As filed with the Securities and Exchange Commission on [ ], 1997
Registration No. 333-[ ]
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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HOLLINGER INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3518892
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
401 NORTH WABASH AVENUE
CHICAGO, ILLINOIS 60611
(312) 321-3000
(Address, including zip code, and telephone
number, including area code, of registrant's
principal executive offices)
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Kenneth L. Serota
Vice President - Law and Finance
and Secretary
HOLLINGER INTERNATIONAL INC.
401 North Wabash Avenue
Chicago, Illinois 60611
(312) 321-2299
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
William P. Rogers, Jr.
Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019
(212) 474-1000
Approximate date of commencement of proposed sale to public: From time
to time after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box.|_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering.|_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering.|_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.|_|
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CALCULATION OF ADDITIONAL REGISTRATION FEE
Proposed
Title of Each Proposed Maximum
Class of Amount Maximum Aggregate Amount of
Securities to Be Offering Price Offering Registration
to Be Registered Registered(1) per Share Price(2) Fee(2)
Class A Common
Stock, par
value $.01
per share...... 34,899,639 N/A $458,232,265 $138,858
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(1) The number of shares is based upon the maximum number shares that may
be issued upon the exercise of the retraction right and exchange
rights provided under the Retractable Shares and the Series I and
Series II Preference Shares. This registration statement also
registers such indefinite number of additional shares, if any, as may
be issued upon the exercise of the Retraction Right or Exchange Right
provided under the Series I and Series II Preference Shares.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c). Computed on the basis of the market price of
the Class A Common Stock.
The registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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<PAGE>
SUBJECT TO COMPLETION, DATED [ ], 1997
HOLLINGER INTERNATIONAL INC.
CLASS A COMMON STOCK
(PAR VALUE $.01 PER SHARE)
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This prospectus covers the exchange by Hollinger Inc., a Canadian
Company ("Hollinger Inc.") of shares of Class A Common Stock, par value
$.01 per share (the "Class A Common Stock"), of its subsidiary Hollinger
International Inc. (the "Company") upon the exercise by holders of the
Retractable Shares and Series I and Series II Exchangeable Non-Voting
Preference Shares (the "Series I and Series II Preference Shares") of
Hollinger Inc. of the retraction rights provided under these securities.
See "Plan of Distribution". The Company will not receive any proceeds from
the exchange of the Class A Common Stock covered by this prospectus.
The Class A Common Stock is listed on the New York Stock Exchange (the
"NYSE") and traded under the symbol "HLR." The last sale price of the Class
A Common Stock as reported on the NYSE Composite Tape on September 15, 1997
was $13.00 per share.
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SEE "RISK FACTORS" BEGINNING ON PAGE 3 OR CERTAIN
CONSIDERATIONS RELEVANT TO AN INVESTMENT IN
THE CLASS A COMMON STOCK.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
As described herein, the number of shares of Class A Common Stock, if
any, to be exchanged for each Retractable Share or Series I or Series II
Preference Shares surrendered will be determined based on the applicable
Retraction Price and the Current Class A Market Price in effect at such
time see "Plan of Distribution."
---------------------------
The date of this Prospectus is [ ], 1997
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This Prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files periodic reports, proxy solicitation materials
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy solicitation materials and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices located at
Seven World Trade Center, Suite 1300, New York, New York 10048 and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that
file electronically with the Commission. The address of the Commission's
Web site is http://www.sec.gov. The Class A Common Stock is listed on the
NYSE. Such reports, proxy solicitation materials and other information can
also be inspected and copied at the NYSE at 20 Broad Street, New York, New
York 10005.
The Company has filed with the Commission a registration statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as
the "Registration Statement") under the Securities Act with respect to the
offering made hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain portions of
which are omitted in accordance with the rules and regulations of the
Commission. Such additional information may be obtained from the
Commission's principal office in Washington, D.C. as set forth above. For
further information, reference is hereby made to the Registration
Statement, including the exhibits filed as a part thereof or otherwise
incorporated herein. Statements made in this Prospectus as to the contents
of any documents referred to are not necessarily complete, and in each
instance reference is made to such exhibit for a more complete description
and each such statement is modified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File
No. 0-24004) pursuant to the Exchange Act are incorporated herein by
reference:
1. the Company's Annual Report on Form 10-K for the year ended
December 31, 1996;
2. the Company's Quarterly Report on Form 10-Q for the quarters
ended March 31, 1997 and June 30, 1997;
3. the Company's Current Reports on Form 8-K dated May 5, 1997; and
July 14, 1997; and
4. the description of the Class A Common Stock contained in the
Company's Registration Statement on Form 8-A dated May 2, 1994,
as the same may be amended from time to time.
All reports and other documents filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this Prospectus and prior to the termination of the offering made
by this Prospectus shall be deemed to be incorporated by reference herein.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all of the documents that are incorporated herein
by reference, other than exhibits to such information (unless such exhibits
are specifically incorporated by reference into such documents). Requests
should be directed to Hollinger International Inc., 401 North Wabash
Avenue, Chicago, Illinois 60611, Attention: Secretary, telephone number
(312) 321-2299.
<PAGE>
THE COMPANY
The Company, through subsidiaries and affiliated companies, is a
leading publisher of English-language newspapers in the United States, the
United Kingdom, Australia, Canada and Israel. Included among the paid daily
newspapers which the Company owns or has an interest are the Chicago
Sun-Times and The Daily Telegraph. In addition, the Company owns or has an
interest in several hundred non-daily newspapers as well as magazines and
other publications principally in small and medium sized communities in the
United States. The Company's strategy is to achieve growth through
acquisitions and improvements in the cash flow and profitability of its
newspapers, principally through cost reductions.
The Company was incorporated in the State of Delaware on December 28,
1990 and is the successor to a business that was formed through
acquisitions in 1986. Its executive offices are located at 401 North Wabash
Avenue, Chicago, Illinois 60611, telephone number (312) 321-3000.
References herein to the "Company" refer to Hollinger International Inc.
and its subsidiaries, unless the context requires otherwise.
RISK FACTORS
Prospective investors should carefully consider the following factors
relating to the business of the Company, together with the other factors,
information and financial data included or incorporated by reference in
this Prospectus, before acquiring any of the shares of Class A Common Stock
offered hereby.
International Holding Company Structure
The Company is an international holding company and its assets consist
solely of investments in its subsidiaries and affiliated companies. As a
result, the Company's ability to meet its future financial obligations is
dependent upon the availability of cash flows from its United States and
foreign subsidiaries and affiliated companies (subject to applicable
withholding taxes) through dividends, intercompany advances, management
fees and other payments. Similarly, the Company's ability to pay dividends
on its Common Stock, its preferred stock or its Preferred Redeemable
Increased Dividend Equity Security PRIDES(SM) ("PRIDES") will be limited as
a result of its dependence upon the distribution of earnings of its
subsidiaries and affiliated companies. The Company's subsidiaries and
affiliated companies are under no obligation to pay dividends and, in the
case of Hollinger International Publishing Inc., a Delaware corporation and
a wholly owned subsidiary of the Company through which the Company holds
all the shares of its other subsidiaries ("Publishing"), and its principal
United States and foreign subsidiaries, are subject to statutory
restrictions and restrictions in debt agreements that may limit their
ability to pay dividends. Substantially all of the shares of the
subsidiaries of the Company have been pledged to lenders of the Company.
The Company's right to participate in the distribution of assets of any
subsidiary or affiliated company upon its liquidation or reorganization
will be subject to the prior claims of the creditors of such subsidiary or
affiliated company, including trade creditors, except to the extent that
the Company may itself be a creditor with recognized claims against such
subsidiary or affiliated company.
Risks Inherent in Growth Strategy
The Company's strategy is to achieve growth through acquisitions and
improvements in the cash flow and profitability of its newspapers,
principally through cost reductions. The Company's growth strategy presents
risks inherent in assessing the value, strengths and weaknesses of
acquisition opportunities, in evaluating the costs of new growth
opportunities at existing operations and in managing the numerous
publications it has acquired and improving their operating efficiency.
