conferred on the Trustee by the Indenture. (Section 4.8) 15 23 The Trustee does not have to exercise any of its rights or powers at the direction of the holders of Debt Securities unless the holders offer the Trustee reasonable security or indemnity against expenses and liabilities. (Section 5.1(d)) DEFEASANCE DEFEASANCE AND DISCHARGE The Indenture provides that we will be discharged from any and all obligations in respect of the Debt Securities of any series (except for certain transfer obligations), if we deposit with the Trustee, in trust, money and/or U.S. government obligations which will provide enough money to pay the principal of and each installment of interest on the Debt Securities of the series on the stated maturity of such payments in accordance with the terms of the Indenture and the Debt Securities of such series. (Section 12.2) Such a trust may only be established if, among other things, we have delivered to the Trustee an opinion of counsel stating that, due to an Internal Revenue Service ruling or a change in Federal income tax law, holders of the Debt Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to Federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred. (Section 12.4) DEFEASANCE OF CERTAIN COVENANTS AND CERTAIN EVENTS OF DEFAULT The Indenture provides that we may omit to comply with certain restrictive covenants in Sections 3.4 and 3.5, and Section 4.1(d) (described above in the fourth bullet point under "Events of Default, Waiver and Notice") without triggering an Event of Default under the Indenture and the Debt Securities of a series, if we deposit with the Trustee, in trust, money and/or U.S. government obligations which through the payment of interest and principal thereon will provide enough money to pay the principal of and each installment of interest on the Debt Securities of such series on the stated maturity of such payments in accordance with the terms of the Indenture and the Debt Securities of such series. Our other obligations under the Indenture and the Debt Securities of such series and other Events of Default shall remain in full force and effect. (Section 12.3) Such a trust may only be established if, among other things, we have delivered to the Trustee an opinion of counsel stating that the holders of the Debt Securities of such series will not recognize income, gain, or loss for Federal income tax purposes as a result of such deposit and defeasance of certain covenants and Events of Default and will be subject to Federal income tax on the same amounts and in the same manner and at the same times, as would have been the case if such deposit and defeasance had not occurred. (Section 12.4) If we exercise the option described in this section and the Debt Securities of such series are declared due and payable because of the occurrence of any Event of Default (other than the Event of Default described above in the fourth bullet point under "Events of Default, Waiver and Notice"), the amount of money and U.S. government obligations on deposit with the Trustee will be sufficient to pay amounts due on the Debt Securities of such series at the time of their stated maturity but may not be sufficient to pay amounts due on the Debt Securities of such series at the time of the acceleration resulting from such Event of Default. 16 24 CHANGES TO THE INDENTURE Holders who own not less than 50% in principal amount of the outstanding Debt Securities of each series affected can agree to change the Indenture or the rights of the holders of the Debt Securities. However, no change without your consent can affect: - the fixed maturity; - the principal or premium amount; - the rate or the time of payment of interest; - the currency; - the portion of the principal amount of an original issue discount Debt Security due and payable upon acceleration of the maturity thereof; - the portion of the principal amount of a Debt Security provable in bankruptcy; - amounts payable upon redemption; - the overdue rate; - any right of repayment at the option of the holder of a Debt Security; or - the percentage of principal amount of the outstanding Debt Securities of each series affected the holders of which may change the terms discussed above. (Section 7.2) We may amend the Indenture in certain circumstances without your consent to evidence the merger of BFGoodrich or the replacement of the Trustee and for certain other purposes. (Section 7.1) CONCERNING THE TRUSTEE We maintain deposit accounts and conduct other banking transactions with the Trustee in the ordinary course of our business. PLAN OF DISTRIBUTION We may sell the Debt Securities (a) to or through underwriters or dealers; (b) directly to one or more purchasers or (c) through agents. BY UNDERWRITERS If underwriters are used in the sale, the offered securities will be acquired by the underwriters for their own account. The underwriters may resell the securities in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The obligations of the underwriters to purchase the securities will be subject to certain conditions. The underwriters will be obligated to purchase all the Debt Securities offered if any of the Debt Securities are purchased. Any initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time. 17 25 DIRECT SALES Debt Securities may also be sold directly by us. In this case, no underwriters or agents would be involved. BY AGENTS Debt Securities may be sold through agents designated by us. The agents agree to use their reasonable best efforts to solicit purchases for the period of their appointment. GENERAL INFORMATION Underwriters, dealers and agents that participate in the distribution of the offered securities may be underwriters as defined in the Securities Act of 1933, and any discounts, concessions or commissions that we pay them and any profit on their resale of the offered securities may be treated as underwriting discounts, concessions and commissions under the Securities Act. We will identify any underwriters or agents and describe their compensation in a prospectus supplement. We may have agreements with the underwriters, dealers and agents who participate in the sale of Debt Securities to indemnify them against certain civil liabilities, including liabilities under the Securities Act, or to contribute with respect to payments which the underwriters, dealers or agents may be required to make. Underwriters, dealers and agents may engage in transactions with, or perform services for, us or our subsidiaries in the ordinary course of their businesses. The Debt Securities, when first issued, will have no established trading market. Any underwriters or agents to or through whom Debt Securities are sold by us for public offering and sale may make a market in the Debt Securities; but such underwriters or agents will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given as to the liquidity of the trading market for any Debt Securities. In connection with an offering of Debt Securities, underwriters or agents may purchase and sell the Debt Securities in the open market. These transactions may include over-allotment and stabilizing transactions, purchases to cover syndicate short positions created in connection with the offering and penalty bids. Over-allotment involves sales in excess of the offering size, which creates a short position. Stabilizing transactions consist of bids or purchases for the purpose of preventing or retarding a decline in the market price of Debt Securities and are permitted so long as the stabilizing bids do not exceed a specified maximum. Syndicate short positions involve the sale by the underwriters or agents of a greater number of Debt Securities than they are required to purchase from us in the offering. The underwriters or agents also may impose a penalty bid which permits them to reclaim selling concessions allowed to syndicate members or certain dealers if they repurchase the Debt Securities in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the Debt Securities, which may be higher than the price that might otherwise prevail in the open market. These activities, if commenced, may be discontinued at any time. These transactions may be effected on the exchange, if any, on which the Debt Securities are traded, in the over-the-counter market or otherwise. If we so indicate in a prospectus supplement we will authorize underwriters or our agents to solicit offers by certain institutional investors to purchase Debt Securities from us which will be paid for and delivered on a future date specified in the applicable prospectus supplement. The obligations of any purchasers under these delayed delivery and payment arrangements will not 18 26 be subject to any conditions except that the purchase at delivery must not be prohibited under the laws of any jurisdiction in the United States to which the institution is subject. LEGAL OPINIONS Nicholas J. Calise, Esq., who is our Vice President, Associate General Counsel and Secretary, or another of our lawyers, will issue an opinion about the validity of the Debt Securities. As of April 6, 1999, Mr. Calise owned 13,617 shares of our Common Stock; has deferred receipt of 6,079 shares of our Common Stock under the Long Term Incentive Plan; has contingently credited to his account 5,918 phantom shares under the 1998-2000 and 1999-2001 Long Term Incentive Plan, all of which are subject to forfeiture; held options to purchase 87,100 shares of our Common Stock; and had credited to his account in our Retirement Plus Savings Plan approximately 5,855 shares of our Common Stock. In addition, Mr. Calise's wife owns 1,000 shares, although Mr. Calise disclaims beneficial ownership of these shares. Any underwriters will be advised about the validity of the Debt Securities by their own legal counsel. EXPERTS Ernst & Young LLP, independent auditors, have audited our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 1998 as set forth in their report, which as to 1996 is based in part on the report of Deloitte & Touche LLP, independent auditors, and which is incorporated by reference in this prospectus and elsewhere in the registration statement. Our consolidated financial statements are incorporated by reference in reliance on their reports, given on their authority as experts in accounting and auditing. Arthur Andersen LLP, independent auditors, have audited Coltec Industries' consolidated financial statements and schedules included in its Annual Report on Form 10-K, for the year ended December 31, 1998, as set forth in their report which is incorporated in this prospectus by reference. Coltec Industries' consolidated financial statements are incorporated by reference in reliance on their report, given on their authority as experts in accounting and auditing. 19 27 UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS The following unaudited pro forma condensed combined statements of income for each of the three years ended December 31, 1996, 1997 and 1998 give effect to the merger with Coltec Industries, accounted for as a "pooling of interests." The unaudited pro forma condensed combined statements of income and the unaudited pro forma condensed combined balance sheet at December 31, 1998 give effect to the merger as though Coltec Industries had always been a part of BFGoodrich. The pro forma information is based on the historical consolidated financial statements of BFGoodrich and of Coltec Industries, under the assumptions and adjustments set forth in the accompanying notes to the unaudited pro forma condensed combined financial statements. You should read the information shown below in conjunction with the consolidated historical financial statements of BFGoodrich and of Coltec Industries, including the respective notes to those financial statements, which are incorporated by reference in this prospectus. We have presented the pro forma data for comparative purposes only. They are not necessarily indicative of the results of operations or of the financial position that would have occurred had the merger been completed during the periods or as of the date for which the pro forma data are presented, and they are not necessarily indicative of BFGoodrich's future results of operations or financial position. Pro forma per share amounts for the combined BFGoodrich and Coltec Industries entity are based on the exchange ratio of 0.56 of a share of BFGoodrich common stock for each share of Coltec Industries common stock. F-1 28 UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET DECEMBER 31, 1998 (DOLLARS IN MILLIONS) The following unaudited pro forma condensed combined balance sheet as of December 31, 1998 is presented to show the impact of the proposed merger on BFGoodrich's historical financial condition. The merger has been reflected under the "pooling of interests" method of accounting.
COLTEC PRO FORMA PRO FORMA BFGOODRICH INDUSTRIES ADJUSTMENTS COMBINED ---------- ---------- ----------- --------- ASSETS Current Assets Cash and cash equivalents... $ 31.7 $ 21.8 $ $ 53.5 Accounts and notes receivable, net.......... 629.0 148.2 777.2 Inventories................. 772.5 236.0 1,008.5 Deferred income taxes....... 142.1 20.5 162.6 Prepaid expenses and other assets................... 39.2 15.6 54.8 -------- -------- ------- -------- Total current assets............ 1,614.5 442.1 -- 2,056.6 -------- -------- ------- -------- Property...................... 1,255.9 306.6 -- 1,562.5 Deferred income taxes......... 39.7 -- -- 39.7 Prepaid pensions.............. 148.0 -- 45.3 4(c) 193.3 Goodwill...................... 771.0 214.6 985.6 Identifiable intangible assets...................... 112.4 -- 112.4 Other assets.................. 251.1 92.3 343.4 -------- -------- ------- -------- $4,192.6 $1,055.6 $ 45.3 $5,293.5 ======== ======== ======= ========
See notes to unaudited pro forma condensed combined financial statements beginning on page F-7. F-2 29 UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET DECEMBER 31, 1998 (DOLLARS IN MILLIONS) (CONTINUED)
COLTEC PRO FORMA PRO FORMA BFGOODRICH INDUSTRIES ADJUSTMENTS COMBINED ---------- ---------- ----------- --------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Short-term bank debt........ $ 144.1 $ -- $ $ 144.1 Accounts payable............ 364.4 96.6 461.0 Accrued expenses............ 420.1 171.1 591.2 Income taxes payable........ 59.4 -- 59.4 Current maturities of long-term debt and capital lease obligations.............. 2.8 5.1 7.9 -------- -------- -------- Total current liabilities....... 990.8 272.8 -- 1,263.6 -------- -------- ------- -------- Long-term debt and capital lease obligations........... 995.2 577.5 1,572.7 Pension obligations........... 43.6 -- 33.0 4(c) 76.6 Postretirement benefits other than pensions............... 338.1 5.9 344.0 Other non-current liabilities................. 101.7 214.5 12.3 4(c) 328.5 Deferred income taxes......... -- 139.9 139.9 Mandatorily redeemable preferred securities of trusts...................... 123.6 145.3 268.9 Shareholders' Equity Common stock................ 381.1 0.7 175.9 4(a) 557.7 Additional capital.......... 543.7 643.6 (303.8) 4(a)(b) 883.5 Income retained in the business................. 736.8 (795.3) (58.5) Accumulated other comprehensive income..... 3.6 (18.7) (15.1) Common stock held in treasury, at cost........ (65.6) (127.9) 127.9 4(b) (65.6) Unearned compensation....... -- (2.7) (2.7) -------- -------- ------- -------- Total Shareholders' Equity............ 1,599.6 (300.3) -- 1,299.3 -------- -------- ------- -------- $4,192.6 $1,055.6 $ 45.3 $5,293.5 ======== ======== ======= ========
See notes to unaudited pro forma condensed combined financial statements beginning on page F-7. F-3 30 UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1998 (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) The following unaudited pro forma condensed combined statements of income are presented to show the impact of the proposed merger on BFGoodrich's historical results of operations. These statements assume that the companies had been combined for each period presented.
