AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 14, 1997
REGISTRATION NO. 333-23073
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- --------------------------------------------------------------------------------As filed with the Securities and Exchange Commission on July 7, 1999
Registration No. 333-26097
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO-------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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UCAR INTERNATIONAL INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
DELAWARE(Exact Name of Registrant as Specified in Its Charter)
Delaware 06-1385548
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
------------------------
39 OLD RIDGEBURY ROAD
DANBURY, CONNECTICUT 06817
(203) 207-77003102 WEST END AVENUE, SUITE 1100
NASHVILLE, TENNESSEE 37203
(615) 760-8227
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
-------------------------------------------
PETER B. MANCINO, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
UCAR INTERNATIONAL INC.
39 OLD RIDGEBURY ROAD
DANBURY, CONNECTICUT 06817
(203) 207-77403102 WEST END AVENUE, SUITE 1100
NASHVILLE, TENNESSEE 37203
(615) 760-7740
(NAME AND ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
Copies Requested To:
M. RIDGWAY BARKER, ESQ. WILSON S. NEELY, ESQ. D. COLLIER KIRKHAM, ESQ.
KELLEY DRYE & WARREN LLP SIMPSON THACHER & BARTLETT CRAVATH, SWAINE & MOORE
TWO STAMFORD PLAZA 425 LEXINGTON AVENUE WORLDWIDE PLAZA
281 TRESSER BOULEVARD NEW YORK, NEW YORK 10017 825 EIGHTH AVENUE
STAMFORD, CONNECTICUT 06901 NEW YORK, NEW YORK 10019
-------------------------------------------
COPY REQUESTED TO:
M. RIDGWAY BARKER, ESQ.
KELLEY DRYE & WARREN LLP
TWO STAMFORD PLAZA
281 TRESSER BOULEVARD
STAMFORD, CONNECTICUT 06901
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
possible after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /|_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /|X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, 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 of 1933, 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. / /|_|
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CALCULATION OF REGISTRATION FEE(1)
==========================================================================================
PROPOSED PROPOSED
AMOUNT TO MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SHARES TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE FEE(2)
==========================================================================================
Common Stock, par value
$.01 per share............. 554,845 $25.06 $13,653,816 $3,796
==========================================================================================
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(1)This Registration Statement on Form S-3 is being filed pursuant to Rule 429
under the Securities Act of 1933, as amended (the "Securities Act").
2,431,151 shares of Common Stock were previously registered, and a fee of
$33,980.90 was previously paid, under our Registration Statement on Form S-3,
No. 333-26097, which is hereby combined with this Registration Statement
under Rule 429.
(2)Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and (h) under the Securities Act of 1933. The registrantprice
per share is estimated based on the average of the high and low trading
prices for the Common Stock on July 2, 1999 as reported by the New York Stock
Exchange.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the registrantRegistrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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EXPLANATORY NOTE
This Registration Statement contains two Prospectuses, one relating to a
public offering in the United States and Canada (the 'U.S. Offering') of an
aggregate of 5,440,000 shares of Common Stock, par value $.01 per share ('Common
Stock'), of UCAR International Inc. and the other relating to a concurrent
offering outside the United States and Canada (the 'International Offering') of
an aggregate of 1,360,000 shares of Common Stock. The complete Prospectus for
the U.S. Offering follows immediately after this explanatory note. After such
Prospectus are the following alternate pages for the Prospectus relating to the
International Offering: a front outside cover page, a front inside cover page
and the pages containing the captions 'Legal Matters' and 'Subscription and
Sale.' All other pages of the Prospectus for the U.S. Offering are to be used
for both the U.S. Offering and the International Offering, except the back
outside cover page, which will be blank in the Prospectus for the International
Offering, and the information appearing under 'Notice to Canadian Residents,'
which will not be included in the Prospectus for the International Offering. One
copy of each complete Prospectus in the exact form in which it is to be used
after the effectiveness of the Registration Statement will be filed in EDGAR
format with the Commission pursuant to Rule 424(b).
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. ATHE PURPOSE OF THIS REGISTRATION STATEMENT RELATINGON FORM S-3 OF UCAR INTERNATIONAL
INC. ("WE" OR "US") IS TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIORREGISTER AN ADDITIONAL 544,845 SHARS OF OUR COMMON
STOCK, PAR VALUE $.01 PER SHARE (THE "COMMON STOCK"), ISSUABLE PURSUANT TO THE
TIMEUCAR INTERNATIONAL INC. MANAGEMENT STOCK OPTION PLAN, AS AMENDED AND RESTATED
THROUGH SEPTEMBER 29, 1998, AND THE UCAR INTERNATIONAL 1996 MID-MANAGEMENT
EQUITY INCENTIVE PLAN, AS AMENDED. 2,431,151 SHARES OF COMMON STOCK WERE
PREVIOUSLY REGISTERED UNDER OUR REGISTRATION STATEMENT BECOMES
EFFECTIVE.ON FORM S-3, NO.
333-26097, WHICH IS HEREBY COMBINED WITH THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFERREGISTRATION STATEMENT PURSUANT TO
SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATIONRULE 429 UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MARCH 14, 1997
6,800,000 Shares
[LOGO]ACT.
2,975,996 SHARES
UCAR INTERNATIONAL INC.
COMMON STOCK
($.01 par value)
------------------
All 6,800,000This Prospectus may be used by certain Selling Stockholders, identified in
this prospectus, for the offer and sale of up to 2,975,996 shares of common stock, par value $.01 per share ('Common Stock'),
of UCAR International Inc. ('UCAR') being sold (the 'Shares') are being sold by
Blackstone Capital Partners II Merchant Banking Fund L.P. ('BCP'), Blackstone
Offshore Capital Partners II L.P. ('BOCP') and Blackstone Family Investment
Partnership II L.P. ('BFIP' and, together with BCP and BOCP, 'Blackstone' or the
'Selling Stockholders'). See 'Selling Stockholders.' UCAR will repurchase
680,000 shares of Common Stock from Blackstone (the 'Blackstone Share
Repurchase') upon the closing of the Offering (as defined below), which
repurchase will constitute part of UCAR's previously announced stock repurchase
program. See 'Summary--Recent Developments.' Following the closing of the
Offering and the Blackstone Share Repurchase and excluding the Retained Interest
(as defined under 'Selling Stockholders'), Blackstone will own 1.5% of the
outstanding Common Stock (0.0%, if the over-allotment option is exercised in
full). The Retained Interest will constitute 2.1% of the outstandingour Common
Stock.
The sizeShares may be offered and sold from time to time by one or more of the
Retained InterestSelling Stockholders. No Selling Stockholder is estimated,required to offer or sell any of
his Shares. The Selling Stockholders anticipate that, if and when offered and
sold, the final number of
shares comprisingShares will be offered and sold in transactions effected on the OfferingNew
York Stock Exchange (NYSE) at then prevailing market prices. The Selling
Stockholders reserve the right, however, to offer and sell the Blackstone Share RepurchaseShares on any
other national securities exchange on which the Common Stock may decrease
as a result of possible changesbecome listed
or in the size ofover-the-counter market, in each case at then prevailing market
prices, or in privately negotiated transactions at a price then to be
negotiated. All offers and sales made on the Retained Interest. See 'Risk
Factors--Shares Eligible For Future Sale'NYSE or any other national
securities exchange or in the over-the-counter market will be made through or to
licensed or registered brokers and 'Selling Stockholders.' UCAR will
not receive any of thedealers.
All proceeds from the sale of the Shares.
OfShares will be paid directly to the
6,800,000Selling Stockholders and will not be deposited in an escrow, trust or other
similar arrangement. We will not receive any proceeds from the offer and sale of
these shares of Common Stock being offered, 5,440,000 shares (the
'U.S. Shares') are initially being offered in the United States and Canada by the U.S. Underwriters (the 'U.S. Offering')Selling Stockholders. We will bear all of
the expenses in connection with the registration of these Shares, including
legal and 1,360,000 shares (the
'International Shares') are initially being concurrently offered outside the
United States and Canadaaccounting fees. No discounts, commissions or other compensation will
be allowed or paid by the Managers (the 'International Offering' and,
togetherSelling Stockholders or us in connection with the
U.S. Offering,offer and sale of these shares of Common Stock, except that usual and customary
brokers' commissions or dealers' discounts may be paid or allowed by the 'Offering'). The offering price and
underwriting discounts and commissionsSelling
Stockholders.
Our corporation was formed under the laws of the U.S. OfferingState of Delaware on
November 24, 1993. Our corporate offices are located at 3102 West End Avenue,
Suite 1100, Nashville, Tennessee 37203, and the
International Offering are identical.
Theour telephone number is (615)
760-8227.
Our Common Stock is listedtraded on the New York Stock Exchange (the 'NYSE')NYSE under the symbol 'UCR.'"UCR." On March 13, 1997,July 2,
1999 the last reportedclosing sale price of the Common Stock, onas reported by the NYSE, was
$43.625.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH
AN INVESTMENT IN THE COMMON STOCK, SEE 'RISK FACTORS' BEGINNING ON PAGE 11.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY$25.13 per share.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION ORNOR ANY STATE SECURITIES
COMMISSION NOR HAS THEAPPROVED OF THESE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACYDETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR ADEQUACY OF THIS PROSPECTUS.COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND SELLING
PUBLIC COMMISSIONS STOCKHOLDERS(1)
--------------- -------------- ----------------
Per Share......................................................... $ $ $
Total(2).......................................................... $ $ $
(1) Expenses of the Offering estimated at $800,000 will be paid by UCAR.
(2) Blackstone has granted the U.S. Underwriters and the Managers an option,
exercisable by Credit Suisse First Boston Corporation for 30 days from theThe date of this Prospectus is July __, 1999.
No broker, dealer, salesperson or other person has been authorized to purchase a maximum of 691,496 additional shares
of Common Stock solelygive
any information or to cover over-allotments of Shares, if any. If the
option is exercisedmake any representation not contained in full, the total Price to Public will be $ ,
Underwriting Discounts and Commissions will be $ , and Proceeds
to Selling Stockholders will be $ .
The U.S. Shares are offered by the several U.S. Underwriters when, asthis Prospectus
and, if delivered to and acceptedgiven or made, such information or representation must not be relied
upon as having been authorized by us or any of the U.S. Underwriters and subject to their right to
reject ordersSelling Stockholders. Neither
the delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in wholethe our
affairs since the date hereof or in part. It is expected that the U.S. Shares willinformation contained herein is
correct as of any time subsequent to the date hereof. This Prospectus shall not
constitute an offer to sell or a solicitation of an offer to buy any securities
in any jurisdiction to any person to whom it would be ready for delivery onunlawful to make such an
offer or about , 1997, against paymentsolicitation in immediately
available funds.
CREDIT SUISSE FIRST BOSTON
DILLON, READ & CO. INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
THE NIKKO SECURITIES CO.
INTERNATIONAL, INC.
Prospectus dated , 1997.
such jurisdiction.
AVAILABLE INFORMATION
UCAR is subject to the informational requirements of the Securities
Exchange Act of 1934 (the 'Exchange Act')We file annual, quarterly and in accordance therewith, filesspecial reports, proxy and information statements and other
information with the Securities and Exchange Commission (the 'Commission')(Commission). The reports, proxyYou may
read and copy any of the information statements and other information so filed may be inspected and
copiedon file with the Commission at the
Commission's public reference facilities maintained by the Commissionroom at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, and at the Commission'sfollowing Regional Offices located at Sevenof the Commission: 7 World Trade
Center, Suite 1300, New York, New York 10048, and Citicorp Center, 500 West Madison Street, Suite
1400,1300, Chicago, Illinois 60661.60661-2511. Copies of such reports, proxy and information statements and
other informationthe filed documents can be
obtained at prescribed ratesby mail from the Public Reference Section of the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549.20549 at prescribed rates. You
may call the Commission at 1-800-SEC-0330 for further information on the public
reference rooms. The Commission also maintains a Web siteSite that contains reports,
proxy and information statements and other information regarding registrants
(including UCAR) that file electronically with the Commission. The address of suchthe Commission's
Web siteSite is http://www.sec.gov.
The Common Stock is listed on the NYSE, and reports, proxy
and information statements and other information filed with the Commission can
also be inspected at the officesThis Prospectus constitutes a part of the NYSE, 20 Broad Street, New York, New
York 10005.
UCAR has filed with the Commission a Registration Statement on Form S-3
(togetherS-8
(herein, together with all amendments and exhibits, schedules and supplements thereto,referred to as the
'Registration Statement'"Registration Statement") that we filed with the Commission under the Securities
Act of 1933 (the 'Securities
Act') with respect to the Shares.1933. This Prospectus which constitutes a part of
the Registration Statement, does not contain all of the information set forth
in the Registration Statement. InformationCertain parts of the Registration Statement are
omitted has been omitted as permitted byin accordance with the rules and regulations of the Commission.
For further information with
respect to UCAR and the Shares, referenceReference is made to the Registration Statement.Statement and exhibits thereto for further
information. Exhibits to the Registration Statement that are omitted from this
Prospectus may also be obtained at the Commission's Web Site described above.
Statements contained in this Prospectus as toor incorporated by reference herein concerning the
contentsprovisions of any contractagreement or other document are not necessarily complete and, where such contract or other
document isfiled as an exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete, and readers are referred to the copy so filed for more
detailed information, each such statement isbeing qualified in all respectsits entirety by
the provisions in such exhibit, to which reference
is hereby made. The Registration Statement may be inspected at, and copies of
all or any portion of the Registration Statement can be obtained at prescribed
rates from, the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549.
UCAR is a corporation formed under the laws of the State of Delaware on
November 24, 1993. The mailing address of its principal executive office is 39
Old Ridgebury Road, Danbury, Connecticut 06817. The telephone number of such
office is (203) 207-7700.reference.
2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filedCommission allows us to "incorporate by UCARreference" the information we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the Commission are
incorporatedwill automatically update and supersede this information. We
incorporate by reference in this Prospectus:
(a) UCAR'sthe documents listed below and any future filings made
with the Commission under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until all of the shares offered are sold.
1. Our Annual Report on Form 10-K for the year ended December 31, 1996;
(b) UCAR's Notice1998
(the "1998 10-K"), as filed with the Commission on March 26, 1999;
2. Our Quarterly Report on Form 10-Q for the quarter ended March 31, 1999,
as filed with the Commission on May 14, 1999;
3. The portions of Meeting andthe Proxy Statement for the 1996our 1999 Annual Meeting of Stockholders; and
(c)that
have been incorporated by reference into the 1998 10-K;
4. The description of UCAR's capital stockthe Common Stock, contained in UCAR'sour Registration
Statement on Form 8-A (File No. 1-13888) dated July 28, 1995 as updated byand filed with the
Commission under Section 12 of the Exchange Act including any amendmentamendments or
reportreports filed for the purpose of updating such description; and
5. The description of the Rights, contained in our Registration Statement
on Form 8-A (File No. 1-13888) dated September 10, 1998 and filed with the
Commission under Section 12 of the Exchange Act including any amendments or
reports filed for the purpose of updating such description.
In addition, all documents filed by UCAR pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the Offering shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such documents. Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document thatwhich also is or is deemed to be
incorporated by reference herein modifies or supersedes suchthat statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
-2-
UCARYou can request, and we will providesend to you without charge, to each person, including any beneficial
ownercopies of
Common Stock, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all of the
documents that are incorporated by reference hereinin this Prospectus but which are
not delivered to you (other than exhibits to such documents unless such exhibitswhich are not
specifically incorporated by reference inreference). You may request these copies by writing
or telephoning the documents that this Prospectus incorporates by reference). Such requests
should be addressed toCompany at: UCAR International Inc., 39 Old Ridgebury Road, Danbury,
Connecticut 06817, Attention: Investor Relations, telephone number (203)
207-7726.
------------------------
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES OFFERED
HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE SHORT
COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES,
SEE 'UNDERWRITING.'
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT. ACTUAL
RESULTS, EVENTS AND CIRCUMSTANCES COULD DIFFER MATERIALLY FROM THOSE SET FORTH
IN SUCH STATEMENTS DUE TO VARIOUS FACTORS. SUCH FACTORS INCLUDE THE POSSIBILITY
THAT ANNOUNCED ADDITIONS TO ELECTRIC ARC FURNACE STEEL PRODUCTION CAPACITY MAY
NOT OCCUR, INCREASED ELECTRIC ARC FURNACE STEEL PRODUCTION MAY NOT OCCUR OR
RESULT IN INCREASED DEMAND OR HIGHER PRICES FOR GRAPHITE ELECTRODES, ACQUIRED
MANUFACTURING CAPACITY MAY NOT BE FULLY UTILIZED, TECHNOLOGICAL ADVANCES
EXPECTED BY THE COMPANY MAY NOT BE ACHIEVED, CHANGING ECONOMIC AND COMPETITIVE
CONDITIONS, OTHER TECHNOLOGICAL DEVELOPMENTS AND OTHER RISKS AND UNCERTAINTIES,
INCLUDING THOSE SET FORTH OR INCORPORATED BY REFERENCE HEREIN.
-3-
SUMMARY
The following summary is qualified in its entirety by and3102 West End Avenue,
Suite 1100, Nashville, Tennessee 37203, (615) 760-8227.
You should be read in
conjunction withrely on the more detailed information and Consolidated Financial
Statements, including the notes thereto, appearing elsewhere or incorporated by reference herein. Unlessor provided
in this Prospectus or any prospectus supplement. We have not authorized anyone
else to provide you with different information.
3
RISKS REGARDING FORWARD-LOOKING STATEMENTS
This Registration Statement contains forward-looking statements. Except as
otherwise indicated, all information (i) assumes that
there willrequired to be disclosed in periodic reports required to be filed by
public companies with the Commission pursuant to the Commission's rules, we have
no exerciseduty to update these statements. Actual future events and circumstances
(including future performance, results and trends) could differ materially from
those set forth in these statements due to various factors. These factors
include the possibility of the over-allotment option, (ii) has been adjustedoccurrence of unanticipated events or
circumstances relating to reflectpending antitrust investigations or investigations or
lawsuits relating to the reclassificationsame subject matter of these pending investigations or
lawsuits, the occurrence of unanticipated events or circumstances relating to
businesses acquired within the past several years, the occurrence of
unanticipated events or circumstances relating to capacity in the industry,
strategic plans or divestiture, joint venture, operating, capital, global
integration or other projects, changes in currency exchange rates, changes in
economic or competitive conditions, technological developments, and other risks
and uncertainties, including those described in this Registration Statement.
THE COMPANY
Our business was founded in 1886 by National Carbon Company. In 1917,
National Carbon Company, along with Union Carbide Company and three other
companies, combined to form a new corporation named Union Carbide and Carbon
Company, now known as Union Carbide Corporation ("Union Carbide"). National
Carbon Company became the Carbon Products Division of Union Carbide. In January
1989, Union Carbide realigned each of its worldwide businesses into separate
subsidiaries. As part of the Common Stock in connection with,realignment, the business of the Carbon Products
Division was separated from Union Carbide's other businesses and became owned by
UCAR and its subsidiaries, which were then wholly owned by Union Carbide. In
February 1991, Union Carbide sold to Mitsubishi Corporation ("Mitsubishi") 50%
of the stock splits effected after, thecommon equity of UCAR and its subsidiaries.
In January 1995, we consummated a leveraged recapitalization on January 26, 1995
(the
'Recapitalization'"Recapitalization") described in note 1pursuant to an agreement among Union Carbide, Mitsubishi,
UCAR and a corporation affiliated with Blackstone Capital Partners II Merchant
Banking Fund L.P. and its affiliates (collectively, "Blackstone"). Pursuant to
the Consolidated Financial
StatementsRecapitalization:
. UCAR issued common stock representing approximately 75% of the then
outstanding common stock to Blackstone, an affiliate of Chase
Manhattan Bank and (iii) assumes there have been no exercises after February 28,
1997certain members of options which have been or may be granted under employee stock option or
equity incentive plans.
Unless the context requires otherwise or otherwise indicated, all
references to 'UCAR' mean UCAR International Inc. and to the 'Company' mean
UCAR, its wholly- and majority-owned subsidiaries (includingmanagement for $203 million.
. UCAR Global Enterprises Inc., a direct wholly-owned subsidiary of
UCAR ('Global')), EMSA
(Pty.("Global") Ltd., its 50%-owned affiliate ('EMSA'), and its and their predecessors
(insofar as a predecessor's activities related to the carbon and graphite
products business), collectively, except that such references do not include
UCAR Grafit OAO ('UCAR Grafit'), Carbone Savoie S.A.S. ('Carbone Savoie') or
UCAR Elektroden GmbH ('UCAR Elektroden' and, together with UCAR Grafit and
Carbone Savoie, the 'Acquired Companies') with respect to time periods prior to
their respective acquisitions. Unless otherwise indicated, all financial
information refers to that of the Company (including UCAR Grafit since its
acquisition) on a consolidated basis (using the equity method for EMSA).
All references to 'Home Markets' mean North America, Western Europe,
Brazil, Mexico and South Africa and to 'Free World' mean worldwide, excluding
China, the former Soviet Union, India and Eastern Europe (other than the former
East Germany).
THE COMPANY
The Company is the largest manufacturer of graphite and carbon electrodes
in the world, with sales in over 70 countries and manufacturing facilities, on
four continents. Graphite electrodes, the Company's principal product, are
consumed primarily in the production of steel in an electric arc furnace
('EAF'), the steelmaking technology used by virtually all 'mini-mills,' as well
as in the refining of steel using ladle furnaces. Carbon electrodes are consumed
primarily to produce silicon metal, which is used in the manufacture of
aluminum. Graphite electrodes and carbon electrodes accounted for approximately
73% and 6%, respectively, of the Company's net sales in 1996. The Company also
manufactures other graphite and carbon products as well as cooling systems and
components for steelmaking furnaces and other high temperature applications.
The Company has benefited from reduced costs resulting from its successful
restructuring and re-engineering projects as well as from significant increases
in graphite electrode pricing (attributable in large part to an industry-wide
capacity reduction) which have taken place since mid-1992. The Company's net
sales have increased to $948 million in 1996 from $659 million in 1992. The
Company had operating profit in 1996 of $268 million as compared to operating
profit of $8 million (excluding restructuring costs) in 1992.
INDUSTRY OVERVIEW AND OUTLOOK
Electrodes act as conductors of electricity in a furnace, generating
sufficient heat to melt scrap metal or other raw materials used to produce
steel, silicon metal or other materials. The electrodes are gradually consumed
in the course of such production. In the case of graphite electrodes in an EAF,
one electrode must be replaced, on average, every eight to ten operating hours
('a stick a shift'). Graphite electrodes are presently the only products
available that are capable of sustaining the levels of heat (as high as 5,000
degrees Fahrenheit) required in an EAF and, therefore, demand for graphite
electrodes is directly related to the amount of EAF steel produced.
Worldwide EAF steel production has significantly increased over the past
two decades and represented approximately 33% of total steel production in 1995
as compared to approximately 18% in 1975, according to
-4-
industry and Company estimates. There are presently in excess of 2,000 EAFs
operating worldwide, which the Company estimates produced approximately 247
million metric tons of steel in 1995. The Company estimates that the net
increase in EAF steel production capacity was approximately 20 million metric
tons in 1995 and approximately 24 million metric tons in 1996. The Company
estimates that it supplied all or a portion of the graphite electrodes consumed
by approximately 50% of the new EAFs which commenced operation during 1995 and
1996.
