Filed Pursuant to Rule No. 424(b)(5)
Registration Nos. 333-84060
333-84060-01
333-84060-02
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH 8, 2002)
$750,000,000
MEADWESTVACO CORPORATION
6.85% NOTES DUE 2012
----------------
MeadWestvaco will pay interest on the notes on April 1 and October 1 of
each year beginning October 1, 2002. The notes are redeemable prior to their
maturity at a make-whole premium described in the description of the notes
contained in this prospectus supplement.
The notes are unsecured and rank equally with all of our other unsecured
and unsubordinated indebtedness. The notes will be guaranteed on an unsecured
basis by each of The Mead Corporation ("Mead") and Westvaco Corporation
("Westvaco"), two of our wholly-owned subsidiaries, as more fully described in
this prospectus supplement and the accompanying prospectus.
We will issue the notes only in denominations of $1,000 and integral
multiples of $1,000.
PER NOTE TOTAL
-------- -----
Public offering price (1)................. 99.338% $745,035,000
Underwriting discount..................... .650% $4,875,000
Proceeds, before expenses, to MeadWestvaco 98.688% $740,160,000
(1) Plus accrued interest from April 2, 2002, if settlement occurs after
that date.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement or the accompanying prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
The notes will be ready for delivery in book-entry form only through The
Depository Trust Company on or about April 2, 2002.
----------------
MERRILL LYNCH & CO.
BNY CAPITAL MARKETS, INC.
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
GOLDMAN, SACHS & CO.
JPMORGAN
MORGAN STANLEY
SALOMON SMITH BARNEY
BARCLAYS CAPITAL
COMMERZBANK CAPITAL MARKETS CORP.
DAIWA SECURITIES SMBC EUROPE
FLEET SECURITIES, INC.
SCOTIA CAPITAL
SUNTRUST ROBINSON HUMPHREY
WACHOVIA
SECURITIES, INC.
----------------
The date of this prospectus supplement is March 26, 2002.
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
Documents Incorporated by Reference................. S-2
The Company......................................... S-4
Recent Developments................................. S-8
Use of Proceeds..................................... S-9
Pro Forma Capitalization of MeadWestvaco Corporation S-9
Summary of Financial Information.................... S-10
Description of the Notes............................ S-11
Underwriting........................................ S-14
Experts............................................. S-15
PROSPECTUS
Documents Incorporated by Reference................. 3
Where You Can Find More Information................. 4
The Company......................................... 5
Ratio of Earnings to Fixed Charges.................. 5
Use of Proceeds..................................... 6
Description of Debt Securities and the Guarantees... 6
Plan of Distribution................................ 15
Legal Opinions...................................... 15
Experts............................................. 16
You should rely only on the information contained in or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We
have not, and the underwriters have not, authorized anyone to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not, and the underwriters are
not, making an offer to sell these securities in any jurisdiction where the
offer or sale is not permitted. You should assume that the information
appearing in this prospectus supplement and the accompanying prospectus, as
well as information we previously filed with the Securities and Exchange
Commission and incorporated by reference, is accurate as of the date on the
front of this prospectus supplement only. Our business, financial condition,
results of operations and prospects may have changed since that date.
----------------
DOCUMENTS INCORPORATED BY REFERENCE
This prospectus incorporates documents by reference which are not
presented in or delivered with this prospectus.
All documents filed by MeadWestvaco, Mead or Westvaco pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date
of this prospectus and prior to the termination of the offering of the
securities, are incorporated by reference into and are deemed to be a part of
this prospectus from the date of filing of those documents.
You should rely only on the information contained in this document or
that which we have referred you to. We have not authorized anyone to provide
you with any additional information.
S-2
The following documents, which have been filed by MeadWestvaco, with the
Securities and Exchange Commission (SEC file number 001-31215) are incorporated
by reference into this prospectus:
Joint Proxy Statement-Prospectus included in Dated December 20, 2001
its registration statement on Form S-4, as
amended (No. 333-71124)
Current Report on Form 8-K/A Filed March 8, 2002
Current Report on Form 8-K Filed March 15, 2002
Annual Report on Form 10-K Two month transition period ended
December 31, 2001
The following documents, which have been filed by Mead with the
Securities and Exchange Commission (SEC file number 001-02267), are
incorporated by reference into this prospectus:
Current Report on Form 8-K Filed August 30, 2001
Current Report on Form 8-K Filed October 17, 2001
Current Report on Form 8-K Filed October 18, 2001
Current Report on Form 8-K Filed January 22, 2002
Current Report on Form 8-K Filed January 29, 2002
Quarterly Report on Form 10-Q Quarter ended April 1, 2001
Quarterly Report on Form 10-Q Quarter ended July 1, 2001
Quarterly Report on Form 10-Q Quarter ended September 30, 2001
and Amendment No. 1
Proxy Statement Filed March 9, 2001
Annual Report on Form 10-K Year ended December 31, 2000
and Amendments No. 1, 2 and 3
The following documents, which were filed by Westvaco with the Securities
and Exchange Commission (SEC file number 001-03013), are incorporated by
reference into this prospectus:
Current Report on Form 8-K Filed December 20, 2001
Current Report on Form 8-K Filed January 29, 2002
Proxy Statement Filed January 12, 2001
Additional Proxy Materials Filed February 13, 2001
Annual Report on Form 10-K Year ended October 31, 2001
Any statement contained in a document incorporated or deemed to be
incorporated by reference into this prospectus will be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus or any other subsequently filed document that is
deemed to be incorporated by reference into this prospectus modifies or
supersedes the statement. Any statement so modified or superseded will not be
deemed, except as so modified or superseded, to constitute a part of this
prospectus.
You may request a copy of these filings at no cost, by writing or
telephoning us at as follows: MeadWestvaco Corporation, One High Ridge Park,
Stamford, Connecticut 06905, telephone (203) 461-7400, Attn: Corporate
Secretary.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. WE HAVE NOT
AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE
NOT MAKING AN OFFER OF THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER IS
NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION APPEARING IN THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, AS WELL AS INFORMATION WE PREVIOUSLY
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND INCORPORATED BY
REFERENCE, IS ACCURATE AS OF THE DATE ON THE FRONT OF THOSE DOCUMENTS ONLY.
S-3
THE COMPANY
GENERAL
MeadWestvaco Corporation is a Delaware corporation formed for the purpose
of consummating the business combination of The Mead Corporation and Westvaco
Corporation. The business combination was consummated on January 29, 2002.
MeadWestvaco's business consists exclusively of the businesses of Mead and
Westvaco. Unless otherwise indicated or the context otherwise requires, the
term "MeadWestvaco" refers to MeadWestvaco Corporation and its consolidated
subsidiaries, including Mead and Westvaco, and the terms "Mead" and "Westvaco"
refer to The Mead Corporation and Westvaco Corporation, respectively, in each
case together with their consolidated subsidiaries.
Westvaco, a Delaware corporation, was incorporated in 1899 as West
Virginia Pulp and Paper Company. Westvaco's historical business has been as a
producer of packaging, paper and specialty chemicals. Westvaco has served
customers in more than 70 countries with operations in the United States,
Brazil, Europe and Asia. Westvaco has produced paper and paperboard to convert
into a variety of packaging products. Westvaco has also been a leading global
supplier of premium packaging for consumer products markets.
Mead, an Ohio corporation, was incorporated in 1930 as the outgrowth of a
paper manufacturing business founded in 1846. Mead's historical business has
been as a producer of paper, packaging systems, pulp, paperboard, lumber and
other wood products. Mead also has manufactured and distributed consumer and
office supplies including time management products. Mead has served customers
in approximately 100 countries with operations in the United States, Canada,
Latin America, Europe and Asia.
BUSINESS SEGMENTS
MeadWestvaco's principal business segments on a combined basis are (1)
packaging products, (2) coated and specialty papers, (3) consumer and office
products and (4) specialty chemicals. While the forest resources operations
represent a segment of MeadWestvaco's business, it does not meet the threshold
to be reported separately.
Westvaco's principal business segments have been the manufacture of (1)
packaging products, (2) paper products, and (3) chemicals. A more detailed
description of Westvaco's segments, including financial information, is
contained in Note S to the consolidated financial statements included in the
MeadWestvaco 2001 Financial Report to Shareholders, and is incorporated herein
by reference.
Mead's principal business segments have been the manufacture of (1)
paper, (2) packaging and paperboard, and (3) consumer and office products. A
more detailed description of Mead's segments, including financial information,
is contained in Note T to the consolidated financial statements for Mead for
the twelve-month period ended December 31, 2001, as included in MeadWestvaco's
Current Report on Form 8-K/A filed with the Securities and Exchange Commission
on March 8, 2002 and incorporated herein by reference.
MARKETING AND DISTRIBUTION
The principal markets for MeadWestvaco's products are in the United
States, Canada, South America, Latin America, Europe and Asia. MeadWestvaco
operates in 33 countries and serves customers in approximately 100 nations.
MeadWestvaco expects to continue to utilize marketing and distribution methods
of Westvaco and Mead to serve the combined business while conducting a review
of these methods as part of the company's overall integration efforts.
S-4
The principal markets for Westvaco's products have been in the United
States, Brazil, Europe and Asia. Substantially all products have been sold
through Westvaco's own sales force. The principal markets for Mead's products
have been in the United States, Canada, Latin America, Europe and Asia. Mead's
products have been sold through a mixture of its own sales force and through
paper merchants and distributors. Each company has maintained sales offices in
key cities for their respective markets throughout the world.
FOREST RESOURCES
The principal raw material used in the manufacture of paper, paperboard
and pulp is wood. MeadWestvaco's strategy, based on the location of its mills
and the composition of surrounding forestland ownership, is to provide a
portion of its wood fiber from company-owned land and to rely on private
woodland owners and private contractors and suppliers for the balance.
MeadWestvaco owns approximately 3.5 million acres of forests worldwide. As part
of MeadWestvaco's strategic review of its timberlands holdings, the company
expects to reduce its U.S. land base over the next several years, disposing of
parcels which are not strategically significant to the company due to their
location in areas where the company otherwise has sufficient appropriate supply
for its mills.