While the Company believes that there are significant numbers of potential
acquisition candidates, the Company is unable to predict the number or
timing of future acquisition opportunities or whether any such
opportunities will meet the Company's acquisition criteria or, if such
acquisitions occur, whether the Company will be able to achieve improved
operating efficiencies or enhanced profitability. Accordingly, there can be
no assurance that the Company will continue to experience the rate of
growth that it has had in the past. In addition, the Company's acquisition
strategy is largely dependent on the Company's ability to obtain additional
debt or other financing on acceptable terms.
<PAGE>
Newspaper Industry Competition
Revenues in the newspaper industry are dependant primarily upon
advertising revenues and paid circulation. Competition for advertising and
circulation revenues comes from local and regional newspapers, radio,
broadcast and cable television, direct mail, and other communications and
advertising media that operate in the Company's markets. The extent and
nature of such competition is, in large part, determined by the location
and demographics of the markets and the number of media alternatives in
those markets. Some of the Company's competitors are larger and have
greater financial resources than the Company. For example, in the Chicago
metropolitan area, the Chicago Sun-Times competes with a large established
metropolitan daily and Sunday newspaper that is the fifth largest
metropolitan daily and Sunday newspaper in the United States such
competition is often intense. In the United Kingdom, The Daily Telegraph
competes with other national newspapers, principally The Times, which over
the past several years has from time to time substantially reduced its
cover price in an effort to increase its circulation. The Daily Telegraph
has met this competition and has from time to time engaged in its own price
reduction or promotional initiatives. These competitive activities can and
have from time to time had an adverse effect on revenues and operating
costs.
Cyclicality of Revenues
Advertising and, to a lesser extent, circulation revenues of the
Company, as well as those of the newspaper industry in general, are
cyclical and dependent upon general economic conditions. Historically,
increases in advertising revenues have corresponded with economic
recoveries while decreases, as well as changes in the mix of advertising,
have corresponded with general economic downturns and regional and local
economic recessions. The Company believes, however, that the geographic
diversity of its global operations may mitigate, to some degree, the
effects of an economic downturn in any particular market served by the
Company.
Newsprint Costs
Newsprint represents the single largest raw material expense of the
Company's newspapers throughout the world and is one of its most
significant operating costs. Newsprint costs are cyclical and vary widely
period to period. For example, Newsprint cost increased approximately 40%
per metric ton in 1995 on an industry-wide basis, and the average cost per
metric ton of newsprint was substantially higher in the first half of 1996
than in the first half of 1995. However, Newsprint costs decreased
significantly in the second half of 1996 and have continued to decline
through the second quarter of 1997. Although the Company has implemented
measures in an attempt to offset a rise in newsprint prices, such as
reducing page width and managing its return policy, price increases have
had an adverse effect on the Company's results of operations. The Company
has no effective ability to use long term fixed price newsprint supply
contracts to hedge its exposure to price fluctuations.
Foreign Operations and Currency Exchange Rates
Operations outside of the United States accounted for approximately
67% of the Company's operating revenues and approximately 50% of the
Company's operating income for the year ended December 31, 1996. In
general, the Company does not hedge against foreign currency exchange rate
risks. As a result, the Company may experience economic loss and a negative
impact on earnings with respect to its investments and on dividends from
its foreign subsidiaries, solely as a result of currency exchange rate
fluctuations.
Control by Hollinger Inc.
The Company has outstanding two classes of common stock, Class A
Common Stock and Class B Common Stock, par value $.01 per shares (the
"Class B Common Shares" and collectively the "Common Stock"). Hollinger
Inc. owns approximately 59.8% of the Common Stock of the Company and
approximately
<PAGE>
84.3% of the combined voting power of the outstanding Common Stock (without
giving effect to the issuance of shares of Class A Common Stock upon
conversion of preferred stock including the PRIDES or the exchange of the
Non-Voting Special Shares) and 50.5% and 77.1%, respectively, upon the
issuance of up to approximately 20,700,000 Shares of Class A Common Stock
in connection with the PRIDES and upon exchange of all the Non-Voting
Special Shares (without giving effect to the issuance of Shares of Class A
Common Stock upon conversion of any other outstanding series of preferred
stock.)
As a result, Hollinger Inc. is in a position to control the outcome of
substantially all actions requiring stockholder approval, including the
election of the entire Board of Directors. The retention by Hollinger Inc.
of securities representing more than 50% of the voting power of the
Company's outstanding Common Stock will preclude any acquisition of control
of the Company not favored by Hollinger Inc. Subject to the fiduciary
responsibilities of the directors of the Company to all stockholders and
the terms of agreements defining the ongoing relationships between
Hollinger Inc. and the Company, Hollinger Inc., through its ability to
control the outcome of any election of directors, will continue to be able
to direct management policy, strategic direction and financial decisions of
the Company. Hollinger Inc. is effectively controlled by Mr. Conrad M.
Black, Chairman of the Board and Chief Executive Officer of Hollinger Inc.
and the Company, through his direct and indirect ownership and control of
Hollinger Inc.'s securities. Mr. Black has advised the Company that
Hollinger Inc. does not presently intend to reduce its voting power in the
Company's outstanding Common Stock to less than 50%. Furthermore, Mr. Black
has advised the Company that he does not presently intend to reduce his
voting control over Hollinger Inc. such that a third party would be able to
exercise effective control over it.
The Class A Common Stock held by Hollinger Inc. is pledged to certain
lenders of Hollinger Inc. In addition, the stock of certain subsidiaries of
the Company have been pledged to secure borrowings by the Company's
subsidiaries. A default by any of such borrower under their outstanding
debt instruments would entitle the lenders thereunder to foreclose on
shares of Class A Common Stock or Subsidiary Stock pledged to such lenders.
Any such foreclose sale could result in (i) a change in control of the
company or one or more of its principal subsidiaries, (ii) a default under
or acceleration of other debts instruments, or both.
Dividend Policy
The Company has paid quarterly dividends on its Common Stock since the
third quarter of 1994. The quarterly dividend was previously $0.025 per
share of Common Stock and was increased to $0.10 per share of Common Stock
in the first quarter of 1996. As an international holding company, the
Company's ability to declare and pay dividends in the future with respect
to its Common Stock will be dependent, among other factors, upon its
results of operations, financial condition and cash requirements, the
ability of its United States and foreign subsidiaries to pay dividends and
make other payments to the Company under applicable law and subject to
restrictions contained in existing and future loan agreements, the prior
payment of dividends to holders of outstanding preferred stock, including
the PRIDES, the preference share terms and other financing obligations to
third parties relating to such United States or foreign subsidiaries or the
Company, as well as foreign and United States tax liabilities with respect
to dividends and other payments from those entities. See "International
Holding Company Structure," "Restrictions in Debt Agreements" and "Other
Restrictive Agreements" above.
Potential Conflicts of Interest
The Company and Hollinger Inc. have entered into agreements for the
purpose of defining their ongoing relationships, including a Services
Agreement and a Business Opportunities Agreement. These agreements were
developed in the context of a parent-subsidiary relationship and,
therefore, were not the result of arms-length negotiations between
independent parties.
