AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 10, 2000
Registration Statement No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
Registration Statement
Under the
Securities Act Of 1933
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THE EARTHGRAINS COMPANY
EARTHGRAINS FINANCING I
(Exact name of each registrant as specified in its respective charter)
Delaware 36-3201045
Delaware Application Pending
(State or Other Jurisdiction (I.R.S. Employer Identification Number)
of Incorporation or Organization)
8400 Maryland Avenue
St. Louis, Missouri 63105
(314) 259-7000
(Address and telephone number of principal executive offices of each registrant)
-------------------------------
Joseph M. Noelker, Esq. Copies to:
Vice President, Secretary & Denis P. McCusker, Esq.
General Counsel Bryan Cave LLP
The Earthgrains Company One Metropolitan Square, Suite 3600
8400 Maryland Avenue St. Louis, Missouri 63102
St. Louis, Missouri 63105
(Name and address of agent for service)
Approximate date of commencement of proposed sale to the public: From time to
time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box:
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box:
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.
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CALCULATION OF REGISTRATION FEE
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Amount to be
Title of each class of securities to be registered Registered (1), (2) Amount of registration fee
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<S> <C> <C>
Common Stock, $0.01 par value, of The Earthgrains Company $ $
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Preferred Stock, $0.01 par value, of The Earthgrains Company
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Debt Securities of The Earthgrains Company
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Purchase Contracts of The Earthgrains Company
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Purchase Units of The Earthgrains Company
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Trust Preferred Securities of Earthgrains Financing
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Guarantee of Trust Preferred Securities of Earthgrains Financing I
by The Earthgrains Company (3)
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Total $750,000,000 $198,000
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<FN>
(1) Such indeterminate number or amount of Common Stock, Preferred Stock, Debt
Securities, Purchase Contracts, Purchase Units and Guarantees of The
Earthgrains Company ("Earthgrains") and Trust Preferred Securities of
Earthgrains Financing I (the "Trust") as may from time to time be issued at
indeterminate prices (collectively, the "Securities").
(2) Such amount in U.S. dollars or the equivalent thereof in foreign currencies
as shall result in an aggregate initial offering price for all Securities
of $750,000,000. In addition, this Registration Statement includes such
indeterminate number or amount of Securities as may be issuable from time
to time upon conversion or exchange of other Securities.
(3) No separate consideration will be received for the Guarantee of
Earthgrains.
</FN>
</TABLE>
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
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SUBJECT TO COMPLETION, DATED APRIL 10, 2000
[OBJECT OMITTED]
$750,000,000
THE EARTHGRAINS COMPANY
Common Stock
Preferred Stock
Debt Securities
Stock Purchase Contracts
Stock Purchase Units
EARTHGRAINS FINANCING I
Trust Preferred Securities Guaranteed by The Earthgrains Company
-----------------------------
This Prospectus describes Securities which The Earthgrains Company and/or
Earthgrains Financing I may issue and sell at various times. A more detailed
description of the Securities is contained in this Prospectus.
o The Securities may be shares of common or preferred stock of The
Earthgrains Company, debt securities of The Earthgrains Company,
stock purchase contracts and units of securities of The Earthgrains
Company, trust preferred securities of Earthgrains Financing I and
a guarantee of the trust preferred securities of Earthgrains
Financing I by The Earthgrains Company.
o The Securities to be issued under this Prospectus may be offered as
separate series or issuances at an aggregate initial public
offering price not to exceed $750,000,000 (or the equivalent amount
in other currencies).
We will determine the terms of each series of Securities (including, as
applicable, the specific designation, aggregate principal amount, interest
rates, maturity, redemption provisions and other terms) at the time of sale, and
we will describe those terms in a Prospectus Supplement which we will deliver
together with this Prospectus at the time of the sale.
We may sell Securities directly to investors or through underwriters,
dealers or agents. More information about the way we will distribute the
Securities is under the heading "Plan of Distribution." Information about the
underwriters or agents who will participate in any particular sale of Securities
will be in the Prospectus Supplement relating to that series of Securities.
See the information under the heading "Risk Factors" starting on page 3,
which describes certain factors you should consider before purchasing the
Securities.
Our principal offices are at 8400 Maryland Avenue, St. Louis, Missouri
63105, and our telephone number is (314) 259-7000.
-------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or passed upon the
adequacy or accuracy of this Prospectus. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is [_________], 2000.
<PAGE>
We have not authorized anyone to give any information or to make any
representations concerning the offering of the Securities except that which is
in this Prospectus or in the Prospectus Supplement which is delivered with this
Prospectus, or which is referred to under "Where You Can Find More Information."
If anyone gives or makes any other information or representation, you should not
rely on it. This Prospectus is not an offer to sell or a solicitation of an
offer to buy any securities other than the Securities which are referred to in
the Prospectus Supplement. This Prospectus is not an offer to sell or a
solicitation of an offer to buy Securities in any circumstances in which the
offer or solicitation is unlawful. You should not interpret the delivery of this
Prospectus, or any sale of Securities, as an indication that there has been no
change in our affairs since the date of this Prospectus. You should also be
aware that information in this Prospectus may change after this date.
TABLE OF CONTENTS
Table of Contents.....................................................2
Where You Can Find More Information...................................2
Risk Factors..........................................................3
Information About Earthgrains.........................................5
Information About Earthgrains Financing I.............................6
Use of Proceeds.......................................................7
Ratio of Earnings to Fixed Charges....................................8
Description of Capital Stock..........................................8
Description of Debt Securities.......................................14
Description of Stock Purchase Contracts and Stock Purchase Units.....21
Description of Trust Preferred Securities............................22
Description of Trust Preferred Guarantee.............................22
Plan of Distribution.................................................25
Legal Opinion........................................................26
Experts..............................................................26
WHERE YOU CAN FIND MORE INFORMATION
Earthgrains files annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any of these documents
at the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
at the SEC's Internet website at http://www.sec.gov. The SEC allows us to
incorporate by reference the information we file with them, which means that we
can disclose important information to you by referring you to those documents.
The information incorporated by reference is considered to be part of this
Prospectus, and later information that we file with the SEC will automatically
update and supersede this information. We incorporate by reference the documents
listed below and any future filings made with the SEC under Sections 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until we sell all of
the Securities. This Prospectus is part of a registration statement we filed
with the SEC.
o Our Annual Report on Form 10-K for the year ended March 30, 1999.
o Our Quarterly Reports on Form 10-Q for the quarters ended June 22 and
September 14, 1999 and January 4, 2000.
o Our Current Reports on Form 8-K dated November 15, 1999 and March 31,
2000.
You may receive a copy of any of these filings, at no cost, by writing or
calling the Investor Relations Department, The Earthgrains Company, 8400
Maryland Avenue, St. Louis, Missouri 63105, telephone 314-259-7000. You can also
find information about Earthgrains at our Internet website at
http://www.earthgrains.com.
We have filed with the SEC a Registration Statement to register the
Securities under the Securities Act of 1933. This Prospectus omits certain
information contained in the Registration Statement, as permitted by SEC rules.
You may obtain copies of the Registration Statement, including exhibits, as
noted in the first paragraph above.
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RISK FACTORS
Forward-Looking Statements
Certain statements under this heading and under the heading "Information
about Earthgrains" in this prospectus, as well as certain information
incorporated by reference which is referred to under the heading "Where You Can
Find More Information," constitute "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995. All such forward-looking
information involves risks and uncertainties and may be affected by many
factors, some of which are beyond our control. These factors include:
o competitive pricing,
o the costs of raw materials,
o our ability to realize projected savings from productivity and
product-quality improvements,
o our ability to continue to participate in industry consolidation and
to successfully integrate acquired businesses,
o economic conditions in the countries in which we operate, including
currency exchange rates and interest rates,
o legal proceedings to which we may become a party, and
o other factors described in this section and in our filings with the
SEC.
Competition
The packaged bakery products business is highly competitive. We face
intense price, product, and service competition for all of our products. We
compete on the basis of product quality, price, brand loyalty, effective
promotional activities, and our ability to identify and satisfy emerging
consumer preferences. Customer service, including frequency of deliveries and
maintenance of fully stocked shelves, also is an important competitive factor.
We compete with other national and regional wholesale bakeries, large
grocery chains that have captive or in-store bakeries, small retail bakeries,
and many producers of alternative foods. Some of our competitors have
significantly greater financial resources than we do.
Our ability to sell our products depends on our ability to attain store
shelf space in relation to competing brands and other food products. Our future
growth will depend on our ability to continue streamlining and reducing
operating costs, maintaining effective cost control programs, improving branded
product mix, taking advantage of industry consolidation opportunities,
developing successful new products, maintaining effective pricing and promotion
of our products, and providing superior customer service. If we are not
successful in our competitive efforts, it could adversely affect our financial
condition and, as a result, the value of the Securities and our ability to make
any required payments on the Securities.
Raw Materials Prices and Availability
Our products require a large volume of various agricultural products,
including wheat for flour, soybean oil for shortening, and corn for high
fructose corn syrup. Agricultural commodities represented 22-25% of the cost of
our products sold for our fiscal year ended March 30, 1999. The commodity
markets have experienced, and may continue to experience, significant price
volatility. The price and supply of raw materials will be determined by, among
other factors, the level of crop production, weather conditions, export demand,
government regulations, and legislation affecting agriculture. Commodity prices
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have declined significantly from record levels in 1996 and 1997. We cannot
predict what future commodity price levels will be. A significant increase in
commodity prices could significantly reduce our profitability if we are not able
to pass along the price increases through increased prices for our products, or
if we cannot offset these commodity price increases with cost reductions, or if
our sales volumes decline because of increases in our prices.
We regularly enter into futures contracts or hedging contracts to protect
us against increases in prices for our raw materials. If market prices fall
after we enter into such contracts, we may pay more than market price for the
raw materials subject to those arrangements.
Risks of Acquisitions
We have made several significant acquisitions in the United States and
Europe since we became an independent company in 1996, and we expect to continue
making acquisitions to take advantage of continued consolidation in our
industry. We have incurred significant amounts of indebtedness in connection
with these acquisitions, and the acquired companies may require significant
additional capital in the future. Our future success could be adversely affected
if the operations of the acquired companies do not meet our expectations, or if
we are not successful in integrating the acquired businesses with our existing
businesses and in accomplishing our objectives of increasing efficiency. Our
efforts to integrate these businesses with our existing businesses will require
significant effort and attention from our management.
Holding Company Structure
The Earthgrains Company is organized as a holding company, and
substantially all of our operations are carried on through subsidiaries. As
such, creditors of our subsidiaries would have a claim against the assets of our
subsidiaries which would be prior to any claim we may assert (except to the
extent we may be recognized as creditors of our subsidiaries) and prior to the
claims of the holders of Securities. At January 4, 2000, the amount of debt of
our subsidiaries to which the Securities would be effectively subordinated was
$4.5 million. Our principal source of income is the dividends and distributions
we receive from our subsidiaries. There are no limitations on our ability or the
ability of our subsidiaries to incur additional debt in the future, except for
certain restrictions on the ability of certain domestic (U.S.) subsidiaries to
incur long-term debt, as described under "The Debt Securities-Certain
Restrictions-Limitation on Funded Debt of Restricted Subsidiaries."
Risks of International Operations
A significant portion of our business is based outside the United States,
primarily in Spain, France and Portugal. We anticipate that we may continue to
expand our international operations as suitable opportunities become available.
International operations present various risks which do not apply to our
domestic businesses, including currency exchange risks. Our foreign subsidiaries
are subject to government regulation and political risk in each market in which
they operate.
Certain of our operations may at times in the future be subject to
expropriation, confiscatory taxation or price controls, and political and
economic changes may damage operating and growth prospects by causing political
and regulatory uncertainty or economic difficulties.
Governmental Regulation
The food industry is subject to regulation by federal, state and local
government in the U.S. and by various governmental bodies in other countries.
These regulations may affect our raw material costs, our production cost and the
costs and methods involved in packaging and distributing our products. Antitrust
laws and regulations may also affect our ability to make acquisitions or the
manner in which we operate companies which we acquire.
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Absence of Public Market for Certain of the Securities
Our common stock is listed on the New York Stock Exchange. However, prior
to the issuance of any other Securities, there will be no public trading market
for such securities. We do not intend to list any of these other Securities on
any national securities exchange. Although the underwriters for the various
series of Securities may make a market in those Securities, they will not be
obligated to do so. If a public market develops for any of these other
Securities, there is no assurance that it will continue to be maintained. If
there is not a public market for any of these other Securities, that may have an
adverse effect on the market price of these other Securities.
