AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 12, 2002
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE GILLETTE COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 04-1366970
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification Number)
organization)
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PRUDENTIAL TOWER BUILDING
BOSTON, MASSACHUSETTS 02199
(617) 421-7000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------------
WILLIAM J. MOSTYN, III
DEPUTY GENERAL COUNSEL AND SECRETARY
THE GILLETTE COMPANY
PRUDENTIAL TOWER BUILDING
BOSTON, MASSACHUSETTS 02199
(617) 421-7000
(Name and address, including zip code, and telephone number, including area
code, of agent for service)
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PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:
PETER M. GREEN, ESQ. MARY E. WEBER, ESQ.
THE GILLETTE COMPANY ROPES & GRAY
PRUDENTIAL TOWER BUILDING ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02199 BOSTON, MASSACHUSETTS 02110
(617) 421-7000 (617) 951-7000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED(1) PRICE(1)(2)(3) REGISTRATION FEE(2)(4)
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Debt Securities....................................... $1,300,000,000 $1,300,000,000 $119,600
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(1) The aggregate initial offering price of all debt securities issued from time
to time pursuant to this Registration Statement will not exceed
$1,300,000,000 or the equivalent thereof in one or more foreign currencies,
foreign currency units, or composite currencies. The Gillette Company may
issue a higher principal amount of debt securities under this Registration
Statement if debt securities are issued at original issue discount, so long
as the aggregate initial offering price of all debt securities issued under
this Registration Statement does not exceed $1,300,000,000.
(2) The proposed maximum aggregate offering price has been estimated solely for
the purpose of calculating the registration fee pursuant to Rule 457(o)
under the Securities Act of 1933.
(3) Exclusive of accrued interest, if any.
(4) Paid on November 8, 2002.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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EXPLANATORY NOTE
THIS PRE-EFFECTIVE AMENDMENT NO. 1 TO FORM S-3 IS FILED HEREWITH IN ITS ENTIRETY
TO CORRECT A TYPOGRAPHICAL ERROR THAT OCCURRED IN THE INITIAL FILING ON NOVEMBER
8, 2002 DUE TO A PRINTER'S ERROR.
THE ERROR WAS ON THE TABLE HEADING FOR THE SELECTED HISTORICAL CONSOLIDATED
FINANCIAL DATA ON PAGE 2 OF THE ORIGINAL FILING. THE TABLE HEADING INDICATED
AMOUNTS FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 AND SHOULD HAVE BEEN
IDENTIFIED AS BEING THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001. ALL OTHER
DISCLOSURE IS UNCHANGED.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL A REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 12, 2002
PROSPECTUS
$1,300,000,000
[GILLETE LOGO]
DEBT SECURITIES
---------------------
We may offer and sell our unsecured debt securities from time to time in
one or more series.
We will provide the specific terms of these securities in supplements to
this prospectus. You should read this prospectus and the accompanying prospectus
supplement carefully before you invest.
This prospectus may be used to offer and sell securities only if
accompanied by the prospectus supplement for those securities.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The Gillette Company
Prudential Tower Building
Boston, Massachusetts 02199
(617) 421-7000
---------------------
The date of this prospectus is November , 2002
TABLE OF CONTENTS
PAGE
----
About This Prospectus....................................... ii
Note Regarding Forward-Looking Statements................... ii
Where You Can Find More Information......................... iii
Incorporation of Documents by Reference..................... iii
The Company................................................. 1
Our Business.............................................. 1
Selected Historical Consolidated Financial Data........... 2
Ratio of Earnings to Fixed Charges.......................... 4
Use of Proceeds............................................. 5
Description of Debt Securities.............................. 5
General................................................... 5
Registration and Transfer................................. 6
Payment and Place of Payment.............................. 7
Events of Default......................................... 7
Modification and Waiver................................... 8
Consolidation, Merger and Sale of Assets.................. 9
Regarding the Trustee..................................... 9
Defeasance................................................ 9
Governing Law............................................. 10
Global Securities........................................... 10
Book-Entry Issuance....................................... 11
Plan of Distribution........................................ 12
Validity of Securities...................................... 13
Experts..................................................... 13
i
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, or "SEC", using a "shelf" registration
process. Under this shelf process, we may issue from time to time the debt
securities described in this prospectus in one or more offerings up to an
aggregate initial offering price of $1,300,000,000.
This prospectus provides a general description of the debt securities we
may offer. Each time we sell debt securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in this prospectus. If the terms of the debt securities described in
this prospectus and the accompanying prospectus supplement vary, you should rely
on the information contained in the prospectus supplement.
You should read both this prospectus and any prospectus supplement,
together with the additional information described under the headings "Where You
Can Find More Information" and "Incorporation of Documents by Reference."
Unless otherwise indicated or unless the context requires otherwise, all
references in this prospectus to "Gillette," the "Company," "we," "us," "our" or
similar references mean The Gillette Company and its subsidiaries.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus may contain "forward-looking statements" under the federal securities
laws. Forward-looking statements may be identified by words such as "plans,"
"expects," "believes," "anticipates," "estimates," "projects," "will" and other
words of similar meaning used in conjunction with, among other things,
discussions of future operations, acquisitions and divestitures, financial
performance, our strategy for growth, product development and new product
launches, market position and expenditures.
Forward-looking statements are based on our current expectations of future
events, but actual results could vary materially from our expectations and
projections. Investors are cautioned not to place undue reliance on any
forward-looking statements. We assume no obligation to update any
forward-looking statements. We caution that historical results should not be
relied upon as indications of future performance.
Factors that could cause actual results to differ materially from those
expressed in any forward-looking statements include, but are not limited to:
- the pattern of our sales, including variations in sales volume within
periods;
- consumer demands and preferences including the acceptance by our
customers and consumers of new products and line extensions;
- the mix of products sold;
- our ability to control our internal costs and the cost of raw materials;
- competitive factors including the prices, promotional incentives and
trade terms of our products and our response and the response of our
customers and competitors to changes in these items;
- technological advances by us and our competitors;
- new patents granted to us and our competitors;
- changes in exchange rates in one or more of our geographic markets;
- changes in accounting policies;
- acquisition and divestiture activities; and
- the impact of general economic conditions in the United States and in
other countries in which we currently do business.
ii
Please refer to the Cautionary Statements contained in our filings with the SEC
that are incorporated by reference in this prospectus for a more detailed
explanation of the inherent limitations of our forward-looking statements.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement under the Securities
Act of 1933 that registers the offer and sale of the debt securities described
in this prospectus. The registration statement, including its exhibits, contains
additional relevant information about us. The rules and regulations of the SEC
allow us to omit from this prospectus some information included in the
registration statement.
