<PAGE> 1
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MAY 30, 1997)
$400,000,000
[POTASH LOGO] POTASH CORPORATION OF SASKATCHEWAN INC.
7.125% NOTES DUE JUNE 15, 2007
------------------
Potash Corporation of Saskatchewan Inc. ("PCS") is offering $400,000,000
principal amount of its 7.125% Notes due June 15, 2007 (the "Notes"). Interest
on the Notes will be payable semi-annually in arrears on each June 15 and
December 15, commencing December 15, 1997. The Notes will mature on June 15,
2007. The Notes will not be redeemable prior to maturity and will not be subject
to any sinking fund. See "Description of the Notes."
The Notes will be represented by one or more fully-registered notes in
book-entry form (the "Global Securities") registered in the name of a nominee of
The Depositary Trust Company ("DTC"). Beneficial interests in the Global
Securities will be shown on, and transfers thereof will be effected only
through, records maintained by DTC (with respect to beneficial interests of
participants) or by participants or persons that hold interests through
participants (with respect to beneficial interests of beneficial owners). Owners
of beneficial interests in the Global Securities will be entitled to physical
delivery of Notes in certificated form equal in principal amount to their
respective beneficial interests only under the limited circumstances described
in "Description of the Notes -- Book-Entry System." Settlement for the Notes
will be made in immediately available funds. The Notes will trade in DTC's
Same-Day Funds Settlement System until maturity, or until the Notes are issued
in certificated form, and secondary market trading activity in the Notes will
therefore settle in immediately available funds. All Payments of principal and
interest in respect of the Notes will be made by PCS in immediately available
funds. See "Description of the Notes -- Same-Day Settlement and Payment."
------------------
PROSPECTIVE INVESTORS SHOULD BE AWARE THAT THE ACQUISITION OF THE
SECURITIES DESCRIBED HEREIN MAY HAVE TAX CONSEQUENCES BOTH IN THE UNITED STATES
AND IN CANADA. SUCH CONSEQUENCES MAY NOT BE FULLY DESCRIBED HEREIN.
------------------
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 TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
============================================================================================================
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) PCS(1)(3)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Per Note 99.332% 0.650% 98.682%
- ------------------------------------------------------------------------------------------------------------
Total $397,328,000 $2,600,000 $394,728,000
============================================================================================================
</TABLE>
(1) Plus accrued interest, if any, from June 16, 1997.
(2) PCS has agreed to indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
(3) Before deducting expenses payable by PCS estimated to be $360,000.
------------------
The Notes are offered by the Underwriters named herein, subject to prior
sale, when, as and if accepted by the Underwriters and subject to certain
conditions. It is expected that delivery of the Notes in book-entry form will be
made through the facilities of DTC, on or about June 16, 1997.
------------------
SMITH BARNEY INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.
J.P. MORGAN & CO.
June 11, 1997
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING
OVER-ALLOTMENT, STABILIZING TRANSACTIONS AND COVERING TRANSACTIONS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
S-2
<PAGE> 3
THE COMPANY
The Company is one of the world's largest integrated fertilizer companies
with significant market share in each of the three primary fertilizer
products -- potash, phosphate and nitrogen. In 1996, the PCS's potash production
represented 15% of global production, 23% of global potash capacity and an
estimated 41% of global potash excess capacity. The Company is the third largest
producer of phosphates worldwide by capacity, currently representing
approximately 9% of world production and 7% of world capacity. The Company
believes its potash and phosphate reserves to be the largest in North America.
On March 6, 1997, the Company acquired all of the outstanding capital stock
of Arcadian Corporation in exchange for cash of $555 million and 8,030,236
common shares of PCS. Since acquiring Arcadian Corporation, the Company has
become the largest producer and marketer of nitrogen fertilizer and chemical
products in the Western hemisphere. Arcadian Corporation now operates under the
name PCS Nitrogen, Inc. In 1996, sales of Arcadian Corporation were divided
approximately 60% to agricultural customers and 40% to industrial customers.
The Company's products are used for agricultural and industrial purposes as
well as for food ingredients. The Company produces and sells potash, solid
phosphate fertilizers (principally diammonium phosphate ("DAP")), liquid
phosphate fertilizers, phosphate feed supplements, purified phosphoric acid,
ammonia, urea, ammonium nitrate, nitric acid and nitrogen solutions. The Company
produces potash from six mines in Saskatchewan (five of which it owns and
operates), one in New Brunswick and one in Utah. The Company operates the
world's largest vertically integrated phosphate mine and processing plant, which
is located in North Carolina, a phosphate mine and two chemical plant complexes
in northern Florida and seven phosphate feed plants in the United States. In
addition, the Company manufactures, processes and distributes fertilizer and
other agricultural supplies from plants located in Florida, Georgia and Alabama.
As a result of the acquisition of Arcadian Corporation, the Company acquired
eight sites dedicated to the production of nitrogen-related products, one of
which also produces phosphate-related products.
S-3
<PAGE> 4
FINANCIAL INFORMATION
The following sets forth selected historical and pro forma consolidated
financial information of PCS for the periods indicated. The summary historical
consolidated financial information is presented in accordance with GAAP and
should be read in conjunction with the Consolidated Financial Statements and the
unaudited consolidated interim financial statements for each of the three-month
periods ended March 31, 1996 and 1997, incorporated by reference in the
accompanying Prospectus. For a discussion of the principal differences between
GAAP and U.S. generally accepted accounting principles, see Note 25 to the
Consolidated Financial Statements. The historical consolidated financial
information for each of the years in the five-year period ended December 31,
1996 are derived from consolidated financial statements of PCS audited by
Deloitte & Touche. The historical consolidated financial information for each of
the three-month periods ended March 31, 1996 and 1997 are derived from the
unaudited consolidated interim financial statements of PCS incorporated by
reference in the Prospectus. The three-month results are not necessarily
indicative of the results that may be expected for any other period or a full
year. The pro forma income statement data for the year ended December 31, 1996
gives effect to the acquisition of Arcadian Corporation (the "Arcadian
Acquisition") as if it had occurred at the beginning of such period. The pro
forma financial information does not purport to be indicative of PCS's results
of operations that would actually have been obtained if the Arcadian Acquisition
had been completed on such date or to project PCS's results of operations at any
future date or for any future period.
<TABLE>
<CAPTION>
THREE MONTHS YEAR ENDED DECEMBER 31,
ENDED MARCH 31, ---------------------------------------------------------------------
--------------------- PRO FORMA
1997(1) 1996 1996 1996 1995(2) 1994 1993 1992
--------- --------- --------- --------- --------- --------- --------- ---------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales.............. 464,834 366,871 2,604,608 1,403,868 856,080 363,117 212,193 214,083
Operating income....... 90,513 87,122 580,672 299,492 224,249 98,475 56,869 50,587
Net income............. 56,365 63,678 353,687 209,036 159,486 91,219 44,697 39,875
Net income per share... 1.18 1.40 6.60 4.59 3.68 2.12 1.13 1.03
FINANCIAL POSITION DATA
(AT END OF PERIOD):
Working capital........ 334,974 210,919 278,801 136,078 103,281 36,985 70,912
Total assets........... 4,446,617 2,525,099 2,494,387 2,581,817 1,027,766 1,036,490 915,049
Long-term debt......... 1,365,791 714,417 619,963 714,498 2,000 20,128 48,900
Shareholders' equity... 2,021,247 1,295,573 1,405,496 1,241,875 964,334 903,719 809,460
OTHER FINANCIAL DATA:
Operating cash flow.... 82,565 68,644 296,186 233,483 150,705 49,773 57,416
Capital expenditures... 25,282 8,384 58,939 39,596 16,751 15,796 9,872
Ratio of earnings to
fixed charges(3)..... 5.36 5.51 5.04 5.48 4.67 14.20 5.03 4.54
</TABLE>
- ---------------
Notes:
(1) The Company acquired Arcadian Corporation on March 6, 1997.
(2) The Company acquired Texasgulf Inc. in April 1995 and White Springs
Agricultural Chemicals, Inc. in October 1995.
(3) For the purpose of computing the ratio of earnings to fixed charges (a)
earnings have been calculated by adding income taxes and fixed charges to
net income, and (b) fixed charges consist of the total of interest charges
and a portion of rentals determined to be representative of the interest
factor.
S-4
<PAGE> 5
CAPITALIZATION
The following table sets forth the consolidated capitalization of PCS at
March 31, 1997, and as adjusted to give effect to the issuance and sale of the
Notes and application of the estimated net proceeds therefrom as if such
issuance and sale and application of proceeds had occurred on March 31, 1997.
<TABLE>
<CAPTION>
AT MARCH 31, 1977
--------------------------
(THOUSANDS OF DOLLARS)
(UNAUDITED)
OUTSTANDING AS ADJUSTED
----------- -----------
<S> <C> <C>
Cash.............................................................. $ 81,035 $ 78,075(1)
========= =========
Short-term debt................................................... $ 140,000 $ 140,000
========= =========
Long-term obligations under capital leases........................ $ 1,391 $ 1,391
Long-term debt
Existing credit facility..................................... 1,320,000 920,000
Notes offered hereby......................................... 0 400,000
Senior notes................................................. 900 900
Industrial revenue and pollution control obligations......... 43,800 43,800
----------- -----------
Total Long-term Obligations............................. 1,366,091 1,366,091
----------- -----------
Shareholders' Equity
Share capital
Unlimited authorization of common shares; issued and
outstanding: 53,662,876 shares.............................. 1,204,192 1,204,192
Contributed surplus............................................... 336,486 336,486
Retained earnings................................................. 480,569 480,569
----------- -----------
Total Shareholders' Equity.............................. 2,021,247 2,021,247
----------- -----------
Total Capitalization............................... $ 3,387,338 $ 3,387,338
========= =========
</TABLE>
- ---------------
(1) Cash has been adjusted to reflect estimated expenses of $360,000 and
Underwriters' discounts and commissions of 0.65% of the aggregate principal
amount of the Notes.
USE OF PROCEEDS
The net proceeds to PCS from the sale of the Notes will be used to repay
borrowings outstanding under the Term Credit Agreement between The Bank of Nova
Scotia (and other financial institutions) and PCS (the "Borrowings"). The
outstanding Borrowings presently bear an interest rate of approximately 6.0% and
are renewable every 364 days with the consent of the lenders. If not renewed
they will be repayable in 20 quarterly installments each equal to 1% of the
principal outstanding with a final payment of the remaining principal due after
five years. The proceeds of the Borrowings were used to retire existing debt of
PCS and to finance the acquisition and refinancing of Arcadian Corporation.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes (referred to
in the Prospectus as "Securities") supplements, and to the extent inconsistent
therewith, replaces, the description of the general terms and provisions of
Securities set forth in the Prospectus, to which description reference is hereby
made. The following statements relating to the Notes and the Indenture between
PCS and Bank of The Nova Scotia Trust Company of New York (the "Indenture
Trustee"), dated as of June 16, 1997 (the "Indenture"), are summaries of
provisions contained therein and do not purport to be complete. Such statements
are qualified by reference to the provisions of the Indenture, including the
definitions therein of certain terms. (Capitalized terms not otherwise defined
herein shall have the meanings given to them in the Prospectus.)