INFORMATION ABOUT EARTHGRAINS
Earthgrains is an international manufacturer, distributor and consumer
marketer of fresh packaged bread and baked goods and refrigerated dough
products.
Our origins date back to 1925 when we began operations with one bakery. We
became an independent, publicly-owned company on March 26, 1996, when
Anheuser-Busch Companies, Inc. distributed the shares of Earthgrains to its
shareholders in a spin-off. Anheuser-Busch acquired Earthgrains (then an
independent public company named Campbell Taggart, Inc.) in 1982.
o Operating Divisions. Our operations are divided into two principal
divisions: Worldwide Bakery Products and Worldwide Refrigerated Dough
Products.
o Worldwide Bakery Products.
Domestic
o Including the recently acquired Metz Holdings, Inc., we operate 64
bakeries and distribute our products primarily through approximately
4,800 company-owned delivery routes in the United States. Based on
independent market data, for the 52-week period ended January 16,
2000, we were the overall dollar market share leader of supermarket
sales for branded packaged fresh baked bread, buns, rolls and
shelf-stable bagels in the geographic markets in which we operate,
with a dollar market share of approximately 16.2% excluding licensed
brands, and approximately 19.5% including Earthgrains licensed brands.
We manufacture and distribute fresh-baked goods such as baked breads,
rolls, bagels, snack cakes and other sweet goods in various states
throughout the South, Southeast, Southwest, Midwest, Upper Midwest and
West. Our primary brands for fresh baked goods are Earth Grains(R),
Colonial(TM), Rainbo(R), IronKids(R), Grant's Farm(R), Heiner's(TM),
Kern's(TM), San Luis Sourdough(R), Old Home(R), Master(R), and
Mother's(TM). We also sell our products in selected markets under the
licensed brands Sunbeam(R), Pillsbury(R), Healthy Choice(R), Country
Hearth(R), Roman Meal(R)Holsum(R), Taystee(R), Sun Maid(R) and D'
Italiano(R). We sell our snack cakes and other sweet goods principally
under the Break Cake(TM) company brand and the Mickey(R)licensed
brand. We also manufacture similar fresh-baked goods for sale under
the brand names of our customers. In addition, we supply specialty
breads and rolls, sandwich buns and other products to food service
customers including major fast food and family restaurant chains.
International
o In Europe, Bimbo, S.A., our Spanish subsidiary, operates ten bakeries
in Spain (including the Canary Islands) and one bakery in Portugal.
Based on independent market data, we believe that Bimbo is the dollar
market share leader in supermarket sales of packaged branded
fresh-baked sliced bread, buns, snack cakes, sweet buns and brioche in
Spain, and is second in dollar market share for packaged branded
fresh-baked sliced bread and buns in Portugal. These products are sold
primarily under the Bimbo(R), Martinez(R), Silueta(R), Semilla de
Oro(R), and Madame Brioche(R) brand names.
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o Worldwide Refrigerated Dough Products.
Domestic
o In the United States, the Refrigerated Dough division manufactures
refrigerated canned dough products, cookie dough products and other
products, in two plants. Products include specialty biscuits, dinner
rolls, danishes, cookie dough, crescent rolls, breadsticks, cinnamon
rolls, pizza crusts, pie crusts and toaster pastries. These products
are sold under different store brands throughout the United States. We
are one of only two manufacturers of canned refrigerated dough in the
United States. In addition, we believe that we are the only
manufacturer of store brand (private label) canned refrigerated dough
products in the United States, and we produce store brand toaster
pastries. Our Refrigerated Dough Products division ranked second in
dollar market share of supermarket sales for packaged refrigerated
dough products in the United States, with a dollar market share of
approximately 14.0% for the 52-week period ended January 16, 2000. Our
refrigerated dough products are also sold under the Merico(R)brand
name and our refrigerated English muffins are sold under the Sun
Maid(R)licensed brand.
International
o In Europe, our Refrigerated Dough Division operates four refrigerated
dough plants in France and sells refrigerated dough products primarily
in France and Germany. It is the only manufacturer of canned
refrigerated dough in Europe. We also make rolled dough, which is used
to prepare foods such as quiches, tarts and pies. In France, where we
are the largest in supermarket sales of packaged refrigerated dough
products, we sell canned dough and rolled dough under various store
brands as well as under our CroustiPate(R), Raulet(R) and HappyRoll(R)
brands, and we sell these products throughout Europe through contract
packaging arrangements with major international food companies.
INFORMATION ABOUT EARTHGRAINS FINANCING I
Earthgrains Financing I is a Delaware statutory business trust (the
"Trust") created pursuant to (i) a Trust Agreement executed by Earthgrains, as
the depositor for the Trust, and the trustees of the Trust (which are described
below) and (ii) the filing of a certificate of trust with the Delaware Secretary
of State. The Trust Agreement will be amended and restated in its entirety
substantially in the form filed as an exhibit to the Registration Statement. The
Trust will also be qualified as an Indenture under the Trust Indenture Act of
1939. The Trust exists for the exclusive purposes of:
o Issuing Trust Preferred Securities and Trust Common Securities. The
Common Securities of the Trust represent undivided beneficial
interests in the assets of the Trust.
o Investing the proceeds received by the Trust from the sale of Trust
Preferred Securities and Trust Common Securities in Debt Securities of
Earthgrains.
o Engaging in only those other activities necessary or incidental to
accomplish the above.
All of the Trust Common Securities will be directly or indirectly owned by
Earthgrains. The Trust Common Securities will rank pari passu with the Trust
Preferred Securities, except that, upon an event of default under the Trust
Agreement, the rights of the holders of the Trust Common Securities to
distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the Trust Preferred Securities.
Earthgrains will directly or indirectly acquire Trust Common Securities in
a liquidation amount equal to 3% of the total capital of the Trust. The Trust
has a term of approximately 25 years but may dissolve earlier, as provided in
the Trust Agreement. The Trust's business and affairs will be conducted by its
trustees, including a Property Trustee (as defined below), a Delaware Trustee
(as defined below) and three individual trustees (the "Administrative Trustees")
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who are employees or officers of or affiliated with Earthgrains (the
"Earthgrains Trustees") appointed by Earthgrains as the holder of the Trust
Common Securities. The holder of the Trust Common Securities of the Trust, or
the holders of a majority in liquidation amount of the related Trust Preferred
Securities if an event of default under the Trust Agreement for the Trust has
occurred and is continuing, will be entitled to appoint, remove or replace the
Property Trustee and/or the Delaware Trustee. The holders of the Trust Preferred
Securities have the right to appoint, remove or replace the Administrative
Trustees.
The duties and obligations of the Earthgrains Trustees will be governed by
the Trust Agreement. One Earthgrains Trustee will be a financial institution
that is not affiliated with Earthgrains and has combined capital and surplus of
not less than $50,000,000. That trustee will act as property trustee and as
indenture trustee for the purposes of the Trust Indenture Act of 1939 (the
"Property Trustee"). In addition, unless the Property Trustee maintains a
principal place of business in the State of Delaware and otherwise meets the
requirements of Delaware law, one Earthgrains Trustee will have a principal
place of business or reside in the State of Delaware (the "Delaware Trustee").
Earthgrains will pay all fees and expenses related to the Trust and the offering
of the Trust Preferred Securities and Trust Common Securities. The payment of
periodic distributions with respect to the Trust Preferred Securities and
payment on liquidation, redemption or otherwise with respect to the Trust
Preferred Securities will be guaranteed by Earthgrains, but only to the extent
described in this Prospectus. See "Description of the Trust Preferred Securities
Guarantees." Our obligations under the Trust Preferred Securities Guarantees
will be subordinate and junior in right of payment to all of our other
liabilities and will rank pari passu with our most senior preferred shares, if
any.
The office of the Delaware Trustee for the Trust is The Bank of New York
(Delaware), Attn: Corporate Trust Dept., 23 White Clay Center, Route 273,
Newark, Delaware 19711. The address for the Trust is c/o Earthgrains, the
depositor for the Trust, at 8400 Maryland Avenue, St. Louis, Missouri 63105.
USE OF PROCEEDS
Unless we indicate otherwise in the Prospectus Supplement which accompanies
this Prospectus, we intend to use the proceeds of the Securities for
acquisitions, capital expenditures, repayment of short-term borrowings, working
capital and other general corporate purposes. Before we use the proceeds for
these purposes, we may invest them in short-term investments.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table shows the ratio of our earnings to fixed charges for
the periods indicated. We do not show information for periods prior to the year
ended March 26, 1996 because information reflecting what our expenses would have
been as an independent company are not available. Prior to the spin-off from
Anheuser-Busch in 1996, Anheuser-Busch provided funds to Earthgrains by
intercompany advances, without interest charges.
We have computed these ratios by dividing earnings available for fixed
charges (income before income taxes plus fixed charges) by fixed charges
(interest expense plus that portion of rental expenses deemed to represent
interest).
<TABLE>
<CAPTION>
For the Forty Weeks
Ended For the Years Ended
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March 26,
January January 5, March 30, March 31, March 25, 1996
4, 2000 1999 1999 1998 1997 (pro forma)
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<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges 4.2x (1) 4.3x (1) 3.3x (1) 5.9x 3.1x (1) (1) (2)
- ---------------------
(1) These calculations reflect certain non-recurring items. The forty weeks
ended January 4, 2000 include a $2.3 million pre-tax provision for
restructuring; the forty weeks ended January 5, 1999 include an $8.4
million pre-tax provision for restructuring and a $1.7 million pre-tax
nonoperating gain on the sale of property; fiscal 1999 includes a $28.0
million pre-tax provision for restructuring, a $2.5 million pre-tax
nonoperating gain on the sale of property and a $2.0 million one-time tax
benefit; fiscal 1997 includes a $12.7 million pre-tax provision for
restructuring; fiscal 1996 includes a $3.0 million pre-tax provision for
restructuring, a $7.8 million pre-tax charge for the Spanish work force
reduction program and a $7.6 million pre-tax charge for a legal settlement
and other non-recurring costs. If these non-recurring items were excluded,
the ratios would be 4.3x for the forty weeks ended January 4, 2000, 4.6x
for the forty weeks ended January 5, 1999, 4.3x for the year ended March
30, 1999 and 4.4x for the year ended March 25, 1997, and the deficiency
(pro forma) for the year ended March 26, 1996 would be approximately $21.6
million.
(2) As a result of the historical loss incurred and incremental pro forma
adjustments to represent Earthgrains as an independent company for this
period, earnings were less than fixed charges for the year ended March 26,
1996. The coverage deficiency was approximately $40.0 million.
</TABLE>
DESCRIPTION OF CAPITAL STOCK
Our Amended and Restated Certificate of Incorporation authorizes the
issuance of up to 150,000,000 shares of Common Stock, par value $0.01 per share,
and 10,000,000 shares of Preferred Stock, par value $0.0l per share. As of
February 1, 2000, there were 42,405,381 shares of Common Stock outstanding, and
no shares of Preferred Stock were outstanding.
The following summary is not complete and is qualified by reference to the
applicable provisions of Delaware law and our Amended and Restated Certificate
of Incorporation, Amended and Restated By-Laws and the Rights Agreement dated
February 22, 1996 between us and the Boatmen's Trust Company, as rights agent.
This is not a complete description of the important terms of Delaware law, our
Certificate of Incorporation, By-Laws or the Rights Agreement. If you would like
more information on the provisions of our Certificate of Incorporation, By-Laws
or the Rights Agreement, you may review our Amended and Restated Certificate of
Incorporation, our Amended and Restated Bylaws and our Rights Agreement, each of
which is incorporated by reference as an exhibit to the Registration Statement
we have filed with the SEC. See "Where You Can Find More Information."
Common Stock
The holders of our Common Stock are entitled to one vote for each share
they own on all matters voted on by our stockholders. The Common Stock does not
have cumulative voting rights. Subject to any preferential or other rights of
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any outstanding series of Preferred Stock that may be designated by our Board of
Directors, the holders of Common Stock will be entitled to such dividends as may
be declared by our Board, and upon liquidation will be entitled to receive their
pro rata portion of all assets of Earthgrains available for distribution to the
holders of Common Stock. All of the outstanding shares of common stock are fully
paid and nonassessable. Holders of common stock have no preemptive rights to
purchase or subscribe for any stock or other securities and there are no
conversion rights or redemption or sinking fund provisions with respect to our
Common Stock. The Transfer Agent and Registrar for our Common Stock is
ChaseMellon Shareholder Services, L.L.C.