In addition, we file annual, quarterly and special reports, proxy
statements and other information with the SEC. Our SEC filings are available
over the Internet at the SEC's website at http://www.sec.gov and at our website
at http://www.gillette.com. Our website is not part of this prospectus.
You also may read and copy any document we file with the SEC at its public
reference facility:
Public Reference Room
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549
You also may obtain copies of the documents at prescribed rates by writing
to the SEC's public reference facility. Please call 1-800 SEC-0330 for further
information on the operations of the public reference facility and copying
charges. Our SEC filings also are available at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. We incorporate by reference in this prospectus
the documents listed below:
- Our Annual Report on Form 10-K for the year ended December 31, 2001.
- Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2002.
- Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.
- Our Quarterly Report on Form 10-Q for the quarter ended September 30,
2002.
- Our Current Reports on Form 8-K as filed with the SEC on August 6, 2002.
- Our Current Report on Form 8-K as filed with the SEC on August 23, 2002.
- Our Current Report on Form 8-K as filed with the SEC on October 1, 2002.
- Our Current Report on Form 8-K as filed with the SEC on October 29, 2002.
We also incorporate by reference any future filings we make with the SEC
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 until we have sold all of the debt securities or the offering is otherwise
terminated. The information incorporated by reference is considered to be part
of this prospectus, and the information that we file later with the SEC will
automatically update and supersede this information.
You can obtain any of the documents incorporated by reference in this
prospectus from us, or from the SEC through the SEC's website at the address
described above. Upon written or oral request, we will provide without charge to
each person, including any beneficial owner, to whom this prospectus is
delivered a copy of any or all of the documents that have been incorporated by
reference in this prospectus other than exhibits to such documents (unless such
exhibits are specifically incorporated by reference in any such documents).
iii
Requests for such copies should be directed to The Gillette Company, Prudential
Tower Building, Boston, Massachusetts 02199, Attention: Investor Relations, or
by telephone to Investor Relations at (617) 421-7000.
We have not authorized anyone to give any information or make any
representation about us that is different from, or in addition to, the
information and representations contained in this prospectus or in any of the
materials that we have incorporated by reference into this prospectus. If you
are in a jurisdiction where offers to sell, or solicitations of offers to
purchase, the securities offered by this prospectus are unlawful, or if you are
a person to whom it is unlawful to direct these activities, then the offer
presented in this prospectus does not extend to you. The information contained
in this prospectus speaks only as of the date of this prospectus unless the
information specifically indicates that another date applies.
iv
THE COMPANY
OUR BUSINESS
Founded in 1901, The Gillette Company is a Delaware corporation. As of
December 31, 2001, we had manufacturing operations at 34 facilities in 15
countries and distributed our products through wholesalers, retailers and agents
in over 200 countries and territories. The common stock of the Gillette Company
is listed on the Boston, Chicago, New York and Pacific Stock Exchanges in the
United States under the symbol "G" and on the Berlin, Dusseldorf and Frankfurt
Stock Exchanges.
Our principal executive offices are located at Prudential Tower Building,
Boston, Massachusetts 02199. Our telephone number at that address is (617)
421-7000.
We manufacture and sell a wide variety of consumer products throughout the
world. We have five principal business segments.
BLADES AND RAZORS
We are the world leader in blades and razors.
We sell our male shaving systems under the Mach3Turbo, Mach3, SensorExcel,
Sensor, Atra, and Trac II brands and our male disposable razors under the Custom
Plus and Good News brands.
We sell our female shaving systems under the Gillette for Women Venus,
Sensor Excel for Women and Sensor for Women brands and our female disposable
razors under the Daisy and Agility brands.
DURACELL
We are the world leader in alkaline batteries for consumers. Our products
include the CopperTop and Duracell Ultra alkaline batteries and Duracell primary
lithium, zinc air and rechargeable nickel-metal hydride batteries.
ORAL CARE
We are the world leader in manual and power toothbrushes. We offer manual
and power toothbrushes under the Oral-B brand and power toothbrushes under the
Braun Oral-B brand.
PERSONAL CARE
We sell shave preparations, after-shave products and deodorants and
antiperspirants under the Gillette Series, Satin Care, Right Guard, Soft & Dri
and Dry Idea brands.
BRAUN
We sell electric shavers under the Braun brand and hair epilators under the
Silk Epil brand. These products include the number one foil electric shaver for
men and the number one hair epilator for women. We also sell small household
appliances under the Braun brand.
For additional information about our business, please see our Form 10-K for
the fiscal year ended December 31, 2001, and our other filings with the SEC that
are incorporated by reference into this prospectus.
1
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The following table sets forth selected financial data as of and for the
six fiscal years ended December 31, 2001, 2000, 1999, 1998, 1997 and 1996 and as
of and for the nine months ended September 30, 2002 and 2001. We derived the
financial data as of the end of and for each of the fiscal years 1996-2001 from
our audited consolidated financial statements. The summary historical financial
data as of and for the nine months ended September 30, 2002 and 2001 were
derived from our unaudited consolidated financial statements. These data are
qualified in their entirety by, and should be read together with, the more
detailed information appearing in our consolidated historical financial
statements and related notes and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and other financial information
incorporated by reference into this prospectus.