The Company believes that EAF steelmaking will continue to grow in the
future and that EAF steelmaking is a cost effective and efficient method of
steel production. Over the past two decades, EAF steelmaking has become more
efficient and cost effective due to technological improvements in EAF
steelmaking processes and equipment design and in graphite electrodes. This
improved efficiency has resulted in a decrease in the quantity of graphite
electrodes consumed per metric ton of steel produced (known as 'Specific
Consumption'). From 1985 through mid-1992, the decrease was offset by increased
levels of EAF steel production, which resulted in relatively stable demand for
graphite electrodes. The Company believes that, since mid-1992, increased levels
of EAF steel production have more than offset the decrease in Specific
Consumption. The Company believes that global demand for graphite electrodes
will increase over the long-term at an average rate of 1% to 2% per year. The
Company has experienced, and expects to continue to experience, volatility with
respect to demand for graphite electrodes in certain geographic areas as general
economic conditions in such areas fluctuate. The Company believes that, on
average, as the costs (relative to the benefits) of achieving significant
further efficiencies in EAF graphite electrode consumption increase, the decline
in Specific Consumption will continue at a more gradual pace, although there can
be no assurance that such will be the case.
Since the mid-1980s, there has been a consolidation in the number of Free
World graphite electrode producers and a reduction of Free World graphite
electrode manufacturing capacity. Company capacity and Free World capacity, as
estimated by the Company, each has been reduced by one-third since 1985. In 1992
and 1993, in two separate transactions, three of the Company's largest
competitors combined into a single entity, SGL Carbon AG ('SGL'). The Company
believes that SGL's capacity is approximately one-third less than the combined
capacity of those three competitors in 1986. Principally as a result of this
consolidation and reduction, the Company believes that Free World capacity and
demand are currently in relative balance. The Company is not aware of any
construction of new graphite electrode manufacturing facilities in the Free
World. Presently, SGL is the only other global manufacturer of electrodes in the
Free World and there are in total only eight other Free World manufacturers.
The excess graphite manufacturing capacity and decreases in Specific
Consumption during the 1980s resulted in downward pressure on worldwide pricing.
The Company believes that, from 1982 to mid-1992, the average Free World
industry-wide price (in dollars and net of changes in currency exchange rates)
for graphite electrodes declined by approximately one-third. Since mid-1992,
there has been a significant improvement in Free World electrode pricing
(attributable, in large part, to such industry-wide reduction in capacity). The
Company believes that there were Free World industry-wide graphite electrode
price increases in 1992 through 1996, the effect of which was to increase
average Free World industry-wide prices (in dollars and net of changes in
currency exchange rates) by approximately 9% in 1993 as compared to 1992, by
approximately 12% in 1994 as compared to 1993, by approximately 9% in 1995 as
compared to 1994 and by approximately 6% in 1996 as compared to 1995. The
Company estimates that the price of graphite electrodes represents only
approximately 3% of the price of finished steel produced by EAF steelmakers in
the Free World.
The Company believes that worldwide total crude steel production in 1997
will increase by approximately 2.5% to approximately 767 million metric tons and
that EAF steel production will increase at a greater rate due to a net increase
in EAF steel production capacity. Approximately 24 million metric tons of net
new EAF steel production capacity was added in 1996 and the Company is aware of
another approximately 54 million metric tons of announced net new EAF steel
production capacity that is scheduled to start-up through 1999. The Company
believes that this additional EAF production capacity will lead to continued
increases in worldwide demand for graphite electrodes in 1997 and that the
Company's worldwide manufacturing facilities and market share have positioned
the Company to benefit from these trends.
-5-
GROWTH STRATEGIES AND RECENT INITIATIVES
The Company expects worldwide demand for graphite electrodes to increase in
the near term due to increased EAF steel production from existing and proposed
new EAFs. The Company believes that it currently has adequate manufacturing
capacity to meet increased sales volume resulting from such increased near term
demand. In addition, the Company actively studies opportunities to leverage its
core competencies, technologies and products for growth. Management teams,
working with outside consultants, continually seek to define the Company's
strengths and evaluate opportunities to use these strengths to increase the
Company's net sales at margins which, within two to three years after
implementation, are at or near the margins that exist today. Areas of potential
growth currently being pursued or considered include:
o Geographic expansions
o Product expansions
o Expansion of manufacturing operations
In line with its strategy of achieving growth both domestically and
internationally, the Company actively reviews possible acquisitions and other
business opportunities on a regular basis.
Acquisition of Minority Interests and Interest in Joint Venture
Affiliate. In 1994, the Company acquired substantially all of the minority
stockholders' interest in its Mexican subsidiary at a net cost of $23 million.
In addition, in 1995, the Company acquired substantially all of the shares of its Brazilian subsidiary that were owned by public shareholders in Brazil for an
aggregate purchase price of $52foreign subsidiaries borrowed
$585 million plus expenses of $3 million.
Thereafter, the Company acquired additional shares from such Brazilian
shareholders for $2 million.
On February 10, 1997, UCAR's Board of Directors approved the purchase of
the shares of EMSA held by its joint venture partner in this 50%-owned
affiliate. The purchase price is expected to be approximately $75 million, plus
expenses. In 1996, EMSA sold approximately 99% of all graphite electrodes
purchased in South Africa (which represents 4% of all graphite electrodes
purchased in the Home Markets), and had net sales of $65 million. The Company
intends to finance the acquisition of the EMSA shares with borrowings under its
revolving credit facility, which is expected to be increased as described below
under '--Recent Developments--Proposed Amendments to Credit Facilities.' The
Company expects that the purchase will be completed by the end of the second
quarter of 1997.
The Company believes that these acquisitions have enabled and will enable
the Company to optimize production of products at various facilities, to better
integrate worldwide operations of these subsidiaries and affiliate with those of
the Company's other subsidiaries, to recognize production efficiencies at
various manufacturing facilities to lower average Company-wide cost of sales and
to better capture and manage cash flow from operations of these subsidiaries and
affiliate.
Focused Factory Project. During 1996, the Company began the construction
of an integrated 'focused factory' at its manufacturing facility in Clarksburg,
West Virginia (the 'Focused Factory Project') at an estimated cost of $16
million. The Focused Factory Project will add additional manufacturing processes
and new technology (developed and tested over the preceding two years by the
Company at its United States technology center) to expand capacity to
manufacture 'superfine grain' graphite specialty products on a cost competitive
basis. The Company believes that worldwide industry sales of such products
approach $400 million annually, that demand for these products has grown and
will continue to grow for at least the next several years (primarily for use in
semiconductor, continuous casting, non-ferrous metal extrusion and electrical
discharge machining applications) and that all of the significant Free World
manufacturers of these products are currently operating at or near capacity. The
Company expects that the Focused Factory Project will be completed by the end of
1998.
Acquisitions in Russia and Germany. On November 10, 1996, the Company
purchased 90% of the equity of UCAR Grafit, which operates a graphite electrode
business in Vyazma, Russia. The aggregate investment was $50 million. The
Company anticipates increasing its ownership up to 98% of such equity at an
additional cost of approximately $2 million. On February 1, 1997, the Company,
through a newly-formed 70%-owned subsidiary, UCAR Elektroden, purchased the
graphite electrode business of Elektrokohle Lichtenberg AG ('EKL') in
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Berlin, Germany. The 30% minority interest in UCAR Elektroden is held by a
private German company. The aggregate purchase price paid by UCAR Elektroden for
the EKL assets was approximately $15 million, consisting of $3 million for
equipment and approximately $12 million for working capital. UCAR Elektroden and
UCAR Grafit work in tandem with UCAR Elektroden manufacturing green electrodes
and UCAR Grafit baking, pitch impregnating, rebaking and graphitizing those
electrodes. The graphitized electrodes are then returned to UCAR Elektroden for
machining and distribution. Together, UCAR Elektroden and UCAR Grafit have
capacity to produce approximately 17,000 metric tons of finished graphite
electrodes.
The Company acquired UCAR Grafit and UCAR Elektroden to expand
geographically. While the Company has been a supplier to Eastern Europe for over
25 years, the Company believes that these acquisitions will increase its
penetration of the large and potentially growing graphite electrode markets in
Eastern Europe, Russia and the other countries of the former Soviet Union, and
the Middle East. In addition, many of the EAF steel producers in these markets
consume lower quality graphite electrodes. Accordingly, net sales by UCAR Grafit
and UCAR Elektroden of such types of electrodes are expected to be additive to
sales currently made by the Company, which expects to continue to export ultra
high power graphite electrodes to its existing customer base in these regions.
While the Company plans to use its process technology to improve operating
efficiency and gross profit margins at UCAR Grafit and UCAR Elektroden, the
Company does not intend to upgrade the quality of their products until demand
for higher quality products in these regions increases. The Company does not
expect that any significant capital expenditures will be required to achieve
such planned improvements.
Acquisition of Cathode Manufacturing Operations. On January 2, 1997, the
Company acquired 70% of the outstanding shares of Carbone Savoie, a wholly-owned
subsidiary of Pechiney S.A., for a purchase price of $33 million. Carbone
Savoie, with facilities in Notre Dame and Venissieux, France, is the leading
worldwide manufacturer of carbon cathodes (with capacity to manufacture
approximately 30,000 metric tons annually). Carbon cathodes are consumed in the
production of aluminum. This acquisition creates an alliance between the Company
and Aluminium Pechiney S.A. (a wholly-owned subsidiary of Pechiney S.A.), one of
the world's leading producers of aluminum and the leading supplier of smelting
technology to the aluminum industry. Aluminium Pechiney S.A. is developing the
use of graphite cathodes (instead of carbon cathodes) in its aluminum smelting
technology, which the Company believes allows for substantial improvement in
process efficiency. The new graphite cathodes will be used by Aluminium Pechiney
S.A. in its own plants and will be marketed to its licensees as well as to third
parties. The Company believes that joint development efforts combining Aluminium
Pechiney S.A.'s technology and the Company's graphite technology and expertise
in high temperature industrial applications should result in important advances.
Carbone Savoie (which had net sales of approximately $80 million in 1996) and
the Company together supplied one-third of the worldwide market for carbon and
graphite cathodes in 1996, according to Company estimates.
BUSINESS STRATEGIES
Restructuring and Re-engineering Projects. The Company has implemented
several successful restructuring and re-engineering projects since the mid-1980s
which have eliminated work, improved operating efficiency and reduced costs. In
connection with these projects, the Company has reduced or eliminated production
at higher cost facilities, maximized production at lower cost facilities,
lowered inventory levels for a given level of forecast sales, significantly
reduced the number of employees worldwide, significantly shortened average
graphite electrode production cycle time, closed manufacturing facilities,
consolidated manufacturing operations and consolidated sales offices. As a
result primarily of these projects, by the end of 1994, the Company had achieved
annual cost savings of approximately $101 million (as compared to 1990) and had
achieved approximately $15 million in additional annual cost savings by the end
of 1996 (as compared to 1994). In January 1995, UCAR's Board of Directors
approved an additional modernization project (the 'Rationalization Project')
designed to close certain high cost manufacturing operations and expand lower
cost manufacturing operations at the Company's North American graphite electrode
plants. The Rationalization Project was completed in July 1996, yielded
approximately $8 million in annual cost savings in 1995 and $20 million in 1996
and is expected to yield $23 million in annual cost savings in 1997 (in each
case, as compared to 1994). Other smaller projects to improve raw materials
technology, enhance equipment technology and upgrade certain
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production facilities (collectively, the 'Technology Improvement Projects'),
implemented in 1996 or expected to be implemented in 1997, are expected to yield
approximately $5 million of additional annual cost savings by the end of 1997
(as compared to 1994). The Company intends to continue to implement total
quality control techniques and pursue other opportunities for cost savings.
Emphasis on Customer Service. The Company believes that its dedication to
providing customers with a high level of technical service support provides an
important competitive advantage. The Company employs approximately 60 engineers
to provide technical assistance to customers in, among other things, all areas
of EAF operation and design, including equipment evaluation and control, power
utilization and electrode purchase management as well as to provide training in
the use of Company products. Such technical assistance includes periodically
monitoring certain customers' EAF efficiency levels via computer modem. In
addition, the Company employs a global direct sales force in 19 sales offices on
five continents to serve its customers more effectively. The Company intends to
integrate the customer service activities of UCAR Elektroden and UCAR Grafit
with its own customer service activities to enhance their effectiveness. Carbone
Savoie has its own dedicated customer service group which works closely with
Aluminium Pechiney S.A.'s customer service group to maximize use of their
respective products and technologies.
Technical Improvements. The Company operates a graphite and carbon
technology center in the United States dedicated to improving product quality
and manufacturing processes through research and development activities
conducted by approximately 80 technical professionals. These activities are
integrated with the efforts of over 100 engineers at manufacturing facilities
who are focused on improving manufacturing processes. Developments by the
Company include larger and stronger electrodes (increasing the Company's ability
to supply various 'supersized' electrodes), new chemical additives to enhance
raw materials used in graphite electrodes and new applications for water spray
cooling technology and other technological advances, resulting in the
development of safer, more cost effective and more efficient EAF steel and
graphite electrode production. The Company has received recognition for the high
quality of its products under several programs around the world and has been
awarded preferred or certified supplier status by many major steel and other
manufacturing companies. In addition, Carbone Savoie operates a dedicated
cathode technology center in Venissieux, France employing approximately 20
professionals.
RECENT DEVELOPMENTS
Proposed Amendments to Credit Facilities. On February 10, 1997, UCAR's
Board of Directors approved a proposal to amend the Company's senior secured bank credit facilities (the 'Seniorarranged
through Chase Manhattan Bank.
. Global issued $375 million of Subordinated Notes.
4
. We repaid approximately $250 million of then existing indebtedness.
. UCAR repurchased and cancelled all of the common equity then held
by Mitsubishi for $406 million.
. UCAR paid to Union Carbide a cash dividend of $347 million on the
common equity then held by Union Carbide, which common equity
represented approximately 25% of the then outstanding common stock.
. Certain members of management received restricted stock matching a
portion of the common stock purchased by them and options to
purchase up to an aggregate of 12% of the then outstanding common
stock on a fully diluted basis, subject to certain vesting
requirements.
In connection with the Recapitalization, we transferred all of our
operating subsidiaries to Global or subsidiaries of Global. UCAR currently holds
no material assets other than common stock of Global and intercompany debt owed
to it.
In August 1995, UCAR completed an initial public offering of common stock.
In connection with the offering, UCAR sold common stock representing 22% of the
common stock outstanding immediately after the offering for net proceeds of $227
million and Union Carbide sold all of the common stock then owned by it. UCAR
used net proceeds from the offering to contribute to Global an amount sufficient
to redeem $175 million aggregate principal amount of Subordinated Notes at a
redemption price equal to 110% of the aggregate principal amount redeemed, plus
accrued interest of $4 million. We used the balance of the net proceeds for
general corporate purposes and to reduce other outstanding indebtedness.
In October 1995, we refinanced the bank credit facilities obtained in
connection with the Recapitalization with the Senior Bank Facilities')Facilities at more
favorable interest rates and with more favorable covenants.
In March 1996, Blackstone, an affiliate of Chase Manhattan Bank and
certain members of management sold shares of common stock in a secondary public
offering. After the offering, Blackstone owned approximately 20% of the then
outstanding shares of common stock.
In March 1997, the Senior Bank Facilities were amended to reduce interest
rates, increase the amount available under theour revolving credit facility to $200$250
million from $100 million and to change the covenants to allow more flexibility in uses
of free cash flow for acquisitions, capital expenditures and restricted
payments.
In April 1997, Blackstone sold approximately 14% of the then outstanding
common stock repurchases. No assurance canin a secondary public offering. Concurrently with the offering, we
repurchased 1,300,000 shares of common stock from Blackstone for $48 million.
This repurchase constituted part of a previously announced stock repurchase
program. After the offering and the repurchase, Blackstone ceased to be given that such amendments will, in fact, become effective.
Stock Repurchase Program. On February 10,a
principal stockholder of UCAR.
5
In 1997, UCAR's Board of Directors authorized a program to repurchase up
to $100$200 million of Common Stockcommon stock at prevailing prices from time to time in the
open market or otherwise depending on market conditions and other factors,
without any established minimum or maximum time period or number of shares. UCAR
purchased an aggregate of $92 million of common stock (including common stock
repurchased from Blackstone) under this program. The last repurchase was made in
1997. We do not expect to repurchase additional common stock under this program
in the near term.
In September 1998, UCAR's Board of Directors adopted a global
restructuring and rationalization plan. The plan is intended to enhance
stockholder value by focusing on optimizing margins, maximizing cash flow,
generating growth in earnings and strengthening competitiveness through
operating and overhead cost reduction and plant rationalization. The plan is
also intended, over the long term, to strengthen our position as a low cost
producer supplying the steel and metals industries and, over the near term, to
respond to global economic conditions that are adversely impacting our
customers. We believe that, under current conditions, the plan will repurchase 680,000 shareshave a
positive impact on earnings in the second half of Common
Stock from Blackstone upon1999.
In November 1998, the closing of the Offering at the same price per
share at which the Shares are sold to the U.S. UnderwritersSenior Bank Facilities were refinanced and the
Managers inindenture governing the Offering, which repurchase will constitute a part of such repurchase
program. UCAR intends to finance such repurchases from existing cash balances,
cash flow from operations, short-term borrowings and borrowings under its
revolving credit facility.
-8-
THE OFFERING
Common Stock offered by the Selling
Stockholders............................... 6,800,000 shares
Common Stock offered for sale in:
The U.S. Offering.......................... 5,440,000 shares
The International Offering................. 1,360,000
----------------
Total................................... 6,800,000 shares
================
Common Stock to be outstanding after the
Offering................................... 46,117,777 shares(a)(b)
Use of proceeds.............................. UCAR will not receive any proceeds from the sale of Shares by the
Selling Stockholders.
Dividend policy.............................. It is the current policy of UCAR's Board of Directors to retain
earnings to finance operations, fund acquisitions, repurchase
shares of Common Stock and repay debt. See 'Price Range of Common
Stock and Dividend Policy.'
NYSE symbol.................................. 'UCR'
Risk factors................................. Prospective investors should carefully consider all the information
set forth in this Prospectus and, in particular, should evaluate
the specific factors set forth under 'Risk Factors' before
purchasing any of the Shares.
- ------------------
(a) As of February 28, 1997 and after giving effect to the Blackstone Share
Repurchase.
(b) Excludes 3,313,840 shares reserved for issuance upon exercise of options
outstanding as of February 28, 1997 under UCAR's Management Stock Option
Plan and UCAR's 1996 Mid-Management Equity Incentive Plan.
-9-
SUMMARY FINANCIAL AND OPERATING DATA
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
------- ------- -------
(DOLLARS IN MILLIONS,
EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA:
Net sales................................................................. $758 $901 $948
Gross profit.............................................................. 243 345 365
Selling, administrative and other expenses................................ 79 115 90
Restructuring costs(a).................................................... -- 30 --
Operating profit.......................................................... 162 189(b) 268
Total interest expense.................................................... 19 93 61
Income before extraordinary charge and cumulative effect of changes in
accounting principles................................................... 100 25(b) 145
Extraordinary charge, net of tax(c)....................................... -- 37 --
Cumulative effect of changes in accounting
principles.............................................................. -- -- 7
Net income (loss)......................................................... 100 (12)(b) 152
Net income per share before cumulative effect of change in accounting
principles (Pro forma in 1995).......................................... $1.87(d) $3.00
Net income per share...................................................... $3.15
Weighted average shares outstanding (Pro forma in 1995) (in
thousands)(e)........................................................... 48,763 48,469
BALANCE SHEET DATA (AT PERIOD END):
Cash and cash equivalents................................................. $ 60 $ 53 $ 95
Total assets.............................................................. 778 864 988
Total debt................................................................ 247 668 635
Stockholders' equity (deficit)............................................ 192 (167) (2)
OTHER DATA:
Gross profit margin....................................................... 32.1% 38.3% 38.5%
Operating profit margin................................................... 21.4 21.0 28.3
Depreciation.............................................................. $ 39 $ 38 $ 36
Capital expenditures...................................................... 34 65 62
EBITDA(f)................................................................. 201 249 304
Cash flow from operations................................................. 174 130 172
Cash flow from investing.................................................. (56) (116) (104)
Cash flow from financing.................................................. (105) (18) (26)
Quantity of graphite electrodes sold (thousands of metric tons)(g)........ 196(h) 217(h) 205
- ------------------
(a) Represents costs recorded in connection with closing or downsizing
operations at certain locations as part of the Company's restructuring and
re-engineering projects. These costs consisted primarily of write-offs of
fixed assets and other shut-down costs.
(b) Includes, in 1995, non-recurring charges related to the Recapitalization of
$8 million related to payments for a senior subordinated credit facility
whichSubordinated Notes was available but not used and payments under the Company's Long Term
Incentive Compensation Plan and non-recurring expenses related to the
Initial Offering (as defined herein) of $18 million for compensation
expense, related to the accelerated vesting of performance stock options and
restricted matching stock.
(c) Resulted from early extinguishment of debt inamended. In connection with the
Redemption
(as defined herein) andrefinancing, we obtained additional term debt of $210 million. Following the
Refinancing (as defined herein).
(d) For unaudited pro forma net income per share, historical net income (loss)
has been adjusted assuming thatrefinancing, the Recapitalization, the Initial Offering,
the Redemption and the Refinancing had occurred as of January 1, 1994.
Historical net income (loss) per share has been omitted as the historical
capitalization of the Company is not indicative of the Company's current
capital structure.
(e) Reflects Common Stock and Common Stock equivalents outstanding after the
Initial Offering, including Common Stock equivalents calculated in
accordance with the 'treasury stock method,' wherein the net proceeds from
the exercise of Common Stock equivalents are assumed to be used for the
repurchase of shares of Common Stock at the average price for such year.
(f) EBITDA, for this purpose, means operating profit plus depreciation,
amortization and the portion of restructuring costs applicable to fixed
asset write-offs. The amount of restructuring costs applicable to fixed
asset write-offs for 1995 was $22 million. The Company believes that EBITDA
is generally accepted as providing useful information regarding a company's
ability to service and/or incur debt. EBITDA should not be considered in
isolation or as a substitute for net income, cash flows from continuing
operations or other consolidated income or cash flow data prepared in
accordance with generally accepted accounting principles or as a measure of
a company's profitability or liquidity.
(g) Excludes graphite electrodes sold by EMSA, which aggregated 24,000 metric
tons, 27,000 metric tons and 26,000 metric tons in 1994, 1995 and 1996,
respectively.
(h) The quantity of graphite electrodes sold in the first quarter of 1994 was
impacted by Customer Buy-Ins (as defined herein) during the fourth quarter
of 1993 in advance of price increases effective in January 1994, and the
quantity of graphite electrodes sold in the first quarter of 1995 was
impacted by Customer Buy-Ins in advance of price increases effective in
April 1995.
-10-
RISK FACTORS
Prospective investors should consider carefully the following factors in
addition to other information included or incorporated by reference in this
Prospectus before purchasing any of the Shares.
SUBSTANTIAL LEVERAGE AND DEBT SERVICE REQUIREMENTS
The Company is highly leveraged and has negative stockholders' equity. At
December 31, 1996, the Company had an aggregate of $635 million of outstanding
indebtedness and a stockholders' deficit of $2 million. The Company's
indebtedness may increase in connection with the implementation of its stock
repurchase program and future acquisitions.