Preferred Stock
Our Board of Directors has the authority to issue the Preferred Stock in
one or more series and to fix certain of the rights, preferences, privileges and
restrictions applicable to such series, including the annual dividend rate, the
time of payment for dividends, whether such dividends shall be cumulative or
non-cumulative, and the date or dates from which any cumulative dividends will
begin to accrue, redemption terms (including sinking fund provisions),
redemption price or prices, liquidation preferences, the extent of the voting
powers, if any, and conversion rights. The Prospectus Supplement will describe
the specific terms of any Preferred Stock.
Certain Provisions of Delaware Law, Our Certificate of Incorporation and By-Laws
General.
Delaware law, our Certificate of Incorporation and our By-Laws contain
provisions that could make it more difficult for someone to acquire control of
Earthgrains by means of a tender offer, open market purchases, a proxy contest
or otherwise.
Classified Board of Directors; Removal of Directors.
Our Certificate of Incorporation provides that we shall have at least three
and not more than 12 directors, with the exact numbers of directors to be
determined from time to time by a majority of our entire Board of Directors. We
now have seven directors. The directors are divided into three classes, as
nearly equal in number as is possible, serving staggered three-year terms. With
a classified Board of Directors, at least two annual meetings of stockholders,
instead of one, is generally required to effect a change in a majority of the
Board's members. As a result, the classification of the Board may discourage
proxy contests for the election of directors, unsolicited tender offers or
purchases of a substantial block of the Common Stock because it could prevent an
acquiror from obtaining control of the Board of Directors in a relatively short
period of time. In addition, pursuant to Delaware law and our Certificate of
Incorporation, a director may be removed only for cause and only by the
affirmative vote of holders of at least a majority of the outstanding shares of
Common Stock entitled to vote. As a result, a classified Board of Directors
delays stockholders who disagree with the policies of the Board of Directors
from replacing directors, unless they can demonstrate that the directors should
be removed for cause and obtain the requisite vote.
Filling Vacancies on the Board.
Our Certificate of Incorporation provides that, subject to the rights of
holders of any shares of Preferred Stock, vacancies on the Board of Directors
may be filled only by a majority of the Board of Directors then in office, even
if less than a quorum, or by the sole remaining director. Accordingly, the Board
could temporarily prevent any stockholder from obtaining majority representation
on the Board of Directors by enlarging the Board of Directors and filling the
new directorships with its own nominees.
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No Stockholder Action by Written Consent; Special Meetings.
Stockholder action can be taken only at an annual or special meeting of
stockholders. Stockholder action by written consent in lieu of a meeting is
prohibited. The special meetings of stockholders may be called only by the
Chairman of the Board of Directors, the President or a majority of the entire
Board of Directors. Stockholders may not call a special meeting or require that
the Board of Directors call a special meeting. Moreover, the business conducted
at any special meeting is limited to the purposes specified in the written
notice of the meeting. The provision prohibiting stockholder action by written
consent may delay consideration of a stockholder proposal until the next annual
meeting (unless a special meeting is called). These provisions prevent the
holders of a majority of the voting power of the outstanding shares of stock
entitled to vote generally in the election of directors from using the written
consent procedure to take stockholder action and from taking action by consent
without giving all the stockholders entitled to vote on a proposed action the
opportunity to participate. Moreover, a stockholder could not force stockholder
consideration of a proposal over the opposition of the Board of Directors, the
Chairman of the Board of Directors and the President by calling a special
meeting of stockholders prior to the time the Board of Directors, the Chairman
of the Board of Directors or the President believes such consideration to be
appropriate.
Advance Notice Provisions for Stockholder Nominations and Stockholder
Proposals.
Our By-Laws establish an advance notice procedure with regard to the
nomination, other than by or at the direction of the Board of Directors, of
candidates for directors and with regard to business to be brought before an
annual or special meeting of stockholders. The nomination procedure provides
that, subject to any rights of holders of Preferred Stock, only persons who are
nominated by or at the direction of the Board of Directors or by a stockholder
who has given timely written notice to the Secretary prior to the meeting at
which directors are to be elected will be eligible for election as directors.
The business procedure provides that at an annual or special meeting only such
business may be conducted as has been specified in the notice of meeting,
brought before the meeting by or at the direction of the Board of Directors or
by a stockholder who has given timely written notice to our Secretary of such
stockholder's intention to bring such business before the meeting. If the
officer presiding at a meeting determines that a person was not nominated in
accordance with the nomination procedure, the nomination shall be disregarded.
If the presiding officer determines that business was not brought before the
meeting in accordance with the business procedure, the business will not be
transacted. Although the By-Laws do not give the Board any power to approve or
disapprove stockholder nominations for the election of directors or proposals
for action, they may have the effect of precluding a contest for the election of
directors or the consideration of stockholder proposals if the proper procedures
are not followed, and of discouraging or deterring a third party from conducting
a solicitation of proxies to elect its own slate of directors or to approve its
proposal without regard to whether consideration of such nominees or proposals
might be harmful or beneficial to Earthgrains and our stockholders.
Fair Price Provision of Our Certificate of Incorporation.
Our Certificate of Incorporation requires the approval of a majority of the
outstanding shares of voting stock, excluding voting stock held by an interested
stockholder (defined generally as the beneficial owner of more than 10% of our
voting stock), in addition to any class vote required by law or otherwise, as a
condition of certain "business combination" transactions with or for the benefit
of an interested stockholder. This requirement does not apply in cases where
either certain price criteria and procedural standards are satisfied or the
transaction is approved by a majority of the Directors who are not affiliated
with an interested stockholder and who either were Directors prior to the time
the interested stockholder became an interested stockholder or were recommended
or elected by a majority of such Directors. For purposes of our Certificate of
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Incorporation, the term business combination includes mergers or consolidations
between us and an interested stockholder, transactions with an interested
stockholder involving our assets or stock (or those of our subsidiaries) and
transactions which increase an interested stockholder's percentage ownership of
our stock.
Delaware Anti-Takeover Law.
We are subject to Section 203 of the Delaware General Corporation Law
regulating corporate takeovers. Section 203, subject to certain exceptions,
prohibits a Delaware corporation from engaging in any "business combination"
with any "interested stockholder" for a period of three years following the date
that such stockholder became an interested stockholder unless:
o prior to such date, the board of directors of the corporation approved
either the business combination or the transaction that resulted in the
stockholder becoming an interested stockholder;
o upon consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced, excluding those shares owned by persons
who are directors and also officers, and employee stock plans in which
employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or
exchange offer; or
o on or subsequent to such date, the business combination is approved by
the board of directors and authorized at an annual or special meeting
of stockholders, and not by written consent, by the affirmative vote of
at least two-thirds of the outstanding voting stock that is not owned
by the interested stockholder.
In general, Section 203 defines "business combination" to include mergers
or consolidations between a Delaware corporation and an interested stockholder,
transactions with an interested stockholder involving the assets or stock of the
corporation or its majority-owned subsidiaries and transactions which increase
an interested stockholder's percentage ownership of stock. In general, Section
203 defines an "interested stockholder" as any entity or person beneficially
owning 15% or more of the outstanding voting stock of the corporation and any
entity or person affiliated with or controlling or controlled by such entity or
person.
Amendment of Certain Certificate of Incorporation and By-Law Provisions.
Under Delaware law, stockholders have the right to adopt, amend or repeal
the by-laws of a corporation. In addition, if the certificate of incorporation
so provides, the by-laws may be amended by the Board of Directors. Our
Certificate of Incorporation provides that our By-Laws may be amended by the
affirmative vote of the majority of the Board of Directors or by the affirmative
vote of the holders of at least 66 2/3% of the outstanding shares of Earthgrains
entitled to vote. Similarly, provisions set forth in our Certificate of
Incorporation relating to the election and term of directors, the removal of
directors, the prohibition of stockholder action without a meeting, calling a
stockholders' meeting, the fair price provision, the elimination of personal
liability of directors and the amendment of the our By-Laws may be amended only
by the affirmative vote of the holders of at least 66 2/3% of the outstanding
shares of Earthgrains.
Rights Agreement
Each share of our Common Stock carries with it an associated Right which is
evidenced by the certificate representing the share. Each Right entitles the
registered holder to purchase from us one one-hundredth of a share of Series A
Junior Participating Preferred Stock, par value $.0l, at a purchase price of
$100 per one-one hundredth of a share, subject to certain adjustments. Until the
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Rights become exercisable, or the earlier redemption or exchange of the rights,
we have and will issue one Right with each share of Common Stock that is newly
issued so that all shares of Common Stock will have Rights attached to them.
The Rights will not become exercisable until (i) 10 business days following
a public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of Common Stock
(the "Stock Acquisition Date"), or (ii) 10 business days (or such later date as
the Board of Directors shall determine) following the commencement of a tender
or exchange offer that would result in a person or group beneficially owning 15%
or more of such outstanding shares of Common Stock (the "Tender Offer Date")
(the earlier of the dates described in (i) and (ii) is referred to as a
"Distribution Date"). The Rights are not exercisable until a Distribution Date
and will expire at the close of business on March 1, 2006, or such later date as
our Board of Directors establishes, unless earlier redeemed by us as described
below.
Until the Distribution Date (or earlier exchange or redemption of the
Rights) the Rights will be transferred with and only with the shares of Common
Stock. Separate certificates for the rights will be issued as soon as
practicable following a Distribution Date to holders of record of the Common
Stock as of the Distribution Date. The Rights will then begin trading
separately from our Common Stock.
Each share of Series A Preferred Stock purchased upon exercise of the
Rights will be entitled to a minimum preferential quarterly dividend payment
equal to the greater of (i) $1.00 per share, and (ii) 100 times the dividend, if
any, declared per share of Common Stock. In the event of liquidation, the
holders of the Series A Preferred Stock will be entitled to a minimum
preferential liquidation payment equal to 100 times the par value per share plus
an amount equal to accrued and unpaid dividends and distributions to the date of
such payment. Each share of Series A Preferred Stock will have 100 votes and
will vote together with the Common Stock. In the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Series A Preferred Stock will be entitled to receive
100 times the amount per share of Common Stock received in such merger,
consolidation or other transaction. These rights are protected by customary
anti-dilution provisions. The shares of Series A Preferred Stock will, if
issued, be junior to any other series of Preferred Stock authorized and issued
by us, unless the terms of the series provide otherwise. Because of the nature
of the Series A Preferred Stock's dividend, liquidation and voting rights, the
value of one one-hundredth of a share of Series A Preferred Stock purchasable
upon the exercise of each Right should approximate the value of one share of
Common Stock.
In the event that any Person becomes the beneficial owner of 15% or more of
the then outstanding shares of our Common Stock (unless such acquisition is made
pursuant to a tender or exchange offer for all outstanding shares of
Earthgrains, upon terms and conditions determined by a majority of the
Continuing Directors (as defined below) to be in the best interest of
Earthgrains and our stockholders (a "Qualifying Offer")), each holder of a Right
(other than an Acquiring Person, certain related parties and transferees) will
thereafter have the right to receive, upon exercise, Common Stock (or, in
certain circumstances, cash, property or other securities of Earthgrains),
having a value equal to two times the exercise price of the Right. The Rights
are not exercisable following the occurrence of any of the events described
above until such time as the Rights are no longer redeemable by Earthgrains as
described below. Nonetheless, following the occurrence of any of the events set
forth in this paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void. For purposes of the Rights Agreement, the term
"Continuing Director" means any member of our Board of Directors who was a
member of the Board on the effective date of the distribution of our Common
Stock to the shareholders of Anheuser-Busch, and any person who is subsequently
elected to our Board if such person is recommended or approved by a majority of
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the Continuing Directors, but shall not include an Acquiring Person, or an
affiliate or associate of an Acquiring Person, or any representative of the
foregoing entities.
If at any time following the Stock Acquisition Date:
o Earthgrains is acquired in a merger or business combination transaction
in which Earthgrains is not the surviving corporation (other than a
merger consummated pursuant to a Qualifying Offer);
o Earthgrains is the surviving corporation in a consolidation or merger
pursuant to which all or part of the outstanding shares of Common Stock
are changed or exchanged for stock or other securities of any other
person or cash or any other property; or
o more than 50% of the combined assets or earning power is sold or
transferred (in each case other than certain consolidations with,
mergers with and into, or sales of assets or earning power by or to
subsidiaries of Earthgrains as specified in the Rights Agreement),
each holder of a Right (except Rights which have previously been voided as set
forth above) shall thereafter have the right to receive, upon exercise thereof,
common stock of the acquiring company having a value equal to two times the
exercise price of the Right.