NINE MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
------------------ --------------------------------------------------------------
2002 2001 2001(A) 2000(B) 1999 1998(C) 1997 1996(D)
------- ------- ------- ------- ------- ------- ------- -------
(MILLIONS, EXCEPT PER SHARE AMOUNTS, EMPLOYEES AND RATIOS)
SUMMARY OF OPERATIONS
Net Sales(e)(g) $ 5,924 $ 5,666 8,961 9,225 9,074 9,136 9,084 8,735
Profit from Operations(e) $ 1,299 1,167 1,498 1,512 2,087 1,776 2,168 1,514
Income before Income Taxes
Continuing $ 1,261 1,029 1,342 1,288 1,912 1,656 2,065 1,403
Discontinued $ -- -- -- (531) 18 13 156 122
------- ------- ------- ------- ------- ------- ------- -------
1,261 1,029 1,342 757 1,930 1,669 2,221 1,525
Net Income
Continuing $ 870 710 910 821 1,248 1,073 1,327 871
Discontinued $ -- -- -- (429) 12 8 100 78
------- ------- ------- ------- ------- ------- ------- -------
870 710 910 392 1,260 1,081 1,427 949
Weighted Average Common Shares
Outstanding
Basic 1,057 1,055 1,055 1,054 1,089 1,117 1,118 1,107
Assuming Full Dilution 1,061 1,058 1,058 1,063 1,111 1,144 1,148 1,140
PER COMMON SHARE DATA
Net Income per Common Share:
Basic
Continuing $ .82 .67 .86 .78 1.14 .95 1.18 .78
Discontinued $ -- -- -- (.41) .01 .01 .09 .07
------- ------- ------- ------- ------- ------- ------- -------
.82 .67 .86 .37 1.15 .96 1.27 .85
Assuming Full Dilution
Continuing $ .82 .67 .86 .77 1.13 .94 1.15 .76
Discontinued $ -- -- -- (.40) .01 .01 .09 .07
------- ------- ------- ------- ------- ------- ------- -------
.82 .67 .86 .37 1.14 .95 1.24 .83
Dividends Declared per Common Share:
Gillette $ .33 .33 .65 .65 .59 .51 .43 .36
Duracell $ -- -- -- -- -- -- -- .58
Stock Price, end of period $ 29.60 29.80 33.40 36.13 41.19 47.81 50.22 38.88
BALANCE SHEET DATA
Net Property, Plant and Equipment(e) $ 3,495 3,537 3,548 3,550 3,467 3,285 2,918 2,404
Total Assets(e) $10,018 9,649 9,946 10,213 10,612 10,630 9,636 9,171
Long-Term Debt $ 1,852 1,669 1,654 1,650 2,931 2,256 1,476 1,490
Stockholders' Equity $ 2,544 2,253 2,137 1,924 3,060 4,543 4,841 4,471
OTHER INFORMATION
Net Interest Expense $ 46 116 141 218 129 86 69 67
Depreciation and Amortization(e) $ 371 359 509 535 464 421 384 347
Capital Expenditures(e) $ 278 449 624 793 889 952 933 787
Employees(e) 31,012 32,000 31,500 35,200 37,600 39,800 40,500 40,400
Ratio of Earnings to Fixed Charges(f) 13.9x 8.0x 8.2x 5.7x 12.3x 13.7x 20.8x 15.9x
---------------
(a) In 2001, charges for restructuring and asset impairment expenses reduced
profit from operations and income before income taxes by $172 million, net
income by $135 million and net income per common share, both basic and
assuming full dilution, by $.13.
(b) In 2000, charges for restructuring and asset impairment expenses reduced
profit from operations and income before income taxes by $572 million, net
income by $430 million and net income per common share, both basic and
assuming full dilution, by $.41.
(c) In 1998, a charge for reorganization and realignment expenses reduced profit
from operations and income before income taxes by $440 million, net income
by $285 million, net income per common share, basic, by $.26, and net income
per common share, assuming full dilution, by $.25.
(d) In 1996, charges for merger-related costs reduced profit from operations and
income before income taxes by $413 million, net income by $283 million, net
income per common share, basic, by $.26 and net income per common share,
assuming full dilution, by $.25.
(e) Represents continuing operations.
(f) For purposes of calculating the ratio of earnings to fixed charges, earnings
consist of income from continuing operations before income taxes and fixed
charges. Fixed charges consist of interest on indebtedness, amortization of
debt premium, the interest component of rentals and preferred stock dividend
requirements.
(g) We adopted EITF Issue No. 00-25, "Vendor Income Statement Characterization
of Consideration to a Purchaser of the Vendor's Products or Services," on
January 1, 2002. This standard addresses the income statement classification
of slotting fees, cooperative advertising arrangements and buydowns. Our
financial data for the nine months ended September 30, 2002 and 2001
presented
2
above reflect the adoption of EITF 00-25. Our financial data for each of the
years ended December 31, 1996 through 2001 presented above have not been
adjusted to reflect the adoption of EITF 00-25. If this standard had been
adopted for each of these years, net sales would have been reduced by $877
million in 2001, $915 million in 2000, $750 million in 1999, $740 million in
1998, $664 million in 1997 and $619 million in 1996. Selling, general and
administrative expenses would have been reduced by the same amounts in each
year. The reclassifications would have no impact on profit from operations,
net income or net income per common share.
As described in the "Accounting Pronouncements" section of the Notes to
Consolidated Financial Statements of our Quarterly Report on Form 10-Q for the
quarter ended September 30, 2002, incorporated by reference in this prospectus,
we adopted SFAS 142, Goodwill and Other Intangible Assets, as of January 1,
2002. SFAS 142 requires that goodwill and other intangible assets with
indefinite lives no longer be amortized, but instead be tested for impairment,
at least annually, in accordance with the new impairment testing provisions of
SFAS 142. SFAS 142 also requires that intangible assets with estimable useful
lives be amortized over their respective useful lives to their estimated
residual values, and reviewed for impairment in accordance with SFAS 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets." The net impact
of our adoption of SFAS 142 is a reduction of annual amortization expense of $34
million. No impairment losses were recognized due to the change in accounting
principle.
The following summarizes the estimated impact on our reported net income
and net income per common share for the years ended December 31, 2001, 2000 and
1999 and the nine months ended September 30, 2002 and 2001 had SFAS 142 been
adopted for those earlier periods.