S-5
<PAGE> 6
GENERAL
The Notes will be issued under the Indenture, and will be limited in this
series to an aggregate principal amount of $400,000,000. The Notes will mature
on June 15, 2007 (the "Maturity Date"). The Notes will not be redeemable prior
to maturity and will not be subject to any sinking fund provisions. The Notes
will only be issued in fully registered book-entry form without coupons in
denominations of $1,000 and integral multiples thereof, except under the limited
circumstances described below under "Book-Entry System."
The Notes will be direct obligations of PCS and will rank equally with each
other and with all other unsecured and unsubordinated indebtedness of PCS. The
Notes will be effectively subordinated to the prior claims of each secured
lender to PCS to the extent of the security that secures such lender's loan. As
of April 30, 1997, such loans aggregated approximately $1,367,000. Subject to
certain limitations set forth in the Indenture and as described under
"Description of Securities -- Certain Covenants" and "-- Merger, Consolidation
or Sale" in the Prospectus, the Indenture permits PCS to incur additional
secured and unsecured indebtedness.
Reference is made to "Description of Securities -- Certain Covenants" in
the Prospectus for a description of the covenants applicable to the Notes.
Compliance with such covenants generally may not be waived by the Indenture
Trustee unless the Holders of at least a majority in principal amount of all
outstanding Notes consent to such waiver; provided, however, that the defeasance
and covenant defeasance provisions in the Indenture described under "Description
of Securities -- Discharge, Defeasance and Covenant Defeasance" in the
Prospectus will apply to the Notes. Notices and demands to or upon PCS in
respect of the Notes may be served at Potash Corporation of Saskatchewan Inc.,
122 -- 1st Avenue South, Saskatatoon, Saskatchewan, Canada S7K 7G3, attention:
Sr. Vice President, Finance & Treasurer.
Except as described under "Description of Securities -- Merger,
Consolidation or Sale" in the Prospectus, the Indenture does not contain any
other provisions that would limit the ability of PCS to incur indebtedness or
that would afford Holders of the Notes protection in the event of (a) a highly
leveraged or similar transaction involving PCS, or (b) a reorganization,
restructuring, merger or similar transaction involving PCS that may adversely
affect the Holders of the Notes. In addition, subject to the limitations set
forth under "Description of Securities -- Certain Covenants" and "-- Merger,
Consolidation or Sale" in the Prospectus, PCS may, in the future, enter into
certain transactions such as the sale of all or substantially all of its assets
or the merger or consolidation of PCS with another entity that would increase
the amount of PCS's indebtedness or substantially reduce or eliminate PCS's
assets, which may have an adverse effect on PCS's ability to service its
indebtedness, including the Notes.
PRINCIPAL AND INTEREST
The Notes will bear interest at the rate set forth on the cover page of
this Prospectus Supplement from June 16, 1997, or the most recent Interest
Payment Date to which interest has been paid or provided for, payable
semi-annually in arrears on each June 15 and December 15, commencing December
15, 1997 (each, an "Interest Payment Date"), and on the applicable Maturity Date
to the persons (the "Holders") in whose names the applicable Notes are
registered in the securities register applicable to the Notes at the close of
business 15 calendar days prior to such payment date regardless of whether such
day is a Business Day (each, a "Regular Record Date"). Interest on the Notes
will be computed on the basis of a 360-day year of twelve 30-day months, and
paid in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
The principal of Notes payable on the applicable Maturity Date will be paid
against presentation and surrender of such Notes at the corporate trust office
of the Indenture Trustee, located initially at One Liberty Plaza, New York, N.Y.
10006, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
If any Interest Payment Date or a Maturity Date falls on a day that is not
a Business Day, the required payment shall be made on the next Business Day as
if it were made on the date such payment was due and no interest shall accrue on
the amount so payable for the period from and after such Interest Payment Date
or
S-6
<PAGE> 7
such Maturity Date, as the case may be. "Business Day" means any day, other than
a Saturday or Sunday, that is neither a legal holiday nor a day on which banking
institutions in the City of New York are authorized or required by law,
regulation or executive order to close.
BOOK-ENTRY SYSTEM
The following are summaries of certain rules and operating procedures of
DTC that affect the payment of principal and interest and transfers of interests
with respect to the Notes. The Notes will be issued in the form of Global
Securities, which will be deposited with, or on behalf of, DTC and will be
registered in the name of Cede & Co., as nominee of DTC. Unless and until
exchanged in whole or in part for Notes in definitive form under the limited
circumstances described below, a Global Security may not be transferred except
as a whole (a) by DTC to a nominee of DTC, (b) by a nominee of DTC to DTC or
another nominee of DTC or (c) by DTC or any such nominee to a successor of DTC
or a nominee of such successor.
Ownership of beneficial interests in the Global Securities will be limited
to persons that have accounts with DTC for the Global Securities
("Participants") or persons that may hold interests through Participants. Upon
the issuance of the Global Securities, DTC will credit, on its book-entry
registration and transfer system, Participants' accounts with the respective
principal amounts of the Notes represented by the Global Securities beneficially
owned by such Participants. Ownership of beneficial interests in the Global
Securities will be shown on, and the transfer of such ownership interests will
be effected only through, records maintained by DTC (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 laws may limit or impair the ability to own, transfer
or pledge beneficial interests in the Global Securities.
So long as DTC or its nominee is the registered owner of the Global
Securities, DTC or its nominee, as the case may be, will be considered the sole
owner or Holder of the Notes represented by the Global Securities for all
purposes under the Indenture. Except as set forth below, owners of beneficial
interests in the Global Securities will not be entitled to have Notes
represented by the Global Securities registered in their names, will not receive
or be entitled to receive physical delivery of such Notes in certificated form,
and will not be considered the registered owners or Holders of any Notes under
the Indenture. Accordingly, each person owning a beneficial interest in the
Global Securities must rely on the procedures of DTC 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 under the Indenture. PCS
understands that under existing industry practices, if PCS requests any action
of Holders or if an owner of a beneficial interest in the Global Securities
desires to give or take any action that a Holder is entitled to give or take
under the Indenture, DTC would authorize 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 instructions of beneficial owners
holding through them.
Principal and interest payments on interests in the Global Securities will
be made to DTC, or its nominee, as the case may be, as the registered owner of
the Global Securities. None of PCS, the Indenture Trustee or any other agent of
PCS or agent of the Indenture Trustee will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership of interests in the Global Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
PCS expects that DTC, upon receipt of any payment of principal or interest
in respect of the Global Securities, will immediately credit Participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the Global Securities as shown on the records of DTC. PCS also
expects that payments by Participants to owners of beneficial interests in the
Global Securities held through such Participants will be governed by standing
customer instructions and customary practice, as is now the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participants.
S-7
<PAGE> 8
If DTC is at any time unwilling or unable to continue as depository for the
Notes and PCS fails to appoint a successor depository registered as a clearing
agency under the Exchange Act within 90 days, PCS will issue the Notes in
definitive form in exchange for the Global Securities. Any Notes issued in
definitive form in exchange for the Global Securities will be registered in such
name or names, and will be issued in denominations of $1,000 and such integral
multiples thereof, as DTC shall instruct the Indenture Trustee. It is expected
that such instructions will be based upon directions received by DTC from
Participants with respect to ownership of beneficial interests in the Global
Securities.
The following is based on information furnished by DTC:
DTC is a limited-purpose trust company organized under the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC holds securities that Participants deposit
with DTC. DTC also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement
of securities certificates. Direct Participants include securities brokers
and dealers (including the Underwriters), banks, trust companies, clearing
corporations and certain other organizations (collectively, "Direct
Participants"). DTC is owned by a number of its Direct Participants and by
the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and
the National Association of Securities Dealers, Inc. Access to the DTC
system is also available to others, such as securities brokers and dealers
and banks and trust companies, that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly. The
rules applicable to DTC and its Participants are on file with the
Securities and Exchange Commission.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest in respect of the Notes
will be made by PCS in immediately available funds, so long as DTC continues to
make its Same-Day Funds Settlement System available to PCS.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearinghouse or next-day funds. In contrast, the Notes
will trade in DTC's Same-Day Funds Settlement System until maturity or until the
Notes are issued in certificated form, and secondary market trading activity in
the Notes will therefore be required by DTC to settle in immediately available
funds. No assurance can be given as to the effect, if any, of settlement in
immediately available funds on trading activity in the Notes.
CREDIT RATINGS
The following table sets forth the credit ratings of the Notes by the
rating agencies indicated:
<TABLE>
<CAPTION>
RANKING WITHIN
RATING CATEGORIES
OF THE
RATING AGENCY RATING RATING AGENCY
-------------------------------------------------------------- ------- ------------------
<S> <C> <C>
Moody's Investors Service..................................... Baa2 4th of 9
Standard & Poor's Rating Services............................. BBB 4th of 9
</TABLE>
Credit ratings are intended to provide investors with an independent
measure of credit quality of any issue of securities. The credit ratings
accorded to debt securities by the rating agencies are not recommendations to
purchase, hold or sell the debt securities rated inasmuch as such ratings do not
comment on market price or suitability for a particular investor. There can be
no assurance that any rating will remain in effect for any given period of time
or that any rating will not be revised or withdrawn entirely by a rating agency
in the future if in its judgment circumstances so warrant, and if any such
rating is so revised or withdrawn, PCS is under no obligation to update this
Prospectus Supplement.
S-8
<PAGE> 9
CERTAIN INCOME TAX CONSIDERATIONS
The following discussion is a summary of the material Canadian and United
States federal tax considerations that may be relevant to initial purchasers of
the Notes of acquiring, owning and disposing of the Notes and, to the limited
extent discussed below under "Certain United States Federal Income Tax
Considerations -- Market Discount" and "-- Amortizable Premium," to subsequent
holders of the Notes. This summary is of a general nature and is not intended to
be, nor should it be construed to be, legal or tax advice to any person
purchasing and holding the Notes pursuant to this Prospectus Supplement. This
discussion does not purport to deal with all aspects of Canadian and United
States federal income taxation that may be relevant to a decision to acquire,
hold or dispose of the Notes and does not take into account Canadian provincial
or territorial tax laws, United States state or local tax laws, or tax laws of
jurisdictions outside of Canada and the United States. The following is based on
the Canadian and United States federal income tax laws and the regulations,
administrative rulings and practice and judicial decisions thereunder as in
effect on the date of this Prospectus Supplement, which are subject to change.
EACH INVESTOR IS URGED TO CONSULT WITH SUCH INVESTOR'S OWN TAX ADVISOR AS
TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF ACQUIRING, OWNING AND
DISPOSING OF NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL
OR FOREIGN INCOME TAX LAWS, AND OF CHANGES IN APPLICABLE TAX LAWS.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Arent Fox Kintner Plotkin & Kahn, U.S. counsel to PCS,
the following summarizes the principal United States federal income tax
considerations applicable to a U.S. Investor of acquiring, owning and disposing
of Notes offered pursuant to this Prospectus Supplement. This discussion applies
only to U.S. Investors who hold the Notes as capital assets within the meaning
of Section 1221 of the Internal Revenue Code of 1986, as amended (the "Code").
This discussion does not address the United States federal income tax
consequences that may be relevant to particular classes of U.S. Investors who
are subject to special treatment under the United States federal income tax law,
including, but not limited to, dealers in securities, banks, insurance
companies, tax-exempt organizations, persons that hold the Notes as a "hedge" or
as part of a "straddle" or "conversion transaction" and persons owning 10% or
more of the voting shares of PCS.