Services Agreement. The Services Agreement governs the provision by
Hollinger Inc. of certain advisory, consultative, procurement and
administrative services to the Company. The Services Agreement also
contemplates that the Company may provide services to Hollinger Inc. The
services to be provided pursuant to the Services Agreement include, among
other things, strategic advice and planning and financial services
(including advice and assistance with respect to acquisitions); assistance
in operational matters; participation in group insurance programs; and
guarantees of indebtedness of the Company or other forms of credit
<PAGE>
enhancements. The party receiving the services will reimburse the party
rendering the services for its allocable costs in providing those services,
as determined by the provider thereof or, in the case of a guarantee, for
an amount equal to the cost to the party of obtaining a bank letter of
credit in the amount of such guarantee. The party allocating its costs will
consider the salaries or other compensation payable to directors, officers
and employees actually providing services, out-of-pocket costs, the cost of
obtaining substantially equivalent services from a third party and other
factors as may be deemed appropriate. The Services Agreement will be in
effect for so long as Hollinger Inc. holds at least 50% of the voting power
of the Company, subject to termination by either party under certain
specified circumstances. Payments made pursuant to the Services Agreement
are subject to the review and approval of the Audit Committee of the Board
of Directors of the Company.
In addition, Hollinger Inc. and The Telegraph are parties to a
separate services agreement under which The Telegraph bears two-thirds of
the cost of the office of the Chairman incurred by Hollinger Inc. as long
as Mr. Black remains Chairman of the Board of The Telegraph, and requires
that other services will be provided at cost, including the arrangement of
insurance, assistance in the arrangement of financing and assistance and
advice on acquisitions, dispositions and joint venture arrangements.
Hollinger Inc. has assigned its rights and obligations under The Telegraph
services agreement to the Company and Publishing on May 9, 1996 with the
consent of The Telegraph.
Business Opportunities. The Business Opportunities Agreement provides
that the Company will be Hollinger Inc.'s principal vehicle for engaging in
and effecting acquisitions in newspaper businesses and in related media
businesses in the United States, Israel and, through The Telegraph, the
European Community, Australia and New Zealand (the "Telegraph Territory").
Hollinger Inc. has reserved to itself the ability to pursue newspaper and
all media acquisition opportunities outside the United States, Israel and
the Telegraph Territory, and media acquisition opportunities unrelated to
the newspaper business in the United States, Israel and the Telegraph
Territory, except that the Company is permitted to increase its indirect
investment in Southam. The Business Opportunities Agreement does not
restrict newspaper companies in which Hollinger Inc. has a minority
investment from acquiring newspaper or media businesses in the United
States, Israel or the Telegraph Territory, nor does it restrict
subsidiaries of Hollinger Inc. from acquiring up to 20% interests in
publicly held newspaper businesses in the United States. The Business
Opportunities Agreement will be in effect for so long as Hollinger Inc.
holds at least 50% of the voting power of the Company, subject to
termination by either party under specified circumstances.
USE OF PROCEEDS
The Company will not receive any proceeds from the exercise by holders
of Retractable Shares or Series I and II Preference Shares of their
retraction rights. All shares of Class A Common Stock delivered pursuant to
the terms of the Retractable Shares and the Series I and II Preference
Shares are owed by Hollinger Inc.
<PAGE>
SELLING SHAREHOLDER
The following table sets forth certain information with respect to the
beneficial ownership by Hollinger Inc. of the Class A Common Stock, the
Class B Common Stock and the Preferred Stock as of September 12, 1997.
<TABLE>
<CAPTION>
Class A Common Class B Common
Stock(1) Stock(2) Post Offerings
Percent Percent
Name of Beneficial Number of Prior to After Voting Number of Shares Voting Ownership
Owner Shares Offering Offering Power Power of Common
Prior to Stock
Offering
<S> <C> <C> <C> <C> <C> <C> <C>
Hollinger Inc. 36,817,799 59.8% 3.1% 84.3% 14,990,000 68.5% 19.5%
_______
(1) Does not give effect to the issuance o the shares of Class A Common Stock which may be issued upon conversion of
preferred stock including the PRIDES or the exchange of the Non-Voting HCPH Special Shares.
(2) Class B Common Stock is supermajority voting stock.
</TABLE>
PLAN OF DISTRIBUTION
On July 30, 1997, Hollinger Inc. announced that it would undertake an
initiative to enable its shareholders to exchange their common shares for
an interest in the Company or to have their investment in Hollinger Inc.
more directly aligned with the Class A Common Stock of the Company. This
initiative involves (i) the payment of a stock dividend consisting of 30
Retractable Shares for each common share outstanding and (ii) a substantial
issuer bid (the "Issuer Bid") in which Hollinger Inc. will offer the Series
I and Series II Preference shares in exchange for up to 80% of the
outstanding "Hollinger Inc. common shares and Retractable Shares.
The stock dividend was paid to all shareholders of record of Hollinger
Inc. common shares on September 12, 1997. Thereafter, the Hollinger Inc.
common shares and Retractable Shares will trade as equity units (the
"Equity Units"), each of which consists of one common share and 30
Retractable Shares. Pursuant to the Issuer Bid, Hollinger Inc. will offer
to exchange the Series I and Series II Preference Shares for up to 80% of
the publicly held outstanding Equity Units. The Issuer Bid will be made by
way of an Issuer Bid Circular. Upon the terms and conditions described
below, Hollinger Inc. will have the option to deliver shares of Class A
Common stock of the Company upon the exercise by holders of their
retraction rights under these newly issued securities.
Retractable Shares
The Retractable Shares are retractable from time to time on or after
December 31, 1997 (or such earlier date as may be specified by Hollinger
Inc.) at the option of the holders for an amount (the "Retraction Price",
as defined below) computed by reference to the underlying assets of
Hollinger Inc. (being principally its interest in the Company) less
provisions for relevant taxes, liabilities and contingencies. Hollinger
Inc. shall pay all or any portion of the Retraction Price of Retractable
Shares to be redeemed on any date which a holder duly tenders the
Retractable Shares ("Retraction Date") by delivering to the holders thereof
(x) a certificate representing that number of Class A Common Stock equal to
the number obtained by dividing the Retraction Price of the Retractable
Shares to be so paid by the Current Class A Market Price (as defined below)
on the Retraction Date or (y) at the option of Hollinger Inc., a check for
the Retraction Price of such Retractable Share. In lieu of delivering a
fraction of a share of Class A Common Stock pursuant to the Share Payment
Right, Hollinger Inc. will make a cash payment in Canadian dollars equal to
the amount obtained by multiplying such fraction by the Current Market
Price of a share of Class A Common Stock.
The "Retraction Price" determined on any date will be 90% of the
(a)"Current Value" of Hollinger Inc. calculated as, the excess of the fair
market value of the assets of Hollinger Inc. over its liabilities,
liquidation entitlements for preference shares other than the Retractable
Shares and relevant taxes, all as determined by the Board of Directors or a
committee thereof (the "Board"), divided by (b) the total number of
Retractable Shares and Hollinger Inc. common shares outstanding on the
determination date. The Board shall determine the Retraction Price as of
the end of each fiscal quarter and as soon as practical thereafter it shall
give notice (a "Retraction Price Notice") thereof in the same manner in
which dividend notices are required to be given by law or any stock
exchange on which the Retractable Shares (or units comprised in part of
Retractable Shares) are listed for trading from time to time.
<PAGE>
The Retraction Price shall be in effect for all retractions subsequent
to the date on which the Retraction Price Notice is given. Notwithstanding
the foregoing, the Board shall have the absolute discretion to change the
Retraction Price at any time fluctuating in the trading price of publicly
traded securities owned by Hollinger Inc. cause a change of more than 10%
in the Current Value. To effect such a change the Retraction Price shall be
determined as of such date selected by the Board and shall become effective
as of the next Business Day following the date on which a press release is
issued by Hollinger Inc. setting out the new Retraction Price or such later
date as specified in such press release. Hollinger Inc. shall set out in
any Retraction Price Notice the number and designation of publicly-traded
securities owned by it (other than Class A Common Stock) if fluctuations in
the trading price thereof during a fiscal quarter of Hollinger Inc. could
reasonable be expected to cause a change of more than 10% in the Current
Value during the fiscal quarter.
