<PAGE>
Filed pursuant to Rule 424(b)(2)
Registration No. 33-99322
PROSPECTUS SUPPLEMENT DATED JANUARY 15, 1998
(TO PROSPECTUS DATED DECEMBER 20, 1995)
$1,000,000,000
[LOGO]
NABISCO, INC.
$400,000,000 6% NOTES DUE FEBRUARY 15, 2011, PUTABLE/CALLABLE FEBRUARY 15, 2001
$300,000,000 6 1/8% NOTES DUE FEBRUARY 1, 2033, PUTABLE/CALLABLE FEBRUARY 1,
2003
$300,000,000 6 3/8% NOTES DUE FEBRUARY 1, 2035, PUTABLE/CALLABLE
FEBRUARY 1, 2005
Nabisco, Inc., (the "Company"), will issue the 6% Notes due February 15,
2011 (the "6% Notes"), the 6 1/8% Notes due February 1, 2033 (the "6 1/8%
Notes") and the 6 3/8% Notes due February 1, 2035 (the "6 3/8% Notes") (the 6%
Notes, the 6 1/8% Notes and the 6 3/8% Notes are individually referred to herein
as a "series of Notes" and are collectively referred to as the "Notes"). With
respect to the 6% Notes, interest on such Notes is payable semi-annually on
February 15 and August 15 of each year, commencing August 15, 1998 and, with
respect to the 6 1/8% Notes and the 6 3/8% Notes, interest on such Notes is
payable on February 1 and August 1 of each year, commencing August 1, 1998.
The 6% Notes, the 6 1/8% Notes and the 6 3/8% Notes will be subject to
mandatory redemption from the existing holders on February 15, 2001, February 1,
2003 and February 1, 2005, respectively, through either (i) the exercise of the
applicable Call Option (as defined herein) by the applicable Callholder (as
defined below) or (ii) in the event the applicable Callholder does not purchase
the corresponding series of Notes pursuant to its Call Option, the automatic
exercise of the applicable Put Option (as defined herein) by Citibank, N.A., as
Trustee (the "Indenture Trustee"), on behalf of the holders. The "Callholder"
with respect to the 6% Notes will be Morgan Stanley & Co. Incorporated and with
respect to the 6 1/8% Notes and the 6 3/8% Notes will be Union Bank of
Switzerland, London branch. If the applicable Callholder, or any successor or
assign thereto, purchases the Notes pursuant to the applicable Call Option, the
6% Notes, the 6 1/8% Notes and the 6 3/8% Notes will be purchased by the
applicable Callholder from the holders thereof on February 15, 2001, February 1,
2003 and February 1, 2005,
CONTINUED ON NEXT PAGE
SEE "RISK FACTORS" BEGINNING ON PAGE S-3 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE NOTES OFFERED
HEREBY.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
<TABLE>
<CAPTION>
PRICE TO THE UNDERWRITING PROCEEDS TO THE
PUBLIC(1) DISCOUNT(2)(3) COMPANY(4)(5)
-------------------- -------------------------- ----------------------------
<S> <C> <C> <C>
6% Notes................................ 99.975% 0.350% 102.9075%
Total................................... $399,900,000 $1,400,000 $411,630,000
6 1/8% Notes............................ 99.576% 0.600% 103.846%
Total................................... $298,728,000 $1,800,000 $311,538,000
6 3/8% Notes............................ 99.696% 0.625% 103.721%
Total................................... $299,088,000 $1,875,000 $311,163,000
</TABLE>
- ------------------------------
(1) Plus accrued interest, if any, from January 22, 1998.
(2) The Company has agreed to indemnify the several Underwriters against certain
liabilities under the Securities Act of 1933. See "Underwriting."
(3) See "Underwriting".
(4) Before deduction of expenses estimated to be $600,000.
(5) Includes consideration for the Notes and compensation for the Call Options.
The Notes are offered severally by the Underwriters, as specified herein,
subject to prior sale and subject to the Underwriters' right to reject orders in
whole or in part. It is expected that the Notes will be ready for delivery in
book-entry form through the facilities of DTC, on or about January 22, 1998.
------------------------------
The Managers for the Offering of the 6% Notes are:
MORGAN STANLEY DEAN WITTER UBS SECURITIES
ABN AMRO CHICAGO CORPORATION LEHMAN BROTHERS
BANCAMERICA ROBERTSON STEPHENS CITICORP SECURITIES, INC.
The Managers for the Offering of the 6 1/8% Notes are:
UBS SECURITIES MORGAN STANLEY DEAN WITTER
DEUTSCHE MORGAN GRENFELL SALOMON SMITH BARNEY
BNY CAPITAL MARKETS, INC. BT ALEX. BROWN
The Managers for the Offering of the 6 3/8% Notes are:
UBS SECURITIES MORGAN STANLEY DEAN WITTER
CHASE SECURITIES INC. MERRILL LYNCH & CO.
CIBC OPPENHEIMER CREDIT LYONNAIS SECURITIES (USA) INC.
The date of this Prospectus Supplement is January 15, 1998.
<PAGE>
respectively (each, a "Coupon Reset Date") at 100% of the entire principal
amount thereof and the interest rate on such series of Notes will be reset (with
respect to each series of Notes, a "Coupon Reset Rate") by the applicable
Calculation Agent (as defined herein) effective on the applicable Coupon Reset
Date pursuant to the applicable Coupon Reset Process (as defined herein). If the
applicable Callholder for any reason fails to purchase a series of Notes on the
applicable Coupon Reset Date, the Company will be required to repurchase the
principal amount of the 6% Notes, the 6 1/8% Notes or the 6 3/8% Notes, as the
case may be, from the holders thereof on the applicable Coupon Reset Date at
100% of the principal amount thereof (with respect to each series of Notes, a
"Put Option"). See "Description of the Notes-- Call Option; Put Option."
Ownership of the Notes will be maintained in book-entry form by or through The
Depository Trust Company ("DTC"). Interests in the Notes will be shown on, and
transfers thereof will be effected only through, records maintained by DTC and
its participants.
S-2
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES. SUCH
TRANSACTIONS MAY INCLUDE THE PURCHASE OF NOTES TO STABILIZE THEIR PRICE, THE
PURCHASE OF NOTES TO COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF
PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
USE OF PROCEEDS
The net proceeds to the Company from the issuance of the Notes will be used
for general corporate purposes, including the refinancing of commercial paper
which had previously been issued for general corporate purposes. As of December
31, 1997, the Company's commercial paper bore an average interest rate of 6.17%.
RISK FACTORS
ABSENCE OF PUBLIC MARKET FOR THE NOTES
The Notes will not be listed on a stock exchange. There will be no market
for the Notes prior to their issuance, and there can be no assurance that a
secondary market will develop or, if it does develop, that it will continue to
provide holders of the Notes with liquidity of investment or will continue for
the life of such Notes.
GLOBAL SECURITIES
The Notes will initially be represented by global securities deposited with,
or on behalf of, DTC and will not be issued as individual definitive securities
to their purchasers. Consequently, unless and until such individual definitive
securities are issued, such purchasers will not be recognized as holders of the
Notes under the Indenture (as defined below) and DTC will be the sole holder for
all purposes under the Indenture and the Notes. Hence, until such time, such
purchasers will only be able to exercise the rights of holders of the Notes
indirectly through DTC and its respective participating organizations and, as a
result, the ability of any such purchaser to pledge the Notes to persons or
entities that do not participate in DTC's system, or to otherwise act with
respect to such Notes, may be limited. See "Description of Securities-- Global
Securities" in the accompanying Prospectus.
THE COMPANY'S RELATIONSHIP WITH AFFILIATES
CONTROL BY RJRN. RJR Nabisco, Inc. ("RJRN"), a wholly-owned subsidiary of
RJR Nabisco Holdings Corp. ("RJRN Holdings"), owns 100% of the outstanding Class
B Common Stock, par value $.01 per share (the "Class B Common Stock"), of
Nabisco Holdings Corp. ("Nabisco Holdings"). The outstanding Class B Common
Stock represents approximately 97.7% of the combined voting power of all of the
outstanding Common Stock of Nabisco Holdings (the "Common Stock") as of December
31, 1997. The Company is a wholly-owned direct subsidiary of Nabisco Holdings
and is therefore controlled by Nabisco Holdings. For as long as RJRN or RJRN
Holdings continues to own beneficially shares of Common Stock representing more
than 50% of the combined voting power of the Common Stock, RJRN Holdings,
through RJRN or directly, will be able to direct the election of all of the
members of Nabisco Holdings' board of directors and exercise a controlling
influence over the business and affairs of Nabisco Holdings and its subsidiaries
(including the Company), including any determinations with respect to mergers or
other business combinations, the acquisition or disposition of assets, the
incurrence of indebtedness and the issuance of equity securities. Similarly,
RJRN and RJRN Holdings will have the power to prevent a change in control of
Nabisco Holdings and its subsidiaries. RJRN Holdings has advised Nabisco
Holdings that its current intent is to continue to hold all of the Class B
Common Stock beneficially owned by it, and the board of directors of RJRN
Holdings has adopted resolutions setting forth RJRN Holdings' intention
S-3
<PAGE>
not to distribute the Class B Common Stock prior to December 31, 1998 if such
distribution would cause the ratings of the senior indebtedness of RJRN to be
reduced from investment grade to non-investment grade or if, after giving effect
to such distribution, any publicly held senior debt of Nabisco Holdings would
not be rated investment grade. However, the board of directors of Nabisco
Holdings is aware that the board of directors of RJRN Holdings is committed to a
spin-off of Nabisco Holdings at the appropriate time. RJRN Holdings has no
agreement with Nabisco Holdings not to sell or distribute such shares, and there
can be no assurance concerning the period of time during which RJRN Holdings
will maintain its beneficial ownership of Common Stock. Beneficial ownership of
at least 80% of the total voting power and value of Common Stock is required in
order for RJRN Holdings to continue to include Nabisco Holdings in its
consolidated group for federal income tax purposes, and ownership of at least
80% of the total voting power and 80% of each class of nonvoting capital stock
is required in order for RJRN Holdings to be able to effect a tax-free spinoff
of Nabisco Holdings.
JOINT AND SEVERAL LIABILITY. Each member of a consolidated group for
federal income tax purposes is jointly and severally liable for the federal
income tax liability of each other member of the consolidated group. For benefit
plan purposes, Nabisco Holdings and its subsidiaries are part of RJRN Holdings'
controlled group, which includes RJRN Holdings and its other subsidiaries. Under
ERISA and federal income tax law, each member of the controlled group is jointly
and severally liable for the funding and termination liabilities of RJRN
Holdings' and its subsidiaries' tax-qualified defined benefit retirement plans
as well as certain plan-related taxes. Accordingly, Nabisco Holdings and its
subsidiaries could be liable under such provisions in the event any such
liability is incurred, and not discharged, by any other member of RJRN Holdings'
consolidated or controlled group. In addition, by virtue of its controlling
beneficial ownership in Nabisco Holdings and the terms of the tax-sharing
agreement entered into between Nabisco Holdings and RJRN Holdings, RJRN
effectively controls all of the Company's tax decisions. Nabisco Holdings and
RJRN Holdings have agreed to indemnify each other for their respective federal
income tax obligations under such tax-sharing arrangements.
INTERCOMPANY AGREEMENTS. RJRN or RJRN Holdings and Nabisco Holdings have
also entered into certain intercompany agreements, including services and
corporate agreements. Under the corporate agreement between Nabisco Holdings and
RJRN Holdings, Nabisco Holdings and its subsidiaries may not take any action or
enter into any commitment or agreement that may reasonably be anticipated to
result in a contravention (or an event of default) under RJRN's credit or other
agreements or under any law, regulation or court order applicable to RJRN
Holdings or RJRN.
