-----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, LIjhT1or2C+4bjclLNKaPcubUUJfmsD2BmvR+08YhoNe7yGV4lxjg+CssWc1boKz aY0snfdRM/zE98Befe2LZA== 0000950152-98-006936.txt : 19980819 0000950152-98-006936.hdr.sgml : 19980819 ACCESSION NUMBER: 0000950152-98-006936 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 19980818 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHERWIN WILLIAMS CO CENTRAL INDEX KEY: 0000089800 STANDARD INDUSTRIAL CLASSIFICATION: PAINTS, VARNISHES, LACQUERS, ENAMELS & ALLIED PRODUCTS [2851] IRS NUMBER: 340526850 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-61735 FILM NUMBER: 98693640 BUSINESS ADDRESS: STREET 1: 101 PROSPECT AVE NW CITY: CLEVELAND STATE: OH ZIP: 44115 BUSINESS PHONE: 2165662200 S-3 1 THE SHERWIN WILLIAMS COMPANY REGISTRATION/FORM S-3 1 As filed with the Securities and Exchange Commission on August 18, 1998. Registration No. 333-_______ ================================================================================ SECURITIES AND EXCHANGE COMMISSION FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 THE SHERWIN-WILLIAMS COMPANY (Exact Name of Registrant as Specified in its Charter) Ohio 34-0526850 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 101 Prospect Avenue, N.W. Cleveland, Ohio 44115-1075 (216) 566-2000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) L.E. Stellato Vice President, General Counsel and Secretary The Sherwin-Williams Company 101 Prospect Avenue, N.W. Cleveland, Ohio 44115-1075 (216) 566-2000 (Name, address, including zip code, and telephone number, including area code, of agent for service) -------------------- Copy to: Steven Kaplan, Esq. Arnold & Porter 555 Twelfth Street, N.W. Washington, D.C. 20004 --------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of the Registration Statement as the Registrant may determine. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------------------------------------------------------------ Title of each class of Amount to be Proposed maximum offering Proposed maximum Amount of securities to be registered registered price per unit (1)(2) aggregate offering price (1) registration fee - ------------------------------------------------------------------------------------------------------------------------------------ Debt Securities (3)(6) (2) (2) (2) - ------------------------------------------------------------------------------------------------------------------------------------ Common Stock, $1.00 par value per share (including Rights) (4)(6) (2) (2) (2) - ------------------------------------------------------------------------------------------------------------------------------------ Warrants (5)(6) (2) (2) (2) - ------------------------------------------------------------------------------------------------------------------------------------ Total $1,500,000,000 100% $1,500,000,000 $442,500 - ------------------------------------------------------------------------------------------------------------------------------------ (1) This amount is estimated solely for the purpose of calculating the registration fee under Rule 457(o). The proposed maximum offering price per unit will be determined from time to time in connection with the issuance of securities registered hereunder. (2) Not applicable under General Instruction II.D. of Form S-3. (3) Subject to Note (7) below, we are registering an indeterminate principal amount of Debt Securities. If any Debt Securities are issued at an original issue discount, then the offering price will be in such greater principal amount as will result in an aggregate initial offering price not to exceed $1,500,000,000 less the dollar amount of any securities previously issued. (4) Subject to Note (7) below, we are registering an indeterminate number of shares of Common Stock. Shares of Common Stock are accompanied by rights (the "Rights") to purchase the Registrant's Cumulative Redeemable Serial Preferred Stock issued pursuant to a Rights Agreement, dated as of April 23, 1997, between the Registrant and the Rights Agent (as defined herein). Until the occurrence of certain prescribed events, none of which has occurred, the Rights are not exercisable, are evidenced by the certificates representing the Common Stock, and will be transferred only with the Common Stock.
2 (5) Subject to Note (7) below, we are registering an indeterminate amount and number of Warrants, representing rights to purchase Debt Securities or Common Stock. (6) Subject to Note (7) below, we are registering an indeterminate number of shares of Debt Securities and Common Stock, to be issued upon conversion or redemption, or upon the exercise of Warrants or Debt Securities. (7) In no event will the aggregate initial offering price of all securities exceed $1,500,000,000 or the equivalent in one or more foreign currencies, foreign currency units, or composite currencies. The aggregate amount of Common Stock registered is further limited to that which is permissible under Rule 415(a)(4) under the Securities Act of 1933. The registered securities may be sold separately or as units with other registered securities. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. 3 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. THE 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. SUBJECT TO COMPLETION DATED August 18, 1998 PROSPECTUS $1,500,000,000 THE SHERWIN-WILLIAMS COMPANY SECURITIES -------------------- The Sherwin-Williams Company (the "Company") may offer from time to time the following types of securities (each a "Security" and collectively the "Securities"): (i) debt securities, in one or more series, which may be senior debt securities or subordinated debt securities (the "Debt Securities"), in each case consisting of notes or other unsecured evidences of indebtedness; (ii) shares of common stock, $1.00 par value per share (the "Common Stock"); and (iii) warrants to purchase Debt Securities or Common Stock. The Securities will have an aggregate initial offering price of up to $1,500,000,000 or an equivalent amount in U.S. dollars if any Securities are denominated in a currency other than U.S. dollars or in currency units. The Securities may be offered separately or together in any combination and as separate series. The amounts, prices, form, designation, specific terms and offering terms of each issuance of Securities will be determined at the time of sale and will be set forth in a Prospectus Supplement. The Common Stock of the Company is traded on the New York Stock Exchange ("NYSE") under the symbol "SHW". On August 14, 1998, the last reported sale price of the Common Stock was $29 1/8. The Company has not yet determined whether any of the other Securities will be listed on the NYSE or other securities exchange. If the Company decides to seek listing of any Security on an exchange, the Prospectus Supplement relating thereto will disclose such exchange or market. Where applicable, the Prospectus Supplement will also contain information about certain material United States federal income tax considerations relating to the Securities. The Securities may be sold directly, through agents designated from time to time or to or through underwriters or dealers. See "Plan of Distribution". If any agents or underwriters are involved in the sale of any Securities, their names and any applicable commissions or discounts will be set forth in a Prospectus Supplement. The net proceeds to the Company from the sale of Securities also will be set forth in a Prospectus Supplement. -------------------- NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. -------------------- The date of this Prospectus is , 1998 1 4 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports and other information with the Securities and Exchange Commission (the "Commission"). Reports, proxy statements and other information can be inspected and copied at the Public Reference Room of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20459, and the Commission's Regional Offices at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of such materials can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20459 at prescribed rates. In addition, such material may be accessed electronically at the Commission's site on the World Wide Web located at http://www.sec.gov. Such reports, proxy statements and other materials concerning the Company may also be inspected at the office of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. The Company has filed with the Commission a registration statement on Form S-3 (including all amendments thereto, the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the Securities offered hereby. As permitted by the rules and regulations of the Commission, this Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto. Such additional information is available for inspection and copying at the offices of the Commission. Statements contained in this Prospectus, in any Prospectus Supplement or in any document incorporated by reference herein or therein as to the contents of any contract or other document referred to herein or therein are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to, or incorporated by reference in, the Registration Statement, each such statement being qualified in all respects by such reference. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents previously filed by the Company (Commission File No. 001-04851) with the Commission under the Exchange Act are incorporated herein by reference: (a) The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997; (b) The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998 and June 30, 1998; (c) The Company's Current Report on Form 8-K filed March 30, 1998; (d) The description of the Common Stock included in the Company's Registration Statement on Form S-8 filed with the Commission on April 28, 1989 under Section 12 of the Securities Exchange Act of 1934; and (e) The description of the Company's Cumulative Redeemable Serial Preferred Stock Purchase Rights (the "Rights") associated with the Common Stock included in the Company's Registration Statement on Form 8-A filed with the Commission on April 24, 1997 under Section 12 of the Securities Exchange Act of 1934. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering of the Securities, shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes hereof to the extent that a statement contained herein (or in any other subsequently filed document that is or is deemed to be incorporated by reference herein) modifies or supersedes such previous statement. Any statement so modified or superceded shall not be deemed to constitute a part hereof except as so modified or superseded. The Company will provide without charge to each person to whom a copy of this Prospectus has been delivered, upon the written or oral request of such person, a copy of any or all of the documents referred to above 2 5 which have been or may be incorporated by reference in this Prospectus other than exhibits to such documents unless such exhibits are also specifically incorporated by reference herein. Requests for such copies should be directed to The Sherwin-Williams Company, 101 Prospect Avenue, N.W., Cleveland, Ohio 44115-1075, Attention: Corporate Secretary; telephone number (216) 566-2000. THE COMPANY The Company, which was first incorporated under the laws of the State of Ohio eighteen years after its founding in 1866, is engaged in the manufacture, distribution and sale of paints, coatings and related products to professional, industrial, commercial and retail customers. The Company's principal executive offices are located at 101 Prospect Avenue, N.W., Cleveland, Ohio 44115-1075, and its telephone number is (216) 566-2000. USE OF PROCEEDS Unless otherwise set forth in the applicable Prospectus Supplement, the net proceeds from the sale of the Securities will be used for general corporate purposes, which may include repayment of indebtedness, acquisitions, additions to working capital and capital expenditures. Additional information on the use of net proceeds from the sale of any particular Security will be set forth in the Prospectus Supplement relating to such Security. RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the Company's consolidated ratios of earnings to fixed charges for each of 1997, 1996, 1995, 1994 and 1993 and for the six months ended June 30, 1998 and 1997 on a historical basis.
Six Months Ended June 30, Year Ended December 31, -------- --------------------------------------- 1998 1997 1997 1996 1995 1994 1993 ---- ---- ---- ---- ---- ---- ---- Ratio of earnings 3.1 2.9 3.2 3.9 4.2 4.1 3.7 to fixed charges *
* For purposes of computing such ratio, earnings consist of income before income taxes and the cumulative effect of accounting changes plus fixed charges, and fixed charges consist of interest expense and gross rent expense. DESCRIPTION OF DEBT SECURITIES The following description of the terms of the Debt Securities sets forth certain general terms and provisions of the Debt Securities to which any Prospectus Supplement may relate. The particular terms of the Debt Securities offered by any Prospectus Supplement and the extent, if any, to which such general provisions may apply to the Debt Securities so offered will be described in the Prospectus Supplement relating to such Debt Securities. Accordingly, for a description of the terms of a particular issue of Debt Securities, reference must be made to both the Prospectus Supplement relating thereto and to the following description. The Debt Securities may be issued, from time to time, in one or more series, and will constitute either senior debt securities (the "Senior Debt Securities") or subordinated debt securities (the "Subordinated Debt Securities"). Senior Debt Securities may be issued from time to time under the indenture dated as of February 1, 1996 (the "Senior Indenture"), between the Company and The Chase Manhattan Bank (formerly known as Chemical Bank), as trustee (the "Senior Trustee"). A copy of the form of Senior Indenture has been filed as an exhibit to the Registration Statement (file no. 333-01093) filed with the Commission on February 20, 1996 and is incorporated by reference herein. Subordinated Debt Securities may be issued from time to time under an indenture (the "Subordinated Indenture") to be entered into between the Company and The Chase Manhattan Bank, as trustee (the "Subordinated Trustee"). 3 6 The Senior Indenture and the Subordinated Indenture are referred to herein individually as an "Indenture" and, collectively, as the "Indentures", and the Senior Trustee and the Subordinated Trustee are referred to herein individually as the "Trustee" and collectively as the "Trustees". The forms of Indentures are filed, or incorporated by reference, as exhibits to the Registration Statement. Capitalized terms used in this section which are not otherwise defined in the Prospectus shall have the meanings set forth in the Indenture to which they relate. The following summaries of certain provisions of the Debt Securities and the Indentures do not purport to be complete and are subject to, and qualified in their entirety by express reference to, all the provisions of the Indentures, including the definitions therein of certain terms. GENERAL Neither Indenture limits the aggregate principal amount of Debt Securities that can be issued thereunder. The Debt Securities may be issued in one or more series as may be authorized from time to time by the Company. Reference is made to the applicable Prospectus Supplement for the following terms of the Debt Securities with respect to which such Prospectus Supplement is being delivered: (a) The title of the Debt Securities to be offered; (b) Any limit on the aggregate principal amount of the Debt Securities to be offered that may be authenticated and delivered under an Indenture; (c) The date or dates on which the principal and premium with respect to the Debt Securities to be offered are payable; (d) The rate or rates (which may be fixed or variable) at which the Debt Securities to be offered shall bear interest (if any) or the method of determining such rate or rates, the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be payable or the method by which such dates will be determined, the record dates for the determination of holders thereof to whom such interest is payable, and the basis upon which interest will be calculated if other than that of a 360-day year of twelve 30-day months; (e) The place or places, if any, in addition to or instead of the Corporate Trust Office of the Trustee, where the principal, premium, and interest with respect to Debt Securities to be offered shall be payable; (f) The price or prices at which, the period or periods within which, and the terms and conditions upon which Debt Securities to be offered may be redeemed, in whole or in part, at the option of the Company or otherwise; (g) The obligation, if any, of the Company to redeem, purchase, or repay Debt Securities to be offered pursuant to any sinking fund or analogous provisions or at the option of a holder thereof and the price or prices at which, the period or periods within which, and the terms and conditions upon which Debt Securities of the series shall be redeemed, purchased, or repaid, in whole or in part, pursuant to such obligations; (h) The terms, if any, upon which the Debt Securities to be offered may be convertible into or exchanged for Common Stock, other Debt Securities, or warrants for Common Stock or Debt Securities, and the terms and conditions upon which such conversion or exchange shall be effected, including the initial conversion or exchange price or rate, the conversion or exchange period, and any other additional provisions; (i) If other than denominations of $1,000 or any integral multiple thereof, the denominations in which Debt Securities to be offered shall be issuable; (j) If the amount of principal, premium, if any, or interest with respect to the Debt Securities to be offered may be determined with reference to an index or pursuant to a formula, the manner in which such amounts will be determined; (k) If the principal amount payable at the stated maturity of Debt Securities to be offered will not be determinable as of any one or more dates prior to such stated maturity, the amount that will be deemed to be such 4 7 principal amount as of any such date for any purpose, including the principal amount thereof which will be due and payable upon any maturity other than the stated maturity or which will be deemed to be outstanding as of any such date (or, in any such case, the manner in which such deemed principal amount is to be determined); (l) Any changes or additions to the provisions of the applicable Indenture dealing with defeasance, including the addition of additional covenants that may be subject to the Company's covenant defeasance option; (m) If other than such coin or currency of the United States as at the time of payment is legal tender for payment of public and private debts, the coin or currency in which payment of the principal, premium, if any, and interest with respect to Debt Securities to be offered shall be payable, and if necessary, the manner of determining the equivalent thereof in United States currency; (n) If other than the principal amount thereof, the portion of the principal amount of Debt Securities to be offered that shall be payable upon declaration of acceleration of the maturity thereof or provable in bankruptcy; (o) Any addition to or change in the Events of Default with respect to the Debt Securities to be offered and any change in the right of the Trustee or the holders to declare the principal, premium, if any, and interest with respect to such Debt Securities due and payable; (p) If the Debt Securities to be offered shall be issued in whole or in part in the form of a Global Security, the terms and conditions, if any, upon which such Global Security may be exchanged in whole or in part for other individual Debt Securities in definitive registered form, the Depositary for such Global Security, and the form of any legend or legends to be borne by any such Global Security in addition to or in lieu of the legend referred to in the Indenture; (q) Any trustee, authenticating or paying agents, transfer agents, or registrars; (r) The applicability of, and any addition to or change in, the covenants and definitions then set forth in the applicable Indenture or in the terms then set forth in such Indenture relating to permitted consolidations, mergers, or sales of assets, including conditioning any merger, conveyance, transfer, or lease permitted by such Indenture upon the satisfaction of an indebtedness coverage standard by the Company and any successor to the Company; (s) The terms, if any, of any guarantee of the payment of principal, premium, and interest with respect to Debt Securities to be offered and any corresponding changes to the provision of the applicable Indenture as then in effect; (t) The terms, if any, of the transfer, mortgage, pledge, or assignment as security for the Debt Securities to be offered of any properties, assets, moneys, proceeds, securities, or other collateral, including whether certain provisions of the Trust Indenture Act are applicable and any corresponding changes to provisions of the applicable Indenture as then in effect; (u) With regard to Debt Securities to be offered that do not bear interest, the dates for certain required reports to the Trustee; and (v) Any other terms of the Debt Securities to be offered (which terms shall not be prohibited by the provisions of the applicable Indenture). The applicable Prospectus Supplement will also describe the following terms of any series of Subordinated Debt Securities offered hereby in respect of which this Prospectus is being delivered: (a) the subordination terms of the Subordinated Debt Securities of such series; and (b) the rights, if any, to defer payments of interest on the Subordinated Debt Securities of such series by extending the interest payment period, and the duration of such extension. 5 8 The Prospectus Supplement will also describe any material United States federal income tax consequences or other special considerations applicable to the series of Debt Securities to which such Prospectus Supplement relates, including those applicable to (i) Debt Securities with respect to which payments of principal, premium, if any, or interest are determined with reference to an index or formula (including changes in prices of particular securities, currencies or commodities), (ii) Debt Securities with respect to which principal, premium, if any, or interest is payable in a foreign or composite currency, (iii) Debt Securities that are issued at a discount below their stated principal amount, bearing no interest or interest at a rate that at the time of issuance is below market rates ("Original Issue Discount Debt Securities"), and (iv) variable rate Debt Securities that are exchangeable for fixed rate Debt Securities. Payments of interest on Registered Securities may be made at the option of the Company by check mailed to the registered holders thereof or, if so provided in the applicable Prospectus Supplement, at the option of a holder by wire transfer to an account designated by such holder. Unless otherwise provided in the applicable Prospectus Supplement, Registered Securities may be transferred or exchanged at the office of the Trustee at which its corporate trust business is principally administered in the United States or at the office of the Trustee or the Trustee's agent in the Borough of Manhattan, the City and State of New York, at which its corporate agency business is conducted, subject to the limitations provided in the Indenture, without the payment of any service charge, other than any tax or governmental charge payable in connection therewith. All funds paid by the Company to a paying agent for the payment of principal, premium, if any, or interest with respect to any Debt Securities that remain unclaimed at the end of two years after such principal, premium, or interest shall have become due and payable will be repaid to the Company, and the holders of such Debt Securities will thereafter look only to the Company for payment thereof. GLOBAL SECURITIES The Debt Securities of a series may be issued in whole or in part in the form of one or more Global Securities. A Global Security is a Debt Security that represents, and is denominated in an amount equal to the aggregate principal amount of, all outstanding Debt Securities of a series, or any portion thereof, in either case having the same terms, including the same original issue date, date or dates on which principal and interest are due, and interest rate or method of determining interest. A Global Security will be deposited with, or on behalf of, a Depositary, which will be identified in the Prospectus Supplement relating to such Debt Securities. Global Securities may be issued in only fully registered form and in either temporary or definitive form. Unless and until it is exchanged in whole or in part for the individual Debt Securities represented thereby, a Global Security may not be transferred except as a whole by the Depositary to a nominee of the Depositary, or by the Depositary or any nominee of the Depositary to a successor Depositary or any nominee of such successor. The specific terms of the depositary arrangement with respect to a series of Debt Securities will be described in the Prospectus Supplement relating to such Debt Securities. The Company anticipates that the following provisions will generally apply to depositary arrangements. Upon the issuance of a Global Security, the Depositary for such Global Security will credit, on its book-entry registration and transfer system, the respective principal amounts of the individual Debt Securities represented by such Global Security to the accounts of persons that have accounts with the Depositary ("participants"). Such accounts shall be designated by the dealers or underwriters with respect to such Debt Securities or, if such Debt Securities are offered and sold directly by the Company or through one or more agents, by the Company or such agents. Ownership of beneficial interests in a Global Security will be limited to participants or persons that hold beneficial interests through participants. Ownership of beneficial interests in such Global Security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the Depositary (with respect to interests of participants) or records maintained by participants (with respect to interests of persons other than participants). The laws of some states require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limitations and laws may impair the ability to transfer beneficial interests in a Global Security. 6 9 So long as the Depositary for a Global Security, or its nominee, is the registered owner of such Global Security, such Depositary or nominee, as the case may be, will be considered the sole owner or holder of the individual Debt Securities represented by such Global Security for all purposes under the applicable Indenture. Except as provided below, owners of beneficial interests in a Global Security will not be entitled to have any of the individual Debt Securities represented by such Global Security registered in their names, will not receive or be entitled to receive physical delivery of any of such Debt Securities in definitive form, and will not be considered the owners or holders thereof under the applicable Indenture. Accordingly, each person owning a beneficial interest in a Global Security must rely on the procedures of the Depository for such Global Security and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder under the Indenture. The Company understands that under existing industry practices, if the Company requests any action of holders or if an owner of a beneficial interest in a Global Security desires to give or take any action which a holder is entitled to give or take under the applicable Indenture, the Depositary for such Global Security would authorize the participants holding the relevant beneficial interests to give or take such action, and such participants would authorize beneficial owners owning through such participants to give or take such action or would otherwise act upon the instructions of beneficial owners holding through them. Payments of principal, premium, if any, and interest with respect to individual Debt Securities represented by a Global Security will be made to the Depositary or its nominee, as the case may be, as the registered owner or holder of such Global Security. Neither the Company, the Trustee, any paying agent or registrar for such Debt Securities, or any agent of the Company or the Trustee will have any responsibility or liability for (i) any aspect of the records relating to or payments made by the Depositary, its nominee, or any participants on account of beneficial interests in the Global Security or for maintaining, supervising, or reviewing any records relating to such beneficial interests, (ii) the payment to the owners of beneficial interests in the Global Security of amounts paid to the Depositary or its nominee, or (iii) any other matter relating to the actions and practices of the Depositary, its nominee, or its participants. Neither the Company, the Trustee, any paying agent or registrar for such Debt Securities, or any agent of the Company or the Trustee will be liable for any delay by the Depositary, its nominee, or any of its participants in identifying the owners of beneficial interests in the Global Security, and the Company and the Trustee may conclusively rely on, and will be protected in relying on, instructions from the Depositary or its nominee for all purposes. The Company expects that the Depositary for a series of Debt Securities or its nominee, upon receipt of any payment of principal, premium, if any, or interest with respect to a definitive Global Security representing any of such Debt Securities, will immediately credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Security, as shown on the records of the Depositary or its nominee. The Company also expects that payments by participants to owners of beneficial interests in such Global Security held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers and registered in "street name". Such payments will be the responsibility of such participants. If the Depositary for a series of Debt Securities is at any time unwilling, unable, or ineligible to continue as depositary, the Company shall appoint a successor depositary. If a successor depositary is not appointed by the Company within 90 days, the Company will issue individual Debt Securities of such series in exchange for the Global Security representing such series of Debt Securities. In addition, the Company may at any time and its sole discretion, subject to any limitations described in the Prospectus Supplement relating to such Debt Securities, determine no longer to have Debt Securities of a series represented by a Global Security and, in such event, will issue individual Debt Securities of such series in exchange for the Global Security representing such series of Debt Securities. Furthermore, if the Company so specifies with respect to the Debt Securities of a series, an owner of a beneficial interest in a Global Security representing Debt Securities of such series may, on terms acceptable to the Company, the Trustee, and the Depositary for such Global Security, receive individual Debt Securities of such series in exchange for such beneficial interests, subject to any limitations described in the Prospectus Supplement relating to such Debt Securities. In any such instance, an owner of a beneficial interest in a Global Security will be entitled to physical delivery of individual Debt Securities of the series represented by such Global Security equal in principal amount to such beneficial interest and to have such Debt Securities registered in its name. 7 10 CERTAIN COVENANTS OF THE COMPANY APPLICABLE TO SENIOR DEBT SECURITIES The following discussion of certain covenants which restricts the Company's ability to create certain liens and enter into certain sale/leaseback transactions applies only to the Senior Indenture and the Senior Debt Securities issued under such Senior Indenture. Limitation on Liens As required under the Senior Indenture, unless otherwise provided in the Prospectus Supplement, the Company and its Restricted Subsidiaries will not create any Liens on any Principal Property or shares of capital stock of any Restricted Subsidiary unless Senior Debt Securities then outstanding are equally and ratably secured, with certain exceptions, including but not limited to: (i) pledges or deposits under worker's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (including government contracts, but excluding contracts for the payment of indebtedness) or other obligations of like nature, in each case incurred in the ordinary course of business, (ii) statutory and tax Liens for sums not yet due or delinquent or being contested in good faith by appropriate proceedings, (iii) certain encumbrances and easements, (iv) Liens existing at the date of the Indenture, (v) Liens securing only Indebtedness of a Wholly Owned Subsidiary of the Company to the Company or one or more Wholly Owned Subsidiaries of the Company, (vi) Purchase Money Liens, (vii) Liens on property or shares of stock of another Person at the time such other Person becomes a Subsidiary of such Person, provided that such Liens are not created in connection with such other Person becoming a Subsidiary of such Person, (viii) Liens securing a Hedging Obligation, (ix) Liens created in connection with a tax-free financing, (x) Liens resulting from the deposit of funds or evidences of Indebtedness in trust for the purpose of defeasing Indebtedness of the Company or any of its Subsidiaries, (xi) rights of a common owner of any interest in property, (xii) Liens placed upon any real property owned or acquired by the Company or any of its Subsidiaries securing Indebtedness in an amount up to 80% of the fair market value of such real property, (xiii) Liens to secure any refinancing, refunding, extension, renewal or replacement of any Indebtedness secured by certain permitted Liens, and (xiv) additional Liens not to exceed a total of 15% of Consolidated Net Tangible Assets. Limitation on Sale/Leaseback Transactions As required by the Senior Indenture, the Company and its Restricted Subsidiaries shall not enter into any Sale/Leaseback Transaction with respect to any Principal Property unless (i) the Company or such Restricted Subsidiary would be entitled to create a Lien on such Principal Property securing Indebtedness in an amount equal to the Attributable Indebtedness with respect to such Sale/Leaseback Transaction without securing the Senior Debt Securities pursuant to the provisions described above under "-- Limitation on Liens," or (ii) the Company, within six months from the effective date of such Sale/Leaseback Transaction, applies an amount equal to the Attributable Indebtedness with respect to such Sale/Leaseback Transaction to the voluntary defeasance or retirement of Senior Debt Securities or other Indebtedness ranking pari passu with the Senior Debt Securities; provided that the foregoing will not prevent the Company or any Restricted Subsidiary from (x) entering into any Sale/Leaseback Transaction involving a lease with a term of less than three years, or (y) entering into any Sale/Leaseback Transaction between the Company and a Restricted Subsidiary or between Restricted Subsidiaries. CERTAIN ADDITIONAL COVENANTS OF THE COMPANY Limitation on Consolidations and Mergers The Company covenants under both the Senior Indenture and the Subordinated Indenture that the Company shall not consolidate with or merge into, or sell, convey, transfer, lease or otherwise dispose of all or substantially all of its assets (in one transaction or a series of related transactions) to another entity unless such entity is a corporation that assumes all the obligations under the Debt Securities and the Indentures and certain other conditions are met (whereupon all such obligations of the Company shall terminate). 8 11 EVENTS OF DEFAULT AND REMEDIES The following events are defined in the Indentures as "Events of Default" with respect to a series of Debt Securities: (a) Default in the payment of any installment of interest on any Debt Securities of that series, as and when the same shall become due and payable and continuance of such default for a period of 30 days; (b) Default in the payment of all or any part of the principal or premium with respect to any Debt Securities of that series as and when the same shall become due and payable, whether at maturity, upon redemption, by declaration, upon required repurchase, or otherwise; (c) Default in the payment of any sinking fund payment with respect to any Debt Securities of that series as and when the same shall become due and payable and continuance of such default for a period of 30 days; (d) Failure on the part of the Company to comply with the provisions of the Indentures relating to consolidations, mergers, and sales of assets; (e) Failure on the part of the Company duly to observe or perform any other of the covenants or agreements on the part of the Company in the Debt Securities of that series, in the applicable Indenture with respect to such series, or in any supplemental Indenture with respect to such series (other than covenants or agreements included solely by or for the benefit of a series of Debt Securities thereunder other than that series) continuing for a period of ninety (90) days after the date on which written notice specifying such failure and requiring the Company to remedy the same and stating that such notice is a "Notice of Default" hereunder shall have been given to the Company by the Trustee or to the Company and the Trustee by the holders of at least 25% in aggregate principal amount of the Debt Securities of that series at the time outstanding; (f) The Company or any of its "Significant Subsidiaries" (defined as any subsidiary of the Company that would be a "significant subsidiary" as defined in Rule 405 under the Securities Act as in effect on the date of the Indenture) shall (i) voluntarily commence any proceeding or file any petition seeking relief under the United States Bankruptcy Code or other federal or state bankruptcy, insolvency, or similar law, (ii) consent to the institution of, or fail to controvert within the time and in the manner prescribed by law, any such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, or similar official for the Company or any such Significant Subsidiary or for a substantial part of its property, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) admit in writing its inability or fail generally to pay its debts as they become due, (vii) take corporate action for the purpose of effecting any of the foregoing, or (viii) take any comparable action under any foreign laws relating to insolvency of the Company or any Significant Subsidiary; (g) The entry of an order or decree by a Court having competent jurisdiction for (i) relief with respect to the Company or any of its Significant Subsidiaries or a substantial part of any of their property under the United States Bankruptcy Code or any other federal or state bankruptcy, insolvency, or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator, or similar official for the Company or any such Significant Subsidiary or for a substantial part of any of their property (except any decree or order appointing such official of any Significant Subsidiary pursuant to a plan under which the assets and operations of such Significant Subsidiary are transferred to or combined with another Subsidiary or Subsidiaries of the Company or to the Company), or (iii) the winding-up or liquidation of the Company or any such Significant Subsidiary (except any decree or order approving or ordering the winding-up or liquidation of the affairs of a Significant Subsidiary pursuant to a plan under which the assets and operations of such Significant Subsidiary are transferred to or combined with another Subsidiary or Subsidiaries of the Company or to the Company), and such order or decree shall continue unstayed and in effect for sixty (60) consecutive days, or any similar relief is granted under any foreign laws and the order or decree stays in effect for sixty (60) consecutive days; and (h) Any other Event of Default provided with respect to Debt Securities of that series. 