COLTEC PRO FORMA PRO FORMA BFGOODRICH INDUSTRIES ADJUSTMENTS COMBINED ---------- ---------- ----------- --------- Sales............................... $3,950.8 $1,504.1 $ -- $5,454.9 Operating costs and expenses: Cost of sales..................... 2,853.1 1,080.8 3,933.9 Selling and administrative costs.......................... 610.4 235.2 -- 845.6 Restructuring costs and asset impairment..................... 10.5 -- -- 10.5 -------- -------- -------- -------- 3,474.0 1,316.0 -- 4,790.0 -------- -------- -------- -------- Operating income.................... 476.8 188.1 -- 664.9 Interest expense.................... (79.0) (54.3) -- (133.3) Interest income..................... 5.2 0.9 -- 6.1 Other income (expense) -- net....... (18.1) 56.2 -- 38.1 -------- -------- -------- -------- Income from continuing operations before income taxes and trust distributions..................... 384.9 190.9 -- 575.8 Income tax expense.................. (146.3) (64.9) -- (211.2) Distributions on trust preferred securities........................ (10.5) (3.7) -- (14.2) -------- -------- -------- -------- Income from continuing operations... 228.1 122.3 -- 350.4 Income (loss) from discontinued operations -- net of taxes........ (1.6) -- -- (1.6) -------- -------- -------- -------- Income before extraordinary item.... 226.5 122.3 -- 348.8 Extraordinary item -- net of tax.... -- (4.3) -- (4.3) -------- -------- -------- -------- Net income.......................... $ 226.5 $ 118.0 $ -- $ 344.5 ======== ======== ======== ======== Basic earnings per share: Continuing operations............. $ 3.09 $ 1.88 $ -- $ 3.18 Discontinued operations........... (0.02) -- -- (0.01) Extraordinary item................ -- (0.07) -- (0.04) -------- -------- -------- -------- Net income........................ $ 3.07 $ 1.81 $ -- $ 3.13 ======== ======== ======== ======== Diluted earnings per share: Continuing operations............. $ 3.04 $ 1.81 $ -- $ 3.08 Discontinued operations........... (0.02) -- -- (0.01) Extraordinary item................ -- (0.06) -- (0.04) -------- -------- -------- -------- Net income........................ $ 3.02 $ 1.75 $ -- $ 3.03 ======== ======== ======== ======== Weighted average number of common and common equivalent shares outstanding -- in millions Basic.......................... 73.7 65.1 -- 110.2 Diluted........................ 75.0 69.4 -- 113.9
See notes to unaudited pro forma condensed combined financial statements beginning on page F-7. F-4 31 UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1997 (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
COLTEC PRO FORMA PRO FORMA BFGOODRICH INDUSTRIES ADJUSTMENTS COMBINED ---------- ---------- ----------- --------- Sales............................... $3,373.0 $1,314.9 $ -- $4,687.9 Operating costs and expenses: Cost of sales..................... 2,454.7 898.3 -- 3,353.0 Charge for MD-90 contract......... 35.2 -- -- 35.2 Selling and administrative costs.......................... 556.0 218.8 -- 774.8 Merger-related costs.............. 77.0 -- -- 77.0 -------- -------- -------- -------- 3,122.9 1,117.1 -- 4,240.0 -------- -------- -------- -------- Operating income.................... 250.1 197.8 -- 447.9 Interest expense.................... (73.0) (54.6) -- (127.6) Interest income..................... 12.0 .6 -- 12.6 Gain on issuance of subsidiary stock............................. 13.7 -- -- 13.7 Other income (expense) -- net....... 15.0 -- -- 15.0 -------- -------- -------- -------- Income from continuing operations before income taxes and trust distributions..................... 217.8 143.8 -- 361.6 Income tax expense.................. (94.1) (48.9) -- (143.0) Distributions on trust preferred securities........................ (10.5) -- -- (10.5) -------- -------- -------- -------- Income from continuing operations... 113.2 94.9 -- 208.1 Income from discontinued operations -- net of taxes........ 84.3 -- -- 84.3 -------- -------- -------- -------- Income before extraordinary item.... 197.5 94.9 -- 292.4 Extraordinary item -- net of tax.... (19.3) -- -- (19.3) -------- -------- -------- -------- Net income.......................... $ 178.2 $ 94.9 $ -- $ 273.1 ======== ======== ======== ======== Basic earnings per share: Continuing operations............. $ 1.59 $ 1.44 $ -- $ 1.93 Discontinued operations........... 1.19 -- -- 0.78 Extraordinary item................ (0.27) -- -- (0.18) -------- -------- -------- -------- Net income........................ $ 2.51 $ 1.44 $ -- $ 2.53 ======== ======== ======== ======== Diluted earnings per share: Continuing operations............. $ 1.53 $ 1.42 $ -- $ 1.86 Discontinued operations........... 1.13 -- -- 0.75 Extraordinary item................ (0.25) $ -- -- (0.17) -------- -------- -------- -------- Net income........................ $ 2.41 $ 1.42 $ -- $ 2.44 ======== ======== ======== ======== Weighted average number of common and common equivalent shares outstanding -- in millions Basic.......................... 71.0 65.9 -- 107.9 Diluted........................ 74.6 66.9 -- 112.1
See notes to unaudited pro forma condensed combined financial statements beginning on page F-7. F-5 32 UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1996 (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
COLTEC PRO FORMA PRO FORMA BFGOODRICH INDUSTRIES ADJUSTMENTS COMBINED ---------- ---------- ----------- --------- Sales............................... $2,845.8 $1,159.7 $ -- $4,005.5 Operating costs and expenses: Cost of sales..................... 2,042.5 811.1 -- 2,853.6 Selling and administrative costs.......................... 481.8 191.0 -- 672.8 Restructuring costs and asset impairment..................... 11.2 -- -- 11.2 -------- -------- -------- -------- 2,535.5 1,002.1 -- 3,537.6 -------- -------- -------- -------- Operating income.................... 310.3 157.6 -- 467.9 Interest expense.................... (89.3) (76.2) -- (165.5) Interest income..................... 4.2 1.3 -- 5.5 Other income (expense) -- net....... (30.8) -- -- (30.8) -------- -------- -------- -------- Income from continuing operations before income taxes and trust distributions..................... 194.4 82.7 -- 277.1 Income tax expense.................. (68.4) (28.1) -- (96.5) Distributions on trust preferred securities........................ (10.5) -- -- (10.5) -------- -------- -------- -------- Income from continuing operations... 115.5 54.6 -- 170.1 Income from discontinued operations -- net of taxes........ 58.4 57.1 -- 115.5 -------- -------- -------- -------- Income before extraordinary item.... 173.9 111.7 -- 285.6 Extraordinary item -- net of tax.... -- (30.6) -- (30.6) -------- -------- -------- -------- Net income.......................... $ 173.9 $ 81.1 $ -- $ 255.0 ======== ======== ======== ======== Basic earnings per share: Continuing operations............. $ 1.74 $ 0.79 $ -- $ 1.62 Discontinued operations........... 0.87 0.83 -- 1.09 Extraordinary item................ -- (0.44) -- (0.29) -------- -------- -------- -------- Net income........................ $ 2.61 $ 1.18 $ -- $ 2.42 ======== ======== ======== ======== Diluted earnings per share: Continuing operations............. $ 1.65 $ 0.79 $ -- $ 1.57 Discontinued operations........... 0.83 0.82 -- 1.05 Extraordinary item................ -- (0.44) -- (0.28) -------- -------- -------- -------- Net income........................ $ 2.48 $ 1.17 $ -- $ 2.34 ======== ======== ======== ======== Weighted average number of common and common equivalent shares outstanding -- in millions Basic.......................... 66.6 69.1 -- 105.3 Diluted........................ 70.9 69.4 -- 109.8
See notes to unaudited pro forma condensed combined financial statements beginning on page F-7. F-6 33 NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION The unaudited pro forma condensed combined statements of income for each of the three years in the period ended December 31, 1998 and the unaudited pro forma condensed combined balance sheet at December 31, 1998 give effect to the merger as though Coltec Industries had always been a part of BFGoodrich. We have presented the unaudited pro forma condensed combined financial statements for comparative purposes only. They are not necessarily indicative of the results of operations or of the financial position that would have occurred had the merger been completed during the periods or as of the date for which the pro forma data are presented. They are also not necessarily indicative of BFGoodrich's future results of operations or financial position. We have included certain reclassifications in the unaudited pro forma condensed combined balance sheet and statements of income to conform statement presentations to those expected to be used by BFGoodrich after the merger. 2. CONFORMITY OF ACCOUNTING POLICIES We are still in the process of reviewing our respective accounting policies to determine if they are consistent or if they need to be conformed. As a result of this review, we might need to restate either Coltec Industries' or BFGoodrich's financial statements to conform to those accounting policies that are most appropriate. We have not included any restatements of prior periods in the unaudited pro forma condensed combined financial statements. At this time, we do not expect that conforming such accounting policies will have a material impact on the unaudited pro forma condensed combined financial statements. We will make any restatements, if appropriate, upon completion of this review process. 3. MERGER-RELATED AND CONSOLIDATION EXPENSES The unaudited pro forma condensed combined financial statements do not include any merger-related and consolidation expenses which we expect to incur in connection with completing the merger and integrating the operations of BFGoodrich and Coltec Industries. It is not possible to determine the actual amount of these costs and expenses until the related operational and transitional plans are complete. These costs and expenses relate to professional and registration fees; employee benefit-related costs such as severance, relocation and retention incentives; facility consolidations; and satisfaction of contractual obligations. Most of these costs and expenses will be incurred to eliminate duplicate facilities and excess capacity in the combined BFGoodrich operations. We cannot determine the exact timing of these charges at this time. They are dependent on the completion of the necessary plans. In connection with the merger, the managements of BFGoodrich and Coltec Industries estimate that BFGoodrich will incur a one-time charge for merger-related and consolidation expenses at the effective date of the merger that is expected to be material. Other merger-related transaction costs include investment banking fees, registration and listing fees, and various accounting, legal and other related costs. 4. PRO FORMA ADJUSTMENTS Pro forma adjustments to reflect the effect of the merger on the unaudited pro forma condensed combined balance sheet at December 31, 1998 are as follows: F-7 34 a. Common stock increased by $175.9 million to record the BFGoodrich common stock issued in the merger. That increase is calculated by multiplying the 63.1 million shares of Coltec Industries common stock outstanding by the exchange ratio of 0.56 and the par value of BFGoodrich common stock of $5 per share, reduced by $0.7 million to record the retirement of Coltec Industries common stock. b. Combined additional capital is adjusted for the effects of pro forma adjustment a. above, and for the retirement of Coltec Industries treasury shares. c. Coltec Industries' pension obligations are reclassified in accordance with BFGoodrich's presentation. d. For purposes of the pro forma information and references to the shares to be issued by BFGoodrich in the merger, we have not included the 14,000,000 shares of BFGoodrich common stock to be issued in the merger in exchange for the 25,000,000 shares of Coltec Industries common stock currently owned by a subsidiary of Coltec Industries. F-8 35 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION* Securities and Exchange Commission registration fee........ $ 0 Printing and engraving expenses............................ 50,000 Rating agency fees......................................... 165,000 Trustee's fees............................................. 5,000 Legal fees................................................. 25,000 Accounting expenses........................................ 10,000 Blue Sky fees and expenses................................. 10,000 Other...................................................... 20,000 -------- Total.................................................... $285,000 ========
- --------------- * All amounts other than the registration fee are estimated. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Under the Company's Restated Certificate of Incorporation no member of the Board of Directors shall have any personal liability to the Company or its shareholders for damages for any breach of duty in such capacity, provided that such liability shall not be limited if a judgment or other final adjudication adverse to the Director establishes that his or her acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law or that the Director personally gained in fact a financial profit or other advantage to which he or she was not legally entitled or that the Director's acts violated section 719 of the New York Business Corporation Law ("B.C.L.") (generally relating to the improper declaration of dividends, improper purchases of shares, improper distribution of assets after dissolution, or making improper loans to directors contrary to specified statutory provisions). Reference is made to Article TWELFTH of the Company's Restated Certificate of Incorporation filed as Exhibit 3(a) to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1988. Under the Company's By-Laws, any person made, or threatened to be made, a party to an action or proceeding by reason of the fact that he, his testator or intestate is or was a director or officer of the Company or served any other corporation in any capacity at the request of the Company shall be indemnified by the Company to the extent and in a manner permissible under the laws of the State of New York. In addition, the Company's By-Laws provide indemnification for directors and officers where they are acting on behalf of the Company where the final judgment does not establish that the director or officer acted in bad faith or was deliberately dishonest or gained a financial profit or other advantage to which he was not legally entitled. The By-Laws provide that the indemnification rights shall be deemed to be "contract rights" and continue after a person ceases to be a director or officer or after rescission or modification of the By-Laws with respect to prior occurring events. They also provide directors and officers with the benefit of any additional indemnification which may be permitted by later amendment to the B.C.L. The By-Laws further provide for advancement of expenses and specify procedures in seeking and II-1 36 obtaining indemnification. Reference is made to Article VI of the Company's By-Laws filed as Exhibit 3(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1988. The Company has insurance to indemnify its directors and officers, within the limits of the Company's insurance policies, for those liabilities in respect of which such indemnification insurance is permitted under the laws of the State of New York. Reference is made to Sections 721-726 of the B.C.L., which are summarized below. Section 721 of the B.C.L. provides that indemnification pursuant to the B.C.L. shall not be deemed exclusive of other indemnification rights to which a director or officer may be entitled, provided that no indemnification may be made if a judgment or other final adjudication adverse to the director or officer establishes that (i) his acts were committed in bad faith or were the result of active and deliberate dishonesty, and, in either case, were material to the cause of action so adjudicated, or (ii) he personally gained in fact a financial profit or other advantage to which he was not legally entitled. Section 722(a) of the B.C.L. provides that a corporation may indemnify a director or officer made, or threatened to be made, a party to any civil or criminal action, other than a derivative action, against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein, if such director or officer acted, in good faith, for a purpose which he reasonably believed to be in the best interests of the corporation and, in criminal actions or proceedings, in addition, had no reasonable cause to believe that his conduct was unlawful. With respect to derivative actions, Section 722(c) of the B.C.L. provides that a director or officer may be indemnified only against amounts paid in settlement and reasonable expenses, including attorneys' fees, actually and necessarily incurred in connection with the defense or settlement of such action, or any appeal therein, if such director or officer acted, in good faith, for a purpose which he reasonably believed to be in the best interests of the corporation and that no indemnification shall be made in respect of (1) a threatened action, or a pending action which is settled or otherwise disposed of, or (2) any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation, unless and to the extent