CLAIMS OF OTHER CREDITORS
Each holder of the Notes will be the holder of unsubordinated and unsecured
obligations of the Company ranking PARI PASSU with all existing and future
unsubordinated and unsecured obligations of the Company. The claims of each
holder of a Note will be subordinated to the claims of holders of the debt of
the Company's subsidiaries with respect to the assets of such subsidiaries. In
addition, each holder of the Notes will be subordinated to the claims of holders
of secured debt of the Company with respect to the collateral securing such
claims, and claims of the Company as the holder of unsecured intercompany debt
will be similarly effectively subordinated to the claims of holders of the
secured debt of its subsidiaries. As of September 30, 1997, the Company had
approximately $56,000,000 of secured debt and approximately $3,213,000,000 of
unsecured debt ranking PARI PASSU with the Notes, after giving PRO FORMA effect
to the Company's subsequent repurchase of debt securities with an aggregate
principal amount of approximately $973,000,000 pursuant to a tender offer, the
issuance of approximately $1,034,000,000 in short term debt and the issuance of
the Notes (collectively, the "Pro Forma Events"). As of such date, the Company's
subsidiaries had approximately $402,000,000 of debt (excluding debt owed to the
Company or its other subsidiaries).
S-4
<PAGE>
LEVERAGE AND DEBT SERVICE
At September 30, 1997, after giving effect to the Pro Forma Events, the
Company, on a consolidated basis, had outstanding total debt (notes payable and
long-term debt, including current maturities), total stockholder's equity and
total capital (total debt and total stockholder's equity) of approximately
$4,696,000,000, $4,150,000,000 and $8,846,000,000 respectively. Accordingly, the
Company's ratios of total debt to total stockholder's equity and total debt to
total capital at September 30, 1997 were 1.13 to 1 and .53 to 1, respectively.
Such ratios may continue to have the effect, generally, of restricting the
ability of the Company to respond to changing business and economic conditions
insofar as they affect the financial condition and financing requirements of the
Company and its subsidiaries.
EFFECT OF NABISCO CREDIT AGREEMENTS; TRANSFERS TO NABISCO HOLDINGS
The Company and Nabisco Holdings are parties to certain credit agreements
(the "Credit Agreements") which impose operating and financial restrictions on
the Company and its subsidiaries by limiting their ability to incur
indebtedness, engage in transactions with stockholders and affiliates, create
liens, sell or dispose of certain assets and engage in mergers and
consolidations. However, the Credit Agreements, the Notes, and the Company's
other indebtedness do not restrict advances, dividends or other distributions by
the Company to Nabisco Holdings. In general, the holders of the Notes have no
claim on the assets of Nabisco Holdings, including the proceeds of any such
advances, dividends or distributions. Nabisco Holdings is dependent on such
advances, dividends and distributions to meet its obligations and to pay
dividends to its stockholders because it is a holding company and substantially
all of its assets consist of stock in the Company.
LIMITATIONS ON ISSUANCE OF EQUITY SECURITIES
The Credit Agreements, as well as certain other credit agreements to which
RJRN and RJRN Holdings are a party, impose limits on the issuance of additional
stock by Nabisco Holdings and the Company. In addition, the issuance of equity
by Nabisco Holdings may also be limited by RJRN Holdings' interest in retaining
at least 80% of the total voting power and value of the outstanding Common Stock
of Nabisco Holdings for tax purposes.
REMOTE EXPOSURE OF COMPANY ASSETS TO TOBACCO-RELATED LITIGATION
Various legal actions, proceedings and claims are pending or may be
instituted against R.J. Reynolds Tobacco Company ("RJRT"), a wholly-owned
subsidiary of RJRN, or certain of its affiliates or indemnitees, including those
claiming that lung cancer and other diseases have resulted from the use of or
exposure to RJRT's tobacco products. In the event the ultimate outcome of such
matters creates liabilities against RJRN which RJRT is unable to satisfy, it is
possible that the plaintiffs would seek to hold RJRN responsible for such
liabilities. If plaintiffs are successful in holding RJRN responsible and RJRN
is otherwise unable to satisfy such liabilities, RJRN's shares of Nabisco
Holdings Class B Common Stock could be among the assets of RJRN available to
satisfy such liabilities. However, Nabisco Holdings and RJRN Holdings believe
that the risk that Nabisco Holdings' or the Company's assets could be attached
to satisfy such liabilities is remote. This belief is based on a factual
analysis of the corporate structures of the Company, Nabisco Holdings, RJRT,
RJRN and RJRN Holdings, and application of the general principles of law under
which a corporation is ordinarily not responsible for obligations of a sister
corporation.
S-5
<PAGE>
DESCRIPTION OF THE NOTES
GENERAL
THE FOLLOWING DESCRIPTION OF THE TERMS OF THE NOTES SUPPLEMENTS AND, TO THE
EXTENT INCONSISTENT THEREWITH, REPLACES, THE DESCRIPTION OF THE GENERAL TERMS
AND PROVISIONS OF THE SECURITIES (AS DEFINED IN THE INDENTURE) SET FORTH IN THE
ACCOMPANYING PROSPECTUS, TO WHICH DESCRIPTION REFERENCE IS HEREBY MADE.
PRINCIPAL AMOUNTS
The 6% Notes, the 6 1/8% Notes and the 6 3/8% Notes are to be issued
pursuant to an Indenture (together with any supplements thereto, the
"Indenture"), dated as of June 5, 1995, between the Company and the Indenture
Trustee, which is more fully described in the accompanying Prospectus. The
aggregate principal amount of the Notes will be $1,000,000,000. The principal
amount of the 6% Notes, the 6 1/8% Notes and the 6 3/8% Notes will be
$400,000,000, $300,000,000 and $300,000,000, respectively. The purchasers of
interests in the Notes will not have the right to receive physical certificates
evidencing their ownership except under the limited circumstances described in
"Description of Securities--Global Securities" in the accompanying Prospectus.
Settlement for the Notes will be made in immediately available funds. All
payments of principal and interest on the Notes will be made by the Company in
immediately available funds so long as the Notes are maintained in book-entry
form. Beneficial interests in the Notes may be acquired, or subsequently
transferred, only in denominations of $1,000 and integral multiples thereof.
Each of the 6% Notes, the 6 1/8% Notes and the 6 3/8% Notes is a separate series
under the Indenture.
INTEREST PAYMENTS AND INTEREST PAYMENT DATES
The 6% Notes, the 6 1/8% Notes and the 6 3/8% Notes will bear interest at
the rate of 6%, 6 1/8% and 6 3/8%, respectively, from January 22, 1998 to but
excluding the applicable Coupon Reset Date. Interest on the 6% Notes is payable
semi-annually on February 15 and August 15 of each year, commencing August 15,
1998 and interest on the 6 1/8% Notes and 6 3/8% Notes is payable on February 1
and August 1 of each year, commencing August 1, 1998 (with respect to each
series of Notes, an "Interest Payment Date"). Interest will be calculated based
on a 360 day year consisting of twelve 30 day months. On each Interest Payment
Date, interest shall be payable to the persons in whose name the Notes are
registered on the fifteenth calendar day (whether or not a Business Day)
immediately preceding the related Interest Payment Date (with respect to each
series of Notes, a "Record Date"). "Business Day" means any day other than a
Saturday, a Sunday or a day on which banking institutions in The City of New
York are authorized or obligated by law, executive order or governmental decree
to be closed. If the applicable Callholder elects to purchase a series of Notes
pursuant to the applicable Call Option, the applicable Calculation Agent (as
defined below) will reset the interest rate of such series effective on the
applicable Coupon Reset Date, pursuant to the Coupon Reset Process described
below. In such circumstance, (i) the applicable series of such Notes will be
purchased by the applicable Callholder, in whole but not in part, at 100% of the
principal amount thereof on its applicable Coupon Reset Date, on the terms and
subject to the conditions described herein (interest accrued to but excluding
the Coupon Reset Date will be paid by the Company on such date to holders on the
most recent Record Date), and (ii) on and after the applicable Coupon Reset
Date, such series of Notes will bear interest at the rate determined by the
applicable Calculation Agent in accordance with the procedures set forth under
"--Coupon Reset Process" below.
FINAL MATURITY DATES
The 6% Notes will mature on February 15, 2011 (the "6% Notes Final Maturity
Date"), the 6 1/8% Notes will mature on February 1, 2033 (the "6 1/8% Notes
Final Maturity Date") and the 6 3/8% Notes will mature on February 1, 2035 (the
"6 3/8% Notes Final Maturity Date", together with the 6% Notes Final Maturity
Date and the 6 1/8% Notes Final Maturity Date, the "Final Maturity Dates"). On
February 15,
S-6
<PAGE>
2001, February 1, 2003 and February 1, 2005, holders of the 6% Notes, the 6 1/8%
Notes and the 6 3/8% Notes, respectively, will be entitled to receive 100% of
the principal amount thereof from (i) the applicable Callholder if it purchases
the applicable series of Notes pursuant to the applicable Call Option or (ii)
the Company by exercise of the applicable Put Option by the Indenture Trustee
for and on behalf of the holders of such series of Notes, if the applicable
Callholder does not purchase such series of Notes pursuant to the applicable
Call Option. If the applicable Call Option is not exercised or the applicable
Call Price is not paid, the Indenture Trustee is required to exercise the Put
Option applicable to the respective series of Notes without the consent of, or
notice to, the holders of the Notes. See "--Call Option; Put Option."
CALL OPTION; PUT OPTION
(I) CALL OPTION. The "Callholder" with respect to the 6% Notes will be
Morgan Stanley & Co. Incorporated and with respect to the 6 1/8% Notes and the
6 3/8% Notes will be Union Bank of Switzerland, London Branch. Pursuant to the
terms of the 6% Notes, the 6 1/8% Notes and the 6 3/8% Notes, the applicable
Callholder has the right to purchase the applicable series of Notes, in whole
but not in part, on the applicable Coupon Reset Date (with respect to each
series of Notes, a "Call Option"), at a price equal to 100% of the principal
amount thereof (with respect to each series of Notes, a "Call Price"), by giving
notice to the Indenture Trustee (with respect to each series of Notes, a "Call
Notice"). The Indenture Trustee shall send a copy of the Call Notice to the
holders as required by the Indenture. Such Call Notice shall be given to the
Indenture Trustee, in writing, prior to 4:00 p.m., New York City time, no later
than fifteen calendar days prior to the applicable Coupon Reset Date for the
corresponding series of Notes. If the applicable Callholder exercises its rights
under the applicable Call Option for a series of Notes, (i) not later than 2:00
p.m., New York City time on the Business Day prior to the applicable Coupon
Reset Date, the Callholder shall deliver the applicable Call Price in
immediately available funds to the Indenture Trustee for payment of the Call
Price on the Coupon Reset Date and (ii) the holders of the applicable series of
Notes will be required to deliver such Notes against payment therefor on the
applicable Coupon Reset Date through the facilities of DTC. No holder of the
Notes or any interest therein shall have any right or claim against the
applicable Callholder as a result of the applicable Callholder not purchasing
the Notes.
Each Call Option with respect to a series of Notes provides for certain
circumstances under which such Call Option may be terminated. If the Call Option
relating to a series of Notes terminates or if the applicable Callholder fails
to pay the Call Price to the Indenture Trustee at or prior to the required time,
the Indenture Trustee shall exercise the Put Option described below. The
Indenture Trustee shall notify the holders that it is exercising the Put Option
as required by the Indenture.
(II) PUT OPTION. If the applicable Callholder fails for any reason to
purchase a series of Notes on the applicable Coupon Reset Date, the Indenture
Trustee will be obligated to exercise on behalf of the holders of such series of
Notes the right to require the Company to purchase such Notes, in whole but not
in part, on the applicable Coupon Reset Date at a price equal to 100% of the
principal amount thereof (for each series of Notes, a "Put Price"). By its
purchase of a Note, each holder irrevocably agrees that the Indenture Trustee
shall exercise the Put Option relating to such Note for or on behalf of the
holder of such Note as provided herein. If the Indenture Trustee exercises the
applicable Put Option then the Company shall deliver the applicable Put Price in
immediately available funds to the Indenture Trustee by no later than 12:00
noon, New York City time, on the Coupon Reset Date and the holders of the
corresponding Notes will be required to deliver such Notes to the Company
against payment therefor on the applicable Coupon Reset Date through the
facilities of DTC. No holder of any series of Notes or any interest therein has
the right to consent or object to the exercise of the Indenture Trustee's duties
under the Put Option.
S-7
<PAGE>
COUPON RESET PROCESS IF THE NOTES ARE CALLED
Pursuant to the Indenture, Morgan Stanley & Co. Incorporated has been
appointed the calculation agent for the 6% Notes and UBS Securities LLC has been
appointed the calculation agent with respect to the 6 1/8% Notes and the 6 3/8%
Notes (each, in its capacity as calculation agent for a series of Notes, a
"Calculation Agent") . With respect to each series of the Notes, if the
applicable Callholder for such series of Notes exercises the applicable Call
Option as set forth above, then the following steps (the "Coupon Reset Process")
shall be taken in order to determine the interest rate to be paid on such series
of Notes from and including such Coupon Reset Date to the applicable Final
Maturity Date. The Company and the Calculation Agent shall use reasonable
efforts to cause the actions contemplated below to be completed in as timely a
manner as possible.