9 12 An Event of Default with respect to one series of Debt Securities is not necessarily an Event of Default for another series of Debt Securities. If an Event of Default described in clause (a), (b), (c), (d), (e), (f) (other than with respect to the Company), (g) (other than with respect to the Company) or (h) above occurs and is continuing with respect to any series of Debt Securities, unless the principal and interest with respect to all the Debt Securities of such series shall have already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Debt Securities of such series (each such series voting as a separate class) then outstanding may declare the principal amount (or, if Original Issue Discount Debt Securities, such portion of the principal amount as may be specified in such series) of and interest on all the Debt Securities of such series due and payable immediately. If an Event of Default described in clause (f) or (g) (in each case with respect to the Company) above occurs, unless the principal and interest with respect to all the Debt Securities of all series shall have become due and payable, the principal amount (or, if any series are Original Issue Discount Debt Securities, such portion of the principal amount as may be specified in such series) of and interest on all Debt Securities of all series then outstanding shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holder of Debt Securities. If an Event of Default occurs and is continuing, the Trustee shall be entitled and empowered to institute any action or proceeding for the collection of the sums so due and unpaid or to enforce the performance of any provisions of the Debt Securities of the affected series or the applicable Indenture, to prosecute any such action or proceeding to judgment or final decree, and to enforce any such judgment or final decree against the Company or any other obligor on the Debt Securities of such series. In addition, if there shall be pending proceedings for the bankruptcy or reorganization of the Company or any other obligor on the Debt Securities, or if a receiver, trustee, or similar official shall have been appointed for its property, the Trustee shall be entitled and empowered to file and prove a claim for the whole amount of principal, premium, and interest (or, in the case of Original Issue Discount Debt Securities, such portion of the principal amount as may be specified in the terms of such series) owing and unpaid with respect to the Debt Securities. No holder of any Debt Security of any series shall have any right to institute any action or proceeding upon or under or with respect to the applicable Indenture, for the appointment of a receiver or trustee, or for any other remedy, unless (i) such holder previously shall have given to the Trustee written notice of an Event of Default with respect to Debt Securities of that series and of the continuance thereof, (ii) the holders of not less than 25% in aggregate principal amount of the outstanding Debt Securities of that series (each such series voting as a separate class) shall have made written request to the Trustee to institute such action or proceeding with respect to such Event of Default and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses, and liabilities to be incurred therein or thereby, and (iii) the Trustee, for 60 days after its receipt of such notice, request, and offer of indemnity shall have failed to institute such action or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant to the provisions of the Indenture. Prior to the acceleration of the maturity of the Debt Securities of any series, the holders of a majority in aggregate principal amount of the Debt Securities of that series at the time outstanding may, on behalf of the holders of all Debt Securities of that series, waive any past default or Event of Default and its consequences for that series, except (i) a default in the payment of the principal, premium, if any, or interest with respect to such Debt Securities, or (ii) a default with respect to a provision of the applicable Indenture that cannot be amended without the consent of each holder affected thereby. In case of any such waiver, such default shall cease to exist, any Event of Default arising therefrom shall be deemed to have been cured for all purposes, and the Company, the Trustee, and the holders of the Debt Securities of that series shall be restored to their former positions and rights under the applicable Indenture. The Trustee shall promptly after the occurrence of a default known to it with respect to a series of Debt Securities, give to the holders of the Debt Securities of such series notice of all uncured defaults with respect to such series known to it, unless such defaults shall have been cured or waived before the giving of such notice; provided, however, that except in the case of default in the payment of principal, premium, if any, or interest with respect to the Debt Securities of such series or in the making of any sinking fund payment with respect to the Debt Securities of such series, the Trustee shall be protected in withholding such notice if it in good faith determines that the withholding of such notice is in the interest of the holders of such Debt Securities. 10 13 MODIFICATION OF THE INDENTURES The Company and either the Senior Trustee or the Subordinated Trustee, as the case may be, may enter into supplemental indentures without the consent of the holders of Debt Securities for one or more of the following purposes: (a) To evidence the succession of another person to the Company pursuant to the provisions of the applicable Indenture relating to consolidations, mergers, and sales of assets and the assumption by such successor of the covenants, agreements, and obligations of the Company in the applicable Indenture and in the Debt Securities; (b) To surrender any right or power conferred upon the Company by the applicable Indenture, to add to the covenants of the Company such further covenants, restrictions, conditions, or provisions for the protection of the holders of all or any series of Debt Securities as the Board of Directors of the Company shall consider to be for the protection of the holders of such Debt Securities and to make the occurrence, or the occurrence and continuance, of a default in any of such additional covenants, restrictions, conditions or provisions a default or an Event of Default under the applicable Indenture (provided, however, that with respect to any such additional covenant, restriction, condition or provision, such supplemental Indenture may provide for a period of grace after default, which may be shorter or longer than that allowed in the case of other defaults, may provide for an immediate enforcement upon such default, may limit the remedies available to the Trustee upon such default, or may limit the right of holders of a majority in aggregate principal amount of any or all series of Debt Securities to waive such default); (c) To cure any ambiguity or to correct or supplement any provision contained in the applicable Indenture, in any supplemental Indenture, or in any Debt Securities that may be defective or inconsistent with any other provision contained therein; (d) To modify or amend the applicable Indenture in such a manner as to permit the qualification of such Indenture or any supplemental Indenture under the Trust Indenture Act as then in effect; (e) To convey, transfer, assign, mortgage, or pledge any property to or with the Trustee, or to make such other provisions in regard to matters or questions arising under the applicable Indenture as shall not adversely affect the interests of any holders of Debt Securities of any series; (f) To comply with the provisions of the applicable Indenture relating to consolidations, mergers, and sales of assets; (g) To add guarantees with respect to the Debt Securities or to secure the Debt Securities; (h) To make any change that does not adversely affect the rights of any holder; (i) To add to, change, or eliminate any of the provisions of the applicable Indenture with respect to one or more series of Debt Securities, so long as any such addition, change or elimination not otherwise permitted under the applicable Indenture shall (i) neither apply to any Debt Security of any series created prior to the execution of such supplemental Indenture and entitled to the benefit of such provision nor modify the rights of the holders of any such Debt Security with respect to such provision or (ii) become effective only when there is no such Debt Security outstanding; (j) To evidence and provide for the acceptance of appointment by a successor or separate Trustee with respect to the Debt Securities of one or more series and to add to or change any of the provisions of the Indenture as shall be necessary to provide for or facilitate the administration of the applicable Indenture by more than one Trustee; and (k) To establish the form or terms of Debt Securities as described under "Description of Debt Securities - General" above. 11 14 With the consent of the holders of a majority in aggregate principal amount of the outstanding Debt Securities of each series affected thereby, the Company and the Trustee may from time to time and at any time enter into a supplemental Indenture for the purpose of adding any provisions to, changing in any manner, or eliminating any of the provisions of the applicable Indenture or of any supplemental Indenture or of modifying in any manner the rights of the holder of the Debt Securities of such series; provided, however, that without the consent of the holders of each Debt Security so affected, no such supplemental Indenture shall (i) reduce the percentage in principal amount of Debt Securities of any series whose holders must consent to an amendment, (ii) reduce the rate of or extend the time for payment of interest on any Debt Security, (iii) reduce the principal of or extend the stated maturity of any Debt Security, (iv) reduce the premium payable upon the redemption of any Debt Security or change the time at which any Debt Security may or shall be redeemed, (v) make any Debt Security payable in a currency other than that stated in the Debt Security, (vi) release any security that may have been granted with respect to the Debt Securities, or (vii) make any change in the provisions of the applicable Indenture relating to waivers of defaults or amendments that require unanimous consent. CONSOLIDATION, MERGER, AND SALE OF ASSETS The Company may not consolidate with or merge with or into any person, or sell, convey, transfer, lease or otherwise dispose of all or substantially all of its assets (in one transaction or a series of related transactions), unless the following conditions have been satisfied: (a) Either (i) the Company shall be the continuing person in the case of a merger, or (ii) the resulting, surviving, or transferee person, if other than the Company (the "Successor Company"), shall be a corporation organized and existing under the laws of the United States, any State, or the District of Columbia and shall expressly assume all of the obligations of the Company under the Debt Securities and the Indentures; (b) Immediately after giving effect to such transaction (and treating any indebtedness that becomes an obligation of the Successor Company or any subsidiary of the Company as a result of such transaction as having been incurred by the Successor Company or such subsidiary at the time of such transaction), no Default or Event of Default under either Indenture would occur or be continuing; and (c) The Company shall have delivered to the Trustee an officers' certificate and an opinion of counsel, each stating that such consolidation, merger, or transfer complies with the Indentures. SATISFACTION AND DISCHARGE OF AN INDENTURE; DEFEASANCE An Indenture shall generally cease to be of any further effect with respect to a series of Debt Securities if (i) the Company has delivered to the Trustee for cancellation all Debt Securities of such series (with certain limited exceptions), or (ii) all Debt Securities of such series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year, and the Company shall have deposited with the Trustee as trust funds the entire amount sufficient (in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee) without consideration of any reinvestment and after payment of all taxes or other charges and assessments in respect thereof payable by the Trustee to pay at maturity or upon redemption all such Debt Securities, no default with respect to the Debt Securities has occurred and is continuing on the date of such deposit, such deposit does not result in a breach or violation of, or constitute a default under, the Indenture or any other agreement or instrument to which the Company is a party and the Company delivered an officers' certificate and an opinion of counsel each stating that such conditions have been complied with (and if, in either case, the Company shall also pay or cause to be paid all other sums payable under the applicable Indenture by the Company). In addition, the Company shall have a "legal defeasance option" (pursuant to which it may terminate, with respect to the Debt Securities of a particular series, all of its obligations under such Debt Securities and the Indenture with respect to such Debt Securities) and a "covenant defeasance option" (pursuant to which it may terminate, with respect to the Debt Securities of a particular series, its obligations with respect to such Debt Securities under certain specified covenants contained in the applicable Indenture). If the Company exercises its legal defeasance option with respect to a series of Debt Securities, payments of such Debt Securities may not be accelerated because of an Event of Default. If the Company exercises its covenant defeasance option with respect to a series of Debt Securities, payment of such Debt Securities may not be 12 15 accelerated because of an Event of Default related to the specified covenants. The Company may exercise its legal defeasance option or its covenant defeasance option with respect to the Debt Securities of a series only if (i) the Company irrevocably deposits in trust with the Trustee cash or U.S. Government Obligations (as defined in the Indentures) for the payment of principal, premium, if any, and interest with respect to such Debt Securities to maturity or redemption, as the case may be, (ii) the Company delivers to the Trustee a certificate from a nationally recognized firm of independent public accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay the principal, premium, if any, and interest when due with respect to all the Debt Securities of such series to maturity or redemption, as the case may be, (iii) 91 days pass after the deposit is made and during the 91 day period no default described in clauses (f) or (g) under "Description of Debt Securities - Events of Default and Remedies" above with respect to the Company occurs that is continuing at the end of such period, (iv) the deposit does not constitute a default under any other agreement binding on the Company, (v) the Company delivers to the Trustee an opinion of counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940, (vi) the Company shall have delivered to the Trustee an opinion of counsel addressing certain federal income tax matters relating to the defeasance, and (vii) the Company delivers to the Trustee an officers' certificate and an opinion of counsel, each stating that all conditions precedent to the defeasance and discharge of the Debt Securities of such series as contemplated by the applicable Indenture have been complied with. The Trustee shall hold in trust cash or U.S. Government Obligations deposited with it as described above and shall apply the deposited cash and the proceeds from deposited U.S. Government Obligations to the payment of principal, premium, if any, and interest with respect to the Debt Securities of the defeased series. THE TRUSTEE The Company may appoint a separate Trustee for any series of Debt Securities. As used herein in the description of a series of Debt Securities, the term "Trustee" refers to the Trustee appointed with respect to such series of Debt Securities. In addition, the Company has the right to replace the Trustee under certain circumstances, including (subject to certain conditions) if the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to another corporation or banking association. The Company may maintain banking and other commercial relationships with the Trustee and its affiliates in the ordinary course of business, and the Trustee may own Debt Securities. DESCRIPTION OF COMMON STOCK The Company may issue, from time to time, shares of its common stock, the general terms and provisions of which are summarized below. This summary does not purport to be complete and is subject to, and is qualified in its entirety by express reference to, the provisions of the Company's Amended Articles of Incorporation, the Company's Regulations and the applicable Prospectus Supplement. GENERAL Under the Company's Amended Articles of Incorporation, the Company has the authority to issue 300,000,000 shares of common stock, par value $1.00 per share ("Common Stock"). As of July 31, 1998, the Company had 172,895,006 shares of Common Stock outstanding. Each share of Common Stock shall be equal to every other share of Common Stock. The outstanding shares of Common Stock are, and the shares offered hereby will be, validly issued, fully paid and nonassessable and the holders thereof are not and will not be subject to any liability as shareholders. The Company's Amended Articles of Incorporation authorize the Company to issue 30,000,000 shares of Serial Preferred Stock, without par value ("Serial Preferred Stock") of which 3,000,000 shares, without par value, 13 16 have been designated as Cumulative Redeemable Serial Preferred Stock ("Cumulative Redeemable Serial Preferred Stock"). As of July 31, 1998 the Company had no shares of Serial Preferred Stock outstanding. The Common Stock is, however, subject to the rights of any outstanding shares of any series of the Serial Preferred Stock which the Company may issue from time to time. DIVIDENDS Subject to the rights of any series of the Serial Preferred Stock, the holders of shares of Common Stock will be entitled to receive dividends on such Common Stock out of assets legally available for distribution, when, as and if authorized and declared by the Company's Board of Directors. The payment of dividends on the Common Stock will be a business decision to be made by the Company's Board of Directors from time to time based upon the results of operations and financial condition of the Company and such other factors as the Company's Board of Directors considers relevant. So long as any Serial Preferred Stock is outstanding, no dividends, except a dividend payable in Common Stock or other shares ranking junior to the Serial Preferred Stock, if any, shall be paid or declared or any distribution be made except as aforesaid on the Common Stock or any other shares ranking junior to the Serial Preferred Stock, nor shall any Common Stock or any other shares ranking junior to the Serial Preferred Stock be purchased, retired or otherwise acquired by the Company (except out of the proceeds of the sale of Common Stock or other shares ranking junior to the Serial Preferred Stock received by the Company subsequent to August 31, 1966) unless (i) all accrued and unpaid dividends on Serial Preferred Stock, including the full dividends for the current quarterly dividend period, shall have been declared and paid or a sum sufficient for payment thereof set apart, and (ii) there shall be no arrearages with respect to the redemption of Serial Preferred Stock of any series from any sinking fund provided for shares of such series in accordance with the provisions of the Amended Articles of Incorporation. Payment of dividends on the Common Stock may be restricted by loan agreements, indentures, and other transactions entered into by the Company from time to time. The applicable Prospectus Supplement will describe any material contractual restrictions on dividend payments. VOTING RIGHTS Holders of shares of Common Stock are entitled to one vote per share on all matters presented to the shareholders. Except as otherwise provided in the Amended Articles of Incorporation or as required by law, the holders of the Serial Preferred Stock and the holders of the Common Stock shall vote together as one class on all matters. The Company's Amended Articles of Incorporation prevent any shareholder from cumulating his voting power. Except as outlined below or otherwise expressly required by statute, the vote, consent, waiver or release of the holders of shares of Common Stock entitling them to exercise a majority of the voting power of the Company, or class if a class vote is required, shall be sufficient for any purpose requiring the vote, consent, waiver or release of the holders of such shares. However, the affirmative vote (i) of the holders of shares entitling them to exercise two-thirds of the voting power of the Company, and (ii) of the holders of two-thirds of the shares of Common Stock at the time outstanding, given in person or by proxy at a meeting called for the purpose at which the holders of Common Stock shall vote separately as a class, shall be necessary: (a) To approve the (i) the sale, exchange, lease, transfer or other disposition by the Company of all, or substantially all, of its assets or business to the related corporation or an affiliate of a related corporation, (ii) the consolidation of the Company with or its merger into a related corporation or an affiliate of a related corporation, (iii) the merger into the Company of a related corporation or an affiliate of a related corporation, or (iv) a combination or majority share acquisition in which the Company is the acquiring corporation and its voting shares are issued or transferred to a related corporation or an affiliate of a related corporation or to shareholders of a related corporation or an affiliate of a related corporation; (b) To approve any agreement, contract or other arrangement with a related corporation providing for any of the transactions described in subparagraph (a) above; or (c) To effect any amendment of the Amended Articles of Incorporation of the Company which changes the voting provisions described above. 14 17 For the purpose of the above voting requirements: (i) a "related corporation" in respect of a given transaction shall be any corporation which, together with its affiliates and associated persons, owns of record or beneficially, directly or indirectly, more than five percent (5%) of the shares of any outstanding class of stock of the Company entitled to vote upon such transaction, as of the record date used to determine the shareholders of the Company entitled to vote upon such transaction, (ii) an "affiliate" of a related corporation shall be any individual, joint venture, trust, partnership or corporation which, directly or indirectly through one or more intermediaries, controls, or its controlled by, or is under common control with, the related corporation, (iii) an "associated person" of a related corporation shall be any officer or director or any beneficial owner, directly or indirectly, of ten percent (10%) or more of any class of equity security, of such related corporation or any of its affiliates, and (iv) the terms "combination", "majority share acquisition" and "acquiring corporation" shall have the same meaning as that contained in Section 1701.01 of the Ohio General Corporation Law or any similar provision hereafter enacted. RIGHT TO ACQUIRE SHARES The Company may from time to time, pursuant to authorization by the Board of Directors and without action by the shareholders, purchase or otherwise acquire shares of the Company of any class or classes in such manner, upon such terms and in such amounts as the Board of Directors shall determine. The Company's right to acquire shares of the Company is subject, however, to such limitation or restriction, if any, as is contained in the express terms of any class of shares of the Company outstanding at the time of the purchase or acquisition in question. LIQUIDATION RIGHTS In the event of a liquidation, dissolution or winding up of the Company, holders of shares of Common Stock will be entitled to share ratably in all assets remaining after payments to all creditors and payments required to be made in respect of any outstanding Serial Preferred Stock (including accrued and unpaid dividends thereon, if any). ABSENCE OF OTHER RIGHTS Holders of Common Stock have no preferences, preemptive, conversion or exchange rights. TRANSFER AGENT; LISTING The Bank of New York is the transfer agent and registrar for the Company's Common Stock. The shares of Common Stock are listed in the New York Stock Exchange under the symbol "SHW". RIGHTS PLAN On April 23, 1997, the Board of Directors of the Company adopted a shareholder's rights plan ("Rights Plan"). In connection therewith, the Board declared a dividend distribution consisting of one right (a "Right") to purchase one one-hundredth (1/100) of a share of Cumulative Redeemable Serial Preferred Stock of the Company, for each share of Common Stock of the Company outstanding as of May 6, 1997 (the "Record Date"). When exercisable, each Right entitles the registered holder to purchase one one-hundredth (1/100) of a share of the Cumulative Redeemable Serial Preferred Stock for one hundred ten dollars ($110.00), subject to adjustment (the "Purchase Price"). The Rights will become exercisable after the "Distribution Date" which shall be the earlier of (i) the first date of public announcement by the Company that a person or group of affiliated persons ("Acquiring Person") has become the beneficial owner of ten percent (10%) or more (fifteen percent (15%) or more in the case of any person or group of affiliated persons who has reported or may report such ownership on Schedule 13G under the Exchange Act) of the outstanding Common Stock, or (ii) ten business days, or such later date as specified by the Board of Directors, after the commencement of a tender offer or exchange offer by a person or group of affiliated persons that would result in such person or a group of affiliated persons beneficially owning ten percent (10%) or more of the outstanding Common Stock. 15 18 Until the Rights become exercisable, the Rights will (i) be evidenced by the certificates representing shares of Common Stock, (ii) trade with the Common Stock, and any transfer of shares of Common Stock will also constitute a transfer of the associated Rights, and (iii) be surrendered for transfer with any shares of Common Stock, with which such Rights are associated, surrendered for transfer. Prior to the Distribution Date (or, if earlier, the expiration, redemption or exchange of the Rights as described below), share certificates issued after the Record Date upon the transfer or new issuance of Common Stock shall reference the Rights by appropriate notation. When the Rights become exercisable, they will detach and trade separately from the shares of Common Stock. As soon as practicable thereafter, separate certificates representing the Rights will be mailed to registered holders. The Rights will "flip-in" and entitle the holder to purchase at the Purchase Price that number of shares of Common Stock having a market value of two times such Purchase Price (or, under certain circumstances, an amount of cash equal to two times such Purchase Price) upon the occurrence of any or all of the following events: (i) a person or group of affiliated persons becomes an Acquiring Person; (ii) an Acquiring Person engages in certain self-dealing transactions with the Company; or (iii) the Company consummates a capital restructuring that has the effect of increasing by more than one percent (1%) the proportionate share of the equity of the Company or a subsidiary thereof owned by an Acquiring Person. Upon the occurrence of any of the events listed in clauses (i) through (iii) (or the Distribution Date, if earlier), Rights held by an Acquiring Person (from and after the date upon which the Acquiring Person became such) shall become null and void and nontransferable. If (i) the Company is acquired in a merger or other business combination by an Acquiring Person and the Company is not the surviving corporation, (ii) an Acquiring Person merges with the Company and the Company is the surviving corporation, but its shares of Common Stock are changed or exchanged, or (iii) fifty percent (50%) or more of its assets or earning power are sold to an Acquiring Person, then each of the Rights will "flip-over" and will entitle the holder to purchase that number of shares of common or other capital stock of the acquiring entity which at the time of such transaction would have a market value of two times the Purchase Price (or, under certain circumstances, an amount of cash equal to two times such Purchase Price). Upon the occurrence of any such event (or the Distribution Date, if earlier), Rights held by the Acquiring Person (from and after the date upon which the Acquiring Person became such) engaging in the transactions set forth in the preceding sentence shall become null and void and nontransferable. At any time after a person or group of affiliated persons becomes an Acquiring Person and until any person or group of affiliated persons beneficially owns fifty percent (50%) or more of the then-outstanding Common Stock, the Board of Directors may exchange all or part of the then-outstanding Rights for shares of Common Stock at an exchange ratio of one share of Common Stock per one Right. In such event, the right to exercise the Rights terminates and the only right thereafter of a holder of such Rights shall be to receive that number of shares of Common Stock equal to the number of such Rights held by such holder multiplied by the exchange ratio. The Purchase Price and the number of shares of Cumulative Redeemable Serial Preferred Stock or Common Stock (or common shares of an acquiror) to be purchased or received upon exercise or exchange of the Rights are subject to adjustment from time to time. The Board of Directors may redeem the Rights in whole, but not in part, at a price of $.005 per Right (the "Redemption Price") at any time prior to the earlier of (i) the first date of public announcement by the Company that an Acquiring Person has become an Acquiring Person or (ii) April 22, 2007 (the "Final Expiration Date"). The terms of the Rights are set forth in a Rights Agreement, dated as of April 23, 1997 (the "Rights Agreement"), by and between the Company and The Bank of New York, as successor Rights Agent to KeyBank National Association (the "Rights Agent"). Prior to the date the Rights cease to be redeemable, the provisions of the Rights Agreement may be supplemented or amended by the Board of Directors and the Rights Agent, without the approval of any holders of the Rights or Common Stock, in any manner, except for a supplement or amendment which decreases the stated Redemption Price to an amount less than $.005 per Right. From and after the date the Rights cease to be redeemable, the Rights Agreement may be supplemented or amended without the approval of any holders of the Rights or Common Stock to (i) cure any ambiguity, (ii) correct or supplement defective or inconsistent provisions, (iii) shorten or lengthen any time period under the Rights Agreement, or (iv) supplement or amend any other provision as the Board of Directors may deem necessary or desirable, provided that such 16 19 supplement or amendment shall not decrease the stated Redemption Price to an amount less than $.005 per Right or otherwise adversely affect the interests of the Rights holders. The foregoing description of the Rights Plan does not purport to be complete and is qualified in its entirety to the Rights Agreement, which is incorporated herein by reference and was filed with the Commission as an Exhibit to a Registration Statement on Form 8-A, dated April 24, 1997. DESCRIPTION OF WARRANTS The Company may issue warrants for the purchase of Debt Securities ("Debt Warrants") or Common Stock ("Common Stock Warrants" and, together with the Debt Warrants, the "Warrants"). Warrants may be issued independently or together with any other Securities and may be attached to or separate from such other Securities. The Warrants will be issued under Warrant Agreements (as defined below) to be entered into between the Company and a bank or trust company, as warrant agent (the "Warrant Agent"), all to be set forth in the applicable Prospectus Supplement relating to any or all Warrants in respect of which this Prospectus is being delivered. Copies of the form of agreement for each Warrant (each a "Debt Securities Warrant Agreement" or a "Common Stock Warrant Agreement", as the case may be, or collectively, the "Warrant Agreements"), including the forms of certificates representing the Warrants (the "Debt Warrant Certificates" or the "Common Stock Warrant Certificates", as the case may be, or collectively, the "Warrant Certificates"), and reflecting the provisions to be included in such agreements that will be entered into with respect to the particular offerings of each type of warrant, are or will be filed as exhibits to the Registration Statement of which this Prospectus forms a part. The following description sets forth certain general terms and provisions of the Warrants to which any Prospectus Supplement may relate. The particular terms of the Warrants to which any Prospectus Supplement may relate and to the extent, if any, to which such general provisions may apply to the Warrant so offered will be described in the applicable Prospectus Supplement. The following summary of certain provisions of the Warrants, Warrant Agreements and Warrants Certificates does not purport to be complete and is subject to, and is qualified in its entirety by express reference to, all of the provisions of the Warrant Agreements and Warrant Certificates, including the definitions therein of certain terms. DEBT WARRANTS The applicable Prospectus Supplement will describe the terms of Debt Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants and Debt Warrant Certificates representing such Debt Warrants, including the following: (a) the title for such Debt Warrants; (b) the aggregate number of such Debt Warrants; (c) the price or prices at which such Debt Warrants will be issued; (d) the designation, aggregate principal amount and terms of the Debt Securities purchasable upon exercise of such Debt Warrants, and the procedures and conditions relating to the exercise of such Debt Warrants; (e) the designation and terms of any related Debt Securities with which such Debt Warrants are issued, and the number of such Debt Warrants issued with each such security; (f) the date, if any, on and after which such Debt Warrants and the related Debt Securities will be separately transferable; (g) the principal amount of Debt Securities purchasable upon exercise of each Debt Warrant, and the price at which such principal amount of Debt Securities may be purchased upon such exercise; (h) the date on which such right shall expire; 17 20 (i) the maximum or minimum number of such Debt Warrants which may be exercised at any time; (j) a discussion of the material United States federal income tax considerations applicable to the exercise of such Debt Warrants; and (k) any other terms of such Debt Warrants and terms, procedures and limitations relating to the exercise of such Debt Warrants. COMMON STOCK WARRANTS The applicable Prospectus Supplement will describe the terms of the Common Stock Warrants offered thereby, the Warrant Agreement relating to such Common Stock Warrants and the Common Stock Warrant Certificates representing such Common Stock Warrants, including the following: (a) the title of such Common Stock Warrants; (b) the securities for which such Common Stock Warrants are exercisable; (c) the price or prices at which such Common Stock Warrants will be issued; (d) the number of shares of Common Stock purchasable upon exercise of each Common Stock Warrant and the price at which such shares may be purchased upon such exercise; (e) the number of such Common Stock Warrants issued with each share of Common Stock; (f) any provisions for adjustment of the number or amount of shares of Common Stock receivable upon exercise of such Common Stock Warrants or the exercise price of such Common Stock Warrants; (g) if applicable, the date on and after which such Common Stock Warrants and the related shares of Common Stock will be separately transferable; (h) if applicable, a discussion of the material United States federal income tax considerations applicable to the exercise of such Common Stock Warrants; (i) any other terms of such Common Stock Warrants, including terms, procedures and limitations relating to the exchange and exercise of such Common Stock Warrants; (j) the date on which the right to exercise such Common Stock Warrants shall commence, and the date on which such right shall expire; and (k) the maximum or minimum number of such Common Stock Warrants which may be exercised at any time. EXERCISE OF WARRANTS Each Warrant will entitle the holder to purchase for cash such principal amount of Debt Securities or such number of shares of Common Stock, as the case may be, at such exercise price as shall in each case be set forth in, or to be determinable as set forth in, the applicable Prospectus Supplement relating to the Warrants offered thereby. Unless otherwise specified in the applicable Prospectus Supplement, Warrants may be exercised at the corporate trust office of the Warrant Agent or any other office indicated in the applicable Prospectus Supplement at any time up to the close of business New York City time on the expiration date set forth in the applicable Prospectus Supplement. After the close of business New York City time on the expiration date, unexercised Warrants will become void. Upon receipt of payment and the Warrant Certificate properly completed and duly executed, the Company will, as soon as practicable, issue the Debt Securities or Common Stock, as the case may be, purchasable 18 21 upon such exercise. If less than all of the Warrants represented by such Warrant Certificate are exercised, a new Warrant Certificate will be issued for the remaining amount of Warrants. NO RIGHTS OF SECURITY HOLDER PRIOR TO EXERCISE Prior to the exercise of their Warrants, holders of Warrants will not have any of the rights of holders of the Debt Securities or Common Stock, as the case may be, purchasable upon such exercise and will not be entitled to (i) in the case of Debt Warrants, payments of principal, premium, if any, or interest on the Debt Securities purchasable upon such exercise or (ii) in the case of Common Stock Warrants, the right to vote or to receive dividend payments on the Common Stock purchasable upon such exercise. EXCHANGE OF WARRANT CERTIFICATES Warrant Certificates will be exchangeable for new Warrant Certificates of different denominations at the corporate trust office of the Warrant Agent or any other office indicated in the applicable Prospectus Supplement. PLAN OF DISTRIBUTION The Company may sell Securities offered hereby to one or more underwriters for public offering and sale by them or may offer and sell Securities to investors directly or through agents or dealers. Any such underwriter, agent or dealer involved in the offer and sale of the Securities will be named in the Prospectus Supplement. Securities offered pursuant to a particular Prospectus Supplement are referred to herein as "Offered Securities". The Company may also sell Offered Securities to an agent as principal. Underwriters may offer and sell the Offered Securities at a fixed price or prices, which may be changed, or from time to time at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. The Company may also, from time to time, authorize underwriters acting as its agents to offer and sell the Offered Securities upon the terms and conditions set forth in any Prospectus Supplement. In connection with the sale of Offered Securities, underwriters or agents acting on the Company's behalf may be deemed to have received compensation from the Company or from purchasers of Offered Securities for whom they may act as agent in the form of underwriting discounts or commissions. Underwriters may sell Offered Securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions (which may be changed from time to time) from the purchasers for whom they may act as agent. If a dealer is used in the sale of the Offered Security in respect of which this Prospectus is delivered, the Company will sell such Offered Security to such dealer, as principal. The dealer may then resell such Offered Security to the public at varying prices to be determined by such dealer at the time of resale. Any underwriting compensation paid by the Company to underwriters or agents in connection with the offering of Offered Securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers, will be set forth in an applicable Prospectus Supplement. Underwriters, dealers and agents participating in the distribution of the Offered Securities may be deemed to be "underwriters" under the Securities Act, and any discounts and commission received by them and any profit realized by them on resale of the Offered Securities may be deemed to be underwriting discounts and commissions under the Securities Act. Underwriters, dealers and agents may be entitled under agreements with the Company to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act, and to reimbursement by the Company for certain expenses. If so indicated in an applicable Prospectus Supplement, the Company will authorize dealers acting as its agents to solicit offers by certain institutions to purchase Offered Securities from the Company at the public offering price set forth in such Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts") providing for payment and delivery on the date or dates stated in such Prospectus Supplement. Each Contract will be for an amount not less than, and the aggregate principal amount or offering price of Offered Securities sold pursuant to Contracts shall not be less nor more than, the respective amounts stated in such Prospectus Supplement. Institutions with whom Contracts, when authorized, may be made include commercial and savings banks, insurance companies, 19 22 pension funds, investment companies, educational and charitable institutions and other institutions, but will in all cases be subject to the approval of the Company. Any underwriter may engage in stabilizing and syndicate covering transactions in accordance with Rule 104 under the Exchange Act. Rule 104 permits stabilizing bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. The underwriters may over-allot shares of the Common Stock in connection with an offering of Common Stock, thereby creating a short position in the underwriters' account. Syndicate covering transactions involve purchases of Debt Securities in the open market after distribution has been completed in order to cover syndicate short positions. Stabilizing and syndicate covering transactions may cause the price of Debt Securities to be higher than it would otherwise be in the absence of such transactions. These transactions, if commenced, may be discontinued at any time. The anticipated date of delivery of Offered Securities will be set forth in the applicable Prospectus Supplement relating to each offer. The Securities may or may not be listed on a national securities exchange or a foreign securities exchange. No assurances can be given that there will be a market for any of the Securities. LEGAL MATTERS Certain legal matters in connection with the Securities will be passed upon for the Company by Louis E. Stellato, Vice President, General Counsel and Secretary of the Company. At June 30, 1998, Mr. Stellato beneficially owned approximately 37,500 shares of Common Stock of the Company and held options to purchase an additional 120,600 shares of Common Stock of which 84,266 shares were exercisable at such date. EXPERTS The consolidated financial statements and schedule of the Company appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 1997 have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements and schedule are incorporated by reference herein in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. 20 23 NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE ISSUER OR ANY UNDERWRITER OR AGENT. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR RESPECTIVE DATES. - ------------------------------------------------------------------------------ TABLE OF CONTENTS Page PROSPECTUS Available Information....................... 2 Incorporation of Certain Documents by Reference.............................. 2 The Company................................. 3 Use of Proceeds............................. 3 Ratio of Earnings to Fixed Charges.......... 3 Description of Debt Securities.............. 3 Description of Common Stock................. 13 Description of Warrants..................... 17 Plan of Distribution........................ 19 Legal Matters............................... 20 Experts..................................... 20 U.S. $1,500,000,000 The Sherwin-Williams Company Securities [SW LOGO] Prospectus , 1998 24 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following statement sets forth the estimated amounts of expenses, other than underwriting discounts, to be borne by the Company in connection with distribution of the Securities.