In order to prevent dilution, the purchase price payable, the number and
kind of shares covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time in accordance with the terms of the
Rights Agreement. With certain exceptions, no adjustments in the purchase price
will be required until cumulative adjustments amount to at least 1% of the
purchase price.
Generally, at any time until ten business days following the Stock
Acquisition Date, Earthgrains may redeem the Rights in whole, but not in part,
at a price of $.0l per Right (payable in cash, shares of Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately upon
the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $.0l redemption price.
Until a Right is exercised, the holder of the Right will have no rights as
a stockholder of Earthgrains, including the right to vote or to receive
dividends.
Any of the provisions of the Rights Agreement may be amended by the Board
of Directors prior to the Distribution Date, other than the redemption price and
the number of one one-hundredths of a share of Series A Preferred Stock for
which a right is exercisable, and the purchase price may not be reduced. After
the Distribution Date, the provisions of the Rights Agreement may be amended by
the Board in order to cure any ambiguity, to make changes which do not adversely
affect the interests of holders of Rights or to shorten or lengthen any time
period under the Rights Agreement, except that no amendment to adjust the time
period governing redemption may be made at such time as the Rights are not
redeemable. The final expiration date of the Rights may be extended and the
Purchase Price may be increased at any time prior to a Stock Acquisition Date or
a Tender Offer Date.
The summary description of the Rights set forth above does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated by reference as an exhibit to the registration
Statement.
Indemnification Agreements and Insurance
We maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of Earthgrains, or is or was a director or officer of
Earthgrains serving at our request as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, or arising out of his or her status as such,
whether or not we would have the power or the obligation to indemnify him
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against such liability under the provisions of our Certificate of Incorporation
and By-Laws.
We have entered into indemnification agreements with each of our executive
officers and directors. The indemnification agreements require us to indemnify
the officers and directors to the fullest extent permitted by law and to advance
to the executive officers and directors all related expenses, subject to
reimbursement if it is subsequently determined that indemnification is not
permitted. We must also indemnify and advance all expenses incurred by executive
officers and directors seeking to enforce their rights under the indemnification
agreements, and cover executive officers and directors under our directors' and
officers' liability insurance. Although the form of indemnification agreement
offers substantially the same scope of coverage afforded by provisions in our
Certificate of Incorporation and By-Laws, it provides greater assurance to
directors and officers that indemnification will be available, because, as a
contract, it cannot be modified unilaterally in the future by the Board of
Directors or by the stockholders to eliminate the rights it provides. Such
unilateral action is possible with respect to the relevant provisions of the
By-Laws, at least as to prospective elimination of such rights.
DESCRIPTION OF DEBT SECURITIES
This section describes some of the general terms of the Debt Securities.
The Prospectus Supplement describes the particular terms of any Debt Securities
we are offering. The Prospectus Supplement also indicates the extent, if any, to
which these general provisions may not apply to the Debt Securities being
offered. If you would like more information on these provisions, you may review
the Indenture which is incorporated by reference as an exhibit to the
Registration Statement we have filed with the SEC. See "Where You Can Find More
Information."
We will issue the Debt Securities under an Indenture dated as of April 1,
1999 between us and The Bank of New York, as trustee. We are summarizing certain
important provisions of the Debt Securities and the Indenture. This is not a
complete description of the important terms. You should refer to the specific
terms of the Indenture for a complete statement of the terms of the Indenture
and the Debt Securities. When we use capitalized terms which we do not define
here, those terms have the meanings given in the Indenture. When we use
references to Sections, we mean Sections in the Indenture.
General
The Debt Securities will be senior unsecured obligations of Earthgrains.
The Indenture does not limit the amount of Debt Securities that we may
issue under the Indenture, nor does it limit other debt that we may issue. We
may issue the Debt Securities at various times in different series, each of
which may have different terms. If we so indicate in the Prospectus Supplement
for any series, we may treat a subsequent offering of Debt Securities as a part
of the same series as that series.
The Prospectus Supplement relating to the particular series of Debt
Securities we are offering includes the following information concerning those
Debt Securities:
o The title of the Debt Securities.
o The total principal amount of the series of Debt Securities, and
whether we may treat a subsequent offering of Debt Securities as a part
of the same series as that series.
o The date on which the principal and interest will be paid, any rights
we may have to extend the maturity of the Debt Securities and any
rights the holders may have to require payment of the Debt Securities
at any time.
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o The interest rate on the Debt Securities. We may specify a fixed rate
or a variable rate, or a rate to be determined under procedures we will
describe in the Prospectus Supplement, and the interest rate may be
subject to adjustment.
o The dates on which we will pay interest on the Debt Securities and the
regular record dates for determining the holders who are entitled to
receive the interest payments.
o Where payments on the Debt Securities will be made, if it is other than
the office mentioned under "Payments on Debt Securities; Transfers"
below.
o If applicable, the prices at which we may redeem all or a part of the
Debt Securities and the time periods during which we may make the
redemptions. The redemptions may be made under a sinking fund or
otherwise.
o Any obligation we may have to redeem, purchase or repay any of the Debt
Securities under a sinking fund or otherwise or at the option of the
holder, and the prices, time periods and other terms which would apply.
o Any additional Events of Default or covenants that will apply to the
Debt Securities.
o The amounts we would be required to pay if the maturity of the Debt
Securities is accelerated, if it is less than the principal amount.
o If we will make payments on the Debt Securities in any currency other
than U.S. dollars, the currencies in which we will make the payments.
o If applicable, the terms under which we or a holder may elect that
payments on the Debt Securities be made in a currency other than U.S.
dollars.
o If amounts payable on the Debt Securities may be determined by a
currency index, information on how the payments will be determined.
o Any other special terms that may apply to the Debt Securities.
Payments on Debt Securities; Transfers
We will make payments on the Debt Securities to the persons in whose names
the securities are registered at the close of business on the record date for
the interest payments. As explained under "Book-Entry Debt Securities" below,
The Depository Trust Company or its nominee will be the initial registered
holder unless the Prospectus Supplement provides otherwise.
Unless we indicate otherwise in the Prospectus Supplement, we will make
payments on the Debt Securities at the Trustee's office, which is now located at
101 Barclay Street, New York, New York 10286. Transfers of Debt Securities can
be made at the same offices. (Sections 202, 301, 305, 307 and 1002)
Form and Denominations
Unless we otherwise indicate in the Prospectus Supplement:
o We will issue the Debt Securities of each series only in registered
form without coupons in denominations of $1,000 and any integral
multiple thereof.
o We will not charge any fee to register any transfer or exchange of the
Debt Securities, except for taxes or other governmental charges, if
any. (Section 305)
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Certain Restrictions
Creation of Secured Indebtedness
Under the Indenture, we and our Restricted Subsidiaries (defined below) may
not create, assume, guarantee or permit to exist any indebtedness for borrowed
money which is secured by a pledge of, or a mortgage or lien on, any Principal
Plants (defined below) or on any of our Restricted Subsidiaries' capital stock,
unless we also provide equal and ratable security for the Debt Securities. A
"Restricted Subsidiary" is a subsidiary which owns or operates a Principal
Plant, unless it is incorporated or has its principal place of business outside
the United States, and any other subsidiary which we elect to treat as a
Restricted Subsidiary. A "Principal Plant" is any of our production facilities,
but does not include a facility which our Board of Directors determines shall
not be treated as a Principal Plant, as long as all such plants which are
determined not to be Principal Plants, taken together, are not of material
importance to the total business conducted by Earthgrains and our Subsidiaries.
Our Board of Directors may change any such designation of a facility as a
Principal Plant or as excluded from the category of Principal Plant at varying
times, subject to the limit described in the preceding sentence.
The restriction described in the preceding paragraph does not apply to:
o purchase money liens, including liens for indebtedness incurred in
connection with the acquisition or construction of a Principal Plant
(so long as we incur the indebtedness within 180 days after the
acquisition or completion of construction of such Principal Plant),
o liens existing on property when we acquire it,
o liens on property of a Restricted Subsidiary when it becomes a
Restricted Subsidiary,
o liens to secure the cost of development or construction of property,
or improvements of property, and which are released or satisfied
within 180 days after completion of the development or construction,
o liens in connection with the acquisition or construction of Principal
Plants or additions thereto financed by tax-exempt securities,
o liens securing indebtedness to Earthgrains or a wholly-owned
Restricted Subsidiary by a Restricted Subsidiary,
o liens existing at the date of the Indenture,
o liens on property of a corporation existing at the time such
corporation is merged with or consolidated with Earthgrains or a
Restricted Subsidiary, or at the time Earthgrains or a Restricted
Subsidiary acquires all or substantially all of the properties of such
corporation,
o liens in favor of the United States government or any U.S. state
government incurred in connection with financing the acquisition or
construction of properties pursuant to a statute or a contract with
any such governmental body,
o extensions, renewals or replacements of the liens referred to above.
(Section 1006(a))
There is an additional exception described below under "Basket Amount."
Sale-Leaseback Financings
Under the Indenture, neither we nor any Restricted Subsidiary may enter
into any sale and leaseback transaction involving a Principal Plant, except a
sale by us to a Restricted Subsidiary or a sale by a Restricted Subsidiary to us
or another Restricted Subsidiary or a lease not exceeding three years, by the
end of which we intend to discontinue use of the property, unless:
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o the net proceeds of the sale are at least equal to the fair market
value of the property, and
o within 180 days of the transfer we repay Funded Debt (defined below)
and/or make expenditures for the expansion, construction or acquisition
of a Principal Plant at least equal to the net proceeds of the sale.
(Section 1007)
There is an additional exception described below under "Basket Amount."
Basket Amount
In addition to the exceptions described above under "Creation of Secured
Indebtedness" and "Sale-Leaseback Financings" the Indenture allows additional
secured indebtedness and additional sale-leaseback financings as long as the
total of the additional indebtedness and the fair market value of the property
transferred in the additional sale-leaseback financings does not exceed 5% of
our consolidated total assets. (Sections 1006(d) and 1007(c))
Limitation on Funded Debt of Restricted Subsidiaries
We may not permit any Restricted Subsidiary to create, assume or permit to
exist any Funded Debt other than:
o Funded Debt secured by a mortgage, pledge or lien which is permitted
under the provisions described above under "Creation of Secured
Indebtedness,"
o Funded Debt owed to us or any wholly-owned Restricted Subsidiary,
o Funded Debt of a corporation existing at the time it becomes a
Restricted Subsidiary,
o Funded Debt created in connection with, or with a view to, compliance
with the requirements of any program, law, statute or regulation of any
federal, state or local governmental authority and applicable to the
Restricted Subsidiary and providing financial or tax benefits to the
Restricted Subsidiary which are not available directly to us, or not
available on as favorable terms,
o guarantees existing at the date of the Indenture, and
o other Funded Debt which, when added to outstanding secured debt and
sale-leaseback financings permitted under the provision described under
"Basket Amount" above, does not exceed 10% of our consolidated total
assets. (Section 1008)
"Funded Debt" means indebtedness for money borrowed and indebtedness
represented by notes, debentures and other similar evidences of indebtedness,
including purchase money indebtedness, having a maturity of more than twelve
months from the date of determination or having a maturity of less than twelve
months but by its terms being renewable or extendible beyond twelve months at
our option, subject only to conditions which we are then capable of fulfilling,
and guarantees of similar indebtedness of others, except that Funded Debt does
not include:
o Any indebtedness of a person held in treasury by that person; or
o Any indebtedness with respect to which sufficient money has been
deposited or set aside in trust to pay the indebtedness; or
o Certain contingent obligations in respect of indebtedness of other
persons, such as keep-well, maintenance of working capital or earnings
or similar agreements.