The Company's high degree of leverage could have important consequences to
investors, including the following: (i) the Company's ability to obtain
additional financing for working capital, capital expenditures, acquisitions,
general corporate purposes or other purposes may be impaired in the future; (ii)
a substantial portion of the Company's cash flow from operations must be
dedicated to debt service, thereby reducing the funds available to the Company
for other purposes; (iii) the Company may be substantially more leveraged than
certain of its competitors, which may place the Company at a competitive
disadvantage; and (iv) the Company's substantial degree of leverage may hinder
its ability to adjust rapidly to changing market conditions and could make it
more vulnerable in the event of a downturn in general economic conditions or its
business.
The Company's ability to service or to refinance its debt will depend on
its financial and operating performance, which, in turn, is subject to
prevailing economic conditions and to certain financial, business and other
factors beyond its control. If the Company's cash flow and capital resources are
insufficient to fund its debt service obligations, the Company may be forced to
reduce or delay planned capital expenditures, sell assets, obtain additional
equity capital or restructure its debt. While substantially all minimum required
principal payments due on such debt through the end of the second quarter of
1998 have been prepaid, there can be no assurance that the Company's results of
operations, cash flow and capital resources will be sufficient to pay the
interest on such debt or subsequent required principal payments. In the absence
of such results of operations, cash flow and resources, the Company could face
substantial liquidity problems and might be required to dispose of material
assets or operations to meet its debt service and other obligations. There can
be no assurance as to the timing of such sales or the amount of proceeds which
the Company could realize therefrom. In addition, since the Company's
obligationscovenants under the Senior Bank Facilities bear interest at floating rates, an
increase in interest rates could adversely affect, among other things,are more restrictive
than they had been prior to the Company'stime when we recorded the $340 million charge
described below. The covenants do, however, allow us to implement our global
restructuring and rationalization plan. Further, the covenants do not restrict
our ability to meet its debt service obligations.
GRAPHITE ELECTRODE INDUSTRY RISKS; DECLINE IN SPECIFIC CONSUMPTION
The Company's revenues are currently derived primarily fromdraw on our revolving credit facility unless payments and
reserves with respect to the litigation matters described below exceed $400
million (adjusted for certain imputed interest expense).
Since 1997, we have been served with subpoenas, search warrants and
information requests by antitrust authorities in the United States and elsewhere
in connection with investigations as to whether there has been any violation of
antitrust laws by producers of graphite electrodes. In addition, antitrust class
action and other civil lawsuits have been commenced against us and other
producers of graphite electrodes in the United States and Canada. We recorded a
charge against results of operations for 1997 in the amount of $340 million as a
reserve for estimated potential liabilities and expenses in connection with
antitrust investigations and related lawsuits and claims. UCAR has also been
named as a nominal defendant in a shareholder derivative lawsuit and is a
defendant in a securities class action lawsuit, each of which is based, in part,
on the subject matter of those antitrust investigations, lawsuits and claims. It
is possible that antitrust investigations in other jurisdictions and additional
civil antitrust lawsuits could be commenced.
In April 1998, pursuant to a plea agreement with the Antitrust Division of
the United States Department of Justice (the "DOJ"), UCAR pled guilty to a
one-count charge of violating U.S. federal antitrust laws in the sale of
graphite electrodes. Growth in EAF steel production through the 1970s ledelectrodes and was sentenced to an
over-expansion in capacity for the manufacture of graphite electrodes. Since
1979, there has beenpay a significant decline in Specific Consumption of graphite
electrodes as a result of technological improvements in EAF steelmaking
processes and equipment design and in graphite electrodes. The over-expansion in
capacity and the decline in Specific Consumption resulted in significant
downward pressure on graphite electrode pricing. From 1985 to mid-1992, there
was a significant consolidationnon-interest-bearing fine in the
numberaggregate amount of manufacturers (which has
continued at$110 million, payable in six annual installments. In March
1999, pursuant to a more moderate pace since that time) andplea agreement with the Canadian Competition Bureau, our
Canadian subsidiary pled guilty to a reduction in
industry-wide capacity. In addition, during that period, demand for graphite
electrodes became relatively stable as the decrease in Specific Consumption was
offset by increased levelsone-count charge of EAF steel production. The Company believes that,
since mid-1992, increased levels of EAF steel production have more than offset
the decrease in Specific Consumption. The Company believes that global demand
for graphite electrodes will increase over the long-term at an average rate of
1% to 2% per year. Although the Company believes that the decline in Specific
Consumption will continue at a more gradual rate, there can be no assurance that
such will be the case. If, for any reason, demand for graphite electrodes were
to decline significantly or manufacturing capacity were to materially exceed
demand, the Company would be materially adversely affected. In addition, the
graphite electrode industry is capital intensive.
-11-violating Canadian
6
DEPENDENCE ON EAF STEEL INDUSTRY
The Company's products are sold primarily to the EAF steel industry.
Although EAF steel production has experienced only two relatively minor
downturns in the past 20 years, the steel industry generally is cyclical and
experiences significant fluctuations in profits based on numerous factors. Sales
of the Company's principal products have historically been somewhat adversely
affected by weakness in the steel industry. Although worldwide EAF steel
production continues to experience growth and worldwide demand for steel
generally has improved over the past several years, there can be no assurance
that growth in EAF steel production will continue or that conditions in the
steel industry will remain favorable.
RESTRICTIVE DEBT COVENANTS
The Senior Bank Facilities contain a number of significant covenants that,
among other things, restrict the ability of the Company to dispose of assets,
incur additional indebtedness, repay or refinance other indebtedness or amend
other debt instruments, create liens on assets, enter into leases, make
investments or acquisitions, engage in mergers or consolidations, make capital
expenditures or engage in certain transactions with subsidiaries and affiliates
and otherwise restrict corporate activities. In addition, under the Senior Bank
Facilities, the Company is required to comply with specified financial ratios
and tests, including minimum interest coverage and maximum leverage ratios. The
indenture among UCAR, Global and the United States Trust Company of New York, as
Trustee (the 'Subordinated Note Indenture'), relating to the 12% senior
subordinated notes due 2005 (the 'Subordinated Notes') issued by Global and
guaranteed by UCARantitrust laws in connection with the Recapitalization also contains certain
restrictive convenants.sale of graphite electrodes and was
sentenced to pay a fine of Cdn.$11 million. The Company is currently in compliance with the covenants contained in the
Senior Bank Facilitiesguilty pleas have made it more
difficult to defend against other investigations, lawsuits and the Subordinated Note Indenture. However, its ability
to continue to comply may be affected by events beyond its control, including
prevailing economic, financial and industry conditions. The breach of any of
such covenants could result in a default under the Senior Bank Facilities and/or
the Subordinated Note Indenture, which would permit the senior lenders or the
holdersclaims. Through
May 7, 1999, we have settled virtually all of the Subordinated Notes to declare all amounts borrowed thereunder to
be dueactual and payable, together with accrued and unpaid interest, and the
commitments of the senior lenders to make further extensions of credit under the
Senior Bank Facilities could be terminated. If the Company were unable to repay
its indebtedness to its senior lenders, such lenders could proceed against the
collateral securing such indebtedness.
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS
The Company operates manufacturing and other facilitiespotential graphite
electrode antitrust claims by steelmakers in 19 countries on
five continents and sells its products in over 70 countries. Net sales of the
Company's products outside the United States in 1996 totalled approximately $642and Canada as
well as antitrust claims by certain other steelmakers. In the aggregate, the
above mentioned fines and settlements are within the amounts we used for
purposes of evaluating the $340 million representing approximately 68%charge. Actual liabilities and expenses
could be materially higher than such charge. We do not believe that the outcome
of the Company's net sales in 1996. As a
result of its international operations, the Company is subject to risks
associated with operating in foreign countries, including devaluations and
fluctuations in currency exchange rates, imposition of limitations on conversion
of foreign currencies into dollars or remittance of dividends and other payments
by foreign subsidiaries, imposition or increase of withholding and other taxes
on remittances and other payments by foreign subsidiaries, hyperinflation in
certain foreign countries and imposition or increase of investment and other
restrictions or requirements by foreign governments and, in the case of
operations in Russia, nationalization and other risks which could result from a
change in government. Although such risks have not had a material adverse effect
on the Company within the past decade, no assurance can be given that such risksshareholder derivative lawsuit will not have a material adverse effect on us.
The securities class action is still in its early stages and no evaluation of
potential liability can yet be made.
SELLING STOCKHOLDERS
This Prospectus covers offers and sales from time to time by or on behalf
of each Selling Stockholder of the Shares owned by each such Selling
Stockholder. The following table sets forth, to the Company's knowledge, certain
information relating to the Shares and the Selling Stockholders as of March 31,
1999. Any or all of the Shares listed may be offered for sale by the Selling
Stockholders from time to time. As of March 31, 1999 the Company had 45,082,530
shares of Common Stock issued and outstanding.
NUMBER OF
SHARES OF NUMBER OF
COMMON SHARES OF
STOCK COMMON STOCK NUMBER OF PERCENTAGE
BENEFICIALLY WHICH MAY BE SHARES OF OF
OWNED OFFERED AND COMMON STOCK OUTSTANDING
PRIOR TO SOLD BY SUCH BENEFICIALLY SHARES
THE SELLING OWNED AFTER AFTER
SELLING STOCKHOLDER OFFERING(a) STOCKHOLDER(a) OFFERING OFFERING
------------------- ----------- -------------- -------- --------
Robert D. Kennedy 535,000 500,000 35,000 *
Petrus J. Barnard 209,515 198,161 11,354 *
Luiz R. Beling 88,587 75,944 12,643 *
William D. Cate 221,872 178,849 43,023 *
Corrado F. De Gasperis 109,767 96,000 13,767 *
Peter B. Mancino 348,132 315,153 32,979 *
Karen G. Narwold 77,739 68,491 9,248 *
Gilbert E. Playford 707,663 600,000 107,663 *
Hermanus L. Pretorius 105,787 92,887 12,900 *
Craig S. Shular 167,996 150,000 17,996 *
R. Eugene Cartledge 11,800 5,000 6,800 *
Alec Flamm 9,400 5,000 4,400 *
John R. Hall 12,000 5,000 7,000 *
Thomas Marshall 9,400 5,000 5,400 *
Michael C. Nahl 6,700 5,000 1,200 *
Robert J. Hart 467,579 293,962 173,617 *
William P. Wiemels 322,356 264,770 57,586 *
Fred C. Wolf 135,221 116,779 18,442 *
7
- ------------
* Represents holdings of less than one percent.
(a) Includes shares subject to vested and unvested options as follows:
SELLING STOCKHOLDER VESTED OPTIONS UNVESTED OPTIONS
------------------- -------------- ----------------
Robert D. Kennedy 500,000 --
Petrus J. Barnard 116,689 81,472
Luiz R. Beling 10,472 65,472
William D. Cate 109,887 68,962
Corrado F. De Gasperis -- 96,000
Peter B. Mancino 215,153 100,000
Karen G. Narwold 16,746 51,745
Gilbert E. Playford -- 600,000
Hermanus L. Pretorius 27,397 65,490
Craig S. Shular -- 150,000
R. Eugene Cartledge 5,000 --
Alec Flamm -- 5,000
John R. Hall 5,000 --
Thomas Marshall -- 5,000
Michael C. Nahl -- 5,000
Robert J. Hart 294,962 --
William P. Wiemels 264,770 --
Fred C. Wolf 116,779 --
Each such Selling Stockholder has been employed by the Company in various
positions during the future.
SEASONALITY; FLUCTUATIONS IN QUARTERLY RESULTS OF OPERATIONSpast three years, except (i) Messrs. De Gasperis and
Playford, both of whom joined the Company in June 1998, and Mr. Shular, who
joined the Company in January 1999, (ii) Messrs. Kennedy, Cartledge, Flamm,
Hall, Marshall and Nahl, each of whom is a director of UCAR, and (iii) Messrs.
Krass, Hart, Wiemels and Wolf, each of whom retired from the Company during
1998.
The Company's net salesSelling Stockholders acquired options to purchase shares of graphite electrodes fluctuate from quarterCommon
Stock pursuant to quarter due to such factors as scheduled plant shut downs by customers, national
vacation practices, changes in customer production schedules in response to
seasonal changes in energy costs, weather conditions, strikes and work stoppages
at customer plants and changes in customer order patterns in response to the
announcement of price increases. The Company
-12-
has experienced, and expects to continue to experience, volatility with respect
to demand for graphite electrodes in certain geographic areas as general
economic conditions in such areas fluctuate. These factors tend to affectgrants under the Company's quarterly as well as annual results of operations. In addition, in the
past, typically during the period prior to the effective date of a price
increase, customers tended to buy additional quantities of graphite electrodes
at the then lower pricing ('Customer Buy-Ins'), which added to the Company's net
sales during that period. During the period following the effective date of a
price increase, customers tended to use those additional quantities before
placing further orders, which reduced the Company's net sales during that
period. Accordingly, results of operations for any quarter are not necessarily
indicative of the results of operations for a full year or otherwise. In order
to mitigate the effect of Customer Buy-Ins on period-to-period net sales, the
Company has begun announcing price increases at different times in different
geographic regions.
DEPENDENCE ON RAW MATERIALS AND ENERGY SUPPLIES
The Company purchases its raw materialsManagement Stock Option Plan and, energy from a variety of
sources and has no material long-term purchase contracts with respect to any raw
materials or energy. The principal raw material used in the manufacture of
graphite electrodes and graphite specialty products is petroleum coke, which is
an engineered by-product of the petroleum industry. Over the past several
decades, the Company has purchased a majority of its petroleum coke from
multiple plants of a single major petroleum company and, since 1988, has done so
pursuant to annual purchase contracts. The Company believes that, under current
conditions, its raw materials are available in adequate quantities at market
prices. The availability and price of raw materials and energy may be subject to
curtailment or change due to limitations which may be imposed under new
legislation or governmental regulations, suppliers' allocations to meet demand
of other purchasers during periods of shortage (or,
in the case of energy
suppliers, extended cold weather), interruptions in production by suppliers,Messrs. Barnard, Beling, Cate and marketPretorius and other events and conditions. Petroleum products, including petroleum
coke, have been subject to significant price fluctuations and, recently, market
prices of petroleum coke have increased for the Company and its competitors.
Over the past several years, the Company has mitigated the effect of such price
increases on its results of operations through a combination of improved
operating efficiency, permanent on-going cost savings and passing such price
increases on to customers. However, there can be no assurance that such measures
will successfully mitigate future increases in the price of petroleum coke or
other raw materials or energy. A substantial increase in raw material or energy
prices which cannot be mitigated or passed on to customers or a continued
interruption in supply, particularly in the supply of petroleum coke, would have
a material adverse effect onMs. Narwold,
under the Company's results of operations.
COMPETITION1996 Mid-Management Equity Incentive Plan. The graphite and carbon products industry is highly competitive.
Competition is based primarily on price, product quality and customer service.
Graphite electrodes, in particular, are subject to rigorous price competition.
Although the Company has periodically increased prices over the past several
years, there can be no assurance that the Company will be able to increase
prices in the future. In addition, further price increases by the Company or
price reductions by competitors, decisions by the Company with respect to
maintaining profit margins rather than market share, or other competitive or
market factors or strategies could adversely affect the Company's market share
or results of operations. Competition could prevent institution of price
increases or could require price reductions or increased spending on research
and development, marketing and sales which could adversely affect the Company's
results of operations.
-13-
ENVIRONMENTAL MATTERS
The Company's operations are subject to federal, state, local and foreign
laws and regulations relating to the storage, handling, generation, treatment,
emission, release, discharge and disposal of certain substances and wastes.
While the Company believes that it is currently in material compliance with
those laws and regulations, there can be no assurance that the Company will not
incur significant costs to remediate violations thereof or to comply with
changes in existing laws and regulations (or the enforcement thereof). Such
costs could have a material adverse effect on the Company's results of
operations.
PROVISIONS HAVING POSSIBLE ANTI-TAKEOVER EFFECTS
UCAR's Certificate of Incorporation and By-Laws contain provisions
concerning voting, issuance of preferred stock, removal of officers and
directors and other matters which may have the effect of discouraging, delaying
or preventing a change in control of UCAR. The Subordinated Note Indenture
requires Global, in the event of a change of control in respect of which it has
not elected to redeem the Subordinated Notes, to repurchase any Subordinated
Notes that holders thereof desire to have repurchased at 101% of the principal
amount thereof, plus accrued interest. In addition, the Senior Bank Facilities
restrict certain events which would constitute a change of control and provide
that certain events which would constitute a change in control would also
constitute an event of default. The exercise by the holders of the Subordinated
Notes of their right to require Global to repurchase the Subordinated Notes may
cause a default under the Senior Bank Facilities or other indebtedness, even if
the change of control does not. Finally, there can be no assurance that Global
will have the financial resources necessary to purchase the Subordinated Notes
upon a change of control or repay amounts due under the Senior Bank Facilities
upon such an event of default.
SHARES ELIGIBLE FOR FUTURE SALE
As of February 28, 1997, 46,797,777 shares of
Common Stock were
outstanding. In addition, as of February 28, 1997, UCAR had reserved an
additional 6,568,769 shares of Common Stock for issuance pursuant to employee
stock option and equity incentive plans. In general, the outstanding shares are,
and any reserved shares issued (other than reserved shares issued to affiliates
of UCAR) will be, freely transferable by persons other than affiliates of UCAR.
Outstanding shares held by, and any reserved shares issued to, affiliates of
UCAR may not be sold other than pursuant to an effective registration statement
or Rule 144 or another exemption from registration under the Securities Act.
Outstanding shares acquired by management in the Recapitalization or tohereunder will be acquired upon the exercise of stock options (or otherwise acquired under employee
stock optionsuch
options.
PLAN OF DISTRIBUTION
The Shares may be offered and sold from time to time by one or equity incentive plans) have beenmore of the
Selling Stockholders. No Selling Stockholder is required to offer or sell any of
his Shares. The Selling Stockholders anticipate that, if and when offered and
sold, the Shares will be registered for
resale to the public. Following the closing of the Offeringoffered and the Blackstone
Share Repurchase and excluding the Retained Interest, Blackstone will own
691,496 shares of Common Stock (no shares, if the over-allotment option is
exercisedsold in full). UCAR, certain of its executive officers and directors and
Blackstone have agreed that, for a period of 90 days, in the case of UCAR, and
45 days, in the case of Blackstone and certain of UCAR's directors and executive
officers, after the date of this Prospectus, they will not sell or otherwise
dispose of any shares of Common Stock without the prior written consent of
Credit Suisse First Boston Corporation, subject to certain limited exceptions.
The shares included in the Retained Interest will be freely transferable after
the end of such 45-day period, except that if the distributee is or has been an
affiliate of UCAR, sales by such distributee will be subject to the volume and
other limitations of Rule 144 until such time as the distributee has not been an
affiliate within the three-month period preceding the sale. No prediction can be
made as to the effect, if any, that future sales of shares, or the availability
of shares for future sale, will havetransactions effected on the New
York Stock Exchange (NYSE) at then prevailing market price ofprices. The Selling
Stockholders reserve the right, however, to offer and sell the Shares on any
other national securities exchange on which the Common Stock prevailing from time to time. Sales of substantial amounts of Common Stockmay become listed
or in the publicover-the-counter market, or the perception that such sales could occur, could
adversely affectin each case at then prevailing market
prices, for the Common Stockor in privately negotiated transactions at a price then to be
negotiated. All offers and could impair
UCAR's ability to raise capital through an offering of its equity securities.
-14-
THE COMPANY
The Company's business was founded in 1886 by National Carbon Company. In
1917, National Carbon Company, along with Union Carbide Company and three other
companies, became subsidiaries of a new corporation named Union Carbide and
Carbon Company, now known as Union Carbide Corporation ('Union Carbide'). In the
1950s, National Carbon Company was dissolved, and its business subsequently
became the Carbon Products Division of Union Carbide.
Effective January 1, 1989, Union Carbide realigned each of its worldwide
businesses into separate subsidiaries (the 'Realignment'). In connection
therewith, the business of the Carbon Products Division was separated from Union
Carbide's other busineses and became owned by the Company, which was then
wholly-owned by Union Carbide. On February 25, 1991, Union Carbide sold 50% of
the common equity of the Company to Mitsubishi Corporation ('Mitsubishi') for
$233 million (the 'Mitsubishi Purchase'). Since the Mitsubishi Purchase, the
Company has operated on a stand alone basis in all material respects. In this
regard, the Company has been self-financing, except for certain credit
enhancements which were provided by Union Carbide and Mitsubishi and which the
Company terminated in their entirety in September 1994.
On January 26, 1995, the Company consummated the Recapitalization pursuant
to the Recapitalization and Stock Purchase and Sale Agreement dated as of
November 14, 1994 (the 'Recapitalization Agreement') among Union Carbide,
Mitsubishi, UCAR and Blackstone. Pursuant to the Recapitalization: (i) UCAR
issued Common Stock representing approximately 75% of the then outstanding
Common Stock to Blackstone, Chase Equity Associates, L.P. and certain members of
management for $203 million; (ii) Global and certain of its subsidiaries
borrowed $585 million under senior secured bank facilities (the
'Recapitalization Bank Facilities'); (iii) Global issued $375 million of
Subordinated Notes; (iv) the Company repaid approximately $250 million of then
existing indebtedness; (v) UCAR repurchased and cancelled all of the common
equity then held by Mitsubishi for $406 million; (vi) UCAR paid to Union Carbide
a cash dividend of $347 millionsales made on the common equity then held by Union Carbide,
which common equity was reclassifiedNYSE or any other national
securities exchange or in the over-the-counter market will be made through or to
licensed or registered brokers and immediately thereafter represented
approximately 25% of the then outstanding Common Stock; and (vii) certain
members of management received restricted stock matching a portion of the Common
Stock purchased by them and options to purchase up to an aggregate of 12% of the
then outstanding Common Stock on a fully diluted basis, subject to certain
vesting provisions. In connection with the Recapitalization, the Company
transferred all of the stock of its operating subsidiaries to Global or
subsidiaries of Global. UCAR currently holds no material assets other than
common stock of Global.
On August 15, 1995, UCAR completed the initial public offering of Common
Stock (the 'Initial Offering'). In connection with the Initial Offering, UCAR
sold Common Stock representing 22% of the Common Stock outstanding immediately
after the Initial Offering for net proceeds of $227 million and Union Carbide
sold all of the Common Stock then owned by it. UCAR used netdealers.
All proceeds from the Initial Offering to contribute to Global an amount sufficient to redeem $175
million aggregate principal amount of Subordinated Notes at a redemption price
equal to 110%sale of the aggregate principal amount thereof, plus accrued interest
thereon of $4 million (the 'Redemption'). On October 19, 1995,Shares will be paid directly to the
Company
refinanced the Recapitalization Bank Facilities with the Senior Bank Facilities
at more favorable interest ratesSelling Stockholders and with more favorable covenants (the
'Refinancing'). The Redemption and Refinancing reduced the Company's annual
interest expense by approximately $34 million (based on the principal amounts
outstanding and the interest rateswill not be deposited in effect at the time of the Redemption and
the Refinancing, respectively).
In March 1996, certain stockholders of UCAR sold an aggregate of 16,675,000
shares of Common Stock in a secondary public offering (the 'Secondary
Offering'). In the Secondary Offering, Blackstone, Chase Equity Associates, L.P.
and certain members of management sold approximately 15,449,000 shares, 826,000
shares and 400,000 shares, respectively. After the Secondary Offering,
Blackstone owned approximately 20% of the outstanding shares of Common Stock.