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- --------------------------
2002 2001 2001 2000 1999
----- ----- ------- ------- ------
NET INCOME:
As reported......................................... $ 870 $ 710 $ 910 $ 392 $1,260
Add: Goodwill amortization, net of tax.............. -- $ 17 $ 23 $ 22 $ 22
Add: Trademark amortization, net of tax............. -- $ 6 $ 8 $ 8 $ 8
Less: Amortization from change in useful lives, net
of tax........................................... -- $ (6) $ (8) $ (8) $ (8)
----- ----- ------- ------- ------
Adjusted............................................ $ 870 $ 727 $ 933 $ 414 $1,282
===== ===== ======= ======= ======
NET INCOME PER COMMON SHARE:
Basic -
As reported......................................... $0.82 $0.67 $ 0.86 $ 0.37 $ 1.15
Add: Goodwill amortization, net of tax.............. -- $0.02 $ 0.02 $ 0.02 $ 0.02
Add: Trademark amortization, net of tax............. -- -- $ -- $ -- $ --
Less: Amortization from change in useful lives, net
of tax........................................... -- -- $ -- $ -- $ --
----- ----- ------- ------- ------
Adjusted............................................ $0.82 $0.69 $ 0.88 $ 0.39 $ 1.17
===== ===== ======= ======= ======
Assuming full dilution -
As reported......................................... $0.82 $0.67 $ 0.86 $ 0.37 $ 1.14
Add: Goodwill amortization, net of tax.............. -- $ .02 $ 0.02 $ 0.02 $ 0.02
Add: Trademark amortization, net of tax............. -- -- $ -- $ -- $ --
Less: Amortization from change in useful lives, net
of tax........................................... -- -- $ -- $ -- $ --
----- ----- ------- ------- ------
Adjusted............................................ $0.82 $0.69 $ 0.88 $ 0.39 $ 1.16
===== ===== ======= ======= ======
3
RATIO OF EARNINGS TO FIXED CHARGES
The table below sets forth the ratio of earnings to fixed charges of The
Gillette Company and our consolidated subsidiaries for each of the periods
indicated.
NINE MONTHS ENDED
SEPTEMBER 30, FISCAL YEAR ENDED DECEMBER 31,
------------------ -----------------------------------
2002 2001 2001 2000 1999 1998 1997
-------- ------- ---- ---- ----- ----- -----
13.9x 8.0x 8.2x 5.7x 12.3x 13.7x 20.8x
For purposes of calculating these ratios, earnings consist of income from
continuing operations before income taxes and fixed charges. Fixed charges
consist of interest on indebtedness, amortization of debt premium, the interest
component of rentals and preferred stock dividend requirements.
4
USE OF PROCEEDS
Unless the prospectus supplement indicates otherwise, we anticipate that
the net proceeds to be received from the sale of the debt securities will be
used to repay indebtedness and for other general corporate purposes, which may
include repurchases of our shares of common stock, working capital, capital
expenditures, acquisitions and other business opportunities.
DESCRIPTION OF DEBT SECURITIES
The Gillette Company will issue the debt securities under an indenture
dated as of April 11, 2002, between The Gillette Company and Bank One, N.A., as
trustee, as amended by a fourth supplemental indenture dated as of November 8,
2002. The indenture may be further amended or supplemented from time to time.
Unless otherwise indicated, when we use the term "indenture" in this prospectus,
we mean the indenture, as amended by the fourth supplemental indenture. A copy
of the indenture is referenced as an exhibit to the registration statement that
we filed with the SEC and which contains this prospectus.
The following summary describes the material terms of the indenture. The
summary is subject to, and is qualified in its entirety by reference to, all of
the provisions of the indenture. The following summary also describes the
general terms of the debt securities. The prospectus supplement will include the
particular terms of the debt securities being offered which differ from or add
to these general terms.
The debt securities will be unsecured and will rank equally with all of our
other unsecured and unsubordinated indebtedness.
In this section, the words "we," "us," "our" or "the Company" do not
include any current or future subsidiary of The Gillette Company.
GENERAL
We previously have issued debt securities under the indenture dated as of
April 11, 2002 and may issue debt securities from time to time in the future in
one or more series under the indenture. The indenture does not limit the
aggregate principal amount of debt securities that we may issue under it.
Neither the indenture nor the debt securities will limit or otherwise restrict
the amount of other indebtedness, including secured indebtedness, which we may
incur or other securities which we may issue.
The applicable prospectus supplement will include the particular terms of
the series of debt securities being offered, including:
- the title and series designation of the debt securities;
- the aggregate principal amount or initial public offering price of the
debt securities of that series and the limit, if any, on the aggregate
principal amount or initial public offering price of the debt securities
of that series that may be issued;
- the rate or rates (or method for establishing the rate or rates) at which
the debt securities will bear any interest;
- the date from which any interest will accrue;
- the dates on which any interest will be paid and the record dates for
determining the registered holders entitled to receive any payments of
interest on those interest payment dates;
- the date or dates on which principal is payable;
- whether the debt securities will be issued in global form;
- any obligation that we may have to redeem or purchase the debt
securities, whether pursuant to a sinking fund or other similar
provision, or at the option of the holder;
- any provisions for redemption of the debt securities at our option, and
the redemption price or prices;
- the denominations in which the debt securities will be issuable if other
than $1,000 and integral multiples of $1,000;
5
- whether the debt securities are denominated or payable in United States
dollars or a foreign currency or units of two or more foreign currencies;
- the place or places where payments on the debt securities will be made;
- if other than the full principal amount, the portion of the principal
amount of the debt securities payable upon acceleration of the maturity
of the debt securities;
- any index or formula used to determine the amount of payment of principal
of, or premium, if any, or interest on the debt securities;
- the person to whom any interest on the debt securities of the series will
be payable if other than the registered holder;
- if the principal amount payable at maturity of the debt securities is not
determinable as of any one or more dates prior to maturity, the amount of
the debt securities that will be deemed to be the principal amount of the
debt securities on or prior to the maturity date or the manner by which
such amount deemed to be principal will be determined;
- any addition to or change in the defaults or events of default that apply
to debt securities of the series and any change in the right of the
trustee or the required percentage of holders of those debt securities to
declare the principal thereof due and payable;
- any addition to or change in the covenants that apply to debt securities
of the series; and
- any other terms of the debt securities.