MeadWestvaco expects to continue to obtain most of its wood requirements
from company owned or controlled timberlands, from private woodland owners and
private contractors or suppliers, including participants in the company's
Cooperate Forest Management Program (CFM) which provides an additional source
of wood fiber from acreage owned by participating landowners and managed with
assistance from company foresters. The company believes that these sources will
be able to adequately supply the company's needs. Additionally, the company has
the capacity to supply all of the wood for its Brazilian mill from company
plantations.
As of December 31, 2001, Westvaco owned 1,378,000 acres of forestland
with approximately 1,068,000 in the South and Middle Atlantic United States,
190,000 acres in the Central United States and approximately 120,000 acres in
southern Brazil (more than 2,000 miles from the Amazon rainforests). As of
December 31, 2001, Mead owned or controlled approximately 2,087,000 acres of
timberlands in the United States, with approximately 820,000 acres in the
Midwest, 660,000 in the Northeast and 607,000 acres in the South.
PATENTS
MeadWestvaco has a large number of foreign and domestic trademarks, trade
names, patents, patent rights and licenses relating to its business. While, in
the aggregate, intellectual property rights are material to MeadWestvaco's
business, the loss of any one or any related group of such rights would not
have a material adverse effect on the business of MeadWestvaco, with the
exception of the "Mead(R)" mark for consumer and office products.
COMPETITION
MeadWestvaco operates in very competitive domestic and foreign markets,
competing with many large, well-established and highly competitive
manufacturers and service providers. In addition, the company's business is
affected by a range of macroeconomic conditions, such as: industry capacity;
industry consolidations; global competition; economic growth in the U.S. and
abroad; and currency exchange rates.
The company competes principally through quality; value-added products
and services (packaging solutions); customer service; innovation; technology;
and product design and price. The company's proprietary trademarks and patents
are also important to the company's competitive position in certain markets.
S-5
RESEARCH
MeadWestvaco's research and development efforts are primarily focused on
increased timber and fiber production on a sustainable basis, as well as new
product innovation and process enhancements.
ENVIRONMENTAL LAWS AND REGULATIONS
MeadWestvaco's operations are subject to extensive regulation by various
federal, state and local authorities, as well as by regulatory authorities with
jurisdiction over foreign operations of the company. These regulations impose
effluent and emission limitations, waste disposal and other requirements upon
the operations of the company, and require the company to obtain and operate in
compliance with the conditions of permits and similar authorizations from the
appropriate governmental authorities. Through its operating subsidiaries,
MeadWestvaco has obtained, has applications pending, or is making application
for such permits and authorizations. MeadWestvaco does not anticipate that
compliance with such statutes and regulations will have a material adverse
effect on its competitive position or its overall business. MeadWestvaco's
competitors are subject to the same statutes and regulations, and while
individual regulatory programs may impact competitors somewhat differently,
MeadWestvaco expects that in the aggregate these statutes and regulations
affect competitors to a relatively similar degree.
Environmental expenditures in the future are anticipated to include
long-term projects for maintenance and upgrade of wastewater treatment plants,
process modifications and air emission controls. Due to changes in
environmental laws and regulations, the application of such laws and
regulations and changes in environmental control technology, it is not possible
for MeadWestvaco to predict with certainty the amount of capital expenditures
to be incurred for environmental purposes. Taking these uncertainties into
account, MeadWestvaco estimates that it may incur approximately $40 million in
expenditures for Westvaco facilities for the year ending December 31, 2002, and
approximately $22 million in expenditures over the next three calendar years
for Mead facilities.
A portion of anticipated future environmental capital expenditures of
MeadWestvaco will concern compliance with regulations promulgated under the
Clean Air Act and Clean Water Act (the "Cluster Rules") designed to reduce air
and water discharges of specific substances from U.S. pulp and paper mills by
2006. MeadWestvaco has taken major steps to comply with the Cluster Rules which
require new and existing integrated pulp and paper mills to install control
devices to limit the release of certain pollutants into the air and water.
MeadWestvaco expects to incur additional capital expenditures of approximately
$80 million over the next five years to comply with the Cluster Rules.
Additional operating expenses will be incurred as capital installations
required by the Cluster Rules are put into service. Environmental organizations
are challenging the Cluster Rules in the U.S. Court of Appeals. MeadWestvaco
and other companies are participating in the litigation which could result in
additional compliance costs in excess of $150 million over several years if the
legal challenge by these environmental organizations is successful.
In 1999, the United States Environmental Protection Agency (the "EPA")
announced its intention to emphasize enforcement of the Clean Air Act's major
source air permitting program. The Agency identified certain industries on
which it intended to focus, including the pulp and paper industry. During 1999
and 2000, EPA issued Notices of Violation against eight companies, including
Westvaco, with kraft pulp mills in Maryland, Pennsylvania, Virginia, West
Virginia and Wisconsin, alleging various violations of the Clean Air Act
Prevention of Significant Deterioration ("PSD") dating back to the late 1970s
and early 1980s. Subsequently, EPA proceeded to file suit in Federal District
Court against Westvaco. To MeadWestvaco's knowledge, none of these enforcement
matters against pulp and paper companies have been settled or resolved. In 1999
and 2000, Mead received multiple requests for information (pursuant to Section
114 of the Clean Air Act) from EPA concerning Mead's kraft pulp mills in
Chillicothe, Ohio, Rumford, Maine, Phenix City, Alabama and Escanaba, Michigan.
Mead has responded to all of the requests and MeadWestvaco is continuing to
cooperate with EPA. Mead did not receive any Notices of Violations or other
claims relating to these matters.
S-6
The EPA has undertaken several initiatives to reduce ozone-causing
pollutants from large utility and industrial sources in the Midwest, including
a call for states to adopt more stringent emission controls on all or some of
the sources within their boundaries (the "NOx SIP Call") and the promulgation
of new federal emission standards that may be applied to specific identified
sources in the affected states. Alabama, Michigan and Ohio are among the states
affected by these EPA initiatives. MeadWestvaco has developed plans for
compliance with the applicable federal programs and the Alabama, Michigan and
Ohio programs, and does not expect that any significant capital expenditures
beyond the expenditures stated above for the Mead facilities will be necessary
in the next three years to assure compliance. MeadWestvaco also expects capital
expenditures in the range of $15-20 million will be required to install
additional controls on facilities located in Kentucky, Maryland and Virginia by
2004. Estimated expenditures assume the technology identified by the EPA is
capable of achieving the NOx reductions projected by the EPA, which
MeadWestvaco has not independently confirmed.
Mead and Westvaco have been notified by the EPA or by various state or
local governments that they may be liable under federal environmental laws or
under applicable state or local laws with respect to the cleanup of hazardous
substances at sites currently operated or used by each company. Mead and
Westvaco are also currently named as a potentially responsible party ("PRP"),
or have received third party requests for contribution under federal, state or
local laws with respect to at least 20 sites. Some of these proceedings are
described in more detail in Part I, Item 3, "Legal Proceedings." There are
other sites which may contain contamination or which may be potential Superfund
sites but for which MeadWestvaco has not received any notice or claim. The
potential liability for all these sites will depend upon several factors,
including the extent of contamination, the method of remediation, insurance
coverage and contribution by other PRPs. Although the costs associated with
remediation of all these sites are not certain at this time, MeadWestvaco has
established reserves of approximately $57 million relating to current
environmental litigation and proceedings which it believes are probable and
reasonably estimable. These reserves were established after considering the
number of other PRPs, their ability to pay their portion of the costs, Mead's
or Westvaco's relative contribution to the site, and other factors. Expenses to
be charged to this reserve are not included in the anticipated capital
expenditures for the next three years stated above. MeadWestvaco believes that
it is reasonably possible that costs associated with these sites may exceed
current reserves by amounts that may prove insignificant or by as much as
approximately $40 million. This estimate of the range of reasonably possible
additional costs is less certain than the estimate upon which reserves are
based.
EMPLOYEES
MeadWestvaco employs approximately 32,500 people worldwide, of which
25,300 are employed in the United States and 7,200 are employed
internationally. Of this group, approximately 16,400 employees are represented
by various labor unions under collective bargaining agreements. Additionally,
most of MeadWestvaco's European facilities have separate house union agreements
or series of agreements specific to the workforce at such facility.
INTERNATIONAL OPERATIONS
MeadWestvaco's operations outside the United States are conducted through
subsidiaries located in Canada, South America, Latin America, Europe and Asia.
While there are risks inherent in foreign investments, MeadWestvaco does not
believe at this time that such risks are material to its overall business
prospects.
Westvaco's sales that were attributable to domestic operations were 85%
during the Transition Period, 89% in the fiscal year ended October 31, 2001,
and 94% in the fiscal years ended October 31, 2000 and 1999. Westvaco's sales
that were attributable to foreign operations were 15% during the Transition
Period, 11% in fis-
cal year 2001, 6% in fiscal years 2000 and 1999. Export sales from Westvaco's
U.S. operations made up approximately 15% during the Transition Period and 14%,
15% and 17% of Westvaco's fiscal year sales in 2001, 2000 and 1999,
respectively. For more information about domestic and foreign operations, see
Note S to the consolidated financial statements, included in the MeadWestvaco
2001 Financial Report to Shareholders, incorporated herein by reference.
S-7
RECENT DEVELOPMENTS
IMPACT OF ADOPTING FINANCIAL ACCOUNTING STANDARDS NO. 142 REGARDING GOODWILL
On March 15, 2002 MeadWestvaco announced that it will adopt, as required,
Statement of Financial Accounting Standards (SFAS) No. 142, effective as of
January 1, 2002. Under the Standard, goodwill and other intangible assets with
indefinite lives will no longer be amortized, but instead will be tested for
impairment at least annually. Westvaco goodwill at the end of 2001 was
approximately $560 million.