The"Current Class A Market Price" is the Canadian Dollar Equivalent
(defined below) for the per share closing price (or if no closing price is
recorded, the average of the bid and the ask prices) of Class A Common
Stock on the last full trading day preceding such date as such price is
reported on the NYSE Composite Transactions Tape, or if the Class A Common
Stock are not listed on the NYSE, such other national, regional or
provincial securities exchange or automated quotation system upon which the
Class A Common Stocks are listed or quoted, as the case may be, as may be
selected by the Board for such purpose; provided, however, that if in the
opinion of the Board the public distribution or trading activity of Class A
Common Stocks is inadequate to create a market that reflects the fair
market value of a Class A Common Stock then the Current Class A Market
Price shall be determined by the Board based upon the advice of such
qualified independent financial advisors as the Board may deem to be
appropriate, and provided further that any such selection, opinion or
determination by the Board shall be conclusive and binding.
The "Canadian Dollar Equivalent" shall be calculated by using the
relevant exchange rate in effect at 12:00 noon (Easter time) on such date
as posted by Canadian Imperial Bank of Commerce or such other exchange rate
as may be deemed by the Board to be appropriate for such purpose.
Based on current market prices for the Class A Common Stock, the
initial Retraction Price would be significantly lower than the current
market price of the Class A Common Stock. As of September 6, 1997, the
closing price of the Class A Common Stock on the NYSE was $12.69.
Series I and Series II Preference Shares
Hollinger Inc. intends to make an Issuer Bid for the Equity Units
pursuant to which shareholders will be able to exchange one Equity Unit for
one Series I Preference Shares and one Series II Preference Shares valued
by Hollinger Inc. in the aggregate at $14.00 (Cdn.). The Series I and
Series II Preference Shares are non-voting except as required by law.
During the Initial Period (as defined below), the Series I and Series II
Preference Shares are entitled to receive in each quarter as and when
declared by the Board and subject to applicable law, a cumulative
preferential cash dividend of (i) $0.07(Cdn.) per Series I Preference
Shares; and (ii )$0.175 (Cdn.) per Series II Preference Share (in each case
being an annual dividend rate of 7% of the stated value of the shares), and
thereafter dividends equal to the dividends received by Hollinger Inc. on
the Class A Common Stock into which the Series I and Series II Preference
Shares are exchangeable, respectively, less, in each case, an amount equal
to applicable United States withholding tax.
Right of Retraction
The Series I and Series II Preference Shares will be retractable for
an initial period (the "Initial Period") of 6 months and 12 months,
respectively, at a retraction price (the "Initial Retraction Price") of
Cdn. $3.50(Cdn.) and Cdn. $8.50(Cdn.), respectively. The Series I and
Series II Preference shares may be retracted only by the registered holder
thereof presenting and surrendering to Hollinger Inc., at any place where
the Series I and Series II Preference Shares may be transferred or at such
other place or places as shall be specified in writing by Hollinger Inc. to
the holders of the Series I and Series II Preference Shares from time to
time, the share certificate or certificates representing the Series I and
Series II Preference Shares to be redeemed, duly completed and endorsed in
the manner prescribed thereon, together with a request in writing in such
form as may be acceptable to Hollinger Inc. from such holder specifying the
number of Series I and Series II Preference Shares to be redeemed by
Hollinger Inc.
<PAGE>
Hollinger Inc. shall on the Retraction Date redeem the appropriate
number of Retractable Shares and shall send or cause to be sent to or to
the order of the registered holder thereof not later than 14 days after the
Retraction Date payment for the Retractable Shares redeemed by check
payable at any branch of Hollinger Inc.'s bankers or, if Hollinger Inc.
exercises its Share Payment Right (defined below) a certificate
representing Class A Common Stock to which such holder is entitled. If less
than all of the Series I and Series II Preference Shares represented by any
certificate or certificates so endorsed are to be redeemed, Hollinger Inc.
shall issue and deliver to such holder, at the expense of Hollinger Inc., a
new share certificate representing the Series I and Series II Preference
Shares which are not being surrendered for retraction.
Hollinger Inc. shall have the right (the "Share Payment Right") to pay
all or any portion of the Retraction Price of Series I and Series II
Preference Shares to be redeemed by delivering to the holders thereof that
number of Class A Common Stock equal to the number obtained by dividing the
Retraction Price of the Series I and Series II Preference Shares to be so
paid by the Current Class A Market Price on the Retraction Date. In the
event that the Company exercises its Share Payment Right, Hollinger Inc.
shall within 14 day after the Retraction Date send or cause to be sent to
such holder of Series I and Series II Preference Shares redeemed on such
date certificates representing the Class A Common Stock to which such
holder is entitled. In lieu of delivering a fraction of a share of Class A
Common Stock pursuant to the Share Payment Right, Hollinger Inc. will make
a cash payment in the Canadian Dollar Equivalent to the amount obtained by
multiplying such fraction by the Current Market Price of a share of Class A
Common Stock.
Cash Redemption
On March 31, 1998 (the "Redemption Date"), subject to the provisions
of the rights, privileges, restrictions and conditions attaching to any
shares of Hollinger Inc. ranking prior to the Series I and Series II
Preference Shares, Hollinger Inc. may, upon giving notice as hereinafter
provided, redeem all (but not part) of either of the then outstanding
Series I and Series II Preference Shares on payment for each share to be
redeemed of $4.00 (Cdn.) and $10 (Cdn.) respectively, together with an
amount equal to all dividends accrued and unpaid thereon up to the
Redemption Date (the whole constituting and being herein referred to as the
"Redemption Price").
Payment in respect of Series I and Series II Preference Shares being
redeemed shall be made by check payable to the respective holders thereof
in lawful money of Canada at any branch in Canada of Hollinger Inc.'s
bankers.
Optional Exchange Right
At any time on or after April 1, 1998 (the "Exchange Date") a holder
of Series I and Series II Preference Shares shall be entitled to require
Hollinger Inc. to redeem all or any of the Series I and Series II
Preference Shares registered in the name of the holder for an amount per
share equal to (a) the Current Class A Market Price on the Exchange Date of
the Exchange Number (defined below) of Class A Common Stock (the "Exchange
Price"), which shall be satisfied in full by Hollinger Inc. causing to be
delivered to such holder the Exchange Number of Class A Common Stock for
each Series I and Series II Preference Share presented and surrendered by
the holder or, at the option of Hollinger Inc. by payment in lawful money
of Canada of the Exchange Price, plus (b) an amount equal to the full
amount of all dividends and distributions declared and unpaid on each of
the Series I and Series II Preference Shares and all dividends and
distributions declared on Class A Common Stock that has not been declared
on each Series I and Series II Shares, if any, on the Exchange Date
(collectively, the "Retraction Price").
"Exchange Number" means, subject to adjustment from time to time, the
result obtained when $4.00 (Cdn.) for the Series I Preference Share and
$10.00 (Cdn.) for the Series II Preference Share, is divided by the
weighted average trading price of the Class A Common Stock on the NYSE for
the period of 20 consecutive trading days (whether or not Class A Common
Stock traded on such day) ending on (and including) March 31, 1998 or, if
such shares are not then listed on the NYSE, on any stock exchange on which
such shares are listed as the Board may select for this purpose, or if such
shares are not listed on any stock exchange, in such over-the-counter
market as the Board may select for such purpose.
<PAGE>
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES TO HOLDERS OF CLASS A
COMMON STOCK
Consequences of Retraction to U.S. Holders of Retractable Shares and Series
I and Series II Preference Shares
It is anticipated that a United States Holder (any Holder subject to
United States tax on a net income basis) of Retractable Shares will
recognize gain or loss on the retraction of the Retractable Shares in
exchange for either cash or Class A Common Stock. Such gain or loss will be
equal to the difference between the fair market value of the Class A Common
Shares at the time of the exchange (together with any cash received in the
exchange) and the United States Holder's tax basis in the Retractable
Shares. The gain or loss will be capital gain or loss, except that, with
respect to any declared but unpaid dividends on the Retractable Shares,
ordinary income may be recognized by the holder thereof. Capital gain or
loss will be long-term capital gain or loss if the Retractable Shares have
been held for more than one year at the time of the exchange. The U.S.