UCAR did not sell any shares in the Secondary Offering and didescrow, trust or other
similar arrangement. We will not receive any proceeds from the shares sold by the selling stockholders. Approximately 193,000offer and sale of
the shares sold by management consisted of shares issued upon the exercise of
stock options concurrently with the Secondary Offering, and UCAR received
proceeds of approximately $1.5 million from the exercise of such options.
-15-
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Common Stock is listed on the NYSE under the trading symbol 'UCR.' The
following table sets forth on a per share basis the high and low sale prices for
the Common Stock as reported on the NYSE for the periods indicated:
HIGH LOW
---------- ----------
1995
Third Quarter*............................................................. $ 29 1/4 $ 24 3/4
Fourth Quarter............................................................. 33 3/4 26 3/8
1996
First Quarter.............................................................. 39 1/2 31
Second Quarter............................................................. 44 7/8 39
Third Quarter.............................................................. 41 7/8 34 3/4
Fourth Quarter............................................................. 41 1/8 32 5/8
1997
First Quarter (through March 13, 1997)..................................... 45 1/4 36 5/8
- ------------------
* Public trading commenced on August 10, 1995.
As of December 31, 1996, there were 66 holders of record of outstanding
shares of Common Stock. The Company estimates that approximately 9,700
stockholders are represented by nominees.
Although the Company is currently able to pay certain cash dividends, it is
the current policy of UCAR's Board of Directors to retain earnings to finance
operations, fund acquisitions, repurchasethese shares of Common Stock and repay debt.
Any declaration and payment of cash dividends will be subject to the discretion
of UCAR's Board of Directors and will be dependent upon the Company's financial
condition, results of operations, cash requirements and future prospects, the
limitations contained in the Senior Bank Facilities and the Subordinated Note
Indenture and other factors deemed relevant by UCAR's Board of Directors. There
can be no assurance that any cash dividends will be declared or paid.
UCAR is a holding company that derives all of its cash flow from Global,
the common stock of which constitutes UCAR's only material asset. Consequently,
UCAR's ability to pay dividends is dependent upon the earnings of Global and its
subsidiaries and the distribution of those earnings by Global to UCAR.
Under the Senior Bank Facilities, Global and UCAR are permitted to pay
dividends to their respective stockholders only in an aggregate amount equal to
a percentage, ranging from 25% to 35% based on certain financial tests, of
cumulative adjusted consolidated net income (provided that, in any event,
dividends aggregating up to $15 million are permitted in any twelve-month
period). In addition, Global is permitted to pay dividends to UCAR (i) in
respect of UCAR's administrative fees and expenses and (ii) for the specific
purpose of the purchase or redemption by UCAR of capital stock held by present
or former officers of the Company up to $5 million per year or $25 million in
the aggregate. In general, amounts which are permitted to be paid as dividends
in a year but not so paid may be paid in subsequent years.
The Subordinated Note Indenture restricts the payment of dividends by
Global to UCAR if (a) at the time of such proposed dividend, Global is unable to
meet certain indebtedness incurrence and income tests or (b) the total amount of
the dividends paid exceeds specified aggregate limits based on consolidated net
income, net proceeds from asset and stock sales and certain other transactions.
Such restrictions are not applicable to dividends paid to UCAR (i) in respect of
UCAR's administrative fees and expenses and (ii) for the specific purpose of the
purchase or redemption by UCAR of capital stock held by present or former
officers of the Company in the amount of up to $5 million per year or $25
million in the aggregate.
USE OF PROCEEDS
All of the Shares offered hereby are being sold by the Selling Stockholders. UCARWe will not receive anybear all of
the proceeds fromexpenses in connection with the registration of these Shares, including
legal and accounting fees. No discounts, commissions or other compensation will
8
be allowed or paid by the Selling Stockholders or us in connection with
the offer and sale of Sharesthese shares of Common Stock, except that usual and
customary brokers' commissions or dealers' discounts may be paid or allowed by
the Selling Stockholders.
-16-
CAPITALIZATIONEXPERTS
The following table sets forth the consolidated capitalizationConsolidated Financial Statements of the Company at December 31, 1996. This table should be read in conjunction with
'Management's Discussion and Analysis of Financial Condition and Results of
Operations' and the Consolidated Financial Statements and related notes which
are incorporated by reference herein.
AT DECEMBER 31, 1996
---------------------
(DOLLARS IN MILLIONS)
Cash and cash equivalents................................................................... $ 95
------
------
Debt (including current portion):
Revolving credit facility under Senior Bank Facilities(a)................................. $ 27
Term loans under Senior Bank Facilities................................................... 352
Subordinated Notes........................................................................ 200
Other debt................................................................................ 56
------
Total debt............................................................................. 635
------
Minority stockholders' equity in consolidated entities...................................... 6
Stockholders' equity (deficit):
Preferred stock--par value $.01; authorized--10,000,000 shares; issued--none.............. --
Common stock--par value $.01; authorized--100,000,000 shares; issued--
46,614,724 shares...................................................................... --
Additional paid-in capital................................................................ 498
Cumulative foreign currency translation adjustment........................................ (116)
Retained earnings (deficit)............................................................... (384)
------
Total stockholders' equity (deficit)................................................... (2)
------
Total capitalization................................................................. $ 639
------
------
- ------------------
(a) On February 10, 1997, UCAR's Board of Directors approved a proposal to amend
the Senior Bank Facilities to increase the amount available under the
revolving credit facility to $200 million from $100 million and to change
the covenants to allow more flexibility in uses of free cash flow for
acquisitions, capital expenditures and stock repurchases. No assurance can
be given that such amendments will, in fact, become effective.
-17-
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected annual consolidated financial data (excluding the
'quantity of graphite electrodes sold') has been derived from the Consolidated
Financial Statements at the dates and for the periods indicated, which have been
audited by KPMG Peat Marwick LLP as indicated in their reports thereon. The
selected annual consolidated financial data set forth below should be read in
conjunction with 'Management's Discussion and Analysis of Financial Condition
and Results of Operations' and the Consolidated Financial Statements at December
31, 1995 and 1996 and for each of the years
in the three year period ended December 31, 1996 and the related notes which are incorporated by reference
herein.
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------------
1992 1993 1994 1995 1996
----- ----- ----- ----- -----
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA:
Net sales...................................................... $ 659 $ 740 $ 758 $ 901 $ 948
Gross profit................................................... 104(a) 203 243 345 365
Selling, administrative and other expenses..................... 78 73 79 115 90
Restructuring costs(b)......................................... 9 33 -- 30 --
Operating profit (loss)........................................ (1)(a) 80 162 189(c) 268
Total interest expense......................................... 22 21 19 93 61
Income (loss) before extraordinary charge and cumulative effect
of changes in accounting principles......................... (30)(a) 50 100 25(c) 145
Extraordinary charge, net of tax(d)............................ -- -- -- 37 --
Cumulative effect of changes in accounting principles.......... (55) (20) -- -- 7
Net income (loss).............................................. (85)(a) 30 100 (12)(c) 152
Net income per share before cumulative effect of change in
accounting principles (Pro forma in 1995)................... $1.87(e) $3.00
Net income per share........................................... $3.15
Weighted average shares outstanding (Pro forma 1995) (in
thousands)(f)............................................... 48,763 48,469
BALANCE SHEET DATA (AT PERIOD END):
Cash and cash equivalents...................................... $ 28 $ 54 $ 60 $ 53 $ 95
Total assets................................................... 784 831 778 864 988
Total debt..................................................... 269 268 247 668 635
Stockholders' equity (deficit)................................. 198 188 192 (167) (2)
OTHER DATA:
Gross profit margin............................................ 15.8% 27.4% 32.1% 38.3% 38.5%
Operating profit margin........................................ N/M 10.8 21.4 21.0 28.3
Depreciation................................................... $ 44 $ 39 $ 39 $ 38 $ 36
Capital expenditures........................................... 19 26 34 65 62
EBITDA(g)...................................................... 43 147 201 249 304
Cash flow from operations...................................... 52 64 174 130 172
Cash flow from investing....................................... (13) (25) (56) (116) (104)
Cash flow from financing....................................... (26) (13) (105) (18) (26)
Quantity of graphite electrodes sold (thousands of metric
tons)(h).................................................... 205 217(i) 196(i) 217(i) 205
- ------------------
N/M: Not meaningful.
(See footnotes on next page)
18
(a) Reduction of domestic inventory quantities in 1992 resulted in liquidation
of certain inventories carried on a 'last in, first out' basis acquired at
lower cost in prior years. This liquidation increased gross profit by $5
million and reduced net loss by $3 million in 1992.
(b) Represents costs recorded in connection with closing or downsizing
operations at certain locations as part of the Company's restructuring and
re-engineering projects. These costs consisted primarily of write-offs of
fixed assets and other shut down costs.
(c) Includes, in 1995, non-recurring charges related to the Recapitalization of
$8 million related to payments for a senior subordinated credit facility
which was available but not used and payments under the Company's Long Term
Incentive Compensation Plan and non-recurring expenses related to the
Initial Offering of $18 million for compensation expense related to
accelerated vesting of performance stock options and restricted matching
stock.
(d) Resulted from early extinguishment of debt in connection with the Redemption
and the Refinancing.
(e) For unaudited pro forma net income per share, historical net income (loss)
has been adjusted assuming that the Recapitalization, the Initial Offering,
the Redemption and the Refinancing had occurred as of January 1, 1994.
Historical net income (loss) per share has been omitted as the historical
capitalization of the Company is not indicative of the Company's current
capital structure.
(f) Reflects Common Stock and Common Stock equivalents outstanding after the
Initial Offering, including Common Stock equivalents calculated in
accordance with the 'treasury stock method,' wherein the net proceeds from
the exercise of Common Stock equivalents are assumed to be used for the
repurchase of shares of Common Stock at the average price for such year.
(g) EBITDA, for this purpose, means operating profit (loss) plus depreciation,
amortization and the portion of restructuring costs applicable to fixed
asset write-offs. The amount of restructuring costs applicable to fixed
asset write-offs for 1993 and 1995 were $28 million and $22 million,
respectively. The Company believes that EBITDA is generally accepted as
providing useful information regarding a company's ability to service and/or
incur debt. EBITDA should not be considered in isolation or as a substitute
for net income, cash flows from continuing operations or other consolidated
income or cash flow data prepared in accordance with generally accepted
accounting principles or as a measure of a company's profitability or
liquidity.
(h) Excludes graphite electrodes sold by EMSA, which aggregated 25,000 metric
tons, 25,000 metric tons, 24,000 metric tons, 27,000 metric tons, and 26,000
metric tons in 1992, 1993, 1994, 1995 and 1996, respectively.
(i) The quantity of graphite electrodes sold in the first quarter of 1994 was
impacted by Customer Buy-Ins during the fouth quarter of 1993 in advance of
price increases effective in January 1994, and the quantity of graphite
electrodes sold in the first quarter of 1995 was impacted by Customer
Buy-Ins in advance of price increases effective in April 1995.
19
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
In 1995, the Company consummated the Recapitalization, the Initial
Offering, the Redemption and the Refinancing. In 1996, the Secondary Offering
was consummated and the Company acquired 90% of the equity of UCAR Grafit.
Subsequent to December 31, 1996, the Company acquired 70% of the equity of
Carbone Savoie and through a newly-formed 70%-owned subsidiary, UCAR Elektroden,
acquired the graphite electrode business of EKL in Berlin, Germany. In addition,
the Company announced its intention to acquire the outstanding shares of EMSA
held by the Company's joint venture partner in South Africa. The acquisitions of
UCAR Grafit, Carbone Savoie and the graphite electrode business of EKL were
accounted for as purchases. See 'Summary--Growth Strategies and Recent
Initiatives' and 'The Company.'
In May and July 1994, the Company increased its ownership of its Mexican
business from 79% to substantially 100% at a net cost of $23 million. These
transactions were accounted for as purchases. In 1995, the Company acquired
substantially all of the shares of its Brazilian subsidiary owned by public
shareholders in Brazil. The aggregate purchase price was $52 million, plus
expenses of $3 million. Thereafter, the Company acquired additional shares from
such Brazilian shareholders for $2 million. These acquisitions were accounted
for as purchases. See 'Summary--Growth Strategies and Recent Initiatives' and
'The Company.'
Cost Reduction Initiatives. Beginning in the mid-1980s, the Company
initiated a project to remove excess, high cost capacity. This project was
designed to close the older, highest cost facilities and increase the operating
efficiencies of the remaining facilities. Five locations were closed as a result
of this project (i.e., three separate manufacturing facilities in the Niagara
Falls, New York area, a manufacturing facility in Sweden and a manufacturing
facility in Puerto Rico). As a result of this project, the Company recorded
fixed asset write-offs and severance costs in 1985 and 1987 through 1989.
A second project was initiated in 1991 and continued through 1992 to
re-engineer work processes in manufacturing facilities and offices and to
downsize the global work force. The Company, working with outside consultants,
redesigned work processes to improve the productivity of the work force and
eliminate unnecessary or redundant activities. The Company recorded severance
costs associated with this project of $28 million and $8 million in 1991 and
1992, respectively.
As a result of these projects, the Company developed a strategy to be the
low cost producer in its industry. With the improved productivity and
efficiencies that had been achieved in its manufacturing facilities, the Company
identified another project, which was approved by UCAR's Board of Directors in
1993, to close the Company's highest cost and oldest graphite manufacturing
facilities at that time, which were located in Sheffield, England and Forno
Allione, Italy, and to increase production at lower cost manufacturing
facilities in Europe and North America. The closing of these facilities resulted
in fixed asset write-offs of $28 million and related shut down costs of $5
million in 1993.
As a result primarily of the projects described in the three preceding
paragraphs, the Company reduced its work force by approximately 2,100 employees,
reduced the average manufacturing cycle time for graphite electrode production
by approximately 50% and achieved a one-third reduction in then existing
inventory levels. By the end of 1994, the Company had achieved annual cost
savings of approximately $101 million (as compared to 1990). The Company
achieved additional annual cost savings from these projects aggregating
approximately $15 million by the end of 1996 (as compared to 1994).
In January 1995, as part of the Company's low cost producer strategy,
UCAR's Board of Directors approved the Rationalization Project to close certain
high cost manufacturing operations and to add modern lower cost manufacturing
operations at the Company's North American graphite electrode plants. The
Rationalization Project was completed in July 1996 and is expected to yield
approximately $23 million in annual cost savings, with approximately $8 million
in savings having been realized in 1995, $20 million having been realized in
1996 and the full $23 million expected to be realized in 1997 (in each case, as
compared to 1994). Capital expenditures of $27 million to build the new
facilities and $4 million to shut down the old facilities were pre-funded as
part of
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the Recapitalization. The Company has written-off fixed assets of approximately
$22 million and recorded $8 million of shut down costs as restructuring costs in
1995 in connection with the Rationalization Project. In addition, the Technology
Improvement Projects are expected to yield approximately $5 million in
additional annual cost savings by the end of 1997 (as compared to 1994) at an
aggregate cost of approximately $7 million.
Currency Matters. The Company sells its products in multiple currencies
but seeks to price its products based on dollar equivalent target prices for
each of its subsidiaries. These target prices are based on evaluations of the
relevant exchange rates, the relationship between all of the target prices and
other factors, if any, which the Company may deem appropriate. Each subsidiary
then seeks to institute price increases to achieve its target price when, as and
if local conditions permit. A subsidiary may rescind a price increase or grant
price discounts if required by local conditions. The impact on net sales of any
price increase in foreign countries can be mitigated or exaggerated by changes
in currency exchange rates. The Company has entered into hedging transactions to
reduce its exposure to changes in currency exchange rates.
While most of the Company's sales are made to customers in markets where
local currencies are readily convertible into dollars, the Company makes sales
to customers in other markets, particularly countries in the former Soviet
Union, Eastern Europe, the Middle East and the Asia Pacific region. When the
Company deems appropriate, the terms of sale to customers in these markets
require payment in dollars or deutsche marks and may additionally require
prepayment or delivery of a bank letter of credit or equivalent security for
payment.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain items
from the Consolidated Statements of Operations and the increase or decrease
(expressed as a percentage of such item in the comparable prior period) of such
items:
PERCENTAGE
INCREASE
FOR THE YEAR ENDED (DECREASE)
DECEMBER 31, -----------------
----------------------- 1994 TO 1995 TO
1994 1995 1996 1995 1996
----- ----- ----- ------- -------
(DOLLARS IN MILLIONS)
Net sales............................... $758 $901 $948 18.9% 5.2%
Cost of sales........................... 515 556 583 8.0 4.9
----- ----- ----- ------- -------
Gross profit............................ 243 345 365 42.0 5.8
Selling, administrative and other
expenses.............................. 79 115 90 45.6 (21.7)
Restructuring costs..................... -- 30 -- N/M N/M
Operating profit........................ 162 189 268 16.7 41.8
- ------------------
N/M: Not meaningful.
The following table sets forth, for the periods indicated, the percentage
(rounded to the nearest tenth) of net sales represented by certain items in the
Consolidated Statements of Operations:
FOR THE YEAR ENDED
DECEMBER 31,
-----------------------
1994 1995 1996
----- ----- -----
Net sales............................... 100.0% 100.0% 100.0%
Cost of sales........................... 67.9 61.7 61.5
----- ----- -----
Gross profit............................ 32.1 38.3 38.5
Selling, administrative and other
expenses.............................. 10.4 12.8 9.5
Restructuring costs..................... -- 3.3 --
Operating profit........................ 21.4 21.0 28.3
1996 Compared to 1995. Net sales in 1996 were $948 million, an increase of
5% from $901 million in 1995. This increase was led by the Company's graphite
specialties and carbon specialties businesses, which both had net sales
increases of 13% in 1996 as compared to 1995. The average selling prices (in
dollars and net of changes in currency exchange rates) for products of these
businesses increased approximately 8% in 1996 as compared to 1995. The carbon
specialties business had increased volume in carbon refractory products, which
are
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sold primarily to the steel industry. The graphite specialties business had
increased volume in 'superfine grain' products, which are used in the
semiconductor industry, and increased volume in graphite cathodes, which are
used in the aluminum industry. Net sales of the Company's core graphite
electrodes business, which accounted for 73% of total net sales in 1996,
increased approximately 3% to $696 million in 1996 as compared to $675 million
in 1995. The average selling price (in dollars and net of changes in currency
exchange rates) of graphite electrodes sold increased approximately 6% to $3,185
per metric ton in 1996 as compared to $3,000 per metric ton in 1995. The volume
of graphite electrodes sold in 1996 declined by approximately 5% in 1996 as
compared to 1995. Graphite electrode sales volume in Western Europe declined 18%
in 1996 as compared to 1995 as a result of lower economic activity as members of
the European Union continued to work toward a unified monetary system. The
Company believes that demand for graphite electrodes will increase if economic
conditions in Western Europe improve and as announced new electric arc furnaces
achieve typical operating rates. Net sales for the Company's products outside of
the United States amounted to $642 million, or approximately 68% of total net
sales, in 1996.
Gross profit in 1996 was $365 million, an increase of $20 million, or 6%,
from gross profit of $345 million in 1995. Price increases on all products sold
together with cost savings offset the decline in graphite electrode sales volume
and allowed for an increase in gross margin to 38.5% in 1996 as compared to
38.3% in 1995.
Operating profit in 1996 was $268 million (28% of net sales), an increase
of $79 million, or 42%, from operating profit of $189 million (21% of net sales)
in 1995. Excluding restructuring costs of $30 million, non-recurring expense of
$6 million associated with a senior subordinated credit facility available but
not used in connection with the Recapitalization, $18 million of non-recurring
compensation expense included in selling, administrative and other expenses as a
result of accelerated vesting of performance stock options and restricted
matching stock in connection with the Initial Offering and $2 million of other
expenses due to payments under the Company's Long Term Incentive Compensation
Plan accelerated as a result of the Recapitalization, operating profit in 1995
would have been $245 million (27% of net sales).
Selling, administrative and other expenses were $90 million in 1996, a
decrease of $25 million, or 22%, from $115 million in 1995. Selling,
administrative and other expenses in 1995 included $18 million in non-recurring
compensation expense associated with the accelerated vesting of performance
stock options and restricted matching stock in connection with the Initial
Offering and $4 million associated with scheduled vesting of performance stock
options.
Restructuring costs of $30 million were incurred in 1995 in connection with
the Rationalization Project. No restructuring costs were incurred in 1996.
Other (income) expense (net) was income of $1 million in 1996 as compared
to expense of $3 million in 1995. The change resulted primarily from a $14
million decrease in interest income (primarily due to a reduction in short-term
investments by the Company's Brazilian subsidiary), a $9 million reduction in
expense from foreign currency adjustments (including reduced translation losses
from Brazilian operations and from dollar-denominated debt of the Company's
foreign subsidiaries) and a non-recurring expense of $7 million associated with
bank fees due to the Recapitalization which were incurred in 1995 but not in
1996.
Interest expense decreased to $61 million in 1996 from $93 million in 1995.
In 1996, the average outstanding total debt balance was $643 million and the
average annual interest rate was 9.4% as compared to an average outstanding
total debt balance of $820 million and an average annual interest rate of 11.5%
in 1995.
Provision for income taxes was $68 million in 1996 as compared to $74
million in 1995. In 1995, income tax expense was higher than the amount computed
by applying the United States federal income tax rate primarily due to
non-recurring taxes of approximately $37 million associated with the
Recapitalization.
Minority stockholders' share of income of the Company's Brazilian
subsidiary decreased to $1 million in 1996 from $4 million in 1995 due to an
increase in the Company's ownership of that subsidiary. Substantially all of the
minority interest of the Brazilian subsidiary was purchased by the Company in
1995. The Company's share of net income of EMSA remained stable at $7 million in
1996 and 1995.
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1995 Compared to 1994. Net sales for 1995 were $901 million, an increase
of $143 million, or 19%, from net sales of $758 million in 1994. This increase
was largely the result of the improved performance of the Company's graphite
electrode business. This increase was driven primarily by increases in the
volume and price of graphite electrodes sold. An 11% increase in the volume of
graphite electrodes sold brought volume to 217,000 metric tons in 1995 from
196,000 metric tons in 1994. Substantially all of the volume increase resulted
from increased sales in Eastern Europe, the Asia Pacific region and the Middle
East. This volume increase also reflected the negative impact on volume in 1994
from Customer Buy-Ins in late 1993 in anticipation of announced price increases
which became effective on January 1, 1994. The average selling price per metric
ton (in dollars and net of changes in currency exchange rates) of graphite
electrodes sold increased 9% in 1995 as compared to 1994. Net sales of the
Company's other products were $224 million, an increase of $36 million, or 19%,
from net sales of $188 million in 1994. This increase was a result of higher
demand and increased prices for these products. Net sales for the Company's
products outside of the United States amounted to $615 million, or 68% of total
net sales, in 1995.
Gross profit in 1995 was $345 million, an increase of $102 million, or 42%,
from gross profit of $243 million in 1994. Price and volume increases of
graphite electrodes sold, as well as continued improvement in manufacturing
efficiency, helped to increase gross margin for 1995 to 38% as compared to 32%
for 1994.
Operating profit in 1995 was $189 million (21% of net sales), an increase
of $27 million, or 17%, from operating profit of $162 million (21% of net sales)
in 1994. On a pro forma basis, as if the Recapitalization, the Initial Offering,
the Redemption and the Refinancing had occurred on January 1, 1994, operating
profit in 1995 would have been $214 million (24% of net sales and a 35% increase
from 1994 operating profit, on such pro forma basis, of $158 million), excluding
$18 million of non-recurring compensation expense due to the accelerated vesting
of performance options and restricted matching stock in connection with the
Initial Offering and $8 million of non-recurring costs related to the
Recapitalization.