In compliance with SFAS No. 142, MeadWestvaco is in the process of
completing an evaluation of the carrying value of goodwill. Based upon the
goodwill assessment work to date, MeadWestvaco estimates that a non-cash
goodwill impairment charge in the range of $250-350 million will be recorded at
the beginning of 2002. The impairment charge will be the same before and after
taxes as the goodwill is not deductible and will not affect cash flow or future
operating results.
MEADWESTVACO PROVIDES OUTLOOK FOR FIRST QUARTER 2002
On March 15, 2002 MeadWestvaco also announced that for the first quarter
of 2002, MeadWestvaco's operating results are expected to be significantly
weaker than the sum of Mead and Westvaco's first quarter results last year. As
a result of a weakening global economy, prices for coated papers,
containerboard and bleached paperboard sold in economically sensitive markets
declined during 2001. Therefore, pricing for some grades of paper and
paperboard are much lower this quarter than in last year's first quarter. In
addition, due to the timing of the merger, the quarter will reflect only two
months of results of operations for the former Mead Corporation. Due to merger
accounting rules, non-cash depreciation for the former Mead Corporation will be
higher.
Total downtime in MeadWestvaco's medium and bleached paperboard
operations is expected to be approximately 100,000 tons in the first quarter of
2002, compared to 68,000 tons in 2001. This downtime includes scheduled
maintenance reducing production at its domestic corrugating medium operations
at Stevenson, Alabama and market-related downtime and extended maintenance at
its Evadale, Texas bleached paperboard operations. In 2001, downtime included
33,000 tons for the former Mead and 35,000 tons for the former Westvaco. In
coated and specialty papers, MeadWestvaco will take approximately 37,000 tons
of market-related downtime to more closely align production with demand. First
quarter 2002 results will also include charges for previously announced
restructuring and other merger-related actions of approximately $40 million.
S-8
USE OF PROCEEDS
The net proceeds from the sale of the notes are estimated to be $738.9
million after deducting the underwriting discount and estimated expenses for
the offering to be paid by the Company. The Company intends to use all of the
net proceeds to repay short-term indebtedness having a weighted average
interest rate as of March 26, 2002, of approximately 2.4%. The short-term
indebtedness was incurred by the Company to finance the repayment of long-term
indebtedness, certain cash payments related to the merger of Mead and Westvaco,
and working capital.
PRO FORMA CAPITALIZATION OF MEADWESTVACO CORPORATION
The following table shows the consolidated pro forma capitalization of
MeadWestvaco at December 31, 2001. The consolidated pro forma capitalization of
MeadWestvaco gives effect to the January 29, 2002 merger between Mead and
Westvaco as if the merger occurred on December 31, 2001. The "Pro Forma As
Adjusted" column reflects the issuance of $750,000,000 aggregate principal
amount of notes offered hereby and the repayment of commercial paper borrowings
and the current portion of long-term debt.
AS OF DECEMBER 31, 2001
----------------------
PRO FORMA
PRO FORMA AS ADJUSTED
- - --------- -----------
(IN MILLIONS)
Pro forma long-term debt:
Commercial paper.............................. $ 425.8 --
Current portion of long-term debt............. 302.3 --
Fixed-rate senior notes and debentures........ 2,867.8 3,617.8
Pollution control & industrial revenue bonds.. 142.5 142.5
Variable-rate senior notes.................... 417.7 417.7
Notes payable and other....................... 389.5 389.5
--------- ---------
Total pro forma long-term debt............ 4,545.6 4,567.5
Pro forma deferred taxes.................. 1,895.2 1,895.2
Total pro forma shareholders' equity:..... 5,387.4 5,387.4
Total pro forma capitalization......... $11,828.2 $11,850.1
========= =========
Ratio of total debt to total capitalization...... 38.4% 38.5%
S-9
SUMMARY OF FINANCIAL INFORMATION
The following is a summary of certain actual and pro forma financial
information of MeadWestvaco and its predecessor, Westvaco and their respective
consolidated subsidiaries. With the exception of the inclusion of the ratios of
earnings to fixed charges and the pro forma financial information, the
following amounts were derived from MeadWestvaco's and Westvaco's consolidated
financial statements and other financial data contained in their reports
incorporated by reference herein or otherwise previously filed with the SEC
pursuant to the Exchange Act (see "Documents Incorporated by Reference"). The
selected unaudited pro forma combined financial data is included only for the
purposes of illustration, and it does not necessarily indicate what the
operating results would have been if the business combination between Westvaco
and Mead had been completed on such date. Moreover, this information does not
necessarily indicate what the future operating results of the combined company
will be. The unaudited pro forma combined condensed income statement data
reflects the full year ended October 31, 2001 for Westvaco and the full year
ended December 31, 2001 for Mead. The unaudited pro forma combined condensed
balance sheet data reflects the December 31, 2001 balance sheet of Westvaco and
records, on a preliminary basis, the acquisition of Mead assuming the
transaction had been completed at December 31, 2001. The Mead balance sheet at
December 31, 2001 was used for purposes of estimating the preliminary purchase
asset allocation. The allocation reflected in the unaudited pro forma
information is preliminary and subject to adjustment as final valuations of
tangible and intangible assets acquired and liabilities assumed are completed.
TWO MONTHS
YEAR ENDED OCTOBER 31, ENDED
------------------------------------------------- DECEMBER 31, PRO FORMA
1997 1998 1999 2000 2001 2001 2001
-------- -------- -------- --------- -------- ------------ ---------
(DOLLARS IN MILLIONS, EXCEPT RATIOS)
INCOME STATEMENT DATA
Net sales................................... $3,151.7 $3,049.9 $2,953.2 $ 3,856.5 $3,935.5 $ 602.7 $ 8,112.0
Cost of products sold....................... 2,590.5 2,506.5 2,390.6 3,008.5 3,224.1 539.9 6,882.0
Selling, research and administration expense 250.0 247.5 241.7 293.1 381.6 66.2 863.4
Restructuring charges....................... -- -- 78.8 16.1 51.7 -- 96.8
-------- -------- -------- --------- -------- -------- ---------
Earnings from operations.................... 311.2 295.9 242.1 538.8 278.1 (3.4) 269.8
Other revenues (expenses)................... 28.7 18.7 29.4 57.0 48.1 (2.3) 66.6
Interest and debt expense................... 93.3 110.2 123.5 192.2 207.7 32.9 321.8
-------- -------- -------- --------- -------- -------- ---------
Income before taxes......................... 246.6 204.4 148.0 403.6 118.5 (38.6) 14.6
Income taxes................................ 83.9 72.4 36.8 148.9 30.3 (16.9) (23.2)
Extraordinary item.......................... -- -- -- (8.8) -- -- --
-------- -------- -------- --------- -------- -------- ---------
Net income.................................. $ 162.7 $ 132.0 $ 111.2 $ 245.9 $ 88.2 $ (21.7) $ 37.8
======== ======== ======== ========= ======== ======== =========
BALANCE SHEET DATA (AT PERIOD END)
Cash & marketable securities................ $ 175.4 $ 105.1 $ 108.8 $ 225.3 $ 81.2 $ 102.4 $ 153.7
Working capital............................. 399.6 272.1 312.9 496.8 314.7 307.8 437.8
Total assets................................ 4,898.8 5,008.7 4,896.7 6,569.9 6,787.0 6,828.3 13,599.8
Current maturities on long-term debt........ 26.1 99.1 50.2 30.1 172.9 166.6 541.1
Long-term debt.............................. 1,449.4 1,455.8 1,426.9 2,686.7 2,660.5 2,697.2 4004.5
Other long-term obligations................. 63.2 70.5 75.3 76.0 76.8 83.0 404.2
Deferred income taxes....................... 702.0 768.8 798.1 907.7 1,007.8 1,007.1 1,895.2
Shareholders' equity........................ 2,278.6 2,246.4 2,171.3 2,332.6 2,340.9 2,315.2 5,387.4
OTHER DATA
EBITDA (a).................................. $ 609.0 $ 595.6 $ 552.0 $ 909.9 $ 673.6 $ 55.0
Net cash provided by operating activities... 390.7 406.7 412.7 583.1 252.6 34.1
Net cash used in investing activities....... (593.0) (416.0) (229.9) (1,475.0) (323.6) (53.7)
Net cash (used in) provided by financing
activities................................. 262.9 (57.0) (160.6) 1,006.2 (62.9) 40.8
Capital expenditures........................ 621.2 423.0 228.9 214.0 290.4 54.1
Dividends................................... 89.8 89.3 88.2 88.5 89.3 --
Ratio of earnings to fixed charges(b)....... 2.8x 2.4x 2.0x 2.9x 1.5x (37.9) 1.1x
- --------
(a)EBITDA represents income before taxes plus interest expense, depreciation
and amortization. Westvaco's EBITDA is included in this prospectus
supplement because it is a measure used by Westvaco's management to assess
Westvaco's operating results and liquidity. EBITDA should not be considered
in isolation or viewed as a substitute for cash flow from operations, net
income or other measures of performance as defined by generally accepted
accounting principles and presented in Westvaco's consolidated financial
statements. EBITDA may not be comparable to other similarly titled measures
of other companies.
(b)For the purpose of computing the consolidated ratio of earnings to fixed
charges (1) earnings have been calculated by adding income taxes and fixed
charges (excluding capitalized interest) to net income before the
extraordinary charge and the cumulative effect of accounting changes, and
(2) fixed charges comprise the total of interest charges and a portion of
rentals determined to be representative of the interest factor.
S-10
DESCRIPTION OF THE NOTES
References in this "Description of the Notes" section to "MeadWestvaco,"
"Mead" and "Westvaco" refer, respectively, to each of them individually and not
to any of their respective consolidated subsidiaries.
The notes will be issued under the Indenture dated as of April 2, 2002
(the "Indenture") between the Company and The Bank of New York, as Trustee (the
"Trustee"), which is more fully described in the accompanying prospectus.
The notes mature on April 1, 2012. The notes bear interest at the rate
set forth on the cover page hereof, payable semi-annually on April 1 and
October 1 of each year to the registered holders thereof on the preceding March
15 or September 15, as the case may be, commencing October 1, 2002. The notes
do not have the benefit of a sinking fund. The notes are unsecured obligations
of MeadWestvaco and will rank equally with all other unsecured and
unsubordinated indebtedness of MeadWestvaco. The notes will be issued in
denominations of $1,000 and multiples thereof.