Holder will take as its tax basis in the Class A Common Shares the fair
market value of the Class A Common Shares at the time of the exchange. The
holding period of the Class A Common Shares received by the United States
Holder in the exchange will begin on the day after the United States Holder
receives the Class A Common Shares.
For U.S. federal income tax purposes, gain realized on the retraction
of Retractable Shares for Common Shares generally will be treated as U.S.
source gain, except that, under the terms of the Canada-United States
Income Tax Convention, such gain may be treated as sourced in Canada. Any
Canadian tax imposed on the exchange will be available as a credit against
U.S. federal income taxes, subject to applicable limitations. A United
States Holder that is ineligible for a foreign tax credit with respect to
any Canadian tax paid may be entitled to a deduction therefor in computing
United States taxable income.
Tax Consequences of Retraction to Non-United States Holders
The following is a general discussion of certain United States federal
income and estate tax consequences of the purchase, ownership and
disposition of Class A Common Stock by a holder that, for United States
federal tax purposes, is not a "United States person" (a "Non-United States
Holder"). For purposes of this discussion, a "United States person" means
any person or entity which is (a) a citizen or resident of the United
States, (b) a corporation created or organized in or under the laws of the
United States or of any political subdivision thereof or (c) an estate or
Trust that is subject to United States federal taxation on its income
regardless of its source. This summary does not address all United States
federal income and estate tax considerations that may be relevant to a
Non-United States Holder in light of its particular circumstances or to
certain Non-United States Holders that may be subject to special treatment
under United States federal tax laws (i.e., insurance companies, tax-exempt
organizations, financial institutions or broker-dealers). Furthermore, this
summary does not discuss any aspects of foreign, state or local taxation.
This summary is based on current provisions of the Internal Revenue Code,
existing, temporary and proposed United States Treasury regulations
promulgated thereunder and administrative and judicial interpretations
thereof, all of which are subject to change, possibly with retroactive
effect. Each prospective Non-United States Holder is advised to consult its
tax advisor with respect to the tax consequences of purchasing, owning and
disposing of Class A Common Stock.
Dividends
Dividends paid to a Non-United States Holder will generally be subject
to withholding of United States Federal income tax at the rate of 30%
unless the dividend is effectively connected with the conduct of a trade or
business within the United States by the Non-United States Holder, in which
case the dividend will be subject to the United States Federal income tax
on net income that applies to United States persons (and, with respect to
corporate holders and under certain circumstances, a 30% branch profits
tax). Non-United States Holders should consult any applicable income tax
treaties, which may provide for reduced withholding or other rules
different from those described above. A Non-United States Holder may be
required to satisfy certain certification requirements in order to claim
treaty benefits or to otherwise claim a reduction of or exemption from
withholding under the foregoing rules.
<PAGE>
Under current United States treasury regulations, dividends paid to an
address outside the United States are presumed to be paid to a resident of
such country for purposes if the withholding discussed above (unless the
payer has knowledge to the contrary), and, under the current interpretation
of United States Treasury regulations, for purposes of determining the
applicability of a tax treaty rate. Under recently proposed United States
Treasury regulations (the "Proposed Regulations"), not currently in effect,
however, a Non-United States Holder of Class A Common Stock who wishes to
claim the benefit of an applicable treaty rate would be required to satisfy
applicable certification and other requirements. The Proposed Regulations
are proposed to be effective for payments made after December 31, 1997.
There can be no assurance that the Proposed Regulations will be adopted or
what the provisions will include if and when adopted in temporary or final
form. Certain certification and disclosure requirements must be complied
with in order to be exempt from withholding under the effectively connected
income exemption discussed above.
A Non-United States Holder of Class A Common Stock that is eligible
for a reduced rate of United States tax withholding pursuant to an income
tax treaty may obtain a refund of any excess amounts currently withheld by
filing an appropriate claim for refund with the Internal Revenue Service.
Sale or Disposition of Class A Common Stock
A Non-United States Holder generally will not be subject to United
States federal income tax on any gain recognized on the sale or other
disposition of Class A Common Stock unless (i) (a) the gain is effectively
connected with a trade or business of the Non-United States Holder in the
United States or (b) if a tax treaty applies, the gain is attributable to a
United States permanent establishment of the Non-United States Holder; (ii)
in the case of a Non-United States Holder who is an individual and holds
the Class A Common Stock as a capital asset, such holder is present in the
United States for 183 or more days in the taxable year of the disposition
and either (a) has a "tax home" for United States federal income tax
purposes in the United States or (b) has an office or other fixed place of
business in the United States to which the gain is attributable; (iii) the
Non-United States Holder is subject to tax pursuant to the provisions of
United States federal income tax laws applicable to certain United States
expatriates; or (iv)(a) the Company is or has been a "U.S. real property
holding corporation" for United States federal income tax purposes at any
time during the five-year period ending on the date of the disposition, or,
if shorter, the period during which the Non-United States Holder held the
Class A Common Stock, and (b) assuming that the Class A Common Stock
continues to be "regularly traded on an established securities market" for
tax purposes, the Non-United States Holder holds, directly or indirectly,
at any time during the five-year period ending on the date of disposition,
more than 5% of the outstanding Class A Common Stock. The Company believes
it is not currently a U.S. Real property holding corporation and does not
anticipate becoming such a corporation.
If an individual Non-United States Holder falls under clause (i)
above, such individual generally will be taxed on the net gain derived from
a sale under regular graduated United States federal income tax rates. If
an individual Non-United States Holder falls under clause (ii) above, such
individual generally will be subject to a flat 30% tax on the gain derived
from a sale, which may be offset by certain United States capital losses
(notwithstanding the fact that such individual is not considered a resident
of the United States). Thus, NonUnited States Holders who have spent (or
expect to spend) 183 days or more in the United States in the taxable year
in which they contemplate a sale of Class A Common Stock are urged to
consult their tax advisors as to the tax consequences of such sale.
If a Non-United States Holder that is a foreign corporation falls
under clause (i) above, it generally will be taxed on its net gain under
regular graduated United States federal income tax rates. Effectively
connected gains realized by a Non-United States corporation may also, under
certain circumstances, be subject to an additional "branch profits tax" at
a 30% rate or such lower rate as may be specified by an applicable income
tax treaty.
Backup Withholding and Reporting Requirements
The Company must report annually to the Internal Revenue Service and
to each Non-United States Holder the amount of dividends paid to, and the
tax withheld with respect to, such holder, regardless of whether any tax
was actually withheld. This information may also be made available to the
tax authorities in the NonUnited Sates Holder's country of residence.
<PAGE>
Under current law, United States backup withholding (which generally
is imposed at a 31% rate) generally will not apply to (i) the payment of
dividends paid on Class A Common Stock to a Non-United States Holder at an
address outside the United States or (ii) the payment of the proceeds of a
sale of Class A Common stock to or through the foreign office of a broker.
However, under the Proposed Regulations, dividend payments may be subject
to information reporting and backup withholding unless applicable
certification requirements are satisfied. In the case of the payment of
proceeds from such a sale of Class A common Stock through a foreign office
of a broker that is a United States person or a "U.S. related person,"
however, information reporting (but not backup withholding) is required
with respect to the payment unless the broker has documentary evidence in
its files that the owner is a Non-United States Holder (and has no actual
knowledge to the contrary) and certain other requirements are met or the
holder otherwise establishes an exemption. For this purpose, a "U.S.
related person" is (i) a "controlled foreign corporation" for United States
federal income tax purposes or (ii) a foreign person 50% or more of whose
gross income from all sources for the three-year period ending with the
close of its taxable year preceding the payment (or for such part of the
period that the broker has been in existence) is derived from activities
which are effectively connected with the conduct of a United States trade
or business. The payment of the proceeds of a sale of shares of class A
Common Stock to or through a United States office of a broker is subject to
information reporting and possible backup withholding at a rate of 31%
unless the holder certifies, among other things, its non-United States
status under penalties or perjury or otherwise establishes an exemption.