AMOUNT ------ Securities and Exchange Commission registration fee............................ $ 442,500 Trustees' fees................................................................. 25,000 Printing and engraving expenses................................................ 50,000 Accounting fees and expenses................................................... 20,000 Legal fees and expenses........................................................ 100,000 Blue Sky fees and expense...................................................... 25,000 Rating agency fees............................................................. 400,000 Miscellaneous.................................................................. 17,500 ---------- Total expense.................................................................. $1,080,000 ==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Article IV of the Company's Regulations, as Amended April 27, 1988 ("Regulations"), filed as Exhibit 4(b) to Post-Effective Amendment No. 1 to Form S-8 Registration Statement (Number 2-91401), dated April 29, 1988, is incorporated herein by reference. Reference is made to Section 1701.13(E) of the Ohio Revised Code relating to the indemnification of directors and officers of an Ohio corporation and to Sections 1 and 2 of Article IV of the Regulations. The Ohio Revised Code permits and Section 1 of Article IV of the Regulations provides that the Company shall indemnify its directors, officers and employees against amounts which may be incurred in connection with certain actions, suits or proceedings under the circumstances as set out in Sections 1(a) and 1(b) of Article IV of the Regulations. However, the Ohio Revised Code and Section 1 of Article IV of the Regulations limit indemnification in respect of certain claims, issue or matters as to which such party is adjudged to be liable for negligence or misconduct in performance of his or her duty to the Company and also in actions in which the only liability asserted against a director is for certain statutory violations. The Ohio Revised Code and Section 1 of Article IV of the Regulations also provide that the general indemnification provisions as found in Section 1(a) and 1(b) of Article IV of the Regulations do not limit the remaining provisions of Article IV of the Regulations. In addition, with certain limited exceptions, expenses incurred by a director in defending an action must be paid by the Company as they are incurred in advance of the final disposition if the director agrees (i) to repay such advances if it proved by clear and convincing evidence that the director's action or failure to act involved an act or omission undertaken with deliberate intent to cause injury to the Company or undertaken with reckless disregard for the Company's best interests, and (ii) to reasonably cooperate with the Company concerning the action. Also, the Company may pay certain expenses incurred by an officer or employee in defending an action as they are incurred in advance of the final disposition of an action if the officer or employee receiving the advance undertakes to repay the advance if it is ultimately determined that the officer or employee receiving the advance is not entitled to indemnification. The Company may from time to time maintain insurance on behalf of any person who is or was a director, officer or employee against any loss arising from any claim asserted against such director, officer or employee in any such capacity, subject to certain exclusions. The Company has entered into indemnification agreements with its directors and certain of its officers providing protection as permitted by law. II-1 25 ITEM 16. EXHIBITS.
EXHIBIT DESCRIPTION 1.1 Form of Underwriting Agreement with respect to Debt Securities. 1.2* Form of Underwriting Agreement with respect to Common Stock. 1.3* Form of Underwriting Agreement with respect to Warrants. 3.1 Amended Articles of Incorporation of the Company, as amended April 25, 1997, incorporated herein by reference to Exhibit 3(i) of the Quarterly Report on Form 10-Q for the period ended March 31, 1997. 3.2 Regulations of the Company, dated April 27, 1988, incorporated herein by reference to Exhibit 4(b) of the Registration Statement on Form S-8 (File No. 2-91401) filed with the Commission on April 29, 1988. 4.1 Indenture between the Company and Chemical Bank, as Trustee, dated as of February 1, 1996, incorporated herein by reference to Exhibit 4(a) of the Registration Statement on Form S-3 (File No. 333-01093) filed with the Commission on February 20, 1996. 4.2** Form of Subordinated Debt Securities Indenture. 4.3* Form of Senior Debt Securities. 4.4* Form of Subordinated Debt Securities. 4.5 Specimen Common Stock Certificate. 4.6 Rights Agreement, including the form of Rights Certificate, incorporated herein by reference to Exhibit 1 of the Registration Statement on Form 8-A filed with the Commission on April 24, 1997. 4.7 Form of Common Stock Warrant Agreement, including form of Warrant Certificate. 4.8 Form of Debt Securities Warrant Agreement, including form of Warrant Certificate. 5 Opinion of Louis E. Stellato regarding validity of the Securities, including consent. 12 Computation of Consolidated Ratio of Earnings to Fixed Charges. 23.1 Consent of Ernst & Young LLP, independent auditors. 23.2 Consent of Counsel, included in Exhibit 5. 24.1 Powers of Attorney. 24.2 Certified Resolution of Registrant's Board of Directors authorizing execution by Power of Attorney. 25.1 Statement of Eligibility on Form T-1 of the Chase Manhattan Bank regarding the Indenture between the Company and Chemical Bank, as Trustee, dated as of February 1, 1996, incorporated herein by reference to Exhibit 25 of the Registration Statement on From S-3 (File No. 333-01093) filed with the Commission on February 20, 1996. 25.2** Statement of Eligibility on Form T-1 regarding the form of Subordinated Debt Securities Indenture filed herewith as Exhibit 4.2. * To be filed as an Exhibit to a document to be incorporated by reference for the specific offering of Securities, if any, to which it relates. ** To be filed by amendment.
ITEM 17. UNDERTAKINGS. A. UNDERTAKING PURSUANT TO RULE 415. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; II-2 26 (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the registration statement; Provided, however, that paragraphs (i) and (ii) above do not apply if 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; and (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. B. UNDERTAKING REGARDING FILINGS INCORPORATING SUBSEQUENT EXCHANGE DOCUMENTS BY REFERENCE. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. C. UNDERTAKING IN RESPECT OF INDEMNIFICATION. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. D. UNDERTAKINGS IN RESPECT RULE 430A. The undersigned Registrant hereby undertakes that: (1) 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. II-3 27 (2) For the purposes of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-4 28 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 requirement for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Cleveland, state of Ohio, on August 18, 1998. THE SHERWIN-WILLIAMS COMPANY By: /s/ Louis E. Stellato --------------------------- Louis E. Stellato Vice President, General Counsel ` and Secretary Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE (i) Principal Executive Officers: *J.G. Breen Director, Chairman of the Board and Chief Executive Officer ------------------- (J.G. Breen) *T.A. Commes Director, President and Chief Operating Officer ------------------- (T.A. Commes) (ii) Principal Financial Officer: *L.J. Pitorak Senior Vice President-Finance, Treasurer and Chief Financial Officer ------------------- (L.J. Pitorak) (iii) Principal Accounting Officer: *J.L. Ault Vice President-Corporate Controller ------------------- J.L. Ault (iv) Directors *J.M. Biggar ------------------- (J.M. Biggar) *D.E. Collins ------------------- (D.E. Collins) *D.E. Evans ------------------- (D.E. Evans) *R.W. Mahoney ------------------- (R.W. Mahoney) *W.G. Mitchell ------------------- (W.G. Mitchell) *A.M. Mixon, III ------------------- (A.M. Mixon, III)
II-5 29 SIGNATURE *C.E. Moll ------------------- (C.E. Moll) *H.O. Petrauskas ------------------- (H.O. Petrauskas) *R.K. Smucker ------------------- (R.K. Smucker) The undersigned, by signing his name hereto, does sign and execute this Registration Statement on behalf of the designated Officers and Directors of The Sherwin-Williams Company pursuant to Powers of Attorney executed on behalf of each of such Directors and Officers which are filed as an Exhibit hereto. By: /s/ Louis E. Stellato August 18, 1998 - -------------------------------------------- Louis E. Stellato (Attorney-in-Fact) II-6 30
EXHIBIT INDEX EXHIBIT DESCRIPTION 1.1 Form of Underwriting Agreement with respect to Debt Securities. 1.2* Form of Underwriting Agreement with respect to Common Stock. 1.3* Form of Underwriting Agreement with respect to Warrants. 3.1 Amended Articles of Incorporation of the Company, as amended April 25, 1997, incorporated herein by reference to Exhibit 3(i) of the Quarterly Report on Form 10-Q for the period ended March 31, 1997. 3.2 Regulations of the Company, dated April 27, 1988, incorporated herein by reference to Exhibit 4(b) of the Registration Statement on Form S-8 (File No. 2-91401) filed with the Commission on April 29, 1988. 4.1 Indenture between the Company and Chemical Bank, as Trustee, dated as of February 1, 1996, incorporated herein by reference to Exhibit 4(a) of the Registration Statement on Form S-3 (File No. 333-01093) filed with the Commission on February 20, 1996. 4.2** Form of Subordinated Debt Securities Indenture. 4.3* Form of Senior Debt Securities. 4.4* Form of Subordinated Debt Securities. 4.5 Specimen Common Stock Certificate. 4.6 Rights Agreement, including the form of Rights Certificate, incorporated herein by reference to Exhibit 1 of the Registration Statement on Form 8-A filed with the Commission on April 24, 1997. 4.7 Form of Common Stock Warrant Agreement, including form of Warrant Certificate. 4.8 Form of Debt Securities Warrant Agreement, including form of Warrant Certificate. 5 Opinion of Louis E. Stellato regarding validity of the Securities, including consent. 12 Computation of Consolidated Ratio of Earnings to Fixed Charges. 23.1 Consent of Ernst & Young LLP, independent auditors. 23.2 Consent of Counsel, included in Exhibit 5. 24.1 Powers of Attorney. 24.2 Certified Resolution of Registrant's Board of Directors authorizing execution by Power of Attorney. 25.1 Statement of Eligibility on Form T-1 of the Chase Manhattan Bank regarding the Indenture between the Company and Chemical Bank, as Trustee, dated as of February 1, 1996, incorporated herein by reference to Exhibit 25 of the Registration Statement on From S-3 (File No. 333-01093) filed with the Commission on February 20, 1996. 25.2** Statement of Eligibility on Form T-1 regarding the form of Subordinated Debt Securities Indenture filed herewith as Exhibit 4.2. * To be filed as an Exhibit to a document to be incorporated by reference for the specific offering of Securities, if any, to which it relates. ** To be filed by amendment.
II-7 EX-1.1 2 EXHIBIT 1.1 1 Exhibit 1.1 The Sherwin-Williams Company [Form of Underwriting Agreement] New York, New York To the Representatives named in Schedule I hereto of the Underwriters named in Schedule II hereto Dear Sirs: The Sherwin-Williams Company, an Ohio corporation (the "Company"), proposes to sell to the underwriters named in Schedule II hereto (the "Underwriters"), for whom you (the "Representatives") are acting as representatives, the principal amount of its securities identified in Schedule I hereto (the "Securities"), to be issued under an [SENIOR DEBT SECURITIES -- indenture (the "Indenture") dated as of February 1, 1996, between the Company and The Chase Manhattan Bank (formerly known as Chemical Bank), as trustee (the "Trustee")] [SUBORDINATED DEBT SECURITIES - indenture (the "Indenture") dated as of __________ __, ____, between the Company and The Chase Manhattan Bank, as trustee (the "Trustee")]. If the firm or firms listed in Schedule II hereto include only the firm or firms listed in Schedule I hereto, then the terms "Underwriters" and "Representatives", as used herein, shall each be deemed to refer to such firm or firms. 1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to, and agrees with, each Underwriter as set forth below in this Section 1. Certain terms used in this Section 1 are defined in paragraph (c) hereof. (a) If the offering of the Securities is a Delayed Offering (as specified in Schedule I hereto), paragraph (i) below is applicable and, if the offering of the Securities is a Non-Delayed Offering (as so specified), paragraph (ii) below is applicable. (i) The Company meets the requirements for the use of Form S-3 under the Securities Act of 1933 (the "Act") and has filed with the Securities and Exchange Commission (the "Commission") a registration statement (the file number of which is set forth in Schedule I hereto) on such Form, including the same basic prospectus, for registration under the Act of the offering and sale of the Securities. The Company may have filed one or more amendments thereto, and may have used a Preliminary Final Prospectus, each of which has previously been furnished to you. Such Registration Statement, as so amended, has become effective. The offering of the Securities is a Delayed Offering and, although the Basic Prospectus may not include all the information with respect to the Securities and the offering thereof required by the Act 2 and the rules thereunder to be included in the Final Prospectus, the Basic Prospectus includes all such information required by the Act and the rules thereunder to be included therein as of the Effective Date. The Company will next file with the Commission pursuant to Rules 415 and 424(b)(2) or (5) a final supplement to the form of prospectus included in such Registration Statement relating to the Securities and the offering thereof. As filed, such final prospectus supplement shall include all required information with respect to the Securities and the offering thereof and, except to the extent the Representatives shall agree in writing to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the Basic Prospectus and any Preliminary Final Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made therein. If the Rule 434 Delivery Alternative is used, the Company will also file the Rule 434 Term Sheet in accordance with Rule 434. As filed, such Rule 434 Term Sheet shall contain all the information required by Rule 434, and except to the extent the Representatives shall agree in writing to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the latest Preliminary Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made therein. Upon your request, but not without your agreement, the Company will also file a Rule 462(b) Registration Statement in accordance with Rule 462(b). (ii) The Company meets the requirements for the use of Form S-3 under the Act and has filed with the Commission a registration statement (the file number of which is set forth in Schedule I hereto) on such Form, including the same basic prospectus, for registration under the Act of the offering and sale of the Securities. The Company may have filed one or more amendments thereto, including a Preliminary Final Prospectus, each of which has previously been furnished to you. Schedule I hereto will specify the registration statement under which such Securities are registered. The Company will next file with the Commission either (x) a final prospectus supplement relating to the Securities in accordance with Rules 430A and 424(b)(1) or (4), or (y) prior to the effectiveness of the Registration Statement, an amendment to the Registration Statement, including the form of final prospectus supplement. In the case of clause (x), the Company has included in such Registration Statement, as amended at the Effective Date, all information (other than Rule 430A Information) required by the Act and the rules thereunder to be included in the Final Prospectus with respect to the Securities and the offering thereof. As filed, such final prospectus supplement or such amendment and form of final prospectus supplement shall contain all Rule 430A Information, together with all other such required information, with respect to the Securities and the offering thereof and, except to the extent the Representatives shall agree in writing to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the Basic Prospectus and any Preliminary Final Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made therein. If the Rule 434 Delivery 2- 3 Alternative is used, the Company will also file the Rule 434 Term Sheet in accordance with Rule 434. As filed, such Rule 434 Term Sheet shall contain all the information required by Rule 434, and except to the extent the Representatives shall agree in writing to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the latest Preliminary Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made therein. Upon your request, but not without your agreement, the Company will also file a Rule 462(b) Registration Statement in accordance with Rule 462(b). (b) On the Effective Date, the Registration Statement referred to in paragraph (a) above did or will, and when the Final Prospectus is first filed (if required) in accordance with Rule 424(b) and on the Closing Date, the Final Prospectus (and any supplement thereto) will, comply in all material respects with the applicable requirements of the Act, the Securities Exchange Act of 1934 (the "Exchange Act") and the Trust Indenture Act of 1939 (the "Trust Indenture Act") and the rules thereunder; on the Effective Date, such Registration Statement did not or will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; on the Effective Date and on the Closing Date the Indenture did or will comply in all material respects with the requirements of the Trust Indenture Act and the rules thereunder; and, on the Effective Date, the Final Prospectus, if not filed pursuant to Rule 424(b), did not or will not, and on the date of any filing pursuant to Rule 424(b) and on the Closing Date, the Final Prospectus (together with any supplement thereto) will not, include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to (i) that part of the Registration Statement which shall constitute the Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act of the Trustee or (ii) the information contained in or omitted from the Registration Statement or the Final Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representatives specifically for inclusion in the Registration Statement or the Final Prospectus (or any supplement thereto). (c) The terms which follow, when used in this Agreement, shall have the meanings indicated. The term "the Effective Date" shall mean, with respect to the registration statement referred to in paragraph (a) above, the date that such registration statement, any post-effective amendment or amendments thereto and any Rule 462(b) Registration Statement became or become effective and each date after the date hereof on which a document incorporated by reference in the Registration Statement is filed. "Execution Time" shall mean the date and time that this Agreement is executed and delivered by the parties hereto. "Basic Prospectus" shall mean the prospectus referred to in paragraph (a) above contained in the Registration Statement at the Effective Date including, in the case of a Non-Delayed Offering, any Preliminary Final Prospectus. "Preliminary Final Prospectus" shall mean any preliminary prospectus supplement to the 3 4 Basic Prospectus which describes the Securities and the offering thereof and is used prior to filing of the Final Prospectus. "Final Prospectus" shall mean the prospectus supplement relating to the Securities that is first filed pursuant to Rule 424(b) after the Execution Time, together with the Basic Prospectus or, if, in the case of a Non-Delayed Offering, no filing pursuant to Rule 424(b) is required, shall mean the form of final prospectus relating to the Securities, including the Basic Prospectus, included in the Registration Statement at the Effective Date. If the Rule 434 Delivery Alternative is used, such term shall also include the Basic Prospectus and the Rule 434 Term Sheet, taken together. "Registration Statement" shall mean the registration statement referred to in paragraph (a) above, including incorporated documents, exhibits and financial statements, as amended at the Execution Time (or, if not effective at the Execution Time, in the form in which it shall become effective) and, in the event any post-effective amendment thereto or any Rule 462(b) Registration Statement becomes effective prior to the Closing Date (as hereinafter defined), shall also mean such Registration Statement as so amended. Such term shall include any Rule 430A Information and Rule 434 Information deemed to be included therein at the Effective Date as provided by Rule 430A and Rule 434, respectively. "Rule 415", "Rule 424", "Rule 430A", "Rule 434", "Rule 462(b)" and "Regulation S-K" refer to such rules or regulations under the Act. "Rule 430A Information" means information with respect to the Securities and the offering thereof permitted to be omitted from the Registration Statement when it becomes effective pursuant to Rule 430A. "Rule 434 Delivery Alternative" shall mean the delivery alternative permitted by Rule 434. "Rule 434 Information" shall mean any information to be included in a Rule 434 Term Sheet. "Rule 434 Term Sheet" shall mean the term sheet or abbreviated term sheet delivered by the Underwriters to investors and filed by the Company with the Commission pursuant to Rule 434. "Rule 462(b) Registration Statement" shall mean a registration statement and any amendments thereto filed pursuant to Rule 462(b) relating to the final Delayed Offering covered by the initial Registration Statement (file number 333-______). Any reference herein to the Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or before the Effective Date of the Registration Statement or the issue date of the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the case may be; and any reference herein to the terms "amend", "amendment" or "supplement" with respect to the Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the Effective Date of the Registration Statement or the issue date of the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated therein by reference. A "Non-Delayed Offering" shall mean an offering of securities which is intended to commence promptly after the effective date of a registration statement, with the result that, pursuant to Rules 415 and 430A, all information (other than Rule 430A Information) with respect to the securities so offered must be included in such registration statement at the effective date thereof. A "Delayed Offering" shall mean an offering of securities pursuant to Rule 415 which does not commence promptly after the effective date of a registration statement, with the result that only information required pursuant to Rule 415 4 5 need be included in such registration statement at the effective date thereof with respect to the securities so offered. Whether the offering of the Securities is a Non-Delayed Offering or a Delayed Offering shall be set forth in Schedule I hereto. 2. PURCHASE AND SALE. Subject to the terms and conditions, and in reliance upon the representations and warranties herein set forth herein, the Company agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company, at the purchase price set forth in Schedule I hereto the principal amount of the Securities set forth opposite such Underwriter's name in Schedule II hereto, except that, if Schedule I hereto provides for the sale of Securities pursuant to delayed delivery arrangements, the respective principal amounts of Securities to be purchased by the Underwriters shall be as set forth in Schedule II hereto less the respective amounts of Contract Securities determined as provided below. Securities to be purchased by the Underwriters are herein sometimes called the "Underwriters' Securities" and Securities to be purchased pursuant to Delayed Delivery Contracts as hereinafter provided are herein called "Contract Securities". If so provided in Schedule I hereto, the Underwriters are authorized to solicit offers to purchase Securities from the Company pursuant to delayed delivery contracts ("Delayed Delivery Contracts"), substantially in the form of Schedule III hereto but with such changes therein as the Company may authorize or approve. The Underwriters will endeavor to make such arrangements and, as compensation therefor, the Company will pay to the Representatives, for the account of the Underwriters, on the Closing Date, the percentage set forth in Schedule I hereto of the principal amount of the Securities for which Delayed Delivery Contracts are made. Delayed Delivery Contracts are to be with institutional investors, including commercial and savings banks, insurance companies, pension funds, investment companies and educational and charitable institutions. The Company will enter into Delayed Delivery Contracts in all cases where sales of Contract Securities arranged by the Underwriters have been approved by the Company but, except as the Company may otherwise agree, each such Delayed Delivery Contract must be for not less than the minimum principal amount set forth in Schedule I hereto and the aggregate principal amount of Contract Securities may not exceed the maximum aggregate principal amount set forth in Schedule I hereto. The Underwriters will not have any responsibility in respect of the validity or performance of Delayed Delivery Contracts. The principal amount of Securities to be purchased by each Underwriter as set forth in Schedule II hereto shall be reduced by an amount which shall bear the same proportion to the total principal amount of Contract Securities as the principal amount of Securities set forth opposite the name of such Underwriter bears to the aggregate principal amount set forth in Schedule II hereto, except to the extent that you determine that such reduction shall be otherwise than in such proportion and so advise the Company in writing; provided, however, that the total principal amount of Securities to be purchased by all Underwriters shall be the aggregate principal amount set forth in Schedule II hereto less the aggregate principal amount of Contract Securities. 3. DELIVERY AND PAYMENT. Delivery of and payment for the Underwriters' Securities shall be made on the date and at the time specified in Schedule I hereto (or such later date not later than five business days after such specified date as the 5 6 Representatives shall designate), which date and time may be postponed by agreement between the Representatives and the Company or as provided in Section 8 hereof (such date and time of delivery and payment for the Underwriters' Securities being herein called the "Closing Date"). Delivery of the Underwriters' Securities shall be made to the Representatives for the respective accounts of the several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer of immediately available funds. Delivery of the Underwriters' Securities shall be made at such location as the Representatives shall reasonably designate at least one business day in advance of the Closing Date. Certificates for the Underwriters' Securities shall be registered in such names and in such denominations as the Representatives may request not less than two full business days in advance of the Closing Date. The Company agrees to have the Underwriters' Securities available for inspection, checking and packaging by the Representatives in New York, New York, not later than 1:00 p.m. on the business day prior to the Closing Date. 4. AGREEMENTS. The Company agrees with the several Underwriters that: (a) The Company will use its best efforts to cause the Registration Statement, if not effective at the Execution Time, and any amendment thereto, to become effective. Prior to the termination of the offering of the Securities, the Company will not file any amendment of the Registration Statement or supplement (including the Final Prospectus or any Preliminary Final Prospectus) to the Basic Prospectus or any Rule 462(b) Registration Statement unless the Company has furnished you a copy for your review prior to filing and will not file any such proposed amendment or supplement or Rule 462(b) Registration Statement to which you reasonably object. Subject to the foregoing sentence, the Company will cause the Final Prospectus, properly completed, and any supplement thereto to be filed with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will provide evidence satisfactory to the Representatives of such timely filing. If the Rule 434 Delivery Alternative is used, the Company will also cause the Rule 434 Term Sheet, properly completed, to be filed with the Commission pursuant to Rule 434 within the time period prescribed and will provide evidence satisfactory to the Representatives of each timely filing. Upon your request, the Company will cause the Rule 462(b) Registration Statement, properly completed, to be filed with the Commission pursuant to Rule 462(b) and will provide evidence satisfactory to the Representatives of such filing. The Company will promptly advise the Representatives (i) when the Registration Statement, if not effective at the Execution Time, and any amendment thereto, shall have become effective, (ii) when the Final Prospectus, any supplement thereto, any Rule 434 Term Sheet or any Rule 462(b) Registration Statement shall have been filed with the Commission pursuant to Rule 424(b), (iii) when, prior to termination of the offering of the Securities, any amendment to the Registration Statement shall have been filed or become effective, (iv) of any request by the Commission for any amendment of the Registration Statement or supplement to the Final Prospectus or for any additional information, (v) of the issuance by the Commission of any stop order suspending the 6 7 effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose and (vi) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. The Company will use its best efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof. (b) If, at any time when a prospectus relating to the Securities is required to be delivered under the Act, any event occurs as a result of which the Final Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or if it shall be necessary to amend the Registration Statement or supplement the Final Prospectus to comply with the Act or the Exchange Act or the respective rules thereunder, the Company promptly will (i) prepare and file with the Commission, subject to the second sentence of paragraph (a) of this Section 4, an amendment or supplement which will correct such statement or omission or effect such compliance and (ii) supply any supplemented Prospectus to you in such quantities as you may reasonably request. (c) As soon as practicable, the Company will make generally available to its security holders and to the Representatives an earnings statement or statements of the Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act. (d) The Company will furnish to the Representatives and counsel for the Underwriters, without charge, copies of the Registration Statement (including exhibits thereto) and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the Act, as many copies of any Preliminary Final Prospectus and the Final Prospectus and any supplement thereto as the Representatives may reasonably request. (e) The Company will use its best efforts to arrange for the qualification of the Securities for sale under the laws of such jurisdictions as the Representatives may designate and to maintain such qualifications in effect so long as required for the distribution of the Securities and, if requested by the Representatives, will arrange for the determination of the legality of the Securities for purchase by institutional investors. (f) Until the business day following the Closing Date, the Company will not, without the consent of the Representatives, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce the offering of, any debt securities issued or guaranteed by the Company (other than (i) the Securities, (ii) commercial paper with a maturity which does not exceed 270 days, (iii) debt securities issued by foreign wholly owned subsidiaries of the Company, (iv) borrowings under the Company's five-year and 364 day revolving credit agreements, and (iv) any debt securities registered with the Commission on Form S-3 (File No 333-41659) filed on December 8, 1997.) 7 8 (g) The Company confirms as of the date hereof that it is in compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-198, AN ACT RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA, and the Company further agrees that if it commences engaging in business with the government of Cuba or with any person or affiliate located in Cuba after the date the Registration Statement becomes or has become effective with the Commission or with the Florida Department of Banking and Finance (the "Department"), whichever date is later, or if the information reported in the Prospectus, if any, concerning the Company's business with Cuba or with any person or affiliate located in Cuba changes in any material way, the Company will provide the Department notice of such business or change, as appropriate, in a form acceptable to that Department. 5. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of the Underwriters to purchase the Underwriters' Securities shall be subject to the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution Time and the Closing Date, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions: (a) If the Registration Statement has not become effective prior to the Execution Time, unless the Representatives agree in writing to a later time, the Registration Statement will become effective not later than (i) 6:00 p.m. New York City time, on the date of determination of the public offering price, if such determination occurred at or prior to 3:00 p.m. New York City time on such date or (ii) 12:00 Noon on the business day following the day on which the public offering price was determined, if such determination occurred after 3:00 p.m. New York City time on such date; if filing of the Final Prospectus, or any supplement thereto, is required pursuant to Rule 424(b), the Final Prospectus, and any such supplement, shall have been filed in the manner and within the time period required by Rule 424(b), or if the filing of the Rule 434 Term Sheet is required pursuant to Rule 434, the Rule 434 Term Sheet will be filed in the manner and within the time period required by Rule 434; and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or threatened. (b) (i) The Company shall have furnished to the Representatives the opinion of the Vice President, General Counsel and Secretary of the Company, dated the Closing Date, to the effect that: (1) the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Ohio, with full corporate power to own its properties and conduct its business as described in the Final Prospectus and is qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction which requires such qualification wherein it owns or leases material properties or conducts material business except where the failure to so qualify would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company's significant subsidiaries (as defined in 8 9 Rule 405 under the Securities Act) (the "Subsidiaries") are duly incorporated and validly existing as corporations in good standing under the laws of the jurisdiction in which it is organized, each with full corporate power and authority to own properties and conduct business as described in the Final Prospectus, and are duly qualified to do business as foreign corporations and are in good standing under the laws of each jurisdiction which requires such qualification wherein each such Subsidiary owns or leases material properties or conducts material business except where the failure to so qualify would not have a material adverse effect on the operations of the Company and its Subsidiaries taken as a whole; (2) all the outstanding shares of capital stock of each Subsidiary have been duly and validly authorized and issued and are fully paid and nonassessable, and, except as otherwise set forth in the Final Prospectus, all outstanding shares of capital stock of the Subsidiaries are owned by the Company either directly or through wholly owned subsidiaries free and clear of any perfected security interest and, to the knowledge of such counsel, after due inquiry, any other security interests, claims, liens or encumbrances; (3) the Company's authorized equity capitalization is as set forth in the Final Prospectus; (4) the Indenture has been duly authorized, executed and delivered, and constitutes a legal, valid and binding instrument enforceable against the Company in accordance with its terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors' rights generally from time to time in effect); and the Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters pursuant to this Agreement, in the case of the Underwriters' Securities, or by the purchasers thereof pursuant to Delayed Delivery Contracts, in the case of any Contract Securities, will constitute legal, valid and binding obligations of the Company entitled to the benefits of the Indenture; (5) to the knowledge of such counsel, after due inquiry, there is no pending or threatened action, suit or proceeding before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries, of a character required to be disclosed in the Registration Statement which is not adequately disclosed in the Final Prospectus, and there is no franchise, contract or other document of a character required to be described in the Registration Statement or Final Prospectus, or to be filed as an exhibit, which is not described or filed as required; and the statements included or incorporated in the Final Prospectus describing any legal proceedings or material contracts or agreements relating to the Company fairly summarize such matters; (6) the Registration Statement and the Final Prospectus (including, for the avoidance of doubt, the documents incorporated by reference therein as of such date, other than the financial statements and other financial and statistical information contained therein as to which such counsel need express no opinion) comply 9 10 as to form in all material respects with the applicable requirements of the Act and the Exchange Act and the respective rules thereunder; (7) this Agreement and any Delayed Delivery Contracts have been duly authorized, executed and delivered by the Company; (8) no consent, approval, authorization or order of any court or governmental agency or body is required for the consummation of the transactions contemplated herein or in any Delayed Delivery Contracts, except such as have been obtained under the Act and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters and such other approvals (specified in such opinion) as have been obtained; (9) neither the execution and delivery of this Agreement or the Indenture, the issue and sale of the Securities, nor the consummation of any other of the transactions herein contemplated nor the fulfillment of the terms hereof or of any Delayed Delivery Contracts will conflict with, result in a breach or violation of, or constitute a default under the Amended Articles of Incorporation or the Code of Regulations, as amended, of the Company or the terms of any indenture or other material agreement or instrument known to such counsel and to which the Company or any of its subsidiaries is a party or bound or any judgment, order or decree known to such counsel to be applicable to the Company or any of its subsidiaries of any court, regulatory body, or administrative agency, governmental body or arbitrator having jurisdiction over the Company or any of its subsidiaries; and (10) no holders of securities of the Company have rights to the registration of such securities under the Registration Statement. Such counsel shall also state that nothing has caused him to believe that at the Effective Date the Registration Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading or that the Final Prospectus includes any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (including in each such case, for the avoidance of doubt, the documents incorporated by reference therein as of such date, but other than the financial statements and other financial and statistical information contained therein as to which such counsel need not express an opinion). In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the State of Ohio or the United States, to the extent deemed proper and specified in such opinion, upon the opinion of other counsel of good standing believed to be reliable and who are satisfactory to counsel for the Underwriters and (B) as to matters of fact, to the extent deemed proper, on certificates of responsible officers of the Company and public officials. References to the Final Prospectus in this paragraph (b) (i) include any supplements thereto at the Closing Date. 10 11 (ii) The Company shall have furnished to the Representatives the opinion of Arnold & Porter, outside counsel for the Company, dated the Closing Date, to the effect that: (1) the Securities conform to the description thereof contained in the Final Prospectus; (2) the Indenture has been duly qualified under the Trust Indenture Act; and (3) the Registration Statement has become effective under the Act; any required filing of the Basic Prospectus, any Preliminary Final Prospectus and the Final Prospectus, and any supplements thereto, pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b), or if the Rule 434 Delivery Alternative was used, the required filing of the Rule 434 Term Sheet has been made in the manner and time period required by Rule 434; to the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued, no proceedings for that purpose have been instituted or threatened, and the Registration Statement and the Final Prospectus (other than the financial statements and other financial and statistical information contained therein as to which such counsel need express no opinion) comply as to form in all material respects with the applicable requirements of the Act and the Trust Indenture Act and the respective rules thereunder. Such counsel shall also state that nothing has caused them to believe that at the Effective Date the Registration Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading or that the Final Prospectus includes any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (in each case except for the documents incorporated by reference in the Registration Statement and the Final Prospectus and the financial statements and other financial and statistical information contained therein, as to which such counsel need not express any opinion). In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of the State of Ohio, to the extent deemed proper and specified in such opinion, upon the opinion of the Vice President, General Counsel and Secretary of the Company and (B) as to matters of fact, to the extent deemed proper, on certificates of responsible officers of the Company and public officials. References to the Final Prospectus in this paragraph (b)(ii) include any supplements therto at the Closing Date. (c) The Representatives shall have received from ______________, counsel for the Underwriters, such opinion or opinions, dated the Closing Date, with respect to the issuance and sale of the Securities, the Indenture, any Delayed Delivery Contracts, the Registration Statement, the Final Prospectus (together with any supplement 11 12 thereto) and other related matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (d) The Company shall have furnished to the Representatives a certificate of the Company, signed by the Senior Vice President-Finance, Treasurer and Chief Financial Officer and Vice President and Assistant Treasurer of the Company, dated the Closing Date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Final Prospectus, any supplement to the Final Prospectus and this Agreement and that: (i) the representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date; (ii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or, to the Company's knowledge, threatened; and (iii) since the date of the most recent financial statements included in the Final Prospectus (exclusive of any supplement thereto), there has been no material adverse change in the condition (financial or other), earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Final Prospectus (exclusive of any supplement thereto). (e) At the Execution Time and at the Closing Date, Ernst & Young LLP shall have furnished to the Representatives a letter or letters (which may refer to letters previously delivered to the Representatives), dated respectively as of the Execution Time and as of the Closing Date, substantially in the forms attached hereto as Exhibit A and Exhibit B. (f) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof) and the Final Prospectus (exclusive of any supplement thereto), there shall not have been (i) any change or decrease specified in the letter or letters referred to in paragraph (e) of this Section 5 or (ii) any change, or any development involving a prospective change, in or affecting the business or properties of the Company and its subsidiaries the effect of which, in any case referred to in clause (i) or (ii) above, is, in the judgment of the Representatives, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Registration Statement (exclusive of any amendment thereof) and the Final Prospectus (exclusive of any supplement thereto). 12 13 (g) Subsequent to the Executive Time, there shall not have been any decrease in the rating of any of the Company's debt securities by Moody's Investors Service Inc. ("Moody's"), Standard & Poor's Corporation ("S&P"), Duff & Phelps Inc. ("Duff & Phelps") or any successor to such rating organizations or any other nationally recognized statistical rating organization which is comparable to Moody's, S&P or Duff & Phelps, or any notice given of any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change. (h) Prior to the Closing Date, the Company shall have furnished to the Representatives such further information, certificates and documents as the Representatives may reasonably request, including any further items specified in Schedule I. (i) The Company shall have accepted Delayed Delivery Contracts in any case where sales of Contract Securities arranged by the Underwriters have been approved by the Company. If any of the conditions specified in this Section 5 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Representatives and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given to the Company in writing or by telephone or telecopy confirmed in writing. The documents required to be delivered by this Section 5 shall be delivered at the offices of ____________________, counsel for the Underwriters, at ____________________________, on the Closing Date. 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. The Company will pay all costs, expenses, fees, disbursements and taxes incident to (i) the preparation by the Company, printing, filing and distribution under the Act of the Registration Statement (including financial statements and exhibits), the Final Prospectus, each Preliminary Final Prospectus and all amendments and supplements to any of them prior to or during the period specified in Section 4(b), (ii) the printing (including duplication costs) and delivery of this Agreement, preliminary and supplemental blue sky memoranda and all other agreements, memoranda, correspondence and other documents printed and delivered in connection with the offering of the Securities, (iii) the registration with the Commission and the offer and sale of the Securities, (iv) the registration or qualification of the Securities for offer and sale under the securities or blue sky laws of the several states (including the reasonable fees and disbursements of your counsel relating to such registration or qualification), (v) filings and clearance with the National Association of Securities Dealers, Inc., in connection with the offering, and (vi) the performance by the Company of its other obligations under this Agreement. 13 14 In addition, if the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 5 hereof is not satisfied, because of any termination pursuant to Section 9 hereof or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or comply with any provision hereof other than by reason of a default by any of the Underwriters, the Company will reimburse the Underwriters severally upon demand for all reasonable out-of-pocket expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities. 7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to indemnify and hold harmless each Underwriter, the directors, officers, employees and agents of each Underwriter and each person who controls any Underwriter within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Securities as originally filed or in any amendment thereof, or in the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that (i) the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Representatives specifically for inclusion therein and (ii) such indemnity with respect to the Basic Prospectus or any Preliminary Final Prospectus shall not inure to the benefit of any Underwriter (or any person controlling such Underwriter) from whom the person asserting any such loss, claim, damage or liability purchased the Securities which are the subject thereof if such person did not receive a copy of the Final Prospectus (or the Final Prospectus as supplemented) excluding documents incorporated therein by reference at or prior to the confirmation of the sale of such Securities to such person in any case where such delivery is required by the Act and the untrue statement or omission of a material fact contained in the Basic Prospectus or any Preliminary Final Prospectus was corrected in the Final Prospectus (or the Final Prospectus as supplemented). This indemnity agreement will be in addition to any liability which the Company may otherwise have. (b) Each Underwriter severally agrees to indemnify and hold harmless the Company, each of its directors, each of its officers and employees who sign the Registration Statement, and each person who controls the Company within the meaning of either the Act or the Exchange Act, against any and all losses, claims, damages or 14 15 liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact in written information relating to such Underwriter furnished to the Company by or on behalf of such Underwriter through the Representatives specifically for inclusion in the Registration Statement for the registration of the Securities as originally filed or in any amendment thereof, or in the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state in such written information a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending such loss, claim, damage, liability or action. This indemnity agreement will be in addition to any liability which any Underwriter may otherwise have. The Company acknowledges that the statements set forth in the last paragraph of the cover page, under the heading "Underwriting" or "Plan of Distribution" and, if Schedule I hereto provides for sales of Securities pursuant to delayed delivery arrangements, in the last sentence under the heading "Delayed Delivery Arrangements" in any Preliminary Final Prospectus or the Final Prospectus constitute the only information furnished in writing by or on behalf of the several Underwriters for inclusion in the documents referred to above, and you, as the Representatives, confirm that such statements are correct. (c) Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party in writing of the commencement thereof; but the failure to so notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party's choice at the indemnifying party's expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying party's election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the 15 16 indemnifying party and the indemnified party shall have reasonably concluded after consultation with legal counsel of its choosing that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the indemnified party in writing to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. Any indemnifying party shall not be liable for any settlement, compromise or consent of any proceeding effected by the indemnified party without the written consent of the indemnifying party (which consent shall not be unreasonably withheld), unless the indemnifying party has waived its right to appoint counsel to represent the indemnified party in such proceeding in which case the indemnified party may effect such a settlement, compromise or consent without the consent of the indemnifying party. (d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 7 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and the Underwriters agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively "Losses") to which the Company and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company and by the Underwriters from the offering of the Securities; provided, however, that in no case shall any Underwriter (except as may be provided in any agreement among underwriters relating to the offering of the Securities) be responsible for any amount in excess of the underwriting discount or commission applicable to the Securities purchased by such Underwriter hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Underwriters shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and of the Underwriters in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses), and benefits received by the Underwriters shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the cover page of the Final Prospectus. Relative fault shall be determined by reference to whether any alleged untrue statement or omission relates to information provided by the Company or the Underwriters. The Company and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent 16 17 misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person who controls an Underwriter within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls the Company within the meaning of either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d). 8. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions which the amount of Securities set forth opposite their names in Schedule II hereto bears to the aggregate amount of Securities set forth opposite the names of all the remaining Underwriters) the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase; provided, however, that in the event that the aggregate amount of Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate amount of Securities set forth in Schedule II hereto, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting Underwriters do not purchase all the Securities, this Agreement will terminate without liability to any nondefaulting Underwriter or the Company. In the event of a default by any Underwriter as set forth in this Section 8, the Closing Date shall be postponed for such period, not exceeding seven days, as the Representatives shall determine in order that the required changes in the Registration Statement and the Final Prospectus or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Company and any nondefaulting Underwriter for damages occasioned by its default hereunder. 9. TERMINATION. This Agreement shall be subject to termination in the absolute discretion of the Representatives, by notice given to the Company prior to delivery of and payment for the Securities, if prior to such time (i) trading in the Company's Common Stock shall have been suspended by the Commission or the New York Stock Exchange or trading in securities generally on the New York Stock Exchange shall have been suspended or limited or minimum prices shall have been established on such Exchange, (ii) a banking moratorium shall have been declared either by Federal or New York State authorities or (iii) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war or other calamity or crisis the effect of which on financial markets is such as to make it, in the judgment of the Representatives, impracticable or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Final Prospectus (exclusive of any supplement thereto). 17 18 10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or any of the officers, directors or controlling persons referred to in Section 7 hereof, and will survive delivery of and payment for the Securities. The provisions of Section 6 and 7 hereof shall survive the termination or cancellation of this Agreement. 11. NOTICES. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Representatives, will be mailed, delivered or telegraphed and confirmed to them, at the address specified in Schedule I hereto; or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at 101 Prospect Avenue, N.W., Cleveland, Ohio 44115-1075, attention: Louis E. Stellato, Esq., Vice President, General Counsel and Secretary. 12. SUCCESSORS. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 7 hereof, and no other person will have any right or obligation hereunder. 13. APPLICABLE LAW. This Agreement will be governed by and construed in accordance with the laws of the State of New York. [SIGNATURES APPEAR ON THE FOLLOWING PAGE] 18 19 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the several Underwriters. Very truly yours, THE SHERWIN-WILLIAMS COMPANY By ------------------------------ Name: Title: The foregoing Agreement is hereby confirmed and accepted as of the date specified in Schedule I hereto. [REPRESENTATIVE(S)] By: ----------------------------- Name: Title: For themselves and the other several Underwriters, if any, named in Schedule II to the foregoing Agreement. 19 20 SCHEDULE I Underwriting Agreement dated Representatives: [REPRESENTATIVE] [ADDRESS] [REPRESENTATIVE] [ADDRESS] Title, Purchase Price and Description of Securities: Title: Principal amount: Purchase price: (include accrued interest or amortization, if any) Sinking fund provisions: Redemption provisions: Other provisions: Registration Statements: $ of such Securities are registered under Registration Statement No. 333-__________ Closing Date, Time and Location: Type of Offering: [Delayed Offering or Non-Delayed Offering] Delayed Delivery Arrangements: Fee: Minimum Principal Amount of all Contracts: $__________ 21 Maximum Principal Amount of all Contracts: $__________ Modification of items to be covered by the letter from Ernst & Young LLP delivered pursuant to Section 5(e) at the Execution Time. 22 SCHEDULE II PRINCIPAL AMOUNT OF SECURITIES UNDERWRITERS TO BE PURCHASED ------------ --------------- Total.......................................... --------------------- $==================== 23 SCHEDULE III Delayed Delivery Contract [REPRESENTATIVE] [ADDRESS] [REPRESENTATIVE] [ADDRESS] Dear Sirs: The undersigned hereby agrees to purchase from The Sherwin-Williams Company (the "Company"), and the Company agrees to sell to the undersigned, on __________, ____, (the "Delivery Date"), $__________ principal amount of the Company's _______________ (the "Securities") offered by the Company's Prospectus dated __________, ____, and related Prospectus Supplement dated __________, ____, receipt of a copy of which is hereby acknowledged, at a purchase price of ___% of the principal amount thereof, plus [accrued interest] [amortization of original issue discount], if any, thereon from __________, ____, to the date of payment and delivery, and on the further terms and conditions set forth in this contract. Payment for the Securities to be purchased by the undersigned shall be made on or before 11:00 a.m., New York City time, on the Delivery Date to or upon the order of the Company in New York Clearing House (next day) funds, at your office or at such other place as shall be agreed between the Company and the undersigned, upon delivery to the undersigned of the Securities in definitive fully registered form and in such authorized denominations and registered in such names as the undersigned may request by written or telecopy communication addressed to the Company not less than five full business days prior to the Delivery Date. If no request is received, the Securities will be registered in the name of the undersigned and issued in a denomination equal to the aggregate principal amount of Securities to be purchased by the undersigned on the Delivery Date. The obligation of the undersigned to take delivery of and make payment for Securities on the Delivery Date, and the obligation of the Company to sell and deliver Securities on the Delivery Date, shall be subject to the conditions (and neither party shall incur any liability by reason of the failure thereof) that (1) the purchase of Securities to be made by the undersigned, which purchase the undersigned represents is not prohibited on the date hereof, shall not on the Delivery Date be prohibited under the laws of the jurisdiction to which the undersigned is subject, and (2) the Company, on or before the Delivery Date, shall have sold to certain underwriters (the "Underwriters") such principal amount of the Securities as is to be sold to them pursuant to the Underwriting Agreement referred to in the Prospectus and Prospectus Supplement mentioned above. Promptly 24 after completion of such sale to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by a copy of the opinion of counsel for the Company delivered to the Underwriters in connection therewith. The obligation of the undersigned to take delivery of and make payment for the Securities, and the obligation of the Company to cause the Securities to be sold and delivered, shall not be affected by the failure of any purchaser to take delivery of and make payment for the Securities pursuant to other contracts similar to this contract. This contract will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other. It is understood that acceptance of this contract and other similar contracts is in the Company's sole discretion and, without limiting the foregoing, need not be on a first come, first served basis. If this contract is acceptable to the Company, it is required that the Company sign the form of acceptance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This will become a binding contract between the Company and the undersigned, as of the date first above written, when such counterpart is so mailed or delivered. This agreement shall be governed by and construed in accordance with the laws of the State of New York. Very truly yours, --------------------------------------- (Name of Purchaser) By: ----------------------------------- (Signature and Title of Officers) --------------------------------------- --------------------------------------- (Address) Accepted: The Sherwin-Williams Company By: ---------------------------------- (Authorized Signature) EX-4.5 3 EXHIBIT 4.5 1 Exhibit 4.5 NUMBER SW COMMON STOCK COMMON STOCK INCORPORATED UNDER THE LAWS OF SHARES [LOGO - COVER THE EARTH] THE STATE OF OHIO. SEE REVERSE FOR CERTAIN DEFINITIONS THE SHERWIN-WILLIAMS COMPANY This is to certify that CUSIP 824348 10 6 is the owner of FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, PAR VALUE $1.00 EACH, OF THE SHERWIN-WILLIAMS COMPANY, transferable on the books of the Company in person or by duly authorized attorney upon surrender of this certificate properly endorsed. This certificate and the shares represented hereby are issued and shall be held subject to all the provisions of the Articles of Incorporation of the Company as amended, filed in the office of the Secretary of State of Ohio to all of which the holder by acceptance hereof assents. This certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar. Witness the seal of the Company and the signatures of its duly authorized officers. Dated /s/ John G. Breen COUNTERSIGNED AND REGISTERED: ------------------------------------ THE BANK OF NEW YORK CHAIRMAN AND CHIEF EXECUTIVE OFFICER /s/ Louis E. Stellato BY SECRETARY TRANSFER AGENT AND REGISTRAR [SHERWIN WILLIAMS LOGO] AUTHORIZED SIGNATURE 2 THE SHERWIN-WILLIAMS COMPANY THE SHERWIN-WILLIAMS COMPANY WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS, WITHIN FIVE DAYS AFTER RECEIPT OF SUCH REQUEST, A STATEMENT OF THE EXPRESS TERMS OF EACH CLASS OF SHARES WHICH THE SHERWIN-WILLIAMS COMPANY IS AUTHORIZED TO ISSUE. ANY SUCH REQUEST IS TO BE IN WRITING AND ADDRESSED TO THE SECRETARY OF THE SHERWIN-WILLIAMS COMPANY, 101 PROSPECT AVENUE, N.W., CLEVELAND, OHIO 44115 OR TO A TRANSFER AGENT NAMED ON THE FACE OF THIS CERTIFICATE. This Certificate also evidences and entitles the holder hereof to certain rights as set forth in a Rights Agreement between The Sherwin-Williams Company and The Bank of New York (as successor Rights Agent to KeyBank National Association), dated as of April 23, 1997, as the same may be amended from time to time in accordance with its terms (the "Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of The Sherwin-Williams Company. The Rights are not exercisable prior to the occurrence of certain events specified in the Rights Agreement. Under certain circumstances, as set forth in the Rights Agreement, such Rights may be redeemed, may be exchanged, may expire, may be amended, or may be evidenced by separate certificates. The Sherwin-Williams Company will mail to the holder of this Certificate a copy of the Rights Agreement, as in effect on the date of mailing, without charge, promptly after receipt of a written request therefor. Under certain circumstances, as set forth in the Rights Agreement, Rights (that may become, are or were beneficially owned by an Acquiring Person, or any Affiliate or Associate of such Person, (as such terms are defined in the Rights Agreement) may become null and void and nontransferable. For Value Received _______________ hereby sell, assign and transfer unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - ---------------------------------------- - ----------------------------------------- - ------------------------------------------------------------------------------- (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------- Shares of the capital stock represented by the within certificate and do hereby irrevocably constitute and appoint - ------------------------------------------------------------------------------- to transfer the said stock on the books of the within-named Company, and full power of substitution in the premises. Dated____________________________ -------------------------------------------- NOTICE: The signature to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever. EX-4.7 4 EXHIBIT 4.7 1 EXHIBIT 4.7 FORM OF COMMON STOCK WARRANT AGREEMENT THE SHERWIN-WILLIAMS COMPANY AND ------------------------------ AS WARRANT AGENT WARRANT AGREEMENT DATED AS OF ------------------ 2
TABLE OF CONTENTS* PAGE ---- Parties .............................................................................. 1 Recitals .............................................................................. 1 ARTICLE I ISSUANCE, EXECUTION AND AUTHENTICATION OF WARRANT CERTIFICATES Section 1.1 Issuance of Warrant Certificates............................................... 1 Section 1.2 Form of Warrant Certificate.................................................... 1 Section 1.3 Execution and Authentication of Warrant Certificates........................... 1 Section 1.4 Temporary Warrant Certificates................................................. 2 Section 1.5 Payment of Taxes .............................................................. 2 Section 1.6 Definition of Holder........................................................... 2 ARTICLE II WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS Section 2.1 Warrant Price ................................................................. 3 Section 2.2 Duration of Warrants .......................................................... 3 Section 2.3 Exercise of Warrants .......................................................... 3 Section 2.4 Reservation of Shares ......................................................... 4 ARTICLE III OTHER TERMS OF WARRANTS Section 3.1 Adjustment of Exercise Price and Number of Shares Purchasable or Number of Warrants..................................... 4 ARTICLE IV [REGISTRATION,] EXCHANGE, TRANSFER AND SUBSTITUTION OF WARRANT CERTIFICATES Section 4.1 Registration, Exchange and Transfer Warrant Certificates ...................... 6 Section 4.2 Mutilated, Destroyed, Lost or Stolen Warrant Certificates ..................... 7 Section 4.3 Persons Deemed Owners ......................................................... 7 Section 4.4 Cancellation of Warrant Certificates .......................................... 7 ARTICLE V OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES Section 5.1 No Rights as Stockholders Conferred by Warrants or Warrant Certificates ....... 7 Section 5.2 Holder of Warrant Certificate May Enforce Rights............................... 8 ARTICLE VI CONCERNING THE WARRANT AGENT Section 6.1 Warrant Agent ................................................................. 8 Section 6.2 Conditions of Warrant Agent's Obligations...................................... 8 Section 6.3 Resignation, Removal and Assignment of Successor............................... 9 ARTICLE VII MISCELLANEOUS Section 7.1 Consolidations and Mergers of the Company and Sales, Leases and Conveyances Permitted Subject Certain Conditions............. 10 Section 7.2 Rights and Duties of Successor Corporation..................................... 10