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Merger
We may not consolidate with or merge into any other corporation or transfer
or lease our properties and assets substantially as an entirety unless certain
conditions are met, including the assumption of the securities by any successor
corporation. (Sections 801 and 1006)
Modification or Amendment of the Indenture
We may modify and amend the Indenture if the holders of a majority in
principal amount of the outstanding Debt Securities affected by the modification
or amendment give their consent, except that no supplemental indenture may
reduce the principal amount of or interest or premium payable on any Debt
Security, change the maturity date or dates of principal, the interest payment
dates or other terms of payment, or reduce the percentage of holders necessary
to approve a modification or amendment of the Indenture, without the consent of
each holder of outstanding Debt Securities affected by the supplemental
indenture. (Section 902)
We and the Trustee may amend the Indenture without the holders' consent for
certain specified purposes, including any change which is not otherwise
inconsistent with the Indenture and which does not materially adversely affect
the holders' interests. (Section 901)
Defeasance
The Indenture includes provisions allowing defeasance of the Debt
Securities of any series. In order to defease Debt Securities, we would deposit
with the Trustee or another trustee money or U.S. Government Obligations
sufficient to make all payments on those Debt Securities. If we make a
defeasance deposit with respect to your Debt Securities, we may elect either:
o to be discharged from all our obligations on your Debt Securities,
except for our obligations to register transfers and exchanges, to
replace temporary or mutilated, destroyed, lost or stolen Debt
Securities, to maintain an office or agency in respect of the Debt
Securities and to hold moneys for payment in trust; or
o to be released from the restrictions described above relating to liens,
sale-leaseback transactions, Funded Debt of Restricted Subsidiaries and
certain other restrictions and obligations of Earthgrains contained in
the Indenture (specifically not including, however, the obligation of
Earthgrains to pay the principal of or interest on any Debt
Securities).
To establish the trust, we must deliver to the Trustee an opinion of our
counsel that the holders of the Debt Securities will not recognize gain or loss
for Federal income tax purposes as a result of the defeasance and will be
subject to Federal income tax on the same amount, in the same manner and at the
same times as would have been the case if the defeasance had not occurred.
(Article Thirteen)
Events of Default, Notice and Waiver
An Event of Default in respect of any series of Debt Securities means:
o default for 30 days in any payment of interest;
o default in payment of principal or premium when due;
o default in payment of any sinking fund amount in accordance with
the terms of such Debt Security;
o default in performance of or breach of any covenant in the Indenture
which applies to the series which continues for 60 days after notice to
Earthgrains by the Trustee or by the holders of 25% in principal amount
of the outstanding Debt Securities of the affected series;
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o default in our payment of indebtedness which we have incurred or
guaranteed exceeding $30 million or acceleration of the maturity such
indebtedness exceeding $30 million;
o certain events of bankruptcy, insolvency and reorganization; and
o any other events which are designated as Events of Default in respect
of that series. (Section 501)
If an Event of Default occurs and is continuing in respect of one or more
series, either the Trustee or the holders of 25% in principal amount of the
outstanding Debt Securities of those series may declare the principal of and
accrued interest, if any, on all securities of those series to be due and
payable. If other specified Events of Default occur and are continuing, either
the Trustee or the holders of 25% in principal amount of the outstanding Debt
Securities of all series may declare the principal of and accrued interest, if
any, on all the outstanding Debt Securities to be due and payable. (Section 501)
Within 60 days after a default in respect of any series of Debt Securities,
the Trustee must give to the holders of the Debt Securities of that series
notice of all uncured and unwaived defaults by us known to it. However, except
in the case of default in payment, the Trustee may withhold the notice if it in
good faith determines that it is in the interest of the holders. The term
"default" means, for this purpose, the occurrence of any event that, upon notice
or lapse of time, would be an Event of Default. (Section 602)
Before the Trustee is required to exercise rights under the Indenture at
the request of holders, it is entitled to be indemnified by the holders, subject
to its duty, during an Event of Default, to act with the required standard of
care. (Sections 6.1 through 6.13)
Subject to the Trustee's duty during default to act with the required
standard of care, the Trustee has the right to be indemnified by the holders of
Debt Securities issued under the Indenture before proceeding to exercise any
right or power under the Indenture at the request of the holders. (Section
603(e)) The holders of a majority in principal amount of the outstanding
securities of any series (voting as a single class) 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 upon the Trustee in respect of the
securities of that series. (Section 512)
The holders of a majority in principal amount of the outstanding securities
of all series affected by a default (voting as a single class) may, on behalf of
the holders of all that securities, waive the default except a default in
payment of the principal of or premium, if any, or interest on any security.
(Section 513) The holders of a majority in principal amount of outstanding
securities of all series entitled to the benefits thereof (voting as a single
class) may waive compliance with certain covenants under the Indenture. (Section
1011)
We will furnish to the Trustee, annually, a statement as to the fulfillment
by us of our obligations under the Indenture. (Section 1004)
Regarding the Trustee
The Bank of New York is the Trustee under the Indenture. The Bank of New
York also is a party to our credit agreement, under which it has committed to
lend us up to $30 million, and it may provide other banking services to us.
Book-Entry Debt Securities
The Prospectus Supplement will indicate whether we are issuing the related
Debt Securities as book-entry securities. Book-entry securities of a series will
be issued in the form of one or more global notes that will be deposited with
The Depository Trust Company, New York, New York, and will evidence all of the
Debt Securities of that series. This means that we will not issue certificates
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to each holder. We will issue one or more global securities to DTC, which will
keep a computerized record of its participants (for example, your broker) whose
clients have purchased the Debt Securities. The participant will then keep a
record of its clients who own the Debt Securities. Unless it is exchanged in
whole or in part for a security evidenced by individual certificates, a global
security may not be transferred, except that DTC, its nominees and their
successors may transfer a global security as a whole to one another. Beneficial
interests in global securities will be shown on, and transfers of beneficial
interests in global notes will be made only through, records maintained by DTC
and its participants. Each person owning a beneficial interest in a global
security must rely on the procedures of DTC and, if the person is not a
participant, on the procedures of the participant through which the person owns
its interest to exercise any rights of a holder of Debt Securities under the
Indenture.
The laws of some jurisdictions require that certain purchasers of
securities such as Debt Securities take physical delivery of the securities in
definitive form. These limits and laws may impair your ability to acquire or
transfer beneficial interests in the global security.
We will make payments on each series of book-entry Debt Securities to DTC
or its nominee, as the sole registered owner and holder of the global security.
Neither Earthgrains nor the Trustee nor any of their agents will be responsible
or liable for any aspect of DTC's records relating to or payments made on
account of beneficial ownership interests in a global security or for
maintaining, supervising or reviewing any of DTC's records relating to the
beneficial ownership interests.
DTC has informed us that, when it receives any payment on a global
security, it will immediately, on its book-entry registration and transfer
system, credit the accounts of participants with payments in amounts
proportionate to their beneficial interests in the global security as shown on
DTC's records. Payments by participants to you, as an owner of a beneficial
interest in the global security, will be governed by standing instructions and
customary practices (as is now the case with securities held for customer
accounts registered in "street name") and will be the sole responsibility of the
participants.
A global security representing a series will be exchanged for certificated
Debt Securities of that series if (a) DTC notifies us that it is unwilling or
unable to continue as Depositary or if DTC ceases to be a clearing agency
registered under the Securities Exchange Act of 1934 and we don't appoint a
successor within 90 days or (b) we decide that the global security shall be
exchangeable. If that occurs, we will issue Debt Securities of that series in
certificated form in exchange for the global security. An owner of a beneficial
interest in the global security then will be entitled to physical delivery of a
certificate for Debt Securities of the series equal in principal amount to that
beneficial interest and to have those Debt Securities registered in its name. We
would issue the certificates for the Debt Securities in denominations of $1,000
or any larger amount that is an integral multiple thereof, and we would issue
them in registered form only, without coupons.
DTC has advised us that it 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 under the 1934 Act. DTC was created to hold the
securities of its participants and to facilitate the clearance and settlement of
securities transactions among its participants through electronic book-entry
changes in accounts of the participants, thereby eliminating the need for
physical movement of securities certificates. DTC's participants include
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations, some of whom (and/or their representatives) own
DTC. Access to DTC's book-entry system is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly. The
rules applicable to DTC and its participants are on file with the SEC. No fees
or costs of DTC will be charged to you.
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DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue Stock Purchase Contracts, representing contracts obligating
holders to purchase from us, and us to sell to the holders, a specified number
of shares of our Common Stock at a future date or dates. The price per share of
Common Stock may be fixed at the time the Stock Purchase Contracts are issued or
may be determined by reference to a specific formula set out in the Stock
Purchase Contracts. The Stock Purchase Contracts may be issued separately or as
a part of Stock Purchase Units consisting of a Stock Purchase Contract and Debt
Securities or Trust Preferred Securities or debt obligations of third parties,
including U.S. Treasury securities, securing the holders' obligations to
purchase the Common Stock under the Stock Purchase Contracts. The Stock Purchase
Contracts may require us to make periodic payments to the holders of the Stock
Purchase Units or vice-versa, and these payments may be unsecured or prefunded
on some basis. The Stock Purchase Contracts may require holders to secure their
obligations thereunder in a specified manner.
The Prospectus Supplement will describe the terms of any Stock Purchase
Contracts or Stock Purchase Units.
DESCRIPTION OF TRUST PREFERRED SECURITIES
The Trust may issue a series of Trust Preferred Securities having the terms
described in the Prospectus Supplement relating to the offering of the Trust
Preferred Securities. The Trust Agreement authorizes the Trustees of the Trust
to issue one series of Trust Preferred Securities on behalf of the Trust. The
Trust Agreement will be qualified as an indenture under the Trust Indenture Act.
The Trust Preferred Securities will have those terms, including terms relating
to distributions, redemption, voting, liquidation rights and such other
preferred, deferred or other special rights or such restrictions, that will be
set forth in the Trust Agreement or made part of the Trust Agreement by the
Trust Indenture Act. The Prospectus Supplement relating to the Trust Preferred
Securities being offered by the Trust includes the following information
concerning the Trust Preferred Securities:
o The distinctive designation of such Trust Preferred Securities.
o The number of Trust Preferred Securities issued.
o The annual distribution rate (or method of determining such rate) for
Trust Preferred Securities and the date or dates upon which such
distributions shall be payable.
o Whether distributions on Trust Preferred Securities shall be
cumulative, and, in the case of Trust Preferred Securities having such
cumulative distribution rights, the date or dates or method determining
the date or dates from which distributions on Trust Preferred
Securities shall be cumulative.
o The amount or amounts which shall be paid out of the assets of such
trust to the holders of Trust Preferred Securities upon voluntary or
involuntary dissolution, winding-up or termination of the Trust.
o The obligation, if any, of the Trust to purchase or redeem Trust
Preferred Securities and the price or prices at which, the period or
periods within which and the terms and conditions upon which Trust
Preferred Securities issued by the Trust shall be purchased or
redeemed, in whole or in part, pursuant to such obligation.
o The voting rights, if any, of Trust Preferred Securities issued by the
Trust in addition to those required by law, including the number of
votes per Trust Preferred Security and any requirement for the approval
by the holders of Trust Preferred Securities as a condition to
specified action or amendments to the Trust Agreement.
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o Whether the Trust Preferred Securities will be issued in the form of
one or more global securities.
o Any other relevant rights, preferences, privileges, limitations or
restrictions of Trust Preferred Securities issued by the Trust
consistent with the Trust Agreement or with applicable law.
All Trust Preferred Securities offered by the Trust will be guaranteed by
Earthgrains to the extent set forth below under "Description of Trust Preferred
Guarantees." United States federal income tax considerations applicable to any
offering of Trust Preferred Securities will be described in the Prospectus
Supplement relating to that offering.
In connection with the issuance of the Trust Preferred Securities, the
Trust will issue a series of Trust Common Securities. The Trust Agreement
authorizes the Regular Trustees to issue on behalf of the Trust a series of
Trust Common Securities having such terms including those relating to
distributions, redemption, voting, liquidation rights or such restrictions as
shall be set forth in the Trust Agreement. The terms of the Trust Common
Securities will be substantially identical to the terms of the Trust Preferred
Securities issued by the Trust and the Trust Common Securities will rank pari
passu, and payments will be made thereon pro rata, with the Trust Preferred
Securities except that, upon the occurrence and during the continuation of an
event of default under the Trust Agreement, the rights of the holders of the
Trust Common Securities to payment in respect of distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the rights of the
holders of the Trust Preferred Securities. Except in certain limited
circumstances, the Trust Common Securities will also carry the right to vote and
to appoint, remove or replace any of the Earthgrains Trustees. Earthgrains will
own all of the Trust Common Securities directly or indirectly.