(a) With respect to each series of Notes subject to the Coupon Reset
Process, the Company shall provide the applicable Calculation Agent with a
list (the "Dealer List"), no later than seven Business Days prior to the
applicable Coupon Reset Date, containing the names and addresses of five
dealers, one of which, in the case of the 6% Notes, shall be Morgan Stanley
& Co. Incorporated and one of which, in the case of the 6 1/8% Notes and the
6 3/8% Notes, shall be UBS Securities LLC, from which it desires the
applicable Calculation Agent to obtain the Bids (as defined below) for the
purchase of such Notes.
(b) With respect to each series of Notes subject to the Coupon Reset
Process, within one Business Day following receipt by the applicable
Calculation Agent of the Dealer List, the Calculation Agent shall provide to
each dealer ("Dealer") on the Dealer List (i) a copy of this Prospectus
Supplement and the accompanying Prospectus, (ii) a copy of the form of such
series of Notes and (iii) a written request that each such Dealer submit a
Bid to the applicable Calculation Agent at 12:00 noon, New York City time,
on the third Business Day prior to the Coupon Reset Date (a "Bid Date"). The
time on the Bid Date upon which Bids will be requested may be changed by the
applicable Calculation Agent. "Bid" shall mean an irrevocable written offer
given by a Dealer for the purchase of a series of Notes, settling on the
applicable Coupon Reset Date, and shall be quoted by such Dealer as a stated
yield to maturity on such series of Notes ("Yield to Maturity"). With
respect to each series of Notes subject to the Coupon Reset Process, each
Dealer shall be provided with (i) the name of the Company, (ii) an estimate
of the Purchase Price (which shall be stated as a US Dollar amount and be
calculated by the applicable Calculation Agent in accordance with clause (c)
below), (iii) the principal amount and maturity of such series of Notes and
(iv) the method by which interest will be calculated on such Notes.
(c) With respect to each series of Notes subject to the Coupon Reset
Process, the purchase price to be paid by any Dealer for such series of
Notes (the "Purchase Price") shall be equal to (i) the principal amount of
such series of Notes plus (ii) a premium (the "Notes Premium") which shall
be equal to the excess, if any, of (1) with respect to the 6% Notes, (A) the
discounted present value to the applicable Coupon Reset Date of a bond with
a maturity of February 15, 2011 which has an interest rate of 5.75%,
semi-annual interest payments on each February 15 and August 15, commencing
August 15, 2001, and a principal amount of $400,000,000, and assuming a
discount rate equal to the Treasury Rate over (B) $400,000,000, (2) with
respect to the 6 1/8% Notes, (A) the discounted present value to the
applicable Coupon Reset Date of a bond with a maturity of February 1, 2033
which has an interest rate of 6.068%, semi-annual interest payments on each
February 1 and August 1, commencing August 1, 2003, and a principal amount
of $300,000,000, and assuming a discount rate equal to the Treasury Rate
over (B) $300,000,000 and (3) with respect to the 6 3/8% Notes, (A) the
discounted present value to the Coupon Reset Date of a bond with a maturity
of February 1, 2035 which has an interest rate of 6.068%, semi-annual
interest payments on each February 1 and August 1, commencing August 1,
2005, and a principal amount of $300,000,000, and assuming a discount rate
equal to the Treasury Rate over (B) $300,000,000. With respect to the 6%
Notes, the "Treasury Rate" means the per annum rate equal to the offer side
yield to maturity of the current on-the-run ten-year United
S-8
<PAGE>
States Treasury Security per Telerate page 500 at 11:00 a.m., New York time
on the applicable Bid Date (or such other date or time that may be agreed
upon by the Company and the applicable Calculation Agent) or, if such rate
does not appear on Telerate page 500 at such time, the rates on GovPx
End-of-Day Pricing at 3:00 p.m. on the applicable Bid Date. With respect to
the 6 1/8% and the 6 3/8% Notes, the "Treasury Rate" means the per annum
rate equal to the mid-point of the bid and offer side yield to maturity of
the current on-the-run thirty-year United States Treasury Security per
Telerate page 500 at 11:00 a.m., New York time on the applicable Bid Date
(or such other date or time that may be agreed upon by the Company and the
applicable Calculation Agent) or, if such rate does not appear on Telerate
page 500 at such time, the rates on GovPx End-of-Day Pricing at 3:00 p.m. on
the applicable Bid Date.
(d) With respect to each series of the Notes subject to the Coupon Reset
Process, the applicable Calculation Agent shall immediately notify the
Company of (i) the names of each of the Dealers from whom the applicable
Calculation Agent received Bids on the Bid Date, (ii) the Bid submitted by
each such Dealer and (iii) the Purchase Price as determined pursuant to
paragraph (c) hereof. Unless the applicable Call Option has terminated, the
applicable Calculation Agent shall thereafter select from the Bids received
the Bid with the lowest Yield to Maturity (the "Selected Bid") and set the
Coupon Reset Rate equal to the interest rate which would amortize the Notes
Premium fully over the term of such Notes at the Yield to Maturity indicated
by the Selected Bid, PROVIDED, HOWEVER, that if the applicable Calculation
Agent has not received a timely Bid from a Dealer, the Selected Bid shall be
the lowest of all Bids received by such time and PROVIDED, FURTHER that if
any two or more of the lowest Bids submitted are equivalent, the Company
shall in its sole discretion select any of such equivalent Bids (and such
selected Bid shall be the Selected Bid).
(e) With respect to each series of the Notes subject to the Coupon Reset
Process, immediately after calculating the Coupon Reset Rate for such series
of Notes, the applicable Calculation Agent shall provide written notice to
the Company and the Indenture Trustee, setting forth such Coupon Reset Rate.
The Coupon Reset Rate applicable to the 6% Notes, the 6 1/8% Notes and the
6 3/8% Notes will be effective from and including the applicable Coupon
Reset Date.
(f) The applicable Callholder shall sell the applicable series of the
Notes to the Dealer that made the Selected Bid at the Purchase Price for
such series, such sale to be settled on the applicable Coupon Reset Date in
immediately available funds.
The Indenture provides that the applicable Calculation Agent for a series of
Notes may resign at any time as Calculation Agent, such resignation to be
effective ten Business Days after the delivery to the Company and the Indenture
Trustee of notice of such resignation. In such case, the Company may appoint a
successor Calculation Agent for such series of Notes.
The applicable Calculation Agent for a series of Notes, in its individual
capacity, may buy, sell, hold and deal such series of the Notes and may exercise
any vote or join in any action which any holder of such series of Notes may be
entitled to exercise or take as if it were not the applicable Calculation Agent.
The applicable Calculation Agent, in its individual capacity, may also engage in
any transaction with the Company or any of its affiliates as if it were not the
applicable Calculation Agent.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain United States Federal income tax
considerations relating to the purchase, ownership and disposition of the Notes
by an initial holder of the Notes who purchases the Notes on the original issue
date. This summary is based upon laws, regulations, rulings and decisions
currently in effect, all of which are subject to change. The discussion does not
deal with all Federal tax considerations applicable to all categories of
investors, some of which may be subject to special rules. In addition, this
summary is limited to investors who will hold the Notes as "capital assets"
(generally,
S-9
<PAGE>
property held for investment) within the meaning of Section 1221 of the Internal
Revenue Code of 1986, as amended (the "Code").
INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE
FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES RELATING TO THE
PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES.
An opinion of tax counsel is not binding on the Internal Revenue Service
(the "Service") or the courts. Prospective investors should note that no rulings
have been or are expected to be sought from the Service with respect to any of
the Federal income tax considerations discussed below, and no assurance can be
given that the Service will not take contrary positions.
TREATMENT OF NOTES
In the opinion of special tax counsel to the Company, Skadden, Arps, Slate,
Meagher & Flom LLP, although there is no authority on point characterizing
instruments such as the Notes, and the matter is not free from doubt, the Notes
should be treated as fixed rate debt instruments that mature on the Coupon Reset
Date. Under this characterization, each holder should include in income the
interest paid or accrued on the Notes in accordance with its usual method of
accounting. Upon the sale, exchange, redemption or other disposition by a holder
of the Notes, the holder should recognize capital gain or loss equal to the
difference between the amount realized from the disposition of the Notes
(exclusive of amounts attributable to the payment of accrued interest not
previously included in income, which will be taxable as ordinary income) and the
holder's adjusted tax basis in the Notes at the time of the sale, exchange,
redemption or other disposition. A holder's adjusted tax basis in the Notes
generally will equal the holder's purchase price for such Notes. Pursuant to
recently enacted legislation, in the case of a holder who is an individual, any
capital gain recognized on the disposition of the Notes will generally be
subject to U.S. Federal income tax at a stated maximum rate of (i) 20%, if the
holder's holding period in the Notes was more than 18 months at the time of such
sale, exchange, redemption or other disposition, or (ii) 28%, if the holder's
holding period in such Notes was more than one year, but not more than 18
months, at the time of such sale, exchange, redemption, or other disposition.
The ability to use capital losses to offset ordinary income in determining
taxable income is generally limited.
However, the Notes may be treated by the Service or a court as maturing on
the Final Maturity Date rather than the Coupon Reset Date. Because of the Coupon
Reset Process, if the Notes were treated as maturing on the Final Maturity Date,
holders would be subject to certain Treasury Regulations dealing with contingent
debt obligations (the "Contingent Debt Regulations"). Under the Contingent Debt
Regulations, each holder would be required (regardless of such holder's usual
method of accounting) to include in income original issue discount for each
interest accrual period in an amount equal to the product of the adjusted issue
price of the Notes at the beginning of each interest accrual period and a
projected yield to maturity of the Notes. The projected yield to maturity would
be based on the "comparable yield" (I.E., the yield at which the Company would
issue a fixed rate debt instrument maturing on the Final Maturity Date, with
terms and conditions otherwise similar to those of the Notes), which will be
higher than the stated interest rate applicable to the Notes prior to the Coupon
Reset Date. In addition, the character of any gain or loss recognized on the
sale, exchange, retirement or other disposition of the Notes could differ from
that set forth in the preceding paragraph. For example, if the Contingent Debt
Regulations applied, any gain recognized on the sale of Notes would be treated
as interest income, while any losses would generally be ordinary to the extent
of previously accrued original issue discount, and any excess would be capital
loss. The ability to use capital losses to offset ordinary income in determining
taxable income is generally limited.
FOREIGN HOLDERS OF NOTES
Interest paid to a holder that is not a United States person (a "Foreign
Holder") generally will not be subject to the 30% withholding tax generally
imposed with respect to U.S. source interest paid to such
S-10
<PAGE>
persons, provided that such holder is not engaged in a trade or business in the
United States in connection with which it holds such Notes, does not bear
certain relationships to the Company and fulfills certain certification
requirements. Under such certification requirements, the holder must certify,
under penalties of perjury, that it is not a "United States person" and is the
beneficial owner of the Notes, and must provide its name and address. For this
purpose, "United States person" means a citizen or resident of the United
States, a corporation, partnership, or other entity created or organized in or
under the laws of the United States or any State thereof (including the District
of Columbia), an estate the income of which is includible in gross income for
United States Federal income tax purposes, regardless of its source, or a trust
subject to the primary supervision of a court within the United States and the
control of one or more U.S. fiduciaries with respect to substantial decisions.
A Foreign Holder generally will not be subject to United States Federal
income tax with respect to any gain recognized upon the disposition of Notes
unless (i) such gain is effectively connected with the conduct by the Foreign
Holder of a trade or business in the United States, (ii) in the case of an
individual holder, such Foreign Holder is present in the United States for 183
days or more in the taxable year during which the disposition occurs and certain
other conditions are met or (iii) the Notes are treated as subject to the
Contingent Debt Regulations and the holder fails to satisfy the certification
requirements of the preceding paragraph.
BACKUP WITHHOLDING
Payments made on the Notes and proceeds from the sale of Notes will not be
subject to a "backup" withholding tax of 31% unless, in general, the holder
fails to comply with certain reporting procedures and is not an exempt recipient
under applicable provisions of the Code.