The aggregate principal amount of notes is limited to $750,000,000. The
Indenture does not limit the amount of other debt that may be issued by
MeadWestvaco except for certain secured debt as described in the prospectus
under "Restrictive Covenants."
GUARANTEES
The notes will be jointly and severally guaranteed by each of Mead and
Westvaco as described in the accompanying prospectus. Accordingly, it shall be
an additional Event of Default with respect to the notes if either (i) any such
guarantee ceases to be in full force and effect (other than in accordance with
its terms) or is declared null and void or unenforceable or found to be invalid
or unenforceable or found to be invalid or any such guarantor denies its
liability under its guarantee (other than by reason of the release of such
guarantor from such guarantee in accordance with its terms), or (ii) certain
events of bankruptcy, insolvency or reorganization occur with respect to any
guarantor.
OPTIONAL REDEMPTION
Upon not less than 30 nor more than 60 days' notice, MeadWestvaco may
redeem the notes, in whole or in part, at any time at the redemption price
equal to 100% of the principal amount thereof plus the Make-Whole Premium,
together with accrued and unpaid interest thereon, if any, to the redemption
date. Notice of redemption shall be mailed by first class mail at least 30 but
not more than 60 days before the redemption to each holder of notes to be
redeemed at its registered address. Notes called for redemption become due on
the date fixed for redemption. On and after the redemption date, interest
ceases to accrue on notes called for redemption.
"Make-Whole Premium" means, with respect to any debenture at any
redemption date, the excess, if any, of (a) the present value of the sum of the
principal amount and premium, if any, that would be payable on such debenture
on its maturity date and all remaining interest payments (not including any
portion of such payments of interest accrued as of the redemption date) to and
including such maturity date, discounted on a semi-annual bond equivalent basis
from such maturity date to the redemption date at a per annum interest rate
equal to the sum of the Treasury Yield (determined on the business day
immediately preceding the date of such redemption), plus 25 basis points, over
(b) the principal amount of notes being redeemed.
"Treasury Yield" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled by
and published in the most recent Federal Reserve Statistical Release H.15 (519)
which has become publicly available at least two business days prior to the
date fixed for redemption (or, if such Statistical Release is no longer
published, any publicly available source of similar data)) most nearly equal to
the then remaining average life of the notes, provided that if the average life
of the notes is
S-11
not equal to the constant maturity of a United States Treasury security for
which a weekly average yield is given, the Treasury yield shall be obtained by
linear interpolation (calculated to the nearest one-twelfth of a year) from the
weekly average yields of United States Treasury securities for which such
yields are given, except that if the average life of the notes is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to an constant maturity of one year shall be used.
BOOK-ENTRY SYSTEM
The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for the notes. The notes will be issued as
fully-registered securities registered in the name of Cede & Co. (DTC's
partnership nominee). One or more fully-registered global debenture
certificates will be issued for the notes and will be deposited with, or on
behalf of, DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants").
The Rules applicable to DTC and its Participants are on file with the
Securities and Exchange Commission.
Purchases of notes under the DTC system must be made by or through Direct
Participants, which will receive a credit for the notes on DTC's records. The
ownership interest of each actual purchaser of the notes ("Beneficial Owner")
is in turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their
purchase, but Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the Direct or Indirect Participant through which the Beneficial
Owner entered into the transaction. Transfers of ownership interests in the
notes are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in the notes, except in the
event that use of the book-entry system for the notes is discontinued.
To facilitate subsequent transfers, all notes deposited by Participants
with DTC are registered in the name of DTC's partnership nominee, Cede & Co.
The deposit of notes with DTC and their registration in the name of Cede & Co.
effect no change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the notes; DTC's records reflect only the identity of the
Direct Participants to whose accounts such notes are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the
notes. Under its usual procedures, DTC would mail an Omnibus Proxy to
MeadWestvaco as soon as possible after the record date. The Omnibus Proxy would
assign Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts the notes are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
S-12
Principal and interest payments on the notes will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the payable date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on the payable date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name", and
will be the responsibility of such Participant and not of DTC, MeadWestvaco or
the Trustee, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and interest to DTC is the
responsibility of MeadWestvaco or the Trustee, disbursement of such payments to
Direct Participants is the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as securities depository with
respect to the notes at any time by giving reasonable notice to MeadWestvaco or
the Trustee. Under such circumstances, in the event that a successor securities
depository is not obtained, definitive certificates are required to be printed
and delivered.
MeadWestvaco may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
definitive certificates will be printed and delivered.
THE INFORMATION IN THIS SECTION CONCERNING DTC AND DTC'S BOOK-ENTRY
SYSTEM HAS BEEN OBTAINED FROM SOURCES THAT MEADWESTVACO BELIEVES TO BE
RELIABLE, BUT MEADWESTVACO TAKES NO RESPONSIBILITY FOR THE ACCURACY THEREOF.
CONCERNING THE TRUSTEE
MeadWestvaco maintains banking relationships with the Trustee in the
ordinary course of its business. Borrowings totaling $1,000,000,000 are
available to MeadWestvaco under its Credit Agreement with a group of banks that
includes the Trustee and certain of its affiliates. There are no borrowings
currently outstanding under this Credit Agreement.
S-13
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement,
MeadWestvaco has agreed to sell to each of the underwriters named below, and
each of the underwriters has severally agreed to purchase from MeadWestvaco,
the respective principal amount of notes set forth opposite its name below:
PRINCIPAL
UNDERWRITER AMOUNT
----------- ------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................ $300,000,000
BNY Capital Markets, Inc............. 60,000,000
Banc of America Securities LLC....... 60,000,000
Banc One Capital Markets, Inc........ 60,000,000
J.P. Morgan Securities Inc........... 60,000,000
Salomon Smith Barney Inc............. 60,000,000
Goldman, Sachs & Co.................. 22,500,000
Morgan Stanley & Co. Incorporated.... 22,500,000
Barclays Capital Inc................. 15,000,000
Commerzbank Capital Markets Corp..... 15,000,000
Daiwa Securities SMBC Europe Limited. 15,000,000
Fleet Securities, Inc................ 15,000,000
Scotia Capital (USA) Inc............. 15,000,000
SunTrust Capital Markets, Inc........ 15,000,000
Wachovia Securities, Inc............. 15,000,000
------------
Total........................ $750,000,000
============
Under the terms and conditions of the Underwriting Agreement, the
underwriters are committed to take and pay for all of the notes offered hereby
if any are taken.
Each of MeadWestvaco, Mead and Westvaco has agreed to indemnify the
several underwriters against certain liabilities, including liabilities under
the Securities Act, and to contribute to payments that the underwriters may be
required to make in respect thereof.
COMMISSIONS, DISCOUNTS AND EXPENSES
The underwriters propose initially to offer the notes to the public at
the public offering price set forth on the cover page of this prospectus
supplement, and to certain dealers at such price less a concession not in
excess of .4% per debenture. The underwriters may allow, and such dealers may
reallow, a discount not in excess of .25% per debenture to certain brokers and
dealers. After the initial public offering, the public offering price,
concession and discount may be changed.
MeadWestvaco estimates that the total expenses of this offering,
excluding underwriting discounts and commissions, will be $1,261,600.
NEW ISSUE OF NOTES
Prior to this offering, there has been no public market for the notes.
The underwriters have advised MeadWestvaco that they intend to make a market in
the notes but are not obligated to do so and may discontinue market making at
any time without notice. No assurance can be given as to the liquidity of the
trading market for the notes or that an active market will develop.
MeadWestvaco does not intend to apply for the notes to be listed on any
national securities exchange or national securities quotation system.
S-14
PRICE STABILIZATION AND SHORT POSITIONS
In connection with this offering, the rules of the Securities and
Exchange Commission permit the underwriters to engage in transactions that
stabilize the price of the notes. Such transactions may consist of bids or
purchases for the purpose of pegging, fixing or maintaining the price of the
notes.
If the underwriters create a short position in the notes in connection
with this offering (i.e., if they sell more notes than are set forth on the
cover page of this prospectus supplement), the underwriters may reduce that
short position by purchasing notes in the open market.
OTHER RELATIONSHIPS
Certain of the underwriters and their affiliates have from time to time
provided commercial banking or investment banking advisory services to both
Mead and Westvaco, as well as MeadWestvaco, for which they have received
customary compensation, and may continue to do so in the future.
EXPERTS
MEADWESTVACO AND WESTVACO
The consolidated financial statements of Westvaco Corporation
incorporated in this prospectus by reference to Westvaco's Annual Report on
Form 10-K for the year ended October 31, 2001, and the consolidated financial
statements incorporated in this prospectus by reference to MeadWestvaco's
Transition Period Report on Form 10-K for the two months ended December 31,
2001 have been audited by PricewaterhouseCoopers LLP, independent auditors, as
stated in their report which is incorporated herein by reference, and have been
so incorporated in reliance upon the report of such firm, given on the
authority of said firm as experts in auditing and accounting.
MEAD AND MW HOLDING CORPORATION
The consolidated balance sheet of MW Holding Corporation incorporated in
this prospectus by reference to MeadWestvaco's Joint Proxy
Statement--Prospectus included in its Registration Statement on Form S-4 (No.
333-71124), as well as the consolidated financial statements of The Mead
Corporation for the year ended December 31, 2001, incorporated in this
prospectus by reference to MeadWestvaco's Form 8-K/A dated March 8, 2002 have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report (which expresses an unqualified opinion and includes an explanatory
paragraph relating to the company's change in its method of accounting for
derivative instruments effective January 1, 2001 and the company's change in
its method of revenue recognition for provisions included in certain sales
agreements effective January 1, 2000) which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm, given upon their authority as experts in auditing and accounting.
S-15
MEADWESTVACO CORPORATION
DEBT SECURITIES
----------------
By this prospectus, we may offer up to $1,000,000,000 of debt securities.