an appropriate court determines that the person is fairly and reasonably entitled to partial or full indemnification. Section 723 of the B.C.L. specifies the manner in which payment of such indemnification may be authorized by the corporation. It provides that indemnification by a corporation is mandatory in any case in which the director or officer has been successful, whether on the merits or otherwise, in defending an action. In the event that the director or officer has not been successful or the action is settled, indemnification may be made by the corporation only if authorized by any of the corporate actions set forth in such Section 723 (unless the corporation has provided for indemnification in some other manner as otherwise permitted by Section 721 of the B.C.L.). Section 724 of the B.C.L. provides that upon proper application by a director or officer, indemnification shall be awarded by a court to the extent authorized under Sections 722 and 723 of the B.C.L. Section 725 of the B.C.L. contains certain other miscellaneous provisions affecting the indemnification of directors and officers, including provision for the return of amounts paid as indemnification if any such person is ultimately found not to be entitled thereto. Section 726 of the B.C.L. authorizes the purchase and maintenance of insurance to indemnify (1) a corporation for any obligation which it incurs as a result of the indemnification of directors and officers under the above sections, (2) directors and officers in instances in which they may be indemnified by a corporation under such sections, and (3) directors and officers in II-2 37 instances in which they may not otherwise be indemnified by a corporation under such sections, provided the contract of insurance covering such directors and officers provides, in a manner acceptable to the New York State Superintendent of Insurance, for a retention amount and for co-insurance. ITEM 16. EXHIBITS 1.a Form of Underwriting Agreement 1.b* Form of Distribution Agreement 4.a Indenture dated as of May 1, 1991 between the Company and the Trustee. This exhibit was filed as an exhibit to the Registrant's Registration Statement on Form S-3 (File No. 33-65658) and is incorporated herein by reference 4.b Form of Fixed Rate Note. This exhibit was filed as an exhibit to the Registrant's Registration Statement on Form S-3 (File No. 333-03341) and is incorporated herein by reference 4.c Form of Floating Rate Note. This exhibit was filed as an exhibit to the Registrant's Registration Statement on Form S-3 (File No. 333-03341) and is incorporated herein by reference 5. Opinion re validity of Debt Securities of Nicholas J. Calise, Esq., Vice President, Associate General Counsel and Secretary (including consent) 12. Computation of Ratio of Earnings to Fixed Charges 23.a Consent of Ernst & Young LLP, independent auditors 23.b Consent of Deloitte & Touche LLP, independent auditors 23.c Consent of Arthur Andersen LLP, independent auditors 23.d Consent of Nicholas J. Calise, Esq. (contained in his opinion filed as Exhibit 5) 24.a Power of Attorney 24.b Power of Attorney 25. Form T-1 Statement of Eligibility and Qualification of the Trustee
- --------------- * To be filed by amendment or on Form 8-K. ITEM 17. UNDERTAKINGS The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a posteffective 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; II-3 38 provided, however, that paragraphs (1)(i) and (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 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. (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) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. 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 provisions described under Item 15 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of an 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-4 39 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 Village of Richfield, State of Ohio, on April 28, 1999. THE B.F.GOODRICH COMPANY By: /s/ N. J. CALISE ----------------------------------- Nicholas J. Calise Vice President, Associate General Counsel and Secretary Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed on April 28, 1999 by the following persons in the capacities indicated. /s/ DAVID L. BURNER /s/ L. A. CHAPMAN ----------------------------------- ------------------------------------- (David L. Burner) (Laurence A. Chapman) Chairman of the Board, Chief Senior Vice President and Executive Officer and Director Chief Financial Officer (Principal Executive Officer) (Principal Financial Officer) /s/ ROBERT D. KONEY, JR. /s/ DIANE C. CREEL ----------------------------------- ------------------------------------- (Robert D. Koney, Jr.) (Diane C. Creel) Vice President and Controller Director (Principal Accounting Officer) /s/ GEORGE A. DAVIDSON, JR. /s/ JAMES J. GLASSER ----------------------------------- ------------------------------------- (George A. Davidson, Jr.) (James J. Glasser) Director Director /s/ JODIE K. GLORE /s/ DOUGLAS E. OLESEN ----------------------------------- ------------------------------------- (Jodie K. Glore) (Douglas E. Olesen) Director Director /s/ RICHARD DE J. OSBORNE /s/ ALFRED M. RANKIN, JR. ----------------------------------- ------------------------------------- (Richard de J. Osborne) (Alfred M. Rankin, Jr.) Director Director
II-5 40 /s/ ROBERT H. RAU /s/ JAMES R. WILSON ----------------------------------- ------------------------------------- (Robert H. Rau) (James R. Wilson) Director Director /s/ A. THOMAS YOUNG ----------------------------------- (A. Thomas Young) Director
*The undersigned, as attorney-in-fact does hereby sign this Registration Statement on behalf of each of the officers and directors indicated above. /s/ N. J. Calise - -------------------------------------- Nicholas J. Calise II-6 41 EXHIBIT INDEX
PAGINATION BY EXHIBIT SEQUENTIAL NUMBER NUMBER EXHIBIT DESCRIPTION SYSTEM - ------- ------------------- ----------------- 1.a Form of Underwriting Agreement 1.b* Form of Distribution Agreement 4.a Indenture dated as of May 1, 1991 between the Company and the Trustee. This exhibit was filed as an exhibit to the Registrant's Registration Statement on Form S-3 (File No. 33-65658) and is incorporated herein by reference 4.b Form of Fixed Rate Note. This exhibit was filed as an exhibit to the Registrant's Registration Statement on Form S-3 (File No. 333-03341) and is incorporated herein by reference 4.c Form of Floating Rate Note. This exhibit was filed as an exhibit to the Registrant's Registration Statement on Form S-3 (File No. 333-03341) and is incorporated herein by reference 5. Opinion re validity of Debt Securities of Nicholas J. Calise, Esq., Vice President, Associate General Counsel and Secretary (including consent) 12. Computation of Ratio of Earnings to Fixed Charges 23.a Consent of Ernst & Young LLP, independent auditors 23.b Consent of Deloitte & Touche LLP, independent auditors 23.c Consent of Arthur Andersen LLP, independent auditors. 23.d Consent of Nicholas J. Calise, Esq. (contained in his opinion filed as Exhibit 5) 24.a Power of Attorney 24.b Power of Attorney 25. Form T-1 Statement of Eligibility and Qualification of the Trustee
- --------------- * To be filed by amendment or on Form 8-K. EX-1.2 2 EXHIBIT 1.2 1 EXHIBIT 1.a THE B.F.GOODRICH COMPANY Debt Securities Underwriting Agreement . . . . . . . ., . . . . [date] [ADDRESS] Dear Sirs: From time to time The B.F.Goodrich Company, a New York corporation (the "Company"), proposes to enter into one or more Pricing Agreements (each, a "Pricing Agreement") in the form of Annex I hereto, with such additions and deletions as the parties thereto may determine, and, subject to the terms and conditions stated herein and therein, to issue and sell to the firms named in Schedule I to the applicable Pricing Agreement (such firms constituting the "Underwriters" with respect to such Pricing Agreement and the securities specified therein) certain of its debt securities (the "Securities") specified in Schedule II to such Pricing Agreement (with respect to such Pricing Agreement, the "Designated Securities"). The terms and rights of any particular issuance of Designated Securities shall be as specified in the Pricing Agreement relating thereto and in or pursuant to the indenture (the "Indenture") identified in such Pricing Agreement. 1. Particular sales of Designated Securities may be made from time to time to the Underwriters of such Securities, for whom the firms designated as representatives of the Underwriters of such Securities in the Pricing Agreement relating thereto will act as representatives (the "Representatives"). The term "Representatives" also refers to a single firm acting as sole representative of the Underwriters and to Underwriters who act without any firm being designated as their representative. This Underwriting Agreement shall not be construed as an obligation of the Company to sell any of the Securities or as an obligation of any of the Underwriters to purchase the Securities. The obligation of the Company to issue and sell any of the Securities and the obligation of any of the Underwriters to purchase any of the Securities shall be evidenced by the Pricing Agreement with respect to the Designated Securities specified therein. Each Pricing Agreement shall specify the aggregate principal amount of such Designated Securities, the 2 initial public offering price of such Designated Securities, the purchase price to the Underwriters of such Designated Securities, the names of the Underwriters of such Designated Securities, the names of the Representatives of such Underwriters and the principal amount of such Designated Securities to be purchased by each Underwriter and shall set forth the date, time and manner of delivery of such Designated Securities and payment therefor. The Pricing Agreement shall also specify (to the extent not set forth in the Indenture and the registration statement and prospectus with respect thereto) the terms of such Designated Securities. A Pricing Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of telegraphic communications or any other rapid transmission device designed to produce a written record of communications transmitted. The obligations of the Underwriters under this Agreement and each Pricing Agreement shall be several and not joint. 2. The Company represents and warrants to, and agrees with, each of the Underwriters that: (a) A registration statement in respect of the Securities has been filed with the Securities and Exchange Commission (the "Commission"); such registration statement and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to the Representatives and, excluding exhibits to such registration statement but including all documents incorporated by reference in the prospectus contained therein, to the Representatives for each of the other Underwriters, have been declared effective by the Commission in such form; no other document with respect to such registration statement or document incorporated by reference therein has heretofore been filed or transmitted for filing with the Commission; and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in such registration statements or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Securities Act of 1933, as amended (the "Act"), being hereinafter called a "Preliminary Prospectus"; the various parts of such registration statements, including all exhibits thereto and the documents incorporated by reference in the prospectus contained in the registration statements at the time such part of the registration statements became effective but excluding Form T-1, each as amended at the time such part of the registration statements became effective, being hereinafter collectively called the "Registration Statement"; the prospectus relating to the Securities, in the form in which it has most recently been filed, or transmitted for filing, with the Commission on or prior to the date of this Agreement, being hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any 2 3 amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to the Prospectus as amended or supplemented in relation to the applicable Designated Securities in the form in which it is filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof, including any documents incorporated by reference therein as of the date of such filing); (b) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Securities; (c) The Registration Statement and the Prospectus conform, and any further amendments or supplements to the Registration Statement or the Prospectus will conform, in all material respects to the requirements of the Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to 3 4 state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Securities; (d) The Company and its subsidiaries considered as a whole have not, since the date of the latest audited financial statements included or incorporated by reference in the Prospectus, sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any change in the capital stock or long-term debt of the Company and its subsidiaries considered as a whole or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company and its subsidiaries considered as a whole, otherwise than as set forth or contemplated in the Prospectus; (e) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of New York and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business in an amount that is material to the business of the Company and its consolidated subsidiaries considered as a whole so as to require such qualification; each Material Subsidiary (as defined below) of the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation and is duly qualified as a foreign corporation for the transaction of business and in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification (as used in this agreement, the term "Material Subsidiary" means a subsidiary of the Company which is a significant subsidiary under Rule 1-02 of Regulation S-X of the Commission); (f) The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; (g) The Securities have been duly authorized, and, when Designated 4 5 Securities are issued and delivered pursuant to this Agreement and the Pricing Agreement with respect to such Designated Securities, such Designated Securities will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indenture, which will be substantially in the form filed as an exhibit to the Registration Statement; the Indenture has been duly authorized and duly qualified under the Trust Indenture Act and, at the Time of Delivery for such Designated Securities (as defined in Section 4 hereof), the Indenture will constitute a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Indenture conforms, and the Designated Securities will conform, in all material respects, to the descriptions thereof contained in the Prospectus as amended or supplemented with respect to such Designated Securities; (h) The issue and sale of the Securities, and the compliance by the Company with all of the provisions of the Securities, the Indenture, this Agreement and any Pricing Agreement, and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Material Subsidiaries is a party or by which the Company or any of its Material Subsidiaries is bound or to which any of the property or assets of the Company or any of its Material Subsidiaries is subject, nor will such action result in any violation of the provisions of the Company's Certificate of Incorporation or By-laws or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its Material Subsidiaries or any of their properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities or the consummation by the Company of the transactions contemplated by this Agreement or any Pricing Agreement or the Indenture, except such as have been, or will have been prior to the Time of Delivery, obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under the state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Underwriters; (i) Neither the Company nor any of its Material Subsidiaries is in violation of its Certificate of Incorporation or By-Laws or in default in the performance or observance of any material obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, material lease or other material 5 6 agreement or instrument to which it is a party or by which it or any of its properties may be bound; (j) The statements set forth in the Prospectus under the captions "Description of Debt Securities" and "Description of the Offered Securities", insofar as they purport to constitute a summary of the terms of the Securities, and under the captions "Plan of Distribution" and "Underwriting", insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair, and, if the Prospectus includes a caption "United States Tax Considerations", the statements set forth in the Prospectus under such caption, insofar as they purport to constitute a summary of the laws referred to therein, are both accurate and complete in all material respects; (k) Other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject, other than litigation which, in the opinion of the Company, will not individually or in the aggregate have a material adverse effect on the current or future consolidated financial position, shareholders' equity or results of operations of the Company and its subsidiaries considered as a whole; and, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (l) The Company is not and, after giving effect to each offering and sale of the Securities, will not be an "investment company" or an entity "controlled" by an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"); (m) Neither the Company nor any of its affiliates does business with the government of Cuba or with any person or affiliate located in Cuba within the meaning of Section 517.075, Florida Statutes; (n) Immediately after any sale of Designated Securities by the Company under any Pricing Agreement, the aggregate amount of Securities which shall have been issued and sold by the Company under any Pricing Agreement and of any debt securities of the Company (other than such Securities) that shall have been issued and sold pursuant to the Registration Statement will not exceed the amount of debt securities registered under the Registration Statement; and (o) Ernst & Young LLP, who have certified certain financial statements of the Company and its subsidiaries, are, to the best knowledge of the Company, independent public accountants as required by the Act and the rules and regulations of the Commission thereunder. 