S-11
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the 6% Notes Underwriting
Agreement (the "6% Notes Underwriting Agreement"), the 6 1/8% Notes Underwriting
Agreement (the "6 1/8% Notes Underwriting Agreement") and the 6 3/8% Notes
Underwriting Agreement (the "6 3/8%) Notes Underwriting Agreement" and, together
with the 6% Notes Underwriting Agreement and the 6 1/8% Notes Underwriting
Agreement, the "Underwriting Agreements"), the Company has agreed to sell to
each of the several Underwriters named below, and each of the Underwriters (for
whom Morgan Stanley & Co. Incorporated and UBS Securities LLC are acting as
joint book managers in the case of the 6% Notes and for whom UBS Securities LLC
and Morgan Stanley & Co. Incorporated are acting as joint book managers in the
case of the 6 1/8% Notes and the 6 3/8% Notes) has severally agreed to purchase
the principal amount of the 6% Notes, the 6 1/8% Notes and the 6 3/8% Notes set
forth opposite its name below:
<TABLE>
<CAPTION>
UNDERWRITER 6% NOTES 6 1/8% NOTES 6 3/8% NOTES
- -------------------------------------------- -------------- -------------- --------------
<S> <C> <C> <C>
Morgan Stanley & Co. Incorporated........... $ 128,000,000 $ 104,000,000 $ 91,990,000
UBS Securities LLC.......................... $ 128,000,000 $ 104,000,000 $ 91,990,000
ABN AMRO Chicago Corporation................ $ 54,000,000 -- --
Chase Securities Inc........................ -- -- $ 43,421,000
Deutsche Morgan Grenfell Inc................ -- $ 34,000,000 --
Lehman Brothers Inc......................... $ 54,000,000 -- --
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................... -- -- $ 43,421,000
Salomon Brothers Inc........................ -- $ 34,000,000 --
BNY Capital Markets, Inc.................... -- $ 12,000,000 --
BT Alex. Brown Incorporated................. -- $ 12,000,000 --
BancAmerica Robertson Stephens.............. $ 18,000,000 -- --
CIBC Oppenheimer Corp....................... -- -- $ 14,589,000
Citicorp Securities, Inc.................... $ 18,000,000 -- --
Credit Lyonnais Securities (USA) Inc........ -- -- $ 14,589,000
-------------- -------------- --------------
Total................................... $ 400,000,000 $ 300,000,000 $ 300,000,000
</TABLE>
Under the terms of the Underwriting Agreements, the Underwriters are
committed to take and pay for all of the Notes, if any are taken.
The Underwriters propose to offer the Notes directly to the public at the
initial public offering price set forth on the cover page hereof and in part to
certain securities dealers at such price less a concession of 0.20 % of the
principal amount of the 6% Notes, 0.270% of the principal amount of the 6 1/8%
Notes and 0.285% of the principal amount of the 6 3/8% Notes. The Underwriters
may allow, and such dealers may reallow, a concession not in excess of 0.10% of
the principal amount of the 6% Notes, and not in excess of 0.125% of the
principal amount of the 6 1/8% Notes and 6 3/8% Notes to certain brokers and
dealers. After the Notes are released for sale to the public, the offering price
and other selling terms may from time to time be varied by the joint book
managers.
The Underwriters have agreed to reimburse certain fees and expenses of the
Company in connection with the offering of the Notes totalling $1,100,000.
The Company has been advised by the Underwriters that the Underwriters
intend to make a market in the Notes, but they are not obligated to do so and
may discontinue market making at any time without notice.
S-12
<PAGE>
The Company will indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, or
contribute to payments the Underwriters may be required to make in respect
thereof.
The Underwriters may engage in over-allotment transactions, stabilizing
transactions, syndicate covering transactions and penalty bids with respect to
the Notes in accordance with Regulation M under the Securities Exchange Act of
1934, as amended. Over-allotment transactions involve syndicate sales of Notes
in excess of the offering size creating a syndicate short position. Stabilizing
transactions permit bids to purchase the Notes so long as the bids do not exceed
a specified maximum. Syndicate covering transactions involve purchases of the
Notes in the open market after the distribution has been completed in order to
cover syndicate short positions. Penalty bids permit the Underwriters to reclaim
a selling concession from a syndicate member when the Notes originally sold by
such syndicate member are purchased in a syndicate covering transaction. Such
over-allotment transactions, stabilizing transactions, syndicate covering
transactions and penalty bids may cause prices of the Notes to be higher than
they would otherwise be in the absence of such transactions. Neither the Company
nor the Underwriters make any representation or prediction as to the direction
or magnitude of any effect that the transactions described above may have on the
price of the Notes. In addition, neither the Company nor the Underwriters make
any representation that the Underwriters will engage in such transactions or
that such transactions, once commenced, will not be discontinued without notice.
In the ordinary course of business, the Underwriters and their respective
affiliates have and may in the future engage in investment banking and
commercial banking transactions with the Company and certain of its affiliates.
LEGAL MATTERS
The validity of the Notes will be passed upon for the Company by James A.
Kirkman III, Esq., Executive Vice President, General Counsel and Secretary of
the Company. Mr. Kirkman owns options to purchase shares of Class A Common Stock
which represent less than 0.1% of the currently outstanding shares of all
classes of Nabisco Holdings Common Stock.
Certain legal matters will be passed upon for the Underwriters by their
counsel, Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York. Certain
Federal income tax matters will be passed upon for the Company by its special
tax counsel, Skadden, Arps, Slate, Meagher & Flom LLP.
S-13
<PAGE>
NABISCO, INC.
[LOGO]
DEBT SECURITIES
Nabisco, Inc. (the "Company") may offer from time to time its debt
securities in one or more series (the "Securities") with an initial public
offering price of up to $1,000,000,000 (or the equivalent in foreign denominated
currency or units based on or relating to currencies, including European
Currency Units). The Company will offer Securities to the public on terms
determined by market conditions. Securities may be issuable in registered form
without coupons or in bearer form with or without coupons attached. Securities
may be sold for U.S. dollars, foreign denominated currency or currency units;
principal of and any interest on Securities likewise may be payable in U.S.
dollars, foreign denominated currency or currency units--in each case, as the
Company specifically designates. See "Description of Securities."
The Securities will be general obligations of the Company and will rank PARI
PASSU with all existing and future unsubordinated obligations of the Company.
See "Description of Securities--Ranking."
The accompanying Prospectus Supplement sets forth the specific designation,
aggregate principal amount, purchase price, maturity, interest rate (or manner
of calculation thereof), time of payment of interest (if any), listing (if any)
on a securities exchange and any other specific terms of the Securities and the
name of and compensation to each dealer, underwriter or agent (if any) involved
in the sale of the Securities. The managing underwriters with respect to each
series sold to or through underwriters will be named in the accompanying
Prospectus Supplement.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------
The Securities may be offered directly to purchasers or through underwriters
or through agents designated from time to time as set forth in the accompanying
Prospectus Supplement. Net proceeds to the Company will be the purchase price in
the case of the dealer, the public offering price less discount in the case of
an underwriter or the purchase price less commission in the case of an agent--in
each case, less other expenses attributable to issuance and distribution. See
"Plan of Distribution" for possible indemnification arrangements for dealers,
underwriters and agents.
------------
The date of this Prospectus is December 20, 1995.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, and also are available for inspection and
copying at the regional offices of the Commission located at Seven World Trade
Center, New York, New York 10048 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can be
obtained from the public reference section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such reports, proxy
statements and other information also can be inspected at the offices of the New
York Stock Exchange (the "NYSE"), 20 Broad Street, New York, New York 10005, on
which exchange certain of the Company's debt securities are listed and on which
shares of the Class A Common Stock, par value $.01 per share (the "Class A
Common Stock"), of the Company's parent company Nabisco Holdings Corp. ("Nabisco
Holdings") are listed.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus omits certain of the information contained in
the Registration Statement in accordance with the rules and regulations of the
Commission. Reference is hereby made to the Registration Statement and related
exhibits for further information with respect to the Company and the Securities.
Statements contained herein concerning the provisions of any document are not
necessarily complete and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such reference.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated by
reference and shall be deemed a part hereof:
(a) Quarterly Reports on Form 10-Q for the fiscal quarters ended March
31, June 30 and September 30, 1995 filed by the Company as amended by Form
10-Q/A dated November 1, 1995 (File No. 1-1021);
(b) Current Report on Form 8-K filed by the Company on June 16, 1995
which includes the Company's annual report for the fiscal year ended
December 31, 1994 (File No. 1-1021); and
(c) All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
Copies of the documents incorporated herein by reference (excluding exhibits
unless such exhibits are specifically incorporated by reference into such
documents) may be obtained upon request without charge by persons, including
beneficial owners, to whom this Prospectus is delivered. Requests should be made
to Nabisco, Inc., Attention: Public Relations Department, 7 Campus Drive,
Parsippany, New Jersey 07054, telephone number (201) 682-5000.
IN CONNECTION WITH THE OFFERING OF CERTAIN SECURITIES, THE UNDERWRITERS MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE
OF THE SECURITIES AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OPEN MARKET OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE>
THE COMPANY
The Company, one of the world's leading packaged foods businesses, operates
in the United States, Canada, Latin America and certain other international
markets. In the United States, the Company has leading market share positions in
a variety of product categories, including cookies, crackers, packaged nuts,
hard roll candy, steak sauce and dog snacks. The Company's domestic operations
are comprised of the Nabisco Biscuit, Specialty Products, LifeSavers, Planters,
Food Service and Fleischmann's Companies. Nabisco Ltd (formerly Nabisco Brands
Ltd), which conducts the Company's businesses in Canada through a biscuit
division and a grocery division, is that country's largest cookie and cracker
business and one of its leading producers of canned fruits, canned vegetables,
baking powder and pet snacks. Nabisco International, Inc., which conducts the
Company's businesses outside the United States and Canada, is one of the largest
multinational packaged foods businesses in Latin America, with operations in 17
countries. Nabisco International, Inc. is a leading manufacturer and marketer of
biscuits, baking powder, powdered desserts, industrial yeasts and processed milk
products in many of the markets in which it operates. The Company's established
and well-known trademarks include OREO, CHIPS AHOY!, NEWTONS, SNACKWELL'S, RITZ,
PREMIUM, LIFESAVERS, PLANTERS, FLEISCHMANN'S, CREAM OF WHEAT, BLUE BONNET, A.1,
GREY POUPON AND MILK-BONE.
The Company is a wholly owned subsidiary of Nabisco Holdings. RJR Nabisco,
Inc. ("RJRN"), a wholly owned subsidiary of RJR Nabisco Holdings Corp., owns
80.5% of the economic interest in Nabisco Holdings.
The Company's principal executive offices are located at 7 Campus Drive,
Parsippany, New Jersey 07054; its telephone number is (201) 682-5000.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the nine months ended September
30, 1995 and for each of the periods in the five-year period ended December 31,
1994 are as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, FOR THE YEARS ENDED DECEMBER 31,
----------------- ------------------------------------------------
1995 1994 1993 1992 1991
----------------- ----- ----- ----- ---------
<S> <C> <C> <C> <C> <C>
(DOLLARS IN MILLIONS)
<CAPTION>
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(a)....................... 2.1 1.8 -- 1.0 --
Deficiency in the coverage of fixed charges
by earnings before fixed charges(a)....................... -- -- $ (3) -- $ (283)
<CAPTION>
1990
---------
<S> <C>
<S> <C>
Ratio of earnings to fixed charges(a)....................... --
Deficiency in the coverage of fixed charges
by earnings before fixed charges(a)....................... $ (756)
</TABLE>
- ------------------------
(a) Earnings before fixed charges includes non-cash amortization of trademarks
and goodwill for the nine months ended September 30, 1995 of $169 million,
and for each year in the five year period ended December 31, 1994 of $224
million, $217 million, $211 million, $205 million and $204 million,
respectively.
For purposes of these computations, earnings before fixed charges consist of
income (loss) before income taxes plus fixed charges. Income (loss) before
income taxes includes amortization of trademarks and goodwill and depreciation
expense. Fixed charges consist of interest on indebtedness and that portion of
operating rental expense representative of the interest factor.