Taxation of Interest Including Additional Amounts. Interest (including any
Additional Amounts, as defined in the Prospectus) payable on the Notes generally
will be taxable to a U.S. Investor as ordinary income at the time it accrues or
is received in accordance with the U.S. Investor's method of accounting for
United States federal income tax purposes. In the event that any Canadian
withholding tax is imposed on the payment of interest (including Additional
Amounts), a U.S. Investor generally may elect to claim either a deduction or,
subject to certain limitations, a credit in computing its United States federal
income tax liability for such Canadian withholding tax.
Market Discount. The income which a U.S. Investor who acquires a Note
subsequent to the initial offering at a "market discount" must recognize may be
affected by the market discount provisions of the Code. Debt instruments, such
as the Notes, are considered to have been purchased at a market discount if,
subsequent to their original issuance, they are purchased at a price below their
stated redemption price at maturity. Under the market discount rules, if a U.S.
Investor purchases a Note at a market discount in excess of a
statutorily-defined de minimis amount and thereafter disposes of the Note (by
sale, retirement, or otherwise, including certain transactions in which gain
ordinarily would not be recognized), the U.S. Investor's gain on the disposition
generally will be treated as ordinary income to the extent of the accrued market
discount, unless the U.S. Investor elects to include the market discount in
income as it accrues.
Amortizable Premium. If a U.S. Investor purchases a Note and immediately
after the purchase its adjusted basis for the Note exceeds the sum of all
amounts, other than qualified stated interest, payable on the instrument after
the purchase date, the Note has "bond premium." A U.S. Investor may elect to
amortize such bond premium over the remaining term of such Note, in which case
generally the amount of interest that must be included in the U.S. Investor's
income will be reduced by a ratable portion of the bond premium. If
S-9
<PAGE> 10
such an election is made to amortize the bond premium, the U.S. Investor's basis
in the Note will be decreased by the bond premium as it is amortized. If an
election to amortize bond premium is not made, the bond premium will decrease
the gain or increase the loss otherwise recognized by the U.S. Investor upon the
sale or other disposition or retirement of the Note.
Sale, Exchange, Redemption or Repayment of the Notes. Upon the disposition
of a Note by sale, exchange, redemption or repayment, a U.S. Investor generally
will recognize gain or loss equal to the difference between the amount realized
on the disposition (other than amounts attributable to accrued interest not
previously included in income, which amounts will be taxable as ordinary
income), and the U.S. Investor's tax basis in the Notes. Such gain or loss
(except to the extent that the market discount rules otherwise provide)
generally will constitute capital gain or loss and will be long-term capital
gain or loss if such U.S. Investor has held such Security for more than one
year.
Back-up Withholding. Under the United States back-up withholding rules, a
tax may be imposed at the rate of 31% on payments in respect of a Note. These
back-up withholding rules may apply unless the payee (a) is a corporation or
other exempt recipient and, if required, demonstrates its status as such; or (b)
provides a United States taxpayer identification number ("TIN"), certifies that
the TIN provided is correct and that the holder has not been notified by the
Internal Revenue Service that it is subject to back-up withholding due to the
under-reporting of interest or dividends, and otherwise complies with the
applicable requirements of the back-up withholding rules. Any amounts withheld
under the back-up withholding rules will be allowed as a refund or credit
against such payee's United States federal income tax liability provided that
the required information is furnished to the Internal Revenue Service. U.S.
Investors should consult their own tax advisors as to the application of the
United States back-up withholding rules.
CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Goodman Phillips & Vineberg S.E.N.C. (Montreal), Canadian
tax counsel to PCS, the following is, as of the date hereof, a fair and adequate
summary of the principal Canadian federal income tax considerations under the
Income Tax Act (Canada) (the "Act") generally applicable to the acquisition,
ownership and disposition of Notes by an investor who throughout the period
during which the investor owns Notes (a) is not resident in Canada for the
purposes of the Act and who is a resident of the United States for the purposes
of the Code and the Canada-United States Income Tax Convention (the
"Convention"); (b) holds the Notes as capital property; (c) deals at arm's
length with PCS; and (d) does not ever use or hold, and is not deemed to ever
use or hold, such Notes in, or in the course of, carrying on a business in
Canada (including that of providing independent personal services in Canada)
and, in the case of a nonresident insurer, the Notes are not "designated
insurance properties" under proposed amendments to the Act and are, in addition,
not effectively connected with an insurance business carried on in Canada (a
"U.S. Holder").
This summary assumes that throughout the period the Notes are outstanding,
PCS will deal with DTC and the U.S. Holder at arm's length within the meaning of
the Act and that PCS will not, under any circumstances, be obliged to pay more
than 25% of the aggregate principal amount of a particular series of the Notes
within five years from the later of the date of issue or the date funds are
advanced, except in the event of a default under the terms of the Notes of such
series or of any agreement relating thereto or if the terms of the Notes of the
particular series or any such agreement become unlawful or are changed by
legislative, judicial or certain administrative action. For the purposes of the
Act, related persons (as therein defined) are deemed not to deal at arm's length
and it is a question of fact whether persons not related to each other deal at
arm's length.
The payment by PCS of interest, principal or premium on the Notes to a U.S.
Holder will be exempt from Canadian withholding tax. No other tax on income
(including capital gains) will by payable under the Act in respect of the
holding or disposition of the Notes or the receipt of interest or premium
thereon by U.S. Holders. As mentioned in the opening paragraph of this section
entitled "Certain Income Tax Considerations," the above discussion is a summary
of the material Canadian federal income tax considerations and does not purport
to deal with all aspects of Canadian income taxation. For example, the foregoing
does not address the income tax consequences and implications to a U.S. Holder
of (a) defeasance and
S-10
<PAGE> 11
covenant defeasance by PCS pursuant to Article 14 of the Indenture which is
summarized under "Description of Securities -- Discharge, Defeasance and
Covenant Defeasance" in the Prospectus and accordingly no opinion is expressed
as to the applicability of withholding tax to, or income tax treatment of, any
payments that may thereby or thereafter be received by U.S. Holders; or (b) a
successor entity assuming the payments under the Notes as described under
Article 8 of the Indenture as summarized in the "Description of
Securities -- Merger, Consolidation or Sale" in the Prospectus and accordingly
no opinion is expressed as to the applicability of any withholding tax to, or
the income tax treatment of, any payments that may thereby or thereafter be
received by U.S. Holders.
UNDERWRITING
Under the terms and subject to the conditions contained in the Terms
Agreement dated June 11, 1997, which incorporates by reference the underwriting
agreement dated June 11, 1997 (collectively, the "Underwriting Agreement"),
between Smith Barney Inc., Donaldson, Lufkin & Jenrette Securities Corporation,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities
Inc. (collectively, the "Underwriters") and PCS, the Underwriters have severally
agreed to purchase, and PCS has agreed to sell to each Underwriter, the
principal amount of Notes set forth opposite the name of such Underwriter below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITERS NOTES
---------------------------------------------------------------------- ------------
<S> <C>
Smith Barney Inc. .................................................... $100,000,000
Donaldson, Lufkin & Jenrette Securities Corporation................... 100,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................. 100,000,000
J.P. Morgan Securities Inc. .......................................... 100,000,000
------------
$400,000,000
===========
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that they may be
terminated upon the occurrence of certain stated events. The Underwriters are,
however, obligated to take up and pay for all the Notes offered hereby if any
are purchased under the Underwriting Agreement.
The Underwriters propose to offer the Notes directly to the public at the
public offering price set forth on the cover page of this Prospectus Supplement
and to certain dealers at such public offering price less a concession not in
excess of 0.4% of the principal amount. The Underwriters may allow, and such
dealers may reallow, a concession not in excess of 0.25% of the principal amount
to other dealers. After the initial public offering, the public offering price
and concessions and reallowances to dealers may be changed by the Underwriters.
PCS has agreed to indemnify the Underwriters and their directors, officers,
employees and agents against certain liabilities, including liabilities under
the Securities Act or will contribute to payments the Underwriters may be
required to make in respect thereof.
The Notes are a new issue of securities with no established trading market.
PCS has been informed by the Underwriters that they 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. No assurance can be given as to the liquidity of the
trading market for the Notes.
In connection with the offering, the Underwriters may purchase and sell the
Notes in the open market. These transactions may include over-allotment and
stabilizing transactions and purchases to cover short positions created by the
Underwriters in connection with the offering. Stabilizing transactions consist
of certain bids or purchases for the purpose of preventing or retarding a
decline in the market price of the Notes; and short positions created by the
Underwriters involve the sale by the Underwriters of a greater number of Notes
than they are required to purchase from PCS in the offering. The Underwriters
may also impose a
S-11
<PAGE> 12
penalty bid, whereby selling concessions allowed to broker-dealers in respect of
the Notes sold in the offering may be reclaimed by the Underwriters if such
Notes are repurchased by the Underwriters in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the Notes, which may be higher than the price that might
otherwise prevail in the open market; and the activities, if commenced, may be
discontinued at any time. The transactions may be effected in the
over-the-counter market or otherwise.
The Notes will not be qualified for sale under the securities laws of
Canada or any province or territory of Canada and may not be offered or sold,
directly or indirectly, in Canada or to residents of Canada in contravention of
the securities laws of any province or territory of Canada. Each Underwriter has
agreed that it will not, directly or indirectly, offer, sell or deliver any
Notes purchased by it, in Canada or to residents of Canada in contravention of
the securities laws of any province or territory of Canada, and that any selling
agreement or similar arrangement with respect to the Notes will require each
dealer or other party thereto to make an agreement to the same effect.
Smith Barney Inc., Donaldson, Lufkin & Jenrette Securities Corporation and
certain of the other Underwriters have provided investment banking services to
PCS in the past. In addition, Morgan Guaranty Trust Company of New York, an
affiliate of J.P. Morgan Securities Inc., is a lender under PCS's Term Credit
Agreement and is expected to receive a portion of the net proceeds form this
offering as repayment of borrowings outstanding under the Term Credit Agreement.
LEGAL MATTERS
The legality of the Notes will be passed upon by Robertson Stromberg,
Saskatchewan counsel to PCS. Certain matters involving the laws of the United
States will be passed upon by Arent Fox Kintner Plotkin & Kahn, U.S. counsel to
PCS. Certain matters involving the tax laws of Canada will be passed upon by
Goodman Phillips & Vineberg S.E.N.C. (Montreal), Canadian tax counsel to PCS.
Certain matters involving United States laws will be passed upon by Skadden,
Arps, Slate, Meagher & Flom LLP (New York, New York) on behalf of the
Underwriters.
S-12
<PAGE> 13
POTASH CORPORATION OF SASKATCHEWAN INC.
DEBT SECURITIES
Potash Corporation of Saskatchewan Inc. ("PCS") may from time to time offer
its debt securities ("Securities") up to an aggregate initial offering price not
to exceed the equivalent of $1,000,000,000, in separate series, in amounts and
at prices and on terms determined by market conditions at the time of the sale.
The Securities may be denominated in U.S. dollars or in any other currency,
currency units or composite currencies as may be designated by PCS.