6 7 3. Upon the execution of the Pricing Agreement applicable to any Designated Securities and authorization by the Representatives of the release of such Designated Securities, the several Underwriters propose to offer such Designated Securities for sale upon the terms and conditions set forth in the Prospectus as amended or supplemented. 4. Designated Securities to be purchased by each Underwriter pursuant to the Pricing Agreement relating thereto, in the form specified in such Pricing Agreement, and in such authorized denominations and registered in such names as the Representatives may request upon at least forty-eight hours' prior notice to the Company, shall be delivered by or on behalf of the Company to the Representatives for the account of such Underwriter, against payment by such Underwriter or on its behalf of the purchase price therefor by wire transfer or certified or official bank check or checks, payable to the order of the Company in the funds specified in such Pricing Agreement, all at the place and time and date specified in such Pricing Agreement or at such other place and time and date as the Representatives and the Company may agree upon in writing, such time and date being herein called the "Time of Delivery" for such Securities. 5. The Company agrees with each of the Underwriters of any Designated Securities: (a) To prepare the Prospectus as amended and supplemented in relation to the applicable Designated Securities in a form approved by the Representatives and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's close of business on the second business day following the execution and delivery of the Pricing Agreement relating to the applicable Designated Securities or, if applicable, such earlier time as may be required by Rule 424(b); to make no further amendment or any supplement to the Registration Statement or Prospectus as amended or supplemented after the date of the Pricing Agreement relating to such Securities and prior to the Time of Delivery for such Securities which shall be disapproved by the Representatives for such Securities promptly after reasonable notice thereof; to advise the Representatives promptly of any such amendment or supplement after such Time of Delivery and furnish the Representatives with copies thereof; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") for so long as the delivery of a prospectus is required in connection with the offering or sale of such Securities, and during such same period to advise the Representatives, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed with the Commission, of 7 8 the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Securities, of the suspension of the qualification of such Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any prospectus relating to the Securities or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal; (b) Promptly from time to time to take such action as the Representatives may reasonably request to qualify such Securities for offering and sale under the securities laws of such jurisdictions as the Representatives may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of such Securities, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; (c) To furnish the Underwriters with copies of the Prospectus as amended or supplemented in such quantities as the Representatives may from time to time reasonably request, and, if the delivery of a prospectus is required at any time in connection with the offering or sale of any Designated Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to notify the Representatives and upon their request to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as the Representatives may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; (d) To make generally available to its securityholders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earning statement of the Company and its consolidated subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including at the option of the Company Rule 158 8 9 under the Act); and (e) During the period beginning from the date of the Pricing Agreement for such Designated Securities and continuing to and including the earlier of (i) the termination of trading restrictions for such Designated Securities, as notified to the Company by the Representatives and (ii) the Time of Delivery for such Designated Securities, not to offer, sell, contract to sell or otherwise dispose of any debt securities of the Company which mature more than one year after such Time of Delivery and which are substantially similar to such Designated Securities, without the prior written consent of the Representatives. 6. The Company covenants and agrees with the several Underwriters that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company's counsel and accountants in connection with the registration of the Securities under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, any Pricing Agreement, any indenture, any Blue Sky and Legal Investment memoranda, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 5(b) hereof, including the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky and legal investment surveys; (iv) any fees charged by securities rating services for rating the Securities; (v) any filing fees incident to any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Securities; (vi) the cost of preparing the Securities; (vii) the fees and expenses of any Trustee and any agent of any Trustee and the fees and disbursements of counsel for any Trustee in connection with any Indenture and the Securities; and (viii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, Section 8 and Section 11 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities by them, and any advertising expenses connected with any offers they may make. 7. The obligations of the Underwriters of any Designated Securities under the Pricing Agreement relating to such Designated Securities shall be subject, in the discretion of the Representatives, to the condition that all representations and warranties and other statements of the Company in or incorporated by reference in the Pricing Agreement relating to such Designated Securities are, at and as of the Time of Delivery for such Designated Securities, true and correct, the condition that the Company shall 9 10 have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions: (a) The Prospectus as amended or supplemented in relation to the applicable Designated Securities shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the Representatives' reasonable satisfaction; (b) Sullivan & Cromwell, counsel for the Underwriters, shall have furnished to the Representatives such opinion or opinions, dated the Time of Delivery for such Designated Securities, with respect to the incorporation of the Company, the validity of the Indenture, the Designated Securities, the Registration Statement, the Prospectus as amended or supplemented and other related matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; (c) Nicholas J. Calise, Vice President, Associate General Counsel and Secretary of the Company, shall have furnished to the Representatives his written opinion, dated the Time of Delivery for such Designated Securities, in form and substance satisfactory to the Representatives, to the effect that: (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of New York, with corporate power and authority to own its properties and conduct its business as described in the Prospectus as amended or supplemented; (ii) The Company has an authorized capitalization as set forth in the Prospectus as amended or supplemented and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; (iii) The Company has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each jurisdiction in the United States other than New York in which it owns or leases plants or other major real property (such counsel being entitled to rely in respect of the opinion in this clause upon opinions of local counsel and in respect of matters of fact upon certificates of officers 10 11 of the Company, provided that such counsel shall state that he believes that both you and he are justified in relying on such opinions and certificates); (iv) Each Material Subsidiary of the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation; all of the issued shares of capital stock of each such Material Subsidiary have been duly and validly authorized and issued, are fully paid and non-assessable, and (except for directors' qualifying shares) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims; (v) To the best of such counsel's knowledge, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject, other than as set forth in the Prospectus and other than litigation which in the aggregate is not material to the Company and its subsidiaries considered as a whole; and, to the best of such counsel's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (vi) This Agreement and the Pricing Agreement with respect to the Designated Securities have been duly authorized, executed and delivered by the Company; (vii) The Designated Securities have been duly authorized, executed, authenticated, issued and delivered and constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indenture; and the Designated Securities and the Indenture conform in all material respects to the descriptions thereof in the Prospectus as amended or supplemented; (viii) The Indenture has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the Trustee, constitutes a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Indenture has been duly qualified under the Trust Indenture Act; (ix) The issue and sale of the Designated Securities and the compliance by the Company with all of the provisions of the Designated Securities, the Indenture, this Agreement and the Pricing Agreement with 11 12 respect to the Designated Securities and the consummation of the transactions herein and therein contemplated will not in any material respect conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the Company or any of its Material Subsidiaries is a party or by which the Company or any of its Material Subsidiaries is bound or to which any of the property or assets of the Company or any of its Material Subsidiaries is subject, nor will such actions result in any violation of the provisions of the Company's Certificate of Incorporation or By-laws or any statute or any order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over the Company or any of its Material Subsidiaries or any of their properties; (x) No consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Designated Securities or the consummation by the Company of the transactions contemplated by this Agreement or such Pricing Agreement or the Indenture, except such as have been obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Designated Securities by the Underwriters; (xi) Neither the Company nor any of its Material Subsidiaries is in violation of its Certificate of Incorporation of By-laws or in default in the performance or observance of any material obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, material lease or other material agreement or instrument to which it is a party or by which it or any of its properties may be bound; (xii) The statements set forth in the Prospectus under the caption "Description of Debt Securities" and "Description of the Notes", insofar as they purport to constitute a summary of the terms of the Securities, and under the caption "Plan of Distribution" and "Underwriting", insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate and fair, and complete in all material respects; (xiii) The documents incorporated by reference in the Prospectus as amended or supplemented (other than the financial statements and related schedules and other financial and statistical data therein, as to which such counsel need express no opinion), when they became effective or 12 13 were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder; and such counsel has no reason to believe that any of such documents, when they became effective or were so filed, as the case may be, contained, in the case of a registration statement which became effective under the Act, an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or, in the case of other documents which were filed under the Act or the Exchange Act with the Commission, an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading; and such counsel does not know of any amendment to the Registration Statement required to be filed or any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Prospectus as amended or supplemented or required to be described in the Registration Statement or the Prospectus as amended or supplemented which are not filed or incorporated by reference or described as required; (xiv) The Company is not and, after giving effect to each offering and sale of the Securities, will not be an "investment company" or an entity "controlled" by an "investment company", as such terms are defined in the Investment Company Act; and (xv) [RESERVED]; In rendering such opinion, such counsel may state that his opinion is limited to the laws of the States of Ohio and New York and the federal laws of the United States; (d) White & Case LLP, or other counsel for the Company satisfactory to the Representatives, shall have furnished to the Representatives their written opinion, dated the Time of Delivery for such Designated Securities, in form and substance satisfactory to the Representatives, to the effect that: (i) If the Prospectus includes a caption "United States Tax Considerations", the statements set forth in the Prospectus under such caption, insofar as they purport to constitute a summary of the laws referred to therein, are both accurate and complete in all material respects; and (ii) The Registration Statement and the Prospectus as amended or supplemented and any further amendments and supplements thereto made by the Company prior to the Time of Delivery for the Designated Securities (other than the financial statements and related schedules and other financial data included or incorporated by reference therein or omitted therefrom, and other than the Trustee's Statement of Eligibility on Form T 13 14 -1, as to which such counsel need express no belief) comply as to form in all material respects with the requirements of the Act and the Trust Indenture Act and the rules and regulations thereunder; although they do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus, such counsel does not believe that, as of its effective date, the Registration Statement or any further amendment thereto made by the Company prior to the Time of Delivery (other than the financial statements and related schedules and other financial data included or incorporated by reference therein or omitted therefrom, and other than the Trustee's Statement of Eligibility on Form T-1, as to which such counsel need express no belief) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that, as of its date, the Prospectus as amended or supplemented or any further amendment or supplement thereto made by the Company prior to the Time of Delivery (other than the financial statements and related schedules and other financial data included or incorporated by reference therein or omitted therefrom, and other than the Trustee's Statement of Eligibility on Form T-1, as to which such counsel need express no belief) contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or that, as of the Time of Delivery, either the Registration Statement or the Prospectus as amended or supplemented or any further amendment or supplement thereto made by the Company prior to the Time of Delivery (other than the financial statements and related schedules and other financial data included or incorporated by reference therein or omitted therefrom, and other than the Trustee's Statement of Eligibility on Form T-1, as to which such counsel need express no belief) contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (e) On the date of the Pricing Agreement for such Designated Securities and at the Time of Delivery for such Designated Securities, Ernst & Young LLP, 14 15 the independent accountants of the Company who have certified the financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement, shall have