USE OF PROCEEDS
Except as set forth in the Prospectus Supplement for a specific offering of
Securities, the net proceeds from the sale of the Securities will be used for
general corporate purposes, which may include refinancings of indebtedness,
working capital, capital expenditures and acquisitions. Pending such uses,
proceeds may be used to repay commercial paper or for short-term liquid
investments.
3
<PAGE>
DESCRIPTION OF SECURITIES
The Securities will be issued under an Indenture dated as of June 5, 1995
between the Company and Citibank, N.A., as supplemented (the "Indenture"). The
following description of certain provisions of the Indenture and the Securities
summarizes the material terms thereof but does not purport to be complete, and
such summary is subject to the detailed provisions of the Indenture to which
reference is hereby made, including the definition of certain terms used herein,
and for other information regarding the Securities. The Indenture has been filed
as an exhibit to the Registration Statement of which this Prospectus is a part.
Numerical references in parentheses below are to sections in the Indenture.
Wherever particular sections or defined terms of the Indenture are referred to,
such sections or defined terms are incorporated herein by reference as part of
the statement made, and the statement is qualified in its entirety by such
reference. Any Securities offered by this Prospectus and the accompanying
Prospectus Supplement are referred to herein as the "Offered Securities."
GENERAL
The Indenture provides for issuance of Securities by the Company in an
unlimited amount from time to time. The Indenture does not limit the amount of
additional indebtedness that the Company may incur and does not contain
provisions which would afford the holders (the "Holders") of the Securities
protection in the event of a decline in the Company's credit quality resulting
from highly leveraged or other transactions involving the Company. However, the
Indenture does limit the amount of additional Funded Debt (as hereinafter
defined) that may be incurred by Restricted Subsidiaries (as hereinafter
defined) of the Company to 10% of Consolidated Net Worth (as hereinafter
defined).
The Indenture provides that Securities may be issued from time to time in
one or more series and may be denominated and payable in foreign currencies or
units based on or relating to foreign currencies, including European Currency
Units ("ECUs"). Special United States federal income tax considerations
applicable to any Securities so denominated are described in the relevant
Prospectus Supplement.
Reference is made to the Prospectus Supplement for the following terms of
and information relating to the Offered Securities (to the extent such terms are
applicable to such Offered Securities): (i) the specific designation, aggregate
principal amount, purchase price and denomination; (ii) currency or units based
on or relating to currencies in which such Offered Securities are denominated
and in which principal of, premium, if any, and any interest on such Offered
Securities will or may be payable; (iii) any date of maturity; (iv) interest
rate or rates (or the method by which such rate or rates will be determined), if
any; (v) the dates on which any such interest will be payable; (vi) the place or
places where the principal of, premium, if any, and any interest on the Offered
Securities will be payable; (vii) any redemption, repayment or sinking fund
provisions; (viii) whether the Offered Securities will be issuable in registered
form or bearer form ("Bearer Securities") or both and, if Bearer Securities are
issuable, any restrictions applicable to the exchange of one form for another
and to the offer, sale and delivery of Bearer Securities; (ix) any applicable
United States federal income tax consequences, including whether and under what
circumstances the Company will pay additional amounts on Offered Securities held
by a person who is not a U.S. person (as defined in the Prospectus Supplement)
in respect of any tax, assessment or governmental charge withheld or deducted
and, if so, whether the Company will have the option to redeem such Offered
Securities rather than pay such additional amounts; and (x) any other specific
terms of the Offered Securities, including any additional events of default or
covenants provided for with respect to such Offered Securities, and any terms
which may be required by or be advisable under applicable laws or regulations.
Securities may be presented for exchange and registered Securities may be
presented for transfer in the manner, at the places and subject to the
restrictions set forth in the Securities and the Prospectus Supplement. Subject
to the limitations provided in the Indenture, such services will be provided
without
4
<PAGE>
charge, other than any tax or other governmental charge payable in connection
therewith. Securities in bearer form and the coupons, if any, appertaining
thereto will be transferable by delivery.
Securities will bear interest at a fixed rate (a "Fixed Rate Security") or a
floating rate (a "Floating Rate Security"). Securities bearing no interest or
interest at a rate that at the time of issuance is below the prevailing market
rate will be sold at a discount below their stated principal amount. Special
United States federal income tax considerations applicable to any such
discounted Securities or to certain Securities issued at par which are treated
as having been issued at a discount for United States federal income tax
purposes are described in the relevant Prospectus Supplement.
Securities may be issued, from time to time, with the principal amount
payable on any principal payment date, or the amount of interest payable on any
interest payment date, to be determined by reference to one or more currency
exchange rates, commodity prices, equity indices or other factors. Holders of
such Securities may receive a principal amount on any principal payment date, or
a payment of interest on any interest payment date, that is greater than or less
than the amount of principal or interest otherwise payable on such dates,
depending upon the value on such dates of the applicable currency, commodity,
equity index or other factors. Information as to the methods for determining the
amount of principal or interest payable on any date, the currencies,
commodities, equity indices or other factors to which the amount payable on such
date is linked and certain additional tax considerations will be set forth in
the applicable Prospectus Supplement.
RANKING
The Securities, when issued, will rank PARI PASSU in right of payment with
the senior indebtedness of the Company, including the obligations of the Company
under its bank facilities, and senior in right of payment to any future
subordinated debt of the Company. However, claims of Holders of the Securities
will be effectively subordinated to the claims of holders of the debt of the
Company's subsidiaries with respect to the assets of such subsidiaries. In
addition, claims of Holders of the Securities will be effectively
subordinated to the claims of holders of secured debt of the Company with
respect to the collateral securing such claims, and claims of the Company as the
holder of unsecured intercompany debt will be effectively subordinated to the
claims of holders of the secured debt of its subsidiaries. The amount of debt
which is PARI PASSU with the Securities, the amount of debt which is secured and
the amount of debt to which holders of the Securities are effectively
subordinated as of the end of the most recently completed fiscal quarter are
included in the accompanying Prospectus Supplement or incorporated herein by
reference.
The Securities may, under certain circumstances, be equally and ratably
secured with other senior indebtedness of the Company. See "--Certain Covenants
of the Company--Restrictions on Liens."
GLOBAL SECURITIES
The registered Securities of a series may be issued in the form of one or
more fully registered global Securities (a "Registered Global Security") that
will be deposited with a depositary (a "Depositary") or with a nominee for a
Depositary identified in the Prospectus Supplement relating to such series and
registered in the name of the Depositary or a nominee thereof. In such case, one
or more Registered Global Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of outstanding registered Securities of the series to be represented by such
Registered Global Security or Registered Global Securities. Unless and until it
is exchanged in whole or in part for Securities in definitive registered form, a
Registered Global Security may not be transferred except as a whole by the
Depositary for such Registered Global Security to a nominee of such Depositary
or by a nominee of such Depositary to such Depositary or another nominee of such
Depositary or such Depositary or any such nominee to a successor of such
Depositary or a nominee of such successor. The Depositary currently accepts only
Securities that are denominated in U.S. dollars.
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The specific terms of the depositary arrangement with respect to any portion
of a series of Securities to be represented by a Registered Global Security will
be described in the Prospectus Supplement relating to such series. The Company
anticipates that the following provisions will apply to all depositary
arrangements.
Ownership of beneficial interests in a Registered Global Security will be
limited to persons that have accounts with the Depositary for such Registered
Global Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Registered Global Security, the Depositary
for such Registered Global Security will credit, on its book-entry registration
and transfer system, the participants' accounts with the respective principal
amounts of the Securities represented by such Registered Global Security
beneficially owned by such participants. The accounts to be credited will be
designated by any dealers, underwriters or agents participating in the
distribution of such Securities. Ownership of beneficial interests in such
Registered Global Security will be shown on, and the transfer of such ownership
interests will be effected only through, records maintained by the Depositary
for such Registered Global Security (with respect to interests of participants)
and on the records of participants (with respect to interests of persons holding
through participants). The laws of some states may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to own, transfer or
pledge beneficial interests in registered Global Securities.
So long as the Depositary for a Registered Global Security, or its nominee,
is the owner of record of such Register Global Security, such Depositary or such
nominee, as the case may be, will be considered the sole owner or holder of the
Securities represented by such Registered Global Security for all purposes under
the Indenture. Except as set forth below, owners of beneficial interests in a
Registered Global Security will not be entitled to have the Securities
represented by such Registered Global Security registered in their names, and
will not receive or be entitled to receive physical delivery of such Securities
in definitive form and will not be considered the owners or holders thereof
under the Indenture. Accordingly, each person owning a beneficial interest in a
Registered Global Security must rely on the procedures of the Depositary for
such Registered Global Security and, if such person is not a participant, on the
procedures of the participant through which such person owns its interest, to
exercise any rights of a holder of record under the Indenture. The Company
understands that under existing industry practices, if the Company requests any
action of holders or if any owner of a beneficial interest in a Registered
Global Security desires to give or take any action which a holder is entitled to
give or take under the Indenture, the Depositary for such Registered Global
Security would authorize the participants holding the relevant beneficial
interests to give or take such action, and such participants would authorize
beneficial owners owning through such participants to give or take such action
or would otherwise act upon the instruction of beneficial owners holding through
them.
Payments of principal of, premium, if any, and any interest on Securities
represented by a Registered Global Security registered in the name of a
Depositary or its nominee will be made to such Depositary or its nominee, as the
case may be, as the registered owner of such Registered Global Security. None of
the Company, the Trustee or any other agent of the Company or agent of the
Trustee will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in
such Registered Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
The Company expects that the Depositary for any Securities represented by a
Registered Global Security, upon receipt of any payment of principal, premium,
if any, or interest in respect of such Registered Global Security, will
immediately credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in such Registered Global Security as
shown on the records of such Depositary. The Company also expects that payments
by participants to owners of beneficial interests in such Registered Global
Security held through such participants will be governed by standing customer
instructions and customary practices, as is now the case with securities held
for the
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accounts of customers in bearer form or registered in "street name," and will be
the responsibility of such participants.
If the Depositary for any Securities represented by a Registered Global
Security notifies the Company that it is at any time unwilling or unable to
continue as Depositary or ceases to be eligible under applicable law, and a
successor Depositary eligible under applicable law is not appointed by the
Company within 90 days, the Company will issue such Securities in definitive
form in exchange for such Registered Global Security. In addition, the Company
may at any time and in its sole discretion determine not to have any of the
Securities of a series represented by one or more Registered Global Securities
and, in such event, will issue Securities of such series in definitive form in
exchange for all of the Registered Global Security or Registered Global
Securities representing such Securities. Any Securities issued in definitive
form in exchange for a Registered Global Security will be registered in such
name or names as the Depositary shall instruct the Trustee. It is expected that
such instructions will be based upon directions received by the Depositary from
participants with respect to ownership of beneficial interests in such
Registered Global Security. The Securities of a series may also be issued in the
form of one or more bearer global Securities (a "Bearer Global Security") that
will be deposited with a common depositary for Euro-clear and CEDEL, or with a
nominee for such depositary identified in the Prospectus Supplement relating to
such series. The specific terms and procedures, including the specific terms of
the depositary arrangement, with respect to any portion of a series of
Securities to be represented by a Bearer Global Security will be described in
the Prospectus Supplement relating to such series.
CERTAIN COVENANTS OF THE COMPANY
The following restrictions apply to each series of Securities unless the
terms of such series of Securities provides otherwise.