If the debt securities are redeemable, we may elect to redeem them at our
option only upon written notice mailed between 30 and 60 days prior to the
redemption date.
We may issue debt securities as "original issue discount securities," which
bear either no interest or interest at a rate which at the time of issuance is
below market rates. Such securities will be sold at a substantial discount below
their principal amount. In the event that the maturity of an original issue
discount security is accelerated, the amount payable to the holder upon
acceleration will be determined in accordance with the terms of that security
and the indenture, but will be an amount less than the amount payable at the
stated maturity of the principal of the security. The prospectus supplement will
describe special federal income tax and other considerations relating to
original issue discount securities.
In the event any sinking fund is established for the retirement of debt
securities of any series, we may satisfy all or any part of the sinking fund
payments required to be made by us with debt securities of the same series to
the extent provided for by the terms of such debt securities.
Unless otherwise indicated in the prospectus supplement, the covenants
contained in the indenture and in any supplemental indenture will not limit our
ability to affect a recapitalization, restructuring or other highly leveraged
transaction or other similar transaction, any of which transactions could result
in a sudden decline in our credit worthiness.
REGISTRATION AND TRANSFER
Unless otherwise indicated in the prospectus supplement, we will issue each
series of debt securities in registered form only, without coupons, and in
denominations of $1,000 and integral multiples of $1,000. Holders may present
debt securities in registered form for registration of transfer or exchange for
other debt securities of the same series at the principal corporate trust office
of the trustee located in the City of New York, New York or such other location
as may be indicated in the prospectus supplement.
If the debt securities of any series are redeemable and we plan to redeem
less than all of the debt securities of that particular series, we will not be
required to:
- issue, register the transfer of, or exchange any debt security of that
series during the period beginning 15 days before the day we mail the
notice of redemption and ending on the day we mail the notice; or
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- register the transfer of or exchange any debt security of that series
selected for redemption, except that we will be required to register the
transfer of or exchange the unredeemed portion of any debt security being
partially redeemed if the holder so requests.
No service charge will be made for any registration of transfer or exchange
of the debt securities except to cover any tax or other governmental charge
payable in connection with the registration of transfer or exchange.
PAYMENT AND PLACE OF PAYMENT
Unless otherwise indicated in the prospectus supplement, we will pay
principal of, and premium, if any, and interest on, the debt securities at the
principal corporate trust office of the trustee located in the City of New York,
New York. However, at our option, we may pay any interest by check mailed to the
holders of registered debt securities at their registered addresses or by wire
transfer or other method acceptable to such holders.
EVENTS OF DEFAULT
The following are "events of default" under the indenture with respect to
any series of debt securities:
- default in the payment of principal or premium, if any, when due;
- default in the payment of any interest when due, which default continues
for 30 days;
- default in the deposit of any sinking fund payment when due, which
default continues for 30 days;
- default in the performance of, or breach of, any other obligation or
warranty contained in the indenture for the benefit of debt securities of
that series, which default continues for 90 days after written notice by
the trustee or by the holders of at least 25% in aggregate principal
amount of the outstanding debt securities of that series;
- specified events of bankruptcy, insolvency or reorganization; and
- any other event of default provided with respect to debt securities of
that series.
If an event of default under the indenture occurs and continues with
respect to any series of debt securities, 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 of that series, or any lesser amount provided
for in the debt securities of that series, to be due and payable immediately.
After the trustee or the holders have declared the acceleration of a series of
debt securities, but before the trustee has obtained a judgment or decree for
payment of money due, the holders of at least a majority in aggregate principal
amount of outstanding debt securities of that series may, under specified
circumstances, rescind and annul the declaration of acceleration.
The holders of at least a majority in aggregate principal amount of the
outstanding debt securities of any series may waive an event of default with
respect to that series, except a default:
- in the payment of the principal of, or premium, if any, or interest on,
any debt securities of that series; or
- in respect of an obligation contained in, or a provision of, the
indenture which cannot be modified under the terms of the indenture
without the consent of each holder of the outstanding debt securities of
the affected series.
The holders of at least a majority in aggregate principal amount of the
outstanding debt securities of a series may 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 debt securities of
that series, provided that this direction is not in conflict with any rule of
law or the indenture and the trustee may take any other action deemed proper by
it which is not inconsistent with such direction. Before proceeding to exercise
any right or power under the indenture at the direction of the holders, the
trustee is entitled to receive from
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those holders reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in complying with the direction.
A holder of a debt security of any series will have the right to institute
a proceeding with respect to the indenture or for any remedy thereunder, if:
- that holder previously gave written notice to the trustee of a continuing
event of default with respect to debt securities of that series;
- the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of that series also have made a written
request to the trustee to institute the proceeding as trustee and offered
the trustee indemnity satisfactory to the trustee;
- the trustee has failed to institute the proceeding within 60 days; and
- the trustee has not received from the holders of at least a majority in
aggregate principal amount of the outstanding debt securities of that
series a direction inconsistent with such request during that 60-day
period.
However, any holder of a debt security has the absolute, unconditional
right to institute suit for any such defaulted payment of principal of, or
premium, if any, or interest on, any debt security after the due date for such
payment under that debt security.
We are required to furnish annually to the trustee a statement as to the
performance of our obligations under the indenture and as to any default in such
performance.
MODIFICATION AND WAIVER
The indenture may be modified and amended by us and the trustee through a
supplemental indenture, with the consent of holders of at least a majority in
aggregate principal amount of the outstanding debt securities of each series to
be affected. However, without the consent of each holder of any debt security to
be affected, we may not amend or modify the indenture to:
- change the stated maturity date of the principal of, or any installment
of principal of or interest on, any debt security;
- reduce the principal amount of, or the rate of interest on, any debt
security or any premium payable upon the redemption of any debt security;
- reduce the amount of principal of an original issue discount debt
security or any other debt security payable upon acceleration of its
maturity;
- change the place of payment or currency of payment of principal of, or
premium, if any, or interest on, any debt security;
- impair the right to institute suit for the enforcement of any payment
with respect to any debt security;
- reduce the percentage in aggregate principal amount of the outstanding
debt securities of any series, the consent of whose holders is required
to modify or amend the indenture or to waive compliance with certain
provisions of the indenture; or
- reduce the percentage in aggregate principal amount of the outstanding
debt securities of any series, the consent of whose holders is required
to waive any past default.