furnished to the Representatives a letter, dated the effective date of the Registration Statement or the date of the most recent report filed with the Commission containing financial statements and incorporated by reference in the Registration Statement, if the date of such report is later than such effective date, and a letter dated such Time of Delivery, respectively, to the effect set forth in Annex II hereto, and with respect to such letter dated at such Time of Delivery, as to such other matters as the Representatives may reasonably request and in form and substance satisfactory to the Representatives; (f) (i) The Company and its subsidiaries considered as a whole shall not, since the date of the latest audited financial statements included or incorporated by reference in the Prospectus as amended or supplemented, have sustained any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus as amended or supplemented, and (ii) since the respective dates as of which information is given in the Prospectus as amended or supplemented there shall not have been any change in the capital stock or long-term debt of the Company and its subsidiaries considered as a whole or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company and its subsidiaries considered as a whole, otherwise than as set forth or contemplated in the Prospectus as amended or supplemented, the effect of which, in any such case described in Clause (i) or (ii), is in the judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Designated Securities on the terms and in the manner contemplated in the Prospectus as amended or supplemented; (g) On or after the date of the Pricing Agreement relating to the Designated Securities (i) no downgrading shall have occurred in the rating accorded the Company's debt securities by any "nationally recognized statistical rating organization," as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities; (h) On or after the date of the Pricing Agreement relating to the Designated Securities there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York 15 16 Stock Exchange; (ii) a suspension or material limitation in trading in the Company's securities on the New York Stock Exchange; (iii) a general moratorium on commercial banking activities in New York declared by either Federal or New York State authorities; or (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war, if the effect of any such event specified in this clause (iv) in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Designated Securities on the terms and in the manner contemplated in the Prospectus as amended or supplemented; and (i) The Company shall have furnished or caused to be furnished to the Representatives at the Time of Delivery for the Designated Securities a certificate or certificates of officers of the Company satisfactory to the Representatives as to the accuracy of the representations and warranties of the Company herein at and as of such Time of Delivery, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (a) and (f) of this Section and as to such other matters as the Representatives may reasonably request. 8. (a) The Company will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by any Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Securities. (b) Each Underwriter will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become 16 17 subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without giving prior written notice to the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act, by or on behalf of any indemnified party. 17 18 (d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters of the Designated Securities on the other from the offering of the Designated Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters of the Designated Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and such Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by such Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the applicable Designated Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters 18 19 of Designated Securities in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Securities and not joint. (e) The obligations of the Company under this Section 8 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Act. 9. (a) If any Underwriter shall default in its obligation to purchase the Designated Securities which it has agreed to purchase under the Pricing Agreement relating to such Designated Securities, the Representatives may in their discretion arrange for themselves or another party or other parties to purchase such Designated Securities on the terms contained herein. If within thirty-six hours after such default by any Underwriter the Representatives do not arrange for the purchase of such Designated Securities, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to the Representatives to purchase such Designated Securities on such terms. In the event that, within the respective prescribed period, the Representatives notify the Company that they have so arranged for the purchase of such Designated Securities, or the Company notifies the Representatives that it has so arranged for the purchase of such Designated Securities, the Representatives or the Company shall have the right to postpone the Time of Delivery for such Designated Securities for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus as amended or supplemented, or in any other documents or arrangements, and the Company agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in the opinion of the Representatives may thereby be made necessary. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to the Pricing Agreement with respect to such Designated Securities. (b) If, after giving effect to any arrangements for the purchase of the Designated Securities of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in subsection (a) above, the aggregate principal amount of such Designated Securities which remains unpurchased does not exceed one-eleventh of the aggregate principal amount of the Designated Securities, then the Company shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Designated Securities which such Underwriter agreed to purchase under the Pricing Agreement relating to such Designated Securities and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the principal amount of the 19 20 Designated Securities which such Underwriter agreed to purchase under such Pricing Agreement) of the Designated Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. (c) If, after giving effect to any arrangements for the purchase of the Designated Securities of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in subsection (a) above, the aggregate principal amount of Designated Securities which remains unpurchased exceeds one-eleventh of the aggregate principal amount of the Designated Securities, as referred to in subsection (b) above, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Designated Securities of a defaulting Underwriter or Underwriters, then the Pricing Agreement relating to such Designated Securities shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 6 hereof and the indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 10. The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Securities. 11. If any Pricing Agreement shall be terminated pursuant to Section 9 hereof, the Company shall not then be under any liability to any Underwriter with respect to the Designated Securities covered by such Pricing Agreement except as provided in Section 6 and Section 8 hereof; but, if for any other reason Designated Securities are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Underwriters through the Representatives for all out-of-pocket expenses approved in writing by the Representatives, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of such Designated Securities, but the Company shall then be under no further liability to any Underwriter with respect to such Designated Securities except as provided in Section 6 and Section 8 hereof. 12. In all dealings hereunder, the Representatives of the Underwriters of Designated Securities shall act on behalf of each of such Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the 20 21 Representatives, if any, as may be designated for such purpose in the Pricing Agreement. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the address of the Representatives as set forth in the Pricing Agreement; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement: Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters' Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. 13. This Agreement and each Pricing Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and, to the extent provided in Section 8 and Section 10 hereof, the officers and directors of the Company and each person who controls the Company or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement or any such Pricing Agreement. No purchaser of any of the Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. 14. Time shall be of the essence of each Pricing Agreement. As used herein, "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. 15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 16. This Agreement and each Pricing Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. 21 22 If the foregoing is in accordance with your understanding, please sign and return to us four counterparts hereof. Very truly yours, THE B.F.GOODRICH COMPANY By:................................. Name: Title: Accepted as of the date hereof: [UNDERWRITER] By:............................................ Name: Title 22 23 ANNEX I Pricing Agreement [ADDRESS] . . . . . . . ., . . . . [date] Dear Sirs: The B.F.Goodrich Company, a New York corporation (the "Company"), proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated ........, 1998 (the "Underwriting Agreement"), between the Company on the one hand and ________________ on the other hand, to issue and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the Securities specified in Schedule II hereto (the "Designated Securities"). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each representation and warranty which refers to the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation or warranty as of the date of the Underwriting Agreement in relation to the Prospectus (as therein defined), and also a representation and warranty as of the date of this Pricing Agreement in relation to the Prospectus as amended or supplemented relating to the Designated Securities which are the subject of this Pricing Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representatives designated to act on behalf of the Representatives and on behalf of each of the Underwriters of the Designated Securities pursuant to Section 12 of the Underwriting Agreement and the address of the Representatives referred to in such Section 12 are set forth at the end of Schedule II hereto. An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Designated Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission. Subject to the terms and conditions set forth herein and in the Underwriting Agreement incorporated herein by reference, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at the time and place and at the purchase price to the Under- 1 24 writers set forth in Schedule II hereto, the principal amount of Designated Securities set forth opposite the name of such Underwriter in Schedule I hereto. If the foregoing is in accordance with your understanding, please sign and return to us ........ counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters and the Company. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof. Very truly yours, The B.F.Goodrich Company By:.................................... Name: Title: Accepted as of the date hereof: [Underwriter(s)] By:........................................ Name: Title: On behalf of each of the Underwriters - 2 - 25 SCHEDULE I Underwriter Principal Amount of Designated Securities to be Purchased ------------ $ ------------ Total..................................... $ ============ - 3 - 26 SCHEDULE II Title of Designated Securities: [ %] [Floating Rate] [Zero Coupon] [Notes] [Debentures] due Aggregate principal amount: [$] Price to Public: __% of the principal amount of the Designated Securities, plus accrued interest from to [and accrued amortization, if any, from to ] Purchase Price by Underwriters: __% of the principal amount of the Designated Securities, plus accrued interest from to [and accrued amortization, if any, from to ] Specified funds for payment of purchase price: [New York] Clearing House funds Indenture: Indenture dated , 19 , between the Company and , as Trustee Maturity: Interest Rate: [ %] [Zero Coupon] [See Floating Rate Provisions] Interest Payment Dates: [months and dates] Redemption Provisions: - 4 - 27 [No provisions for redemption] [The Designated Securities may be redeemed, otherwise than through the sinking fund, in whole or in part at the option of the Company, in the amount of [$] or an integral multiple thereof, [on or after , at the following redemption prices (expressed in percentages of principal amount). If [redeemed on or before , %, and if] redeemed during the 12-month period beginning , Redemption Year Price ---- ---------- and thereafter at 100% of their principal amount, together in each case with accrued interest to the redemption date.] [on any interest payment date falling in or after , , at the election of the Company, at a redemption price equal to the principal amount thereof, plus accrued interest to the date of redemption.] [Other possible redemption provisions, such as mandatory redemption upon occurrence of certain events or redemption for changes in tax law] [Restriction on refunding] Sinking Fund Provisions: [No sinking fund provisions] [The Designated Securities are entitled to the benefit of a sinking fund to retire [$] principal amount of Designated Securities on in each of the years through at 100% of their principal amount plus accrued interest][,together with [cumulative] [noncumulative] redemptions at the option of the Company to retire an additional [$] principal amount of Designated Securities in the years through at 100% of their principal amount plus accrued interest]. [If Securities are extendable debt Securities, insert-- Extendable provisions: - 5 - 28 Securities are repayable on , [insert date and years], at the option of the holder, at their principal amount with accrued interest. Initial annual interest rate will be %, and thereafter annual interest rate will be adjusted on , and to a rate not less than % of the effective annual interest rate on U.S. Treasury obligations with - -year maturities as of the [insert date 15 days prior to maturity date] prior to such [insert maturity date].] [If Securities are Floating Rate debt Securities, insert-- Floating rate provisions: Initial annual interest rate will be % through and thereafter will be adjusted [monthly] [on each , , ________________ and ] [to an annual rate of % above the average rate for - -year [month] [securities] [certificates of deposit] issued by and [insert names of banks].] [and the annual interest rate [thereafter] [from through ] will be the interest yield equivalent of the weekly average per annum market discount rate for - -month Treasury bills plus % of Interest Differential (the excess, if any, of (i) then current weekly average per annum secondary market yield for - -month certificates of deposit over (ii) then current interest yield equivalent of the weekly average per annum market discount rate for -month Treasury bills); [from and thereafter the rate will be the then current interest yield equivalent plus % of Interest Differential].] Defeasance provisions: Time of Delivery: Closing Location: Names and addresses of Representatives: Designated Representatives: - 6 - 29 Address for Notices, etc.: [Other Terms]*: *A description of particular tax, accounting or other unusual features (such as the addition of event risk provisions) of the Securities should be set forth, or referenced to an attached and accompanying description, if necessary to ensure agreement as to the terms of the Securities to be purchased and sold. Such a description might appropriately be in the form in which such features will be described in the Prospectus Supplement for the offering. - 7 - 30 ANNEX II Pursuant to Section 7(e) of the Underwriting Agreement, Ernst & Young LLP shall furnish letters to the Underwriters to the effect that: (i) They are independent certified public accountants with respect to the Company and its subsidiaries within the meaning of the Act and the applicable published rules and regulations thereunder; (ii) In their opinion, the financial statements and any supplementary financial information and schedules (and, if applicable, prospective financial statements and/or pro forma financial information) examined by them and included or incorporated by reference in the Registration Statement or the Prospectus comply as to form in all material respects with the applicable accounting requirements of the Act or the Exchange Act, if applicable, and the related published rules and regulations thereunder; and, if applicable, they have made a review in accordance with standards established by the American Institute of Certified Public Accountants of the consolidated interim financial statements, selected financial data, pro forma financial