Selling, administrative and other expenses increased 46% to $115 million in
1995 from $79 million in 1994. This increase was due primarily to $18 million in
non-recurring compensation expense associated with the accelerated vesting of
performance stock options and restricted matching stock in connection with the
Initial Offering and $4 million associated with scheduled vesting of performance
stock options, a $4 million increase in compensation expense for other variable
compensation plans and a $4 million increase in other variable costs resulting
from higher sales.
Restructuring costs were $30 million in 1995 as compared to none in 1994.
The restructuring costs consisted of fixed asset write-offs of $22 million and
$8 million of related shutdown costs in connection with the Rationalization
Project.
Other (income) expense (net) was expense of $3 million in 1995 as compared
to income of $5 million in 1994. The change was principally the result of a $6
million expense associated with a senior subordinated credit facility provided,
but not used, in connection with the Recapitalization and a $4 million
translation loss on dollar-denominated debt of the Company's foreign
subsidiaries.
Interest expense increased to $93 million in 1995 from $19 million in 1994.
In 1995, the average outstanding total debt balance was $820 million and the
average annual interest rate was 11.5% as compared to an average outstanding
total debt balance of $254 million and an average annual interest rate of 7.4%
in 1994. The increases were primarily the result of the Recapitalization.
Provision for income taxes was $74 million in 1995 as compared to $37
million in 1994. The increase in income tax expense was primarily due to
non-recurring taxes of approximately $37 million associated with the
Recapitalization as a result of the repatriation to the United States of funds
borrowed by foreign subsidiaries, partially offset by the effect of lower
pre-tax income.
Minority stockholders' share of income of the Company's Brazilian and
Mexican subsidiaries decreased to $4 million in 1995 from $10 million in 1994
due to an increase in the Company's ownership of those subsidiaries.
Substantially all of the minority interest of the Mexican subsidiary was
purchased by the Company
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in May and July 1994 and substantially all of the minority interest of the
Brazilian subsidiary was purchased by the Company in 1995. The Company's share
of net income of EMSA increased to $7 million in 1995 from $4 million in 1994
due to an increase in EMSA's earnings.
The Company recorded an extraordinary charge of $37 million related to
early extinguishment of debt (net of tax benefit of $20 million) resulting from
the prepayment in connection with the Recapitalization of $175 million of senior
notes issued by UCAR in 1994, the Redemption and the Refinancing. The
extraordinary charge consisted of a premium of $18 million paid on the
redemption of the Subordinated Notes and the write-off of deferred debt issuance
costs of $39 million.
Net loss for 1995 totaled $12 million as compared with net income of $100
million in 1994. On a pro forma basis, as if the Recapitalization, the Initial
Offering, the Redemption and the Refinancing had occurred on January 1, 1995,
net income for 1995 would have been $91 million (after giving effect to $20
million in after tax restructuring costs relating to the Rationalization
Project), an increase of 52% from net income, on such pro forma basis, of $60
million in 1994.
The following table sets forth a summary of the results of operations for
1995, as adjusted for certain non-recurring expenses, taxes and costs:
OPERATING NET
PROFIT INCOME
--------- ------
(DOLLARS IN
MILLIONS,
EXCEPT PER SHARE
DATA)
As reported in the Consolidated Financial Statements............................... $189 $ (12)
Non-recurring expenses, taxes and costs:
Compensation expense due to accelerated vesting of performance stock options and
restricted matching stock in connection with the Initial Offering............. 18 12
Senior subordinated credit facility expense and Long Term Incentive Compensation
Plan payments in connection with the Recapitalization......................... 8 5
Extraordinary charge for early extinguishment of debt............................ -- 37
Taxes associated with the Recapitalization....................................... -- 37
Pro forma interest adjustment to give effect to the Recapitalization, the Initial
Offering, the Redemption and the Refinancing as if they occurred on January 1,
1995.......................................................................... (1) 12
--------- ------
Pro forma operating profit/net income.............................................. $214 $ 91
--------- ------
--------- ------
Pro forma net income per share..................................................... $1.87
------
------
EFFECTS OF INFLATION
In general, the Company's cost of sales is affected by the inflation in
each country in which it has a manufacturing facility. During the past three
years, the effects of inflation in the United States and foreign countries
(except for hyperinflationary countries) have been offset by a combination of
improved operating efficiency, improved pricing and permanent, on-going cost
savings and, accordingly, have not been material to the Company. The Company
maintains operations in Brazil and Mexico, countries which historically have had
hyperinflationary economies. Through December 31, 1993, the financial statements
of these foreign entities have been remeasured as if the respective functional
currencies of the Brazilian and Mexican economic environments were the United
States dollar. Accordingly, translation gains and losses were included in the
Consolidated Statements of Operations. Foreign currency gains on debt and prior
period tax liabilities were included in interest expense and provision for
income taxes, respectively. Effective January 1, 1994, because of significant
declines in the rate of inflation in Mexico, the Company changed its functional
currency in Mexico to the Mexican peso. The reporting currency amounts at the
date of the change were translated into the local currency at the then current
exchange rates, and those amounts became the new functional currency accounting
basis. Hyperinflation
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has not had a material effect on the Company's results of operations because the
Company has been able to mitigate the effects of hyperinflation by increasing
prices generally in line with inflation as well as through improved efficiency
and cost savings.
The cost of petroleum coke, a principal raw material used by the Company,
and natural gas, which is used by the Company in its electrode and graphite
specialties baking operations, may fluctuate widely for various reasons,
including fuel shortages and cold weather. Changes in such costs have not been
material to the Company during the past three years.
EFFECTS OF CHANGES IN CURRENCY EXCHANGE RATES
The Company produces and sells its products in multiple currencies. In
general, the Company's results of operations are affected by changes in currency
exchange rates. Although such has not been the case in the past, such changes in
the future could have a material effect on the Company's results of operations.
The Company attempts to mitigate the effects of exchange rate changes by
adjusting sales prices, in local currency (to the extent permitted by local
market conditions), to maintain a dollar equivalent target price. In addition,
the Company engages in hedging activities and uses various off-balance sheet
financial instruments to manage exposure to general economic and specific
financial market risks caused by currency exchange rate changes. The amount of
forward exchange contracts used by the Company to minimize these risks was $350
million at December 31, 1996, $269 million at December 31, 1995 and $80 million
at December 31, 1994.
In connection with the Recapitalization, certain of the Company's foreign
subsidiaries borrowed $343 million of dollar-denominated debt. In November 1995,
the Company repatriated dollar-denominated debt of its Mexican subsidiary by
replacing it with debt of Global. As a result of such repatriation and other
principal payments, $189 million of dollar-denominated debt of the Company's
foreign subsidiaries was outstanding at December 31, 1996. Changes in the
exchange rates between the dollar and the currencies in the countries in which
these subsidiaries are located result in foreign currency gains and losses that
are reported in other (income) expense (net) in the Consolidated Statements of
Operations. While changes in currency exchange rates have not materially
affected the Company in the past, there can be no assurance that such changes
will not have a material adverse effect on the Company at some future date. In
November 1995, the Company's foreign subsidiaries with dollar-denominated debt
entered into forward foreign currency contracts to protect against exchange rate
changes. The amount of such contracts was $169 million at December 31, 1996 and
$198 million at December 31, 1995. Premiums on the contracts are amortized over
the life of the contracts, resulting in $4 million in charges which have been
amortized to other (income) expense (net) over 1995 and 1996. The Company
believes that the repatriation of the dollar-denominated debt from its Mexican
subsidiary and such contracts substantially mitigate the Company's exposure to
exchange rate changes related to such borrowings.
During December 1994 and in 1995, the Mexican peso devalued substantially
against the dollar. As a result of this devaluation, the stockholders' equity of
the Company's Mexican subsidiary was reduced by $14 million and $5 million
during December 1994 and in 1995, respectively. This reduction had no impact on
the Company's results of operations because translation gains and losses are
reported in the cumulative foreign currency translation adjustment component of
stockholders' equity. The selling price of graphite electrodes sold in Mexican
pesos increased by 215% from December 1994 through December 1995, partially
offsetting the significant devaluation of the Mexican peso against the dollar.
Approximately 38% of the Mexican subsidiary's sales are made outside Mexico in
dollars. The Company's dollar earnings from such sales benefit to the extent
that local costs become lower in dollar terms.
LIQUIDITY AND CAPITAL RESOURCES
The Company's sources of funds have consisted principally of invested
capital, operating cash flow and debt financing from affiliates, banks and
institutional investors. The Company's uses of those funds (other than for
operations) have consisted principally of debt reduction, capital expenditures,
distributions to stockholders (including the redemption and repurchases of
common equity), acquisition of controlling interests in new companies or
businesses and acquisition of minority stockholders' shares of consolidated
subsidiaries.
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Acquisitions have been and are expected to be, and repurchases under UCAR's
stock repurchase program (including the Blackstone Share Repurchase) are
expected to be, financed from existing cash balances, cash flow from operations,
short-term borrowings and borrowings under the revolving credit facility.
Debt Financing and Debt Reduction. Upon consummation of the
Recapitalization, the Company established the Recapitalization Bank Facilities
which provided for borrowings of up to $685 million, of which $585 million was
used in connection with the Recapitalization. On October 19, 1995, the Company
refinanced the Recapitalization Bank Facilities with the Senior Bank Facilities
at more favorable interest rates and with more favorable covenants. The Senior
Bank Facilities provide for borrowings of up to $620 million, of which $520
million was used in connection with the Refinancing and $100 million is
available on a revolving credit basis for general corporate purposes. In 1995
and 1996, the Company voluntarily repaid an aggregate of $161 million and $55
million, respectively, of indebtedness under the Recapitalization Bank
Facilities and the Senior Bank Facilities, which repayments were funded from
available cash and cash flow from operations. Accordingly, the Company's next
required installment payments for the tranche A facility and the tranche B term
facility under the Senior Bank Facilities occur during 1998, and 2002,
respectively. In connection with the Recapitalization, the Company, through
Global, issued $375 million aggregate principal amount of Subordinated Notes, of
which $175 million aggregate principal amount were redeemed with proceeds from
the Initial Offering.
At December 31, 1996, the Company had total debt of $635 million and a
stockholders' deficit of $2 million as compared to $668 million and $167
million, respectively, at December 31, 1995. At December 31, 1996, cash and cash
equivalents were $95 million as compared to $53 million at December 31, 1995.
The Company is currently seeking to amend the Senior Bank Facilities to reduce
interest rates on amounts outstanding under the Senior Bank Facilities and to
increase the amount available on a revolving credit basis to $200 million to
allow for more flexibility in uses of free cash flow for acquisitions, capital
expenditures and stock repurchases. No assurance can be given that such
amendments will, in fact, become effective.
Although no assurance can be given that such will be the case, the Company
believes that cash flow from operations combined with its revolving credit
facility and existing cash balances will be adequate to meet debt service
requirements, fund continued capital expenditures, allow for certain growth
opportunities and meet working capital and general corporate needs. The
acquisition of the remaining shares of EMSA will be financed with borrowings
under the revolving credit facility, which is expected to be amended as
described above.
Inventory Levels and Working Capital. As a result of efficiencies achieved
pursuant to the Company's restructuring and re-engineering projects, there has
been improvement in managing inventory levels with respect to finished products,
work in process, raw materials and supplies for a given level of forecasted
sales. Inventory levels at any specified date are affected by increases in
inventories of raw materials to meet anticipated increases in sales of finished
products, Customer Buy-Ins in advance of announced price increases, changes in
scheduled production by the Company to meet anticipated Customer Buy-Ins and
other factors.
The Company's working capital increased to $234 million at December 31,
1996 from $175 million at December 31, 1995, primarily as a result of a $40
million increase in inventory levels due principally to weaker than expected
graphite electrode sales volume in Western Europe and an $11 million increase
resulting from a change in accounting for LIFO inventories in the United States.
Cash and cash equivalents were $42 million higher at December 31, 1996 than at
December 31, 1995. Cash and cash equivalents increased due to cash flow from
operations in excess of cash used for financing and investing activities. In
addition, short-term debt increased by $22 million primarily due to the
acquisition of UCAR Grafit.
Capital Expenditures. Capital expenditures aggregated $62 million
(including $4 million for the Rationalization Project) in 1996. The Company
expects capital expenditures in 1997 to total approximately $75 million to $80
million (including approximately $11 million for the Focused Factory Project and
the Technology Improvement Projects and $15 million for capital improvements
relating to facilities of the Acquired Companies). In November 1996, UCAR's
Board of Directors approved a project to modernize the Company's manufacturing
facility in Caserta, Italy in order to reduce operating costs, improve product
quality, improve working conditions and reduce emissions at a cost of
approximately $21 million. Capital expenditures aggregated
-26-
$65 million and $34 million in 1995 and 1994, respectively. Except for the
Focused Factory Project, most of the Company's capital expenditures have been,
and are expected to be, made to maintain existing facilities and equipment,
achieve cost savings and improve operating efficiency.
Capital expenditures for the Rationalization Project of $27 million to
build new facilities and $4 million to pay costs to shut down old facilities
were pre-funded under the Recapitalization Bank Facilities as part of the
Recapitalization. During 1995, in connection with the Rationalization Project,
the Company wrote-off fixed assets of $22 million and recorded $8 million of
facility closing expenses and environmental clean-up costs.
Cash Distributions and Restrictions on Dividends or Distributions. The
Company made cash distributions to Union Carbide and Mitsubishi aggregating $84
million on September 30, 1994 and $10 million on January 20, 1995. On January
26, 1995, in connection with the Recapitalization, the Company repurchased and
cancelled all of the common equity then held by Mitsubishi for $406 million and
paid to Union Carbide a dividend of $347 million. In March 1995, Union Carbide
and Mitsubishi refunded approximately $7 million of the $10 million distributed
on January 20, 1995 as required by the Recapitalization Agreement.
Under the Senior Bank Facilities, Global and UCAR are generally permitted
to pay dividends to their respective stockholders only in an annual amount up to
the greater of $15 million or a specified percentage of adjusted consolidated
net income. In general, amounts which are permitted to be paid as dividends in a
year but not so paid may be paid in subsequent years. The Subordinated Note
Indenture also limits the payments of dividends by Global to UCAR.
CHANGES IN ACCOUNTING PRINCIPLES
Effective January 1, 1996, the Company changed its method of determining
LIFO inventories. The new methodology provides specifically identified
parameters for defining new items within the LIFO pool which the Company
believes improves the accuracy of costing those items. The Company recorded
income of $7 million (after related income taxes of $4 million) as the
cumulative effect on prior years of this change in accounting for inventories.
The new method of accounting resulted in charging lower inventory costs to cost
of goods sold during 1996 which reduced cost of goods sold by $4 million (and
increased net income by $2 million).
In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ('SFAS') 123, 'Accounting for Stock-Based
Compensation' which is effective for years beginning after December 15, 1995.
SFAS 123 permits a fair value based method of accounting for employee stock
compensation plans. It also allows a company to continue to use the intrinsic
value method of accounting prescribed by Accounting Principles Board Opinion No.
25, 'Accounting for Stock Issued to Employees' ('APB 25'). Companies electing to
continue to use the accounting prescribed by APB 25 must make pro forma
disclosures of net income and net income per share as if the fair value based
method of accounting defined in SFAS 123 had been applied. The Company has
elected to continue the accounting prescribed by APB 25. Accordingly, the
adoption of SFAS 123 will have no effect on the Company with the exception of
expanded disclosures required under SFAS 123.
COSTS RELATING TO PROTECTION OF THE ENVIRONMENT
The Company has been and is subject to increasingly stringent environmental
protection laws and regulations. In addition, the Company has an on-going
commitment to rigorous internal environmental protection standards. Expenses
relating to environmental protection were approximately $10 million, $15 million
and $15 million in 1994, 1995 and 1996, respectively. Capital expenditures
relating to environmental protection were approximately $5 million, $6 million
and $14 million in 1994, 1995 and 1996, respectively.
-27-
MANAGEMENT
The following table sets forth certain information with respect to the
executive officers and directors of UCAR.
NAME AGE* POSITION
- --------------------------------------------------- ---- -----------------------------------------------------
Robert P. Krass.................................... 60 Chairman of the Board, President and Chief Executive
Officer
Robert J. Hart..................................... 59 Vice President and General Manager (North and South
America)
Peter B. Mancino................................... 54 Vice President, General Counsel and Secretary
Maurice Marcellin.................................. 62 Vice President and General Manager (Europe and South
Africa)
William P. Wiemels................................. 52 Vice President, Chief Financial Officer and Treasurer
Fred C. Wolf....................................... 52 Vice President, Administration and Strategic Projects
R. Eugene Cartledge................................ 67 Director
John R. Hall....................................... 64 Director
Glenn H. Hutchins.................................. 41 Director
Robert D. Kennedy.................................. 64 Director
Howard A. Lipson................................... 33 Director
Peter G. Peterson.................................. 70 Director
Stephen A. Schwarzman.............................. 50 Director
- ------------------
* As of February 28, 1997
The business experience of each of the executive officers and directors is
set forth below. Following the Offering, Messrs. Hutchins, Lipson, Peterson and
Schwarzman will resign as directors.
Robert P. Krass was elected director and Chairman of the Board of UCAR in
connection with the Recapitalization. Mr. Krass joined Union Carbide in 1963 and
held various sales and management positions in the United States and Europe,
including Director of Marketing, Europe, of the Carbon Products Division and
Managing Director of the Division's business in the United Kingdom. He was Vice
President, Marketing, of the Electrode Systems Division from 1983 to 1986. In
1987, Mr. Krass became President of the Carbon Products Division and Vice
President of Union Carbide. He has been President of the Company since 1989 and
Chief Executive Officer of the Company since 1991. Mr. Krass is a member of the
Nominating Committee of UCAR's Board of Directors.
Robert J. Hart joined Union Carbide in 1961 and held various manufacturing
and marketing positions in the Carbon Products Division in the United States,
Europe and South America. In 1986, he returned from South America to the United
States as Vice President and General Manager of the Carbon Products Division,
first for the Pan American and South African regions and later worldwide. He has
been Vice President and General Manager, North and South America, of the Company
since 1991.
Peter B. Mancino joined the Law Department of Union Carbide in 1975 and
became Division Counsel of the Industrial Gases and Carbon Products Divisions in
1980. In 1989, he became General Counsel of the Company. Mr. Mancino has been a
Vice President and the Secretary of the Company since 1991.
Maurice Marcellin joined Union Carbide in 1962 and held various positions
in the Carbon Products Division in Europe. He has been Vice President and
General Manager, Europe and South Africa, of the Company since 1991.
William P. Wiemels joined Union Carbide in 1967 and held various technical,
sales and marketing positions in the Carbon Products Division in the United
States and Europe. He became Director of Marketing in Europe in 1986 and
Director of Technology of the Company in 1989. Mr. Wiemels was Vice President,
U.S.A. Operations,
-28-
of the Company from 1991 to 1994 and has been Vice President, Chief Financial
Officer and Treasurer of the Company since 1994.
Fred C. Wolf joined Union Carbide in 1967 and held various financial and
management positions in the Carbon Products Division until 1979. From 1979 to
1985, he held various finance and business positions in the Industrial Gases and
Engineering Products and Processes Divisions. He returned to the Carbon Products
Division in 1985 as Controller and was a Vice President of the Division from
1986 to 1989. He has been Vice President, Administration and Strategic Projects,
of the Company since 1990.
R. Eugene Cartledge was elected director of UCAR in February 1996. From
1986 until his retirement in 1994, he was the Chairman of the Board and Chief
Executive Officer of Union Camp Corporation, where he had served in various
sales and management capacities since 1956. Mr. Cartledge is Chairman of the
Board of Savannah Foods and Industries, Inc. and a director of Union Camp
Corporation, Chase Brass Industries, Inc., Sun Company, Inc., Delta Air Lines,
Inc., and Blount, Inc. Mr. Cartledge is Chairman of the Nominating Committee and
a member of the Audit Committee of UCAR's Board of Directors.
John R. Hall was elected director of UCAR in November 1995. He retired as
Chairman effective January 31, 1997 and as Chief Executive Officer effective
October 1, 1996 of Ashland Inc., which positions he held since 1981. Mr. Hall
served in various engineering and managerial capacities at Ashland Inc. since
1957. Mr. Hall is a director of Banc One Corporation, Canada Life Assurance
Company, CSX Corporation, Humana Inc. and Reynolds Metals Company. Mr. Hall is
Chairman of the Organization and Compensation Committee and a member of the
Audit Committee of UCAR's Board of Directors.
Glenn H. Hutchins was elected director of UCAR in connection with the
Recapitalization. He is a member of Blackstone Group Holdings L.L.C. Mr.
Hutchins joined The Blackstone Group L.P. in September 1994. Mr. Hutchins was a
Managing Director of Thomas H. Lee Co. from 1987 until 1994 and, while on leave
from Thomas H. Lee Co. during parts of 1993 and 1994, was a Special Advisor in
the White House. Mr. Hutchins is a director of Haynes International Inc. Mr.
Hutchins is a member of the Nominating and Organization and Compensation
Committees of UCAR's Board of Directors.
Robert D. Kennedy was elected director of the Company in June 1990. He
joined Union Carbide in 1955 and held various marketing and management positions
in the United States and Europe. He was Senior Vice President of Union Carbide
from 1981 to 1985. In 1985, Mr. Kennedy was elected a director and President of
Union Carbide. In 1986, he was elected Chief Executive Officer and Chairman of
the Board of Union Carbide. Mr. Kennedy retired as Chief Executive Officer and
President of Union Carbide in April 1995 and as Chairman of the Board (but not
as a director) of Union Carbide in December 1995. Mr. Kennedy is also a director
of Union Camp Corporation, Sun Company, Inc., Birmingham Steel Corp., KMart
Corp. and General Signal Corp. Mr. Kennedy is Chairman of the Audit Committee
and a member of the Organization and Compensation Committee of UCAR's Board of
Directors.
Howard A. Lipson was elected director of UCAR in connection with the
Recapitalization. Mr. Lipson is a member of Blackstone Group Holdings L.L.C. Mr.
Lipson was a Managing Director from 1994 to 1995, was a Vice President from 1991
to 1994 and joined The Blackstone Group L.P. in 1988. Mr. Lipson is a director
of Volume Services, Inc., Prime Succession Inc., Ritvik Holdings, Inc., AMF
Group, Inc., Rose Hills, Inc. and Transtar Holdings, L.P. Mr. Lipson is a member
of the Organization and Compensation Committee of UCAR's Board of Directors..
Peter G. Peterson was elected director of UCAR in connection with the
Recapitalization. He is a Co-Founder and has served as Chairman of The
Blackstone Group L.P. since 1985. Mr. Peterson is also a director of Sony
Corporation, Transtar Holdings L.P. and the Federal Reserve Bank of New York.
Stephen A. Schwarzman was elected director of UCAR in connection with the
Recapitalization. He is a Co-Founder and has served as President and Chief
Executive Officer of The Blackstone Group L.P. since 1985. Mr. Schwarzman is
also a director of Great Lakes Dredge & Dock Corporation, Transtar, Inc., Prime
Succession Inc. and Collins & Aikman Corporation.