The indenture provides that, without the consent of any holders, we and the
trustee may enter into one or more supplemental indentures for certain purposes,
including:
- to add to our covenants for the benefit of the holders of all or any
series of debt securities or to surrender any right or power conferred
upon us in the indenture;
- to add any additional defaults or events of defaults for the benefit of
the holders of all or any series of debt securities;
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- to add to, change or eliminate any of the provisions of the indenture in
respect of one or more series of debt securities, provided that any such
addition, change or elimination (A) will not apply to, or modify the
rights with respect to such provision of any holder of, any debt security
of any series created prior to the supplemental indenture and entitled to
the benefit of such provision or (B) will become effective only when
there are no debt securities of any series outstanding; and
- to cure ambiguities, to correct or supplement any defective or
inconsistent provision of the indenture, provided that such action will
not adversely affect the interests of the holders of debt securities of
any series.
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may consolidate or merge with or into any other corporation or other
organization, and we may convey, transfer or lease all or substantially all of
our assets to any individual or organization, provided that:
- the successor or transferee, if other than us, is a corporation or other
organization organized and existing under the laws of the United States,
any U.S. state or the District of Columbia;
- the successor or transferee expressly assumes our obligations under the
indenture; and
- neither we nor any successor or transferee corporation or other
organization is, immediately after any consolidation or merger, in
default under the indenture.
REGARDING THE TRUSTEE
Bank One, N.A. is the trustee under the indenture. We maintain banking
relationships with the trustee and affiliates of the trustee in the ordinary
course of business.
DEFEASANCE
Unless otherwise provided in the prospectus supplement for such series of
debt securities, we may cause ourself (subject to the terms of the indenture) to
be discharged from any and all obligations with respect to any debt securities
or series of debt securities (except for certain obligations with respect to the
issuance of temporary securities and obligations to register the transfer or
exchange of such debt securities, to replace such debt securities if stolen,
lost or mutilated, to maintain paying agencies and to hold money for payment in
trust) on or after the date the conditions set forth in the indenture are
satisfied. Those conditions include the deposit with the trustee, in trust, of
money and/or qualifying U.S. government obligations in an amount sufficient to
pay the principal of, and premium, if any, and interest on, such debt securities
and any other payments required to be made on the respective due dates of such
payments or upon redemption, as the case may be, in accordance with the terms of
the indenture and such debt securities.
Under current U.S. federal income tax law, the defeasance of the debt
securities would be treated as a taxable exchange of the relevant debt
securities in which holders of debt securities would recognize gain or loss. In
addition, thereafter, the amount, timing and character of amounts that holders
would be required to include in income might be different from that which would
be includable in the absence of such defeasance. Prospective investors are urged
to consult their own tax advisors as to the specific consequences of a
defeasance, including the applicability and effect of tax laws other than the
U.S. federal income tax law.
GOVERNING LAW
The indenture and the debt securities will be governed by and construed in
accordance with the laws of the State of New York.
9
GLOBAL SECURITIES
We may issue the debt securities in whole or in part in the form of one or
more fully registered global securities, each a "global security," that will be
deposited with, or on behalf of, a depositary. Unless otherwise indicated in the
prospectus supplement, the depositary will be The Depository Trust Company, or
"DTC," and the debt securities will be registered in the name of Cede & Co. or
another nominee of DTC.
The specific terms of the depositary arrangement with respect to any debt
securities, if different from those terms set forth below, will be described in
the prospectus supplement. We anticipate that the following provisions will
apply to all depositary arrangements.
So long as the depositary or its nominee is the holder of a global
security, the depositary or the nominee will be considered the sole owner or
holder of the debt securities represented by the global security for all
purposes under the indenture. Except as set forth below, owners of beneficial
interests in a global security representing debt securities:
- will not be entitled to have the debt securities registered in their
names;
- will not receive or be entitled to receive physical delivery of the debt
securities in certificated form; and
- will not be considered the owners or holders of the debt securities under
the indenture.
Accordingly, each person owning a beneficial interest in a global security
must rely on the procedures of the depositary and, if that person is not a
participant in the depositary, on the procedures of the participant through
which that person owns his or her interest, to exercise any rights of a holder
under the indenture. We understand that, under existing industry practices, if
we request any action of holders or if an owner of a beneficial interest in a
global security desires to give or take any action which a holder is entitled to
give or take under the indenture, the depositary will authorize the participants
holding the relevant beneficial interest to give or take that action, and the
participants will authorize beneficial owners owning through them to give or
take (or direct the participants to give or take) that action.
Payments of principal of, and premium, if any, and interest on, debt
securities represented by a global security will be made to the depositary or
its nominee as the registered holder of the global security representing the
debt securities. Neither we, the trustee for the debt securities, any paying
agent for the debt securities nor the securities registrar will have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in a global security
for the debt securities or for maintaining, supervising or reviewing any records
relating to those beneficial ownership interests.
A global debt security may be exchanged for a certificated debt security
only if:
- the depositary has notified us that it is unwilling or unable to continue
as depositary for the global debt security or has ceased to be a clearing
agency registered under the Securities Exchange Act of 1934 at a time
when the depositary is requested to be so registered in order to act as
depositary;
- there shall have occurred and be continuing an event of default with
respect to the debt securities represented by the global debt security;
- we decide, in our sole discretion, that the global debt security will be
exchangeable; or
- such other conditions, if any, specified in the prospectus supplement
have been satisfied.
Unless and until it is exchanged in whole or in part for debt securities in
certificated form for any of the reasons above, a global security may not be
transferred except as a whole by the depositary to a nominee of the depositary,
by a nominee of the depositary to the depositary or another nominee of the
depositary, or by the depositary or any such nominee to a successor of the
depositary or a nominee of such successor.