Market conditions at the time these securities are sold will determine the
prices and terms of these securities.
Each issue of debt securities of MeadWestvaco Corporation
("MeadWestvaco") under this prospectus may have a different aggregate principal
amount, maturity date, public offering price, interest rate or rates, timing of
interest payments, provisions for redemption, sinking fund requirements, and
other variable terms. The specific terms of each offering of debt securities
under this prospectus will be included in an accompanying prospectus supplement.
Each issue of debt securities of MeadWestvaco may be guaranteed on an
unsecured basis by either or both of The Mead Corporation ("Mead") and Westvaco
Corporation ("Westvaco"), two of MeadWestvaco's wholly-owned subsidiaries. See
"Description of the Debt Securities and the Guarantees". If an issue of debt
securities of MeadWestvaco is being issued with the benefit of any such
guarantees, the accompanying prospectus supplement will identify the guarantor
or guarantors and any additional terms relating to such guarantees not set
forth herein.
This prospectus may not be used to consummate sales of offered securities
unless accompanied by a prospectus supplement. You should read this prospectus
and the accompanying prospectus supplement carefully before you invest.
----------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
----------------
We may sell securities under this prospectus to or through underwriters.
We may also sell these securities directly to other purchasers or through
agents.
----------------
The date of this prospectus is March 8, 2002.
TABLE OF CONTENTS
PAGE
----
Documents Incorporated By Reference.................. 3
Where You Can Find More Information.................. 4
The Company.......................................... 5
Ratio of Earnings to Fixed Charges................... 5
Use of Proceeds...................................... 6
Description of the Debt Securities and the Guarantees 6
Plan of Distribution................................. 15
Legal Opinions....................................... 15
Experts.............................................. 16
2
DOCUMENTS INCORPORATED BY REFERENCE
This prospectus incorporates documents by reference which are not
presented in or delivered with this prospectus.
All documents filed by MeadWestvaco, Mead or Westvaco pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date
of this prospectus and prior to the termination of the offering of the
securities, are incorporated by reference into and are deemed to be a part of
this prospectus from the date of filing of those documents.
You should rely only on the information contained in this document or
that which we have referred you to. We have not authorized anyone to provide
you with any additional information.
The following documents, which have been filed by MeadWestvaco, with the
Securities and Exchange Commission (SEC file number 001-31215) are incorporated
by reference into this prospectus:
Joint Proxy Statement-Prospectus included in Dated December1 20, 2001
its registration statement on Form S-4, as
amended (No. 333-71124)
Current Report on Form 8-K Filed January 30, 2002
Current Report on Form 8-K Filed January 31, 2002
Current Report on Form 8-K Filed February 1, 2002
Current Report on Form 8-K Filed February 6, 2002
Current Report on Form 8-K/A Filed February 6, 2002
Current Report on Form 8-K/A Filed March 8, 2002
The following documents, which have been filed by Mead with the
Securities and Exchange Commission (SEC file number 001-02267), are
incorporated by reference into this prospectus:
Current Report on Form 8-K Filed August 30, 2001
Current Report on Form 8-K Filed October 17, 2001
Current Report on Form 8-K Filed October 18, 2001
Current Report on Form 8-K Filed January 22, 2002
Current Report on Form 8-K Filed January 29, 2002
Quarterly Report on Form 10-Q Quarter ended April 1, 2001
Quarterly Report on Form 10-Q Quarter ended July 1, 2001
Quarterly Report on Form 10-Q Quarter ended September 30, 2001
and Amendment No. 1
Proxy Statement Filed March 9, 2001
Annual Report on Form 10-K Year ended December 31, 2000
and Amendments No. 1, 2 and 3
3
The following documents, which were filed by Westvaco with the Securities
and Exchange Commission (SEC file number 001-03013), are incorporated by
reference into this prospectus:
Current Report on Form 8-K Filed December 20, 2001
Current Report on Form 8-K Filed January 29, 2002
Proxy Statement Filed January 12, 2001
Additional Proxy Materials Filed February 13, 2001
Annual Report on Form 10-K Year ended October 31, 2001
Any statement contained in a document incorporated or deemed to be
incorporated by reference into this prospectus will be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus or any other subsequently filed document that is
deemed to be incorporated by reference into this prospectus modifies or
supersedes the statement. Any statement so modified or superseded will not be
deemed, except as so modified or superseded, to constitute a part of this
prospectus.
You may request a copy of these filings at no cost, by writing or
telephoning us at as follows: MeadWestvaco Corporation, One High Ridge Park,
Stamford, Connecticut 06905, telephone (203) 461-7400, Attn: Corporate
Secretary.
You should rely only on the information contained or incorporated by
reference in this prospectus or any prospectus supplement. We have not
authorized any other person to provide you with different information. We are
not making an offer of these securities in any jurisdiction where the offer is
not permitted. You should assume that the information appearing in this
prospectus or any prospectus supplement, as well as information we previously
filed with the Securities and Exchange Commission and incorporated by
reference, is accurate as of the date on the front of those documents only.
WHERE YOU CAN FIND MORE INFORMATION
MeadWestvaco will file, and each of Mead and Westvaco have filed, annual,
quarterly and special reports, proxy statements and other information with the
Securities and Exchange Commission. Such filings are available to the public
over the Internet at the Securities and Exchange Commission's web site
at http://www.sec.gov. You may also read and copy any such document at the
Securities and Exchange Commission's public reference rooms at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the public reference
rooms.
This prospectus is a part of a registration statement on Form S-3 and
exhibits filed with the Securities and Exchange Commission. This prospectus
does not contain all of the information in the registration statement. Please
refer to the registration statement and its exhibits for further information
regarding MeadWestvaco and the offered securities.
4
THE COMPANY
MeadWestvaco is a newly formed Delaware corporation formed for the
purpose of consummating the business combination of Mead and Westvaco. The
business combination was consummated on January 29, 2002. MeadWestvaco's
business consists exclusively of the businesses of Mead and Westvaco. The
principal executive offices of MeadWestvaco are located at One High Ridge Park,
Stamford, Connecticut 06905, and its telephone number at that address is (203)
461-7400.
Mead was incorporated in 1930 under the laws of the state of Ohio as the
outgrowth of a paper manufacturing business founded in 1846. Mead manufactures
and sells paper, packaging systems, pulp, paperboard, lumber and other wood
products. Mead also manufactures and distributes consumer and office supplies
including time management products. Mead serves customers in approximately 100
countries with operations in North America, Latin America, Europe and Asia.
Westvaco, a Delaware corporation, was incorporated in 1899 as West
Virginia Pulp and Paper Company. Westvaco is a producer of packaging, paper and
specialty chemicals. Westvaco serves customers in more than 70 countries with
operations in the North America, Latin America, Europe and Asia. Westvaco
produces paper and paperboard to convert into a variety of packaging products.
Westvaco is also a leading global supplier of packaging for consumer products
markets. Westvaco also manufactures a variety of specialty chemicals, sells
timber from its forestlands, is engaged in land development and produces lumber.
Unless otherwise indicated or the context otherwise requires, the term
"MeadWestvaco" refers to MeadWestvaco Corporation and its consolidated
subsidiaries, including Mead and Westvaco, and the terms "Mead" and "Westvaco"
refer to The Mead Corporation and Westvaco Corporation, respectively, in each
case together with their consolidated subsidiaries.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of MeadWestvaco, Mead and
Westvaco are set forth below for the periods indicated. For periods in which
earnings before fixed charges were insufficient to cover fixed charges (or
combined fixed charges and preferred dividends), the dollar amount of coverage
deficiency (in millions), instead of the ratio, is disclosed.
Westvaco had a fiscal year ending October 31, and Mead has a fiscal year
ending December 31. Therefore, the pro forma ratio of earnings to fixed charges
for MeadWestvaco has been derived from the full year ended October 31, 2001 for
Westvaco and the full year ended December 31, 2001 for Mead. In each case, the
pro forma ratio of earnings to fixed charges for MeadWestvaco is presented to
give effect to the business combination of Mead and Westvaco as if it occurred
at November 1, 2000. MeadWestvaco believes that it is meaningful to present pro
forma financial information based on the fiscal year-end of the combined
company to facilitate an analysis of the pro forma effects of the business
combination.
The pro forma ratios have been derived from, and should be read in
conjunction with, the unaudited pro forma consolidated condensed financial data
including the notes thereto, of MeadWestvaco. Those unaudited pro forma
consolidated condensed financial data are included in MeadWestvaco's Current
Report on Form 8-K/A dated March 8, 2002, which is incorporated herein by
reference.
For the purpose of computing the consolidated ratios of earnings to fixed
charges (1) earnings have been calculated by adding income taxes and fixed
charges (excluding capitalized interest) to net income before the extraordinary
charge and the cumulative effect of accounting changes, and (2) fixed charges
comprise the total of interest charges and a portion of rentals determined to
be representative of the interest factor.
5
MEADWESTVACO(A)
PRO FORMA
------------
YEAR ENDED
OCTOBER 31, 2001
----------------
Ratio of earnings to fixed charges 1.07x
- --------
(a)MeadWestvaco became the parent of Mead and Westvaco on January 29, 2002 as
the result of the consummation of the business combination of Mead and
Westvaco. Because Westvaco is the predecessor of MeadWestvaco for accounting
purposes, MeadWestvaco's historical ratios are the same as Westvaco's
historical ratios, which are presented below.
MEAD
HISTORICAL FISCAL YEAR ENDED DECEMBER 31,
----------------------------------------
1997 1998 1999 2000 2001
---- ---- ---- ---- ------
Ratio of earnings to fixed charges..................... 3.0x 2.8x 3.3x 2.7x
Deficiency in earnings necessary to cover fixed charges $(45.9)
WESTVACO
HISTORICAL FISCAL YEAR ENDED OCTOBER 31,
----------------------------------------
1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Ratio of earnings to fixed charges 2.8x 2.4x 2.0x 2.9x 1.5x
USE OF PROCEEDS
Except as otherwise set forth in the accompanying prospectus supplement
relating to an offering of the Securities, the net proceeds from the sale of
the Securities being offered will be added to MeadWestvaco's general corporate
funds and will be available for general corporate purposes, including, but not
limited to, future capital outlays, working capital and the repayment of
existing debt.