_________________ * The Table of Contents is not part of the Warrant Agreement. i 3 Section 7.3 Amendment..................................................................... 10 Section 7.4 Notices and Demands to the Company and Warrant Agent ......................... 11 Section 7.5 Notices to Warrantholders..................................................... 11 Section 7.6 Addresses .................................................................... 11 Section 7.7 Governing Law................................................................. 11 Section 7.8 Delivery of Prospectus ....................................................... 12 Section 7.9 Obtaining of Government Approvals ............................................ 12 Section 7.10 Persons Having Rights Under Warrant Agreement................................. 12 Section 7.11 Headings ..................................................................... 12 Section 7.12 Counterparts.................................................................. 12 Section 7.13 Inspection of Agreement ...................................................... 12 Testimonium .............................................................................. 13 Signatures .............................................................................. 13 Exhibit A Form of Warrant Certificate................................................... A-1
ii 4 THIS WARRANT AGREEMENT, dated as of _______________, is between The Sherwin-Williams Company, a corporation duly organized and existing under the laws of the State of Ohio (the "Company") and ____________, a [corporation] [national banking association] organized and existing under the laws of _____________, as Warrant Agent (herein called the "Warrant Agent"). WHEREAS, the Company proposes to sell [IF OFFERED SECURITIES AND WARRANTS - [title of Offered Securities being offered] (the "Offered Securities") with] warrant certificates (such warrant certificates and other warrant certificates issued pursuant to this Agreement herein called the "Warrant Certificates") evidencing one or more warrants (the "Warrants" or, individually, a "Warrant") representing the right to purchase shares of common stock, par value $1.00 per share (the "Common Stock"), of the Company; and WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, exchange, exercise and replacement of the Warrant Certificates, and in this Agreement wishes to set forth, among other things, the form and provisions of the Warrant Certificates and the terms and conditions on which they may be issued, exchanged, exercised and replaced; NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the parties hereto agree as follows: ARTICLE I ISSUANCE, EXECUTION AND AUTHENTICATION OF WARRANT CERTIFICATES Section 1.1 ISSUANCE OF WARRANT CERTIFICATES. [IF WARRANTS ALONE -- Upon issuance, each Warrant Certificate shall evidence one or more Warrants.] [IF OFFERED SECURITIES AND WARRANTS -- Warrant Certificates shall be [initially] issued in units with the Offered Securities and shall [not] be separately transferable [before __________, ____ (the "Detachable Date")]. Each such unit shall consist of a Warrant Certificate or Certificates evidencing an aggregate of __________ Warrants.] Each Warrant evidenced thereby shall represent the right, subject to the provisions contained herein and therein, to purchase one share of Common Stock. Section 1.2 FORM OF WARRANT CERTIFICATE. The Warrant Certificates (including the Form(s) of Exercise [and Assignment] to be set forth on the reverse thereof) shall be in substantially the form set forth in Exhibit A hereto, shall be printed, lithographed or engraved on steel engraved borders (or in any other manner determined by the officers executing such Warrant Certificates, with the execution thereof by such officers conclusively evidencing such determination) and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange on which the Warrant Certificates may be listed or as may, consistently herewith, be determined by the officers executing such Warrant Certificates, with the execution thereof by such officers conclusively evidencing such determination. Section 1.3 EXECUTION AND AUTHENTICATION OF WARRANT CERTIFICATES. The Warrant Certificates shall be executed on behalf of the Company by its Chairman, its Chief Executive Officer, its President or one of its Vice Presidents (any reference to a Vice President of the Company herein shall be deemed to include any Vice President of the Company whether or not designated by a number or a word or words added before or after the title "Vice President"), under its corporate seal reproduced thereon attested to by its Treasurer or Secretary or one of its Assistant Treasurers or Assistant Secretaries. The signature of any of these officers on the Warrant Certificates may be manual or facsimile. The seal of the Company may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced on the Warrant Certificates. Warrant Certificates evidencing the right to purchase a number of shares of Common Stock having an 1 5 aggregate value (based on the then current market price per share of Common Stock determined as set forth in Section 3.1(e) hereof), not exceeding $_________ (except as provided in Sections 1.4, 2.3(c), 4.1 and 4.2) may be executed by the Company and delivered to the Warrant Agent upon the execution of this Warrant Agreement or from time to time thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates duly executed on behalf of the Company, authenticate Warrant Certificates evidencing Warrants representing the right to purchase a number of shares of Common Stock having an aggregate liquidation value not exceeding $ _________ and shall deliver such Warrant Certificates to or upon the order of the Company. Subsequent to such original issuance of the Warrant Certificates, the Warrant Agent shall authenticate a Warrant Certificate only if the Warrant Certificate is issued in exchange or in substitution for one or more previously authenticated Warrant Certificates or in connection with their transfer, as hereinafter provided. Each Warrant Certificate shall be dated the date of its authentication by the Warrant Agent. No Warrant Certificate shall be entitled to any benefit under this Agreement or be valid or obligatory for any purpose, and no Warrant evidenced thereby shall be exercisable, until such Warrant Certificate has been authenticated by the manual signature of the Warrant Agent. Such signature by the Warrant Agent upon any Warrant Certificate executed by the Company shall be conclusive evidence, and the only evidence, that the Warrant Certificate so authenticated has been duly issued hereunder. Warrant Certificates bearing the manual or facsimile signatures of individuals who were at the time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Warrant Certificates or did not hold such offices at the date of such Warrant Certificates. Section 1.4 TEMPORARY WARRANT CERTIFICATES. Pending the preparation of definitive Warrant Certificates, the Company may execute, and upon the order of the Company the Warrant Agent shall authenticate and deliver, temporary Warrant Certificates which are printed, lithographed, typewritten, mimeographed or otherwise produced substantially of the tenor of the definitive Warrant Certificates in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Warrant Certificates may determine, with the execution thereof by such officers conclusively evidencing such determination. If temporary Warrant Certificates are issued, the Company will cause definitive Warrant Certificates to be prepared without unreasonable delay. After the preparation of definitive Warrant Certificates, the temporary Warrant Certificates shall be exchangeable for definitive Warrant Certificates upon surrender of the temporary Warrant Certificates at the corporate trust office of the Warrant Agent [or ____________], without charge to the Holder (as defined in Section 1.6 below). Upon surrender for cancellation of any one or more temporary Warrant Certificates, the Company shall execute and the Warrant Agent shall authenticate and deliver in exchange therefor definitive Warrant Certificates representing the same aggregate number of Warrants. Until so exchanged, the temporary Warrant Certificates shall in all respects be entitled to the same benefits under this Agreement as definitive Warrant Certificates. Section 1.5 PAYMENT OF TAXES. The Company will pay all stamp taxes and other duties, if any, to which, under the laws of the United States of America or any State or political subdivision thereof, this Agreement or the original issuance of the Warrant Certificates may be subject. Section 1.6 DEFINITION OF HOLDER. The term "Holder" as used herein shall mean [IF OFFERED SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -- prior to the Detachable Date, the registered owner of the Offered Security to which such Warrant Certificate was initially attached, and, after such Detachable Date,] the person in whose name at the time such Warrant Certificate shall be registered upon the books to be maintained by the Warrant Agent for that purpose pursuant to Section 4.1. [IF OFFERED SECURITIES AND WARRANTS WHICH ARE 2 6 NOT IMMEDIATELY DETACHABLE -- Prior to the Detachable Date, the Company will, or will cause the registrar of the Offered Securities to, make available to the Warrant Agent current information as to Holders of the Offered Securities.] ARTICLE II WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS Section 2.1 WARRANT PRICE.* During the period set forth in Section 2.2, each Warrant shall entitle the Holder thereof, subject to the provisions of this Agreement, to purchase from the Company one share of Common Stock at the exercise price of $_________. Such exercise price of each Warrant is referred to in this Agreement as the "Exercise Price." Section 2.2 DURATION OF WARRANTS. Any Warrant evidenced by a Warrant Certificate may be exercised at any time, as specified herein, on or after [the date thereof] [________, ____] and at or before the close of business on ________, ____ (the "Expiration Date"). Each Warrant not exercised at or before the close of business on the Expiration Date shall become void, and all rights of the Holder of the Warrant Certificate evidencing such Warrant under this Agreement or otherwise shall cease. Section 2.3 EXERCISE OF WARRANTS. (a) During the period specified in Section 2.2, any whole number of Warrants may be exercised by surrendering the Warrant Certificate evidencing such Warrants at the place or at the places set forth in the Warrant Certificate, with the purchase form set forth in the Warrant Certificate duly executed, accompanied by payment in full, in lawful money of the United States of America, [in cash or by certified check or official bank check in New York Clearing House funds] [by bank wire transfer in immediately available funds,] of the Exercise Price for each Warrant exercised. The date on which payment in full of the Exercise Price for a Warrant and the duly executed and completed Warrant Certificate are received by the Warrant Agent shall be deemed to be the date on which such Warrant is exercised. The Warrant Agent shall deposit all funds received by it as payment for the exercise of Warrants to the account of the Company maintained with it for such purpose and shall advise the Company by telephone at the end of each day on which such a payment is received of the amount so deposited to its account. The Warrant Agent shall promptly confirm such telephonic advice to the Company in writing. (b) The Warrant Agent shall from time to time, as promptly as practicable after the exercise of any Warrants in accordance with the terms and conditions of this Agreement and the Warrant Certificates, advise the Company of (i) the number of Warrants so exercised, (ii) the instructions of each Holder of the Warrant Certificates evidencing such Warrants with respect to delivery of the certificate or certificates representing shares of Common Stock to which such Holder is entitled upon such exercise, and instructions of such Holder as to delivery of Warrant Certificates evidencing the balance, if any, of the Warrants remaining after such exercise, and (iii) such other information as the Company shall reasonably require. (c) As soon as practicable after the exercise of any Warrants, the Company shall issue to or upon the order of the Holder of the Warrant Certificate evidencing such Warrants, a certificate or certificates representing the number of shares of Common Stock to which such Holder is entitled in such name or names as may be directed by such Holder; and, if fewer than all of the Warrants evidenced by such Warrant Certificate were exercised, the Company shall execute and an authorized officer of the Warrant Agent shall manually authenticate and deliver a new Warrant Certificate evidencing the number of Warrants remaining unexercised. (d) The Company shall not be required to pay any stamp or other tax or other governmental charge required to be paid in connection with any transfer involved in the issuance of the Common Stock; and in the event that any such transfer is involved, the Company shall not be required to issue or deliver any shares of Common _________________ * Complete and modify the provisions of this Section as appropriate to reflect the exact terms of the Warrants. 3 7 Stock until such tax or other charge shall have been paid or it has been established to the Company's satisfaction that no such tax or other charge is due. Section 2.4 RESERVATION OF SHARES. For the purpose of enabling it to satisfy any obligation to issue shares of Common Stock upon exercise of Warrants, the Company will, at all times through the close of business on the Expiration Date, reserve and keep available, free from preemptive rights and out of its aggregate authorized but unissued shares or treasury shares, or both, of Common Stock, the number of shares of Common Stock deliverable upon the exercise of all outstanding Warrants. The Company covenants that all shares of Common Stock issued upon exercise of the Warrants will, upon issuance in accordance with the terms of this Agreement, be fully paid and nonassessable and free from all taxes, liens, charges and security interests created by or imposed upon the Company with respect to the issuance and holding thereof. ARTICLE III OTHER TERMS OF WARRANTS Section 3.1 ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES PURCHASABLE OR NUMBER OF WARRANTS. The Exercise Price, the number of shares of Common Stock purchasable upon the exercise of each Warrant and the number of Warrants outstanding are subject to adjustment from time to time upon the occurrence of the events enumerated in this Section 3.1. (a) If the Company shall (i) pay a dividend on or make a distribution of shares of its capital stock, whether shares of Common Stock or shares of its capital stock of any other class, (ii) subdivide its outstanding shares of Common Stock, (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock or (iv) issue any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), then the number of shares of Common Stock purchasable upon exercise of each Warrant immediately prior thereto shall be adjusted so that the holder of each Warrant shall be entitled to receive the kind and number of shares of Common Stock or other securities of the Company which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such Warrant been exercised immediately prior to the happening of such event or any record date with respect thereto. An adjustment made pursuant to this paragraph (a) shall become effective immediately after the effective date of such event, retroactive to immediately after the record date, if any, for such event. (b) If the Company shall issue rights, options or warrants to all holders of its outstanding Common Stock, without any charge to such holders, entitling them to subscribe for or purchase shares of Common Stock at a price per share that is lower than the market price per share of Common Stock (as defined in paragraph (e) below) at the record date mentioned below, the number of shares of Common Stock thereafter purchasable upon the exercise of each Warrant shall be determined by multiplying the number of shares of Common Stock theretofore purchasable upon exercise of each Warrant by a fraction, of which the numerator shall be (i) the number of shares of Common Stock outstanding on the date of issuance of such rights, options or warrants plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the denominator shall be (ii) the number of shares of Common Stock outstanding on the date of issuance of such rights, options or warrants plus the number of shares which the aggregate offering price of the total number of shares of Common Stock so offered would purchase at the market price per share of Common Stock at such record date. Such adjustment shall be made whenever such rights, options or warrants are issued, and shall become effective retroactive to immediately after the record date for the determination of stockholders entitled to receive such rights, options or warrants. (c) If the Company shall distribute to all holders of its shares of Common Stock evidences of its indebtedness or assets (excluding cash dividends or 4 8 distributions payable out of capital surplus and dividends or distributions referred to in paragraph (a) above) or rights, options or warrants or convertible or exchangeable securities containing the right to subscribe for or purchase shares of Common Stock (excluding those referred to in paragraph (b) above), then in each case the number of shares of Common Stock thereafter purchasable upon the exercise of each Warrant shall be determined by multiplying the number of shares of Common Stock theretofore purchasable upon the exercise of each Warrant, by a fraction, of which the numerator shall be (i) the then current market price per share of Common Stock (as defined in paragraph (e) below) on the date of such distribution, and of which the denominator shall be (ii) the then current market price per share of Common Stock less the then fair value (as determined by the Board of Directors of the Company, whose determination shall be conclusive) of the portion of the assets or evidences of indebtedness so distributed or of such subscription rights, options or warrants or convertible or exchangeable securities applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made, and shall become effective on the date of distribution retroactive to immediately after the record date for the determination of stockholders entitled to receive such distribution. (d) In the event of any capital reorganization or any reclassification of the Common Stock (except as provided in paragraphs (a) through (c) above), any holder of Warrants upon exercise thereof shall be entitled to receive, in lieu of the Common Stock to which he or she would have become entitled upon exercise immediately prior to such reorganization or reclassification, the shares (of any class or classes) or other securities or property of the Company that he or she would have been entitled to receive at the same aggregate Exercise Price upon such reorganization or reclassification if his or her Warrants had been exercised immediately prior thereto. (e) For the purpose of any computation under paragraphs (b) and (c) of this Section 3.1, the current or closing market price per share of Common Stock at any date shall be deemed to be the average of the daily closing prices for _________ consecutive trading days commencing __________ trading days before the date of such computation. The closing price for each day shall be the last sale price for such day or in the case no such reported sale takes place on such day, the average of the reported closing bid and asked price, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange (the "NYSE") or if the Common Stock is not listed on the NYSE, then on the principal United States national securities exchange on which the Common Stock is listed or quoted. If the Common Stock is not listed or quoted on any United States national securities exchange, then the current or closing market price per share of Common Stock shall be determined by the Board of Directors of the Company in good faith. (f) Whenever the number of shares of Common Stock purchasable upon the exercise of each Warrant is adjusted as herein provided, the Exercise Price payable upon the exercise of each Warrant shall be adjusted by multiplying such Exercise Price immediately prior to such adjustment by a fraction, of which the numerator shall be the number of shares purchasable upon the exercise of each Warrant immediately prior to such adjustment, and of which the denominator shall be the number of shares so purchasable immediately thereafter. (g) The Company may elect, on or after the date of any adjustment required by paragraphs (a) through (d) of this Section 3.1, to adjust the number of Warrants in substitution for an adjustment in the number of shares of Common Stock purchasable upon the exercise of a Warrant. Each of the Warrants outstanding after such adjustment of the number of Warrants shall be exercisable for the same number of shares of Common Stock as immediately prior to such adjustment. Each Warrant held of record prior to such adjustment of the number of Warrants shall become that number of Warrants (calculated to the nearest hundredth) obtained by dividing the Exercise Price in effect prior to adjustment of the Exercise Price by the Exercise Price in effect after adjustment of the Exercise Price. The Company shall notify the holders of Warrants, in the same manner as provided in the first paragraph of Section 7.5, of its election to adjust the number of Warrants, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Exercise Price is adjusted or any day thereafter. Upon each adjustment of the number of Warrants pursuant to this paragraph (g) the Company shall, as promptly as practicable, cause to be distributed to holders of record of Warrants on such record date Warrant Certificates evidencing, subject to paragraph (h), the additional Warrants to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Warrant Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Warrant Certificates evidencing all the Warrants to be issued, executed and registered in the manner specified in Section 1 (and which may bear, at the option of the Company, the adjusted Exercise Price) and shall be registered in the names of the holders of record of Warrant Certificates on the record date specified in the notice. 5 9 (h) The Company shall not be required to issue fractions of Warrants on any distribution of Warrants to holders of Warrant Certificates pursuant to paragraph (g) or to distribute Warrant Certificates that evidence fractional Warrants. In lieu of such fractional Warrants, there shall be paid to the registered holders of the Warrant Certificates with regard to which such fractional Warrants would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a full Warrant on the trading day immediately prior to the date on which such fractional Warrant would have been otherwise issuable (the "Valuation Date"). For purposes of this paragraph (h), the current market value of a Warrant shall be the aggregate closing market price on the Valuation Date (determined as set forth in paragraph (e)) of all shares of Common Stock issuable upon exercise of one Warrant plus the fair value (as determined by the Board of Directors of the Company, whose determination shall be conclusive) of any other assets or securities purchasable upon exercise of one Warrant less the Exercise Price of one Warrant. (i) Notwithstanding any adjustment pursuant to Section 3.1 in the number of shares of Common Stock purchasable upon the exercise of a Warrant, the Company shall not be required to issue fractions of shares of Common Stock upon exercise of the Warrants or to distribute certificates which evidence fractional shares. In lieu of fractional shares, there shall be paid to the registered holders of Warrant Certificates at the time such Warrant Certificates are exercised as herein provided an amount in cash equal to the same fraction of the current market value of a share of Common Stock. For purposes of this paragraph (i), the current market value of a share of Common Stock shall be the closing market price (determined as set forth in paragraph (e)) of a share of Common Stock for the trading day immediately prior to the date of such exercise. ARTICLE IV [REGISTRATION,] EXCHANGE, TRANSFER AND SUBSTITUTION OF WARRANT CERTIFICATES Section 4.1 REGISTRATION, EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES. [If registered Warrants - - The Warrant Agent shall keep, at its corporate trust office [and at _________], books in which, subject to such reasonable regulations as it may prescribe, it shall register Warrant Certificates and transfers of outstanding Warrant Certificates]. [IF OFFERED SECURITIES AND WARRANTS WHICH ARE IMMEDIATELY DETACHABLE -- Prior to the Detachable Date, a Warrant Certificate may be exchanged or transferred only together with the Offered Security to which such Warrant Certificate was initially attached, and only for the purpose of effecting, or in conjunction with, an exchange or transfer of such Offered Security. Additionally, on or prior to the Detachable Date, each transfer or exchange of an Offered Security [on the register of the Offered Securities] shall operate also to transfer or exchange the Warrant Certificate or Certificates to which such Offered Security was initially attached. After the Detachable Date, upon] [IF OFFERED SECURITIES AND WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR IF WARRANTS ALONE -- Upon] surrender at the corporate trust office of the Warrant Agent [or _________] of Warrant Certificates properly endorsed [or accompanied by appropriate instruments of transfer] and accompanied by written instructions for [transfer or] exchange, all in form satisfactory to the Company and the Warrant Agent, such Warrant Certificates may be exchanged for other Warrant Certificates or may be transferred in whole or in part; provided that Warrant Certificates issued in exchange for [or upon transfer of] surrendered Warrant Certificates shall evidence the same aggregate number of Warrants as the Warrant Certificates so surrendered. No service charge shall be made for any exchange [or transfer] of Warrant Certificates, but the Company may require payment of a sum sufficient to cover any stamp or other tax or governmental charge that may be imposed in connection with any such exchange [or transfer]. Whenever any Warrant Certificates are so surrendered for exchange [or transfer], the Company shall execute and an authorized officer of the Warrant Agent shall manually authenticate and deliver to the person or persons entitled thereto a Warrant Certificate or Warrant Certificates as so requested. The Warrant Agent shall not be required to effect any exchange [or transfer] which would result in the issuance of a Warrant Certificate evidencing a fraction of a Warrant or a number of full Warrants and a fraction of a Warrant. All Warrant Certificates issued upon any exchange [or transfer] of Warrant Certificates shall evidence the same obligations, and be entitled to the same benefits under this Agreement, as the Warrant Certificates surrendered for such exchange [or transfer]. 6 10 Section 4.2 MUTILATED, DESTROYED, LOST OR STOLEN WARRANT CERTIFICATES. If any mutilated Warrant Certificate is surrendered to the Warrant Agent, the Company shall execute and an officer of the Warrant Agent shall manually authenticate and deliver in exchange therefor a new Warrant Certificate of like tenor and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and the Warrant Agent (i) evidence to their satisfaction of the destruction, loss or theft of any Warrant Certificate and of the ownership thereof and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Warrant Agent that such Warrant Certificate has been acquired by a bona fide purchaser or a protected purchaser, the Company shall execute and upon its request an officer of the Warrant Agent shall manually authenticate and deliver, in lieu of any such destroyed, lost or stolen Warrant Certificate, a new Warrant Certificate of like tenor and bearing a number not contemporaneously outstanding. Upon the issuance of any new Warrant Certificate under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Warrant Agent) connected therewith. Every new Warrant Certificate issued pursuant to this Section in lieu of any destroyed, lost or stolen Warrant Certificate shall evidence an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Warrant Certificate shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Agreement equally and proportionately with any and all other Warrant Certificates duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Warrant Certificates. Section 4.3 PERSONS DEEMED OWNERS. [IF OFFERED SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -- Prior to the Detachable Date, the Company, the Warrant Agent and all other persons may treat the owner of any Offered Security as the owner of the Warrant Certificates initially attached thereto for any purpose and as the person entitled to exercise the rights represented by the Warrants evidenced by such Warrant Certificates, any notice to the contrary notwithstanding. After the Detachable Date, and] Prior to due presentment of a Warrant Certificate for registration of transfer, the Company, the Warrant Agent and all other persons may treat the Holder as the owner thereof for any purpose and as the person entitled to exercise the rights represented by the Warrants evidenced thereby, any notice to the contrary notwithstanding. Section 4.4 CANCELLATION OF WARRANT CERTIFICATES. Any Warrant Certificate surrendered for exchange[, transfer] or exercise of the Warrants evidenced thereby shall, if surrendered to the Company, be delivered to the Warrant Agent, and all Warrant Certificates surrendered or so delivered to the Warrant Agent shall be promptly cancelled by it and shall not be reissued and, except as expressly permitted by this Agreement, no Warrant Certificate shall be issued hereunder in lieu or in exchange thereof. The Company may at any time deliver to the Warrant Agent for cancellation any Warrant Certificates previously issued hereunder which the Company may have acquired in any manner whatsoever, and all Warrant Certificates so delivered shall be promptly cancelled by the Warrant Agent. All cancelled Warrant Certificates held by the Warrant Agent shall be destroyed by it unless by written order the Company requests their return to it. ARTICLE V OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES Section 5.1 NO RIGHTS AS STOCKHOLDERS CONFERRED BY WARRANTS OR WARRANT CERTIFICATES. No Warrant Certificate or Warrant evidenced thereby shall entitle the Holder thereof to any of the rights of a stockholder, including, without limitation, the right to receive dividends. 