DESCRIPTION OF TRUST PREFERRED GUARANTEE
This section describes some of the general terms of the Trust Preferred
Guarantee that will be executed and delivered by Earthgrains for the benefit of
the holders, from time to time, of Trust Preferred Securities. The Trust
Preferred Guarantee Agreement under which the Trust Preferred Guarantee is
issued will be qualified as an indenture under the Trust Indenture Act. The
trustee under the Trust Preferred Guarantee (the "Guarantee Trustee") will be
identified in the Prospectus Supplement, and will be a financial institution not
affiliated with Earthgrains that has a combined capital and surplus of not less
than $50,000,000. The terms of the Trust Preferred Guarantee will be those set
forth in the Trust Preferred Guarantee and those made part of such Trust
Preferred Guarantee by the Trust Indenture Act. If you would like more
information on these provisions, you may review the form of the Trust Preferred
Guarantee which is filed as an exhibit to the Registration Statement we have
filed with the SEC. See "Where You Can Find More Information."
We are summarizing certain important provisions of the Trust Preferred
Guarantee. This is not a complete description of the important terms. You should
refer to the specific terms of the Trust Preferred Guarantee for a complete
statement of the terms of Trust Preferred Guarantee. When we use capitalized
terms which we do not define here, those terms have the meanings given in the
Trust Preferred Guarantee.
General
Earthgrains will unconditionally agree, to the extent set forth in the
Trust Preferred Guarantee and described below, to pay in full to the holders of
the Trust Preferred Securities issued by the Trust the Trust Preferred Guarantee
Payments (defined below), except to the extent paid by the Trust, as and when
due, regardless of any defense, right of set-off or counterclaim which the Trust
may have or assert. The "Trust Preferred Guarantee Payments" means, to the
extent not paid by the Trust:
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o any accumulated and unpaid distributions that are required to be paid
on the Trust Preferred Securities, but if and only to the extent that
in each case Earthgrains has made a payment to the Property Trustee of
interest, principal and premium, if any, on the Debt Securities held in
the Trust as trust assets;
o the redemption price, including all accrued and unpaid distributions,
but if and only to the extent that in each case Earthgrains has made a
payment to the Property Trustee of interest and principal on the Debt
Securities held in the Trust as trust assets with respect to any Trust
Preferred Securities called for redemption by the Trust; and
o upon a voluntary or involuntary dissolution, winding-up or termination
of the Trust (other than in connection with the distribution of Debt
Securities to the holders of Trust Preferred Securities or the
redemption of all of the Trust Preferred Securities), the lesser of:
o the aggregate of the liquidation amount and all accrued and unpaid
distributions on such Trust Preferred Securities to the date of
payment to the extent such the Trust has funds available therefor; or
o the amount of assets of the Trust remaining available for distribution
to holders of such Trust Preferred Securities in liquidation of the
Trust.
The obligation of Earthgrains to make a Trust Preferred Guarantee Payment may be
satisfied by direct payment of the required amounts by Earthgrains to the
holders of Trust Preferred Securities or by causing the Trust to make the
required payments.
The Trust Preferred Guarantee will be a guarantee with respect to the Trust
Preferred Securities issued by the Trust, but will not apply to any payment of
distributions, except to the extent Earthgrains has made a payment to the
Property Trustee of interest or principal on the Debt Securities held in the
Trust as trust assets. If Earthgrains does not make interest payments on Debt
Securities purchased by the Trust, the Trust will not pay distributions on the
Trust Preferred Securities issued by the Trust and will not have funds available
therefor and such payment obligation will therefore not be guaranteed by
Earthgrains under the Trust Preferred Guarantee.
The Company's obligations under the Trust Agreement for the Trust, the
Trust Preferred Guarantee issued with respect to Trust Preferred Securities
issued by the Trust, the Debt Securities purchased by the Trust and the
Indenture in the aggregate will provide a full and unconditional guarantee on a
subordinated basis by Earthgrains of payments due on the Trust Preferred
Securities issued by the Trust.
Earthgrains has also agreed to unconditionally guarantee the obligations of
the Trust with respect to the Trust Common Securities (the "Trust Common
Guarantees") to the same extent as the Trust Preferred Guarantees, except that,
upon an event of default under the Indenture, holders of Trust Preferred
Securities under the Trust Preferred Guarantees shall have priority over holders
of Trust Common Securities under the Trust Common Guarantee with respect to
distributions and payments on liquidation, redemption or otherwise.
Certain Covenants of Earthgrains
In the Trust Preferred Guarantee, Earthgrains will covenant that, so long
as any Trust Preferred Securities issued by the Trust remain outstanding, if
there shall have occurred any event that would constitute an event of default
under the Trust Preferred Guarantee or the declaration of the Trust, then
o Earthgrains shall not declare or pay any dividend on, or make any
distribution with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock and
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o Earthgrains shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities
issued by it which rank junior to the Debt Securities.
However, the Trust Preferred Guarantee will except from the foregoing any stock
dividends paid by Earthgrains, or any of its subsidiaries, where the dividend
stock is of the same class as that on which the dividend is being paid.
Modification of the Trust Preferred Guarantee; Assignment
Except with respect to any changes that do not adversely affect the rights
of holders of Trust Preferred Securities in any material respect (in which case
no vote will be required), the Trust Preferred Guarantee may be amended only
with the prior approval of the holders of not less than a majority in
liquidation amount of the outstanding Trust Preferred Securities issued by the
Trust. The manner of obtaining the approval of holders of the Trust Preferred
Securities will be set forth in the Prospectus Supplement. All guarantees and
agreements contained in the Trust Preferred Guarantee shall bind the successors,
assignees, receivers, trustees and representatives of Earthgrains and shall
inure to the benefit of the holders of the Trust Preferred Securities of the
Trust outstanding at that time.
Events of Default
An Event of Default under the Trust Preferred Guarantee will occur upon the
failure of Earthgrains to perform any of the payment or other obligations of
Earthgrains under the Trust Preferred Guarantee. The holders of a majority in
liquidation amount of the Trust Preferred Securities to which the Trust
Preferred Guarantee relates have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trust Preferred
Guarantee Trustee in respect of the Trust Preferred Guarantee or to direct the
exercise of any trust or power conferred upon the Trust Preferred Guarantee
Trustee under the Trust Preferred Guarantee.
If the Trust Preferred Guarantee Trustee fails to enforce the Trust
Preferred Guarantee, any holder of Trust Preferred Securities relating to the
Trust Preferred Guarantee may, after a period of 30 days has elapsed from such
holder's written request to the Trust Preferred Guarantee Trustee to enforce the
Trust Preferred Guarantee, institute a legal proceeding directly against
Earthgrains to enforce the Trust Preferred Guarantee Trustee's rights under such
Trust Preferred Guarantee without first instituting a legal proceeding against
the Trust, the Trust Preferred Guarantee Trustee or any other person or entity.
Earthgrains will furnish to the Trust Preferred Guarantee Trustee,
annually, a statement as to the performance by Earthgrains of certain of the
obligations of Earthgrains under the Trust Preferred Guarantee and as to any
default in such performance and an officer's certificate as to compliance with
all conditions under the Trust Preferred Guarantee.
Termination of Trust Preferred Guarantee
The Trust Preferred Guarantee will terminate as to the Trust Preferred
Securities issued by the Trust upon full payment of all distributions relating
to the Trust Preferred Securities or the redemption price of all Trust Preferred
Securities of the Trust, upon distribution of the Debt Securities held by the
Trust to the holders of the Trust Preferred Securities of the Trust or upon full
payment of the amounts payable in accordance with the declaration of the Trust
upon liquidation of the Trust. The Trust Preferred Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of Trust Preferred Securities issued by the Trust must restore payment of any
sums paid under the Trust Preferred Securities or the Trust Preferred Guarantee.
Status of the Trust Preferred Guarantee
The Trust Preferred Guarantee will constitute an unsecured obligation of
Earthgrains and will rank:
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o subordinate and junior in right of payment to all other liabilities of
Earthgrains;
o pari passu with the most senior Preferred Stock hereafter issued by
Earthgrains and with any guarantee now or hereafter entered into by
Earthgrains in respect of any Preferred Stock of any affiliate of
Earthgrains; and
o senior to Earthgrains' Common Stock.
The terms of the Trust Preferred Securities provide that each holder of Trust
Preferred Securities issued by the Trust agree to the subordination provisions
and other terms of the Trust Preferred Guarantee by acceptance of such security.
The Trust Preferred Guarantee Trustee is obligated to enforce the Trust
Preferred Guarantee on behalf of the holders of the Trust Preferred Securities
issued by the Trust. The holders of not less than a majority in aggregate
liquidation amount of the Trust Preferred Securities issued by the Trust have
the right to direct the time, method and place of conducting any proceeding for
any remedy available in respect of the Trust Preferred Guarantee, including the
giving of directions of the Trust Preferred Guarantee Trustee. If the Trust
Preferred Guarantee Trustee fails to enforce the Trust Preferred Guarantee, any
holder of Trust Preferred Securities issued by the Trust may institute a legal
proceeding directly against Earthgrains, as guarantor, to enforce its rights
under such Trust Preferred Guarantee, without first instituting a legal
proceeding against the Trust or any other person or entity.
The Trust Preferred Guarantee will constitute a guarantee of payment and
not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the guarantor to enforce its rights under the Trust
Preferred Guarantee without instituting a legal proceeding against any other
person or entity).
PLAN OF DISTRIBUTION
We may sell the Securities to or through one or more underwriters or
dealers, and also may sell the Securities directly to other purchasers or
through agents. These firms may also act as our agents in the sale of the
Securities. Only underwriters named in the Prospectus Supplement will be
considered as underwriters of the Securities offered by the Prospectus
Supplement.
We may distribute the Securities at different times in one or more
transactions. We may sell the Securities at fixed prices, which may change, at
market prices prevailing at the time of sale, at prices related to the
prevailing market prices or at negotiated prices.
In connection with the sale of the Securities, underwriters may receive
compensation from us or from purchasers of the Securities in the form of
discounts, concessions or commissions. Underwriters, dealers and agents that
participate in the distribution of the Securities may be deemed to be
underwriters. Discounts or commissions they receive and any profit on their
resale of the Securities may be considered underwriting discounts and
commissions under the Securities Act of 1933. We will identify any underwriter
or agent, and we will describe any compensation, in the Prospectus Supplement.
We may agree to indemnify underwriters, dealers and agents who participate
in the distribution of the Securities against certain liabilities, including
liabilities under the 1933 Act.
We may authorize dealers or other persons who act as our agents to solicit
offers by certain institutions to purchase the Securities from us under
contracts which provide for payment and delivery on a future date. We may enter
into these contracts with commercial and savings banks, insurance companies,
pension funds, investment companies, educational and charitable institutions and
others. If we enter into these agreements concerning any series of Securities,
we will indicate that in the Prospectus Supplement.
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In connection with an offering of the Securities, underwriters may engage
in transactions that stabilize, maintain or otherwise affect the price of the
Securities. Specifically, underwriters may over-allot in connection with the
offering, creating a syndicate short position in the Securities for their own
account. In addition, underwriters may bid for, and purchase, Securities in the
open market to cover short positions or to stabilize the price of the
Securities. Finally, underwriters may reclaim selling concessions allowed for
distributing the Securities in the offering if the underwriters repurchase
previously distributed Securities in transactions to cover short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the Securities above independent market levels.
Underwriters are not required to engage in any of these activities and may end
any of these activities at any time.
Each series of Securities (other than our Common Stock) offered will be a
new issue of securities and will have no established trading market. The
Securities (other than our Common Stock) may or may not be listed on a national
securities exchange. No assurance can be given as to the liquidity of or the
existence of trading markets for any Securities offered (other than with respect
to our Common Stock).
LEGAL OPINION
Bryan Cave LLP, St. Louis, Missouri, as our counsel, has issued an opinion
as to the legality of the Securities.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of Earthgrains for the year ended
March 30, 1999 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.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth estimated expenses in connection with the
issuance and distribution of the securities being registered, assuming one
issuance of securities:
Registration Fee .......................... $ 198,000
Printing and Engraving .................... $ 75,000 *
Trustee's Charges ........................ $ 20,000 *
Accounting Fees ........................... $ 40,000 *
Rating Agency Fees......................... $ 305,000 *
Legal Fees ................................ $ 100,000 *
Miscellaneous ............................. $ 12,000 *
------------
Total ............................... $ 750,000 *
============
* Estimated
Item 15. Indemnification of Directors and Officers.