DESCRIPTION OF SECURITIES
References in this "Description of Securities" section to "MeadWestvaco",
"Mead" and "Westvaco" refer, respectively, to each of them individually and not
to any of their respective consolidated subsidiaries.
The Securities are to be issued under an Indenture (the "Indenture")
between MeadWestvaco, as issuer, Westvaco, as guarantor, Mead, as guarantor
(together with Westvaco in such capacity, the "Guarantors" and each
individually a "Guarantor") and The Bank of New York, as Trustee (the
"Trustee"), a copy of which is filed as an exhibit to the registration
statement. If the Securities of any particular series are issued with the
benefit of a guarantee (a "Guarantee") from either or both of the Guarantors,
the terms of such series and the accompanying prospectus supplement will so
specify. The following summaries of certain provisions of the Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all provisions of the Indenture, including the definitions
therein of certain terms. Wherever particular Sections or defined terms of the
Indenture are referred to, it is intended that such Sections or defined terms
shall be incorporated herein by reference. The following sets forth certain
general terms and provisions of the Securities to which any prospectus
supplement may relate. The particular terms of the Securities offered by any
prospectus supplement (the "Offered Securities") and the extent, if any, to
which such general provisions may apply to the Securities so offered, will be
described in the prospectus supplement relating to such Offered Securities.
6
GENERAL
The Indenture does not limit the aggregate principal amount of Securities
which may be issued thereunder and provides that Securities may be issued from
time to time in one or more series. The Securities will be unsecured
obligations of MeadWestvaco.
Reference is made to the prospectus supplement relating to the particular
series of Securities offered thereby for the following terms of the Offered
Securities:
. the title of the Offered Securities;
. any limit on the aggregate principal amount of the Offered Securities;
. the price or prices (expressed as a percentage of the aggregate
principal amount thereof) at which the Offered Securities will be
issued;
. the date or dates on which the Offered Securities will mature;
. the rate or rates (which may be fixed or variable) per annum at which
the Offered Securities will bear interest, if any;
. the date from which such interest, if any, on the Offered Securities
will accrue, the dates on which such interest, if any, will be
payable, the date on which payment of such interest, if any, will
commence and the Regular Record Dates for such Interest Payment
Dates, if any;
. the ranking of the Offered Securities relative to any and all other
securities of MeadWestvaco theretofore issued;
. the Guarantees, if any, issued for the benefit of Holders of the
Offered Securities;
. the dates, if any, on which and the price or prices at which the
Offered Securities will, pursuant to any mandatory sinking fund
provisions, or may, pursuant to any optional sinking fund or to any
purchase fund provisions, be redeemed or purchased by MeadWestvaco,
and the other detailed terms and provisions of such sinking and/or
purchase funds;
. the date, if any, after which and the price or prices at which the
Offered Securities may, pursuant to any optional redemption
provisions, be redeemed at the option of MeadWestvaco or of the
Holder thereof and the other detailed terms and provisions of such
optional redemption; and
. any other terms of the series (which will not be inconsistent with
the provisions of the Indenture).
Unless otherwise indicated in the related prospectus supplement,
principal of and premium, if any, and interest, if any, on the Securities will
be payable, and the transfer of the Securities will be registrable, at the
office of the Trustee in the Borough of Manhattan, The City of New York, except
that, at the option of MeadWestvaco, interest may be paid by mailing a check to
the address of the person entitled thereto as it appears on the Security
Register. (Sections 301, 305, 1002)
Unless otherwise indicated in the related prospectus supplement, the
Securities will be issued only in fully registered form without coupons and in
denominations of $1,000 or any integral multiple thereof. No service charge
will be made for any transfer or exchange of the Securities, but MeadWestvaco
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Sections 302, 305)
Securities may be issued as Original Issue Discount Securities to be sold
at a substantial discount below their principal amount. Special federal income
tax and other considerations applicable thereto will be described in the
prospectus supplement relating thereto.
7
The Indenture does not contain any covenants or other provisions which
would afford Holders of Securities protection in the event of a highly
leveraged transaction involving MeadWestvaco.
GUARANTEES
Securities of a series may be issued with the benefit of a Guarantee from
one or more Guarantors pursuant to the terms of the Indenture and such series
of Securities. The Guarantor or Guarantors, as the case may be, will fully and
unconditionally guarantee to each Holder of Securities of the specified series
and to the Trustee and its successors and assigns, (1) the full and punctual
payment of all monetary obligations of MeadWestvaco under the Indenture
(including obligations to the Trustee) with respect to such Securities of the
applicable series and (2) the full and punctual performance within applicable
grace periods of all other obligations of MeadWestvaco under the Indenture with
respect to such Securities of the applicable series. Such Guarantees will
constitute guarantees of payment, performance and compliance and not merely of
collection. The obligations of each Guarantor will be unconditional
irrespective of the absence or existence of any action to enforce the same, the
recovery of any judgment against MeadWestvaco or each other or any waiver or
amendment of the provisions of the Indenture or specified Securities to the
extent that any such action or similar action would otherwise constitute a
legal or equitable discharge or defense of a Guarantor (except that each such
waiver or amendment shall be effective in accordance with its terms). The
obligations of each Guarantor to make any payments may be satisfied by causing
MeadWestvaco or the other Guarantor, if any, to make such payments. If any
Holder of any Security of the applicable series or the Trustee is required by a
court or otherwise to return to MeadWestvaco, a Guarantor or any custodian,
trustee, liquidator or other similar official acting in relation to any of
them, any amount paid by any of them to the Trustee or such Holder, the
Guarantee of a Guarantor, to the extent theretofore discharged, shall be
reinstated in full force and effect. Further, each Guarantor agrees to pay any
and all costs and expenses (including reasonable attorneys' fees) incurred by
the Trustee or any Holder of Securities of the applicable series in enforcing
any of their respective rights under the respective Guarantee. Each Guarantee
is limited to the maximum amount that can be guaranteed by the respective
Guarantor, without rendering the relevant Guarantee voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
Each Guarantee (taken individually) shall be automatically released and
shall terminate upon (a) the merger of the respective Guarantor with or into
MeadWestvaco or the other Guarantor, if any, (b) the consolidation of the
respective Guarantor with MeadWestvaco or the other Guarantor, if any, (c) the
transfer of all or substantially all of the assets of the respective Guarantor
to MeadWestvaco or the other Guarantor, if any, or (d) the termination of such
Guarantor's guarantee of the MeadWestvaco's obligations under each of the Bank
Credit Facilities. "Bank Credit Facilities" means (i) the Five-Year Credit
Agreement, dated as of December 21, 2001, among MeadWestvaco and the lenders
and agents listed therein, with The Bank of New York, as administrative agent
and Bank One, NA, as syndication agent, as amended, supplemented or otherwise
modified, (ii) the 364-Day Credit Agreement, dated as of December 21, 2001,
among MeadWestvaco and the lenders and agents listed therein, with The Bank of
New York, as administrative agent and Bank One, NA, as syndication agent, as
amended, supplemented or otherwise modified, and (iii) any amendments,
renewals, refundings, refinancings, extensions, modifications or replacements
with respect to any of the foregoing.
Each of Mead and Westvaco, prior to consummation of the business
combination, has issued several series of debt securities and commercial paper
that remain outstanding as of the date of this prospectus. In connection with
the business combination (1) each of MeadWestvaco and Mead has guaranteed
Westvaco's obligations under its outstanding series of debt securities and
commercial paper, and (2) each of MeadWestvaco and Westvaco has guaranteed
Mead's obligations under its outstanding series of debt securities and
commercial paper.
Each of Mead and Westvaco, prior to consummation of the business
combination, has entered into obligations with respect to several series of tax
exempt debt in conjunction with several municipalities. In connection with the
business combination (1) each of MeadWestvaco and Mead has guaranteed Westvaco's
8
obligations with respect to the various series of tax exempt debt issued for
its benefit, and (2) each of MeadWestvaco and Westvaco has guaranteed Mead's
obligations with respect to certain of its outstanding series of tax exempt
debt issued for its benefit. MeadWestvaco anticipates that Mead's obligations
with respect to any series of tax exempt debt issued for Mead's benefit that
have not been guaranteed by MeadWestvaco and Westvaco will become so guaranteed
in the future.
Each of Mead and Westvaco may, in the future, guarantee obligations of
MeadWestvaco, including, but not limited to, obligations with respect to series
of Securities, credit facilities, tax exempt debt and commercial paper. As of
the date of this prospectus, each of Mead and Westvaco has guaranteed
MeadWestvaco's obligations under its Bank Credit Facilities described in
clauses (i) and (ii) of the definition thereof and its commercial paper program.
RESTRICTIVE COVENANTS
Certain capitalized terms used in this "Restrictive Covenants" section
have the meanings provided in the last paragraph hereof.