information, prospective financial statements, and/or condensed financial statements derived from audited financial statements of the Company for the periods specified in such letter, as indicated in their reports thereon, copies of which have been separately furnished to the Representatives; (iii) They have made a review in accordance with standards established by the American Institute of Certified Public Accountants of the unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows included in the Prospectus as indicated in their reports thereon copies of which have been separately furnished to the Representatives; and on the basis of specified procedures including inquiries of officials of the Company who have responsibility for financial and accounting matters regarding whether the unaudited condensed consolidated financial statement referred to in paragraph (vi)(A)(i) below comply as to form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and the related published rules and regulations, nothing came to their attention that caused them to believe that the unaudited condensed consolidated financial statements do not comply as to form in all material respects with the applicable accounting requirements of the Act and the related published rules and regulations; (iv) Subject to the introductory paragraphs appearing under the caption "Selected Consolidated Financial Data" in the Registration Statement, the unaudited selected financial information with respect to the consolidated results of operations and financial position of the Company for the five most recent fiscal years included in the Prospectus and included or incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K for the most recent fiscal year agrees with the corresponding amounts (after restatement where applicable) in the audited consolidated financial statements for the five such fiscal years which were included or incorporated by reference in the Company's Annual Reports on Form 10-K for such fiscal years; 1 31 (v) They have compared the information in the Prospectus under the selected captions with the disclosure requirements of Regulation S-K and on the basis of limited procedures specified in such letter nothing came to their attention as a result of the foregoing procedures that caused them to believe that this information does not conform in all material respects with the disclosure requirements of Items 301, 302, 402 and 503(d), respectively, of Regulation S-K; (vi) On the basis of limited procedures, not constituting an examination in accordance with generally accepted auditing standards, consisting of a reading of the unaudited financial statements and other information referred to below, a reading of the latest available interim financial statements of the Company and its subsidiaries, inspection of the minute books of the Company and its subsidiaries since the date of the latest audited financial statements included or incorporated by reference in the Prospectus, inquiries of officials of the Company and its subsidiaries responsible for financial and accounting matters and such other inquiries and procedures as may be specified in such letter, nothing came to their attention that caused them to believe that: (A) the unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows included or incorporated by reference in the Company's Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Exchange Act as it applies to Form 10-Q and the related published rules and regulations thereunder or are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with the basis for the audited consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows included or incorporated by reference in the Company's Annual Report on Form 10-K for the most recent fiscal year; (B) any other unaudited income statement data and balance sheet items included in the Prospectus do not agree with the corresponding items in the unaudited consolidated financial statements from which such data and items were derived, and any such unaudited data and items were not determined on a basis substantially consistent with the basis for the corresponding amounts in the audited consolidated financial statements included or incorporated by reference in the Company's Annual Report on Form 10-K for the most recent fiscal year; (C) the unaudited financial statements which were not included in the Prospectus but from which were derived the unaudited condensed financial statements referred to in Clause (A) and any unaudited income statement data and balance sheet items included in the Prospectus and referred to in Clause (B) were not determined on a basis substantially consistent with the basis for the audited financial statements included or incorporated by reference in the Company's Annual Report on Form 10-K for the most recent fiscal year; (D) any unaudited pro forma consolidated condensed financial statements included 2 32 or incorporated by reference in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Act and the published rules and regulations thereunder or the pro forma adjustments have not been properly applied to the historical amounts in the compilation of those statements; (E) as of a specified date not more than five days prior to the date of such letter, there have been any changes in the consolidated capital stock (other than issuances of capital stock upon exercise of options and stock appreciation rights, upon earn-outs of performance shares and upon conversions of convertible securities, in each case which were outstanding on the date of the latest balance sheet included or incorporated by reference in the Prospectus) or any increases in consolidated long-term debt of the Company and its subsidiaries, or any decreases in consolidated net current assets or net assets or other items specified by the Representatives, or any increases in any items specified by the Representatives, in each case as compared with amounts shown in the latest balance sheet included or incorporated by reference in the Prospectus, except in each case for changes, increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (F) for the period from the date of the latest financial statements included or incorporated by reference in the Prospectus to the specified date referred to in Clause (E) there were any decreases in consolidated net revenues or operating profit or the total or per share amounts of consolidated net income or other items specified by the Representatives, or any increases in any items specified by the Representatives, in each case as compared with the comparable period of the preceding year and with any other period of corresponding length specified by the Representatives, except in each case for increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (vii) In addition to the audit referred to in their report(s) included or incorporated by reference in the Prospectus and the limited procedures, inspection of minute books, inquiries and other procedures referred to in paragraphs (iii) and (iv) above, they have carried out certain specified procedures, not constituting an examination in accordance with generally accepted auditing standards, with respect to certain amounts, percentages and financial information specified by the Representatives which are derived from the general accounting records of the Company and its subsidiaries, which appear in the Prospectus (excluding documents incorporated by reference), or in Part II of, or in exhibits and schedules to, the Registration Statement specified by the Representatives or in documents incorporated by reference in the Prospectus specified by the Representatives, and have compared certain of such amounts, percentages and financial information with the accounting records of the Company and its subsidiaries and have found them to be in agreement. All references in this Annex II to the Prospectus shall be deemed to refer to the Prospectus (including the documents incorporated by reference therein) as defined in the Underwriting Agreement as of the date of the letter delivered on the date of the Pricing Agreement for purposes 3 33 of such letter and to the Prospectus as amended or supplemented (including the documents incorporated by reference therein) in relation to the applicable Designated Securities for purposes of the letter delivered at the Time of Delivery for such Designated Securities. 4 EX-5 3 EXHIBIT 5 1 Exhibit 5 [logo] Nicholas J. Calise The BFGoodrich Company Vice President 4020 Kinross Lakes Parkway Associate General Counsel Richfield, OH 44286-9368 and Secretary Tele: (330) 659-7711 Fax: (330) 659-7727 e-mail:calise@corp.bfg.com April 27, 1999 The B.F.Goodrich Company 4020 Kinross Lakes Parkway Richfield, OH 44286-9368 Re: Registration Statement on Form S-3 ------------------------------------ Ladies and Gentlemen: I have examined the Registration Statement on Form S-3 (the "Registration Statement"), filed by The B.F.Goodrich Company (the "Company") with the Securities and Exchange Commission (the "Commission"), pursuant to the Securities Act of 1933, as amended (the "Act"), for the registration of $200,000,000 aggregate principal amount of the Company's Debt Securities (the "Securities") to be issued under an indenture (the "Indenture") dated as of May 1, 1991 between the Company and Harris Trust and Savings Bank (the "Trustee"). It is my opinion that when the Registration Statement has become effective under the terms of the Act, the terms of any Securities and of their issuance and sale have been duly established in conformity with the terms of indenture so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company, and such Securities have been duly executed and authenticated in accordance with the indenture and issued and sold as described in the Registration Statement (including any prospectus and prospectus supplement relating to such Securities), such Securities will consitute the valid and legally binding obligations of the Company, subject to bankruptcy, insolvency, and similar laws affecting the enforcement of creditors' rights generally and to general principles of equity (regardless of whether endorsement is sought in a proceeding in equity or at law). The opinions expressed herein are limited to matters of the laws of the States of Ohio and New York and the federal laws of the United States. I express no opinion as to the effect of any applicable law of any other jurisdiction. 2 In rendering such opinions, I have relied as to certain matters on information obtained from public officials, officers of the Company and other sources I believe to be responsible, and I have assumed that the Indenture has been duly authorized, executed and delivered by the Trustee, an assumption that I have not independently verified. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to me under the caption "Legal Opinions" in the prospectus forming a part of the Registration Statement. Very truly yours, Nicholas J. Calise Vice President, Associate General Counsel and Secretary NJC/th EX-12 4 EXHIBIT 12 1 EXHIBIT 12 THE B.F.GOODRICH COMPANY COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (In millions, except for ratios)
YEAR ENDED DECEMBER 31, ------------------------------------------ 1994 1995 1996 1997 1998 ------ ------ ------ ------ ------ COMPUTATION OF EARNINGS: Income from continuing operations before income taxes, QUIP distributions and cum, eff. of change in accounting method $102.9 $157.2 $194.4 $217.8 $384.9 Add (Deduct): Interest expense, net of capitalized interest 106.9 111.5 101.2 77.0 87.6 Amortization of interest previously capitalized 1.3 1.4 1.3 1.5 2.1 Portion of rent expense representative of an interest factor 10.1 10.5 10.4 10.0 10.5 ------ ------ ------ ------ ------ EARNINGS $221.2 $280.6 $307.3 $306.3 $485.1 ====== ====== ====== ====== ====== COMPUTATION OF FIXED CHARGES: Interest expense, net of capitalized interest $106.9 $111.5 $101.2 $ 77.0 $ 87.6 Distributions on quarterly income preferred securities -- $ 5.1 $ 10.5 $ 10.5 $ 10.5 Portion of rent expense representative of an interest factor 10.1 10.5 10.4 10.0 10.5 Capitalized interest 1.0 2.7 6.7 5.3 3.5 ------ ------ ------ ------ ------ FIXED CHARGES $118.0 $129.8 $128.8 $102.8 $112.1 ------ ------ ------ ------ ------ RATIO OF EARNINGS TO FIXED CHARGES 1.87 2.16 2.39 2.98 4.33 ------ ------ ------ ------ ------
EX-23.A 5 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 in Post-Effective Amendment No. 1 to the Registration Statement (Form S-1 No. 333-48775) and related Prospectus of The B.F.Goodrich Company for the registration of debt securities and to the incorporation by reference therein of our report, dated February 5, 1999, with respect to the consolidated financial statements of The B.F.Goodrich Company included in its Annual Report (Form 10-K) for the year ended December 31, 1998, filed with the Securities Exchange Commission. ERNST & YOUNG LLP Cleveland, Ohio April 22, 1999 EX-23.B 6 EXHIBIT 23(B) 1 Exhibit 23.b INDEPENDENT AUDITORS CONSENT We consent to the incorporation by reference in this Registration Statement on Form S-3 and in this Post-Effective Amendment No. 1 to Registration Statement No. 333-48775 on Form S-1 of The B.F.Goodrich Company of our report dated September 11, 1997, on our audit of Rohr, Inc. for the year ended July 31, 1996, appearing in the Annual Report on Form 10-K of The B.F.Goodrich Company for the year ended December 31, 1998, and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. /s/ Deloitte & Touche LLP San Diego, California April 22, 1999 EX-23.C 7 EXHIBIT 23(C) 1 Exhibit 23c ARTHUR ANDERSEN LLP Consent of Independent Public Accountants As independent public accountants, we hereby consent to the incorporation by reference in this registration statement (Form S-3) and in Post-Effective Amendment No. 1 to Registration Statement File No. 333-48775 (Form S-1) of our report dated January 22, 1999, included in Coltec Industries Inc's Annual Report on Form 10-K for the year ended December 31, 1998, and to all references to our firm included in this registration statement. /s/ Arthur Andersen LLP Charlotte, North Carolina, April 28, 1999. EX-24.A 8 EXHIBIT 24(A) 1 Exhibit 24(a) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Les C. Vinney, Terrence G. Linnert and Nicholas J. Calise, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and revocation, in his or her name and on his or her behalf, to do any and all acts and things and to execute any and all instruments which they may deem necessary or advisable to enable The B.F.Goodrich Company (the "Company") to comply with the Securities Act of 1933 (the "Act") and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration under the Act of Debt Securities including Medium Term Notes in an aggregate principal amount not to exceed $200 million remaining available under Registration Statement No. 333-48775, and up to 2,761,585 shares (including the 754,717 shares in Registration Statement No. 333-03343) of the Company's Common Stock held by the Master Trust for the Company's salary and wage defined benefit plans, including power and authority to sign his or her name in any and all capacities (including his or her capacity as a Director and/or Officer of the Company) to one or more registration statements on Form S-1, S-3 or such other available form as may be approved by officers of the Company, and to any and all amendments, including post-effective amendments, to such registration statements; and the undersigned hereby ratifies and confirms all that said attorneys-in-fact and agents, or any of them, shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned have subscribed these presents this 7th day of December, 1998. /s/ David L. Burner /s/ Diane C. Creel ---------------------------- ---------------------------- (David L. Burner) (Diane C. Creel) Chairman of the Board, Chief Director Executive Officer and Director (Principal Executive Officer) /s/ George A. Davidson, Jr. /s/ James J. Glasser ---------------------------- ---------------------------- (George A. Davidson, Jr.) (James J. Glasser) Director Director /s/ Jodie K. Glore /s/ Robert D. Koney, Jr. ---------------------------- ---------------------------- (Jodie K. Glore) (Robert D. Koney, Jr.) Director Vice President and Controller (Principal Accounting Officer)
2 /s/ Douglas E. Olesen /s/ Richard de J. Osborne ---------------------------- ---------------------------- (Douglas E. Olesen) (Richard de J. Osborne) Director Director /s/ Alfred M. Rankin, Jr. /s/ Robert H. Rau ---------------------------- ---------------------------- (Alfred M. Rankin, Jr.) (Robert H. Rau) Director Director /s/ L. C. Vinney /s/ James R. Wilson ---------------------------- ---------------------------- (L.C. Vinney) (James R. Wilson) Senior Vice President and Chief Financial Officer Director (Principal Financial Officer) /s/ A. Thomas Young ---------------------------- (A. Thomas Young) Director