The designation, aggregate principal amount, maturity date, public offering
price, interest rate or rates (which may be fixed or variable) or the method by
which such rate or rates are determined and timing of payments of interest, if
any, provision for redemption, sinking fund requirements, if any, any other
variable terms and the method of distribution in connection with the offering of
Securities in respect of which this Prospectus is being delivered, will be set
forth in a Prospectus Supplement relating thereto. The Prospectus Supplement
will contain information, where applicable, relating to certain U.S. and
Canadian federal income taxes relating to, and any listing on a securities
exchange of, the Securities covered by such 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 ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
PCS may sell Securities to or through underwriters or groups of
underwriters or dealers, and also may sell Securities to one or more other
purchasers, directly or through agents. See "Plan of Distribution." The
Prospectus Supplement will set forth the names of any underwriters, dealers or
agents involved in the sale of any Securities offered thereunder, the principal
amounts, if any, to be purchased by underwriters and the compensation of such
underwriters, dealers or agents.
THE DATE OF THIS PROSPECTUS IS MAY 30, 1997.
<PAGE> 14
AVAILABLE INFORMATION
PCS is subject to the information 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 may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the Commission's Regional Offices at 7 World Trade Center,
13th Floor, New York, New York 10048, and at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials may be
obtained at the prescribed rates from the Public Reference Section of the
Commission at its principal office in Washington, D.C. The Commission maintains
a site on the World Wide Web that contains documents filed electronically with
the Commission. The address of the Commission's web site is http://www.sec.gov,
and the materials filed electronically by PCS may be inspected at such site. In
addition, the materials filed by PCS at the New York Stock Exchange may be
inspected at the Exchange's offices, 20 Broad Street, New York, New York 10005.
PCS has filed a Registration Statement on Form S-3 with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"), concerning
the Securities. This Prospectus, which constitutes a part of the Registration
Statement, omits certain of the information contained in the Registration
Statement and the exhibits thereto. Statements contained in this Prospectus, or
in any document incorporated by reference herein, as to the contents of any
document are summaries of such documents and 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 such other document, each such
statement being hereby qualified in all respects by such reference. The
Registration Statement, including the exhibits thereto, is on file at the
offices of the Commission and may be inspected and copied as described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
PCS incorporates by reference herein the following documents, which have
been filed with the Commission pursuant to the Exchange Act (File No. 1-10351):
(a) PCS's Annual Report on Form 10-K for the year ended December 31,
1996;
(b) PCS's Current Report on Form 8-K, dated March 20, 1997, as amended
by the Current Report on Form 8-K/A dated May 15, 1997, for the event dated
March 6, 1997; and
(c) PCS's Quarterly Report on Form 10-Q for the three months ended
March 31, 1997.
All documents and reports filed by PCS pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the dates of filing of such
documents or reports.
Any statement contained herein or in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of the
Registration Statement and this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which also is
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 the Registration Statement or this
Prospectus.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. Such documents (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference) are
available, without charge, to any person to whom this Prospectus is delivered,
upon written or oral request to Potash Corporation of Saskatchewan Inc., Suite
500, 122-1st Avenue South, Saskatoon, Saskatchewan, Canada S7K 7G3, telephone
(306) 933-8500 (Attention: Corporate Secretary).
2
<PAGE> 15
ENFORCEABILITY OF CIVIL LIABILITIES UNDER
UNITED STATES FEDERAL SECURITIES LAWS
PCS is a corporation organized under the laws of the Province of
Saskatchewan, Canada. Certain of the directors and executive officers of PCS are
residents of Canada, and certain of the experts named in this Prospectus are
residents of Canada. Substantial portions of the assets of PCS and its direct
and indirect subsidiaries and such individuals and experts are located outside
of the United States. As a result, it may be difficult or impossible for persons
who purchase the Securities to effect service of process upon such persons
within the United States in connection with matters arising under the United
States federal securities laws or to enforce against them in United States
courts judgments of United States courts predicated upon the civil liability
provisions of the United States federal securities laws. There is some doubt as
to the enforceability in Canada in original actions, or in actions for
enforcement of judgments of United States courts, of civil liabilities
predicated upon the United States federal securities laws. In addition, awards
for punitive damages in actions brought in the United States or elsewhere may be
unenforceable in Canada.
FINANCIAL STATEMENT PRESENTATION
Although PCS presents its financial statements in United States dollars,
its financial statements and financial data derived therefrom presented in this
Prospectus and in the documents incorporated by reference herein (other than pro
forma information) have been prepared in accordance with generally accepted
accounting principles in Canada ("GAAP"), and thus may not be comparable to
financial statements of United States companies. For a reconciliation of GAAP to
generally accepted accounting principles in the United States as applied to the
consolidated financial statements of PCS for the three years ended December 31,
1996 (the "Consolidated Financial Statements"), see Note 25 to the Consolidated
Financial Statements which are incorporated by reference herein.
THE COMPANY
The Company is one of the world's largest integrated fertilizer companies
with significant market share in each of the three primary fertilizer
products -- potash, phosphate and nitrogen. In 1996, PCS's potash production
represented 15% of global production, 23% of global potash capacity and an
estimated 41% of global potash excess capacity. The Company is the third largest
producer of phosphates worldwide by capacity, currently representing
approximately 9% of world production and 7% of world capacity. The Company
believes its potash and phosphate reserves to be the largest in North America.
On March 6, 1997, the Company acquired all of the outstanding capital stock
of Arcadian Corporation in exchange for cash of $555 million and 8,030,236
common shares of PCS. Since acquiring Arcadian Corporation, the Company has
become the largest producer and marketer of nitrogen fertilizer and chemical
products in the Western hemisphere. Arcadian Corporation now operates under the
name PCS Nitrogen, Inc. In 1996, sales of Arcadian Corporation were divided
approximately 60% to agricultural customers and 40% to industrial customers.
The Company's products are used for agricultural and industrial purposes as
well as for food ingredients. The Company produces and sells potash, solid
phosphate fertilizers (principally diammonium phosphate ("DAP")), liquid
phosphate fertilizers, phosphate feed supplements, purified phosphoric acid,
ammonia, urea, ammonium nitrate, nitric acid and nitrogen solutions. The Company
produces potash from six mines in Saskatchewan (five of which it owns and
operates), one in New Brunswick and one in Utah. The Company operates the
world's largest vertically integrated phosphate mine and processing plant, which
is located in North Carolina, a phosphate mine and two chemical plant complexes
in northern Florida and seven phosphate feed plants in the United States. In
addition, the Company manufactures, processes and distributes fertilizer and
other agricultural supplies from plants located in Florida, Georgia and Alabama.
As a result of the acquisition of Arcadian Corporation, the Company acquired
eight sites dedicated to the production of nitrogen-related products, one of
which also produces phosphate-related products.
The mailing address of the Company's principal executive offices is Suite
500, 122-1st Avenue South, Saskatoon, Saskatchewan, Canada S7K 7G3, and its
telephone number is (306) 933-8500. In this Prospectus, the "Company" means
Potash Corporation of Saskatchewan Inc., its predecessors and its direct and
indirect subsidiaries, unless the context otherwise indicates.
3
<PAGE> 16
FINANCIAL INFORMATION
The following sets forth selected historical and pro forma consolidated
financial information of PCS for the periods indicated. The summary historical
consolidated financial information is presented in accordance with GAAP and
should be read in conjunction with the Consolidated Financial Statements and the
unaudited consolidated interim financial statements for each of the three-month
periods ended March 31, 1996 and 1997, incorporated by reference herein. For a
discussion of the principal differences between GAAP and U.S. generally accepted
accounting principles, see Note 25 to the Consolidated Financial Statements. The
historical consolidated financial information for each of the years in the
five-year period ended December 31, 1996 are derived from consolidated financial
statements of PCS audited by Deloitte & Touche. The historical consolidated
financial information for each of the three-month periods ended March 31, 1996
and 1997 are derived from the unaudited consolidated interim financial
statements of PCS incorporated by reference herein. The three-month results are
not necessarily indicative of the results that may be expected for any other
period or a full year. The pro forma income statement data for the year ended
December 31, 1996 gives effect to the acquisition of Arcadian Corporation (the
"Arcadian Acquisition") as if it had occurred at the beginning of such period.
The pro forma financial information does not purport to be indicative of PCS's
results of operations that would actually have been obtained if the Arcadian
Acquisition had been completed on such date or to project PCS's results of
operations at any future date or for any future period.
<TABLE>
<CAPTION>
THREE
MONTHS ENDED YEAR ENDED DECEMBER 31,
MARCH 31, -------------------------------------------------------------------
--------------------- PRO FORMA
1997(1) 1996 1996 1996 1995(2) 1994 1993 1992
--------- --------- --------- --------- --------- --------- --------- -------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales.......................... 464,834 366,871 2,604,608 1,403,868 856,080 363,117 212,193 214,083
Operating income................... 90,513 87,122 580,672 299,492 224,249 98,475 56,869 50,587
Net income......................... 56,365 63,678 353,687 209,036 159,486 91,219 44,697 39,875
Net income per share............... 1.18 1.40 6.60 4.59 3.68 2.12 1.13 1.03
FINANCIAL POSITION DATA
(AT END OF PERIOD):
Working capital.................... 334,974 210,919 278,801 136,078 103,281 36,985 70,912
Total assets....................... 4,446,617 2,525,099 2,494,387 2,581,817 1,027,766 1,036,490 915,049
Long-term debt..................... 1,365,791 714,417 619,963 714,498 2,000 20,128 48,900
Shareholders' equity............... 2,021,247 1,295,573 1,405,496 1,241,875 964,334 903,719 809,460
OTHER FINANCIAL DATA:
Operating cash flow................ 82,565 68,644 296,186 233,483 150,705 49,773 57,416
Capital expenditures............... 25,282 8,384 58,939 39,596 16,751 15,796 9,872
Ratio of earnings to fixed
charges(3)....................... 5.36 5.51 5.04 5.48 4.67 14.20 5.03 4.54
</TABLE>
- ---------------
Notes:
(1) The Company acquired Arcadian Corporation on March 6, 1997.
(2) The Company acquired Texasgulf Inc. in April 1995 and White Springs
Agricultural Chemicals, Inc. in October 1995.
(3) For the purpose of computing the ratio of earnings to fixed charges (a)
earnings have been calculated by adding income taxes and fixed charges to
net income, and (b) fixed charges consist of the total of interest charges
and a portion of rentals determined to be representative of the interest
factor.
4
<PAGE> 17
USE OF PROCEEDS
Except as otherwise provided in an applicable Prospectus Supplement, the
net proceeds from the sale of the Securities will be added to PCS's funds to be
used for general corporate purposes, including working capital, capital
expenditures and the repayment of debt outstanding from time to time. Pending
such application, such net proceeds may be invested in short-term marketable
securities. Specific information about the use of proceeds from the sale of
Securities will be set forth in the applicable Prospectus Supplement. PCS may
from time to time incur additional indebtedness other than through the offering
of Securities pursuant to this Prospectus.