LIMITATIONS ON LIENS. The Indenture provides that so long as any of the
Securities are outstanding MeadWestvaco will not, and will not permit any
Domestic Subsidiary to, issue, assume or guarantee any debt for money borrowed
(herein referred to as "Debt") if such Debt is secured by any mortgage,
security interest, pledge or other lien (herein referred to as a "mortgage")
upon any Principal Property of MeadWestvaco or any Domestic Subsidiary or
indebtedness of any Domestic Subsidiary, whether owned at the date of the
Indenture or thereafter acquired, without effectively securing the Securities
equally and ratably with such Debt. The foregoing restriction does not apply to:
(1) mortgages on any property acquired, constructed or improved
after the date of the Indenture which are created or assumed within 24
months after such acquisition, construction or improvement (or within six
months thereafter pursuant to a firm commitment for financing
arrangements entered into within such 24 month period) to secure or
provide for the payment of the purchase price or cost thereof incurred
after the date of the Indenture, or existing mortgages on property
acquired, provided such mortgages shall not apply to any property
theretofore owned by MeadWestvaco or a Domestic Subsidiary other than
theretofore unimproved real property;
(2) mortgages existing on any property acquired from a corporation
merged with or into MeadWestvaco or a Domestic Subsidiary;
(3) mortgages on property of any corporation existing at the time
it becomes a Domestic Subsidiary;
(4) mortgages securing Debt owed by a Domestic Subsidiary to
MeadWestvaco or to another Domestic Subsidiary;
(5) mortgages in favor of governmental bodies to secure advance or
other payments pursuant to any contract or statute or to secure
indebtedness incurred to finance the purchase price or cost of
constructing or improving the property subject to such mortgages;
(6) mortgages on timberlands in connection with an arrangement
under which MeadWestvaco or a Domestic Subsidiary is obligated to cut or
pay for timber in order to provide the secured party with a specified
amount of money, however determined; or
(7) mortgages securing tax exempt debt of MeadWestvaco or a
Domestic Subsidiary;
(8) mortgages for extending, renewing or replacing Debt secured by
any mortgage referred to in the foregoing clauses (1) to (7) inclusive or
in this clause or any mortgage existing on the date of the Indenture,
PROVIDED, HOWEVER, that the principal amount of Debt secured thereby
shall not exceed the principal amount of Debt so secured at the time of
such extension, renewal or replacement, and that such
9
extension, renewal or replacement shall be limited to all or a part of
the property which secured the mortgage so extended, renewed or replaced
(plus improvements on such property).
Such restriction does not apply to the issuance, assumption or guarantee
by MeadWestvaco or any Domestic Subsidiary of Debt secured by a mortgage which
would otherwise be subject to the foregoing restriction up to an aggregate
amount which, together with all other secured Debt (not including secured Debt
permitted under the foregoing exceptions) and the Value (as defined) of Sale
and Lease-back Transactions existing at such time (other than Sale and
Lease-back Transactions the proceeds of which have been applied to the
retirement of Securities or of Funded Debt or to the purchase of other
Principal Property, and other than Sale and Lease-back Transactions in which
the property involved would have been permitted to be mortgaged under clause
(1) above), does not exceed 15% of Consolidated Net Tangible Assets. (Section
1005)
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS. Sale and Lease-back
Transactions by MeadWestvaco or any Domestic Subsidiary of any Principal
Property are prohibited (except for temporary leases for a term, including
renewals, of not more than three years and except for leases between
MeadWestvaco and a Domestic Subsidiary or between Domestic Subsidiaries) unless
the net proceeds of such sale are at least equal to the fair value of such
Principal Property and:
. MeadWestvaco or such Domestic Subsidiary would be entitled to incur Debt
secured by a mortgage on the property to be leased without securing the
Securities pursuant to clause (1) under "Limitations on Liens" or
. the Value thereof would be an amount permitted under the last sentence
under "Limitations on Liens" or
. MeadWestvaco or any of its subsidiaries applies an amount equal to the
fair value of such Principal Property
(a) to the retirement of Funded Debt of MeadWestvaco or a Domestic
Subsidiary or
(b) to the purchase of Principal Property (other than that
involved in such Sale and Lease-back Transaction). (Section 1006)
For the purposes of the covenants described above,
"Consolidated Net Tangible Assets" means the total of all the assets
appearing on the consolidated balance sheet of MeadWestvaco and its
subsidiaries less the following: (1) current liabilities, including liabilities
for indebtedness maturing more than 12 months from the date of the original
creation thereof but maturing within 12 months from the date of determination;
(2) reserves for depreciation and other asset valuation reserves; (3)
intangible assets such as goodwill, trademarks, trade names, patents, and
unamortized debt discount and expense carried as an asset on said balance
sheet; and (4) appropriate adjustments on account of minority interests of
other persons holding stock in any subsidiary of MeadWestvaco. Consolidated Net
Tangible Assets shall be determined in accordance with generally accepted
accounting principles and practices applicable to the type of business in which
MeadWestvaco and its subsidiaries are engaged and which are approved by the
independent accountants regularly retained by MeadWestvaco, and may be
determined as of a date not more than sixty days prior to the happening of the
event for which such determination is being made.
"Domestic Subsidiary" means any Subsidiary which owns a Principal
Property.
"Funded Debt" means any Debt which by its terms matures at or is
extendable or renewable at the sole option of the obligor without requiring the
consent of the obligee to a date more than twelve months after the date of the
creation of such Debt.
"Principal Property" means any mill, converting plant, manufacturing
plant, manufacturing facility, including, in each case, the equipment therein,
or timberlands, located within the continental United States of
10
America (other than any of the foregoing acquired principally for the control
or abatement of atmospheric pollutants or contaminants or water, noise, odor or
other pollution, or any facility financed from the proceeds of pollution
control or revenue bonds), whether owned at the date of the Indenture or
thereafter acquired, having a gross book value (without deductions of any
applicable depreciation reserves) on the date as of which the determination is
being made of more than 5% of Consolidated Net Tangible Assets, but shall not
include any minerals or mineral rights, or any timberlands designated by the
Board of Directors of MeadWestvaco or of a Domestic Subsidiary, as the case may
be, as being held primarily for development and/or sale.
"Sale and Lease-back Transaction" means any arrangement with any person
providing for the leasing to MeadWestvaco or any Domestic Subsidiary of any
Principal Property (except for temporary leases for a term, including any
renewal thereof, of not more than three years and except for leases between
MeadWestvaco and a Domestic Subsidiary or between Domestic Subsidiaries), which
Principal Property has been or is to be sold or transferred by MeadWestvaco or
such Domestic Subsidiary to such person.
"Value" means with respect to a Sale and Lease-back Transaction, as of
any particular time, the amount equal to the greater of (1) the net proceeds
from the sale or transfer of the property leased pursuant to such Sale and
Lease-back Transaction or (2) the fair value in the opinion of the Board of
Directors of MeadWestvaco of such property at the time of entering into such
Sale and Lease-back Transaction, in either case divided first by the number of
full years of the terms of the lease and then multiplied by the number of full
years of such term remaining at the time of determination, without regard to
any renewal or extension options contained in the lease.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to
Securities of any series:
. failure to pay principal of or any premium on any Security of that
series when due;
. failure to pay any interest on any Security of that series when due,
continued for 30 days;
. failure to deposit any sinking fund payment, when due, in respect of
any Security of that series;
. failure to perform any other covenant of MeadWestvaco in the
Indenture (other than a covenant included in the Indenture solely for
the benefit of a series of Securities other than that series),
continued for 60 days after written notice as provided in the
Indenture;
. certain events in bankruptcy, insolvency or reorganization with
respect to MeadWestvaco and
. any other Event of Default provided with respect to Securities of
that series. (Section 501)
MeadWestvaco expects that the terms of any series of Securities issued
with the benefit of one or more Guarantees will provide that it shall be an
additional Events of Default with respect to such series of Securities if
either (i) any such Guarantee ceases to be in full force and effect (other than
in accordance with its terms) or is declared null and void or unenforceable or
found to be invalid or unenforceable or found to be invalid or any applicable
Guarantor denies its liability under such Guarantee (other than by reason of
the release of such Guarantor from such Guarantee in accordance with its
terms), or (ii) certain events of bankruptcy, insolvency or reorganization
occur with respect to any applicable Guarantor. If any such additional Events
of Default are applicable with respect to a series of Securities, the
accompanying prospectus supplement will specify such additional Events of
Default and shall, to the extent inconsistent with the foregoing, supersede the
expectation of MeadWestvaco set forth above.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, either the Trustee or the Holders of
at least 25% in aggregate principal amount of the Outstanding Securities of
that series may declare the principal amount (or, if the Securities of that
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Securities
of that series to be due and payable immediately. At any time after a
declaration of acceleration with
11
respect to Securities of any series has been made, but before a judgment or
decree based on acceleration has been obtained, the Holders of a majority in
aggregate principal amount of Outstanding Securities of that series may, under
certain circumstances, rescind and annul such acceleration. (Section 502)
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. (Section 603) Subject to such
provisions for the indemnification of the Trustee, the Holders of a majority in
aggregate principal amount of the Outstanding Securities of any series will
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Securities of that series.
(Section 512)
No Holder of any Security of any series will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless such Holder shall have previously given to the Trustee written notice of
a continuing Event of Default with respect to Securities of that series and
also unless the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities of that series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a majority
in principal amount of the Outstanding Securities of that series a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days. (Section 507) However, the Holder of any Security
will have an absolute right to receive payment of the principal of (and
premium, if any) and interest on such Security on or after the due dates
expressed in such Security and to institute suit for the enforcement of any
such payment. (Section 508)
MeadWestvaco is required to furnish to the Trustee annually a statement
as to performance by MeadWestvaco of certain of its obligations under the
Indenture and as to any default in such performance. (Section 1007)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by MeadWestvaco
and the Trustee with the consent of the Holders of a majority in aggregate
principal amount of all Outstanding Securities, taken together as a single
class, affected by such modification or amendment. However, no such
modification or amendment may, without the consent of the Holder of each
Outstanding Security affected thereby:
. change the stated maturity date of the principal of, or any
installment of principal or interest on, any Security;
. reduce the principal amount of, or any premium or interest on, any
Security;
. reduce the amount of principal of an Original Issue Discount Security
payable upon acceleration of the maturity thereof;
. change the place or currency of payment of principal of, or any
premium or interest on, any Security;
. impair the right to institute suit for the enforcement of any payment
on or with respect to any Security; or
. reduce the percentage in principal amount of Outstanding Securities
the consent of whose Holders is required for modification or
amendment of the Indenture or for waiver of compliance with certain
provisions of the Indenture or for waiver of certain defaults.