EX-24.B 9 EXHIBIT 24(B) 1 Exhibit 24(b) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Terrence G. Linnert and Nicholas J. Calise, and each of them, his or her true and lawfully attorneys-in-fact and agents, with full power of substitution and revocation, in his or her name and on his or her behalf, to do any and all acts and things and to execute any and all instruments which they may deem necessary or advisable to enable The B.F.Goodrich Company (the "Company") to comply with the Securities Act of 1933 (the "Act") and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration under the Act of Debt Securities including Medium Term Notes in an aggregate principal amount not to exceed $500 million and up to 2,761, 585 shares of the Company's Common Stock held by the Master Trust for the company's salary and wage defined benefit plans, including power and authority to sign his or her name in any and all capacities (including his or her capacity as a Director and/or Officer of the Company) to one or more registration statements on Form S-1, or such other available form as may be approved by officers of the Company and to any and all amendments, including post-effective amendments, to such registration statements; and the undersigned hereby ratifies and confirms all that said attorneys-in-fact and agents, or any of them, shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned have subscribed these presents this 20th day of April 1999. /s/ L. A. Chapman /s/ Robert D. Koney, Jr. ---------------------------- ----------------------------- (Laurence A. Chapman) (Robert D. Koney, Jr.) Senior Vice President and Vice President and Controller Chief Financial Officer (Principal Accounting Officer) (Principal Financial Officer
EX-25 10 EXHIBIT 25 1 Exhibit 25 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM T-1 Statement of Eligibility Under the Trust Indenture Act of 1939 of a Corporation Designated to Act as Trustee Check if an Application to Determine Eligibility of a Trustee Pursuant to Section 305(b)(2) _______________ HARRIS TRUST AND SAVINGS BANK (Name of Trustee) Illinois 36-1194448 (State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street; Chicago, Illinois 60603 (Address of principal executive offices) Daryl L. Pomykala; Harris Trust and Savings Bank; 311 West Monroe Street; Chicago, Illinois, 60606 312/461-7458 (Name, address and telephone number for agent for service) The B.F.Goodrich Company (Name of obligor) New York (State of Incorporation) 34-0252680 (I.R.S. Employer Identification Number) 4020 Kinross Lakes Parkway Richfield, Ohio 44286-9368, (330) 659-7600 (Address of principal executive offices) Debt Securities (Title of Indenture Securities) 2 1. GENERAL INFORMATION. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. Commissioner of Banks and Trust Companies, State of Illinois, Springfield, Illinois; Chicago Clearing House Association, 164 West Jackson Boulevard, Chicago, Illinois; Federal Deposit Insurance Corporation, Washington, D.C.; The Board of Governors of the Federal Reserve System,Washington, D.C. (b) Whether it is authorized to exercise corporate trust powers. Harris Trust and Savings Bank is authorized to exercise corporate trust powers. 2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the Trustee, describe each such affiliation. The Obligor is not an affiliate of the Trustee. 3. thru 15. NO RESPONSE NECESSARY 16. LIST OF EXHIBITS. 1. A copy of the articles of association of the Trustee is now in effect which includes the authority of the trustee to commence business and to exercise corporate trust powers. A copy of the Certificate of Merger dated April 1, 1972 between Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which constitutes the articles of association of the Trustee as now in effect and includes the authority of the Trustee to commence business and to exercise corporate trust powers was filed in connection with the Registration Statement of Louisville Gas and Electric Company, File No. 2-44295, and is incorporated herein by reference. 2. A copy of the existing by-laws of the Trustee. A copy of the existing by-laws of the Trustee was filed in connection with the Registration Statement of C-Cube Microsystems, Inc.; File No. 33-97166, and is incorporated herein by reference. 3. The consents of the Trustee required by Section 321(b) of the Act. (included as Exhibit A to this statement) 4. A copy of the latest report of condition of the Trustee published pursuant to law or the requirements of its supervising or examining authority. (included as Exhibit B to this statement) 2 3 SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the laws of the State of Illinois, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago, and State of Illinois, on the 27th day of April, 1999. HARRIS TRUST AND SAVINGS BANK By: /S/ Daryl L. Pomykala ---------------------------- Daryl L. Pomykala Assistant Vice President EXHIBIT A The consents of the Trustee required by Section 321(b) of the Act. Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that reports of examinations of said trustee by Federal and State authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. HARRIS TRUST AND SAVINGS BANK By: /S/ Daryl L. Pomykala ---------------------------- Daryl L. Pomykala Assistant Vice President 3 4 EXHIBIT B Attached is a true and correct copy of the statement of condition of Harris Trust and Savings Bank as of December 31, 1998, as published in accordance with a call made by the State Banking Authority and by the Federal Reserve Bank of the Seventh Reserve District. HARRIS BANK Harris Trust and Savings Bank 111 West Monroe Street Chicago, Illinois 60603 of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of business on December 31, 1998, a state banking institution organized and operating under the banking laws of this State and a member of the Federal Reserve System. Published in accordance with a call made by the Commissioner of Banks and Trust Companies of the State of Illinois and by the Federal Reserve Bank of this District. Bank's Transit Number 71000288 THOUSANDS ASSETS OF DOLLARS Cash and balances due from depository institutions: Non-interest bearing balances and currency and coin.................................. $ 1,435,233 Interest bearing balances............................................................ $ 98,929 Securities:........................................................................... a. Held-to-maturity securities $ 0 b. Available-for-sale securities $ 5,295,498 Federal funds sold and securities purchased under agreements to resell $ 151,575 Loans and lease financing receivables: Loans and leases, net of unearned income............................................. $ 9,320,939 LESS: Allowance for loan and lease losses........................................... $ 108,280 ----------- Loans and leases, net of unearned income, allowance, and reserve (item 4.a minus 4.b)................................................................. $ 9,212,659 Assets held in trading accounts....................................................... $ 252,881 Premises and fixed assets (including capitalized leases).............................. $ 271,540 Other real estate owned............................................................... $ 366 Investments in unconsolidated subsidiaries and associated companies................... $ 57 Customer's liability to this bank on acceptances outstanding.......................... $ 30,829 Intangible assets..................................................................... $ 257,627 Other assets.......................................................................... $ 1,093,599 ----------- TOTAL ASSETS $18,100,793
4 5 LIABILITIES Deposits: In domestic offices..................................................................... $10,270,499 Non-interest bearing.................................................................... $3,410,568 Interest bearing........................................................................ $6,859,931 In foreign offices, Edge and Agreement subsidiaries, and IBF's.......................... $ 935,609 Non-interest bearing.................................................................... $ 69,215 Interest bearing........................................................................ $ 866,394 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's: Federal funds purchased & securities sold under agreements to repurchase................. $ 3,642,049 Trading Liabilities 131,909 Other borrowed money:.................................................................... a. With remaining maturity of one year or less $ 1,107,125 b. With remaining maturity of more than one year $ 0 Bank's liability on acceptances executed and outstanding $ 30,829 Subordinated notes and debentures........................................................ $ 225,000 Other liabilities........................................................................ $ 424,376 ----------- TOTAL LIABILITIES $16,767,396 =========== EQUITY CAPITAL Common stock............................................................................. $ 100,000 Surplus.................................................................................. $ 608,116 a. Undivided profits and capital reserves............................................... $ 593,973 b. Net unrealized holding gains (losses) on available-for-sale securities $ 31,308 ----------- TOTAL EQUITY CAPITAL $ 1,333,397 =========== Total liabilities, limited-life preferred stock, and equity capital...................... $18,100,793 ===========
I, Pamela Piarowski, Vice President of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. PAMELA PIAROWSKI 1/27/99 We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and, to the best of our knowledge and belief, has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and the Commissioner of Banks and Trust Companies of the State of Illinois and is true and correct. EDWARD W. LYMAN, ALAN G. McNALLY, RICHARD E. TERRY Directors. 5 6 [LOGO] Harris Trust and 311 West Monroe, 12th Floor By Fax: (312) 461-3525 Savings Bank P. O. Box 755 Chicago, Illinois 60690 INDENTURE TRUST DIVISION
________________________________________________________________________________ TRUSTEE'S CERTIFICATE HARRIS TRUST AND SAVINGS BANK, as Trustee hereby certifies that: 1. Attached hereto as Annex A is a true copy of extracts of the By-laws of Harris Trust and Savings Bank duly adopted by the Board of Directors of Harris Trust and Savings Bank, which By-laws have been in full force and effect at all times since September 1, 1997 to and including the date hereof. 2. The Indenture, dated as of May 1, 1991 (the "Indenture"), between The B.F.Goodrich Company (the "Company") and Harris Trust and Savings Bank, as Trustee (the "Trustee"), has been duly executed and delivered in the name and on behalf of the Trustee by R.G. Mason, one of its Vice Presidents, and the Trustee's corporate seal has been duly affixed thereto and duly attested by F.A. Pierson, one of its Assistant Secretaries. 3. Each person who, on behalf of the Trustee, executed and delivered the Indenture, attested its corporate seal or authenticated the notes issued thereunder was at the date thereof duly elected, appointed or authorized, qualified and acting as officer the Trustee and dully authorized to perform such acts at the respective times of such acts and the signatures of such persons appearing on such documents are their genuine signatures. IN WITNESS WHEREOF, Harris Trust and Savings Bank has caused this certificate to be executed in its corporate name by an officer thereunto duly authorized and its corporate seal to be affixed hereto. Dated: April 27, 1999 HARRIS TRUST AND SAVINGS BANK, as Trustee By:/s/ Daryl L. Pomykala --------------------- D. Pomykala Assistant Vice President 7 ANNEX A HARRIS TRUST AND SAVINGS BANK BYLAWS DECEMBER, 1996 [LOGO] 8 ARTICLE I: MEETINGS OF STOCKHOLDERS SECTION 1. TIME AND NOTICE. The annual meeting of stockholders shall be held on the third Wednesday of April as soon as practicable after the adjournment of the annual meeting of the stockholders of Harris Bankcorp, Inc. for the election of directors and for such other business as may properly come before the meeting. Notice of the place, day and time of the annual meeting shall be given by mailing not less than ten nor more than forty days previous to such meeting, a notice addressed to each stockholder entitled to vote, at his address as the same shall appear on the stock books of the Bank. SECTION 2. SPECIAL MEETINGS. Special meetings of stockholders may be called at any time by the Board of Directors or by the Chairman of the Board, a Vice Chair of the Board or the President or by a majority of the directors without a meeting. It shall be the duty of the Chairman of the Board to call such meetings whenever requested in writing so to do by stockholders owning a majority of the capital stock. Notice of such special meetings stating the purpose thereof shall be given in the same manner as for the annual meeting, unless the purpose of the meeting is to change the Bank's charter, in which event such notice shall be given within the time and published as provided for in the following Section 3. SECTION 3. CHARTER AMENDMENT. If any special meeting is called to effect a change in the Bank's charter as provided for in Section 17 of the Illinois Banking Act, the Board of Directors shall adopt a resolution setting forth the proposed amendment and directing that it be submitted to vote at the special meeting; and notice of the purpose, place, day and hour of the special meeting shall be given by publication thereof at least once in each week for three successive weeks immediately preceding the week during which the meeting is to be held in a newspaper published in the city of Chicago and by mailing such notice not less than thirty days previous to such meeting to each stockholder entitled to vote at his address as the same shall appear on the stock books of the Bank. SECTION 4. LOCATION. The Board of Directors may designate any place in the State of Illinois as the place of meeting for any annual or special meeting. SECTION 5. RECORD DATE. In lieu of closing the stock transfer books for the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders, or stockholders entitled to receive payment of any dividend, or in order to make a determination of stockholders for any other proper purpose, the Board of Directors may fix in advance a date as the record date for any such determination. In the absence of specific action by the Board closing the stock transfer books or fixing a different record date for each annual and each special meeting of the stockholders, the date on which notice of such meeting is mailed shall be the record date for such determination of stockholders entitled to vote. SECTION 6. QUORUM. A majority of the outstanding shares of the capital stock of the Bank, represented either by the holders thereof or by duly authenticated proxies, shall constitute a quorum for the transaction of business at any meeting of the stockholders, but in the absence of a quorum a meeting may be adjourned from time to time without notice to the stockholders. ARTICLE II: DIRECTORS SECTION 1. POWERS. The business and affairs of the Bank shall be managed by the Board of Directors. The Board of Directors may adopt such rules and regulations for the conduct of its meetings and the management of the affairs of the Bank as it may deem proper, not inconsistent with the laws of the United States, of the State of Illinois, or these bylaws; and all officers and employees shall strictly adhere to and be bound by such rules and regulations. Directors need not be stockholders of the Bank or of any company which has control over the Bank within the meaning of Section 2 of the Illinois Bank Holding Company Act, as now or hereafter amended. 9 SECTION 2. COMMITTEES. The Board of Directors may, by resolution or resolutions passed by majority of the whole Board, designate an Executive Committee and such other committees as it may deem necessary, and from time to time suspend or continue the powers and duties of any committee. The Chairman of the Board, a Vice Chair of the Board, the President or the member or members of any Board committee present at any duly called meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may designate another member or other members of the Board of Directors to act at such meeting, and any director or directors so designated shall have the same powers, duties and compensation as regular members. The presence at the meeting of any director or directors so designated shall be considered in determining whether a quorum is present. SECTION 3. VACANCIES. Vacancies in the Board of Directors may be filled for the unexpired term at a special meeting of the stockholders called for that purpose. Additionally, the Board of Directors pursuant to paragraph (5) of Section 16 of the Illinois Banking Act, by the affirmative vote of a majority of the Board of Directors at any regular or special meeting of the Board, may during the interval between annual meetings of stockholders elect not more than a total of three persons as directors to fill vacancies arising during such interval. SECTION 4. MEETINGS. Regular meetings of the Board of Directors shall be held on the third Wednesday of each month at 11:00 o'clock a.m. (except for the meeting, if any, in January, April, July and October which shall be held at 9:30 o'clock a.m.) unless such day be a legal holiday, in which case the regular meeting shall be held at the same hour on the next business day, or at such other time, which may be a legal holiday, as the Board of Directors may determine. There shall be a minimum of two such regular meetings in each calendar quarter, the times of such meetings to be determined by the Chairman of the Board, or in his temporary absence, a Vice Chair of the Board. All such regular meetings shall be held at the offices of the Bank, or at such other place or such other time as the Chairman of the Board or a Vice Chair of the Board may at any time designate, and in the event of such designation, notice of the alternate meeting place or time shall be given by mailing the same to each director not later than five business days preceding the date of the meeting, or by telegraphing or telefaxing the same to him or her or delivering the same to him or her personally not later than the day previous to such meeting, but save for any such notice of alternate meeting place or time, such regular meetings shall be held without other notice than this bylaw. Special meetings may be called by the Chairman of the Board or a Vice Chair of the Board. Except to the extent the time or method of giving notice is regulated by statute, notice of any such meeting shall be given in the same manner as provided for notice or regular meetings. Any director may waive notice of any meeting by waiver signed either before or after such meeting. Except as otherwise required by statute or these bylaws, neither the business to be transacted at, nor the purpose of any meeting need be specified in the notice or waiver. SECTION 5. QUORUM. A majority of the authorized number of directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but less than a quorum shall have power to take a recess or adjourn a meeting to another day or hour. SECTION 6. SECRETARY OF THE BOARD. The Board of Directors may appoint a Secretary of the Board other than the Secretary of the Bank as provided for in Section 10 of Article III of the bylaws, who may or may not be a member of the Board and who shall keep the minutes of the meetings of the Board and perform such other duties as the Board shall from time to time prescribe. 