RESTRICTIONS ON LIENS. The Indenture provides that the Company will not,
and will not permit any Restricted Subsidiary (as defined herein) to, create,
incur or suffer to exist any mortgage or pledge, as security for any
indebtedness, on or of any shares of stock, indebtedness or other obligations of
a Restricted Subsidiary (as defined herein) or any Principal Property (as
defined herein) of the Company or a Restricted Subsidiary, whether such shares
of stock, indebtedness or other obligations of a Restricted Subsidiary or
Principal Property are owned at the date of the Indenture or thereafter
acquired, unless the Company secures or causes such Restricted Subsidiary to
secure the outstanding Securities equally and ratably with all indebtedness
secured by such mortgage or pledge, so long as such indebtedness shall be so
secured. This covenant shall not apply in the case of: (i) the creation of any
mortgage, pledge or other lien on any shares of stock, indebtedness or other
obligations of a Subsidiary or any Principal Property acquired after the date of
the Indenture (including acquisitions by way of merger or consolidation) by the
Company or a Restricted Subsidiary contemporaneously with such acquisition, or
within 120 days thereafter, to secure or provide for the payment or financing of
any part of the purchase price thereof, or the assumption of any mortgage,
pledge or other lien upon any shares of stock, indebtedness or other obligations
of a Subsidiary or any Principal Property acquired after the date of the
Indenture existing at the time of such acquisition, or the acquisition of any
shares of stock, indebtedness or other obligations of a Subsidiary or any
Principal Property subject to any mortgage, pledge or other lien without the
assumption thereof, PROVIDED that every such mortgage, pledge or lien referred
to in this clause (i) shall attach only to the shares of stock, indebtedness or
other obligations of a Subsidiary or any Principal Property so acquired and
fixed improvements thereon; (ii) any mortgage, pledge or other lien on any
shares of stock, indebtedness or other obligations of a Subsidiary or any
Principal Property existing at the date of the Indenture; (iii) any mortgage,
pledge or other lien on any shares of stock, indebtedness or other obligations
of a Subsidiary or any Principal Property in favor of the Company or any
Restricted Subsidiary; (iv) any mortgage, pledge or other lien on any Principal
Property being constructed or improved securing loans to finance such
construction or improvements; (v) any mortgage, pledge or other lien on shares
of stock, indebtedness or other obligations of a Subsidiary or any Principal
Property incurred in connection with the issuance of tax-
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exempt governmental obligations; and (vi) any renewal of or substitution for any
mortgage, pledge or other lien permitted by any of the preceding clauses (i)
through (v), PROVIDED, in the case of a mortgage, pledge or other lien permitted
under clause (i), (ii) or (iv), the indebtedness secured is not increased nor
the lien extended to any additional assets. (SECTION 4.3(A)) Notwithstanding the
foregoing, the Company or any Restricted Subsidiary may create or assume liens
in addition to those otherwise permitted by the preceding sentence of this
paragraph, and renew, extend or replace such liens, PROVIDED that at the time of
such creation, assumption, renewal, extension or replacement, and after giving
effect thereto, Exempted Debt (as defined herein) does not exceed 10% of
Consolidated Net Worth (as defined herein). (SECTION 4.3(B))
RESTRICTIONS ON SALE AND LEASE-BACK TRANSACTIONS. The Indenture provides
that the Company will not, and will not permit any Restricted Subsidiary to,
sell or transfer, directly or indirectly, except to the Company or a Restricted
Subsidiary, any Principal Property as an entirety, or any substantial portion
thereof, with the intention of taking back a lease of such property, except a
lease for a period of three years or less at the end of which it is intended
that the use of such property by the lessee will be discontinued; PROVIDED that,
notwithstanding the foregoing, the Company or any Restricted Subsidiary may sell
any such Principal Property and lease it back for a longer period (i) if the
Company or such Restricted Subsidiary would be entitled, pursuant to the
provisions of Section 4.3(a) described above under "--Restrictions on Liens", to
create a mortgage on the property to be leased securing Funded Debt (as defined
herein) in an amount equal to the Attributable Debt (as defined herein) with
respect to such sale and lease-back transaction without equally and ratably
securing the outstanding Securities or (ii) if (A) the Company promptly informs
the Trustee of such transaction, (B) the net proceeds of such transaction are at
least equal to the fair value (as determined by Board Resolution of the Company)
of such property and (C) the Company causes an amount equal to the net proceeds
of the sale to be applied to the retirement, within 120 days after receipt of
such proceeds, of Funded Debt incurred or assumed by the Company or a Restricted
Subsidiary (including the Securities): PROVIDED further that, in lieu of
applying all of or any part of such net proceeds to such retirement, the Company
may, within 75 days after such sale, deliver or cause to be delivered to the
applicable trustee for cancellation either debentures or notes evidencing Funded
Debt of the Company (which may include the Securities) or of a Restricted
Subsidiary previously authenticated and delivered by the applicable trustee, and
not theretofore tendered for sinking fund purposes or called for a sinking fund
or otherwise applied as a credit against an obligation to redeem or retire such
notes or debentures, and a certificate of an officer of the Company (which shall
be delivered to the Trustee) stating that the Company elects to deliver or cause
to be delivered such debentures or notes in lieu of retiring Funded Debt as
hereinabove provided. If the Company shall so deliver debentures or notes to the
applicable trustee and the Company shall duly deliver such officer's
certificate, the amount of cash which the Company shall be required to apply to
the retirement of Funded Debt under this provision of the Indenture shall be
reduced by an amount equal to the aggregate of the then applicable optional
redemption prices (not including any optional sinking fund redemption prices) of
such debentures or notes, or, if there are no such redemption prices, the
principal amount of such debentures or notes; PROVIDED, that in the case of
debentures or notes which provide for an amount less than the principal amount
thereof to be due and payable upon a declaration of the maturity thereof, such
amount of cash shall be reduced by the amount of principal of such debentures or
notes that would be due and payable as of the date of such application upon a
declaration of acceleration of the maturity thereof pursuant to the terms of the
indenture pursuant to which such debentures or notes were issued. (SECTION
4.4(A)) Notwithstanding the foregoing, the Company or any Restricted Subsidiary
may enter into sale and lease-back transactions in addition to those otherwise
permitted by this paragraph without any obligation to retire any outstanding
Securities or other Funded Debt, provided that at the time of entering into such
sale and lease-back transactions and after giving effect thereto, Exempted Debt
does not exceed 10% of Consolidated Net Worth. (SECTION 4.4(B))
RESTRICTIONS ON FUNDED DEBT OF RESTRICTED SUBSIDIARIES. The Indenture
provides that the Company will not permit any Restricted Subsidiary (a) to
create, assume or permit to exist any Funded Debt other than (i) Funded Debt
secured by a mortgage, pledge or lien which is permitted to such Restricted
Subsidiary
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under the provisions of Section 4.3(a) described above under "--Restrictions on
Liens", (ii) Funded Debt owed to the Company or any Restricted Subsidiary, (iii)
Funded Debt of a corporation existing at the time it becomes a Restricted
Subsidiary, (iv) Funded Debt existing on the date of the Indenture, (v) Funded
Debt created in connection with the issuance of tax-exempt governmental
obligations and (vi) renewals, extensions or replacements of the foregoing; or
(b) to guarantee, directly or indirectly through any arrangement which is
substantially the equivalent of a guarantee, any Funded Debt except for (i)
guarantees existing on the date of the Indenture, (ii) guarantees which, on the
date of the Indenture, a Restricted Subsidiary is obligated to give, (iii)
guarantees of Funded Debt secured by a mortgage, pledge or lien which is
permitted to such Restricted Subsidiary under the provisions of Section 4.3(a)
described above under "--Restrictions on Liens" and (iv) renewals, extensions or
replacements of the foregoing. (SECTION 4.5(A)) Notwithstanding the foregoing,
any Restricted Subsidiary may create, assume or guarantee Funded Debt in
addition to that otherwise permitted by this paragraph, and renew, extend or
replace such Funded Debt, PROVIDED that at the time of such creation,
assumption, guarantee, renewal, extension or replacement, and after giving
effect thereto, Exempted Debt does not exceed 10% of Consolidated Net Worth.
(SECTION 4.5(B))
CERTAIN DEFINITIONS
The term "Attributable Debt" as defined in the Indenture means when used in
connection with a sale and lease-back transaction referred to above under
"--Restrictions on Sale and Lease-back Transactions", on any date as of which
the amount thereof is to be determined, the product of (a) the net proceeds from
such sale and lease-back transaction multiplied by (b) a fraction, the numerator
of which is the number of full years of the term of the lease relating to the
property involved in such sale and lease-back transaction (without regard to any
options to renew or extend such term) remaining on the date of the making of
such computation and the denominator of which is the number of full years of the
term of such lease measured from the first day of such term.
The term "Consolidated Net Worth" as defined in the Indenture means, at any
date of determination, the consolidated stockholders' equity of the Company, as
set forth on the then most recently available consolidated balance sheet of the
Company and its consolidated Subsidiaries.
The term "Exempted Debt" as defined in the Indenture means the sum, without
duplication, of the following items outstanding as of the date Exempted Debt is
being determined: (i) indebtedness of the Company and its Restricted
Subsidiaries incurred after the date of the Indenture and secured by liens
created or assumed or permitted to exist pursuant to Section 4.3(b) of the
Indenture described above under "--Restrictions on Liens"; (ii) Attributable
Debt of the Company and its Restricted Subsidiaries in respect of all sale and
lease-back transactions with regard to any Principal Property entered into
pursuant to Section 4.4(b) of the Indenture described above under
"--Restrictions on Sale and Lease-back Transactions"; and (iii) Funded Debt of
Restricted Subsidiaries created, assumed or guaranteed pursuant to Section
4.5(b) of the Indenture described above under "--Restrictions on Funded Debt of
Restricted Subsidiaries".
The term "Funded Debt" as defined in the Indenture means all indebtedness
for money borrowed, including purchase money indebtedness, having a maturity of
more than one year from the date of its creation or having a maturity of less
than one year but by its terms being renewable or extendible, at the option of
the obligor in respect thereof, beyond one year from the date of its creation.
The term "Holder" or "Securityholder" as defined in the Indenture means the
registered holder of any Security with respect to registered Securities and the
bearer of any unregistered Security or any coupon appertaining thereto, as the
case may be.
"Original Issue Discount Security" as defined in the Indenture means any
Security that provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration of the maturity thereof
pursuant to Section 6.2 of the Indenture.
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The term "Principal Property" as defined in the Indenture means land, land
improvements, buildings and associated factory and laboratory equipment owned or
leased pursuant to a capital lease and used by the Company or a Restricted
Subsidiary primarily for processing, producing, packaging or storing its
products, raw materials, inventories or other materials and supplies and located
within the United States of America and having an acquisition cost plus
capitalized improvements in excess of 2% of Consolidated Net Worth as of the
date of such determination, but shall not include any such property financed
through the issuance of tax exempt governmental obligations, or any such
property that has been determined by Board Resolution not to be of material
importance to the respective business conducted by the Company or such
Restricted Subsidiary, effective as of the date such Board Resolution is passed.
The term "Restricted Subsidiary" as defined in the Indenture means any
Subsidiary organized and existing under the laws of the United States of America
and the principal business of which is carried on within the United States of
America which owns or is a lessee pursuant to a capital lease of any Principal
Property and in which the investment of the Company and all its Subsidiaries
exceeds 5% of Consolidated Net Worth as of the date of such determination other
than: (i) each Subsidiary the major part of whose business consists of finance,
banking, credit, leasing, insurance, financial services or other similar
operations, or any combination thereof; and (ii) each Subsidiary formed or
acquired after the date of the Indenture for the purpose of acquiring the
business or assets of another Person and which does not acquire all or any
substantial part of the business or assets of the Company or any Restricted
Subsidiary; PROVIDED, HOWEVER that any Subsidiary may be declared a Restricted
Subsidiary by Board Resolution, effective as of the date such Board Resolution
is adopted; PROVIDED further that any such declaration may be rescinded by
further Board Resolution, effective as of the date such further Board Resolution
is adopted.
The term "Subsidiary" as defined in the Indenture means with respect to any
Person, any corporation, association or other business entity of which more than
50% of the outstanding Voting Stock (as defined in the Indenture) is owned
directly or indirectly, by such Person and one or more other Subsidiaries of
such Person.