7 11 Section 5.2 HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS. Notwithstanding any of the provisions of this Agreement, any Holder of any Warrant Certificate, without the consent of the Warrant Agent, any stockholder or the Holder of any other Warrant Certificate, may, on its own behalf and for its own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company suitable to enforce or otherwise in respect of its right to exercise the Warrant or Warrants evidenced by his or her Warrant Certificate in the manner provided in the Warrant Certificates and in this Agreement. ARTICLE VI CONCERNING THE WARRANT AGENT Section 6.1 WARRANT AGENT. The Company hereby appoints ____________ as Warrant Agent of the Company in respect of the Warrants and the Warrant Certificates upon the terms and subject to the conditions herein set forth, and ___________ hereby accepts such appointment. The Warrant Agent shall have the power and authority granted to and conferred upon it in the Warrant Certificates and hereby and such further power and authority to act on behalf of the Company as the Company may hereafter grant to or confer upon it. All of the terms and provisions with respect to such power and authority contained in the Warrant Certificates are subject to and governed by the terms and provisions hereof. Section 6.2 CONDITIONS OF WARRANT AGENT'S OBLIGATIONS. The Warrant Agent accepts its obligations herein set forth, upon the terms and conditions hereof, including the following, to all of which the Company agrees and to all of which the rights hereunder of the Holders from time to time of the Warrant Certificates shall be subject: (a) COMPENSATION AND INDEMNIFICATION. The Company agrees promptly to pay the Warrant Agent the compensation to be agreed upon with the Company for all services rendered by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including reasonable counsel fees) incurred by the Warrant Agent in connection with the services rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent for, and hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Warrant Agent, arising out of or in connection with its acting as such Warrant Agent hereunder, including the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance at any time of its powers or duties hereunder. The obligations of the Company under this subsection (a) shall survive the exercise of the Warrant Certificates and the resignation or removal of the Warrant Agent. (b) AGENT FOR THE COMPANY. In acting under this Warrant Agreement and in connection with the Warrant Certificates, the Warrant Agent is acting solely as agent of the Company and does not assume any obligation or relationship of agency or trust for or with any of the owners or holders of the Warrant Certificates. (c) COUNSEL. The Warrant Agent may consult with counsel, which may include counsel for the Company, and the written advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon. (d) DOCUMENTS. The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted by it in reliance upon any notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper parties. (e) CERTAIN TRANSACTIONS. The Warrant Agent, any of its officers, directors and employees, or any other agent of the Company, in its individual or any other capacity, may become the owner of, or acquire any interest in, any Warrant Certificates, with the same rights that it would have if it were not such Warrant Agent, officer, director, employee or other agent, and, to the extent permitted by applicable law, it may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent 8 12 for, any committee or body of holders of securities or other obligations of the Company as freely as if it were not such Warrant Agent, officer, director, employee or other agent. (f) NO LIABILITY FOR INTEREST. The Warrant Agent shall not be under any liability for interest on any monies at any time received by it pursuant to any of the provisions of this Agreement or of the Warrant Certificates unless otherwise agreed to in writing by the Company and the Warrant Agent and except for the negligence of the Warrant Agent. (g) NO LIABILITY FOR INVALIDITY. The Warrant Agent shall not incur any liability with respect to the validity of this Agreement or any of the Warrant Certificates. (h) NO RESPONSIBILITY FOR REPRESENTATIONS. The Warrant Agent shall not be responsible for any of the Recitals or representations contained herein or in the Warrant Certificates (except as to the Warrant Agent's Certificate of Authentication thereon), all of which are made solely by the Company. (i) NO IMPLIED OBLIGATIONS. The Warrant Agent shall be obligated to perform such duties as are herein and in the Warrant Certificates specifically set forth and no implied duties or obligations shall be read into this Agreement or the Warrant Certificates against the Warrant Agent. The Warrant Agent shall not be under any obligation to take any action hereunder which may tend to involve it in any expense or liability, the payment of which within a reasonable time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any of the Warrant Certificates authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of the Warrant Certificates or any exercise of the Warrants evidenced thereby. The Warrant Agent shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements contained herein or in the Warrant Certificates or in the case of the receipt of any written demand from a Holder of a Warrant Certificate with respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise or, except as provided in Section 7.4 hereof, to make any demand upon the Company. Section 6.3 RESIGNATION, REMOVAL AND ASSIGNMENT OF SUCCESSOR. (a) The Company agrees, for the benefit of the Holders from time to time of the Warrant Certificates, that there shall at all times be a Warrant Agent hereunder until all of the Warrant Certificates are no longer exercisable. (b) The Warrant Agent may at any time resign as such agent by giving written notice to the Company of such intention on its part, specifying the date on which it desires its resignation to become effective; provided that, without the consent of the Company, such date shall not be less than three months after the date on which such notice is given. The Warrant Agent hereunder may be removed at any time by the filing with it of an instrument in writing signed by or on behalf of the Company and specifying such removal and the date on which the Company expects such removal to become effective. Such resignation or removal shall take effect upon the appointment by the Company of a successor Warrant Agent (which shall be a bank or trust company organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia and authorized under such laws to exercise corporate trust powers) by an instrument in writing filed with such successor Warrant Agent and the acceptance of such appointment by such successor Warrant Agent pursuant to Section 6.3(d). (c) In case at any time the Warrant Agent shall resign, or be removed, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or shall file a voluntary petition in bankruptcy or make an assignment for the benefit of its creditors or consent to the appointment of a receiver or custodian of all or any substantial part of its property, or shall admit in writing its inability to pay or meet its debts as they mature, or if a receiver or custodian of it or of all or any substantial part of its property shall be appointed, or if an order of any court shall be entered approving any petition filed by or against it under the provisions of any applicable bankruptcy or similar law, or if any public officer shall have taken charge or control of the Warrant Agent or of its property or affairs, a successor Warrant Agent, qualified as aforesaid, shall be appointed by the Company by an instrument in writing filed with the successor Warrant Agent. Upon the appointment as aforesaid of a successor Warrant Agent and acceptance by the latter of such appointment, the Warrant Agent so superseded shall cease to be the Warrant 9 13 Agent hereunder. (d) Any successor Warrant Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the Company an instrument accepting such appointment hereunder, and thereupon such successor Warrant Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, trusts, immunities, duties and obligations of such predecessor with like effect as if originally named as Warrant Agent hereunder, and such predecessor, upon payment of its charges and disbursements then unpaid, shall thereupon become obligated to transfer, deliver and pay over, and such successor Warrant Agent shall be entitled to receive, all monies, securities and other property on deposit with or held by such predecessor, as Warrant Agent hereunder. (e) Any corporation into which the Warrant Agent hereunder may be merged or converted or any corporation with which the Warrant Agent may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Warrant Agent shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Warrant Agent, provided that it shall be qualified as aforesaid, shall be the successor Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto. ARTICLE VII MISCELLANEOUS Section 7.1 CONSOLIDATIONS AND MERGERS OF THE COMPANY AND SALES, LEASES AND CONVEYANCES PERMITTED SUBJECT TO CERTAIN CONDITIONS. The Company may consolidate with, or sell or convey all or substantially all of its assets to, or merge with or into any other corporation, provided that in any such case, either the Company shall be the continuing corporation, or the corporation (if other than the Company) formed by such consolidation or into which the Company is merged or the corporation which acquired by purchase or conveyance all or substantially all of the assets of the Company shall expressly assume the obligations of the Company hereunder. Section 7.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of any such consolidation, merger, sale, lease or conveyance and upon any such assumption by the successor corporation, such successor corporation shall succeed to and be substituted for the Company, with the same effect as if it had been named herein, and the predecessor corporation, except in the event of a lease, shall be relieved of any further obligation under this Agreement and the Warrants. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of the Company, any or all of the shares of Common Stock issuable pursuant to the terms hereof. Section 7.3 AMENDMENT. This Agreement may be amended by the parties hereto, without the consent of the Holder of any Warrant Certificate, for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained herein, or making such provisions in regard to matters or questions arising under this Agreement as the Company may deem necessary or desirable; provided that such action shall not adversely affect the interests of the Holders of the Warrant Certificates in any material respect. Any amendment or supplement to this Agreement or the Warrants that has a material adverse effect on the interests of Holders of any series of Warrants shall require the written consent of the Holders of a majority of the then outstanding Warrants of such series. The consent of each Holder of a Warrant affected shall be required for any amendment pursuant to which the Warrant Price would be increased or the number of shares of Common Stock purchasable upon exercise of Warrants would be decreased. The Warrant Agent may, but shall not be obligated to, enter into any amendment to this Agreement which affects the Warrant Agent's own rights, duties or immunities under this Agreement or otherwise. 10 14 Section 7.4 NOTICES AND DEMANDS TO THE COMPANY AND WARRANT AGENT. If the Warrant Agent shall receive any notice or demand addressed to the Company by the Holder of a Warrant Certificate pursuant to the provisions of the Warrant Certificates, the Warrant Agent shall promptly forward such notice or demand to the Company. Section 7.5 NOTICES TO WARRANTHOLDERS. Upon any adjustment of the number of shares purchasable upon exercise of each Warrant, the Exercise Price or the number of Warrants outstanding pursuant to Section 3.1, the Company within _______ calendar days thereafter shall (i) cause to be filed with the Warrant Agent a certificate of the Chief Financial Officer of the Company setting forth the Exercise Price and either the number of shares of Common Stock and other securities or assets purchasable upon exercise of each Warrant or the additional number of Warrants to be issued for each previously outstanding Warrant, as the case may be, after such adjustment and setting forth in reasonable detail the method of calculation and the facts upon which such adjustment are made, which certificate shall be conclusive evidence of the correctness of the matters set forth therein, and (ii) cause to be given to each of the registered holders of the Warrant Certificates at such holder's address appearing on the Warrant Register written notice of such adjustments by first-class mail, postage prepaid. Where appropriate, such notice may be given in advance and included as part of the notice required to be mailed under the provisions of this Section 7.5. If: (a) the Company shall declare any dividend payable in any securities upon its shares of Common Stock or make any distribution (other than a cash dividend) to the holders of its shares of Common Stock; or (b) the Company shall offer to the holders of its shares of Common Stock any additional shares of Common Stock or securities convertible into shares of Common Stock or any right to subscribe thereto; or (c) there shall be a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation, merger, or sale of all substantially all of its property, assets, and business as an entirety); then the Company shall (i) cause written notice of such event to be filed with the Warrant Agent and shall cause written notice of such event to be given to each of the registered holders of the Warrant Certificates at such holder's address appearing on the Warrant Register, by first-class mail, postage prepaid, and (ii) make a public announcement in a daily newspaper of general circulation in ___________________ of such event, such giving of notice and publication to be completed at least ________ calendar days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders entitled to such dividend, distribution, or subscription rights, or for the determination of stockholders entitled to vote on such proposed dissolution, liquidation or winding up. Such notice shall specify such record date or the date of closing the transfer books, as the case may be. The failure to give the notice required by this Section 7.5 or any defect therein shall not affect the legality or validity of any distribution, right, warrant, dissolution, liquidation or winding up or the vote upon or any other action taken in connection therewith. Section 7.6 ADDRESSES. Any communications from the Company to the Warrant Agent with respect to this Agreement shall be addressed to _______________, Attention: ________________, and any communications from the Warrant Agent to the Company with respect to this Agreement shall be addressed to The Sherwin-Williams Company, 101 Prospect Avenue, Cleveland, Ohio 44115-1075, Attention: Corporate Secretary (or such other address as shall be specified in writing by the Warrant Agent or by the Company). Section 7.7 GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT CERTIFICATE ISSUED HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 11 15 Section 7.8 DELIVERY OF PROSPECTUS. The Company will furnish to the Warrant Agent sufficient copies of a prospectus, appropriately supplemented, relating to the Common Stock (the "Prospectus"), and the Warrant Agent agrees that upon the exercise of any Warrant Certificate, the Warrant Agent will deliver to the person designated to receive a certificate representing shares of Common Stock, prior to or concurrently with the delivery of such Securities, a Prospectus. Section 7.9 OBTAINING OF GOVERNMENTAL APPROVALS. The Company will from time to time take all action which may be necessary to obtain and keep effective any and all permits, consents and approvals of governmental agencies and authorities and securities acts filings under United States Federal and State laws (including, without limitation, to the extent required, the maintenance of the effectiveness of a registration statement in respect of the Common Stock under the Securities Act of 1933, as amended), which may be or become required in connection with exercise of the Warrant Certificates and the original issuance and delivery of the Common Stock. Section 7.10 PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT. Nothing in this Agreement expressed or implied and nothing that may be inferred from any of the provisions herein is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the Company, the Warrant Agent and the Holders of the Warrant Certificates any right, remedy or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise or agreement hereof; and all covenants, conditions, stipulations, promises and agreements contained in this Agreement shall be for the sole and exclusive benefit of the Company and the Warrant Agent and their successors and of the Holders of the Warrant Certificates. Section 7.11 HEADINGS. The Article and Section headings herein and the Table of Contents are for convenience of reference only and shall not affect the construction hereof. Section 7.12 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original; but such counterparts shall together constitute but one and the same instrument. Section 7.13 INSPECTION OF AGREEMENT. A copy of this Agreement shall be available at all reasonable times at the principal corporate trust office of the Warrant Agent [and at ___________] for inspection by the Holder of any Warrant Certificate. The Warrant Agent may require such Holder to submit its Warrant Certificate for inspection by it. 12 16 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, and their respective corporate seal to be hereunto affixed and attested, all as of the day and year first above written. THE SHERWIN-WILLIAMS COMPANY By:____________________ Name: Title: [SEAL] Attest:____________________ Name: Title: [NAME OF WARRANT AGENT] By:____________________ Name: Title: [SEAL] Attest:____________________ Name: Title: 13 17 EXHIBIT A [FORM OF WARRANT CERTIFICATE] [Face] FORM OF LEGEND IF OFFERED SECURITIES [Prior to __________, this Warrant Certificate may be WITH WARRANTS WHICH ARE NOT transferred or exchanged if and only if [Title of IMMEDIATELY DETACHABLE Security] to which it was initially attached is so transferred or exchanged.] FORM OF LEGEND IF WARRANTS ARE NOT [Prior to __________, Warrants evidenced by this IMMEDIATELY EXERCISABLE Warrant Certificate cannot be exercised.]
EXERCISABLE ONLY IF AUTHENTICATED BY THE WARRANT AGENT AS PROVIDED HEREIN VOID AFTER THE CLOSE OF BUSINESS ON ____________, ____ THE SHERWIN-WILLIAMS COMPANY Warrant Certificate representing Warrants to purchase Common Stock as described herein. ____________________ No.____ __________ Warrants This certifies that __________ or registered assigns is the registered owner of the above indicated number of Warrants, each Warrant entitling such registered owner to purchase, at any time [after the close of business on _________, ____, and] on or before the close of business on ________, ____, one share of common stock, par value $1.00 per share (the "Common Stock"), of The Sherwin-Williams Company (the "Company"), on the following basis.* During such period, each Warrant shall entitle the Holder thereof, subject to the provisions of the Warrant Agreement (as defined below), to purchase from the Company one share of Common Stock at the exercise price of $________ (the "Exercise Price"). The Holder of this Warrant Certificate may exercise the Warrants evidenced hereby, in whole or in part, by surrendering this Warrant Certificate, with the purchase form set forth hereon duly completed, accompanied by payment in full, in lawful money of the United States of America, [in cash or by certified check or official bank check in New York Clearing House funds or by bank wire transfer in immediately available funds], the Exercise Price for each Warrant exercised, to the Warrant Agent (as hereinafter defined), at the corporate trust office of [name of Warrant Agent], or its successor, as warrant agent (the "Warrant Agent") [or at ________], the addresses specified on the reverse hereof and upon compliance with and subject to the conditions set forth herein and in the Warrant Agreement. The term "Holder" as used herein shall mean [IF OFFERED DEBT SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -- prior to ________, ____ (the "Detachable Date"), the registered owner of the Company's [title of Offered Securities] to which such Warrant Certificate was initially attached, and after such Detachable Date,] the person in whose name at the time such Warrant Certificate shall be registered upon the books to be maintained by the Warrant Agent for that purpose pursuant to Section 4.1 of the Warrant Agreement. Any whole number of Warrants evidenced by this Warrant Certificate may be exercised to purchase shares - --------------- * Complete and modify the following provisions as appropriate to reflect the terms of the Warrants. A-1 18 of Common Stock. Upon any exercise of fewer than all of the Warrants evidenced by this Warrant Certificate, there shall be issued to the registered owner hereof a new Warrant Certificate evidencing the number of Warrants remaining unexercised. This Warrant Certificate is issued under and in accordance with the Warrant Agreement dated as of ________, ____ (the "Warrant Agreement"), between the Company and the Warrant Agent and is subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the holder of this Warrant Certificate consents by acceptance hereof. Copies of the Warrant Agreement are on file at the above-mentioned office of the Warrant Agent [and at ________]. [IF OFFERED SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -- prior to ________, ____ (the "Detachable Date"), this Warrant Certificate may be exchanged or transferred only together with the [title of Offered Security] (the "Offered Security") to which this Warrant Certificate was initially attached, and only for the purpose of effecting, or in conjunction with, an exchange or transfer of such Offered Security. Additionally, on or prior to the Detachable Date, each transfer of such Offered Security on the register of the Offered Securities shall operate also to transfer this Warrant Certificate. After the Detachable Date, this] [IF OFFERED DEBT SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS ALONE--This] Warrant Certificate and all rights hereunder, may be transferred when surrendered at the corporate trust office of the Warrant Agent [or ________] by the registered owner or his assigns, in person or by an attorney duly authorized in writing, in the manner and subject to the limitations provided in the Warrant Agreement. [IF OFFERED SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -- Except as provided in the immediately preceding paragraph, after] [IF OFFERED DEBT SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS ALONE-After] authentication by the Warrant Agent and prior to the expiration of this Warrant Certificate, this Warrant Certificate may be exchanged at the corporate trust office of the Warrant Agent [or at ______________________] for Warrant Certificates representing the same aggregate number of Warrants. This Warrant Certificate shall not entitle the registered owner hereof to any of the rights of a stockholder, including, without limitation, the right to receive dividends. Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. This Warrant Certificate shall not be valid obligatory for any purpose until authenticated by the Warrant Agent. A-2 19 IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed under its corporate seal. Dated:__________ THE SHERWIN-WILLIAMS COMPANY By:____________________________ Name: Title: Attest: ________________________________ Certificate of Authentication This is one of the Warrant Certificates referred to in the within-mentioned Warrant Agreement. ________________________________ As Warrant Agent By:_____________________________ Authorized Signature A-3 20 [FORM OF WARRANT CERTIFICATE] [REVERSE] (Instructions for Exercise of Warrants) To exercise any Warrants evidenced hereby, the Holder of this Warrant Certificate must pay [in cash or by certified check or official bank check in New York Clearing House funds or by bank wire transfer in immediately available funds], the Exercise Price in full for each of the Warrants exercised, to _________, Corporate Trust Department, ____________, Attn: [or ____________], which payment should specify the name of the Holder of this Warrant Certificate and the number of Warrants exercised by such Holder. In addition, the Holder of this Warrant Certificate should complete the information required below and present in person or mail by registered mail this Warrant Certificate to the Warrant Agent at the addresses set forth below. [FORM OF EXERCISE] (To be executed upon exercise of Warrants.) The undersigned hereby irrevocably elects to exercise Warrants, represented by this Warrant Certificate, to purchase ________ shares of common stock, par value $1.00 per share (the "Common Stock"), of The Sherwin-Williams Company and represents that he or she has tendered payment for such shares of Common Stock [in cash or by certified check or official bank check in New York Clearing House funds or by bank wire transfer in immediately available funds] to the order of The Sherwin-Williams Company, c/o Treasurer, in the amount of $________ in accordance with the terms hereof. The undersigned requests that said shares of Common Stock be registered in such names and delivered, all as specified in accordance with the instructions set forth below. If said number of shares of Common Stock is less than all of the shares of Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of the Warrants evidenced hereby be issued and delivered to the undersigned unless otherwise specified in the instructions below. Dated:_________________ Name:__________________________ __________________________ (Please Print) (Insert Social Security or Other Identifying Number of Holder) Address:_____________________________ _____________________________ _____________________________
________________________ Signature (Signature must conform in all respects to name of holder as specified on the face of this Warrant and must bear a signature guarantee by a, trust company or member broker of the New York, Chicago or Pacific Stock Exchange.) This Warrant may be exercised at the following addresses: By hand at: _____________________________ By mail at _____________________________ _____________________________ _____________________________ _____________________________ _____________________________
A-4 21 (Instructions as to form and delivery of certificates representing shares of Common Stock and/or Warrant Certificates): [FORM OF ASSIGNMENT] (TO BE EXECUTED TO TRANSFER THE WARRANT CERTIFICATE) FOR VALUE RECEIVED _______________ hereby sells, assigns and transfers unto ______________________ ______________________ ______________________ Please print name and address (including zip code) Please insert social security or other identifying number ______________________ the right represented by the within Warrant Certificate and does hereby irrevocably constitute and appoint __________, Attorney, to transfer said Warrant Certificate on the books of the Warrant Agent with full power of substitution. Dated:________________ ______________________ Signature (Signature must conform in all respects to name of holder as specified on the face of this Warrant and must bear a signature guarantee by a, trust company or member broker of the New York, Chicago or Pacific Stock Exchange.) Signature Guaranteed: ______________________ A-5 EX-4.8 5 EXHIBIT 4.8 1 EXHIBIT 4.8 FORM OF DEBT SECURITIES WARRANT AGREEMENT THE SHERWIN-WILLIAMS COMPANY AND ------------------------------ AS WARRANT AGENT WARRANT AGREEMENT DATED AS OF --------------- 2 TABLE OF CONTENTS*
PAGE ---- Parties ............................................................................... 1 Recitals ............................................................................... 1 ARTICLE I ISSUANCE, EXECUTION AND COUNTERSIGNATURE WARRANT CERTIFICATES Section 1.1 Issuance of Warrant Certificates............................................... 1 Section 1.2 Form of Warrant Certificates................................................... 1 Section 1.3 Execution and Authentication of Warrant Certificates........................... 1 Section 1.4 Temporary Warrant Certificates................................................. 2 Section 1.5 Payment of Taxes............................................................... 2 Section 1.6 Definition of Holder........................................................... 3 ARTICLE II WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS Section 2.1 Warrant Price.................................................................. 3 Section 2.2 Duration of Warrants........................................................... 3 Section 2.3 Exercise of Warrants........................................................... 3 ARTICLE III OTHER TERMS OF WARRANTS Section 3.1 [Call of Warrants by the Company].............................................. 4 ARTICLE IV [REGISTRATION,] EXCHANGE, TRANSFER AND SUBSTITUTION OF WARRANT CERTIFICATES Section 4.1 [Registration,] Exchange and Transfer of Certificates.......................... 4 Section 4.2 Mutilated, Destroyed, Lost or Stolen Warrant Certificates...................... 5 Section 4.3 Persons Deemed Owners.......................................................... 5 Section 4.4 Cancellation of Warrant Certificates........................................... 5 ARTICLE V OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES Section 5.1 No Rights as Holders of Warrant Debt Securities Conferred by Warrants or Warrant Certificates............................................... 6 Section 5.2 Holder of Warrant Certificate May Enforce Rights............................... 6 ARTICLE VI CONCERNING THE WARRANT AGENT Section 6.1 Warrant Agent.................................................................. 6 Section 6.2 Conditions of Warrant Agent's Obligations...................................... 6 Section 6.3 Resignation, Removal and Appointment of Successor.............................. 8 ARTICLE VII MISCELLANEOUS Section 7.1 Consolidations and Mergers of the Company and Sales, Leases and Conveyances Permitted Subject to Certain Conditions............................ 8 Section 7.2 Rights and Duties of Successor Corporation..................................... 8 Section 7.3 Amendment...................................................................... 9
________________________ * The Table of Contents is not a part of the Warrant Agreement. i 3 Section 7.4 Notice and Demands to the Company and Warrant Agent............................ 9 Section 7.5 Notices to Warrantholders...................................................... 9 Section 7.6 Addresses...................................................................... 9 Section 7.7 Governing Law.................................................................. 9 Section 7.8 Delivery of Prospectus......................................................... 10 Section 7.9 Obtaining of Governmental Approvals............................................ 10 Section 7.10 Persons Having Rights under Warrant Agreement.................................. 10 Section 7.11 Headings....................................................................... 10 Section 7.12 Counterparts................................................................... 10 Section 7.13 Inspection of Agreement ....................................................... 10 Testimonium ............................................................................... 11 Signatures ............................................................................... 11 Exhibit A Form of Warrant Certificate.................................................... A-1 - ---------
ii 4 THIS WARRANT AGREEMENT, dated as of __________, is between The Sherwin-Williams Company, a corporation duly organized and existing under the laws of the State of Ohio (the "Company") and _____________________, a [corporation][national banking association] organized and existing under the laws of _______________, as Warrant Agent (herein called the "Warrant Agent"). WHEREAS, the Company has entered into an Indenture (the "Indenture") dated as of ____________, ____ with [ ] as trustee (such trustee, and any successors to such trustee, herein called the "Trustee"), providing for the issuance from time to time, in one or more series, of its [Senior] [Subordinated] Debt Securities; and WHEREAS, the Company proposes to sell [IF OFFERED DEBT SECURITIES AND WARRANTS -- [title of Debt Securities being offered] (the "Offered Debt Securities") with] warrant certificates (such warrant certificates and other warrant certificates issued pursuant to this Agreement herein called the "Warrant Certificates") evidencing one or more warrants ("Warrants" or, individually, a "Warrant") representing the right to purchase [title of Debt Securities purchasable through exercise of Warrants] (the "Warrant Debt Securities"); and WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, exchange, exercise and replacement of the Warrant Certificates, and in this Agreement wishes to set forth, among other things, the form and provisions of the Warrant Certificates and the terms and conditions on which they may be issued, exchanged, exercised and replaced; NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the parties hereto agree as follows: ARTICLE I ISSUANCE, EXECUTION AND COUNTERSIGNATURE OF WARRANT CERTIFICATES Section 1.1 ISSUANCE OF WARRANT CERTIFICATES. [IF WARRANTS ALONE -- Upon issuance, each Warrant Certificate shall evidence one or more Warrants.] [IF OFFERED DEBT SECURITIES AND WARRANTS -- Warrant Certificates shall be [initially] issued in units with the Offered Debt Securities and shall [not] be separately transferable [before ____________, ____ (the "Detachable Date")]. Each such unit shall consist of a Warrant Certificate or Certificates evidencing an aggregate of ____ Warrants for each $___________ principal amount of Offered Debt Securities.] Each Warrant evidenced thereby shall represent the right, subject to the provisions contained herein and therein, to purchase Warrant Debt Securities in the aggregate principal amount of $________. Section 1.2 FORM OF WARRANT CERTIFICATES. The Warrant Certificates (including the Form[s] of Exercise [and Assignment] to be set forth on the reverse thereof) shall be in substantially the form set forth in Exhibit A hereto, shall be printed, lithographed or engraved on steel engraved borders (or in any other manner determined by the officers executing such Warrant Certificates, with the execution thereof by such officers conclusively evidencing such determination) and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange on which the Warrant Certificates may be listed or as may, consistently herewith, be determined by the officers executing such Warrant Certificates, with the execution thereof by such officers conclusively evidencing such determination. Section 1.3 EXECUTION AND AUTHENTICATION OF WARRANT CERTIFICATES. The Warrant Certificates shall be executed on behalf of the Company by its Chairman, its Chief Executive Officer, its President or one of its Vice Presidents (any reference to a Vice President of the Company herein shall be deemed to include any Vice President of the Company whether or not designated by a number or a word or words 1 5 added before or after the title "Vice President") under its corporate seal reproduced thereon attested to by its Treasurer or Secretary or one of its Assistant Treasurers or Assistant Secretaries. The signature of any of these officers on the Warrant Certificates may be manual or facsimile. The seal of the Company may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced on the Warrant Certificates. Warrant Certificates evidencing the right to purchase an aggregate principal amount not exceeding $____________ of Warrant Debt Securities (except as provided in Sections 1.4, 2.3(c), 4.1 and 4.2) may be executed by the Company and delivered to the Warrant Agent upon the execution of this Warrant Agreement or from time to time thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates duly executed on behalf of the Company, authenticate Warrant Certificates evidencing Warrants representing the right to purchase up to $_____________ aggregate principal amount of Warrant Debt Securities and shall deliver such Warrant Certificates to or upon the order of the Company. Subsequent to such original issuance of the Warrant Certificates, the Warrant Agent shall authenticate a Warrant Certificate only if the Warrant Certificate is issued in exchange or substitution for one or more previously authenticated Warrant Certificates [IF REGISTERED WARRANTS -- or in connection with their transfer], as hereinafter provided. Each Warrant Certificate shall be dated the date of its authentication by the Warrant Agent. No Warrant Certificate shall be entitled to any benefit under this Agreement or be valid or obligatory for any purpose, and no Warrant evidenced thereby shall be exercisable, until such Warrant Certificate has been authenticated by the manual signature of the Warrant Agent. Such signature by the Warrant Agent upon any Warrant Certificate executed by the Company shall be conclusive evidence, and the only evidence, that the Warrant Certificate so authenticated has been duly issued hereunder. Warrant Certificates bearing the manual or facsimile signatures of individuals who were at the time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Warrant Certificates or did not hold such offices at the date of such Warrant Certificates. Section 1.4 TEMPORARY WARRANT CERTIFICATES. Pending the preparation of definitive Warrant Certificates, the Company may execute, and upon the order of the Company the Warrant Agent shall authenticate and deliver, temporary Warrant Certificates which are printed, lithographed, typewritten, mimeographed or otherwise produced, substantially of the tenor of the definitive Warrant Certificates in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Warrant Certificates may determine, with the execution thereof by such officers conclusively evidencing such determination. If temporary Warrant Certificates are issued, the Company will cause definitive Warrant Certificates to be prepared without unreasonable delay. After the preparation of definitive Warrant Certificates, the temporary Warrant Certificates shall be exchangeable for definitive Warrant Certificates upon surrender of the temporary Warrant Certificates at the corporate trust office of the Warrant Agent [or ], without charge to the Holder (as defined in Section 1.6 below). Upon surrender for cancellation of any one or more temporary Warrant Certificates the Company shall execute and the Warrant Agent shall authenticate and deliver in exchange therefor definitive Warrant Certificates representing the same aggregate number of Warrants. Until so exchanged, the temporary Warrant Certificates shall in all respects be entitled to the same benefits under this Agreement as definitive Warrant Certificates. Section 1.5 PAYMENT OF TAXES. The Company will pay all stamp taxes and other duties, if any, to which, under the laws of the United States of America or any State or political subdivision thereof, this Agreement or the original issuance of the Warrant Certificates may be subject. 