DESCRIPTION OF SECURITIES
The Securities will be issued under an indenture (the "Indenture") between
PCS and The Bank of Nova Scotia Trust Company of New York, as trustee (the
"Indenture Trustee"). A form of the Indenture has been filed as an exhibit to
the Registration Statement of which this Prospectus is a part and is available
for inspection at the corporate trust office of the Indenture Trustee at One
Liberty Plaza, New York, N.Y. 10006. The Indenture will be subject to and
governed by the Trust Indenture Act of 1939, as amended. The statements made
under this heading relating to the Securities and the Indenture are summaries of
the provisions thereof and do not purport to be complete and are qualified in
their entirety by reference to the Indenture and the Securities. All Section
references herein are to Sections of the Indenture, which are incorporated
herein by reference. Capitalized terms used but not defined have the respective
meanings set forth in the Indenture.
GENERAL
The Securities will be direct unsecured obligations of PCS and will rank
equally with all other unsecured and unsubordinated indebtedness of PCS. The
Securities may be issued in one or more series, in each case as established from
time to time by PCS or as established in the Indenture or in one or more
indentures supplemental to the Indenture. All Securities of one series need not
be issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the holders of the Securities of such series,
for issuance of additional Securities of such series (Section 301).
The Indenture provides that there may be more than one Indenture Trustee
thereunder, each with respect to one or more series of Securities. Any Indenture
Trustee under the Indenture may resign or be removed with respect to one or more
series of Securities, and a successor Indenture Trustee may be appointed to act
with respect to such series (Section 608). If two or more persons are acting as
Indenture Trustee with respect to different series of Securities, each such
Indenture Trustee will be an Indenture Trustee of a trust under the Indenture
separate and apart from the trust administered by any other Indenture Trustee
(Section 609). In general, any action to be taken by an Indenture Trustee may be
taken by each such Indenture Trustee with respect to, and only with respect to,
the one or more series of Securities for which it is Indenture Trustee under the
Indenture.
The Prospectus Supplement relating to the series of Securities being
offered will contain the specific terms thereof, including:
(a) The designation of such Securities.
(b) The aggregate principal amount of such Securities.
(c) The percentage of the principal amount at which such Securities
will be issued and, if other than the principal amount thereof, the portion
of the principal amount thereof payable upon declaration of acceleration of
the maturity thereof, or the method by which any such portion will be
determined.
(d) The date or dates, or the method for determining such date or
dates, on which the principal of such Securities will be payable.
5
<PAGE> 18
(e) The rate or rates (which may be fixed or variable), or the method
by which such rate or rates will be determined, at which such Securities
will bear interest.
(f) The date or dates, or the method for determining such date or
dates, from which any such interest will accrue, the dates on which any
such interest will be payable, the record dates for such interest payment
dates, or the method by which such dates will be determined, the persons to
whom such interest will be payable, and the basis upon which interest will
be calculated if other than that of a 360-day year of twelve 30-day months.
(g) The place or places where the principal of (and premium, if any)
and interest on such Securities will be payable, where such Securities may
be surrendered for registration of transfer or exchange and where notices
or demands to or upon PCS in respect of such Securities and the Indenture
may be served.
(h) The period or periods within which, the price or prices at which
and the other terms and conditions upon which such Securities may be
redeemed, as a whole or in part, at the option of PCS, if PCS is to have
such an option.
(i) The obligation, if any, of PCS to redeem, repay or purchase such
Securities pursuant to any sinking fund or analogous provision or at the
option of a holder thereof, and the period or periods within which, the
price or prices at which and the other terms and conditions upon which such
Securities will be redeemed, repaid or purchased, as a whole or in part,
pursuant to such obligation.
(j) If other than U.S. dollars, the currency or currencies in which
such Securities are denominated and payable, which may be another currency
or units of two or more other currencies or a composite currency or
currencies, and the terms and conditions relating thereto.
(k) Whether the amount of payments of principal of (and premium, if
any) or interest on such Securities may be determined with reference to an
index, formula or other method (which index, formula or method may, but
need not, be based on a currency, currencies, currency unit or units or
composite currency or currencies) and the manner in which such amounts will
be determined.
(l) The Events of Default or covenants of such Securities, to the
extent different from those described herein.
(m) Whether such Securities will be issued in certificated or
book-entry form.
(n) Whether such Securities will be in registered or bearer form and,
if in registered form, the denominations thereof if other than $1,000 and
any integral multiple thereof and, if in bearer form, the denominations
thereof and terms and conditions relating thereto.
(o) The applicability, if any, of the defeasance and covenant
defeasance provisions described herein, or any modification thereof.
(p) Any other terms, conditions, rights and preferences of such
Securities (Section 301).
The Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities"). Special U.S. federal income tax,
accounting and other considerations applicable to Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
The Prospectus Supplement for each offering of Securities may add to or
change statements contained in this Prospectus. Except as may be set forth in
any Prospectus Supplement, the Securities will not contain any provisions that
would limit the ability of PCS to incur unsecured indebtedness or that would
afford holders of Securities protection in the event of a highly leveraged or
similar transaction involving PCS or in the event of a change of control.
Reference is made to the applicable Prospectus Supplement for information with
respect to
6
<PAGE> 19
any deletions from, modifications of or additions to the Events of Default or
covenants of PCS that are described below, including any addition of a covenant
or other provision providing event risk or similar protection.
DENOMINATION, INTEREST, REGISTRATION OF TRANSFER
Unless specified in the applicable Prospectus Supplement, the Securities of
any series will be issuable in denominations of $1,000 and integral multiples
thereof (Section 302).
The principal of (and applicable premium, if any) and interest on any
series of Securities will be payable at the corporate trust office of the
Indenture Trustee, which initially will be One Liberty Plaza, New York, New York
10006; provided that, at the option of PCS, payment of interest may be made by
check mailed to the address of the Person entitled thereto as it appears in the
applicable register for such Securities or by wire transfer of funds to such
Person at an account maintained within the United States (Sections 301, 307 and
1002).
Any interest not punctually paid or duly provided for on any interest
payment date with respect to a Security ("Defaulted Interest") will forthwith
cease to be payable to the holder on the applicable Regular Record Date and may
either be paid to the Person in whose name such Security is registered at the
close of business on a special record date (the "Special Record Date") for the
payment of such Defaulted Interest to be fixed by the Indenture Trustee, notice
whereof will be given to the holder of such Security not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner, all as more completely described in the Indenture (Section 307).
Subject to certain limitations imposed upon Securities issued in book-entry
form, the Securities of any series will be exchangeable for other Securities of
the same series and of a like aggregate principal amount and tenor of different
authorized denominations upon surrender of such Securities at the corporate
office of the Indenture Trustee. In addition, subject to certain limitations
imposed upon Securities issued in book-entry form, the Securities of any series
may be surrendered for registration of transfer or exchange thereof at the
corporate trust office of the Indenture Trustee. Every Security surrendered for
registration of transfer or exchange must be duly endorsed or accompanied by a
written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of any Securities, but PCS may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith (Section 305). If the applicable Prospectus
Supplement refers to any transfer agent (in addition to the Indenture Trustee)
initially designated by PCS with respect to any series of Securities, PCS may at
any time rescind the designation of any such transfer agent or approve a change
in the location through which any such transfer agent acts, except that PCS will
be required to maintain a transfer agent in each place of payment for such
series. PCS may at any time designate additional transfer agents with respect to
any series of Securities (Section 1002).
Neither PCS nor the Indenture Trustee will be required to (a) issue,
register the transfer of or exchange Securities of any series during a period
beginning at the opening of business 15 days before any selection of Securities
of that series to be redeemed and ending at the close of business on the day of
mailing of the relevant notice of redemption, (b) register the transfer of or
exchange any Security, or portion thereof, called for redemption, except the
unredeemed portion of any Security being redeemed in part, or (c) issue,
register the transfer of or exchange any Security that has been surrendered for
repayment at the option of the holder, except the portion, if any, of such
Security not to be so repaid (Section 305).
MERGER, CONSOLIDATION OR SALE
PCS will be permitted to amalgamate or consolidate with, or sell, lease or
convey all or substantially all of its assets to, or merge with or into, any
other entity, provided that (a) either PCS will be the continuing entity, or the
successor entity (if other than PCS) formed by or resulting from any such
amalgamation, consolidation or merger or which will have received the transfer
of such assets is an entity organized and existing under the laws of the United
States or any state thereof or the District of Columbia or Canada or any
province thereof and will expressly assume payment of the principal of (and
premium, if any) and interest on all of the Securities and the due and punctual
performance and observance of all of the covenants and conditions
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contained in the Indenture; (b) immediately after giving effect to such
transaction, no Event of Default under the Indenture, and no event which, after
notice or the lapse of time, or both, would become such an Event of Default,
will have occurred and be continuing; and (c) an officer's certificate and legal
opinion covering such conditions will be delivered to the Indenture Trustee
(Sections 801 and 804).
CERTAIN COVENANTS
Additional Amounts. Payments made by PCS under or with respect to the
Securities will be free and clear of and without withholding or deduction for or
on account of any present or future tax, duty, levy, impost, assessment or other
governmental charge of any nature whatsoever imposed or levied by or on behalf
of the Government of Canada or of any province or territory thereof or by any
authority or agency therein or thereof having power to tax ("Taxes"), unless PCS
is required to withhold or deduct Taxes by law or by the interpretation or
administration thereof. If PCS is so required to withhold or deduct any amount
for or on account of Taxes from any payment made under or with respect to the
Securities, PCS will pay such additional interest ("Additional Amounts") as may
be necessary so that the net amount received by each Holder (including
Additional Amounts) after such withholding or deduction will not be less than
the amount the Holder would have received if such Taxes had not been withheld or
deducted; provided that no Additional Amounts will be payable with respect to a
payment made to a Holder (such Holder, an "Excluded Holder") (a) with which PCS
does not deal at arm's length (within the meaning of the Income Tax Act
(Canada)) at the time of making such payment, or (b) which is subject to such
Taxes by reason of its being connected with Canada or any province or any
territory thereof otherwise than by the mere holding of Securities or the
receipt of payments thereunder. PCS will also (a) make such withholding or
deduction and (b) remit the full amount deducted or withheld to the relevant
authority in accordance with applicable law. PCS will furnish to the Holders of
the Securities, within 30 days after the date the payment of any Taxes is due
pursuant to applicable law, certified copies of tax receipts evidencing such
payment by PCS. PCS will indemnify and hold harmless each Holder (other than an
Excluded Holder) and upon written request reimburse each such Holder for the
amount of (a) any Taxes so levied or imposed and paid by such Holder as a result
of payments made under or with respect to the Securities, (b) any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, and (c) any Taxes imposed with respect to any reimbursement under (a)
or (b) in this sentence, but excluding any such Taxes on such Holder's net
income.
At least 30 days prior to each date on which any payment under or with
respect to the Securities is due and payable, if PCS will be obligated to pay
Additional Amounts with respect to such payment, PCS will deliver to the Trustee
an Officer's Certificate stating the fact that such Additional Amounts will be
payable, the amounts so payable and such other information necessary to enable
the Trustee to pay such Additional Amounts to Holders on the payment date.
Wherever in this Prospectus or a Prospectus Supplement there is mentioned the
payment of the principal of (or premium, if any) or interest on, or in respect
of, any Security of any series or payment of any related coupon or the net
proceeds received on the sale or exchange of any Security of any series, the
payment of principal (and premium, if any), interest or any other amount payable
under or with respect to a Security, such mention shall be deemed to include
mention of the payment of Additional Amounts to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof.
The obligations of PCS to pay Additional Amounts if and when due will
survive the termination of the Indenture and the payment of all amounts under or
with respect to the Securities (Section 1009).