(Section 902)
The Holders of a majority in aggregate principal amount of the
Outstanding Securities, taken together as a single class, may, on behalf of all
Holders of Securities, waive, insofar as that series is concerned, compliance
12
by MeadWestvaco with certain restrictive provisions of the Indenture. (Section
1008) The Holders of a majority in aggregate principal amount of the
Outstanding Securities, taken together as a single class, may, on behalf of all
Holders of Securities, waive any past default under the Indenture with respect
to all Outstanding Securities of that series, except a default in the payment
of principal or any premium or interest or in respect of a provision which
under the Indenture cannot be modified or amended without the consent of the
Holder of each Outstanding Security. (Section 513)
With respect to any Guarantor the provisions of the Indenture governing
the Guarantees may be modified or amended with the consent of the Holders of a
majority in aggregate principal amount of all Outstanding Securities entitled
to the benefits of a Guarantee from such Guarantor, voting together as a single
class. However, any Guarantee, once issued, may not be released (other than in
accordance with the provisions set forth under "--Guarantees") without the
consent of each Holder of Outstanding Securities affected thereby without first
obtaining the consent of each such Holder.
CONSOLIDATION, MERGER AND SALE OF ASSETS
MeadWestvaco may consolidate or merge with or into, or transfer its
assets substantially as an entirety to, any corporation organized under the
laws of any domestic jurisdiction, provided that the successor corporation
assumes MeadWestvaco's obligations on the Securities and under the Indenture,
that after giving effect to the transaction no Event of Default, and no event
which, after notice or lapse of time, would become an Event of Default, shall
have occurred and be continuing, and that certain other conditions are met.
(Section 801)
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
We may, at our option and at any time, elect to have all of our
obligations discharged with respect to the Outstanding Securities of any series
and all obligations of any Guarantors discharged with respect to their
Guarantees ("Legal Defeasance") except for:
(1) the rights of Holders of Outstanding Securities to receive
payments in respect of the principal of, or interest or premium, if any,
on such Securities when such payments are due from the trust referred to
below;
(2) our obligations with respect to the Securities concerning
issuing temporary Securities, registration of Securities, mutilated,
destroyed, lost or stolen Securities and the maintenance of an office or
agency for payment and money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the
trustee, and our obligations in connection therewith; and
(4) the Legal Defeasance provisions of the indenture.
In addition, we may, at our option and at any time, elect to have our and
our Subsidiaries' obligations released with respect to certain covenants that
are described in the indenture ("Covenant Defeasance") and thereafter any
omission to comply with those covenants will not constitute a Default or Event
of Default with respect to the Securities of the applicable series. In the
event Covenant Defeasance occurs, certain events (not including non-payment,
bankruptcy, receivership, rehabilitation and insolvency events) described
under "--Events of Default will no longer constitute an Event of Default with
respect to the Securities of the applicable series.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) we must irrevocably deposit with the trustee, in trust, for
the benefit of the Holders of the Securities of the applicable series,
cash in U.S. dollars, non-callable Government Securities, or a
combination of cash in U.S. dollars and non-callable Government
Securities, in amounts as will be
13
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, or interest and premium, if
any, on the outstanding Securities of the applicable series on the stated
maturity or on the applicable redemption date, as the case may be, and we
must specify whether the Securities of the applicable series are being
defeased to maturity or to a particular redemption date;
(2) in the case of Legal Defeasance, we have delivered to the
trustee an opinion of counsel (with customary assumptions and exceptions)
reasonably acceptable to the trustee confirming that (a) we have received
from, or there has been published by, the Internal Revenue Service a
ruling or (b) since the date of the supplemental indenture, there has
been a change in the applicable federal income tax law, in either case to
the effect that, and based thereon such opinion of counsel will confirm
that, the Holders of the outstanding Securities of the applicable series
will not recognize income, gain or loss for federal income tax purposes
as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Legal Defeasance had not occurred;
PROVIDED that this clause (2) shall not apply in the case of any Legal
Defeasance occurring within one year of the Stated Maturity of the
Securities of the applicable series or after such time as all outstanding
Securities of the applicable series have been called for redemption.
(3) in the case of Covenant Defeasance, we have delivered to the
trustee an opinion of counsel (with customary assumptions and exceptions)
reasonably acceptable to the trustee confirming that the Holders of the
outstanding Securities of the applicable series will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred; PROVIDED that this
clause (3) shall not apply in the case of any Covenant Defeasance
occurring within one year of the Stated Maturity of the Securities of the
applicable series or after such times as all outstanding Securities of
the applicable series have been called for redemption.
(4) no Default or Event of Default has occurred and is continuing
on the date of such deposit (other than a Default or Event of Default
with respect to the applicable series of Securities only resulting from
the procurement of funds to be applied to such deposit) and any related
incurrence of a mortgage or mortgages;
(5) such Legal Defeasance or Covenant Defeasance will not result
in a breach or violation of, or constitute a default under any material
agreement or instrument to which we or any of our Restricted Subsidiaries
is a party or by which we or any of our Restricted Subsidiaries is bound;
(6) we must deliver to the trustee an officers' certificate
stating that the deposit was not made by us with the intent of preferring
the Holders of Securities of the applicable series over the other of our
creditors with the intent of defeating, hindering, delaying or defrauding
our creditors or others; and
(7) we must deliver to the trustee an officers' certificate and an
opinion of counsel, each stating that all conditions precedent relating
to the Legal Defeasance or the Covenant Defeasance have been complied
with.
CONCERNING THE TRUSTEE
MeadWestvaco maintains banking relationships with the Trustee in the
ordinary course of its business. Borrowings totaling $1,000,000,000 are
available to MeadWestvaco under its Credit Agreement with a group of banks that
includes the Trustee and certain of its affiliates. There are no borrowings
currently outstanding under this Credit Agreement.
14
PLAN OF DISTRIBUTION
MeadWestvaco may sell Securities to or through underwriters, and also may
sell Securities directly to other purchasers or through agents.
The distribution of the Securities may be effected from time to time in
one or more transactions at a fixed price or prices (which may be changed from
time to time), at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Each
prospectus supplement will describe the method of distribution of the
Securities offered thereby.
In connection with the sale of the Securities, underwriters may receive
compensation from MeadWestvaco or from purchasers of Securities for whom they
may act as agents, in the form of discounts, concessions or commissions. The
underwriters, dealers and agents that participate in the distribution of
Securities may be deemed to be underwriters under the Securities Act of 1933
and any discounts or commissions received by them and any profit on the resale
of Securities by them may be deemed to be underwriting discounts and
commissions under such Act. Any such underwriter will be identified and any
such compensation will be described in the prospectus supplement.
If so indicated in the prospectus supplement, MeadWestvaco will authorize
the underwriters to solicit offers by certain institutions to purchase
Securities from MeadWestvaco at the public offering price set forth in the
prospectus supplement pursuant to Delayed Delivery Contracts providing for
payment and delivery on the date stated in the prospectus supplement. Each such
contract will be for an amount not less than, and unless MeadWestvaco otherwise
agrees, the aggregate principal amount of Securities sold pursuant to such
contracts shall not be more than, the respective amounts stated in the
prospectus supplement. Institutions with whom such contracts, when authorized,
may be made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions, and other
institutions, but shall in all cases be subject to the approval of
MeadWestvaco. Delayed Delivery Contracts will not be subject to any conditions
except that the purchase by an institution of the Securities covered thereby
shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject.
The Underwriting Agreement to be entered into with respect to any
Securities sold through underwriters will provide that the obligations of the
underwriter or underwriters will be subject to certain conditions precedent and
that the underwriters will be obligated to purchase all of the Securities
covered by the applicable prospectus supplement if any are purchased.
MeadWestvaco and the Guarantors, if any, will also agree to in demnify the
several underwriters against certain civil liabilities, including liabilities
under the Securities Act of 1933.
In connection with any offering, the underwriters may over-allot or
effect transactions which stabilize or maintain the market price of the
securities at a level above that which might otherwise prevail in the open
market. Such stabilizing if commenced, may be discontinued at any time.
LEGAL OPINIONS
The legality of the Securities offered hereby will be passed upon for
MeadWestvaco and, if applicable, Mead and Westvaco, as Guarantors, by Wendell
L. Willkie, II, Esq., Senior Vice President and General Counsel of MeadWestvaco
and for the Underwriters by Cahill Gordon & Reindel, New York, New York. Mr.
Willkie is the beneficial owner of shares of MeadWestvaco's common stock held
in trust under MeadWestvaco's Savings and Investment Plan. He is also the
recipient of stock options granted by MeadWestvaco. Cahill Gordon & Reindel has
in the past performed certain legal services for Westvaco, and continues to
perform certain legal services for MeadWestvaco.
15
EXPERTS
MEADWESTVACO
The consolidated balance sheet of MeadWestvaco (f/k/a MW Holding
Corporation) incorporated in this prospectus by reference to MeadWestvaco's
Joint Proxy Statement--Prospectus included in its Registration Statement on
Form S-4 (No. 333-71124) have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm, given upon their authority as experts in auditing and accounting.
MEAD
The consolidated financial statements of The Mead Corporation for the
year ended December 31, 2001, incorporated in this prospectus by reference to
MeadWestvaco's Form 8-K/A dated March 8, 2002 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report (which expresses an
unqualified opinion and includes an explanatory paragraph relating to the
company's change in its method of accounting for derivative instruments
effective January 1, 2001 and the company's change in its method of revenue
recognition for provisions included in certain sales agreements effective
January 1, 2000) which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm, given upon their
authority as experts in auditing and accounting.
WESTVACO
The consolidated financial statements of Westvaco Corporation
incorporated in this prospectus by reference to Westvaco's Annual Report on
Form 10-K for the year ended October 31, 2001 have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
16
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[LOGO] MeadWestvaco
$750,000,000
MEADWESTVACO CORPORATION
6.85% NOTES DUE 2012
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PROSPECTUS SUPPLEMENT
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MERRILL LYNCH & CO.
BNY CAPITAL MARKETS, INC.
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
GOLDMAN, SACHS & CO.
JPMORGAN
MORGAN STANLEY
SALOMON SMITH BARNEY
BARCLAYS CAPITAL
COMMERZBANK CAPITAL MARKETS CORP.
DAIWA SECURITIES SMBC EUROPE
FLEET SECURITIES, INC.
SCOTIA CAPITAL
SUNTRUST ROBINSON HUMPHREY
WACHOVIA SECURITIES, INC.
MARCH 26, 2002
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