Backup withholding is not an additional tax. Amounts withheld under
the backup withholding rules are generally allowable as refund or credit
against such Non-United States Holder's United States federal income tax
liability, if any, provided that the required information is furnished to
the Internal Revenue Service.
Federal Estate Taxes
Class A Common Stock owned or treated as owned by an individual who is
not a citizen or resident of the United States (as defined for United Sates
federal estate tax purposes) at the time of death with be included in such
individual's gross estate for United States federal estate tax purposes
unless an applicable estate tax treaty provides otherwise.
THE FOREGOING DISCUSSION IS A SUMMARY OF THE PRINCIPAL UNITED STATES
FEDERAL INCOME AND ESTATE TAX CONSEQUENCES OF THE OWNERSHIP, SALE OR OTHER
DISPOSITION OF CLASS A COMMON STOCK BY NON-UNITED STATES HOLDERS.
ACCORDINGLY, INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH RESPECT
TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE OWNERSHIP AND
DISPOSITION OF CLASS A COMMON STOCK, INCLUDING THE APPLICATION AND EFFECT
OF THE LAWS OF ANY STATE, LOCAL FOREIGN OR OTHER TAXING JURISDICTION.
LEGAL MATTERS
Certain legal matters in connection with the shares of Class A Common
Stock offered hereby will be passed upon for the Company by Cravath, Swaine
& Moore, New York, New York.
EXPERTS
The consolidated financial statements of Hollinger International Inc.
and subsidiaries as of December 31, 1996 and 1995, and for each of the
years in the three-year period ended December 31, 1996, incorporated by
reference herein from the Company's 1996 Form 10-K, have been incorporated
by reference in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants and upon the authority of said
firm as experts in accounting and auditing.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO ==================================
GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS, AND, HOLLINGER INTERNATIONAL INC.
IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE CLASS A COMMON STOCK
RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY -----------------
ANY SECURITIES OTHER THAN THE PROSPECTUS
SECURITIES TO WHICH IT RELATES OR -----------------
AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER , 1997
OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE. =================================
TABLE OF CONTENTS
Page
Available Information..................2
Incorporation of Certain
Documents by Reference................2
The Company............................3
Risk Factors...........................3
Use of Proceeds........................6
Selling Stockholder....................6
Plan of Distribution...................7
Certain United States Federal
Tax Consequences to
Non-united States Holders
of Class A Common Stock...........9
Legal Matters.........................12
Experts.............................. 12
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses to be paid by Hollinger Inc., Ontario Limited,
Canada Limited and/or the Company in connection with the distribution of
the securities being registered, other than underwriting discounts and
commissions, are as follows:
Securities and Exchange Commission Filing $139,209
Fee.........................................
*Legal Fees and Expenses.................... $100,000
*Printing Expenses.......................... $30,000
*Miscellaneous Expenses..................... $791
Total $270,000
--------------------
*Estimated.
Item 15. Indemnification of Directors and Officers.
The Company's Restated Certificate of Incorporation provides that no
director of the Company will be personally liable to the Company or any of
its stockholders for monetary damages arising from the director's breach of
the duty of care as a director, with certain limited exceptions.
Pursuant to the provisions of Section 145 of the Delaware General
Corporation Law, every Delaware corporation has the power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (other than an
action by or in the right of the corporation) by reason of the fact that he
is or was a director, officer, employee or agent of any corporation,
partnership, joint venture, trust or other enterprise, against any and all
expenses, judgments, fines and amounts paid in settlement and reasonably
incurred in connection with such action, suit or proceeding. The power to
indemnify applies only if such person acted in good faith and in a manner
he reasonably believed to be in the best interest, or not opposed to the
best interest, of the corporation and with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
The power to indemnify applies to actions brought by or in the right
of the corporation as well, but only to the extent of defense and
settlement expenses and to any satisfaction of a judgment or settlement of
the claim itself, and with the further limitation that in such actions no
indemnification shall be made in the event of any adjudication or liability
unless the court, in its discretion, believes that in light of all the
circumstances indemnification should apply.
To the extent any of the persons referred to in the two immediately
preceding paragraphs is successful in the defense of the actions referred
to therein, such person is entitled, pursuant to Section 145, to
indemnification as described above.
The Company's Restated Certificate of Incorporation and Amended and
Restated Bylaws provide for indemnification to officers and directors of
the Company to the fullest extent permitted by the Delaware General
Corporation Law.
The Company maintains a policy of liability insurance which insures
its officers and directors against losses resulting from certain wrongful
acts committed by them in their capacity as officers and directors of the
Company.
<PAGE>
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits. The following exhibits are filed as part of this
registration statement:
Exhibit
Number Description
4.01 Specimen Certificate evidencing Class A Common Stocks (filed as
Exhibit 4.1 to Registration Statement on Form S-1 (No. 33-74980))
5.01 Opinion of Cravath, Swaine & Moore*
23.01 Consent of Cravath, Swaine & Moore (included in Exhibit 5.01)*
23.02 Consent of KPMG Peat Marwick LLP
24.01 Powers of Attorney (contained on the signature page)
99.01 Terms of Retractable Shares
99.02 Terms of the Series I and Series II Exchangeable Non-Voting
Preference Shares*
-------
*To be filed by Amendment
<PAGE>
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this to registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on September 8, 1997.
HOLLINGER INTERNATIONAL INC.