Limitation on Liens. PCS may not, and may not permit any Subsidiary of PCS
to, incur any Lien on or with respect to any of the Principal Property of PCS or
any such Subsidiary owned on or acquired after the date of the Indenture to
secure Debt without making, or causing such Subsidiary to make, effective
provision for securing the Securities equally and ratably with such Debt or, in
the event such Debt is subordinate in right of payment to the Securities, prior
to such Debt, as to such Principal Property for so long as such Debt will be so
secured. The foregoing restrictions will not apply to Liens in respect of Debt
existing on the date of the Indenture, to Liens on or with respect to property
that is not Principal Property, or to (a) Liens securing only Securities; (b)
Liens in favor of PCS or any of its Subsidiaries; (c) Liens on property existing
immediately prior to the time of acquisition thereof (and not created in
anticipation of the financing of such acquisition);
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(d) Liens to secure Debt incurred for the purpose of financing all or any part
of the purchase price or the cost of construction or improvement of property
used in the business of PCS or any of its Subsidiaries and subject to such
Liens, provided that (i) the principal amount of any Debt secured by such Lien
does not exceed 100% of such purchase price or cost, (ii) such Lien does not
extend to or cover any other property other than such property and any such
improvements, and (iii) such Debt is incurred within 270 days of such purchase,
construction or improvement; (e) Liens on property of a Person existing at the
time such Person is merged with or into or amalgamated or consolidated with PCS
or any of its Subsidiaries that were not created in anticipation of the
acquisition of such Person, provided that such Lien does not extend to or cover
any property other than that of the Person so merged, amalgamated or
consolidated; (f) Liens on any Principal Property in favor of a governmental
body to secure partial progress, advance or other payments pursuant to any
contract or statute of such governmental body; and (g) Liens to secure Debt
incurred to extend, renew, refinance, replace or refund (or successive
extensions, renewals, refinancings, replacements or refundings), in whole or in
part, (i) any secured Debt existing on the date of this Indenture, or (ii) any
Debt secured by any Lien referred to in the foregoing clauses, so long as in
each such case the Lien does not extend to any other property and the Debt so
secured is not increased other than for reasonable costs related to such
extension, renewal, refinancing, replacement or refunding.
In addition to the foregoing, PCS and its Subsidiaries may incur a Lien or
Liens to secure Debt (excluding Debt secured by Liens permitted under the
foregoing exceptions) the aggregate amount of which, including Attributable Debt
in respect of Sale and Leaseback Transactions, does not exceed 10% of
Consolidated Net Tangible Assets. PCS and its Subsidiaries may also incur a Lien
or Liens to secure any Debt incurred pursuant to a Sale and Leaseback
Transaction, without securing the Securities equally and ratably with or prior
to such Debt, as applicable, provided that such Sale and Leaseback Transaction
is permitted by the provisions of the Indenture described below in clauses (b)
and (c) under "-- Limitation on Sale and Leaseback Transactions" (Section 1010).
Limitation on Sale and Leaseback Transactions. PCS may not, and may not
permit any Subsidiary of PCS to, enter into any Sale and Leaseback Transaction
with respect to any Principal Property (except for a period, including renewals,
not exceeding 36 months) unless (a) at the time of entering into such Sale and
Leaseback Transaction, PCS or such Subsidiary would be entitled to incur Debt,
in a principal amount equal to the Attributable Debt in respect of such Sale and
Leaseback Transaction, secured by a Lien, without equally and ratably securing
the Securities; (b) PCS or such Subsidiary applies, within 12 months after the
sale or transfer, an amount equal to the greater of (i) the net proceeds of the
Principal Property sold pursuant to the Sale and Leaseback Transaction, or (ii)
the fair value (in the opinion of an executive officer of PCS) of such Principal
Property to the acquisition of or construction on property used or to be used in
the ordinary course of business of PCS or a Subsidiary of PCS, and PCS shall
have elected to designate such amount as a credit against such Sale and
Leaseback Transaction; or (c) PCS or such Subsidiary applies, within 12 months
after the sale or transfer, an amount equal to the net proceeds of the Principal
Property sold pursuant to the Sale and Leaseback Transaction to the voluntary
defeasance or retirement of Debt, which amount will not be less than the fair
value (in the opinion of an executive officer of PCS) of such Principal Property
less an amount equal to the principal amount of such Debt voluntarily defeased
or retired by PCS or such Subsidiary within such 12-month period and not
designated as a credit against any other Sale and Leaseback Transaction (Section
1011).
Notwithstanding the foregoing, in no event shall PCS be required to defease
or retire, in the aggregate with respect to any and all such transactions, more
than 25% of the original aggregate principal amount of a series of the
Securities on or prior to the fifth anniversary of the Issue Date thereof. If
the aggregate net proceeds that would be otherwise required to defease or retire
Securities on or prior to the fifth anniversary of the Issue Date would exceed
25% of the original aggregate principal amount of such series (such excess being
"25% Excess Proceeds"), then promptly after such fifth anniversary PCS shall
defease or retire Securities in an amount equal to the 25% Excess Proceeds.
Pending such defeasing or retiring of Securities, the 25% Excess Proceeds shall
be invested and maintained in Permitted Short-Term Investments and PCS shall not
distribute such proceeds in respect of its shares (Section 1011).
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<PAGE> 22
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that the following events are "Events of Default"
with respect to any series of Securities issued thereunder: (a) default for 30
days in the payment of any installment of interest on any Security of such
series; (b) default in the payment of principal of (or premium, if any) any
Security of such series when due; (c) default in making any sinking fund payment
as required for any Security of such series; (d) default in the performance or
breach of any other covenant or warranty of PCS contained in the Indenture
(other than a covenant added to the Indenture solely for the benefit of a series
of Securities other than such series), continued for 60 days after written
notice as provided in the Indenture; (e) a default under any bond, debenture,
note or other evidence of indebtedness for money borrowed by PCS (including
obligations under leases required to be capitalized on the balance sheet of the
lessee under GAAP but not including any indebtedness or obligations for which
recourse is limited to property purchased) in an aggregate principal amount in
excess of US$ 50,000,000 or under any mortgage, indenture or other instrument
under which there may be issued or by which there may be secured or evidenced
any indebtedness for money borrowed by PCS (including such leases, but not
including such indebtedness or obligations for which recourse is limited to
property purchased) in an aggregate principal amount in excess of US$
50,000,000, whether such indebtedness now exists or is hereafter created, which
default shall have resulted in such indebtedness becoming or being declared due
and payable prior to the date on which it would otherwise have become due and
payable or such obligations being accelerated, without such acceleration having
been rescinded or annulled; (f) certain events of bankruptcy, insolvency or
reorganization, or court appointment of a receiver, liquidator or trustee of PCS
or any Significant Subsidiary of PCS; and (g) any other Event of Default
provided with respect to a particular series of Securities (Section 501).
If an Event of Default under the Indenture with respect to Securities of
any series at the time outstanding occurs and is continuing, then in every such
case the Indenture Trustee or the holders of not less than 25% in principal
amount of the outstanding Securities of that series will have the right to
declare the principal amount (or, if the Securities of that series are Original
Issue Discount Securities or Indexed Securities, such portion of the principal
amount as may be specified in the terms thereof) of all the Securities of that
series to be due and payable immediately by written notice thereof to PCS (and
to the Indenture Trustee if given by the holders). However, at any time after
such a declaration of acceleration with respect to Securities of such series (or
of all Securities then outstanding under the Indenture, as the case may be) has
been made, but before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee, the holders of not less than a majority in
principal amount of outstanding Securities of such series (or of all Securities
then outstanding under the Indenture, as the case may be) may rescind and annul
such declaration and its consequences if (a) PCS deposits with the Indenture
Trustee all required payments of the principal of (and premium, if any) and
interest on the Securities of such series (or of all Securities then outstanding
under the Indenture, as the case may be), plus certain fees, expenses,
disbursements and advances of the Indenture Trustee, and (b) all Events of
Default, other than the non-payment of accelerated principal (or specified
portion thereof), with respect to Securities of such series (or of all
Securities then outstanding under the Indenture, as the case may be) are cured
or waived as provided in the Indenture (Section 502). The Indenture also
provides that the holders of not less than a majority in principal amount of the
outstanding Securities of any series (or of all Securities then outstanding
under the Indenture, as the case may be) may waive any past default with respect
to such series and its consequences, except a default (a) in the payment of the
principal of (or premium, if any) or interest on any Security of such series, or
(b) under a covenant or provision contained in the Indenture that cannot be
modified or amended without the consent of the holder of each outstanding
Security affected thereby (Section 513).
The Indenture Trustee will be required to give notice to the holders of
Securities within 90 days of default under the Indenture unless such default is
cured or waived; provided that such Indenture Trustee may withhold notice to the
holders of any series of Securities of any default with respect to such series
(except a default in the payment of the principal of (or premium, if any) or
interest on any Security of such series or in payment of any sinking fund
installment in respect of any Security of such series) if specified responsible
officers of such Indenture Trustee consider such withholding to be in the
interest of such holders (Section 601).
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The Indenture provides that no holders of Securities of any series may
institute any proceedings, judicial or otherwise, with respect to the Indenture
or for any remedy thereunder, except in the cases of failure of the Indenture
Trustee, for 60 days, to act after it has received a written request to
institute proceedings in respect of an Event of Default from the holders of not
less than 25% in principal amount of the outstanding Securities of such series
(Section 507). This provision will not prevent, however, any holder of
Securities from instituting suit for the enforcement of payment of the principal
of (and premium, if any) and interest on such Securities at the due dates
thereof.
Subject to provisions in the Indenture relating to its duties in case of
default, the Indenture Trustee will not be under any obligation to exercise any
of its rights or powers under the Indenture at the request or direction of any
holders of any series of Securities then outstanding under such Indenture,
unless such holders offer to the Indenture Trustee reasonable security or
indemnity. The holders of not less than a majority in principal amount of the
outstanding Securities of any series (or of all Securities then outstanding
under the Indenture, as the case may be) will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Indenture Trustee, or of exercising any trust or power conferred upon such
Indenture Trustee. However, an Indenture Trustee may refuse to follow any
direction which is in conflict with any law or the Indenture, which may involve
the Indenture Trustee in personal liability or which may be unduly prejudicial
to the holders of Securities of such series not joining therein (Section 512).
Within 120 days after the close of each fiscal year, PCS will be required
to deliver to the Indenture Trustee a certificate, signed by one of several
specified officers of PCS, stating whether or not such officer has knowledge of
any default under the Indenture and, if so, specifying each such default and the
nature and status thereof (Section 1009).
MODIFICATION OF THE INDENTURE
Modifications and amendments of the Indenture will be permitted to be made
only with the consent of the holders of not less than a majority in principal
amount of all outstanding Securities issued under the Indenture which are
affected by such modification or amendment; provided that no such modification
or amendment may, without the consent of the holder of each Security affected
thereby, (a) change the stated maturity of the principal of (or premium, if
any), or any installment of interest on any Security; (b) reduce the principal
amount of any Security, or reduce the amount of principal of an Original Issue
Discount Security that would be due and payable upon declaration of acceleration
of the maturity thereof or would be provable in bankruptcy, or adversely affect
any right of repayment of the holder of any such Security; (c) change the place
of payment, or the coin or currency, for payment of principal of (or premium, if
any) or interest on any Security; (d) impair the right to institute suit for the
enforcement of any payment on or with respect to any Security; (e) reduce the
above-stated percentage of outstanding Securities of any series necessary to
modify or amend the Indenture, to waive compliance with certain provisions
thereof or certain defaults and consequences thereunder or to reduce the quorum
or voting requirements set forth in the Indenture; or (f) modify any of the
foregoing provisions or any of the provisions relating to the waiver of certain
past defaults or certain covenants, except to increase the required percentage
to effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the holder of such Security (Section
902).