2 6 Section 1.6 DEFINITION OF HOLDER. The term "Holder" as used herein shall mean [IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE --, prior to the Detachable Date, the registered owner of the Offered Debt Security to which such Warrant Certificate was initially attached, and, after such Detachable Date,] [if bearer Warrants, the bearer of such Warrant Certificates] [if registered Warrants, the person in whose name at the time such Warrant Certificate shall be registered upon the books to be maintained by the Warrant Agent for that purpose pursuant to Section 4.1]. [IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -- Prior to the Detachable Date, the Company will, or will cause the registrar of the Offered Debt Securities to, make available to the Warrant Agent current information as to Holders of the Offered Debt Securities.] ARTICLE II WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS Section 2.1 WARRANT PRICE.* During the period from ____________, ____ through and including ____________, ____, each Warrant shall entitle the Holder thereof, subject to the provisions of this Agreement, to purchase from the Company the principal amount of Warrant Debt Securities stated in the Warrant Certificate at the exercise price of % of the principal amount thereof [plus accrued amortization, if any, of the original issue discount of the Warrant Debt Securities] [plus accrued interest, if any, from the most recent date from which interest shall have been paid on the Warrant Debt Securities or, if no interest shall have been paid on the Warrant Debt Securities, from __________, ____]. [In each case, the original issue discount ($ for each $1,000 principal amount of Warrant Debt Securities) will be amortized at a % annual rate, computed on a[n] [semi-]annual basis [using a 360-day year consisting of twelve 30-day months].] Such exercise price of each Warrant is referred to in this Agreement as the "Exercise Price." Section 2.2 DURATION OF WARRANTS. Any Warrant evidenced by a Warrant Certificate may be exercised at any time, as specified herein, on or after [the date thereof] [ , ] and at or before the close of business on , (the "Expiration Date"). Each Warrant not exercised at or before the close of business on the Expiration Date shall become void, and all rights of the Holder of the Warrant Certificate evidencing such Warrant under this Agreement or otherwise shall cease. Section 2.3 EXERCISE OF WARRANTS. (a) During the period specified in Section 2.2, any whole number of Warrants may be exercised by surrendering the Warrant Certificate evidencing such Warrants at the place or at the places set forth in the Warrant Certificate, with the purchase form set forth in the Warrant Certificate duly executed, accompanied by payment in full, in lawful money of the United States of America, [in cash or by certified check or official bank check in New York Clearing House funds]] [by surrender of the [specified aggregate amount of [identified securities]] [by bank wire transfer in immediately available funds], of the Exercise Price for each Warrant exercised. The date on which payment in full of the Exercise Price for a Warrant and the duly executed and completed Warrant Certificate are received by the Warrant Agent shall be deemed to be the date on which such Warrant is exercised. The Warrant Agent shall deposit all funds received by it as payment for the exercise of Warrants to the account of the Company maintained with it for such purpose and shall advise the Company by telephone at the end of each day on which such a payment is received of the amount so deposited to its account. The Warrant Agent shall promptly confirm such telephonic advice to the Company in writing. (b) The Warrant Agent shall from time to time, as promptly as practicable after the exercise of any ________________________ * Complete and modify the provisions of this Section as appropriate to reflect the exact terms of the Warrants and the Warrant Debt Securities 3 7 Warrants in accordance with the terms and conditions of this Agreement and the Warrant Certificates, advise the Company and the Trustee of (i) the number of Warrants so exercised, (ii) the instructions of each Holder of the Warrant Certificates evidencing such Warrants with respect to delivery of the Warrant Debt Securities to which such Holder is entitled upon such exercise, and instructions of such Holder as to delivery of Warrant Certificates evidencing the balance, if any, of the Warrants remaining after such exercise, and (iii) such other information as the Company or the Trustee shall reasonably require. (c) As soon as practicable after the exercise of any Warrants, the Company shall issue, pursuant to the Indenture, in authorized denominations, to or upon the order of the Holder of the Warrant Certificate evidencing such Warrants, the Warrant Debt Security or Warrant Debt Securities to which such Holder is entitled in fully registered form, registered in such name or names as may be directed by such Holder; and, if fewer than all of the Warrants evidenced by such Warrant Certificate were exercised, the Company shall execute and an authorized officer of the Warrant Agent shall manually authenticate and deliver a new Warrant Certificate evidencing the number of Warrants remaining unexercised. (d) The Company shall not be required to pay any stamp or other tax or other governmental charge required to be paid in connection with any transfer involved in the issue of the Warrant Debt Securities; and in the event that any such transfer is involved, the Company shall not be required to issue or deliver any Warrant Debt Securities until such tax or other charge shall have been paid or it has been established to the Company's satisfaction that no such tax or other charge is due. ARTICLE III OTHER TERMS OF WARRANTS Section 3.1 [CALL OF WARRANTS BY THE COMPANY.]* [IF WARRANTS ISSUED HEREUNDER ARE CALLABLE BY THE COMPANY -- The Company shall have the right to call and repurchase any or all Warrants on or after ________, ____ (the "Call Date") and upon the occurrence of [discuss events or circumstances under which Company may call the Warrants] (the "Call Terms") at a price of $ ________ per Warrant (the "Call Price"). Notice of such Call Price, Call Date and Call Terms shall be given to registered holders of Warrants in the manner provided in Section 7.5.] ARTICLE IV [REGISTRATION,] EXCHANGE, TRANSFER AND SUBSTITUTION OF WARRANT CERTIFICATES Section 4.1 [REGISTRATION,] EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES. [IF REGISTERED WARRANTS -- The Warrant Agent shall keep, at its corporate trust office [and at _________], books in which, subject to such reasonable regulations as it may prescribe, it shall register Warrant Certificates and transfers of outstanding Warrant Certificates]. [IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -- Prior to the Detachable Date, a Warrant Certificate may be exchanged or transferred only together with the Offered Debt Security to which such Warrant Certificate was initially attached, and only for the purpose of effecting, or in conjunction with, an exchange or transfer of such Offered Debt Security. Additionally, on or prior to the Detachable Date, each transfer or exchange of an Offered Debt Security [on the register of the Offered Debt Securities] shall operate also to transfer or exchange the Warrant Certificate or Certificates to which such Offered Debt Security was initially attached. After the Detachable Date, upon] [IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR IF WARRANTS ALONE -- Upon] surrender at the corporate trust office of the Warrant Agent [or ____ ____ ______] of Warrant Certificates properly endorsed [or accompanied by appropriate instruments of transfer] and accompanied by written instructions ________________________ * Complete and modify the provisions of this Section as appropriate to reflect the exact terms of the Warrants and the Warrant Debt Securities 4 8 for [transfer or] exchange, all in a form satisfactory to the Company and the Warrant Agent, such Warrant Certificates may be exchanged for other Warrant Certificates [IF REGISTERED WARRANTS -- or may be transferred in whole or in part]; provided that Warrant Certificates issued in exchange for [or upon transfer of] surrendered Warrant Certificates shall evidence the same aggregate number of Warrants as the Warrant Certificates so surrendered. No service charge shall be made for any exchange [or transfer] of Warrant Certificates, but the Company may require payment of a sum sufficient to cover any stamp or other tax or governmental charge that may be imposed in connection with any such exchange [or transfer]. Whenever any Warrant Certificates are so surrendered for exchange [or transfer], the Company shall execute and an authorized officer of the Warrant Agent shall manually authenticate and deliver to the person or persons entitled thereto a Warrant Certificate or Warrant Certificates as so requested. The Warrant Agent shall not be required to effect any exchange [or transfer] which would result in the issuance of a Warrant Certificate evidencing a fraction of a Warrant or a number of full Warrants and a fraction of a Warrant. All Warrant Certificates issued upon any exchange [or transfer] of Warrant Certificates shall evidence the same obligations, and be entitled to the same benefits under this Agreement, as the Warrant Certificates surrendered for such exchange [or transfer]. Section 4.2 MUTILATED, DESTROYED, LOST OR STOLEN WARRANT CERTIFICATES. If any mutilated Warrant Certificate is surrendered to the Warrant Agent, the Company shall execute and an officer of the Warrant Agent shall manually authenticate and deliver in exchange therefor a new Warrant Certificate of like tenor and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and the Warrant Agent (i) evidence to their satisfaction of the destruction, loss or theft of any Warrant Certificate and of the ownership thereof and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Warrant Agent that such Warrant Certificate has been acquired by a bona fide purchaser or a protected purchaser, the Company shall execute and upon its request an officer of the Warrant Agent shall manually authenticate and deliver, in lieu of any such destroyed, lost or stolen Warrant Certificate, a new Warrant Certificate of like tenor and bearing a number not contemporaneously outstanding. Upon the issuance of any new Warrant Certificate under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Warrant Agent) connected therewith. Every new Warrant Certificate issued pursuant to this Section in lieu of any destroyed, lost or stolen Warrant Certificate shall evidence an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Warrant Certificate shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Agreement equally and proportionately with any and all other Warrant Certificates duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Warrant Certificates. Section 4.3 PERSONS DEEMED OWNERS. [IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -- Prior to the Detachable Date, the Company, the Warrant Agent and all other persons may treat the registered owner of any Offered Debt Security as the owner of the Warrant Certificates initially attached thereto for any purpose and as the person entitled to exercise the rights represented by the Warrants evidenced by such Warrant Certificates, any notice to the contrary notwithstanding. After the Detachable Date,] [IF REGISTERED WARRANTS -- and prior to due presentment of a Warrant Certificate for registration of transfer, the] [IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS ALONE -- The] Company, the Warrant Agent and all other persons may treat the Holder as the owner thereof for any purpose and as the person entitled to exercise the rights represented by the Warrants evidenced thereby, any notice to the contrary notwithstanding. Section 4.4 CANCELLATION OF WARRANT CERTIFICATES. Any Warrant Certificate surrendered for exchange [, transfer] or exercise of the Warrants evidenced thereby shall, if surrendered to the Company, be delivered to the Warrant Agent, and [IF WARRANT CERTIFICATES ARE ISSUED IN BEARER FORM -- , except as provided below,] all Warrant Certificates surrendered or so delivered to the Warrant Agent shall be promptly cancelled by it and shall not be reissued and, except as expressly permitted by this Agreement, no Warrant Certificate shall be issued hereunder in lieu or in 5 9 exchange thereof. [IF WARRANT CERTIFICATES ARE ISSUED IN BEARER FORM -- Warrant Certificates delivered to the Warrant Agent in exchange for Warrant Certificates of other denominations may be retained by the Warrant Agent for reissue as authorized hereunder.] The Company may at any time deliver to the Warrant Agent for cancellation any Warrant Certificates previously issued hereunder which the Company may have acquired in any manner whatsoever, and all Warrant Certificates so delivered shall be promptly cancelled by the Warrant Agent. All cancelled Warrant Certificates held by the Warrant Agent shall be disposed of, as instructed by the Company, subject to applicable law. ARTICLE V OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES Section 5.1 NO RIGHTS AS HOLDERS OF WARRANT DEBT SECURITIES CONFERRED BY WARRANTS OR WARRANT CERTIFICATES. No Warrant Certificate or Warrant evidenced thereby shall entitle the Holder thereof to any of the rights of a Holder of the Warrant Debt Securities, including, without limitation, the right to receive the payment of principal of (or premium, if any) or interest, if any, on the Warrant Debt Securities or to enforce any of the covenants in the Indenture. Section 5.2 HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS. Notwithstanding any of the provisions of this Agreement, any Holder of any Warrant Certificate, without the consent of the Warrant Agent, the Trustee, the holder of any Warrant Debt Securities or the Holder of any other Warrant Certificate, may, on its own behalf and for its own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company suitable to enforce or otherwise in respect of its right to exercise the Warrant or Warrants evidenced by his or her Warrant Certificate in the manner provided in the Warrant Certificates and in this Agreement. ARTICLE VI CONCERNING THE WARRANT AGENT Section 6.1 WARRANT AGENT. The Company hereby appoints _______________ as Warrant Agent of the Company in respect of the Warrants and the Warrant Certificates upon the terms and subject to the conditions herein set forth, and ____________________________ hereby accepts such appointment. The Warrant Agent shall have the power and authority granted to and conferred upon it in the Warrant Certificates and hereby and such further power and authority to act on behalf of the Company as the Company may hereafter grant to or confer upon it. All of the terms and provisions with respect to such power and authority contained in the Warrant Certificates are subject to and governed by the terms and provisions hereof. Section 6.2 CONDITIONS OF WARRANT AGENT'S OBLIGATIONS. The Warrant Agent accepts its obligations herein set forth, upon the terms and conditions hereof, including the following, to all of which the Company agrees and to all of which the rights hereunder of the Holders from time to time of the Warrant Certificates shall be subject: (a) COMPENSATION AND INDEMNIFICATION. The Company agrees promptly to pay the Warrant Agent the compensation to be agreed upon with the Company for all services rendered by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including reasonable counsel fees) incurred by the Warrant Agent in connection with the services rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Warrant Agent, arising out of or in connection 6 10 with its acting as such Warrant Agent hereunder, including the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance at any time of its powers or duties hereunder. The obligations of the Company under this subsection (a) shall survive the exercise of the Warrant Certificates and the resignation or removal of the Warrant Agent. (b) AGENT FOR THE COMPANY. In acting under this Warrant Agreement and in connection with the Warrant Certificates, the Warrant Agent is acting solely as agent of the Company and does not assume any obligation or relationship of agency or trust for or with any of the owners or Holders of the Warrant Certificates. (c) COUNSEL. The Warrant Agent may consult with counsel, which may include counsel for the Company, and the written advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (d) DOCUMENTS. The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted by it in reliance upon any notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper parties. (e) CERTAIN TRANSACTIONS. The Warrant Agent, any of its officers, directors and employees, or any other agent of the Company, in its individual or any other capacity, may become the owner of, or acquire any interest in, any Warrant Certificates, with the same rights that it would have if it were not such Warrant Agent, officer, director, employee or other agent, and, to the extent permitted by applicable law, it may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of holders of Warrant Debt Securities or other obligations of the Company as freely as if it were not such Warrant Agent, officer, director, employee or other agent. Nothing in this Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as Trustee under the Indenture. (f) NO LIABILITY FOR INTEREST. The Warrant Agent shall not be under any liability for interest on any monies at any time received by it pursuant to any of the provisions of this Agreement or of the Warrant Certificates unless otherwise agreed to in writing by the Company and the Warrant Agent and except for the negligence of the Warrant Agent. (g) NO LIABILITY FOR INVALIDITY. The Warrant Agent shall not incur any liability with respect to the validity of this Agreement or any of the Warrant Certificates. (h) NO RESPONSIBILITY FOR REPRESENTATIONS. The Warrant Agent shall not be responsible for any of the recitals or representations contained herein or in the Warrant Certificates (except as to the Warrant Agent's Certificate of Authentication thereon), all of which are made solely by the Company. (i) NO IMPLIED OBLIGATIONS. The Warrant Agent shall be obligated to perform such duties as are herein and in the Warrant Certificates specifically set forth and no implied duties or obligations shall be read into this Agreement or the Warrant Certificates against the Warrant Agent. The Warrant Agent shall not be under any obligation to take any action hereunder which may tend to involve it in any expense or liability, the payment of which within a reasonable time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any of the Warrant Certificates authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of the Warrant Certificates or any exercise of the Warrants evidenced thereby. The Warrant Agent shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements contained herein or in the Warrant Certificates or in the Warrant Debt Securities or in the case of the receipt of any written demand from a Holder of a Warrant Certificate with respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceeding at law or otherwise or, except as provided in Section 7.4 hereof, to make any demand upon the Company. 7 11 Section 6.3 RESIGNATION, REMOVAL AND APPOINTMENT OF SUCCESSOR. (a) The Company agrees, for the benefit of the Holders from time to time of the Warrant Certificates, that there shall at all times be a Warrant Agent hereunder until all of the Warrant Certificates are no longer exercisable. (b) The Warrant Agent may at any time resign as such agent by giving written notice to the Company of such intention on its part, specifying the date on which it desires its resignation to become effective; provided that, without the consent of the Company, such date shall not be less than three months after the date on which such notice is given. The Warrant Agent hereunder may be removed at any time by the filing with it of an instrument in writing signed by or on behalf of the Company and specifying such removal and the date on which the Company expects such removal to become effective. Such resignation or removal shall take effect upon the appointment by the Company of a successor Warrant Agent (which shall be a bank or trust company organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia and authorized under such laws to exercise corporate trust powers) by an instrument in writing filed with such successor Warrant Agent and the acceptance of such appointment by such successor Warrant Agent pursuant to Section 6.3(d). (c) In case at any time the Warrant Agent shall resign, or be removed, or shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or shall file a voluntary petition in bankruptcy or make an assignment for the benefit of its creditors or consent to the appointment of a receiver or custodian of all or any substantial part of its property, or shall admit in writing its inability to pay or meet its debts as they mature, or if a receiver or custodian of it or of all or any substantial part of its property shall be appointed, or if an order of any court shall be entered approving any petition filed by or against it under the provisions of any applicable bankruptcy or similar law, or if any public officer shall have taken charge or control of the Warrant Agent or of its property or affairs, a successor Warrant Agent, qualified as aforesaid, shall be appointed by the Company by an instrument in writing, filed with the successor Warrant Agent. Upon the appointment as aforesaid of a successor Warrant Agent and acceptance by the latter of such appointment, the Warrant Agent so superseded shall cease to be Warrant Agent hereunder. (d) Any successor Warrant Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the Company an instrument accepting such appointment hereunder, and thereupon such successor Warrant Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, trusts, immunities, duties and obligations of such predecessor with like effect as if originally named as Warrant Agent hereunder, and such predecessor, upon payment of its charges and disbursements then unpaid, shall thereupon become obligated to transfer, deliver and pay over, and such successor Warrant Agent shall be entitled to receive, all monies, securities and other property on deposit with or held by such predecessor, as Warrant Agent hereunder. (e) Any corporation into which the Warrant Agent hereunder may be merged or converted or any corporation with which the Warrant Agent may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Warrant Agent shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Warrant Agent, provided that it shall be qualified as aforesaid, shall be the successor Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto. ARTICLE VII MISCELLANEOUS Section 7.1 CONSOLIDATIONS AND MERGERS OF THE COMPANY AND SALES, LEASES AND CONVEYANCES PERMITTED SUBJECT TO CERTAIN CONDITIONS. To the extent permitted in the Indenture, the Company may consolidate with, or sell or convey all or substantially all of its assets to, or merge with or into any other corporation. 8 12 Section 7.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of any such consolidation, merger, sale, lease or conveyance and upon any such assumption by the successor corporation, such successor corporation shall succeed to and be substituted for the Company, with the same effect as if it had been named herein, and the predecessor corporation, except in the event of a lease, shall be relieved of any further obligation under this Agreement and the Warrants. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of the Company, any or all of the Warrant Debt Securities issuable pursuant to the terms hereof. All the Warrant Debt Securities so issued shall in all respects have the same legal rank and benefit under the Indenture as the Warrant Debt Securities theretofore or thereafter issued in accordance with the terms of this Agreement and the Indenture. In case of any such consolidation, merger, sale, lease or conveyance, such changes in phraseology and form (but not in substance) may be made in the Warrant Debt Securities thereafter to be issued as may be appropriate. Section 7.3 AMENDMENT. This Agreement may be amended by the parties hereto, without the consent of the Holder of any Warrant Certificate, for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained herein, or making such provisions in regard to matters or questions arising under this Agreement as the Company may deem necessary or desirable; provided that such action shall not adversely affect the interests of the Holders of the Warrant Certificates in any material respect. Any amendment or supplement to this Agreement or the Warrants that has a material adverse effect on the interests of Holders of any series of Warrants shall require the written consent of Holders of a majority of the then outstanding Warrants of such series. The consent of each Holder of a Warrant affected shall be required for any amendment pursuant to which the Warrant Price would be increased or the number of Debt Securities purchasable upon exercise of Warrants would be decreased. The Warrant Agent may, but shall not be obligated to, enter into any amendment to this Agreement which affects the Warrant Agent's own rights, duties or immunities under this Agreement or otherwise. Section 7.4 NOTICE AND DEMANDS TO THE COMPANY AND WARRANT AGENT. If the Warrant Agent shall receive any notice or demand addressed to the Company by the Holder of a Warrant Certificate pursuant to the provisions of the Warrant Certificates, the Warrant Agent shall promptly forward such notice or demand to the Company. Section 7.5 NOTICES TO WARRANTHOLDERS. Pursuant to Sections 3.1 [add other sections as applicable], the Company shall cause written notice of such Call Price, Call Date and Call Terms [reference other items as applicable], as the case may be, to be given as soon as practicable to the Warrant Agent and to each of the registered holders of the Warrant Certificates by first class mail, postage prepaid, at such holder's address appearing on the Warrant Register. In addition to the written notice referred to in the preceding sentence, the Company shall make a public announcement in a daily morning newspaper of general circulation in __________ of such Call Price, Call Date, and Call Terms [reference other items as applicable], as the case may be, at least once a week for two successive weeks prior to the implementation of such terms. Section 7.6 ADDRESSES. Any communications from the Company to the Warrant Agent with respect to this Agreement shall be addressed to___________ _________, Attention: _____________________, and any communications from the Warrant Agent to the Company with respect to this Agreement shall be addressed to The Sherwin-Williams Company, 101 Prospect Avenue, N.W., Cleveland, Ohio 44115, Attention: Corporate Secretary (or such other address as shall be specified in writing by the Warrant Agent or by the Company). Section 7.7 GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT CERTIFICATE ISSUED HEREUNDER SHALL BE 9 13 GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Section 7.8 DELIVERY OF PROSPECTUS. The Company will furnish to the Warrant Agent sufficient copies of a prospectus, appropriately supplemented, relating to the Warrant Debt Securities (the "Prospectus"), and the Warrant Agent agrees that, upon the exercise of any Warrant Certificate, the Warrant Agent will deliver to the person designated to receive Warrant Debt Securities, prior to or concurrently with the delivery of such Securities, a Prospectus. Section 7.9 OBTAINING OF GOVERNMENTAL APPROVALS. The Company will from time to time take all action which may be necessary to obtain and keep effective any and all permits, consents and approvals of governmental agencies and authorities and securities acts filings under United States Federal and State laws (including, without limitation, to the extent required, the maintenance of the effectiveness of a registration statement in respect of the Warrant Debt Securities under the Securities Act of 1933, as amended), which may be or become required in connection with the exercise of the Warrant Certificates and the original issuance and delivery of the Warrant Debt Securities. Section 7.10 PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT. Nothing in this Agreement expressed or implied and nothing that may be inferred from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the Company, the Warrant Agent and the Holders of the Warrant Certificates any right, remedy or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise or agreement hereof; and all covenants, conditions, stipulations, promises and agreements contained in this Agreement shall be for the sole and exclusive benefit of the Company and the Warrant Agent and their successors and of the Holders of the Warrant Certificates. Section 7.11 HEADINGS. The Article and Section headings herein and the Table of Contents are for convenience of reference only and shall not affect the construction hereof. Section 7.12 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original; but such counterparts shall together constitute but one and the same instrument. Section 7.13 INSPECTION OF AGREEMENT. A copy of this Agreement shall be available at all reasonable times at the principal corporate trust office of the Warrant Agent [and at _______________] for inspection by the Holder of any Warrant Certificate. The Warrant Agent may require such Holder to submit its Warrant Certificate for inspection by it. 10 14 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, and their respective corporate seal to be hereunto affixed and attested, all as of the day and year first above written. THE SHERWIN-WILLIAMS COMPANY By:_____________________________ Name: Title: [SEAL] Attest:____________________ Name: Title: [NAME OF WARRANT AGENT] By:_____________________________ Name: Title: [SEAL] Attest:____________________ Name: Title: 11 15 EXHIBIT A [FORM OF WARRANT CERTIFICATE] [Face] FORM OF LEGEND IF OFFERED DEBT [Prior to __________, this Warrant Certificate may be SECURITIES WITH WARRANTS transferred or exchanged if and only if the [Title of WHICH ARE NOT IMMEDIATELY DETACHABLE Offered Debt Securities] to which it was initially attached is so transferred or exchanged.] FORM OF LEGEND IF WARRANTS ARE NOT IMMEDIATELY [Prior to __________, Warrants evidenced by this EXERCISABLE: Warrant Certificate cannot be exercised.]