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BOOK-ENTRY ISSUANCE
DTC has advised us that:
- 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 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. This
eliminates the need for physical movement of securities certificates.
Participants include securities brokers and dealers, banks, trust
companies, clearing corporations and other organizations. DTC is owned by
a number of its 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 custodial relationships with direct
participants, either directly or indirectly ("indirect participants").
The rules applicable to DTC and its participants are on file with the
SEC.
- Purchases of debt securities within the DTC system must be made by or
through direct participants, which will receive a credit for the debt
securities on DTC's records. The ownership interest of each actual
purchaser of each debt security (a "beneficial owner") is in turn
recorded on the direct and indirect participants' records. DTC will
maintain accounts showing the debt security holdings of its participants,
and these participants will, in turn, maintain accounts showing the debt
security holdings of their customers. Some of these customers may
themselves be securities intermediaries holding debt securities for their
customers. Thus, each beneficial owner of a book-entry debt security will
hold that debt security indirectly through a hierarchy of intermediaries,
with DTC at the "top" and the beneficial owner's own securities
intermediary at the "bottom."
- Beneficial owners will not receive written confirmation from DTC of their
purchases. Instead, beneficial owners are expected to receive written
confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the direct or indirect participants
through which the beneficial owners purchased the debt securities.
Transfers of ownership interests in the debt securities are 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 debt securities, except in
limited cases such as the discontinuance of the use of the book-entry
system for the debt securities.
- DTC has no knowledge of the actual beneficial owners of the debt
securities. DTC's records reflect only the identity of the direct
participants to the accounts of which those debt securities are credited,
which may or may not be the beneficial owners. The direct and indirect
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, and
the voting rights of direct participants, indirect participants and
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.
- Redemption notices will be sent to Cede & Co. (or other DTC nominee) as
the registered holder of the debt securities. If less than all of the
debt securities are being redeemed, DTC's current practice is to
determine by lot the amount of the interest of each direct participant to
be redeemed.
- Although voting with respect to the debt securities is limited to the
holders of record of the debt securities, in those instances in which a
vote is required, neither DTC nor Cede & Co. (or other DTC
11
nominee) will itself consent or vote with respect to the debt securities.
Under its usual procedures, DTC will mail an omnibus proxy to the trustee
as soon as possible after the record date. An omnibus proxy assigns Cede
& Co.'s consenting or voting rights to those direct participants to the
accounts of which the debt securities are credited on the record date,
which are identified in a listing attached to the omnibus proxy.
- Redemption proceeds and distribution payments on the debt securities will
be made by us or the trustee to Cede & Co. (or other DTC nominee) as
registered holder of the debt securities. DTC's practice is to credit
direct participants' accounts on the relevant payment date in accordance
with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payments on that payment date.
Payments by participants to beneficial owners will be governed by
standing instructions and customary practices and will be the
responsibility of participants and not of DTC, the trustee or us, subject
to any applicable statutory or regulatory requirements. Payment of
redemption proceeds and distributions to DTC is the responsibility of us
or the trustee, and disbursements of those payments to the beneficial
owners is the responsibility of direct and indirect participants.
- DTC may discontinue providing its services as securities depositary with
respect to any of the debt securities at any time by giving reasonable
notice to the trustee and us. Under these circumstances, in the event
that a successor securities depositary is not obtained, definitive
certificates representing such debt securities are required to be printed
and delivered. Additionally, we, at our option, may decide to discontinue
use of the system of book-entry transfers through DTC (or a successor
depositary). In that event, definitive certificates for such debt
securities will be printed and delivered.
Neither we nor the trustee has any responsibility for the performance by
DTC or its participants of their respective obligations as described above or
under the rules and procedures governing their respective operations.
PLAN OF DISTRIBUTION
We may sell the debt securities:
- to the public through one or more underwriters or dealers;
- through one or more agents; or
- directly to purchasers.
The distribution of the debt 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 those prevailing market prices; or
- at negotiated prices.
Each prospectus supplement will describe the method of distribution of the
particular series of debt securities being offered and any applicable
restrictions.
The prospectus supplement with respect to the debt securities of a
particular series will describe the terms of the offering of the debt
securities, including the following:
- the name or names of any underwriters, dealers or agents;
- the public offering or purchase price;
- any discounts and commissions to be allowed or paid to the underwriters
or agents;
- all other items constituting underwriting compensation;
- any discounts and commissions to be allowed or paid to dealers; and
- any exchanges on which the debt securities will be listed.
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We may agree to enter into an agreement to indemnify the agents, dealers
and underwriters against specified civil liabilities, including liabilities
under the Securities Act of 1933, or to contribute to payments the agents,
dealers or underwriters may be required to make.
Underwriters and their associates and affiliates may be customers of, have
borrowing relationships with, engage in other transactions with, and/or perform
services, including investment banking services, for us in the ordinary course
of business.
No series of debt securities will have an established trading market.
Unless otherwise indicated in the prospectus supplement relating to the series
of debt securities being offered, the debt securities will not be listed on a
national securities exchange or the Nasdaq National Market. We can give no
assurance as to the liquidity of or the existence of trading markets for the
debt securities.
VALIDITY OF SECURITIES
The validity of the debt securities will be passed upon for us by Ropes &
Gray, Boston, Massachusetts.
EXPERTS
The consolidated financial statements of The Gillette Company as of
December 31, 2001 and 2000, and for each of the years in the three-year period
ended December 31, 2001, have been incorporated by reference in this prospectus
in reliance upon the report of KPMG LLP, independent accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing.
13
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses in connection with the
issuance and distribution of the securities being registered. Except for the SEC
registration fee, all amounts are estimates.