The Delaware General Corporation Law permits the indemnification by a
Delaware corporation of its directors, officers, employees and other agents
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement in connection with specified actions, suits or proceedings,
whether civil, criminal, administrative or investigative (other than derivative
actions which are by or in the right of the corporation) if they acted in good
faith and in a manner they 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 their conduct was unlawful. A
similar standard of care is applicable in the case of derivative actions, except
that indemnification only extends to expenses (including attorneys' fees)
incurred in connection with defense or settlement of such an action and requires
court approval before there can be any indemnification where the person seeking
indemnification has been found liable to the corporation.
The Restated Certificate of Incorporation of Earthgrains provides that each
person who was or is made a party to, or is involved in, any action, suit or
proceeding by reason of the fact that he or she is or was a director or officer
of Earthgrains (or was serving at the request of Earthgrains as a director,
officer, employee or agent for another entity) while serving in such capacity
will be indemnified and held harmless by Earthgrains to the full extent
authorized or permitted by Delaware law. The Restated Certificate of
Incorporation also provides that no director will be personally liable to
Earthgrains or its stockholders for monetary damages for any breach of fiduciary
duty by such a director as a director to the full extent authorized or permitted
by Delaware law. A director, however, will be liable to the extent provided by
applicable law for:
1. any breach of the director's duty of loyalty to Earthgrains or its
stockholders;
2. acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
3. violations of Section 174 of the Delaware General Corporation Law; or
4. any transaction from which the director derived an improper personal
benefit.
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Item 16. Exhibits.
1.1 - Form of Underwriting Agreement relating to debt securities of The
Earthgrains Company (previously filed as Exhibit 4 to
Earthgrains' Registration Statement on Form S-3 (File No.
333-74267) and incorporated herein by reference).
1.2* - Form of Underwriting Agreement relating to Trust Preferred
Securities of Earthgrains Financing I and Preferred Securities
Guarantee of The Earthgrains Company.
4.1 - Amended and Restated Certificate of Incorporation of The
Earthgrains Company (dated February 26, 1996) (previously filed
as Exhibit 3.1 to Earthgrains' Annual Report on Form 10-K for the
fiscal year ended March 25, 1997 and incorporated herein by
reference).
4.2 - Certificate of Amendment of Amended and Restated Certificate of
Incorporation of The Earthgrains Company (filed November 17,
1998) (previously filed as Exhibit 3.2 to Earthgrains' Annual
Report on Form 10-K for the fiscal year ended March 30, 1999 and
incorporated herein by reference).
4.3 - By-Laws of The Earthgrains Company (amended and restated as of
dated February 22, 1996) (previously filed as Exhibit 3.2 to
Earthgrains' Annual Report on Form 10-K for the fiscal year ended
March 25, 1997 and incorporated herein by reference).
4.4 - Rights Agreement, dated as of February 22, 1996 between
Earthgrains and Boatmen's Trust Company, as Rights Agent
(previously filed as Exhibit 4.1 to Earthgrains' Annual Report on
Form 10-K for the fiscal year ended March 25, 1997 and
incorporated herein by reference)
4.5 - Form of Indenture between The Earthgrains Company and The Bank of
New York, as Trustee, relating to debt securities (previously
filed as Exhibit 4 to Earthgrains' Registration Statement on Form
S-3 (File No. 333-74267) and incorporated herein by reference).
4.6 - Certificate of Trust of Earthgrains Financing I.
4.7 - Trust Agreement of Earthgrains Financing I.
4.8* - Form of Amended and Restated Trust Agreement for Earthgrains
Financing I, with respect to the Trust Preferred Securities.
4.9* - Form of Preferred Security Certificate for Earthgrains Financing
I, with respect to the Trust Preferred Securities (included as
Exhibit A-1 to the Amended and Restated Declaration of Trust
(Exhibit 4.8)).
4.10* - Form of Preferred Securities Guarantee with respect to
Earthgrains Financing I.t.
5.1* - Opinion and consent of Bryan Cave LLP, counsel to the
Registrants, as to the validity of the Securities being
registered.
12.1 - Calculation of Ratio of Earnings to Fixed Charges.
23.1 - Consent of PricewaterhouseCoopers LLP.
23.2* - Consent of Bryan Cave LLP (included in Exhibit 5).
24.1 - Powers of Attorney executed by certain of the officers and
directors of the Registrants (included in signature pages).
24.2 - Power of Attorney for The Earthgrains Company, as Sponsor, to
sign the Registration Statement on behalf of Earthgrains
Financing I (included in Exhibit 4.7)
25.1 - Form T-1, Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of The Bank of New York, as Trustee.
25.2* - Form T-1 Statement of Eligibility for The Bank of New York,
(Delaware), as Delaware trustee under the Amended and Restated
Trust Agreement for Earthgrains Financing I.
25.3* - Form T-1 Statement of Eligibility for The Bank of New York, as
guarantee trustee under the Preferred Securities Guarantee
Agreement.
--------------------------------
* To be filed by amendment
II-2
<PAGE>
Item 17. Undertakings.
The undersigned Registrants hereby undertake:
1. To file, during any period in which offers or sales are being made of
the securities registered hereby, 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 the registration statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
the registration statement; notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement; provided, however, that the undertakings set forth in subparagraphs
(i) and (ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Securities and Exchange Commission by the
Registrant pursuant to Section 13 or 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.
4. That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
Registrants certify that they have reasonable grounds to believe that they meet
all the requirements for filing on Form S-3 and have duly caused this
registration statement to be signed on their behalf by the undersigned,
thereunto duly authorized, in the County of St. Louis, State of Missouri, on
April 10, 2000.
THE EARTHGRAINS COMPANY EARTHGRAINS FINANCING I
By: THE EARTHGRAINS COMPANY, as Depositor
By: /S/ Mark H. Krieger By: /S/ Mark H. Krieger
---------------------------------- --------------------------------------
Mark H. Krieger Mark H. Krieger
Vice President and Chief Financial Vice President and Chief Financial
Officer Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Mark H. Krieger, Joseph M. Noelker and Michael A. Salamone, and each of them,
his or her true and lawful attorneys-in-fact and agents, with full power of
substitution, to sign any amendments (including post-effective amendments) and
supplements to this Registration Statement (and any additional Registration
Statement related thereto permitted by Rule 462(b) promulgated under the
Securities Act of 1933), and to file such amendments and any related documents
with the Securities and Exchange Commission, and ratifies and confirms the
actions that any such attorney-in-fact and agents, or their substitutes, may
lawfully do or cause to be done under this power of attorney.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated:
<TABLE>
<S> <C> <C>
Chairman of the Board, Chief
/S/ Barry H. Beracha Executive Officer and Director April 10, 2000
- ------------------------------------------- (Principal Executive Officer)
(Barry H. Beracha)
/S/ Mark H. Krieger Vice President and Chief Financial
- ------------------------------------------- Officer (Principal Financial
(Mark H. Krieger) Officer) April 10, 2000
/S/ Virgil H. Rehkemper
- ------------------------------------------- Vice President and Controller
(Virgil H. Rehkemper) (Principal Accounting Officer) April 10, 2000
/S/ J. Joe Adorjan
- -------------------------------------------
(J. Joe Adorjan) Director April 10, 2000
/S/ Peter F. Benoist Director April 10, 2000
- -------------------------------------------
(Peter F. Benoist)
/S/ Maxine K. Clark
- -------------------------------------------
(Maxine K. Clark) Director April 10, 2000
/S/ Jaime Inglesias
- -------------------------------------------
(Jaime Inglesias) Director April 10, 2000
/S/ Jerry E. Ritter
- -------------------------------------------
(Jerry E. Ritter) Director April 10, 2000
/S/ William E. Stevens
- -------------------------------------------
(William E. Stevens) Director April 10, 2000
</TABLE>
II-1
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit
- ------- ----------------------
1.1 - Form of Underwriting Agreement relating to debt securities of The
Earthgrains Company (previously filed as Exhibit 4 to
Earthgrains' Registration Statement on Form S-3 (File No.
333-74267) and incorporated herein by reference).
1.2* - Form of Underwriting Agreement relating to Trust Preferred
Securities of Earthgrains Financing I and Preferred Securities
Guarantee of The Earthgrains Company.
4.1 - Amended and Restated Certificate of Incorporation of The
Earthgrains Company (dated February 26, 1996) (previously filed
as Exhibit 3.1 to Earthgrains' Annual Report on Form 10-K for the
fiscal year ended March 25, 1997 and incorporated herein by
reference).
4.2 - Certificate of Amendment of Amended and Restated Certificate of
Incorporation of The Earthgrains Company (filed November 17,
1998) (previously filed as Exhibit 3.2 to Earthgrains' Annual
Report on Form 10-K for the fiscal year ended March 30, 1999 and
incorporated herein by reference).
4.3 - By-Laws of The Earthgrains Company (amended and restated as of
dated February 22, 1996) (previously filed as Exhibit 3.2 to
Earthgrains' Annual Report on Form 10-K for the fiscal year ended
March 25, 1997 and incorporated herein by reference).
4.4 - Rights Agreement, dated as of February 22, 1996 between
Earthgrains and Boatmen's Trust Company, as Rights Agent
(previously filed as Exhibit 4.1 to Earthgrains' Annual Report on
Form 10-K for the fiscal year ended March 25, 1997 and
incorporated herein by reference)
4.5 - Form of Indenture between The Earthgrains Company and The Bank of
New York, as Trustee, relating to debt securities (previously
filed as Exhibit 4 to Earthgrains' Registration Statement on Form
S-3 (File No. 333-74267) and incorporated herein by reference).
4.6 - Certificate of Trust of Earthgrains Financing I.
4.7 - Trust Agreement of Earthgrains Financing I.
4.8* - Form of Amended and Restated Trust Agreement for Earthgrains
Financing I, with respect to the Trust Preferred Securities.
4.9* - Form of Preferred Security Certificate for Earthgrains Financing
I, with respect to the Trust Preferred Securities (included as
Exhibit A-1 to the Amended and Restated Declaration of Trust
(Exhibit 4.8)).
4.10* - Form of Preferred Securities Guarantee with respect to
Earthgrains Financing I.t.
5.1* - Opinion and consent of Bryan Cave LLP, counsel to the
Registrants, as to the validity of the Securities being
registered.
12.1 - Calculation of Ratio of Earnings to Fixed Charges.
23.1 - Consent of PricewaterhouseCoopers LLP.
23.2* - Consent of Bryan Cave LLP (included in Exhibit 5).
24.1 - Powers of Attorney executed by certain of the officers and
directors of the Registrants (included in signature pages).
24.2 - Power of Attorney for The Earthgrains Company, as Sponsor, to
sign the Registration Statement on behalf of Earthgrains
Financing I (included in Exhibit 4.7)
25.1 - Form T-1, Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of The Bank of New York, as Trustee.
25.2* - Form T-1 Statement of Eligibility for The Bank of New York,
(Delaware), as Delaware trustee under the Amended and Restated
Trust Agreement for Earthgrains Financing I.
25.3* - Form T-1 Statement of Eligibility for The Bank of New York, as
guarantee trustee under the Preferred Securities Guarantee
Agreement.
--------------------------------
* To be filed by amendment
II-2
Exhibit 4.6
CERTIFICATE OF TRUST
OF
EARTHGRAINS FINANCING I
This Certificate of Trust of Earthgrains Financing I (the
"Trust") is being executed and filed on behalf of the Trust by the undersigned,
as trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. Section 3801 et seq.) (the "Act").
1. Name. The name of the business trust formed hereby
is Earthgrains Financing I.
2. Delaware Trustee. The name and business address of the
trustee of the Trust in the State of Delaware is The Bank of New York
(Delaware), White Clay Center, Route 273, Newark, DE 19711.
3. Effective Date. This Certificate of Trust shall be
effective upon filing.
In witness whereof, the undersigned have duly executed this
Certificate of Trust in accordance with Section 3811(a)(1) of the Act.
The Bank of New York (Delaware),
as Delaware trustee
By: /S/ Michael Santino
-----------------------------
Michael Santino
Senior Vice President
/S/ Michael A. Salamone
--------------------------------
Michael A. Salamone
Trustee
/S/ Mark H. Krieger
--------------------------------
Mark H. Krieger
Trustee
Exhibit 4.7
TRUST AGREEMENT
OF
EARTHGRAINS FINANCING I
THIS TRUST AGREEMENT (the "Trust Agreement") is made as of
April 10, 2000, by and among The Earthgrains Company, as Depositor (the
"Depositor"), and the individual trustees identified on the signature page
hereto (the "Trustees").