The holders of not less than a majority in principal amount of outstanding
Securities issued under the Indenture will have the right to waive compliance by
PCS with certain covenants in the Indenture (Section 1013).
Modifications and amendments of the Indenture will be permitted to be made
by PCS and the Indenture Trustee thereunder without the consent of any holder of
Securities for any of the following purposes: (a) to evidence the succession of
another person to PCS as obligor under the Indenture; (b) to add to the
covenants of PCS for the benefit of the holders of all or any series of
Securities or to surrender any right or power conferred upon PCS in the
Indenture; (c) to add Events of Default for the benefit of the holders of all or
any series of Securities; (d) to add or change any provisions of the Indenture
to facilitate the issuance of, or to liberalize certain terms of, Securities in
bearer form, or to permit or facilitate the issuance of Securities in
uncertificated form, provided that such action will not adversely affect the
interests of holders of the Securities
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in any material respect; (e) to change or eliminate any provisions of the
Indenture, provided that any such change or elimination will become effective
only when there are no Securities outstanding of any series created prior
thereto which are entitled to the benefit of such provision; (f) to secure the
Securities; (g) to establish the form or terms of Securities of any series; (h)
to provide for the acceptance of appointment by a successor Indenture Trustee or
facilitate the administration of the trusts under the Indenture by more than one
Indenture Trustee; (i) to cure any ambiguity, defect or inconsistency in the
Indenture, provided that such action will not adversely affect the interests of
holders of Securities of any series issued under such Indenture in any material
respect; or (j) to supplement any of the provisions of the Indenture to the
extent necessary to permit or facilitate defeasance and discharge of any series
of such Securities, provided that such action will not adversely affect the
interests of the holders of the Securities of any series in any material respect
(Section 901).
The Indenture will provide that in determining whether the holders of the
requisite principal amount of outstanding Securities of a series have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
or whether a quorum is present at a meeting of holders of Securities, (a) the
principal amount of an Original Issue Discount Security that is deemed to be
outstanding will be the amount of the principal thereof that would be due and
payable as of the date of such determination upon declaration of acceleration of
the maturity thereof, (b) the principal amount of any Security denominated in a
currency other than U.S. dollars that will be deemed outstanding will be the
U.S. dollar equivalent, determined on the issue date for such Security, of the
principal amount (or, in the case of Original Issue Discount Security, the U.S.
dollar equivalent on the issue date of such Security of the amount determined as
provided in (a) above), (c) the principal amount of an Indexed Security that
will be deemed outstanding will be the principal face amount of such Indexed
Security at original issuance, unless otherwise provided with respect to such
Indexed Security in the Indenture, and (d) Securities owned by PCS or any other
obligor upon the Securities or any Affiliate of PCS or of such other obligor
will be disregarded (Section 101).
The Indenture contains provisions for convening meetings of the holders of
Securities of a series (Section 1501). A meeting will be permitted to be called
at any time by the Indenture Trustee, and also, upon request, by PCS or the
holders of at least 10% in principal amount of the outstanding Securities of
such series, in any such case upon notice given as provided in the Indenture
(Section 1500). Except for any consent that must be given by the holder of each
Security affected by certain modifications and amendments of the Indenture, any
resolution presented at a meeting at which a quorum is present may be adopted by
the affirmative vote of the holders of a majority in principal amount of the
outstanding Securities of that series; provided, that, except as referred to
above, any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action that may be made, given or
taken by the holders of a specified percentage, which is less than a majority,
in principal amount of the outstanding Securities of a series may be adopted at
a meeting by the affirmative vote of the holders of such specified percentage in
principal amount of the outstanding Securities of that series. Any resolution
passed or decision taken at any meeting of holders of Securities of any series
duly held in accordance with the Indenture will be binding on all holders of
Securities of that series. The quorum at any meeting called to adopt a
resolution will be persons holding or representing a majority in principal
amount of the outstanding Securities of a series (Section 1504).
Notwithstanding the foregoing provision, the Indenture provides that if any
action is to be taken at a meeting of holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that the Indenture expressly provides may be made, given
or taken by the holders of a specified percentage, which is less than a
majority, in principal amount of all outstanding Securities affected thereby, or
of the holders of such series and one or more additional series: (a) there will
be no quorum requirement for such meeting, and (b) the principal amount of the
outstanding Securities of such series that vote in favor of such request,
demand, authorization, direction, notice, consent, waiver or other action will
determine whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under the
Indenture (Section 1504).
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DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
PCS is permitted under the Indenture to discharge certain obligations to
holders of any series of Securities issued thereunder that have not already been
delivered to the Indenture Trustee for cancellation and that either have become
due and payable or will become due and payable within one year (or scheduled for
redemption within one year) by irrevocably depositing with the Indenture
Trustee, in trust, funds in such currency in which such Securities are payable
in an amount sufficient to pay the entire indebtedness on such Securities in
respect of principal (and premium, if any) and interest to the date of such
deposit (if such Securities have become due and payable) or to the stated
maturity and redemption date, as the case may be (Section 401).
The Indenture provides that PCS may elect either (a) to defease and be
discharged from any and all obligations with respect to the Securities or a
series (except for the obligation to pay additional amounts, if any, upon the
occurrence of certain events of tax, assessment or governmental charge with
respect to payments on such Securities and the obligations to register the
transfer or exchange of such Securities, to replace temporary or mutilated,
destroyed, lost or stolen Securities, to maintain an office or agency in respect
of such Securities and to hold moneys for payment in trust) ("defeasance")
(Section 1402), or (b) to be released from its obligations with respect to such
Securities under the restrictions described under "-- Certain Covenants" or, if
provided pursuant to the Indenture, its obligations with respect to any other
covenant, and any omission to comply with such obligations will not constitute
an Event of Default with respect to such Securities ("covenant defeasance")
(Section 1403), in either case upon the irrevocable deposit by PCS with the
Indenture Trustee, in trust, of an amount, in such currency in which such
Securities are payable at stated maturity, or Government Obligations, or both,
applicable to such Securities which through the scheduled payment of principal
and interest in accordance with their terms will provide money in an amount
sufficient to pay the principal of (and premium, if any) and interest on such
Securities, and any mandatory sinking fund or analogous payments thereon, on the
scheduled due dates therefor (Section 1404).
Such a trust will only be permitted to be established if, among other
things, PCS has delivered to the Indenture Trustee an opinion of counsel to the
effect that the holders of such Securities will not recognize income, gain or
loss for U.S. federal income tax purposes as a result of such defeasance or
covenant defeasance and will be subject to U.S. federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such defeasance or covenant defeasance had not occurred, and such opinion of
counsel, in the case of defeasance, will be required to refer to and be based
upon a ruling of the Internal Revenue Service or a change in applicable United
States federal income tax law occurring after the date of the Indenture (Section
1404).
If after PCS has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Securities of any series, (a)
the holder of a Security of such series is entitled to, and does, elect pursuant
to the Indenture or the terms of such Security to receive payment in a currency,
currency unit or composite currency other than that in which such deposit has
been made in respect of such Security, or (b) a Conversion Event (as defined
below) occurs in respect of the currency, currency unit or composite currency in
which such deposit has been made, the indebtedness represented by such Security
will be deemed to have been, and will be, fully discharged and satisfied though
the payment of the principal of (and premium, if any) and interest on such
Security as they become due out of the proceeds yielded by converting the amount
so deposited in respect of such Security into the currency, currency unit or
composite currency in which such Security becomes payable as a result of such
election based on the applicable market exchange rate. "Conversion Event" means
the cessation of use of (a) a currency, currency unit or composite currency both
by the government of the country which issued such currency and for the
settlement of transactions by a central bank or other public institution of or
within the international banking community, (b) the ECU, both within the
European Monetary System and for the settlement of transactions by public
institutions of or within the European Communities, or (c) any currency unit or
composite currency other than the ECU for the purposes for which it was
established. All payments of principal of (and premium, if any) and interest on
any Security that is payable in a currency other than U.S. dollars that ceases
to be used by its government of issuance will be in U.S. dollars (Section 101).
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<PAGE> 26
If PCS effects covenant defeasance with respect to any Securities and such
Securities are declared due and payable because of an Event of Default, the
amount in such currency in which such Securities are payable, and Government
Obligations on deposit with the Indenture Trustee, will be sufficient to pay
amounts due on such Securities at the time of their stated maturity but may not
be sufficient to pay amounts due on such Securities at the time of the
acceleration resulting from such Event of Default. However, PCS would remain
liable to make payment of such amounts due at the time of acceleration.
GLOBAL SECURITIES
The Securities of a series may be issued in whole or in part in the form of
one or more global securities (the "Global Securities") that will be deposited
with, or on behalf of, a depositary identified in the applicable Prospectus
Supplement relating to such series. The Global Securities may be issued in
either registered or bearer form and in either temporary or permanent form. The
specific terms of the depositary arrangement with respect to a series of
Securities will be described in the applicable Prospectus Supplement relating to
such series.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms, as well as other terms used herein for which no definition is
provided (Section 101).
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" means, with respect to any Sale and Leaseback
Transaction as of any particular time, the present value (discounted at the rate
of interest implicit in the terms of the lease) of the obligations of the lessee
under such lease for net rental payments during the remaining term of the lease
(including any period for which such lease has been extended). "Net rental
payments" under any lease for any period means the sum of the rental and other
payments required to be paid in such period by the lessee thereunder, not
including, however, any amounts required to be paid by such lessee (whether or
not designated as rental or additional rental) on account of maintenance and
repairs, insurance, taxes, assessments or similar charges.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible or exchangeable for corporate stock), warrants
or options to purchase any thereof.
"Consolidated Net Tangible Assets" of PCS means, at any date, the gross
book value as shown by the accounting books and records of PCS of all property
both real and personal of PCS and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP (including appropriate deductions for any minority
interests in property of Subsidiaries of PCS) less (a) the gross book value of
all its licenses, patents, patent applications, copyrights, trademarks, trade
names, goodwill, non-compete agreements or organizational expenses and other
like intangibles, (b) gross Debt discount and expense, (c) all reserves for
depreciation, obsolescence, depletion and amortization of its properties, and
(d) all other proper reserves which in accordance with GAAP should be provided
in connection with the business conducted by PCS or its Subsidiaries.