Registration fee under the Securities Act of 1933........... $ 119,600
Fees of rating agencies..................................... 400,000
Trustees' fee and expenses.................................. 20,000
Printing and engraving...................................... 100,000
Accounting fees and expenses................................ 100,000
Legal fees and expenses..................................... 400,000
Blue sky fees and expenses.................................. 15,000
Miscellaneous............................................... 100,000
----------
Total.................................................. $1,254,600
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, as amended (the
"DGCL"), provides that a corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal or investigative
(other than an action by or in the right of the corporation), by reason of the
fact that such person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
such person's conduct was unlawful. Section 145 further provides that a
corporation similarly may indemnify any such person serving in any such capacity
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor, against expenses (including attorneys' fees)
actually and reasonably incurred in connection with the defense or settlement of
such action or suit, if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Delaware Court
of Chancery or such other court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 102(b)(7) of the DGCL permits a corporation to include in its
certificate of incorporation a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such provision
shall not eliminate or limit the liability of a director (1) for any breach of
the director's duty of loyalty to the corporation or its stockholders; (2) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (3) under Section 174 of the DGCL (relating to
unlawful payment of dividends and unlawful stock purchase and redemption); or
(4) for any transaction from which the director derived an improper personal
benefit.
The registrant's bylaws provide that the registrant shall indemnify any
current or former director, officer or employee of the registrant, or any person
currently or formerly serving as a director, officer, employee or
II-1
agent of another company at the request of the registrant, in connection with
proceedings in which such person becomes involved by reason of such position
with the registrant or such other company to the fullest extent permitted by
Delaware law. The registrant's Certificate of Incorporation, as amended,
provides that a director of the registrant shall not be liable to the registrant
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except as is not permitted under the DGCL.
The registrant has obtained insurance policies that insure its directors
and officers against certain liabilities.
For the undertaking with respect to indemnification, see Item 17 herein.
ITEM 16. EXHIBITS.
EXHIBIT NO. DESCRIPTION
----------- ------------------------------------------------------------
*1.1 Form of Underwriting Agreement.
**4.1 Indenture dated as of April 11, 2002 between The Gillette
Company and Bank One, N.A., as trustee.
*4.2 Fourth Supplemental Indenture dated as of November 8, 2002
between The Gillette Company and Bank One, N.A., as trustee.
*5.1 Opinion of Ropes & Gray.
*12.1 Statements re: Computation of Ratio of Earnings to Fixed
Charges.
*23.1 Consent of KPMG LLP.
*23.2 Consent of Ropes & Gray (included in the opinion filed
herewith as Exhibit 5.1).
*24.1 Power of Attorney.
***25.1 Statement of Eligibility and Qualification of Trustee on
Form T-1.
---------------
* Previously filed on November 8, 2002.
** Previously filed as Exhibit 4 to Registration Statement on Form S-3 of The
Gillette Company (File No. 333-86336) and incorporated by reference herein.
*** Previously filed as Exhibit 25 to Registration Statement on Form S-3 of The
Gillette Company (File No. 333-86336) and incorporated by reference herein.
ITEM 17. UNDERTAKINGS
A. SUBSEQUENT DOCUMENTS INCORPORATED BY REFERENCE
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein; and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
B. INDEMNIFICATION OF OFFICERS, DIRECTORS AND CONTROLLING PERSONS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities, other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding, is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by the controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such
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indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
C. OTHER UNDERTAKINGS
The undersigned registrant hereby also undertakes:
(1) To file, during any period in which offers or sale are being made, a
post-effective amendment to this registration statement:
i. To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
ii. To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most
recent post-effective amendment thereto) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
iii. To include any material information with respect to the plan of
distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) shall not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the SEC by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Pre-Effective
Amendment No. 1 to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Boston, Commonwealth of
Massachusetts, on November 12, 2002.
THE GILLETTE COMPANY
By: /s/ CHARLES W. CRAMB, JR.
------------------------------------
Name: Charles W. Cramb, Jr.
Title: Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the registration statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
* Chairman of the Board of November 12, 2002
------------------------------------------------ Directors, Chief Executive
James M. Kilts Officer and Director
* President, Chief Operating November 12, 2002
------------------------------------------------ Officer and Director
Edward F. DeGraan
/s/ CHARLES W. CRAMB, JR. Senior Vice President and November 12, 2002
------------------------------------------------ Chief Financial Officer
Charles W. Cramb, Jr.
* Vice President, Controller and November 12, 2002
------------------------------------------------ Principal Accounting Officer
Claudio E. Ruben
* Director November 12, 2002
------------------------------------------------
Warren E. Buffett
* Director November 12, 2002
------------------------------------------------
Wilbur H. Gantz
* Director November 12, 2002
------------------------------------------------
Michael B. Gifford
* Director November 12, 2002
------------------------------------------------
Ray J. Groves
* Director November 12, 2002
------------------------------------------------
Dennis F. Hightower
* Director November 12, 2002
------------------------------------------------
Herbert H. Jacobi
II-4
SIGNATURE TITLE DATE
--------- ----- ----
* Director November 12, 2002
------------------------------------------------
Nancy J. Karch
* Director November 12, 2002
------------------------------------------------
Jorge P. Lemann
* Director November 12, 2002
------------------------------------------------
Richard R. Pivirotto
* Director November 12, 2002
------------------------------------------------
Marjorie M. Yang
*By /s/ CHARLES W. CRAMB, JR.
-----------------------------------------
Charles W. Cramb, Jr.
(Attorney in Fact)
II-5
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- ------------------------------------------------------------
*1.1 Form of Underwriting Agreement.
**4.1 Indenture dated as of April 11, 2002 between The Gillette
Company and Bank One, N.A., as trustee.
*4.2 Fourth Supplemental Indenture dated as of November 8, 2002
between The Gillette Company and Bank One, N.A., as trustee.
*5.1 Opinion of Ropes & Gray.
*12.1 Statements re: Computation of Ratio of Earnings to Fixed
Charges.
*23.1 Consent of KPMG LLP.
*23.2 Consent of Ropes & Gray (included in the opinion filed
herewith as Exhibit 5.1).
*24.1 Power of Attorney.
***25.1 Statement of Eligibility and Qualification of Trustee on
Form T-1.
---------------
* Previously filed on November 8, 2002.
** Previously filed as Exhibit 4 to Registration Statement on Form S-3 of The
Gillette Company (File No. 333-86336) and incorporated by reference herein.
*** Previously filed as Exhibit 25 to Registration Statement on Form S-3 of The
Gillette Company (File No. 333-86336) and incorporated by reference herein.