-29-
SELLING STOCKHOLDERS
The following table sets forth the number and percentage, as of February
28, 1997, of outstanding shares of Common Stock owned beneficially by the
Selling Stockholders before the Offering, the number of Shares to be sold by the
Selling Stockholders in the Offering and the percentage, as of February 28,
1997, of outstanding shares of Common Stock to be beneficially owned by the
Selling Stockholders after the Offering and the Blackstone Share Repurchase.
With respect to shares held by BFIP and shares held by BCP and BOCP allocable to
the general partner thereof, 965,889 of such shares (the 'Principal Retained
Interest') will be retained for subsequent distribution to and/or sale by or for
the account of the indirect owners of such shares. With respect to shares held
by BCP and BOCP allocable to their limited partners, certain of such limited
partners may elect to retain on a similar basis some or all of their respective
allocated shares in lieu of having such shares sold in the Offering (the
'Limited Partner Retained Interest' and, together with the Principal Retained
Interest, the 'Retained Interest'). Information herein assumes that there will
not be any Limited Partner Retained Interest. The number of shares included in
the Principal Retained Interest, which would constitute approximately 2.1% of
the outstanding Common Stock, is estimated. The final number of shares included
in each of the Principal Retained Interest and the Limited Partner Retained
Interest will be determined prior to the date of the final Prospectus and
reflected therein.
PERCENTAGE OF OUTSTANDING SHARES
--------------------------------
NUMBER SHARES
NAME AND ADDRESS OF OF SHARES TO BE BEFORE
BENEFICIAL OWNER BEFORE OFFERING SOLD OFFERING
- -------------------------------------------------- --------------- ---------- --------------------------------
Blackstone Management Associates II LLC 9,137,385(b) 8,171,496(c) 19.5%(b)
('BMA II')(a) ..................................
345 Park Avenue
New York, NY 10154
Glenn H. Hutchins(b)(e)(f)........................ 9,137,385 -- 19.5%
Howard A. Lipson(b)(e)(f)......................... 9,137,385 -- 19.5%
Peter G. Peterson(b)(e)(f)........................ 9,137,385 -- 19.5%
Stephen A. Schwarzman(b)(e)(f).................... 9,137,385 -- 19.5%
PERCENTAGE OF
OUTSTANDING SHARES
AFTER OFFERING AND
NAME AND ADDRESS OF BLACKSTONE
BENEFICIAL OWNER SHARE REPURCHASE
- -------------------------------------------------- ------------------
Blackstone Management Associates II LLC 0.0%(d)
('BMA II')(a) ..................................
345 Park Avenue
New York, NY 10154
Glenn H. Hutchins(b)(e)(f)........................ *
Howard A. Lipson(b)(e)(f)......................... *
Peter G. Peterson(b)(e)(f)........................ *
Stephen A. Schwarzman(b)(e)(f).................... *
- ------------------
(a) BMA II, as the general partner of each of BCP, BOCP and BFIP, exercises
voting and dispositive power with respect to the shares beneficially owned
by Blackstone.
(b) 9,137,385 shares, or 19.5%, of the outstanding shares (before the Offering)
are held collectively by BCP, BOCP and BFIP. BCP, BOCP and BFIP may be
deemed beneficially to own 9,969,919 shares, or 21.3%, of the outstanding
shares (before the Offering), collectively, due to (i) an agreement between
Blackstone and Chase Equity Associates, L.P. pursuant to which Chase Equity
Associates, L.P. has agreed to vote its shares in the same manner as
Blackstone votes its shares and (ii) agreements between Blackstone and
certain members of management pursuant to which they have agreed to vote
their shares in the same manner as Blackstone votes its shares, all of
which agreements are expected to terminate upon the closing of the
Offering.
(c) Assumes that the over-allotment option is exercised in full and gives
effect to the Blackstone Share Repurchase.
(d) Assumes that the over-allotment option is exercised in full and excludes
the Retained Interest. If the over-allotment option is not exercised,
approximately 1.5% of the outstanding shares of Common Stock would be owned
by Blackstone after the Offering, excluding the Retained Interest.
(e) Each such person's business address is c/o The Blackstone Group L.P., 345
Park Avenue, New York, NY 10154.
(f) Messrs. Peterson, Schwarzman, Hutchins and Lipson are members of the
general partner of each of BCP, BOCP and BFIP. Beneficial ownership of
shares by such four individuals (before the Offering) includes the shares
beneficially owned by each of BCP, BOCP and BFIP, and each of such persons
disclaims beneficial ownership of such shares.
* Represents such person's allocable share of the Principal Retained Interest,
which in each case will represent less than 1% of the outstanding shares.
UCAR, Blackstone and Chase Equity Associates, L.P. are parties to an
Amended and Restated Stockholders' Agreement (the 'Stockholders' Agreement')
which granted certain registration rights, restricted certain transactions
between UCAR and Blackstone, contained certain transfer restrictions, granted
certain 'tag-along' and 'drag-along' rights and provided for certain rights and
obligations relating to voting shares of Common Stock held by Chase Equity
Associates, L.P. UCAR currently pays a monitoring fee of approximately $1
million per year to Blackstone as permitted by the Stockholders' Agreement. It
is expected that, upon the closing of the Offering, such payments and all
provisions of the Stockholders' Agreement will terminate other than the
provisions relating to indemnification and reimbursement of expenses in
connection with such registration rights and monitoring services. Under the
Stockholders' Agreement, UCAR has agreed to indemnify the Selling Stockholders
against certain liabilities, including civil liabilities under the Securities
Act.
Pursuant to a Stock Repurchase Agreement dated , 1997 among UCAR,
BCP, BOCP and BFIP (the 'Repurchase Agreement'), UCAR has agreed to repurchase
from Blackstone an aggregate of 680,000 shares of Common Stock upon the closing
of the Offering at the same price per share at which the Shares are sold to the
U.S. Underwriters and the Managers in the Offering, which repurchase will
constitute a part of UCAR's previously announced stock repurchase program. The
obligation to consummate such repurchase is conditioned on the closing of the
Offering and will terminate if the Offering does not close on or before ,
1997. The number of shares to be repurchased is estimated. The final number of
shares to be repurchased will be approximately 10% of the final number of Shares
(excluding shares of Common Stock included in the over-allotment option).
-30-
In connection with the Recapitalization, certain members of management
entered into agreements with UCAR and UCAR adopted a stock option plan and an
equity ownership program structured with the advice of Blackstone. These
agreements, plan and program contained certain 'holdback' provisions, provided
for certain 'drag-along' and 'tag-along' rights, granted certain registration
rights, contained certain transfer restrictions, provided for certain tax
assistance loans and related collateralization arrangements and provided for
certain rights and obligations relating to voting shares of Common Stock held by
certain members of management. Upon the closing of the Offering, such provisions
will terminate pursuant to their terms or pursuant to the Repurchase Agreement,
other than those related to loan collateralization which shall be modified to
release UCAR securities constituting such collateral to the extent the value of
such collateral exceeds the principal amounts of such loans.
CERTAIN UNITED STATES TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS
A general discussion of certain United States federal income and estate tax
consequences of the ownership and disposition of Common Stock applicable to
Non-U.S. Holders (as defined) of Common Stock is set forth below. In general, a
'Non-U.S. Holder' is a person other than: (i) a citizen or resident (as defined
for United States federal income or estate tax purposes, as the case may be) of
the United States; (ii) a corporation organized in or under the laws of the
United States or a political subdivision thereof; or (iii) an estate or trust
the income of which is subject to United States federal income taxation
regardless of its source. The discussion is based on current law and is provided
for general information only. The discussion does not address aspects of United
States federal taxation other than income and estate taxation and does not
address all aspects of federal income and estate taxation. The discussion does
not consider any specific facts or circumstances that may apply to a particular
Non-U.S. Holder and does not address all aspects of United States federal income
tax law that may be relevant to Non-U.S. Holders that may be subject to special
treatment under such law (for example, insurance companies, tax-exempt
organizations, financial institutions or broker-dealers). ACCORDINGLY,
PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE
UNITED STATES FEDERAL, STATE, LOCAL AND NON-U.S. CURRENT AND POSSIBLE FUTURE
INCOME AND OTHER TAX CONSEQUENCES OF HOLDING AND DISPOSING OF COMMON STOCK.
DIVIDENDS
In general, the gross amount of dividends paid to a Non-U.S. Holder will be
subject to United States withholding tax at a 30% rate (or any lower rate
prescribed by an applicable tax treaty) unless the dividends are effectively
connected with a trade or business carried on by the Non-U.S. Holder within the
United States. In determining the applicability of a tax treaty that provides
for a lower rate of withholding, dividends paid to an address in a foreign
country are presumed under current regulations of the Treasury Department to be
paid to a resident of that country. Under proposed Treasury regulations,
however, a Non-U.S. Holder would be required to file certain forms in order to
claim the benefit of an applicable treaty rate. Dividends effectively connected
with a trade or business carried on by a Non-U.S. Holder within the United
States will generally not be subject to withholding (if the Non-U.S. Holder
properly files Internal Revenue Service Form 4224 with the payor of the
dividend) and will generally be subject to United States federal income tax at
ordinary federal income tax rates. Effectively connected dividends may be
subject to different treatment under an applicable tax treaty depending on
whether such dividends are attributable to a permanent establishment of the
Non-U.S. Holder in the United States. In the case of a Non-U.S. Holder which is
a corporation, effectively connected income may be subject to the branch profits
tax (which is generally imposed on a foreign corporation at a rate of 30% of the
deemed repatriation from the United States of 'effectively connected earnings
and profits') except to the extent that an applicable tax treaty provides
otherwise. A Non-U.S. Holder eligible for a reduced rate of United States
withholding tax pursuant to an income tax treaty may obtain a refund of any
excess amounts withheld by filing an appropriate claim for refund with the
Internal Revenue Service.
SALE OF COMMON STOCK
Generally, a Non-U.S. Holder will not be subject to United States federal
income tax on any gain realized upon the disposition of his Common Stock unless:
(i) UCAR has been, is, or becomes a 'U.S. real property holding corporation' for
federal income tax purposes and certain other requirements are met; (ii) the
gain is
-31-
effectively connected with a trade or business carried on by the Non-U.S. Holder
(or by a partnership, trust or estate in which the Non-U.S. Holder is a partner
or beneficiary) within the United States; or (iii) the Common Stock is disposed
of by an individual Non-U.S. Holder, who holds the Common Stock as a capital
asset and is present in the United States for 183 days or more in the taxable
year of the disposition, and the gains are considered derived from sources
within the United States. UCAR believes that it has not been, is not currently
and, based upon its current business plans, is not likely to become a U.S. real
property holding corporation. A Non-U.S. Holder also may be subject to tax
pursuant to the provisions of United States tax law applicable to certain United
States expatriates. Non-U.S. Holders should consult applicable treaties, which
may exempt from United States taxation gains realized upon the disposition of
Common Stock in certain cases.
ESTATE TAX
Common Stock owned or treated as owned by an individual Non-U.S. Holder at
the time of death will be includible in the individual's gross estate for United
States federal estate tax purposes, unless an applicable treaty provides
otherwise, and may be subject to United States federal estate tax.
BACKUP WITHHOLDING AND INFORMATION REPORTING
UCAR must report annually to the Internal Revenue Service and to Non-U.S.
Holders the amount of dividends paid to, and the tax withheld with respect to,
each Non-U.S. Holder. These information reporting requirements apply regardless
of whether withholding was reduced by an applicable tax treaty or if withholding
was not required because the dividends were effectively connected with a trade
or business in the United States of the Non-U.S. Holder. Copies of these
information returns also may be made available under the provisions of a
specific treaty or agreement to the tax authorities in the country in which the
Non-U.S. Holder resides or is established. Under current law, United States
backup withholding tax (which generally is a withholding tax imposed at the rate
of 31% on certain payments to persons that fail to furnish the information
required under the United States information reporting and backup withholding
rules) generally will not apply to dividends paid on Common Stock to a Non-U.S.
Holder at an address outside the United States, absent actual knowledge by the
payor that the payee is not a Non-U.S. Holder or to dividends paid to Non-U.S.
Holders that are either subject to the U.S. withholding tax (whether at 30% or a
reduced treaty rate) or that are exempt from such withholding because such
dividends constitute effectively connected income. Under proposed United States
Treasury regulations not currently in effect, however, a Non-U.S. Holder will be
subject to backup withholding unless applicable certification requirements are
met. Backup withholding and information reporting generally will apply to
dividends paid on Common Stock to a Non-U.S. Holder at an address inside the
United States unless such Non-U.S. Holder owner, under penalties of perjury,
certifies, among other things, its status as a Non-U.S. Holder or otherwise
establishes an exemption.
The payment of the proceeds from the disposition of Common Stock to or
through the United States office of a broker will be subject to information
reporting and backup withholding unless the owner certifies its foreign status
as described above or otherwise establishes an exemption. The payment of the
proceeds from the disposition of Common Stock to or through a foreign office of
a non-United States broker will not be subject to backup withholding and
generally will not be subject to information reporting. Unless the broker has
documentary evidence in its files that the owner is a Non-U.S. Holder and
certain conditions are met or the holder otherwise establishes an exemption,
information reporting generally will apply to dispositions through (a) a non-
United States office of a United States broker and (b) a non-United States
office of a non-United States broker that is either a 'controlled foreign
corporation' for United States federal income tax purposes or a person 50% or
more of whose gross income from all sources for a three year testing period was
effectively connected with a United States trade or business.
The backup withholding and information reporting rules are currently under
review by the Treasury Department and their application to the Common Stock is
subject to change.
Any amount withheld under the backup withholding rules from a payment to a
Non-U.S. Holder would be allowed as a credit against such Non-U.S. Holder's
United States federal income tax and any amounts withheld in excess of such
Non-U.S. Holder's United States federal income tax liability would be refunded,
provided that required information is furnished to the Internal Revenue Service.
-32-
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated , 1997 (the 'U.S. Underwriting Agreement') among
UCAR, the Selling Stockholders and the underwriters named below (the 'U.S.
Underwriters'), the U.S. Underwriters have severally but not jointly agreed to
purchase from the Selling Stockholders the following respective numbers of U.S.
Shares as set forth opposite their names:
NUMBER OF
U.S. UNDERWRITER U.S. SHARES
- ------------------------------------------------------------------------------------------ -----------
Credit Suisse First Boston Corporation....................................................
Dillon, Read & Co. Inc....................................................................
Goldman, Sachs & Co.......................................................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated........................................
PaineWebber Incorporated..................................................................
The Nikko Securities Co. International, Inc...............................................
-----------
Total.............................................................................. 5,440,000
-----------
-----------
The U.S. Underwriting Agreement provides that the obligations of the U.S.
Underwriters are subject to certain conditions precedent and that the U.S.
Underwriters will be obligated to purchase all of such U.S. Shares offered
hereby (other than those covered by the over-allotment option described below)
if any are purchased. The U.S. Underwriting Agreement provides that, in the
event of a default by a U.S. Underwriter in certain circumstances, the purchase
commitments of non-defaulting Underwriters may be increased or the U.S.
Underwriting Agreement may be terminated.
UCAR and the Selling Stockholders have entered into a Subscription
Agreement (the 'Subscription Agreement') with the Managers of the International
Offering (the 'Managers') providing for the concurrent offer and sale of the
International Shares outside the United States and Canada. The closing of the
U.S. Offering is a condition to the closing of the International Offering and
vice versa.
Blackstone has granted to the U.S. Underwriters and the Managers an option,
exercisable by Credit Suisse First Boston Corporation on behalf of the U.S.
Underwriters and the Managers, expiring at the close of business on the 30th day
after the date of this Prospectus, to purchase up to an additional 691,496
shares of Common Stock (the 'Option Shares') from them at the initial public
offering price less the underwriting discounts and commissions, all as set forth
on the cover page of this Prospectus. The U.S. Underwriters and the Managers may
exercise the option only to cover over-allotments, if any, in the sale of the
Shares, including the sale of the International Shares. To the extent that the
option to purchase is exercised, each U.S. Underwriter and each Manager will
become obligated, subject to certain conditions, to purchase approximately the
same percentage of Option Shares as the number set forth next to such U.S.
Underwriter's name in the preceding table and as the number set forth next to
such Manager's name in the corresponding table in the prospectus relating to the
International Offering bears to the total number of Shares in such table.
UCAR and the Selling Stockholders have been advised by Credit Suisse First
Boston Corporation, on behalf of the U.S. Underwriters, that the U.S.
Underwriters propose to offer the U.S. Shares in the United States and Canada to
the public initially at the public offering price set forth on the cover page of
this Prospectus and to certain dealers at such price less a concession of $
per share and that the U.S. Underwriters and such dealers may allow a discount
of $ per share on sales to certain other dealers. After the initial public
offering, the public offering price, concession and discount to dealers may be
changed by the U.S. Underwriters.
The public offering price, the aggregate underwriting discounts and
commissions per share and per share concession and discount to dealers for the
U.S. Offering and the International Offering will be identical. Pursuant
-33-
to an Agreement between the U.S. Underwriters and the Managers (the
'Intersyndicate Agreement') relating to the Offering, changes in the public
offering price, concession and discount to dealers will be made only upon the
mutual agreement of Credit Suisse First Boston Corporation, on behalf of the
U.S. Underwriters, and Credit Suisse First Boston (Europe) Limited ('CSFBL'), on
behalf of the Managers.
Pursuant to the Intersyndicate Agreement, each of the U.S. Underwriters has
agreed that, as part of the distribution of the U.S. Shares and subject to
certain exceptions, it has not offered or sold, and will not offer or sell,
directly or indirectly, any shares of Common Stock or distribute any prospectus
relating to the Common Stock to any person outside the United States or Canada
or to any other dealer who does not so agree. Each of the Managers has agreed or
will agree that, as part of the distribution of the International Shares and
subject to certain exceptions, it has not offered or sold, and will not offer or
sell, directly or indirectly, any shares of Common Stock or distribute any
prospectus relating to the Common Stock to any person in the United States or
Canada or to any other dealer who does not so agree. These limitations do not
apply to stabilization transactions or to transactions between the U.S.
Underwriters and the Managers pursuant to the Intersyndicate Agreement. As used
herein, 'United States' means the United States of America (including the States
and the District of Columbia), its territories, possessions and other areas
subject to its jurisdiction, 'Canada' means Canada, its provinces, territories,
possessions and other areas subject to its jurisdiction, and an offer or sale
shall be in the United States or Canada if it is made to (i) an individual
resident in the United States or Canada or (ii) a corporation, partnership,
pension, profit-sharing or other trust or other entity (including any such
entity acting as an investment adviser with discretionary authority) whose
office most directly involved with the purchase is located in the United States
or Canada.
Pursuant to the Intersyndicate Agreement, sales may be made between the
U.S. Underwriters and the Managers of such number of Shares as may be mutually
agreed. The price of any Shares so sold shall be the public offering price, less
such amount as may be mutually agreed upon by Credit Suisse First Boston
Corporation, on behalf of the U.S. Underwriters, and CSFBL, on behalf of the
Managers, but not exceeding the selling concession applicable to such Shares. To
the extent there are sales between the U.S. Underwriters and the Managers
pursuant to the Intersyndicate Agreement, the number of Shares initially
available for sale by the U.S. Underwriters or by the Managers may be more or
less than the amount appearing on the cover page of this Prospectus. Neither the
U.S. Underwriters nor the Managers are obligated to purchase from the other any
unsold Shares.
This Prospectus may be used by underwriters and dealers in connection with
sales of International Shares to persons located in the United States, to the
extent such sales are permitted by the contractual limitations on sales
described above.
UCAR, certain of its executive officers and directors and Blackstone have
agreed that none of them will, directly or indirectly, offer, sell, announce its
intention to sell, contract to sell, pledge, hypothecate, grant any option to
purchase or otherwise dispose of, and UCAR has agreed that it will not file with
the Commission a registration statement under the Securities Act relating to,
any shares of Common Stock or securities convertible or exchangeable into or
exercisable for any shares of Common Stock without the prior written consent of
Credit Suisse First Boston Corporation for a period of 90 days, in the case of
UCAR, and 45 days, in the case of Blackstone and certain of UCAR's directors and
executive officers, after the date of this Prospectus, subject to certain
limited exceptions.
UCAR and the Selling Stockholders have agreed to indemnify the U.S.
Underwriters and the Managers against certain liabilities, including civil
liabilities under the Securities Act, and to contribute to payments that the
U.S. Underwriters and the Managers may be required to make in respect thereof.
Credit Suisse First Boston Corporation, on behalf of the U.S. Underwriters
and the Managers, may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with Regulation M
under the Exchange Act. Over-allotment involves syndicate sales in excess of the
offering size, which creates a syndicate short position. Stabilizing
transactions permit bids to purchase shares of Common Stock so long as the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of Common Stock in the open market after the
distribution has been completed in order to cover
-34-
syndicate short positions. Penalty bids permit Credit Suisse First Boston
Corporation, on behalf of the U.S. Underwriters and the Managers, to reclaim a
selling concession from a syndicate member when the Shares originally sold by
such syndicate member are purchased in a syndicate covering transaction to cover
syndicate short positions. Such over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids may cause the price of shares
of Common Stock to be higher than it would otherwise be in the absence of such
transactions. These transactions may be effected on the NYSE or otherwise and,
if commenced, may be discontinued at any time.
Certain of the U.S. Underwriters have provided certain financial advisory
and investment banking services to the Company and Blackstone in the past.
Credit Suisse First Boston Corporation was the placement agent for the private
placement by UCAR of senior notes in June 1994, Credit Suisse First Boston
Corporation and Goldman, Sachs & Co. were underwriters for the offering by
Global of the Subordinated Notes in January 1995 and certain of the U.S.
Underwriters and the Managers were underwriters, managing underwriters or
managers for the Initial Offering and the Secondary Offering, for which in each
case they received customary underwriting discounts and commissions. Credit
Suisse First Boston Corporation and Goldman, Sachs & Co. are market-makers with
respect to the Subordinated Notes and, at the time of the Redemption, may have
been the beneficial owner of Subordinated Notes, some of which may have been
redeemed.
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the Shares in Canada is being made only on a private
placement basis exempt from the requirements that a prospectus be prepared and
filed with the securities regulatory authorities in each province where trades
of the Shares are effected. Accordingly, any resale of the Shares in Canada must
be made in accordance with applicable securities laws which will vary depending
on the relevant jurisdiction and which may require resales to be made in
accordance with available statutory exemptions or pursuant to a discretionary
exemption granted by the applicable securities regulatory authority. Purchasers
are advised to seek legal advice prior to any resale of the Shares.
REPRESENTATIONS OF PURCHASERS
Each purchaser of Shares in Canada who receives a purchase confirmation
will be deemed to represent to UCAR, the Selling Stockholders and the dealer
from whom such purchase confirmation is received that such purchaser or any
ultimate purchaser for which such initial purchaser is acting as agent (i) is
entitled under applicable provincial securities laws to purchase such Shares
without the benefit of a prospectus qualified under such securities laws and
pursuant to registration exemptions under such securities laws other than in
Ontario, (ii) where required by law, that such purchaser is purchasing as
principal and not as agent and (iii) such purchaser has reviewed the text above
under 'Resale Restrictions.' Such purchaser will also be deemed to represent (i)
if in Ontario and purchasing from a person registered with the Ontario
Securities Commission as an international dealer, that such person is a
'designated institution' within the meaning of Section 204 of the Regulation to
the Securities Act (Ontario), (ii) if in Quebec, and purchasing from a person
other than a dealer with an unlimited registration pursuant to the Securities
Act (Quebec), that such purchaser is a 'sophisticated purchaser' within the
meaning of Section 44 of the Securities Act (Quebec), (iii) if in Alberta, that
such purchaser is purchasing Shares with the benefit of the prospectus exemption
provided by Section 107(1) of the Securities Act (Alberta) and (iv) if in
Manitoba, that such purchaser is not an individual. Such purchaser will also be
agreeing that it is such purchaser's express wish that all documents evidencing
or relating in any way to the sale of Shares be written in the English language
only. Chaque acuereur de valeurs mobileres reconnaitra par les presentes et en
accusant reception de la confirmation de sa souscription, avoir expressement
exige que tous les documents attestant la vente des valeurs mobilieres ou s'y
rapportant de quelque maniere que ce soit soient rediges uniquement en anglais.