The Trustees hereby agree as follows:
1. The trust created hereby (the "Trust") shall be known as
"Earthgrains Financing I" in which name the Trustees or the Depositor, to the
extent provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets
over to the Trust the sum of $10. The Trustees hereby declare that they will
hold the trust estate in trust for such persons as are or may become entitled to
a beneficial interest in the trust estate. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under Chapter
38 of Title 12 of the Delaware Code, 12 Del. Code ss. 3801 et seq. (the
"Business Trust Act"), and that this document constitute the governing
instrument of the Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust in the office of the Secretary of State
of the State of Delaware in the form attached hereto.
3. The Depositor and the Trustees intend to enter into an
amended and restated Trust Agreement, satisfactory to each such party, to
provide for the contemplated operation of the Trust created hereby and the
Preferred or Capital Securities and Common Securities referred to therein. Prior
to the execution and delivery of such amended and restated Trust Agreement, the
Trustees shall not have any duty or obligation hereunder or with respect to the
trust estate, except as required by law or as may be necessary to obtain prior
to such execution and delivery any licenses, consents or approvals required by
applicable law or otherwise. Notwithstanding the foregoing, the Trustees may
take all actions deemed proper as are necessary to effect the transactions
contemplated herein.
4. The Depositor, as Depositor of the Trust, is hereby
authorized, in its discretion, (i) to prepare and file with the Securities and
Exchange Commission (the "Commission") and to execute, in the case of the 1933
Act Registration Statement and 1934 Act Registration Statement (as herein
defined), on behalf of the Trust, (a) a Registration Statement (the "1933 Act
Registration Statement"), including all pre-effective and post-effective
amendments thereto, relating to the registration under the Securities Act of
1933, as amended (the "1933 Act"),of the Preferred or Capital Securities of the
Trust, (b) any preliminary prospectus or prospectus or supplement thereto
relating to the Preferred or Capital Securities of the Trust required to be
filed pursuant to the 1933 Act, and (c) a Registration Statement on Form 8-A or
other appropriate form (the "1934 Act Registration Statement"), including all
pre-effective and post-effective amendments thereto, relating to the
registration of the Preferred or Capital Securities of the Trust under the
Securities Exchange Act of 1934, as amended; (ii) if and at such time as
<PAGE>
determined by the Depositor, to file with the New York Stock Exchange or other
exchange, or the National Association of Securities Dealers ("NASD"), and
execute on behalf of the Trust a listing application and all other applications,
statements, certificates, agreements and other instruments as shall be necessary
or desirable to cause the Preferred or Capital Securities of the Trust to be
listed on the New York Stock Exchange or such other exchange, or the NASD's
Nasdaq National Market; (iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents that shall be
necessary or desirable to register the Preferred or Capital Securities of the
Trust under the securities or "Blue Sky" laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or desirable; (iv) to
execute and deliver letters or documents to, or instruments for filing with, a
depository relating to the Preferred or Capital Securities of the Trust; and (v)
to execute, deliver and perform on behalf of the Trust an underwriting agreement
with one or more underwriters relating to the offering of the Preferred or
Capital Securities of the Trust.
In the event that any filing referred to in this Section 4 is
required by the rules and regulations of the Commission, the New York Stock
Exchange or other exchange, NASD, or state securities or "Blue Sky" laws to be
executed on behalf of the Trust by the Trustees, the Trustees, in their capacity
as trustees of the Trust, are hereby authorized to join in any such filing and
to execute on behalf of the Trust any and all of the foregoing, it being
understood that the Trustees, in their capacity as trustees of the Trust, shall
not be required to join in any such filing or execute on behalf of the Trust any
such document unless required by the rules and regulations of the Commission,
the New York Stock Exchange or other exchange, NASD, or state securities or
"Blue Sky" laws.
5. This Trust Agreement may be executed in one or more
counterparts.
6. The number of Trustees initially shall be three (3) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by a majority of the Trustees, which
may increase or decrease the number of Trustees; provided, however, that to the
extent required by the Business Trust Act, one trustee of the Trust shall either
be a natural person who is a resident of the State of Delaware or, if not a
natural person, an entity which has its principal place of business in the State
of Delaware. Subject to the foregoing, the Depositor is entitled to appoint or
remove without cause any trustee of the Trust at any time. Any trustee of the
Trust may resign upon thirty days' prior notice to the Depositor.
7. The Depositor hereby agrees to (i) reimburse the Trustees
for all reasonable expenses (including reasonable fees and expenses of counsel
and other experts) and (ii) indemnify, defend and hold harmless the Trustees and
any of the officers, directors, employees and agents of the Trustees (the
"Indemnified Persons") from and against any and all losses, damages,
liabilities, claims, actions, suits, costs, expenses, disbursements (including
the reasonable fees and expenses of counsel), taxes and penalties of any kind
and nature whatsoever (collectively, "Expenses"), to the extent that such
Expenses arise out of or are imposed upon or asserted at any time against such
Indemnified Persons with respect to the performance of this Trust Agreement, the
creation,
2
<PAGE>
operation or termination of the Trust or the transactions contemplated hereby;
provided, however, that the Depositor shall not be required to indemnify any
Indemnified Person for any Expenses which are a result of the willful
misconduct, bad faith or gross negligence of such Indemnified Person.
8. This Trust Agreement and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware and all rights and remedies shall be governed by such laws
without regard to the principles of conflict of laws.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.
THE BANK OF NEW YORK (DELAWARE),
as Delaware trustee
By: /S/ Michael Santino
----------------------------
Michael Santino, Senior Vice
President
/S/ Michael A. Salamone
--------------------------------
Michael A. Salamone, as Trustee
/S/ Mark H. Krieger
--------------------------------
Mark H. Krieger, as Trustee
3
Exhibit 12.1
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows the ratio of earnings to fixed charges for the periods
indicated. We do not show information for periods prior to the year ended March
26, 1996 because information reflecting what our expenses would have been as an
independent company are not available. Prior to the spin-off from Anheuser-Busch
in 1996, Anheuser-Busch provided funds to Earthgrains by intercompany advances,
without interest charges. We have computed these ratios by dividing earnings
available for fixed charges (income before income taxes plus fixed charges) by
fixed charges (interest expense plus that portion of rental expenses deemed to
represent interest).
Computation of The Earthgrains Company Ratio of Earnings to Fixed Charges -
Historical
(Dollars in millions, except ratios)
<TABLE>
<CAPTION>
Forty Weeks Ended For the Years Ended
--------------------------------- --------------------------------------------------------------
March 26, 1996
January 4, 2000 January 5, 1999 March 30, 1999 March 31, 1998 March 25, 1997 (pro forma)
--------------- --------------- -------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Earnings before income taxes 75.8 62.7 59.9 62.0 22.7 (39.0)
Capitalized interest (0.7) (0.7) (1.0) (0.7) (0.8) (1.0)
----- ----- ----- ------ ------ -----
Total 75.1 62.0 58.9 61.3 21.9 (40.0)
===== ===== ===== ===== ===== =====
Fixed Charges:
Interest Expense 18.9 15.1 19.5 8.2 6.3 7.0
Debt Issuance Expense 0.0 0.0 0.0 0.0 0.0 0.5
1/3 of Rent Expense 4.7 4.0 5.7 4.3 3.9 4.9
----- ----- ----- ----- ----- -----
Total 23.6 19.1 25.2 12.5 10.2 12.4
===== ===== ===== ===== ===== =====
Earnings before income taxes
and Fixed Charges 98.7 81.1 84.1 73.8 32.1 (27.6)
===== ===== ===== ===== ===== =====
Ratio of Earnings to Fixed Charges 4.2 (1) 4.3(1) 3.3(1) 5.9 3.1(1) (1)(2)
===== ===== ===== ===== ===== =====
</TABLE>
(1) These calculations reflect certain non-recurring items. The forty weeks
ended January 4, 2000 include a $2.3 million pre-tax provision for
restructuring; the forty weeks ended January 5, 1999 include an $8.4
million pre-tax provision for restructuring and a $1.7 million pre-tax
nonoperating gain on the sale of property; fiscal 1999 includes a $28.0
million pre-tax provision for restructuring, a $2.5 million pre-tax
nonoperating gain on the sale of property and a $2.0 million one-time tax
benefit; fiscal 1997 includes a $12.7 million pre-tax provision for
restructuring; fiscal 1996 includes a $3.0 million pre-tax provision for
restructuring, a $7.8 million pre-tax charge for the Spanish work force
reduction program and a $7.6 million pre-tax charge for a legal settlement
and other non-recurring costs. If these non-recurring items were excluded,
the ratios would be 4.3x for the forty weeks ended January 4, 2000, 4.6x
for the forty weeks ended January 5, 1999, 4.3x for the year ended March
30, 1999 and 4.4x for the year ended March 25, 1997, and the deficiency
(pro forma) for the year ended March 26, 1996 would be approximately $21.6
million.
(2) As a result of the historical loss incurred and incremental pro forma
adjustments to represent Earthgrains as an independent company for this
period, earnings were less than fixed charges for the year ended March 26,
1996. The coverage deficiency was approximately $40.0 million.
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
April 29, 1999 relating to the financial statements, which appears in the 1999
Annual Report to Shareholders, which is incorporated by reference in The
Earthgrains Company's Annual Report on Form 10-K for the year ended March 30,
1999. We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/S/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
St. Louis, Missouri
April 10, 2000
Exhibit 25.1
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
---------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------------
THE EARTHGRAINS COMPANY
(Exact name of obligor as specified in its charter)
Delaware 36-3201045
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
8400 Maryland Avenue
St. Louis, Missouri 63105
(Address of principal executive offices) (Zip code)
---------------------------
Debt Securities
(Title of the indenture securities)
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
===================================== =======================================
Name Address
===================================== =======================================
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006,
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4
to Form T-1 filed with Registration Statement No. 33-31019.)
- 2 -
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration
Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
- 3 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 7th day of April, 2000.
THE BANK OF NEW YORK
By: /s/ MARY BETH A. LEWICKI
------------------------------
Name: MARY BECK A. LEWICKI
Title: VICE PRESIDENT
- 4 -
<PAGE>
Exhibit 7 to Form T-1
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1999, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
ASSETS Dollar Amounts
In Thousands
Cash and balances due from depository
institutions:
Noninterest-bearing balances and currency and coin.. $3,247,576
Interest-bearing balances........................... 6,207,543
Securities:
Held-to-maturity securities......................... 827,248
Available-for-sale securities....................... 5,092,464
Federal funds sold and Securities purchased 5,306,926
under agreements to resell..........................
Loans and lease financing receivables:
Loans and leases, net of unearned
income..................................37,734,000
LESS: Allowance for loan and
lease losses...............................575,224
LESS: Allocated transfer risk
reserve.....................................13,278
Loans and leases, net of unearned income, 37,145,498
allowance, and reserve............................
Trading Assets......................................... 8,573,870
Premises and fixed assets (including 723,214
capitalized leases..................................
Other real estate owned................................ 10,962
Investments in unconsolidated subsidiaries 215,006
and associated companies............................
Customers' liability to this bank on 682,590
acceptances outstanding.............................
Intangible assets...................................... 1,219,736
Other assets........................................... 2,542,157
----------
Total assets........................................... $71,794,790
===========
<PAGE>
LIABILITIES
Deposits:
In domestic offices................................. $27,551,017
Noninterest-bearing.......................11,354,172
Interest-bearing..........................16,196,845
In foreign offices, Edge and Agreement 27,950,004
subsidiaries, and IBFs............................
Noninterest-bearing..........................639,410
Interest-bearing..........................27,310,594
Federal funds purchased and Securities sold under 1,349,708
agreements to repurchase............................
Demand notes issued to the U.S.Treasury................ 300,000
Trading liabilities.................................... 2,339,554
Other borrowed money:
With remaining maturity of one year or 638,106
less..............................................
With remaining maturity of more than one 449
year through three years..........................
With remaining maturity of more than 31,080
three years.......................................
Bank's liability on acceptances executed and 684,185
outstanding.........................................
Subordinated notes and debentures...................... 1,552,000
Other liabilities...................................... 3,704,252
----------
Total liabilities...................................... 66,100,355
===========
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 866,947
Undivided profits and capital reserves................. 3,765,900
Net unrealized holding gains (losses) on ( 44,599)
available-for-sale securities.......................
Cumulative foreign currency translation
adjustments......................................... ( 29,097)
Total equity capital................................... 5,694,435
----------
Total liabilities and equity capital................... $71,794,790
===========
<PAGE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
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Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi Directors
Alan R. Griffith
Gerald L. Hassell
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