RESTRICTIONS ON MERGERS AND SALES OF ASSETS
Under the Indenture, the Company shall not consolidate with, merge with or
into, or sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its property and assets (as an entirety or substantially as
an entirety in one transaction or a series of related transactions) to, any
Person (other than a consolidation with or merger with or into a Subsidiary or a
sale, conveyance, transfer, lease or other disposition to a Subsidiary) or
permit any Person to merge with or into the Company unless: (a) either (i) the
Company shall be the continuing Person or (ii) the Person (if other than the
Company) formed by such consolidation or into which the Company is merged or
that acquired or leased such property and assets of the Company shall be a
corporation organized and validly existing under the laws of the United States
of America or any jurisdiction thereof and shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, all of the
obligations of the Company on all of the Securities and under the Indenture and
the Company shall have delivered to the Trustee an opinion of counsel stating
that such consolidation, merger or transfer and such supplemental indenture
complies with this provision and that all conditions precedent provided for in
the Indenture relating to such transaction have been complied with and that such
supplemental indenture constitutes the legal, valid and binding obligation of
the Company or such successor enforceable against such entity in accordance with
its terms, subject to customary exceptions; and (b) an officers' certificate and
opinion of counsel to the effect that immediately after giving effect to such
transaction, no Default (as defined in the Indenture) shall have occurred and be
continuing. (SECTION 5.1)
EVENTS OF DEFAULT
Events of Default defined in the Indenture with respect to the Securities of
any series are: (a) the Company defaults in the payment of the principal of any
Securities of such series when the same becomes
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due and payable at maturity, upon acceleration, redemption or mandatory
repurchase, including as a sinking fund installment, or otherwise; (b) the
Company defaults in the payment of interest on any Securities of such series
when the same becomes due and payable, and such default continues for a period
of 30 days; (c) the Company defaults in the performance of or breaches any other
covenant or agreement of the Company in the Indenture with respect to any
Security of such series or in the Securities of such series and such default or
breach continues for a period of 30 consecutive days after written notice to the
Company by the Trustee or to the Company and the Trustee by the Holders of 25%
or more in aggregate principal amount of the Securities of all series affected
thereby; (d) an involuntary case or other proceeding shall be commenced against
the Company or any Restricted Subsidiary with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in effect
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against the Company
or any Restricted Subsidiary under the federal bankruptcy laws as now or
hereafter in effect; (e) the Company or any Restricted Subsidiary (i) commences
a voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or consents to the entry of an order for relief
in an involuntary case under any such law, (ii) consents to the appointment of
or taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Restricted Subsidiary or
for all or substantially all of the property and assets of the Company or any
Restricted Subsidiary or (iii) effects any general assignment for the benefit of
creditors; or (f) any other Event of Default established with respect to any
series of Securities issued pursuant to the Indenture occurs. (SECTION 6.1)
The Indenture provides that if an Event of Default described in clauses (a)
or (b) of the immediately preceding paragraph with respect to the Securities of
any series then outstanding occurs and is continuing, then, and in each and
every such case, except for any series of Securities the principal of which
shall have already become due and payable, either the Trustee or the Holders of
not less than 25% in aggregate principal amount of the Securities of any such
affected series then outstanding under the Indenture (each such series treated
as a separate class) by notice in writing to the Company (and to the Trustee if
given by Securityholders), may declare the entire principal (or, if the
Securities of any such series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of such series
established pursuant to the Indenture) of all Securities of such affected
series, and the interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable. If an Event of Default described in clauses (c) or (f) of the
immediately preceding paragraph with respect to the Securities of one or more
but not all series then outstanding or with respect to the Securities of all
series then outstanding occurs and is continuing, then, and in each and every
such case, except for any series of Securities the principal of which shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Securities of all such affected
series then outstanding under the Indenture (treated as a single class) by
notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the entire principal (or, if the Securities of any
such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series established
pursuant to the Indenture) of all Securities of all such affected series, and
the interest accrued thereon, if any, to be due and payable immediately, and
upon any such declaration the same shall become immediately due and payable. If
an Event of Default described in clause (d) or (e) of the immediately preceding
paragraph occurs and is continuing, then the principal amount (or, if any
Securities are Original Issue Discount Securities, such portion of the principal
as may be specified in the terms thereof established pursuant to the Indenture)
of all the Securities then outstanding and interest accrued thereon, if any,
shall be and become immediately due and payable, without any notice or other
action by any Holder or the Trustee to the full extent permitted by applicable
law. Upon certain conditions such declarations may be rescinded and annulled and
past defaults may be waived by the Holders of a majority in principal of the
then outstanding Securities of all such series that have been accelerated
(voting as a single class). (SECTION 6.2)
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The Indenture contains a provision under which, subject to the duty of the
trustee during a default to act with the required standard of care, (i) the
Trustee may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, officers' certificate, opinion of counsel (or
both), statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper person or persons and the Trustee need not investigate
any fact or matter stated in the document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit; (ii) before the Trustee acts or refrains from acting, it may
require an officers' certificate and/or an opinion of counsel, which shall
conform to the requirements of the Indenture and the Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
certificate or opinion; subject to the terms of the Indenture, whenever in the
administration of the trusts of the Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting any action under the Indenture, such matter (unless other
evidence in respect thereof be specifically prescribed in the Indenture) may, in
the absence of negligence or bad faith on the part of the Trustee, be deemed to
be conclusively proved and established by an officers' certificate delivered to
the Trustee, and such certificate, in the absence of negligence or bad faith on
the part of the Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted by it under the provisions of the Indenture upon the
faith thereof; (iii) the Trustee may act through its attorneys and agents not
regularly in its employ and shall not be responsible for the misconduct or
negligence of any agent or attorney appointed with due care; (iv) any request,
direction, order or demand of the Company mentioned in the Indenture shall be
sufficiently evidenced by an officers' certificate (unless other evidence in
respect thereof be specifically prescribed in the Indenture); and any Board
Resolution may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Company; (v) the Trustee shall be
under no obligation to exercise any of the rights or powers vested in it by the
Indenture at the request, order or direction of any of the Holders, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction; (vi) the Trustee shall not be liable
for any action it takes or omits to take in good faith that it believes to be
authorized or within its rights or powers or for any action it takes or omits to
take in accordance with the direction of the Holders in accordance with the
Indenture relating to 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, under the Indenture; (vii) the Trustee may consult
with counsel and the written advice of such counsel or any opinion of counsel
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it under the Indenture in good faith and in
reliance thereon; and (viii) prior to the occurrence of an Event of Default
under the Indenture and after the curing or waiving of all Events of Default,
the Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, officers' certificate, opinion of
counsel, Board Resolution, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing so to do by the
Holders of not less than a majority in aggregate principal amount of the
Securities of all series affected then outstanding; PROVIDED that, if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of the Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding. (SECTION 7.2)
Subject to such provisions in the Indenture for the indemnification of the
Trustee and certain other limitations, the Holders of at least a majority in
aggregate principal amount (or, if any Securities are Original Issue Discount
Securities, such portion of the principal as may be specified in the terms
thereof established pursuant to the Indenture) of the outstanding Securities of
all series affected (voting as a single class) may direct the time, method and
place of conducting any proceeding for any remedy available to the
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<PAGE>
Trustee or exercising any trust or power conferred on the Trustee with respect
to the Securities of such series by the Indenture; PROVIDED, that the Trustee
may refuse to follow any direction that conflicts with law or the Indenture,
that may involve the Trustee in personal liability, or that the Trustee
determines in good faith may be unduly prejudicial to the rights of Holders not
joining in the giving of such direction; and PROVIDED FURTHER, that the Trustee
may take any other action it deems proper that is not inconsistent with any
directions received from Holders of Securities pursuant to this paragraph.
(SECTION 6.5)
Subject to various provisions in the Indenture, the Holders of at least a
majority in principal amount (or, if the Securities are Original Issue Discount
Securities, such portion of the principal as may be specified in the terms
thereof established pursuant to the Indenture) of the outstanding Securities of
all series affected (voting as a single class), by notice to the Trustee, may
waive an existing Default or Event of Default with respect to the Securities of
such series and its consequences, except a Default in the payment of principal
of or interest on any Security as specified in clauses (a) or (b) of Section 6.1
of the Indenture or in respect of a covenant or provision of the Indenture which
cannot be modified or amended without the consent of the Holder of each
outstanding Security affected. Upon any such waiver, such Default shall cease to
exist, and any Event of Default with respect to the Securities of such series
arising therefrom shall be deemed to have been cured, for every purpose of the
Indenture; but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereto. (SECTION 6.4)
The Indenture provides that no Holder of any Securities of any series may
institute any proceeding, juridical or otherwise, with respect to the Indenture
or the Securities of such series, or for the appointment of a receiver or
trustee, or for any other remedy under the Indenture, unless: (i) such Holder
has previously given to the Trustee written notice of a continuing Event of
Default with respect to the Securities of such series; (ii) the Holders of at
least 25% in aggregate principal amount of outstanding Securities of all such
series affected shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee under
the Indenture; (iii) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory to the Trustee against any costs, liabilities
or expenses to be incurred in compliance with such request; (iv) the Trustee for
60 days after its receipt of such notice, request and offer of indemnity has
failed to institute any such proceeding; and (v) during such 60-day period, the
Holders of a majority in aggregate principal amount of the outstanding
Securities of all such affected series have not given the Trustee a direction
that is inconsistent with such written request. A Holder may not use the
Indenture to prejudice the rights of another Holder or to obtain a preference or
priority over such other Holder. (SECTION 6.6)
The Indenture contains a covenant that the Company will file with the
Trustee, within 15 days after the Company is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act. (SECTION 4.7)
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides with respect to each series of Securities that the
Company may terminate its obligations under the Securities of a series and the
Indenture with respect to Securities of such series if: (i) all Securities of
such series previously authenticated and delivered, with certain exceptions,
have been delivered to the Trustee for cancellation and the Company has paid all
sums payable by it under the Indenture; or (ii) (A) the Securities of such
series mature within one year or all of them are to be called for redemption
within one year under arrangements satisfactory to the Trustee for giving the
notice of redemption, (B) the Company irrevocably deposits in trust with the
Trustee, as trust funds solely for the benefit of the Holders of such
Securities, for that purpose, money or U.S. Government Obligations or a
combination thereof sufficient (unless such funds consist solely of money, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee), without
consideration of any reinvestment, to pay principal of and interest on the
Securities of such series to maturity or redemption, as the case may be, and to
pay all other sums payable by it under
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<PAGE>
the Indenture, and (C) the Company delivers to the Trustee an officers'
certificate and an opinion of counsel, in each case stating that all conditions
precedent provided for in the Company's Indenture relating to the satisfaction
and discharge of the Indenture with respect to the Securities of such series
have been complied with. With respect to the foregoing clause (i), only the
Company's obligations to compensate and indemnify the Trustee under the
Indenture shall survive. With respect to the foregoing clause (ii), only the
Company's obligations to execute and deliver Securities of such series for
authentication, to set the terms of the Securities of such series, to maintain
an office or agency in respect of the Securities of such series, to have moneys
held for payment in trust, to register the transfer or exchange of Securities of
such series, to deliver Securities of such series for replacement or to be
cancelled, to compensate and indemnify the Trustee and to appoint a successor
trustee, and its right to recover excess money held by the Trustee shall survive
until such Securities are no longer outstanding. Thereafter, only the Company's
obligations to compensate and indemnify the Trustee, and its right to recover
excess money held by the Trustee shall survive. (SECTION 8.1)
The Indenture provides that the Company (i) will be deemed to have paid and
will be discharged from any and all obligations in respect of the Securities of
any series, and the provisions of the Indenture will, except as noted below, no
longer be in effect with respect to the Securities of such series ("legal
defeasance") and (ii) may omit to comply with any term, provision or condition
of the Indenture described above under "--Certain Covenants" (or any other
specific covenant relating to such series provided for in a Board Resolution or
supplemental indenture which may by its terms be defeased pursuant to the
Indenture), and such omission shall be deemed not to be an Event of Default
under clauses (c) or (f) of the first paragraph of "--Events of Default" with
respect to the outstanding Securities of a series ("covenant defeasance");
PROVIDED that the following conditions shall have been satisfied: (A) the
Company has irrevocably deposited in trust with the Trustee as trust funds
solely for the benefit of the Holders of the Securities of such series, for
payment of the principal of and interest on the Securities of such series, money
or U.S. Government Obligations or a combination thereof sufficient (unless such
funds consist solely of money, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee) without consideration of any reinvestment and after
payment of all federal, state and local taxes or other charges and assessments
in respect thereof payable by the Trustee, to pay and discharge the principal of
and accrued interest on the outstanding Securities of such series to maturity or
earlier redemption (irrevocably provided for under arrangements satisfactory to
the Trustee), as the case may be; (B) such deposit will not result in a breach
or violation of, or constitute a default under, the Indenture or any other
material agreement or instrument to which the Company is a party or by which it
is bound; (C) no Default with respect to such Securities of such series shall
have occurred and be continuing on the date of such deposit; (D) the Company
shall have delivered to the Trustee an opinion of counsel that (1) the Holders
of the Securities of such series will not recognize income, gain or loss for
federal income tax purposes as a result of the Company's exercise of its option
under this provision of the Indenture and will be subject to federal income tax
on the same amount and in the same manner and at the same times as would have
been the case if such deposit and defeasance had not occurred and (2) the
Holders of the Securities of such series have a valid security interest in the
trust funds subject to no prior liens under the Uniform Commercial Code, and (E)
the Company has delivered to the Trustee an officers' certificate and an opinion
of counsel, in each case stating that all conditions precedent provided for in
the Indenture relating to the defeasance contemplated have been complied with.