-35-
RIGHTS OF ACTION AND ENFORCEMENT
The securities offered hereby are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available, including
common law rights of action for damages or rescission or rights of action under
the civil liability provisions of the federal securities laws of the United
States. Prospective purchasers are advised to consult their own legal advisers
as to which, or whether, any of such rights of action under the civil liability
provisions of the federal securities laws of the United States are available to
them.
All of the issuer's directors and officers as well as the experts named
herein and the Selling Stockholders may be located outside of Canada and, as a
result, it may not be possible for Canadian purchasers to effect service of
process within Canada upon the issuer, such persons or the Selling Stockholders.
All or a substantial portion of the assets of the issuer, such persons and the
Selling Stockholders may be located outside of Canada and, as a result, it may
not be possible to satisfy a judgment against the issuer, such persons or the
Selling Stockholders in Canada or to enforce a judgment obtained in Canadian
courts against the issuer, such persons or the Selling Stockholders outside of
Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of Shares to whom the Securities Act (British Columbia) applies
is advised that such purchaser is required to file with the British Columbia
Securities Commission a report within ten days of the sale of any Shares
purchased by such purchaser pursuant to the Offering. Such report must be in the
form attached to British Columbia Securities Commission Blanket Order BOR
#95/17, a copy of which may be obtained from UCAR. Only one such report must be
filed in respect of Shares purchased on the same date and under the same
prospectus exemption.
TAX CONSIDERATIONS
Prospective purchasers of Shares should consult their own tax advisers with
respect to the Canadian and other tax considerations applicable to their
individual circumstances.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Shares will be
passed upon for UCAR by Kelley Drye & Warren LLP, New York, New York and
Stamford, Connecticut. Certain legal matters with respect to the Offering will
be passed upon for the Selling Stockholders by Simpson Thacher & Bartlett (a
partnership which includes professional corporations), New York, New York. The
U.S. Underwriters have been represented by Cravath, Swaine & Moore, New York,
New York.
EXPERTS
The Consolidated Financial Statements of the Company at December 31, 1995
and 1996 and for each of the years in the three year period ended December 31,
1996, which are included in UCAR's
Annual Report on Form 10-K for the year ended December 31, 1996,1998, have been
incorporated by reference ininto this Prospectus and ininto the Registration
Statement in which this Prospectus appears in reliance upon the report of KPMG Peat Marwick
LLP, independent certified public accountants, which is incorporated by
reference herein, and upon the authority of such firm as experts in accounting
and auditing.
The report of KPMG Peat Marwick LLP refers to a change in 1996 in1998 to the Company'sFIFO method of
determining LIFO inventories.
-36-valuing certain U.S. inventory.
LEGAL MATTERS
Certain legal matters in connection with the legality of the Shares have
been passed upon for the Company by Kelley Drye & Warren LLP, Stamford,
Connecticut.
* * * * *
9
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON
HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS PROSPECTUS, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY SELLING STOCKHOLDER OR ANY U.S.
UNDERWRITER.STOCKHOLDER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY
ANY OF THE SECURITIES OFFERED HEREBY IN
ANY JURISDICTION TO ANY PERSON TO WHOM IT UCAR INTERNATIONAL INC.
IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS 2,975,996 Shares
BEEN NO CHANGE IN THE AFFAIRS OF THE Common Stock
COMPANY SINCE THE DATE HEREOF OR THAT THE ($.01 par value)
INFORMATION CONTAINED HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------PROSPECTUS
TABLE OF CONTENTS
PAGE
---------
Available Information........................... 2PAGE
Available Information................3
Incorporation of Documents by Reference......... 2
Summary......................................... 4
Risk Factors.................................... 11
The Company..................................... 15
Price Range of Common Stock and
Dividend Policy............................... 16
Use of Proceeds................................. 16
Capitalization.................................. 17
Selected Consolidated Financial Data............ 18
Management's Discussion and Analysis
of Financial Condition and Results
of Operations................................. 20
Management...................................... 28
Selling Stockholders............................ 30
Certain United States Tax Consequences to
Non-United States Holders..................... 31
Underwriting.................................... 33
Notice to Canadian Residents.................... 35
Legal Matters................................... 36
Experts......................................... 36
- --------------------------------------------------------------------------------
[LOGO]
UCAR INTERNATIONAL INC.
6,800,000 Shares
Common Stock
($.01 par value)
PROSPECTUS
CREDIT SUISSE FIRST BOSTON
DILLON, READ & CO. INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
THE NIKKO SECURITIES CO.
INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MARCH 14, 1997 [ALT]
6,800,000 Shares
[LOGO] UCAR INTERNATIONAL INC.
COMMON STOCK
($.01 par value)
------------------
All 6,800,000 shares of common stock, par value $.01 per share ('Common Stock'),Documents by
Reference..........................4
Risks Regarding Forward-Looking
Statements........................5
The Company..........................5
Selling Stockholders.................8
Plan of UCAR International Inc. ('UCAR') being sold (the 'Shares') are being sold by
Blackstone Capital Partners II Merchant Banking Fund L.P. ('BCP'), Blackstone
Offshore Capital Partners II L.P. ('BOCP') and Blackstone Family Investment
Partnership II L.P. ('BFIP' and, together with BCP and BOCP, 'Blackstone'
or the 'Selling Stockholders'). See 'Selling Stockholders.' UCAR will
repurchase 680,000 shares of Common Stock from Blackstone (the
'Blackstone Share Repurchase') upon the closing of the Offering (as
defined below), which repurchase will constitute part of UCAR's
previously announced stock repurchase program. See 'Summary--Recent
Developments.' Following the closing of the Offering and the
Blackstone Share Repurchase and excluding the Retained Interest
(as defined under 'Selling Stockholders'), Blackstone will own
1.5% of the outstanding Common Stock (0.0%, if the
over-allotment option is exercised in full). The Retained
Interest will constitute 2.1% of the outstanding Common Stock.
The size of the Retained Interest is estimated, and the final
number of shares comprising the Offering and the Blackstone
Share Repurchase may decrease as a result of possible
changes in the size of the Retained Interest. See 'Risk
Factors--Shares Eligible For Future Sale' and 'Selling
Stockholders.' UCAR will not receive any
of the proceeds from the sale of the Shares.
Of the 6,800,000 shares of Common Stock being offered, 1,360,000 shares (the
'International Shares') are initially being offered outside the United States
and Canada by the Managers (the 'International Offering') and 5,440,000
shares (the 'U.S. Shares') are initially being concurrently offered in
the United States and Canada by the U.S. Underwriters (the 'U.S.
Offering' and, together with the International Offering, the
'Offering'). The offering price and underwriting discounts and
commissions of the International Offering and the U.S. Offering
are identical.
The Common Stock is listed on the New York Stock Exchange (the 'NYSE') under the
symbol 'UCR.' On March 13, 1997, the last
reported sale price of the Common Stock on the NYSE was $43.625.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH
AN INVESTMENT IN THE COMMON STOCK, SEE 'RISK FACTORS' BEGINNING ON PAGE 11.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND SELLING
PUBLIC COMMISSIONS STOCKHOLDERS(1)
-------------- -------------- ------------------
Per Share...................................................... $ $ $
Total(2)....................................................... $ $ $
(1) Expenses of the Offering estimated at $800,000 will be paid by UCAR.
(2) Blackstone has granted the Managers and the U.S. Underwriters an option,
exercisable by Credit Suisse First Boston Corporation for 30 days from the
date of this Prospectus, to purchase a maximum of 691,496 additional shares
of Common Stock solely to cover over-allotments of Shares, if any. If the
option is exercised in full, the total Price to Public will be
$ , Underwriting Discounts and Commissions will be $ ,
and Proceeds to Selling Stockholders will be $ .
The International Shares are offered by the several Managers when, as and if
delivered to and accepted by the Managers and subject to their right to reject
orders in whole or in part. It is expected that the International Shares will be
ready for delivery on or about , 1997, against payment in immediately
available funds.
CREDIT SUISSE FIRST BOSTON
DILLON, READ & CO. INC. GOLDMAN SACHS INTERNATIONAL
MERRILL LYNCH INTERNATIONAL PAINEWEBBER INTERNATIONAL
NIKKO EUROPE PLC
Prospectus dated , 1997.
[ALT]
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, ANY SELLING STOCKHOLDER OR ANY MANAGER.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
IN THIS PROSPECTUS, REFERENCES TO 'DOLLARS' AND '$' ARE TO UNITED STATES
DOLLARS.
IN CONNECTION WITH THE OFFERING, CREDIT SUISSE FIRST BOSTON CORPORATION, ON
BEHALF OF THE MANAGERS AND U.S. UNDERWRITERS, MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES OFFERED
HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE SHORT
COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES,
SEE 'SUBSCRIPTION AND SALE.'
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING
OF SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT.
ACTUAL RESULTS, EVENTS OR CIRCUMSTANCES COULD DIFFER MATERIALLY FROM THOSE SET
FORTH IN SUCH STATEMENTS DUE TO VARIOUS FACTORS. SUCH FACTORS
INCLUDE THE POSSIBILITY THAT ANNOUNCED ADDITIONS TO ELECTRIC ARC FURNACE
STEEL PRODUCTION CAPACITY MAY NOT OCCUR, INCREASED ELECTRIC ARC FURNACE
STEEL PRODUCTION MAY NOT OCCUR OR RESULT IN INCREASED DEMAND OR HIGHER
PRICES FOR GRAPHITE ELECTRODES, ACQUIRED MANUFACTURING CAPACITY MAY NOT
BE FULLY UTILIZED, TECHNOLOGICAL ADVANCES EXPECTED BY THE COMPANY MAY
NOT BE ACHIEVED, CHANGING ECONOMIC AND COMPETITIVE CONDITIONS, OTHER
TECHNOLOGICAL DEVELOPMENTS AND OTHER RISKS AND UNCERTAINTIES, INCLUDING
THOSE SET FORTH OR INCORPORATED BY REFERENCE HEREIN.
TABLE OF CONTENTS
PAGE
----
Available Information...................................................................................... 3
Incorporation of Documents by Reference.................................................................... 3
Summary.................................................................................................... 4
Risk Factors............................................................................................... 11
The Company................................................................................................ 15
Price Range of Common Stock and Dividend Policy............................................................ 16
Use of Proceeds............................................................................................ 16
Capitalization............................................................................................. 17
Selected Consolidated Financial Data....................................................................... 18
Management's Discussion and Analysis of Financial Condition and Results of Operations...................... 20
Management................................................................................................. 28
Selling Stockholders....................................................................................... 30
Certain United States Tax Consequences to Non-United States Holders........................................ 31
Subscription and Sale...................................................................................... 33
Legal Matters.............................................................................................. 35
Experts.................................................................................................... 35
-2-
[ALT]
AVAILABLE INFORMATION
UCAR is subject to the informational requirements of the Securities
Exchange Act of 1934 (the 'Exchange Act') and, in accordance therewith, files
reports, proxy and information statements and other information with the
Securities and Exchange Commission (the 'Commission'). The reports, proxy and
information statements and other information so filed may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the Commission's
Regional Offices located at Seven World Trade Center, Suite 1300, New York, New
York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such reports, proxy and information statements and
other information can be obtained at prescribed rates from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants (including UCAR) that
file electronically with the Commission. The address of such Web site is
http://www.sec.gov. The Common Stock is listed on the NYSE, and reports, proxy
and information statements and other information filed with the Commission can
also be inspected at the offices of the NYSE, 20 Broad Street, New York, New
York 10005.
UCAR has filed with the Commission a Registration Statement on Form S-3
(together with amendments, exhibits, schedules and supplements thereto, the
'Registration Statement') under the Securities Act of 1933 (the 'Securities
Act') with respect to the Shares. This Prospectus, which constitutes a part of
the Registration Statement, does not contain all of the information set forth in
the Registration Statement. Information omitted has been omitted as permitted by
the rules and regulations of the Commission. For further information with
respect to UCAR and the Shares, reference is made to the Registration Statement.
Statements contained in this Prospectus as to the contents of any contract or
other document are not necessarily complete and, where such contract or other
document is an exhibit to the Registration Statement, each such statement is
qualified in all respects by the provisions in such exhibit, to which reference
is hereby made. The Registration Statement may be inspected at, and copies of
all or any portion of the Registration Statement can be obtained at prescribed
rates from the Public Reference Section of the Commission, 450 Fifth Street,
N.W. Washington, D.C. 20549.
UCAR is a corporation formed under the laws of the State of Delaware on
November 24, 1993. The mailing address of its principal executive office is 39
Old Ridgebury Road, Danbury, Connecticut 06817. The telephone number of such
office is (203) 207-7700.
INCORPORATION OF DOCUMENTS
BY REFERENCE
The following documents previously filed by UCAR with the Commission are
incorporated by reference in this Prospectus:
(a) UCAR's Annual Report on Form 10-K for the year ended December 31, 1996;
(b) UCAR's Notice of Meeting and Proxy Statement for the 1996 Annual
Meeting of Stockholders; and
(c) the description of UCAR's capital stock contained in UCAR's
Registration Statement on Form 8-A dated July 28, 1995, as updated by
any amendment or report filed for the purpose of updating such
description.
In addition, all documents filed by UCAR pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the Offering shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such documents. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document that also is incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
UCAR will provide without charge to each person, including any beneficial
owner of Common Stock, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all of the
documents incorporated by reference herein (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference in
the documents that this Prospectus incorporates by reference). Such requests
should be addressed to UCAR International Inc., 39 Old Ridgebury Road, Danbury,
Connecticut 06817, Attention: Investor Relations, telephone number (203)
207-7726.
-3-
[ALT]
SUBSCRIPTION AND SALE
Under the terms and subject to the conditions contained in a Subscription
Agreement dated , 1997 (the 'Subscription Agreement') among UCAR,
the Selling Stockholders and the institutions named below (the 'Managers'), the
Managers have severally but not jointly agreed to purchase from the Selling
Stockholders the following respective numbers of International Shares as set
forth opposite their names:
NUMBER OF
MANAGER INTERNATIONAL SHARES
- ------------------------------------------------------------------------------------ --------------------
Credit Suisse First Boston Limited..................................................
Dillon, Read & Co. Inc..............................................................
Goldman Sachs International.........................................................
Merrill Lynch International.........................................................
PaineWebber International (U.K.) Ltd................................................
Nikko Europe Plc....................................................................
--------------------
Total........................................................................ 1,360,000
--------------------
--------------------
The Subscription Agreement provides that the obligations of the Managers
are subject to certain conditions precedent and that the Managers will be
obligated to purchase all of such International Shares offered hereby (other
than those covered by the over-allotment option described below) if any are
purchased. The Subscription Agreement provides that, in the event of a default
by a Manager in certain circumstances, the purchase commitments of the
non-defaulting Managers may be increased or the Subscription Agreement may be
terminated.
UCAR and the Selling Stockholders have been advised by Credit Suisse First
Boston (Europe) Limited ('CSFBL'), on behalf of the Managers, that the Managers
propose to offer the International Shares outside the United States and Canada
to the public initially at the public offering price set forth on the cover page
of this Prospectus and to certain dealers at such price less a commission of
$. per share and that the Managers may reallow a commission of $. per share on
sales to certain other dealers. After the initial offering, the public offering
price, commission and reallowance may be changed.
UCAR and the Selling Stockholders have entered into an Underwriting
Agreement (the 'U.S. Underwriting Agreement') with the U.S. Underwriters of the
U.S. Offering (the 'U.S. Underwriters') providing for the concurrent offer and
sale of the U.S. Shares in the United States and Canada. The closing of the
International Offering is a condition to the closing of the U.S. Offering and
vice versa.
Blackstone has granted to the Managers and the U.S. Underwriters an option,
exercisable by Credit Suisse First Boston Corporation on behalf of the Managers
and the U.S. Underwriters, expiring at the close of business on the 30th day
after the date of this Prospectus, to purchase up to an additional 691,496
shares of Common Stock (the 'Option Shares') from them at the initial public
offering price less the underwriting discounts and commissions, all as set forth
on the cover page of this Prospectus. The Managers and the U.S. Underwriters may
exercise the option only to cover over-allotments, if any, in the sale of the
Shares, including the sale of the U.S. Shares. To the extent that the option to
purchase is exercised, each Manager and each U.S. Underwriter will become
obligated, subject to certain conditions, to purchase approximately the same
percentage of Option Shares as the number set forth next to such Manager's name
in the preceding table and as the number set forth next to such U.S.
Underwriter's name in the corresponding table in the prospectus relating to the
U.S. Offering bears to the total number of Shares in such table.
The public offering price, the aggregate underwriting discounts and
commissions per share and the per share commission and re-allowance to dealers
for the International Offering and the U.S. Offering will be identical.
-33-
[ALT]
Pursuant to an Agreement between the U.S. Underwriters and the Managers (the
'Intersyndicate Agreement') relating to the Offering, changes in the public
offering price, commission and re-allowance to dealers will be made only upon
the mutual agreement of CSFBL, on behalf of the Managers, and Credit Suisse
First Boston Corporation, on behalf of the U.S. Underwriters.
Pursuant to the Intersyndicate Agreement, each of the Managers has agreed
that, as part of the distribution of International Shares and subject to certain
exceptions, it has not offered or sold, and will not offer or sell, directly or
indirectly, any shares of Common Stock or distribute any prospectus relating to
the Common Stock to any person in the United States or Canada or to any other
dealer who does not so agree. Each of the U.S. Underwriters has agreed or will
agree that, as part of the distribution of the U.S. Shares and subject to
certain exceptions, it has not offered or sold, and will not offer or sell,
directly or indirectly, any shares of Common Stock or distribute any prospectus
relating to the Common Stock to any person outside the United States and Canada
or to any other dealer who does not so agree. These limitations do not apply to
stabilization transactions or to transactions between the Managers and the U.S.
Underwriters pursuant to the Intersyndicate Agreement. As used herein, 'United
States' means the United States of America (including the States and the
District of Columbia), its territories, possessions and other areas subject to
its jurisdiction, 'Canada' means Canada, its provinces, territories, possessions
and other areas subject to its jurisdiction, and an offer or sale shall be in
the United States or Canada if it is made to (i) an individual resident in the
United States or Canada or (ii) a corporation, partnership, pension,
profit-sharing or other trust or other entity (including any such entity acting
as an investment adviser with discretionary authority) whose office most
directly involved with the purchase is located in the United States or Canada.
Pursuant to the Intersyndicate Agreement, sales may be made between the
Managers and the U.S. Underwriters of such number of Shares as may be mutually
agreed. The price of any Shares so sold shall be the public offering price less
such amount as may be mutually agreed upon by CSFBL, on behalf of the Managers,
and Credit Suisse First Boston Corporation, on behalf of the U.S. Underwriters,
but not exceeding the selling concession applicable to such Shares. To the
extent there are sales between the Managers and the U.S. Underwriters pursuant
to the Intersyndicate Agreement, the number of Shares initially available for
sale by the Managers or by the U.S. Underwriters may be more or less than the
amount appearing on the cover page of this Prospectus. Neither the Managers nor
the U.S. Underwriters are obligated to purchase from the other any unsold
Shares.
Each of the Managers and the U.S. Underwriters severally represents and
agrees that (1) it has not offered or sold, and prior to the date six months
after the date of issuance of the Shares will not offer or sell, any shares of
Common Stock to any person in the United Kingdom, except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, (2) it has complied and will comply with
all applicable provisions of the Financial Services Act of 1986 with respect to
anything done by it in relation to any shares of Common Stock in, from or
otherwise involving the United Kingdom and (3) it has only issued or passed on
and will only issuance or pass on to any person in the United Kingdom any
document received by it in connection with the issue of any shares of Common
Stock if the person is of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or is a
person to whom such document may otherwise lawfully be issued or passed on.
Purchasers of Shares outside the United States may be required to pay stamp
taxes and other charges in accordance with the laws and practices of the country
of purchase in addition to the public offering price set forth on the cover page
of this Prospectus.
UCAR, certain of its executive officers and directors and Blackstone have
agreed that none of them will, directly or indirectly, offer, sell, announce its
intention to sell, contract to sell, pledge, hypothecate, grant any option to
purchase or otherwise dispose of, and UCAR has agreed that it will not file with
the Commission a registration statement under the Securities Act relating to,
any shares of Common Stock or securities convertible or exchangeable into or
exercisable for any shares of Common Stock without the prior written consent of
Credit Suisse First Boston Corporation for a period of 90 days, in the case of
UCAR, and 45 days, in the case of Blackstone and
-34-
[ALT]
certain of UCAR's directors and executive officers, after the date of this
Prospectus, subject to certain limited exceptions.
UCAR and the Selling Stockholders have agreed to indemnify the Managers and
the U.S. Underwriters against certain liabilities, including civil liabilities
under the Securities Act, and to contribute to payments that the Managers and
the U.S. Underwriters may be required to make in respect thereof.
Credit Suisse First Boston Corporation, on behalf of the U.S. Underwriters
and the Managers, may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with Regulation M
under the Exchange Act. Over-allotment involves syndicate sales in excess of the
offering size, which creates a syndicate short position. Stabilizing
transactions permit bids to purchase shares of Common Stock so long as the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of shares of Common Stock in the open market
after the distribution has been completed in order to cover syndicate short
positions. Penalty bids permit Credit Suisse First Boston Corporation, on behalf
of the U.S. Underwriters and the Managers, to reclaim a selling concession from
a syndicate member when the Shares originally sold by such syndicate member are
purchased in a syndicate covering transaction to cover syndicate short
positions. Such over-allotment, stabilizing transactions, syndicate covering
transactions and penalty bids may cause the price of shares of Common Stock to
be higher than it would otherwise be in the absence of such transactions. These
transactions may be effected on the NYSE or otherwise and, if commenced, may be
discontinued at any time.
Certain of the U.S. Underwriters have provided certain financial advisory
and investment banking services to the Company and Blackstone in the past.
Credit Suisse First Boston Corporation was the placement agent for the private
placement by UCAR of senior notes in June 1994, Credit Suisse First Boston
Corporation and Goldman, Sachs & Co. were underwriters for the offering by
Global of the Subordinated Notes in January 1995 and certain of the U.S.
Underwriters and the Managers were underwriters, managing underwriters or
managers for the Initial Offering and the Secondary Offering, for which in each
case they received customary underwriting discounts and commissions. Credit
Suisse First Boston Corporation and Goldman, Sachs & Co. are market-makers with
respect to the Subordinated Notes and, at the time of the Redemption, may have
been the beneficial owner of Subordinated Notes, some of which may have been
redeemed.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Shares will be
passed upon for UCAR by Kelley Drye & Warren LLP, New York, New York and
Stamford, Connecticut. Certain legal matters with respect to the Offering will
be passed upon for the Selling Stockholders by Simpson Thacher & Bartlett (a
partnership which includes professional corporations), New York, New York. The
Managers have been represented by Cravath, Swaine & Moore, New York, New York.