By: /s/ KENNETH L. SEROTA
----------------------
Name: Kenneth L. Serota
Title: Vice President Law & Finance
Each person whose signature appears below appoints Kenneth Serota or
Jack A. Boultbee, as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and
to file the same, with all exhibits thereto and all other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and anything appropriate or necessary to be
done, as fully and for all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitutes may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this to
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ CONRAD M. BLACK Chairman of the Board, September 8, 1997
- ------------------------ Chief
Conrad M. Black Executive Officer and
Director (Principal
Executive Officer)
/s/ F. DAVID RADLER President, Chief Operating September 8, 1997
- ------------------------ Officer and Director
F. David Radler and Director
/s/ J. A. BOULTBEE Executive Vice President September 8, 1997
- ------------------------ and Chief Financial
J. A. Boultbee Officer (Principal
Financial Officer)
/s/ FREDERICK A. CREASEY Group Corporate Controller September 8, 1997
- ------------------------ (Principal Accounting
Frederick A. Creasey Officer)
/s/ BARBARA AMIEL BLACK Director September 8, 1997
- ------------------------
Barbara Amiel Black
/s/ DWAYNE O. ANDREAS Director September 8, 1997
- -----------------------
Dwayne O. Andreas
- ----------------------- Director September 8, 1997
Richard Burt
<PAGE>
Signature Title Date
--------- ----- ----
- ------------------------ Director September 8, 1997
Raymond G. Chambers
/s/ DANIEL W. COLSON Director September 8, 1997
- ------------------------
Daniel W. Colson
/s/ HENRY A. KISSINGER Director September 8, 1997
- ------------------------
Henry A. Kissinger
/s/ MARIE-JOSEE KRAVIS Director September 8, 1997
- ------------------------
Marie-Josee Kravis
- ------------------------ Director September 8, 1997
Shmuel Meitar
/s/ RICHARD N. PERLE Director September 8, 1997
- ------------------------
Richard N. Perle
/s/ ROBERT S. STRAUSS Director September 8, 1997
- ------------------------
Robert S. Strauss
- ------------------------ Director September 8, 1997
Alfred Taubman
/s/ JAMES R. THOMPSON Director September 8, 1997
- -----------------------
James R. Thompson
/s/ LORD WEIDENFELD Director September 8, 1997
- -----------------------
Lord Weidenfeld
- ----------------------- Director September 8, 1997
Leslie H. Wexner
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
4.01 Specimen Certificate evidencing Class A Common Stocks
(filed as Exhibit 4.1 to Registration Statement on Form S-1
(No. 33- 74980))
5.01 Opinion of Cravath, Swaine & Moore*
23.01 Consent of Cravath, Swaine & Moore (included in Exhibit 5.01)*
23.02 Consent of KPMG Peat Marwick LLP
24.01 Powers of Attorney (contained on the signature page)
99.01 Terms of Retractable Shares
99.02 Terms of the Series I and Series II Exchangeable Non-Voting
Preference Shares*
- -------
*To be filed by Amendment
NUMBER AND DESIGNATION OF AND
RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS
ATTACHING TO THE RETRACTABLE SHARES
The twelfth series of Preference Shares of the Corporation shall
consist of an unlimited number of Preference Shares which shall be
designated as Retractable Shares (hereinafter referred to as the
"Retractable Shares") and which, in addition to the rights, privileges,
restrictions and conditions attached to the Preference Shares as a class,
shall have attached thereto the following rights, privileges, restrictions
and conditions:
1. INTERPRETATION
1.1. Definitions
For the purposes hereof:
(a) "Act" means the Canada Business Corporations Act, as
amended, re-enacted or replaced from time to time;
(b) "Board" means the board of directors of the Corporation, the
Executive Committee thereof or any other committee
contemplated by section 3.2 hereof;
(c) "Business Day" means a day other than Saturday, Sunday or
any other day that is treated as a statutory holiday in the
jurisdiction in which the Corporation's registered office is
located;
(d) "Canadian Dollar Equivalent" means in respect of an amount
expressed in a foreign currency (the "Foreign Currency
Amount") at any date the product obtained by multiplying (A)
the Foreign Currency Amount by (B) the exchange rate for
such foreign currency in effect at 12 o'clock noon (eastern
time) on such date as posted by Canadian Imperial Bank of
Commerce or such other exchange rate on such date for such
foreign currency as may be deemed by the Board to be
appropriate for such purpose;
(e) "Class A Common Shares" means shares of Class A common stock
of Hollinger International Inc., par value U.S. $0.01 per
share, and any other securities into which such shares may
be changed or for which such shares may be exchanged
(whether or not Hollinger International shall be the issuer
of such other securities) or any other consideration which
may be received by the holders of such shares pursuant to a
recapitalization, reconstruction, reorganization or
reclassification of, or amalgamation, merger, liquidation or
similar transaction affecting, such shares;
(f) "Common Shares" means the common shares of the Corporation;
(g) "Current Class A Market Price" means in respect of a Class A
Common Share on any date, the Canadian Dollar Equivalent of
the per share closing price (or if no closing price is
recorded, the average of the bid and the ask prices) of
Class A Common Shares on the last full trading day preceding
such date as such price is reported on the NYSE Composite
Transactions Tape, or if the Class A Common Shares are not
listed on the NYSE, such other national, regional or
provincial securities exchange or automated quotation system
upon which the Class A Common Shares are listed or quoted,
as the case may be, as may be selected by the Board for such
purpose; provided, however, that if in the opinion of the
Board the public distribution or trading activity of Class A
Common Shares is inadequate
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to create a market that reflects the fair market value of a
Class A Common Shares then the Current Class A Market Price
shall be determined by the Board based upon the advice of
such qualified independent financial advisors as the Board
may deem to be appropriate, and provided further that any
such selection, opinion or determination by the Board shall
be conclusive and binding;
(h) "Current Value" as at any date means the aggregate Fair
Market Value of all of the assets of the Corporation
(including any refundable tax previously paid by the
Corporation which, in the opinion of the Board, is
refundable as at such time) less the aggregate of:
(i) the maximum amount payable at such date by the
Corporation on its liquidation, dissolution or
winding-up in respect of any outstanding Preference
Shares other than the Retractable Shares; and
(ii) the Corporation's liabilities, including any tax
liabilities that would arise on a sale by the
Corporation of all or substantially all of its assets
which in the opinion of the Board would not be
refundable as at such date;
all as determined by the Board;
(i) "Fair Market Value" as of any date of any asset means:
(i) with respect to shares of Class B common stock of
Hollinger International Inc., the Fair Market Value of
that number of Class A Common Shares into which such
shares are convertible;
(ii) subject to clause (i) above, with respect to any
security listed and posted on a stock exchange, the
weighted average price at which such security traded
for the 20 trading days or such lesser period as the
Board may determine from time to time on which such
security was traded immediately preceding such date on
the stock exchange on which the greatest volume of
trading in the security occurred during such period;
(iii) subject to clause (i) above, with respect to a
security not listed and posted on a stock exchange but
traded in an over-the-counter market, the weighted
average trading price of such security on such
over-the-counter market for the 20 trading days
preceding such date or such lesser period as the Board
may determine from time to time; and
(iv) for any other asset, the fair market value thereof;
(j) "NYSE" means the New York Stock Exchange, Inc.;
(k) "Retractable Shares" means the Retractable Shares of the
Corporation; and
(l) "Retraction Price" on any date shall be 90% of the quotient
obtained by dividing the Current Value on such date by the
total number of Retractable Shares and Common Shares
outstanding on such date.
1.2 Headings
The headings in these share provisions do not affect their
interpretation.
1.3 Number and Gender
Words importing the singular include the plural and vice-versa
and words importing gender include all genders.
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1.4 Dates
In the event that any date on which any dividend on the
Retractable Shares is payable by the Corporation, or on or by which any
other action is required to be taken by the Corporation or the holders of
Retractable Shares hereunder, is not a Business Day, then such dividend
shall be payable, or such other action shall be required to be taken, on or
by the next succeeding date that is a Business Day.
1.5 Currency
All cash amounts paid by the Corporation in respect of the
Retractable Shares shall be made in Canadian dollars and all references
herein to monetary amounts shall be construed accordingly.
2. DIVIDENDS
The holders of the Retractable Shares shall be entitled to
receive, and the Corporation shall pay thereon, as and when declared by the
board of directors of the Corporation, subject to the insolvency provisions
of applicable law, dividends in equal or equivalent amounts per share to
any dividends which the board of directors may declare on the Common Shares
from time to time. No dividend on the Common Shares shall be declared or
paid unless an equal or equivalent dividend per share on the Retractable
Shares is contemporaneously declared or paid.
3. RETRACTION RIGHT
3.1 Right of Retraction
A holder of Retractable Shares shall be entitled at any time
after the earlier of December 31, 1997 and the date specified by the
Corporation in a notice given in the manner set out to section 3.2(a),
subject to the provisions of the Act and in the manner hereinafter
provided, to surrender for retraction all or any of the Retractable Shares
registered in the name of such holder.
3.2 Retraction Price
(a) The Board shall determine the Retraction Price as of the end of
each fiscal quarter of the Corporation and as soon as practicable
thereafter the Corporation shall give notice thereof (a
"Retraction Price Notice") in the same manner in which dividend
notices are required to be given by law or any stock exchange on
which the Retractable Shares (or units comprised in part of
Retractable Shares) are listed for trading from time to time.
Subject to the following sentence, the Retraction Price set out
in a Retraction Price Notice shall be in effect for all
retractions subsequent to the date on which the Retraction Price
Notice is given to and including the date on which the next
Retraction Price Notice is given. Notwithstanding the foregoing,
the Board shall have the absolute discretion to change the
Retraction Price at any time as set out below if there is a
change of more than 10% in the Current Value during a fiscal
quarter of the Corporation. To effect such a change the
Retraction Price shall be determined as of such date as is
selected by the Board and shall become effective as of the next
Business Day following the date on which a press release is
issued by the Corporation setting out the new Retraction Price or
such later date as is specified in such press release.