EXERCISABLE ONLY IF AUTHENTICATED BY THE WARRANT AGENT AS PROVIDED HEREIN VOID AFTER THE CLOSE OF BUSINESS ON _______, ____ THE SHERWIN-WILLIAMS COMPANY Warrant Certificate representing Warrants to purchase [Title of Warrant Debt Securities] as described herein No.__________ __________ Warrants This certifies that [the bearer is the] [_______________________ or registered assigns is the registered] owner of the above indicated number of Warrants, each Warrant entitling such [bearer [IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE --, subject to the bearer qualifying as a "Holder" of this Warrant Certificate, as hereinafter defined] [registered owner] to purchase, at any time [after the close of business on _________, ____, and] on or before the close of business on __________, ____ _______ principal amount of [Title of Warrant Debt Securities] (the "Warrant Debt Securities") of The Sherwin-Williams Company (the "Company"), issued or to be issued under the Indenture (as hereinafter defined), on the following basis.* Complete and modify the following provisions as appropriate to reflect the terms of the Warrants and the Warrant Debt Securities. [During the period from ________, ____ through and including ________ ____, each Warrant shall entitle the Holder thereof, subject to the provisions of the Warrant Agreement (as defined below), to purchase from the Company the principal amount of Warrant Debt Securities stated above in this Warrant Certificate at the exercise price of ___% of the principal amount thereof [plus accrued amortization, if any, of the original issue discount of the Warrant Debt Securities] [plus accrued interest, if any, from the most recent date from which interest shall have been paid on the Warrant Debt Securities or, if no interest shall have been paid on the Warrant Debt Securities, from __________, ___]; [in each case, the original issue discount ($________ for each $1,000 principal amount of Warrant Debt Securities) will be amortized at a ___% annual rate, computed on a[n] [semi-]annual basis[, using a 360-day year consisting of twelve 30-day months] [(the "Exercise Price")]. The Holder of this Warrant Certificate may exercise the Warrants evidenced hereby, in whole or in part, by surrendering this Warrant Certificate, with the purchase form set forth hereon duly completed, accompanied [by payment in full, in lawful money of the United States of America, [in cash or by certified check or official bank check in New York Clearing House funds] [by bank wire transfer in immediately available funds]] [by surrender of the [specified aggregate principal amount of [identified securities]], the Exercise Price for each Warrant exercised, to the Warrant Agent (as hereinafter defined), at the corporate trust office of [name of Warrant Agent], or its successor as warrant agent (the "Warrant Agent") [or at ________,] at the addresses specified on the reverse hereof and upon compliance with and subject to the conditions set forth herein and in the Warrant Agreement. This Warrant Certificate may be exercised only for the purchase of Warrant Debt Securities in the principal amount of [$1,000] or any integral ________________________ * Complete and modify the provisions of this Section as appropriate to reflect the exact terms of the Warrants and the Warrant Debt Securities A-1 16 multiple thereof. The term "Holder" as used herein shall mean [IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -- , prior to ___________, ____ (the "Detachable Date"), the registered owner of the Company's [title of Offered Debt Securities] to which such Warrant Certificate was initially attached, and after such Detachable Date,] [the bearer of such Warrant Certificate] [the person in whose name at the time such Warrant Certificate shall be registered upon the books to be maintained by the Warrant Agent for that purpose pursuant to Section 3.01 of the Warrant Agreement]. Any whole number of Warrants evidenced by this Warrant Certificate may be exercised to purchase Warrant Debt Securities in registered form. Upon any exercise of fewer than all of the Warrants evidenced by this Warrant Certificate, there shall be issued to the [bearer] [registered owner] hereof a new Warrant Certificate evidencing the number of Warrants remaining unexercised. This Warrant Certificate is issued under and in accordance with the Warrant Agreement dated as of ____________, ____ (the "Warrant Agreement"), between the Company and the Warrant Agent and is subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the Holder of this Warrant Certificate consents by acceptance hereof. Copies of the Warrant Agreement are on file at the above-mentioned office at the Warrant Agent [and at ____________]. The Warrant Debt Securities to be issued and delivered upon the exercise of warrants evidenced by this Warrant Certificate will be issued under and in accordance with an Indenture (the "Indenture"), dated as of ___________, ___ between the Company and ______________________________________________, as trustee (such trustee, and any successors to such trustee, the "Trustee") and will be subject to the terms and provisions contained in the Warrant Debt Securities and in the Indenture. Copies of the Indenture, including the form of the Warrant Debt Securities, are on file at the corporate trust office of the Trustee [and at ____________________]. [IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -- Prior to ___________, ____ (the "Detachable Date"), this Warrant Certificate may be exchanged or transferred only together with the [title of Offered Debt Security] (the "Offered Debt Security") to which this Warrant Certificate was initially attached, and only for the purpose of effecting, or in conjunction with, an exchange or transfer of such Offered Debt Security. Additionally, on or prior to the Detachable Date each transfer of such Offered Debt Security on the register of the Offered Debt Securities shall operate also to transfer this Warrant Certificate. After the Detachable Date, this] [IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS ALONE -- This] Warrant Certificate, and all rights hereunder, may be transferred [IF BEARER WARRANTS -- by delivery and the Company and the Warrant Agent may treat the bearer hereof as the owner for all purposes] [IF REGISTERED WARRANTS -- when surrendered at the corporate trust office of the Warrant Agent [or ___________] by the registered owner or his assigns, in person or by an attorney duly authorized in writing, in the manner and subject to the limitations provided in the Warrant Agreement]. [IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -- Except as provided in the immediately preceding paragraph, after] [IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS ALONE -- After] authentication by the Warrant Agent and prior to the expiration of this Warrant Certificate, this Warrant Certificate may be exchanged at the corporate trust office at the Warrant Agent [or at _______________] for Warrant Certificates representing the same aggregate number of Warrants. This Warrant Certificate shall not entitle the [bearer] [registered owner] hereof to any of the rights of a [registered] [holder] of the Warrant Debt Securities, including, without limitation, the right to receive payments of principal (and premium, if any) or interest, if any, on the Warrant Debt Securities or to enforce any of the covenants of the Indenture. Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. A-2 17 IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed under its corporate seal. Dated:__________ THE SHERWIN-WILLIAMS COMPANY By:______________________________ Name: Title: Attest: ______________________________________ Certificate of Authentication This is one of the Warrant Certificates referred to in the within-mentioned Warrant Agreement. ______________________________________ As Warrant Agent By:___________________________________ Authorized Signature A-3 18 [FORM OF WARRANT CERTIFICATE] [REVERSE] (Instructions for Exercise of Warrants) To exercise any Warrants evidenced hereby, the Holder of this Warrant Certificate must pay [in cash or by certified check or official bank check in New York Clearing House funds or by bank wire transfer in immediately available funds], the Exercise Price in full for each of the Warrants exercised, to _______________, Corporate Trust Department, ______________, Attn: _____________ [or ________________], which payment should specify the name of the Holder of this Warrant Certificate and the number of Warrants exercised by such Holder. In addition, the Holder of this Warrant Certificate should complete the information required below and present in person or mail by registered mail this Warrant Certificate to the Warrant Agent at the addresses set forth below. [FORM OF EXERCISE] (To be executed upon exercise of Warrants.) The undersigned hereby irrevocably elects to exercise ____ Warrants, represented by this Warrant Certificate, to purchase $________ principal amount of the [Title of Warrant Debt Securities] (the "Warrant Debt Securities") of The Sherwin-Williams Company and represents that he has tendered payment for such Warrant Debt Securities [in cash or by certified check or official bank check in New York Clearing House funds or by bank wire transfer in immediately available funds] to the order of The Sherwin-Williams Company, c/o Treasurer, in the amount of $_________ in accordance with the terms hereof. The undersigned requests that said principal amount of Warrant Debt Securities be in fully registered form, in the authorized denominations, registered in such names and delivered, all as specified in accordance with the instructions set forth below. If said principal amount of Warrant Debt Securities is less than all of the Warrant Debt Securities purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of the Warrants evidenced hereby be issued and delivered to the undersigned unless otherwise specified in the instructions below. Dated:________________ Name: ___________________________ _____________________ (Please Print) (Insert Social Security or Other Identifying Number of Holder) Address:_______________________________ _______________________________ _______________________________
_________________________ Signature [If registered Warrant -- (Signature must conform in all respects to name of holder as specified on the face of this Warrant and must bear a signature guarantee by a trust company or member broker of the New York, Chicago or Pacific Stock Exchange.)] This Warrant may be exercised at the following addresses: By hand at: ____________________ By mail at ___________________ ____________________ ___________________ ____________________ ___________________
A-4 19 (Instructions as to form and delivery of Warrant Debt Securities and/or Warrant Certificates): [FORM OF ASSIGNMENT] (TO BE EXECUTED TO TRANSFER THE WARRANT CERTIFICATE) FOR VALUE RECEIVED _______________ hereby sells, assigns and transfers unto ___________________ ___________________ ___________________ Please print name and address (including zip code) Please insert social security or other identifying number ___________________ the right represented by the within Warrant Certificate and does hereby irrevocably constitute and appoint __________, Attorney, to transfer said Warrant Certificate on the books of the Warrant Agent with full power of substitution. Dated: ____________ ___________________ Signature (Signature must conform in all respects to name of holder as specified on the face of this Warrant and must bear a signature guarantee by a trust company or member broker of the New York, Chicago or Pacific Stock Exchange.) Signature Guaranteed: ___________________ A-5 EX-5 6 EXHIBIT 5 1 Exhibit 5 August 18, 1998 The Sherwin-Williams Company 101 Prospect Avenue, N.W. Cleveland, Ohio 44115 Ladies and Gentlemen: As General Counsel for The Sherwin-Williams Company ("Company"), I am delivering this opinion for use as an Exhibit to the Form S-3 Registration Statement ("Registration Statement") filed with the Securities and Exchange Commission ("Commission") on August 18, 1998 under the Securities Act of 1933, as amended ("Securities Act"). The Registration Statement relates to the issuance and sale from time to time, pursuant to Rule 415 of the General Rules and Regulations of the Commission promulgated under the Securities Act, of the following securities of the Company with an aggregate initial public offering price of up to $1,500,000,000 or the equivalent thereof in one or more foreign currencies or composite currencies: (i) senior debt securities or subordinated debt securities, in one or more series (the "Debt Securities"), which may be issued under either a senior debt indenture or a subordinated indenture (each an "Indenture" and, collectively, the "Indentures") entered into or proposed to be entered into among the Company and the trustees (the "Trustees") that have been or will be appointed prior to the issuance of Debt Securities; (ii) shares of the Company's common stock, par value $1.00 per share (the "Common Stock"); (iii) warrants to purchase Debt Securities (the "Debt Warrants") to be issued pursuant to a warrant agreement (the "Debt Warrant Agreement") between the Company and a warrant agent to be appointed prior to the issuance of Debt Warrants; and (iv) warrants to purchase Common Stock (the "Common Stock Warrants" and, together with the Debt Warrants, the "Warrants") to be issued pursuant to a warrant agreement (the "Common Stock Warrant Agreement" and, together with the Debt Warrant Agreement, the "Warrant Agreements") between the Company and a warrant agent to be appointed prior to the issuance of Common Stock Warrants. The Debt Securities, the Common Stock and the Warrants are collectively referred to herein as the "Offered Securities". The Prospectus contained in the Registration Statement is referred to as the "Basic Prospectus". The term "Total Prospectus" refers to the Basic Prospectus and the applicable supplement to such Basic Prospectus with respect to a particular offering of Offered Securities. This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K promulgated under the Securities Act. 2 As General Counsel of the Company, I have examined the following in connection with this opinion: (i) the Articles of Incorporation and the Regulations of the Company, each as amended to date; (ii) the Registration Statement, including the Basic Prospectus and the Exhibits being filed with it as of this date; (iii) the form of Underwriting Agreement filed as Exhibit 1.1 to the Registration Statement that may be entered into between or among the Company and one or more underwriters to be named therein in connection with any offering of Debt Securities; (iv) the Indenture relating to the senior Debt Securities and the form of Indenture relating to the subordinated Debt Securities thereof filed, or incorporated by reference, as exhibits to the Registration Statement; (v) the forms of the Warrant Agreements filed as exhibits, or incorporated by reference, to the Registration Statement; (vi) a specimen certificate representing the Common Stock; and (vii) certain resolutions of the Board of Directors of the Company (the "Board of Directors") adopted at a meeting duly held on July 23, 1998 (the "Board Resolutions") relating to the issuance and sale of the Offered Securities and related matters. I have also examined such records, certificates and other documents relating to the Company that I have considered necessary or appropriate for the purpose of this opinion. In making such examination and rendering the opinion set forth below, I have assumed: (i) the genuineness and authenticity of all signatures on original documents; (ii) the authenticity of all documents submitted to me as originals; and (iii) the conformity of originals of all documents submitted to me as certified, telecopied, photostated or reproduced copies and the authenticity of all originals of such documents. I am registered to practice law in the State of Ohio and do not express any opinion on any laws other than the laws of the State of Ohio and the federal securities laws of the United States of America. This opinion speaks as of today's date and is limited to present statutes, regulations and judicial interpretations. In rendering this opinion, I assume no obligation to revise or supplement this opinion should the present laws be changed by legislative or regulatory action, judicial decision or otherwise or should the agreements or other documents (or forms thereof) that I have examined in connection with this opinion hereafter be changed. With respect to any Common Stock held as treasury shares that may be sold, my opinion is also subject to the condition that such shares had been validly issued before they were reacquired by the Company and became treasury shares, and I have assumed that certificates evidencing the Common Stock have been duly countersigned by the applicable registrar and transfer agent. Based upon the foregoing, and subject to the qualifications and limitations stated herein, I am of the opinion that: (1) When the Registration Statement has become effective in accordance with applicable law and appropriate corporate action has been taken with respect to the Common Stock being issued and sold, then any shares of Common Stock (including shares of Common Stock duly issued (i) upon conversion of any Debt Securities or 3 (ii) upon the exercise of any Common Stock Warrants) offered and sold upon the terms and conditions set forth in the Registration Statement and the Total Prospectus will have been duly authorized and, when issued and sold for legal consideration in accordance with the Board Resolutions, the Total Prospectus and the Registration Statement, and, if applicable, the terms of the Common Stock Warrant or convertible Debt Securities related thereto, will be validly issued, fully paid and nonassessable. (2) When the Registration Statement has become effective in accordance with applicable law, appropriate corporate action has been taken with respect to the Debt Securities being issued and sold and the Debt Securities are authenticated and issued pursuant to and in accordance with the terms and conditions set forth in the respective Indenture and delivered and sold as set forth in the Registration Statement and the Total Prospectus, with payment having been made therefor, then such Debt Securities (including Debt Securities issuable upon exercise of Debt Warrants), when issued and sold in accordance with the Board Resolutions and the respective Indenture, and, if applicable, the terms of the Debt Warrant related thereto, will be duly and validly authorized and issued and will be valid and binding obligations of the Company. (3) When the Registration Statement has become effective in accordance with applicable law and appropriate corporate action has been taken with respect to the Warrants being issued and sold, then any Warrants offered and sold upon the terms and conditions set forth in the applicable Warrant Agreement, the Registration Statement and the Total Prospectus, when issued and sold in accordance with the Board Resolutions and the applicable Warrant Agreement, will be duly and validly authorized and issued and will be valid and binding obligations of the Company. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to me under the caption "Legal Opinions" in the Prospectus included in Part I of the Registration Statement. In giving such consent, I do not thereby admit that I come within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder. Very truly yours, /s/ Louis E. Stellato Louis E. Stellato Vice President, General Counsel and Secretary EX-12 7 EXHIBIT 12 1 Exhibit 12 THE SHERWIN-WILLIAMS COMPANY Calculation of Earnings to Fixed Charges (Dollars in Millions) (Historical Basis)
Six Months Ended June 30, Year Ended December 31, -------- ---------------------------- 1998 1997 1997 1996 1995 1994 1993 ---- ---- ---- ---- ---- ---- ---- Earnings: Income before income taxes and cumulative effect of accounting changes 201 191 427 375 318 299 264 Fixed Charges 96 98 194 130 99 97 98 ------------ ---------------------------------------- Earnings (1) 297 289 621 505 417 396 362 ============ ======================================== Fixed Charges: Interest Expense 38 42 81 25 3 3 6 Gross rents 58 56 113 105 96 94 92 ------------ ---------------------------------------- Fixed Charges (2) 96 98 194 130 99 97 98 ============ ======================================== Ratio of earnings to fixed 3.1 2.9 3.2 3.9 4.2 4.1 3.7 charges (1)/(2)
EX-23.1 8 EXHIBIT 23.1 1 Exhibit 23.1 Consent of Independent Auditors We hereby consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3) and related Prospectus of The Sherwin-Williams Company for the registration of $1,500,000,000 of securities and to the incorporation by reference therein of our reports dated January 28, 1998, with respect to the consolidated financial statements and schedule of The Sherwin-Williams Company included in its Annual Report (Form 10-K) for the year ended December 31, 1997, filed with Securities and Exchange Commission. /s/ ERNST & YOUNG LLP Cleveland, Ohio August 13, 1998 EX-24.1 9 EXHIBIT 24.1 1 Exhibit 24.1 POWER OF ATTORNEY THE SHERWIN-WILLIAMS COMPANY The undersigned director of The Sherwin-Williams Company, an Ohio corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A. Commes and L.E. Stellato, or any of them, with full power of substitution and resubstitution, as attorneys or attorney to sign for me and in my name, as a director of the Company, any and all documents, registrations and other papers necessary in connection with the filing by the Company, with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, and any rules and regulations of the Securities and Exchange Commission, a Registration Statement with respect to the issuance by the Company of up to $1,500,000,000 aggregate principal amount (at stated maturity) of equity and debt securities and to file with the Securities and Exchange Commission any and all post-effective amendments to any such Registration Statement with all exhibits thereto, and any and all documents in connection therewith and any and all applications or other documents to be filed with the Securities and Exchange Commission or any national securities exchange pertaining to such securities or to such registration, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, hereby ratifying and approving the acts of said attorneys and any of them and any such substitute. Executed the date set opposite my name. July 29, 1998 /s/ J.M. Biggar ---------------------------- J.M. Biggar Director 2 POWER OF ATTORNEY THE SHERWIN-WILLIAMS COMPANY The undersigned director of The Sherwin-Williams Company, an Ohio corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A. Commes and L.E. Stellato, or any of them, with full power of substitution and resubstitution, as attorneys or attorney to sign for me and in my name, as a director of the Company, any and all documents, registrations and other papers necessary in connection with the filing by the Company, with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, and any rules and regulations of the Securities and Exchange Commission, a Registration Statement with respect to the issuance by the Company of up to $1,500,000,000 aggregate principal amount (at stated maturity) of equity and debt securities and to file with the Securities and Exchange Commission any and all post-effective amendments to any such Registration Statement with all exhibits thereto, and any and all documents in connection therewith and any and all applications or other documents to be filed with the Securities and Exchange Commission or any national securities exchange pertaining to such securities or to such registration, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, hereby ratifying and approving the acts of said attorneys and any of them and any such substitute. Executed the date set opposite my name. July 18, 1998 /s/ D.E. Collins ---------------------------- D.E. Collins Director 3 POWER OF ATTORNEY THE SHERWIN-WILLIAMS COMPANY The undersigned director of The Sherwin-Williams Company, an Ohio corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A. Commes and L.E. Stellato, or any of them, with full power of substitution and resubstitution, as attorneys or attorney to sign for me and in my name, as a director of the Company, any and all documents, registrations and other papers necessary in connection with the filing by the Company, with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, and any rules and regulations of the Securities and Exchange Commission, a Registration Statement with respect to the issuance by the Company of up to $1,500,000,000 aggregate principal amount (at stated maturity) of equity and debt securities and to file with the Securities and Exchange Commission any and all post-effective amendments to any such Registration Statement with all exhibits thereto, and any and all documents in connection therewith and any and all applications or other documents to be filed with the Securities and Exchange Commission or any national securities exchange pertaining to such securities or to such registration, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, hereby ratifying and approving the acts of said attorneys and any of them and any such substitute. Executed the date set opposite my name. July 21, 1998 /s/ D.E. Evans ---------------------------- D.E. Evans Director 4 POWER OF ATTORNEY THE SHERWIN-WILLIAMS COMPANY The undersigned director of The Sherwin-Williams Company, an Ohio corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A. Commes and L.E. Stellato, or any of them, with full power of substitution and resubstitution, as attorneys or attorney to sign for me and in my name, as a director of the Company, any and all documents, registrations and other papers necessary in connection with the filing by the Company, with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, and any rules and regulations of the Securities and Exchange Commission, a Registration Statement with respect to the issuance by the Company of up to $1,500,000,000 aggregate principal amount (at stated maturity) of equity and debt securities and to file with the Securities and Exchange Commission any and all post-effective amendments to any such Registration Statement with all exhibits thereto, and any and all documents in connection therewith and any and all applications or other documents to be filed with the Securities and Exchange Commission or any national securities exchange pertaining to such securities or to such registration, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, hereby ratifying and approving the acts of said attorneys and any of them and any such substitute. Executed the date set opposite my name. July 22, 1998 /s/ R.W. Mahoney ---------------------------- R.W. Mahoney Director 5 POWER OF ATTORNEY THE SHERWIN-WILLIAMS COMPANY The undersigned director of The Sherwin-Williams Company, an Ohio corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A. Commes and L.E. Stellato, or any of them, with full power of substitution and resubstitution, as attorneys or attorney to sign for me and in my name, as a director of the Company, any and all documents, registrations and other papers necessary in connection with the filing by the Company, with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, and any rules and regulations of the Securities and Exchange Commission, a Registration Statement with respect to the issuance by the Company of up to $1,500,000,000 aggregate principal amount (at stated maturity) of equity and debt securities and to file with the Securities and Exchange Commission any and all post-effective amendments to any such Registration Statement with all exhibits thereto, and any and all documents in connection therewith and any and all applications or other documents to be filed with the Securities and Exchange Commission or any national securities exchange pertaining to such securities or to such registration, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, hereby ratifying and approving the acts of said attorneys and any of them and any such substitute. Executed the date set opposite my name. July 23, 1998 /s/ W.G. Mitchell ---------------------------- W.G. Mitchell Director 6 POWER OF ATTORNEY THE SHERWIN-WILLIAMS COMPANY The undersigned director of The Sherwin-Williams Company, an Ohio corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A. Commes and L.E. Stellato, or any of them, with full power of substitution and resubstitution, as attorneys or attorney to sign for me and in my name, as a director of the Company, any and all documents, registrations and other papers necessary in connection with the filing by the Company, with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, and any rules and regulations of the Securities and Exchange Commission, a Registration Statement with respect to the issuance by the Company of up to $1,500,000,000 aggregate principal amount (at stated maturity) of equity and debt securities and to file with the Securities and Exchange Commission any and all post-effective amendments to any such Registration Statement with all exhibits thereto, and any and all documents in connection therewith and any and all applications or other documents to be filed with the Securities and Exchange Commission or any national securities exchange pertaining to such securities or to such registration, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, hereby ratifying and approving the acts of said attorneys and any of them and any such substitute. Executed the date set opposite my name. July 23, 1998 /s/ A.M. Mixon ---------------------------- A.M. Mixon, III Director 7 POWER OF ATTORNEY THE SHERWIN-WILLIAMS COMPANY The undersigned director of The Sherwin-Williams Company, an Ohio corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A. Commes and L.E. Stellato, or any of them, with full power of substitution and resubstitution, as attorneys or attorney to sign for me and in my name, as a director of the Company, any and all documents, registrations and other papers necessary in connection with the filing by the Company, with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, and any rules and regulations of the Securities and Exchange Commission, a Registration Statement with respect to the issuance by the Company of up to $1,500,000,000 aggregate principal amount (at stated maturity) of equity and debt securities and to file with the Securities and Exchange Commission any and all post-effective amendments to any such Registration Statement with all exhibits thereto, and any and all documents in connection therewith and any and all applications or other documents to be filed with the Securities and Exchange Commission or any national securities exchange pertaining to such securities or to such registration, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, hereby ratifying and approving the acts of said attorneys and any of them and any such substitute. Executed the date set opposite my name. July 22, 1998 /s/ Curtis E. Moll ---------------------------- C.E. Moll Director 8 POWER OF ATTORNEY THE SHERWIN-WILLIAMS COMPANY The undersigned director of The Sherwin-Williams Company, an Ohio corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A. Commes and L.E. Stellato, or any of them, with full power of substitution and resubstitution, as attorneys or attorney to sign for me and in my name, as a director of the Company, any and all documents, registrations and other papers necessary in connection with the filing by the Company, with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, and any rules and regulations of the Securities and Exchange Commission, a Registration Statement with respect to the issuance by the Company of up to $1,500,000,000 aggregate principal amount (at stated maturity) of equity and debt securities and to file with the Securities and Exchange Commission any and all post-effective amendments to any such Registration Statement with all exhibits thereto, and any and all documents in connection therewith and any and all applications or other documents to be filed with the Securities and Exchange Commission or any national securities exchange pertaining to such securities or to such registration, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, hereby ratifying and approving the acts of said attorneys and any of them and any such substitute. Executed the date set opposite my name. July 23, 1998 /s/ H.O. Petrauskas ---------------------------- H.O. Petrauskas Director 9 POWER OF ATTORNEY THE SHERWIN-WILLIAMS COMPANY The undersigned director of The Sherwin-Williams Company, an Ohio corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A. Commes and L.E. Stellato, or any of them, with full power of substitution and resubstitution, as attorneys or attorney to sign for me and in my name, as a director of the Company, any and all documents, registrations and other papers necessary in connection with the filing by the Company, with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, and any rules and regulations of the Securities and Exchange Commission, a Registration Statement with respect to the issuance by the Company of up to $1,500,000,000 aggregate principal amount (at stated maturity) of equity and debt securities and to file with the Securities and Exchange Commission any and all post-effective amendments to any such Registration Statement with all exhibits thereto, and any and all documents in connection therewith and any and all applications or other documents to be filed with the Securities and Exchange Commission or any national securities exchange pertaining to such securities or to such registration, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, hereby ratifying and approving the acts of said attorneys and any of them and any such substitute. Executed the date set opposite my name. July 20, 1998 /s/ R.K. Smucker ---------------------------- R.K. Smucker Director 10 POWER OF ATTORNEY THE SHERWIN-WILLIAMS COMPANY The undersigned Director, Chairman of the Board and Chief Executive Officer of The Sherwin-Williams Company, an Ohio corporation ("Company"), hereby constitutes and appoints T.A. Commes, L.J. Pitorak and L.E. Stellato, or any of them, with full power of substitution and resubstitution, as attorneys or attorney to sign for me and in my name, as a director and officer of the Company, any and all documents, registrations and other papers necessary in connection with the filing by the Company, with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, and any rules and regulations of the Securities and Exchange Commission, a Registration Statement with respect to the issuance by the Company of up to $1,500,000,000 aggregate principal amount (at stated maturity) of equity and debt securities and to file with the Securities and Exchange Commission any and all post-effective amendments to any such Registration Statement with all exhibits thereto, and any and all documents in connection therewith and any and all applications or other documents to be filed with the Securities and Exchange Commission or any national securities exchange pertaining to such securities or to such registration, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, hereby ratifying and approving the acts of said attorneys and any of them and any such substitute. Executed the date set opposite my name. July 23, 1998 /s/ J.G. Breen ---------------------------- J.G. Breen Director, Chairman of the Board and Chief Executive Officer 11 POWER OF ATTORNEY THE SHERWIN-WILLIAMS COMPANY The undersigned Director, President and Chief Operating Officer of The Sherwin-Williams Company, an Ohio corporation ("Company"), hereby constitutes and appoints J.G. Breen, L.J. Pitorak and L.E. Stellato, or any of them, with full power of substitution and resubstitution, as attorneys or attorney to sign for me and in my name, as a director and officer of the Company, any and all documents, registrations and other papers necessary in connection with the filing by the Company, with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, and any rules and regulations of the Securities and Exchange Commission, a Registration Statement with respect to the issuance by the Company of up to $1,500,000,000 aggregate principal amount (at stated maturity) of equity and debt securities and to file with the Securities and Exchange Commission any and all post-effective amendments to any such Registration Statement with all exhibits thereto, and any and all documents in connection therewith and any and all applications or other documents to be filed with the Securities and Exchange Commission or any national securities exchange pertaining to such securities or to such registration, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, hereby ratifying and approving the acts of said attorneys and any of them and any such substitute. Executed the date set opposite my name. July 17, 1998 /s/ T.A. Commes ---------------------------- T.A. Commes Director, President and Chief Operating Officer 12 POWER OF ATTORNEY THE SHERWIN-WILLIAMS COMPANY The undersigned Senior Vice President-Finance, Treasurer and Chief Financial Officer of The Sherwin-Williams Company, an Ohio corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A. Commes and L.E. Stellato, or any of them, with full power of substitution and resubstitution, as attorneys or attorney to sign for me and in my name, as an officer of the Company, any and all documents, registrations and other papers necessary in connection with the filing by the Company, with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, and any rules and regulations of the Securities and Exchange Commission, a Registration Statement with respect to the issuance by the Company of up to $1,500,000,000 aggregate principal amount (at stated maturity) of equity and debt securities and to file with the Securities and Exchange Commission any and all post-effective amendments to any such Registration Statement with all exhibits thereto, and any and all documents in connection therewith and any and all applications or other documents to be filed with the Securities and Exchange Commission or any national securities exchange pertaining to such securities or to such registration, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, hereby ratifying and approving the acts of said attorneys and any of them and any such substitute. Executed the date set opposite my name. July 23, 1998 /s/ L.J. Pitorak ---------------------------- L.J. Pitorak Senior Vice President-Finance, Treasurer and Chief Financial Officer 13 POWER OF ATTORNEY THE SHERWIN-WILLIAMS COMPANY The undersigned Vice President-Corporate Controller of The Sherwin-Williams Company, an Ohio corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A. Commes and L.E. Stellato, or any of them, with full power of substitution and resubstitution, as attorneys or attorney to sign for me and in my name, as an officer of the Company, any and all documents, registrations and other papers necessary in connection with the filing by the Company, with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, and any rules and regulations of the Securities and Exchange Commission, a Registration Statement with respect to the issuance by the Company of up to $1,500,000,000 aggregate principal amount (at stated maturity) of equity and debt securities and to file with the Securities and Exchange Commission any and all post-effective amendments to any such Registration Statement with all exhibits thereto, and any and all documents in connection therewith and any and all applications or other documents to be filed with the Securities and Exchange Commission or any national securities exchange pertaining to such securities or to such registration, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, hereby ratifying and approving the acts of said attorneys and any of them and any such substitute. Executed the date set opposite my name. July 23, 1998 /s/ J.L. Ault ---------------------------- J.L. Ault Vice President-Corporate Controller EX-24.2 10 EXHIBIT 24.2 1 Exhibit 24.2 CERTIFICATE OF RESOLUTION OF THE SHERWIN-WILLIAMS COMPANY I, the undersigned, Secretary of The Sherwin-Williams Company (the "Corporation"), hereby certify that attached hereto is a true and complete copy of a resolution of the Directors of the Corporation, duly adopted at a meeting held on February 19, 1997, and that such resolution is in full force and effect and has not been amended, modified, revoked or rescinded as of the date hereof. IN WITNESS WHEREOF, I have executed this certificate as of this 14th day of August, 1998. /s/ L.E. Stellato ---------------------------- L.E. Stellato, Secretary FURTHER RESOLVED, that the appropriate officers of the Company are each hereby authorized (i) to execute and deliver a power of attorney appointing J.G. Breen, T.A. Commes, L.J. Pitorak and L.E. Stellato or any of them to act as attorneys-in-fact for the Company and for such officers for the purpose of executing and filing with the SEC, on behalf of the Company, such registration statement or statements and any and all amendments thereto (including, without limitation, post-effective amendments) with all supplements and exhibits thereto and any and all applications or other documents in connection therewith, with the SEC and any national securities exchange; and (ii) to cause such registration statement, amendment, supplement or document to be executed by any proper officer, on behalf of the Company, pursuant to such power of attorney; -----END PRIVACY-ENHANCED MESSAGE-----