10 ARTICLE III: OFFICERS SECTION 1. NUMBER AND TENURE. The officers of the Bank shall be chosen by the Board of Directors and may consist of a Chairman of the Board, one or more Vice Chairs of the Board and a President, each of whom shall be a member of the Board, and one of whom shall be designated the Chief Executive Officer, one or more Senior Executive Vice Presidents, one or more Executive Vice Presidents, and one or more Executives (of any whose titles may be accompanied by reference to the area of their respective responsibilities), one or more Senior Vice Presidents, Vice President, Assistant Vice Presidents, a Secretary, one or more Assistant Secretaries, a Cashier, a Controller, an Auditor, one or more Trust Counsel, and such other officers as the Chief Executive Officer may from time to time designate. Officer directors shall be elected by the Board. Executives who are not also directors shall be elected by the Directors Committee on Compensation. All other officers shall be appointed by the Chief Executive Officer. Officers, whether elected or appointed, shall hold their respective offices until the next succeeding annual meeting of stockholders and their successors are elected and qualified, or until their retirement, resignation, removal or appointment to another office. Any officer may be removed by the Chief Executive Officer or the Board at any time with or without cause. SECTION 2. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall exercise general control and supervision of the business and affairs of the Bank, shall see to it that all resolutions and orders of the Board of Directors are effected and shall have such other powers and duties as the directors may specify. He may appoint persons to hold office as Senior Vice President or below. During any absence or disability to act of the Chief Executive Officer, his powers and duties shall be exercised and performed by a Vice Chair of the Board, the President, or by an officer designated by the Board of Directors for that purpose. He shall be an ex-officio member of all Board committees. SECTION 3. CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside at all meetings of the Board of Directors and of the stockholders. He shall have general responsibility for all Board matters, including without limitation, the development of corporate governance policies and processes, committee assignments, and meeting agendas. He shall have such other powers and duties as the Board of Directors may specify. He shall be an ex-officio member of all Board committees. SECTION 4. PRESIDENT. The President shall have such powers and duties as the Board of Directors or the Chief Executive Officer may specify. During any absence or disability to act of the President, his powers and duties shall be performed and exercised by an officer designated in writing by the Chief Executive, or in the absence of such designation, by an officer designated by the Board of Directors for that purpose. SECTION 5. CHIEF OPERATING OFFICER. The Chief Operating Officer shall manage or supervise the management of the day-to-day operations of the Bank and shall have such powers and duties as the Chief Executive Officer or the Board of Directors may specify. SECTION 6. VICE CHAIR OF THE BOARD. A Vice Chair of the Board shall have such powers and duties as the Board of Directors may specify. During any absence or disability to act of the Chairman of the Board, a Vice Chair of the Board shall preside at all meetings of the Board of Directors and of the stockholders and have and exercise his powers and duties. 11 SECTION 7. SENIOR EXECUTIVE VICE PRESIDENTS, EXECUTIVE VICE PRESIDENTS, EXECUTIVES, SENIOR VICE PRESIDENTS, VICE PRESIDENTS. Each Senior Executive Vice President, Executive Vice President, Executive, Senior Vice President, and Vice President shall have and perform such duties as the Chairman of the Board, a Vice Chair of the Board or the President may delegate and is authorized to accept trusts, execute contracts and agreements in relation to trusts and loans, sign authentications and certificates in connection with trusts and certificates of stock, and sign or countersign checks, drafts, certificates of deposit and letters of credit and all similar instruments or obligations issued by the Bank. SECTION 8. ASSISTANT VICE PRESIDENTS. Each Assistant Vice President is authorized, subject to the supervision and direction of the President or a Vice President, to accept trusts, execute contracts and agreements in relation to trusts and to sign authentications and certificates in connection with trusts and certificates of stock; also to sign or countersign checks, drafts, certificates of deposit and letters of credit and all similar instruments or obligations issued by the Bank. SECTION 9. CASHIER. The Cashier shall have charge and superintendence of the operations of the Bank touching the deposit of money and commercial and savings accounts, subject to the supervision and direction of the Chairman of the Board, a Vice Chair of the Board, the President or a Vice President, and is authorized to sign or countersign checks, drafts, certificates of deposit and letters of credit and, as provided in Article V hereof, to sign certificates representing stock of the Bank. SECTION 10. SECRETARY. The Secretary shall act as secretary of the Board and as secretary at meetings of the stockholders and, in general, shall have charge of all records of the Bank relating to its organization and corporate action and shall have power to certify the contents thereof. SECTION 11. ASSISTANT SECRETARIES. Each Assistant Secretary is authorized, subject to the supervision and direction of the President, a Vice President or the Secretary, to accept trusts, execute contracts and agreements in relation to trusts, to sign authentications and certificates in connection with trusts and certificates of stock, and to certify the contents of all records of the Bank, to the same extent as the Secretary; to sign or countersign checks, drafts, certificates of deposit, letters of credit and, as provided in Article V hereof, certificates representing the stock of the Bank. SECTION 12. OTHER OFFICERS. All other officers shall perform such duties and possess such powers as from time to time may be directed or delegated by the Board of Directors, the Executive Committee, the Chairman of the Board, a Vice Chair of the Board, the President or a Vice President. SECTION 13. OTHER SIGNING AUTHORITY. In addition to the signing authorities granted by or pursuant to the foregoing provisions of this Article III, the Chairman of the Board, a Vice Chair of the Board, the President, any Senior Executive Vice President, Executive Vice President, or Executive or any Senior Vice President within the area of his assigned duties or responsibilities, may designate from time to time in writing any officer or employee, either by name or by title, to sign or execute any documents, instruments or contracts to which the Bank is a party. ARTICLE IV: SEAL The Board shall provide a Seal for the Bank, which shall be in the charge of the Secretary or any other officer designated by him or by the President or the Executive Committee, such Seal or a facsimile thereof to be affixed to or otherwise reproduced on certificates of stock and any other documents in accordance with the directions of the Board, the Executive Committee, the President, any Vice President or the Secretary. 12 ARTICLE V: CAPITAL STOCK SECTION 1. TRANSFER. Transfers of shares of stock of the Bank shall be made upon the books of the Bank by the registered holder in person, or by attorney duly authorized, on surrender of the certificate or certificates representing such shares. The person in whose name shares of stock stand on the books of the Bank shall be deemed to be the owner thereof for all purposes as regards the Bank. All transfers of shares of stock in the Bank to a fiduciary, including an executor, administrator, trustee, guardian, committee, conservator, curator, tutor, custodian or nominee, and any transfer of shares of stock of the Bank upon assignment by such fiduciary, shall be made by the Bank under, and the Bank shall have the protections and rights with respect thereto provided for by, an Act of the General Assembly of the State of Illinois entitled "An Act relating to the transfer of securities to and by fiduciaries and to repeal a part of an Act therein named", approved May 23, 1957. SECTION 2. CERTIFICATES. All certificates representing stock of the Bank shall be signed manually by the Chairman of the Board or the President or a Vice President or the Cashier, and by the Secretary or an Assistant Secretary. ARTICLE VI: LOANS ON STOCK OF THIS BANK The Bank shall make no loans in whole or in part upon the stock of the Bank as collateral. ARTICLE VII: AUDITS SECTION 1. SCOPE. The scope of and the procedures or tests to be followed in the auditing division in examining the books, assets, liabilities and affairs of the Bank and reporting thereon to the Board of Directors, and the extent and manner of coordinating such examination and report into or with any audit report by certified public accountants, shall be such as may be from time to time prescribed by the Board of Directors or by an Examining Committee appointed from time to time by the Board of Directors and consisting of at least two directors who are not officers of the Bank. SECTION 2. REPORTS. The Auditor, or the officer designated by the Board as responsible for the supervision of the auditing division, shall report under seal to the Examining Committee appointed by the Board of Directors and, if none is appointed, to the Board of Directors, itself, on the audit program and internal controls in each quarter of the year and shall appear at any time at the request of the Board of Directors or the Executive Committee at any regular or special meetings thereof and report on the results of examinations, the soundness of condition of the Bank and any other pertinent information in connection therewith. The Auditor, or officer designated by the Board as responsible for the supervision of the auditing division, shall have continuing responsibility to report promptly under seal to the Board of Directors or the Executive Committee any material irregularities which in his opinion are of sufficient importance to be brought to their attention before his next quarterly report. 13 ARTICLE VIII: INDEMNIFICATION SECTION 1. APPLICABILITY. Every person now or heretofore or hereafter serving as a director, officer or employee of the Bank or of a wholly owned subsidiary of the Bank, and every officer or employee of the Bank or of any such wholly owned subsidiary now, heretofore or hereafter serving as director or officer of one or more other corporations or organizations, or as trustee, executor, administrator, guardian or conservator or in a similar fiduciary capacity, at the request of the Bank as evidenced by action of the Executive Committee or the Board designating the situation as one entitled to the benefit of this bylaw or to the benefit of a similar indemnifying resolution of the Board, shall be indemnified or reimbursed by the Bank from and for expenses, liabilities, fines, penalties and costs that may be imposed upon or incurred by him, including by way of settlement, in connection with any action, suit, or proceeding, civil or criminal, in which he may be or become a party by reason of his being or having been such director, officer, trustee, executor, administrator, guardian, conservator or other such fiduciary; provided, however, that no such person shall be entitled to such indemnity or reimbursement. (a) in relation to matters as to which he shall be finally adjudged in an action brought by the Bank directly or derivatively to be liable for breach of a duty to or for nonpayment of a liability to the Bank; or (b) in relation to matters included in an action, suit or proceeding of the kind referred to in the foregoing subparagraph (a) but which is settled or disposed of without final adjudication on the merits except and unless the Board or, as the case may be, the stockholders, shall make the same findings as are provided for in the following subparagraph (c) as a condition precedent to such indemnity or reimbursement; or (c) in relation to matters involved in an action, suit or proceeding which is of a kind other than that referred to in the foregoing subparagraph (a), unless such action, suit or proceeding is dismissed or otherwise disposed of on the merits in favor of such person, or, if not so dismissed or disposed of, unless the Board shall find that such person acted in good faith for a purpose which he reasonably believed to be in the best interests of the Bank, and in the case of criminal actions or proceedings, in addition had good warrant to believe that his conduct was not unlawful. SECTION 2. FINDINGS. The action by the Board called for in subparagraph (c) of Section 1 hereof shall be at a meeting at which a quorum consisting of directors who are not parties to such suit, action or proceeding is present; and in taking such action no director involved shall be qualified to vote thereon. In the absence of quorum, such finding shall nevertheless be effective if made by resolution of the stockholders adopted at an annual meeting or at a special meeting of the stockholders. The right of indemnification or reimbursement provided for by this Article shall not be exclusive and shall not affect any right to indemnification or reimbursement which any director, officer or employee might otherwise have as a matter of law. The term "Bank" as used in this Article shall be deemed to include the Bank and the predecessor bank of the same name, all with the same effect as if the Bank and said predecessor had at all times been one and the same corporation. SECTION 3. LEGAL EXPENSES. Expenses incurred by a director, officer or employee in defending a civil or criminal action, suit or proceeding may be paid by the Bank in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in a specific case upon receipt of an undertaking by or on behalf of the director, officer or employee to repay such amount unless it shall ultimately be determined that he is entitled to indemnification as provided in this Article VIII. ARTICLE IX: MANAGEMENT SUCCESSION PROVISIONS In the temporary absence of the Chairman of the Board, the Vice Chairs of the Board and the President, certain Senior Executive Vice Presidents, Executive Vice Presidents, Executives or Senior Vice Presidents shall have and exercise all the powers and duties of the Chief Executive Officer until the Board of Directors meets to provide for permanent succession, the order of precedence having been set by the Board of Directors referring to this Article IX. The provisions of this paragraph are, however, subject to the right of the stockholder, the Board of Directors and of the Executive Committee to appoint the presiding officer of their respective meetings. ARTICLE X: AMENDMENT OR REPEAL These bylaws, or any part hereof, may be amended, altered, changed, added to or repealed, and others adopted in their place by the Board of Directors of the Bank at any regular or special meeting. I, D. L. Pomykala hereby certify that I am an Assistant Secretary of Harris Trust and Savings Bank; Chicago, Illinois, and that the foregoing is a true and correct copy of the bylaws of this Bank and that the same are in full force and effect this 27th day of April, 1999. /s/ D.L. Pomykala ---------------------------- Assistant Secretary -----END PRIVACY-ENHANCED MESSAGE-----