"Debt" of PCS or any Subsidiary means any indebtedness of PCS or any
Subsidiary, whether or not contingent, in respect of (without duplication) (a)
borrowed money, whether or not evidenced by bonds, notes, debentures or similar
instruments, (b) indebtedness secured by any Lien existing on property owned by
PCS or any Subsidiary, (c) the reimbursement obligations, contingent or
otherwise, in connection with any letters of credit actually issued or amounts
representing the balance deferred and unpaid of the purchase price
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<PAGE> 27
of any property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or obligations
under any title retention agreement, (d) the principal amount of all obligations
of PCS or any Subsidiary with respect to redemption, repayment or other
repurchase of any Disqualified Stock, or (e) any lease of property by PCS or any
Subsidiary as lessee which is reflected on PCS's consolidated balance sheet as a
capitalized lease in accordance with GAAP to the extent, in the case of items of
indebtedness under (a) through (c) above, that any such items (other than
letters of credit) would appear as a liability on PCS's consolidated balance
sheet in accordance with GAAP, and also includes, to the extent not otherwise
included, any obligation by PCS or any Subsidiary to be liable for, or to pay,
as obligor, guarantor or otherwise (other than for purposes of collection in the
ordinary course of business), Debt of another Person (other than PCS or any
Subsidiary).
"Disqualified Stock" means, with respect to any Person, any Capital Stock
of such Person which by the terms of such Capital Stock (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise, (a) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, (b)
is convertible into or exchangeable or exercisable for Debt or Disqualified
Stock, or (c) is redeemable at the option of the holder thereof, in whole or in
part, in each case on or prior to the Stated Maturity of the series of
Securities.
"GAAP" means generally accepted accounting principles, as in effect from
time to time, in Canada, applied on a consistent basis.
"Government Obligations" means securities which are (a) direct obligations
of the United States of America or the government which issued the other
currency in which the Securities of a particular series are payable, for the
payment of which its full faith and credit is pledged, or (b) obligations of a
person controlled or supervised by and acting as an agency or instrumentality of
the United States of America or the government which issued the other currency
in which the Securities of such series are payable, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America or such other government, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and will also
include a depository receipt issued by a bank or trust as custodian with respect
to any such Government Obligation or a specific payment of interest on or
principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
"Issue Date" means the date upon which a series of Securities was first
issued and authenticated under the Indenture.
"Lien" means any mortgage, charge, security interest, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security agreement except: (a) liens for
taxes and other governmental assessments, including utility charges and vault
rentals, (i) which are not yet delinquent, or (ii) which are being contested in
good faith by all appropriate proceedings; (b) carriers', warehousemen's,
mechanics', materialmen's, repairmen's, brokers' or other like liens (i) which
do not remain unsatisfied or undischarged for a period of more than 90 days, or
(ii) which are being contested in good faith by all appropriate proceedings; (c)
attachment or judgment liens not giving rise to a default or an Event of Default
and which are being contested in good faith by appropriate proceedings; (d)
pledges or deposits in connection with workers compensation, unemployment
insurance and other social security legislation and deposits securing liability
to insurance carriers under insurance or self-insurance arrangements; (e)
deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business; and (f) easements, rights of way, restrictions,
development orders, plats and other similar encumbrances.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
15
<PAGE> 28
"Permitted Short-Term Investments" means investments in obligations,
maturing not more than 180 days after the date of acquisition: (a) issued by the
Government of Canada or the United States of America, or an instrumentality or
agency thereof and guaranteed fully as to principal, premium, if any, and
interest by Canada or the United States of America; (b) issued by a province of
Canada, or an instrumentality or agency thereof, with a rating of at least R-1
(low) by Dominion Bond Rating Service Limited ("DBRS") or A-1 (low) by Canadian
Bond Rating Service ("CBRS"); (c) term deposits, guaranteed investment
certificates, certificates of deposit, bankers' acceptances or bearer deposit
notes of any Canadian chartered bank or other financial institution which have
been rated at least A-1 by Standard & Poor's ("S&P") or at least P-1 or the
equivalent thereof by Moody's Investors Service ("Moody's"), or at least A-1 by
CBRS or at least R-1 (mid) by DBRS; (d) commercial paper issued by a corporation
organized and existing under the laws of Canada or the United States of America
with a rating of at least A-1 by S&P, P-1 by Moody's, R-1 (mid) by DBRS or A-1
by CBRS; (e) any asset-backed debt securities with ratings of at least A-1 by
S&P, P-1 by Moody's, R-1 (high) by DBRS or A-1+ by CBRS; and (f) notes, bonds,
coupons, debentures or other debt securities issued by any United States or
Canadian corporation with ratings of at least A-1 by S&P, P-1 by Moody's, R-1
(mid) by DBRS or A-1 by CBRS; provided that in the event of a rating downgrade
on any Permitted Short-Term Investment by S&P, Moody's, DBRS or CBRS during the
period in which the Permitted Short-Term Investment is held, PCS acting
reasonably shall have the full discretion to retain the Permitted Short-Term
Investment to maturity.
"Principal Property" means (a) any real property interest (all such
interests forming an integral part of a single development or operation being
considered as one interest), including any mining claims and leases, and any
plants, buildings or other improvements thereon, and any part thereof, that is
held by PCS or any Subsidiary and has a gross book value (without deduction of
any reserve for depreciation), on the date as of which the determination is
being made, exceeding 3% of Consolidated Net Tangible Assets of PCS (other than
any such interest that the board of directors of PCS determines by resolution is
not material to the business of PCS and its Subsidiaries taken as a whole), or
(b) any of the Capital Stock or debt securities issued by any Significant
Subsidiary.
"Sale and Leaseback Transaction" of any Person means an arrangement with
any lender or investor or to which such lender or investor is a party providing
for the leasing by such Person of any property or asset of such Person which has
been or is being sold or transferred by such Person more than 270 days after the
acquisition thereof or the completion of construction or commencement of
operation thereof to such lender or investor or to any Person to whom funds have
been or are to be advanced by such lender or investor on the security of such
property or asset. The stated maturity of such arrangement is the date of the
last payment of rent or any other amount due under such arrangement prior to the
first date on which such arrangement may be terminated by the lessee without
payment of a penalty.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (as defined in Rule 1-02 of Regulation S-X, promulgated by the
Commission) of PCS.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means an entity a majority of the partnership interests or a
majority of the outstanding voting stock of which is owned, directly or
indirectly, by PCS and/or one or more other Subsidiaries of PCS. For the
purposes of this definition, "voting stock" means stock having voting power for
the election of directors, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) is at the time owned by such Person
and/or one or more Wholly Owned Subsidiaries of such Person.
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<PAGE> 29
CERTAIN INCOME TAX CONSIDERATIONS
The applicable Prospectus Supplement will describe the principal Canadian
federal income tax consequences to an investor (a) who is not resident in Canada
for purposes of the Income Tax Act (Canada) (the "Act"), (b) who is a resident
of the United States for purposes of the Canada-United States Income Tax
Convention, and (c) who meets certain other requirements (a "U.S. Investor") of
acquiring, owning and disposing of Securities, including whether the payment by
the Company of principal (and premium, if any) and interest will be subject to
Canadian non-resident withholding tax under the Act.
The applicable Prospectus Supplement also will describe the principal
United States federal income tax considerations applicable to a U.S. Investor of
acquiring, owning and disposing of Securities, including any such considerations
relating to (a) principal (and premium, if any) and interest payable with
respect to the Securities, in a currency other than the United States dollar,
(b) the issuance of Securities with "original issue discount" (as defined for
United States federal income tax purposes), if applicable, and (c) the inclusion
of any special terms in Securities that may have a material effect for United
States federal income tax purposes.
PLAN OF DISTRIBUTION
PCS may sell Securities to or through underwriters and also may sell
Securities to one or more other purchasers directly or through agents.
The distribution of 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.
In connection with the sale of Securities, underwriters may receive
compensation from PCS or from purchasers of Securities, for whom they may act as
agents, in the form of discounts, concessions or commissions. Underwriters may
sell Securities to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agents.
Underwriters, dealers and agents that participate in the distribution of
Securities may be deemed to be underwriters, and any discounts or commissions
they receive from PCS, and any profit on the resale of Securities they realize
may be deemed to be underwriting discounts and commissions under the Securities
Act. Any such underwriter or agent will be identified and any such compensation
received from PCS will be described in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, each
series of Securities will be a new issue with no established trading market. PCS
may elect to list any series of Securities on an exchange, but is not obligated
to do so. It is possible that one or more underwriters may make a market in a
series of Securities, but they will not be obligated to do so and may
discontinue any market-making at any time without notice. Therefore, no
assurance can be given as to the liquidity of the trading market for the
Securities.
Under agreements PCS may enter into, underwriters, dealers and agents, who
participate in the distribution of Securities, may be entitled to
indemnification by PCS against certain liabilities, including liabilities under
the Securities Act.
The Securities have not been and will not be qualified for sale under the
securities laws of Canada or any province or territory of Canada. The Securities
may not be offered or sold, directly or indirectly, in Canada, or to or for the
benefit of any resident thereof, in violation of the securities laws of Canada
or any province or territory thereof.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be customers of, PCS in the ordinary course of
business.
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LEGAL MATTERS
The legality of the Securities offered hereby will be passed upon by
Robertson Stromberg, Saskatchewan counsel to PCS. Certain matters involving the
laws of the United States will be passed upon by Arent Fox Kintner Plotkin &
Kahn, U.S. counsel to PCS.
EXPERTS
The consolidated financial statements of PCS as of December 31, 1995 and
1996, and for each of the three years in the period ended December 31, 1996,
incorporated by reference herein and in the Registration Statement of which this
Prospectus is a part, have been audited by Deloitte & Touche, independent
chartered accountants, as stated in their report incorporated by reference
herein and therein, and are so incorporated in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.
The consolidated financial statements of Arcadian Corporation as of
December 31, 1995 and 1996, and for each of the three years in the period ended
December 31, 1996, incorporated by reference herein and in the Registration
Statement of which this Prospectus is a part, have been so incorporated in
reliance upon the reports of KPMG Peat Marwick LLP, independent certified public
accountants, and Coopers & Lybrand, independent chartered accountants,
incorporated by reference herein and therein, and upon the authority of said
firms as experts in accounting and auditing.
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED
IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY PCS OR BY ANY OF THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO
WHICH THEY RELATE OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY,
THOSE TO WHICH THEY RELATE IN ANY STATE TO ANY PERSON WHOM IT IS NOT LAWFUL TO
MAKE SUCH AN OFFER IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION CONTAINED IN
EITHER IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR RESPECTIVE DATES.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Company........................... S-3
Financial Information................. S-4
Capitalization........................ S-5
Use of Proceeds....................... S-5
Description of Notes.................. S-5
Credit Ratings........................ S-8
Certain Income Tax Considerations..... S-9
Underwriting.......................... S-11
Legal Matters......................... S-12
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents
by Reference........................ 2
Enforceability of Civil Liabilities
Under United States Federal
Securities Laws..................... 3
Financial Statement Presentation...... 3
The Company........................... 3
Financial Information................. 4
Use of Proceeds....................... 5
Description of Securities............. 5
Certain Definitions................... 14
Certain Income Tax Considerations..... 17
Plan of Distribution.................. 17
Legal Matters......................... 18
Experts............................... 18
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
$400,000,000
POTASH CORPORATION OF
SASKATCHEWAN INC.
7.125% NOTES DUE
JUNE 15, 2007
[POTASH LOGO]
---------
PROSPECTUS SUPPLEMENT
JUNE 11, 1997
(INCLUDING PROSPECTUS
DATED MAY 30, 1997)
---------
SMITH BARNEY INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.
J.P. MORGAN & CO.
- ------------------------------------------------------
- ------------------------------------------------------