EXPERTS
The Consolidated Financial Statements of the Company at December 31, 1995
and 1996 and for each of the years in the three year period ended December 31,
1996, which are included in UCAR's Annual Report on Form 10-K for the year ended
December 31, 1996, have been incorporated by reference in this Prospectus and in
the Registration Statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, which is incorporated by reference
herein, and upon the authority of such firm as experts in accounting and
auditing.
The report of KPMG Peat Marwick LLP refers to a change in 1996 in the
Company's method of determining LIFO inventories.
-35-Distribution.................9
Experts.............................10
Legal Matters.......................10
10
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, paid or to be paid in connection with
the issuance and distribution of the securities being registered.
SEC registration fee..................................................................... $ 99,035.31
NASD filing fee.......................................................................... 30,500.00
Blue Sky qualification fees and expenses (including related legal fees and expenses)..... 10,000.00*
Printing and engraving expenses.......................................................... 300,000.00*
Legal fees and expenses.................................................................. 200,000.00*
Accounting fees and expenses............................................................. 100,000.00*
Miscellaneous............................................................................ 60,464.69*
-----------
Total............................................................................... $800,000.00*
-----------
-----------
SEC registration fee...................................... $36,280.00
Legal fees and expenses................................... 6,000.00*
Accounting fees and expenses.............................. 2,500.00*
Miscellaneous............................................. 220.00
----------
Total............................................... $45,000.00
- ------------------
* Estimated.
All expenses of such issuance and distribution will be paid by the
registrant, other than the underwriting discounts and commissions relating to
the securities being registered hereby to be sold by the Selling Stockholders
and transfer taxes relating to the sale of the securities
registered hereby to be sold by the Selling Stockholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware (the
'Law'"Law") provides as follows:
'(a)"(a) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that the person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that the
person's conduct was unlawful.
(b) A corporation shall have the power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by the person in connection with the defense or settlement of such
action or suit if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and
II-1
only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because the person has
met the applicable standard of conduct set forth in subsections (a) and (b) of
this section. Such determination shall be made (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum, or (2) if there are no such directors, or if such directors
so direct, by independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
II-2
whether or not the corporation would have the power to indemnify him
against such liability under this section.
(h) For purposes of this section, references to 'the corporation'"the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to 'other enterprises'"other enterprises" shall
include employee benefit plans; references to 'fines'"fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to 'serving"serving at the request of the corporation'corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner 'not"not
opposed to the best interests of the corporation'corporation" as referred to in this
section.
II-2
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses (including attorneys'
fees).'"
Section 102(b)(7) of the Law provides as follows:
'(b)"(b) In addition to the matters required to be set forth in the
certificate of incorporation by subsection (a) of this section, the certificate
of incorporation may also contain any or all of the following matters:
(7) A provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of a director: (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) under section 174 of this title; or (iv) for any
transaction from which the director derived an improper personal benefit. No
such provision shall eliminate or limit the liability of a director for any act
or omission occurring prior to the date when such provision becomes effective.
All references in this
II-3
paragraph to a director shall also be deemed to refer (x) to a member of
the governing body of a corporation which is not authorized to issue capital
stock, and (y) to such other person or persons, if any, who, pursuant to a
provision of the certificate of incorporation in accordance with Section141(a)Section 141(a)
of this title, exercise or perform any of the powers or duties otherwise
conferred or imposed upon the board of directors by this title.'"
The Company maintains a director's and officer's liability insurance
policy which indemnifies directors and officers for certain losses arising from
claims by reason of a wrongful act, as defined therein, under certain
circumstances.
Directors of the registrant who are affiliated with Blackstone may be
entitled to indemnification under the organizational documents or contractual
arrangements of Blackstone.
In addition, in response to this Item 15, the following information is
incorporated by reference: the information included in the description of the
registrant's capital stock contained in the registrant's Registration Statement
on Form 8-A dated July 28, 1995, as updated by any amendment or report filed for
the purpose of updating such description; the description of the rights
contained in the registrant's Registration Statement on Form 8-A dated September
10, 1998, as updated by any amendment or report filed for the purpose of
updating such description; Articles Tenth and Eleventh of the Amended and
Restated Certificate of Incorporation of the registrant incorporated by
reference as Exhibit 3.1 to this Registration Statement; and Article V of the
Amended and Restated By-Laws of the registrant incorporated by reference as
Exhibit 3.2 to this Registration Statement; Section 7 of the Underwriting
Agreement in substantially the form included as Exhibit 1.1 to this Registration
Statement; and Section 7 of the Subscription Agreement in substantially the form
included as Exhibit 1.2 to this Registration Statement.
II-4
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The exhibits listed in the following table have been filed as part of
this Registration Statement.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------- ----------------------------------------------------------------------------------------------------
1.1* Form of Underwriting Agreement
1.2* Form of Subscription Agreement
2.1(1) Recapitalization and Stock Purchase and Sale Agreement dated as of November 14, 1994 among Union
Carbide Corporation, Mitsubishi Corporation, UCAR International Inc. and UCAR International
Acquisition Inc. and Guaranty made by Blackstone Capital Partners II Merchant Banking Fund L.P. and
Blackstone Offshore Capital Partners II L.P.
II-3
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------- ----------------------------------------------------------------------------------------------------
2.2(2) Amended and Restated Stockholders' Agreement dated as of February 29, 1996
2.3(1) Form of Management Common Stock Subscription Agreement
2.4(3) Form of Management Pledge and Security Agreement, together with form of Promissory Note
2.5(2) Amendment, Waiver and Release in connection with such Management Common Stock Subscription
Agreements, Management Pledge and Security Agreements and Promissory Notes
2.6(1) Indemnification Agreement dated as of January 26, 1995 among Mitsubishi Corporation, Union Carbide
Corporation and UCAR International Inc.
2.7(1) Stock Purchase and Sale Agreement dated as of January 26, 1995 between UCAR International Inc. and
UCAR Holdings S.A.
2.8(1) Exchange Agreements made as of January 26, 1995 between UCAR International Inc. and UCAR Holdings II
Inc.
2.9(1) Stock Purchase and Sale Agreement dated as of January 26, 1995 between UCAR International Inc. and
UCAR Inc.
2.10(1) Exchange Agreement made as of January 26, 1995 between UCAR Carbon Company Inc. and UCAR Holdings
Inc.
2.11(1) Stock Purchase and Sale Agreement dated as of January 26, 1995 between UCAR Carbon Company Inc. and
UCAR Mexicana, S.A. de C.V.
2.12(1) Exchange Agreement made as of January 26, 1995 between UCAR International Inc. and UCAR Global
Enterprises Inc.
2.13(1) Stock Purchase and Sale Agreement dated as of January 26, 1995 between UCAR Carbon Company Inc. and
Arapaima s.r.l.
2.14(1) Deed of Purchase and Sale of 528,999 Shares of UCAR Carbon Navarra S.L.
2.15(1) Exchange Agreement dated as of December 15, 1993 by and among Union Carbide Corporation, Union
Carbide Chemicals and Plastics Company Inc., Mitsubishi Corporation and UCAR International Inc.
2.16(1) Stock Purchase and Sale Agreement dated as of November 9, 1990 among Mitsubishi Corporation, Union
Carbide Corporation and UCAR Carbon Company Inc.
2.17(1) [omitted]
2.18(1) Settlement Agreement dated as of November 30, 1993 among Mitsubishi Corporation, Union Carbide
Corporation and UCAR Carbon Company Inc.
2.19(1) Transfer Agreement dated January 1, 1989 between Union Carbide Corporation and UCAR Carbon Company
Inc.
2.20(1) Amendment No. 1 to such Transfer Agreement dated December 31, 1989
2.21(1) Amendment No. 2 to such Transfer Agreement dated as of July 2, 1990
2.22(1) Amendment No. 3 to such Transfer Agreement dated as of February 25, 1991
2.23(1) Amended and Restated Realignment Indemnification Agreement dated as of June 4, 1992 among Union
Carbide Corporation, Union Carbide Chemicals and Plastics Company Inc., Union Carbide Industrial
Gases Inc., UCAR Carbon Company Inc. and Union Carbide Coatings Service Corporation
2.24(1) Environmental Management Services and Liabilities Allocation Agreement dated as of January 1, 1990
among Union Carbide Corporation, Union Carbide Chemicals and Plastics Company Inc., UCAR Carbon
Company Inc., Union Carbide Industrial Gases Inc. and Union Carbide Coatings Service Corporation
2.25(1) Amendment No. 1 to such Environmental Management Services and Liabilities Allocation Agreement dated
as of June 4, 1992
II-4
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------- ----------------------------------------------------------------------------------------------------
2.26 [omitted]
2.27 [omitted]
2.28(4) Trade Name and Trademark License Agreement dated March 1, 1996 between Union Carbide Corporation and
UCAR Carbon Technology Corporation
2.29(1) Employee Benefit Services and Liabilities Agreement dated January 1, 1990 between Union Carbide
Corporation and UCAR Carbon Company Inc.
2.30(1) Amendment to such Employee Benefit Services and Liabilities Agreement dated January 15, 1991
2.31(1) Supplemental Agreement to such Employee Benefit Services and Liabilities Agreement dated February
25, 1991
2.32(1) Letter Agreement dated December 31, 1990 among Union Carbide Chemicals and Plastics Company Inc.,
UCAR Carbon Company Inc., Union Carbide Grafito, Inc. and Union Carbide Corporation
2.33* Form of Stock Repurchase Agreement between UCAR International Inc. and each of Blackstone Capital
Partners II Merchant Banking Fund L.P., Blackstone Offshore Capital Partners II L.P. and Blackstone
Family Investment Partnership II L.P.
3.1(3) Amended and Restated Certificate of Incorporation of UCAR International Inc.
3.2(3) Amended and Restated By-Laws of UCAR International Inc.
4.1(3) Specimen certificate representing Common Stock, par value $.01 per share, of UCAR International Inc.
4.2(1) Indenture dated as of January 15, 1995 among UCAR International Inc., UCAR Global Enterprises Inc.
and the United States Trust Company of New York, as Trustee
5.1 Opinion of Kelley Drye & Warren LLP regarding the legality of the securities being registered
23.1 Consent of Kelley Drye & Warren LLP (included in Exhibit 5.1)
23.2** Consent of KPMG Peat Marwick LLP
24.1*** Powers of Attorney (included on signature page)
- ------------------
* To be filed by amendment.
** Filed herewith.
*** Previously filed and filed herewith.
Unless otherwise indicated, all exhibits have been previously filed.
(1) Incorporated by reference to the Registration Statement ofEXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
4.1 UCAR International Inc. and UCAR Global Enterprises Inc. on for S-1 (File No.
33-84850).
(2) Incorporated by reference to the Annual Report of the registrant of Form
10-K for the year ended December 31, 1995.
(3) IncorporatedManagement Stock Option Plan effective
September 29, 1998 (Senior Management Version)(incorporated by
reference to the Registration Statement of the registrantRegistrant on Form
S-8 (File No. 333-82411), as amended).
4.2 Form of Non-Qualified Stock Option Agreement (incorporated by
reference to the Registration Statement of the Registrant on Form
S-1 (File No. 33-94698)33-84850)).
(4) Incorporated4.3 Form of Non-Qualified Stock Option Agreement Standard Option Version
(incorporated by reference to the QuarterlyAnnual Report on Form 10-K of the
registrantRegistrant for the year ended December 31, 1998).
4.4 UCAR International Inc. 1996 Mid-Management Equity Incentive Plan
effective as of February 6, 1996 (incorporated by reference to the
Registration Statement of the Registrant on Form 10-Q forS-1 (File No.
333-1090)).
5.1 Opinion of Kelley Drye & Warren LLP regarding the quarter ended March 31, 1996.validity of the
Securities originally registered (previously filed).
5.2 Opinion of Kelley Drye & Warren LLP regarding the validity of the
Securities registered subsequently (previously filed).
5.3 Opinion of Kelley Drye & Warren LLP regarding the validity of the
Securities being registered.
23.1 Consent of Kelley Drye & Warren LLP (included in Exhibit 5.1).
23.2 Consent of KPMG LLP.
23.3 Consent of Kelley Drye & Warren LLP (included in Exhibit 5.2).
23.4 Consent of Kelley Drye & Warren LLP (included in Exhibit 5.3).
24.1 Powers of Attorney.
(b) Financial Statement Schedules
Not applicable.All schedules are omitted as the required information is inapplicable or
the information is presented in the Consolidated Financial Statements or related
notes thereto.
ITEM 17. UNDERTAKINGS
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:
II-5
ITEM 17. UNDERTAKINGS(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this 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 this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in the volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation form the low or high and 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 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement; PROVIDED,
HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the Registrant
Statement is on Form S-3, Form S-8 or Form F-3, and the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in this
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 fideBONA FIDE offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act 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 Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
II-6
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
The registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, 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.
(2) For the purpose of determining any liability under the Securities
Act, 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-6II-7
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT TO THE
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF DANBURY,NASHVILLE, STATE OF CONNECTICUT,TENNESSEE, ON THE 14TH7TH DAY OF
MARCH, 1997.JULY, 1999.
UCAR INTERNATIONAL INC.
BY:By: /s/ WILLIAM P. WIEMEL
-----------------------------------Craig S. Shular
-----------------------------------------------
Name: Craig S. Shular
Title: Vice President and Chief Financial Officer
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints Robert P. Krass, William P.
Weimels and Peter B. Mancino, and each of them individually, his true and lawful
agent, proxy and attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to (a) act on, sign and file with the Securities and Exchange
Commission any and all amendments (including post-effective amendments) to this
Registration Statement and any and all schedules and exhibits thereto, (ii) act
on, sign and file with the Securities and Exchange Commission any registration
statement (and any and all schedules and exhibits thereto) relating to the
offering described in this Registration Sattement (as such offering may be
increased or decreased or the terms thereof may be modified from time to time at
any time) that is to be effective upon filing pursuant to Rule 462 under the
Securities Act of 1933, as amended, (iii) act on, sign and file with the
Securities and Exchange Commission any exhibits to this Registration Statement
or any such registration statement or amendments (including post-effective
amendments), (iv) act on, sign and file such certificates, instruments,
agreements and other documents as may be necessary or appropriate in connection
therewith, (v) act on and file any supplement to any prospectus included in this
Registration Statement or any such registration statement or amendments
(including post-effective amendments) and (vi) take any and all actions which
may be necessary or appropriate in connection therewith or with such offering,
granting unto such agents, proxies and attorneys-in-fact, and each of them
individually, full power and authority to do and perform each and every act and
thing necessary or appropriate in connection therewith or with such offering, as
fully for all intents and purposes as he might or could do in person, hereby
approving, ratifying and confirming all that such agents, proxies and
attorneys-in-fact, any of them or any of his or their substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURES TITLE DATE
- ----------------------------------------- ------------------------------------------- ------------------
* Chairman of the Board,SIGNATURES TITLE DATE
---------- ----- ----
*
- ---------------------------------- President, and Chief March 14, 1997
ROBERT P. KRASS Executive July 7, 1999
Gilbert E. Playford Officer and Director
(Principal Executive
Officer)
II-7
SIGNATURES TITLE DATE
- ----------------------------------------- ------------------------------------------- ------------------
/s/ WILLIAM P. WIEMELS Vice President, Chief Financial Officer and March 14, 1997
WILLIAM P. WIEMELS Treasurer (Principal Financial and
Accounting Officer)
* Director March 14, 1997
ROBERT D. KENNEDY
* Director March 14, 1997
JOHN R. HALL
* Director March 14, 1997
PETER G. PETERSON
* Director March 14, 1997
STEPHEN A. SCHWARZMAN
* Director March 14, 1997
GLENN H. HUTCHINS
* Director March 14, 1997
HOWARD A. LIPSON
/s/ R. EUGENE CARTLEDGE Director March 14, 1997
R. EUGENE CARTLEDGE
*By: /s/ PETER B. MANCINO
ATTORNEY-IN-FACT
/s/ Craig S. Shular
- ---------------------------------- Vice President and Chief July 7, 1999
Craig S. Shular Financial Officer
(Principal Financial
Officer)
*
- ---------------------------------- Controller July 7, 1999
Corrado F. De Gasperis (Principal Accounting
Officer)
*
- ---------------------------------- Director July 7, 1999
Robert D. Kennedy
*
- ---------------------------------- Director July 7, 1999
R. Eugene Cartledge
*
- ---------------------------------- Director July 7, 1999
Alec Flamm
II-8
*
- ---------------------------------- Director July 7, 1999
John R. Hall
*
- ---------------------------------- Director July 7, 1999
Thomas Marshall
*
- ---------------------------------- Director July 7, 1999
Michael C. Nahl
*By /s/ Craig S. Shular
-------------------------------
Attorney-in-fact
II-9
EXHIBIT INDEX
TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------- -----------------------------------------------------------------------------------------
1.1* Form of Underwriting Agreement
1.2* Form of Subscription Agreement
2.1(1) Recapitalization and Stock Purchase and Sale Agreement dated as of November 14, 1994
among Union Carbide Corporation, Mitsubishi Corporation, UCAR International Inc. and
UCAR International Acquisition Inc. and Guaranty made by Blackstone Capital Partners II
Merchant Banking Fund L.P. and Blackstone Offshore Capital Partners II L.P.
2.2(2) Amended and Restated Stockholders' Agreement dated as of February 29, 1996
2.3(1) Form of Management Common Stock Subscription Agreement
2.4(3) Form of Management Pledge and Security Agreement, together with form of Promissory Note
2.5(2) Amendment, Waiver and Release in connection with such Management Common Stock
Subscription Agreements, Management Pledge and Security Agreements and Promissory Notes
2.6(1) Indemnification Agreement dated as of January 26, 1995 among Mitsubishi Corporation,
Union Carbide Corporation and UCAR International Inc.
2.7(1) Stock Purchase and Sale Agreement dated as of January 26, 1995 between UCAR International
Inc. and UCAR Holdings S.A.
2.8(1) Exchange Agreements made as of January 26, 1995 between UCAR International Inc. and UCAR
Holdings II Inc.
2.9(1) Stock Purchase and Sale Agreement dated as of January 26, 1995 between UCAR International
Inc. and UCAR Inc.
2.10(1) Exchange Agreement made as of January 26, 1995 between UCAR Carbon Company Inc. and UCAR
Holdings Inc.
2.11(1) Stock Purchase and Sale Agreement dated as of January 26, 1995 between UCAR Carbon
Company Inc. and UCAR Mexicana, S.A. de C.V.
2.12(1) Exchange Agreement made as of January 26, 1995 between UCAR International Inc. and UCAR
Global Enterprises Inc.
2.13(1) Stock Purchase and Sale Agreement dated as of January 26, 1995 between UCAR Carbon
Company Inc. and Arapaima s.r.l.
2.14(1) Deed of Purchase and Sale of 528,999 Shares of UCAR Carbon Navarra S.L.
2.15(1) Exchange Agreement dated as of December 15, 1993 by and among Union Carbide Corporation,
Union Carbide Chemicals and Plastics Company Inc., Mitsubishi Corporation and UCAR
International Inc.
2.16(1) Stock Purchase and Sale Agreement dated as of November 9, 1990 among Mitsubishi
Corporation, Union Carbide Corporation and UCAR Carbon Company Inc.
2.17(1) [omitted]
2.18(1) Settlement Agreement dated as of November 30, 1993 among Mitsubishi Corporation, Union
Carbide Corporation and UCAR Carbon Company Inc.
2.19(1) Transfer Agreement dated January 1, 1989 between Union Carbide Corporation and UCAR
Carbon Company Inc.
2.20(1) Amendment No. 1 to such Transfer Agreement dated December 31, 1989
2.21(1) Amendment No. 2 to such Transfer Agreement dated as of July 2, 1990
2.22(1) Amendment No. 3 to such Transfer Agreement dated as of February 25, 1991
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------- -----------------------------------------------------------------------------------------
2.23(1) Amended and Restated Realignment Indemnification Agreement dated as of June 4, 1992 among
Union Carbide Corporation, Union Carbide Chemicals and Plastics Company Inc., Union
Carbide Industrial Gases Inc., UCAR Carbon Company Inc. and Union Carbide Coatings
Service Corporation
2.24(1) Environmental Management Services and Liabilities Allocation Agreement dated as of
January 1, 1990 among Union Carbide Corporation, Union Carbide Chemicals and Plastics
Company Inc., UCAR Carbon Company Inc., Union Carbide Industrial Gases Inc. and Union
Carbide Coatings Service Corporation
2.25(1) Amendment No. 1 to such Environmental Management Services and Liabilities Allocation
Agreement dated as of June 4, 1992
2.26 [omitted]
2.27 [omitted]
2.28(4) Trade Name and Trademark License Agreement dated March 1, 1996 between Union Carbide
Corporation and UCAR Carbon Technology Corporation
2.29(1) Employee Benefit Services and Liabilities Agreement dated January 1, 1990 between Union
Carbide Corporation and UCAR Carbon Company Inc.
2.30(1) Amendment to such Employee Benefit Services and Liabilities Agreement dated January 15,
1991
2.31(1) Supplemental Agreement to such Employee Benefit Services and Liabilities Agreement dated
February 25, 1991
2.32(1) Letter Agreement dated December 31, 1990 among Union Carbide Chemicals and Plastics
Company Inc., UCAR Carbon Company Inc., Union Carbide Grafito, Inc. and Union Carbide
Corporation
2.33* Form of Stock Repurchase Agreement between UCAR International Inc. and each of Blackstone
Capital Partners II Merchant Banking Fund L.P., Blackstone Offshore Capital Partners II
L.P. and Blackstone Family Investment Partnership II L.P.
3.1(3) Amended and Restated Certificate of Incorporation of UCAR International Inc.
3.2(3) Amended and Restated By-Laws of UCAR International Inc.
4.1(3) Specimen certificate representing Common Stock, par value $.01 per share, of UCAR
International Inc.
4.2(1) Indenture dated as of January 15, 1995 among UCAR International Inc., UCAR Global
Enterprises Inc. and the United States Trust Company of New York, as Trustee
5.1 Opinion of Kelley Drye & Warren LLP regarding the legality of the securities being
registered
23.1 Consent of Kelley Drye & Warren LLP (included in Exhibit 5.1)
23.2** Consent of KPMG Peat Marwick LLP
24.1*** Powers of Attorney (included on signature page)
EXHIBIT NO. DESCRIPTION PAGE NO.
- ------------------
* To be filed by amendment.
** Filed herewith.
*** Previously filed and filed herewith.
Unless otherwise indicated, all exhibits have been previously filed.
(1) Incorporated by reference to----------- ----------- --------
5.3 Opinion of Kelley Drye & Warren LLP regarding the Registration Statement of UCAR
International Inc. and UCAR Global Enterprises Inc. on for S-1 (File No.
33-84850).
(2) Incorporated by reference to the Annual Reportvalidity
of the registrantSecurities being registered.
23.2 Consent of Form
10-K for the year ended December 31, 1995.
(3) Incorporated by reference to the Registration StatementKPMG LLP.
23.4 Consent of the registrant on
Form S-1 (File No. 33-94698)Kelley Drye & Warren LLP (included in Exhibit 5.3).
(4) Incorporated by reference to the Quarterly Report24.1 Powers of the registrant on Form
10-Q for the quarter ended March 31, 1996.
Attorney.
II-10