In the case of legal defeasance under clause (i) above, the opinion of counsel
referred to in clause (D)(1) above may be replaced by a ruling directed to the
Trustee received from the Internal Revenue Service to the same effect.
Subsequent to legal defeasance under clause (i) above, the Company's obligations
to execute and deliver Securities of such series for authentication, to set the
terms of the Securities of such series, to maintain an office or agency in
respect of the Securities of such series, to have moneys held for payment in
trust, to register the transfer or exchange of Securities of such series, to
deliver Securities of such series for replacement or to be cancelled, to
compensate and indemnify the Trustee and to appoint a successor trustee, and its
right to recover excess money held by the Trustee shall survive until
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<PAGE>
such Securities are no longer outstanding. After such Securities are no longer
outstanding, in the case of legal defeasance under clause (i) above, only the
Company's obligations to compensate and indemnify the Trustee and its right to
recover excess money held by the Trustee shall survive. (SECTIONS 8.2 AND 8.3)
MODIFICATION OF THE INDENTURE
The Indenture provides that the Company and the Trustee may amend or
supplement the Indenture or the Securities of any series without notice to or
the consent of any Holder: (1) to cure any ambiguity, defect or inconsistency in
the Indenture; PROVIDED that such amendments or supplements shall not materially
and adversely affect the interests of the Holders; (2) to comply with Article 5
of the Indenture; (3) to comply with any requirements of the Commission in
connection with the qualification of the Indenture under the Trust Indenture
Act; (4) to evidence and provide for the acceptance of appointments under the
Indenture with respect to the Securities of any or all series by a successor
Trustee; (5) to establish the form or forms or terms of Securities of any series
or of the coupons appertaining to such Securities as permitted under the
Indenture; (6) to provide for uncertificated or unregistered Securities and to
make all appropriate changes for such purpose; and (7) to make any change that
does not materially and adversely affect the rights of any Holder. (SECTION 9.1)
The Indenture also contains provisions whereby the Company and the Trustee,
subject to certain conditions, without prior notice to any Holders, may amend
the Indenture and the outstanding Securities of any series with the written
consent of the Holders of a majority in principal amount of the Securities then
outstanding of all series affected by such supplemental indenture (all such
series voting as one class), and the Holders of a majority in principal amount
of the outstanding Securities of all series affected thereby (all such series
voting as one class) by written notice to the Trustee may waive future
compliance by the Company with any provision of the Indenture or the Securities
of such series. Notwithstanding the foregoing provisions, without the consent of
each Holder affected thereby, an amendment or waiver, including a waiver
pursuant to Section 6.4 of the Indenture, may not: (i) extend the stated
maturity of the principal of, or any sinking fund obligation or any installment
of interest on, such Holder's Security, or reduce the principal amount thereof
or the rate of interest thereon (including any amount in respect of original
issue discount), or any premium payable with respect thereto, or adversely
affect the rights of such Holder under any mandatory redemption or repurchase
provision or any right of redemption or repurchase at the option of such Holder,
or reduce the amount of the principal of an Original Issue Discount Security
that would be due and payable upon an acceleration of the maturity thereof or
the amount thereof provable in bankruptcy, or change any place of payment where,
or the currency in which, any Security or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of any such
payment on or after the due date therefor; (ii) reduce the percentage in
principal amount of outstanding Securities of the relevant series the consent of
whose Holders is required for any such supplemental indenture, for any waiver of
compliance with certain provisions of the Indenture or certain Defaults and
their consequences provided for in the Indenture; (iii) waive a Default in the
payment of principal of or interest on any Security of such Holder; or (iv)
modify any of the provisions of this section of the Indenture, except to
increase any such percentage or to provide that certain other provisions of the
Indenture cannot be modified or waived without the consent of the Holder of each
outstanding Security affected thereby. A supplemental indenture which changes or
eliminates any covenant or other provision of the Indenture which has expressly
been included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of Holders of Securities of such series
with respect to such covenant or provision, shall be deemed not to affect the
rights under the Indenture of the Holders of Securities of any other series or
of the coupons appertaining to such Securities. It shall not be necessary for
the consent of any Holder under this section of the Indenture to approve the
particular form of any proposed amendment, supplement or waiver, but it shall be
sufficient if such consent approves the substance thereof. After an amendment,
supplement or waiver under this section of the Indenture becomes effective, the
Company shall give to the Holders affected thereby a notice briefly describing
the amendment, supplement or waiver. The Company will mail supplemental
Indentures to Holders upon request. Any failure of the
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Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture or waiver.
(SECTION 9.2)
CONCERNING THE TRUSTEE
The Company and its subsidiaries maintain ordinary banking relationships
with Citibank, N.A. and its affiliates and a number of other banks. Citibank,
N.A. is one of the five senior managing agents under the Company's principal
revolving credit and commercial paper liquidity facilities and RJRN's credit
agreements and is the trustee under various indentures pursuant to which RJRN
has issued debt securities from time to time. Citibank, N.A. has also extended
loans to various RJRN subsidiaries and provides certain cash management and
other financial and agency services to RJRN and its subsidiaries.
PLAN OF DISTRIBUTION
The Company may offer the Securities directly to purchasers or to or through
underwriters, dealers or agents. Any such underwriters, dealers or agents
involved in the offer and the sale of the Securities in respect of which this
Prospectus is delivered will be named in the Prospectus Supplement. The
Prospectus Supplement with respect to such Securities will also set forth the
terms of the offering of such Securities, including the purchase price of such
Securities and the proceeds of the Company from such sale, any underwriting
discounts and other items constituting underwriters' compensation, any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers and any securities exchanges on which such Securities may be
listed.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Prospectus Supplement will
describe the method of distribution of the Securities.
If underwriters are used in an offering of Securities, the name of each
managing underwriter, if any, and any other underwriters and the terms of the
transaction, including any underwriting discounts and other items constituting
compensation of the underwriters and dealers, if any, will be set forth in the
Prospectus Supplement relating to such offering and the Securities will be
acquired by the underwriters for their own accounts and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
Any initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time. It is anticipated
that any underwriting agreement pertaining to any Securities will (1) entitle
the underwriters to indemnification by the Company against certain civil
liabilities under the Securities Act, or to contribution with respect to
payments which the underwriters may be required to make in respect thereof, (2)
provide that the obligations of the underwriters will be subject to certain
conditions precedent and (3) provide that the underwriters will be obligated to
purchase all Securities offered in a particular offering if any such Securities
are purchased.
If a dealer is used in an offering of Securities, the Company will sell such
Securities to the dealer, as principal. The dealer may then resell such
Securities to the public at varying prices to be determined by such dealer at
the time of resale. The name of the dealer and the terms of the transaction will
be set forth in the Prospectus Supplement relating thereto.
If an agent is used in an offering of Securities, the agent will be named,
and the terms of the agency will be set forth, in the Prospectus Supplement
relating thereto. Unless otherwise indicated in such Prospectus Supplement, an
agent will act on a best efforts basis for the period of its appointment.
Dealers and agents named in a Prospectus Supplement may be deemed to be
underwriters (within the meaning of the Securities Act) of the Securities
described therein and, under agreements which may be entered into with the
Company, may be entitled to indemnification by the Company against certain civil
16
<PAGE>
liabilities under the Securities Act. Underwriters, dealers and agents may be
customers of, engage in transactions with, or perform services for, the Company
in the ordinary course of business.
Offers to purchase Securities may be solicited, and sales thereof may be
made, by the Company directly to institutional investors or others, who may be
deemed to be underwriters within the meaning of the Securities Act with respect
to any resales thereof. The terms of any such offer will be set forth in the
Prospectus Supplement relating thereto.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other agents of the Company to solicit offers by certain
institutional investors to purchase Securities from the Company pursuant to
contracts providing for payment and delivery at a future date. Institutional
investors with which such contracts may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such purchasers must be
approved by the Company. The obligations of any purchaser under any such
contract will not be subject to any conditions except that (1) the purchase of
the Securities shall not at the time of delivery be prohibited under the laws of
any jurisdiction to which such purchaser is subject and (2) if the Securities
are also being sold to underwriters, the Company shall have sold to such
underwriters the Securities not subject to delayed delivery. Underwriters and
other agents will not have any responsibility in respect of the validity or
performance of such contracts.
The anticipated date of delivery of Securities will be set forth in the
Prospectus Supplement relating to each offering.
LEGAL MATTERS
The validity of the Securities will be passed upon for the Company by James
A. Kirkman III, Esq., Executive Vice President, General Counsel and Secretary of
the Company. Mr. Kirkman owns options to purchase shares of Class A Common Stock
which represent less than 0.1% of the currently outstanding shares of all
classes of Nabisco Holdings Common Stock.
EXPERTS
The consolidated financial statements of the Company as of December 31, 1994
and 1993 and for each of the three years in the period ended December 31, 1994
incorporated herein by reference to the Company's Current Report on Form 8-K
filed by Nabisco, Inc. on June 16, 1995, which includes the Company's annual
report for the fiscal year ended December 31, 1994, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report
incorporated by reference herein, and have been so incorporated by reference in
reliance upon such report given upon the authority of that firm as experts in
accounting and auditing.
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NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR BY ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITY OTHER THAN THE NOTES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION
IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION TO SUCH PERSON.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AT ANY
TIME NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF. NO ACTION HAS BEEN OR WILL BE TAKEN IN ANY JURISDICTION BY THE
COMPANY OR BY ANY UNDERWRITER THAT WOULD PERMIT A PUBLIC OFFERING OF THE NOTES
OFFERED HEREBY OR POSSESSION OR DISTRIBUTION OF THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED,
OTHER THAN IN THE UNITED STATES. PERSONS INTO WHOSE POSSESSION THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS COME ARE REQUIRED BY THE COMPANY AND THE
UNDERWRITERS TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY RESTRICTIONS AS TO
THE OFFERING OF THE NOTES OFFERED HEREBY AND THE DISTRIBUTION OF THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Use of Proceeds................................. S-3
Risk Factors.................................... S-3
Description of the Notes........................ S-6
Certain Federal Income Tax Considerations....... S-9
Underwriting.................................... S-12
Legal Matters................................... S-13
PROSPECTUS
Available Information........................... 2
Incorporation of Documents by Reference......... 2
The Company..................................... 3
Ratio of Earnings to Fixed Charges.............. 3
Use of Proceeds................................. 3
Description of Securities....................... 4
Plan of Distribution............................ 16
Legal Matters................................... 17
Experts......................................... 17
</TABLE>
NABISCO, INC.
$400,000,000
6% NOTES DUE 2011,
PUTABLE/CALLABLE FEBRUARY 15, 2001
$300,000,000
6 1/8% NOTES DUE 2033,
PUTABLE/CALLABLE FEBRUARY 1, 2003
$300,000,000
6 3/8% NOTES DUE 2035,
PUTABLE/CALLABLE FEBRUARY 1, 2005
[LOGO]
PROSPECTUS SUPPLEMENT
JANUARY 15, 1998
(INCLUDING PROSPECTUS
DATED DECEMBER 20, 1995)
MANAGERS FOR THE OFFERING OF THE 6% NOTES:
MORGAN STANLEY DEAN WITTER
UBS SECURITIES
ABN AMRO CHICAGO CORPORATION
LEHMAN BROTHERS INC.
BANCAMERICA ROBERTSON STEPHENS
CITICORP SECURITIES, INC.
MANAGERS FOR THE OFFERING OF THE 6 1/8% NOTES:
UBS SECURITIES
MORGAN STANLEY DEAN WITTER
DEUTSCHE MORGAN GRENFELL
SALOMON SMITH BARNEY
BNY CAPITAL MARKETS, INC.
BT ALEX. BROWN
MANAGERS FOR THE OFFERING OF THE 6 3/8% NOTES:
UBS SECURITIES
MORGAN STANLEY DEAN WITTER
CHASE SECURITIES INC.
MERRILL LYNCH & CO.
CIBC OPPENHEIMER
CREDIT LYONNAIS SECURITIES (USA) INC.
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