(b) The Corporation shall set out in any Retraction Price Notice the
number and designation of publicly-traded securities owned by it
(other than Class A Common Shares) if fluctuations in the trading
price thereof during a fiscal quarter of the Corporation could
reasonably be expected to cause a change of more than 10% in
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the Current Value during the fiscal quarter or any other
circumstance or development which could reasonably be expected to
cause such a change.
(c) All determinations to be made by the Board relating to the
Retraction Price may be made by the Executive Committee of the
Board of Directors of the Corporation or any other committee of
the Board of Directors to which such authority is delegated and
shall be conclusive and binding on all shareholders of the
Corporation.
3.3 Retraction Procedure
(a) Retractable Shares may be retracted only by the registered holder
thereof presenting and surrendering at any place where the
Retractable Shares may be transferred or at such other place or
places as shall be specified in writing by the Corporation to the
holders of the Retractable Shares from time to time, the share
certificate or certificates representing the Retractable Shares
to be redeemed, duly completed and endorsed in the manner
prescribed thereon, together with a request in writing in such
form as may be acceptable to the Corporation (in this section
3.3, the "Retraction Notice") from such holder specifying the
number of Retractable Shares to be redeemed by the Corporation.
The date on which a holder duly tenders the documents described
above is referred to herein as the "Retraction Date".
(b) Subject to sections 3.5.2 and 3.6 and Article 4 hereof, the
Corporation shall redeem the appropriate number of Retractable
Shares by sending or causing to be sent to or to the order of the
registered holder thereof not later than 14 days after the
Retraction Date a certificate representing that number of Class A
Common Shares equal to (i) the Retraction Price of the
Retractable Shares to be redeemed divided by (ii) the Current
Class A Market Price on the Retraction Date.
(c) If less than all of the Retractable Shares represented by any
certificate or certificates so endorsed are to be redeemed, the
Corporation shall issue and deliver to such holder, at the
expense of the Corporation, a new share certificate representing
the Retractable Shares which are not being surrendered for
retraction.
3.4 Election Irrevocable
Subject to paragraph 3.6 hereof, the election by any registered
holder of Retractable Shares to surrender any Retractable Shares for
retraction shall be irrevocable upon receipt by the Corporation at its
registered office of the Retraction Notice and the certificate and
certificates representing the Retractable Shares to be redeemed; provided
that the Corporation may, in its unfettered discretion, permit withdrawal
of any such election at any time prior to payment of the Retraction Price
for the Retractable Shares to be redeemed.
3.5 Relating to the Delivery of Class A Common Shares
3.5.1 Qualification and Listing
The Corporation shall satisfy the following conditions
in respect of Class A Common Shares delivered on a redemption of
Retractable Shares:
(a) the qualification of the Class A Common Shares by the filing
of a prospectus and obtaining a final receipt therefor from the
securities regulatory authorities in each of the provinces of
Canada in which the distribution of such Class A Common Shares
occurs, unless there exists an applicable exemption to
qualification thereunder that allows such Class A Common Shares
(other than
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those issued to a person who is in a position by himself or in
combination with others to materially affect control of the
Corporation) to be immediately traded free of resale restrictions
under applicable securities legislation; and
(b) the effectiveness of a registration statement under the U.S.
Securities Act of 1933 ("U.S. Securities Act") with respect to
the delivery of such Class A Common Shares, unless an exemption
from the registration requirements of the U.S. Securities Act is
available which would allow such Class A Common Shares to be
immediately traded free of resale restrictions; and
(c) the listing of such Class A Common Shares on each stock
exchange on which the Class A Common Shares are then listed.
3.5.2. Fractions of Class A Common Shares
The Corporation shall not deliver a fraction of a Class
A Common Share on a redemption of Retractable Shares. In lieu thereof
the Corporation shall make a case payment equal to the amount which
would have been satisfied by the fraction of the Class A Common Share.
3.6 Retraction Limitation
(a) If the redemption by the Corporation of all Retractable
Shares surrendered for retraction on a Retraction Date would
be contrary to applicable law, the Corporation shall redeem
only the maximum number of Retractable Shares which it is
then permitted to redeem selected pro rata (disregarding
fractions of shares) from the Retractable Shares surrendered
for retraction according to the number of Retractable Shares
surrendered for retraction by each holder thereof.
Thereupon, each such holder shall be entitled, by notice to
the Corporation, to withdraw all or part only of the
Retractable Shares surrendered by such holder for retraction
on such Retraction Date which have not been redeemed by the
Corporation and the Corporation shall, at its expense, issue
and deliver to each holder who exercises such right of
withdrawal a new share certificate representing the
Retractable Shares so withdrawn. Thereafter, the Corporation
shall redeem on a date or dates determined by the Board on
which the Corporation shall have sufficient assets to permit
such redemption, the maximum number of Retractable Shares as
have been surrendered for retraction and not previously
withdrawn or redeemed which the Corporation determines it is
then permitted to redeem, selected pro rata (disregarding
fractions of shares) from such Retractable Shares according
to the number of such Retractable Shares then held by each
holder thereof and so on until all such Retractable Shares
have been redeemed.
(b) If the Board has acted in good faith in making any of the
determinations referred to in paragraph 3.6(a) hereof, the
Board and the Corporation shall have no liability if such
determination proves to be inaccurate.
(c) If the Corporation does not redeem all Retractable Shares
surrendered for retraction on a Retraction Date the
Corporation shall forthwith after such date notify each
holder whose Retractable Shares have not been redeemed on
such date of such holder's right to withdraw the Retractable
Shares to surrendered and not redeemed by the Corporation.
3.7 Cessation of Rights
The Retractable Shares redeemed pursuant to this Article 3
shall cease to be entitled to dividends or any participation in the assets
of the Corporation and the registered holder thereof shall not be entitled
to exercise any of the rights of holders of Retractable Shares in respect
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thereof, unless payment therefor is not made as required herein, in which
event the rights of the registered holder of such Retractable Shares shall
remain unaffected.
4. REDEMPTION RIGHT ON RECEIPT OF RETRACTION NOTICE
4.1 Right of Redemption
On receipt of a Retraction Notice duly tendered pursuant to
section 3.3 together with the share certificate or certificates
representing Retractable Shares to be redeemed, the Corporation shall be
entitled to redeem all or any part of such Retractable Shares pursuant to
this Article 4 for a cash payment equal to the Retraction Price per share
on the Retraction Date in lieu of redeeming them in the manner set out in
Article 3.
4.2 Cash Payment
The Corporation shall exercise its redemption right pursuant
to this Article 4 by sending or causing to be sent to or to the order of
the registered holder thereof not later than 14 days after the Retraction
Date a cheque payable at any branch of the Corporation's bankers for the
Retraction Price of the Retractable Shares to be redeemed.
4.3 Pro Rata Treatment
The Corporation shall exercise its redemption right pursuant
to this Article 4 so that, subject to section 3.5.2, all holders of
Retractable Shares to be redeemed on any Retraction Date shall receive the
same portion of the Retraction Price payable to them in the form of Class A
Common Shares and cash.
4.4 Procedure
The provisions of sections 3.6 and 3.7 shall apply, mutatis
mutandis, to a redemption of Retractable Shares pursuant to this Article 4.
5. VOTING RIGHTS
The holders of the Retractable Shares shall be entitled to
receive notice of and to attend at all meetings of the shareholders of the
Corporation, other than separate meetings of the holders of another class
or series of shares, and to vote at any such meeting together with the
holders of Common Shares on the basis of one vote for each Retractable
Share held.
6. LIQUIDATION, DISSOLUTION OR WINDING-UP
In the event of the liquidation, dissolution or winding-up
of the Corporation, whether voluntary or involuntary, or in the event of
any other distribution of assets of the Corporation among its shareholders
for the purpose of winding up its affairs, the holders of the Retractable
Shares shall be entitled to receive from the assets of the Corporation any
amount for each Retractable Share held by them equal or equivalent to any
amount per share to be paid by the Corporation or any assets of the
Corporation shall be distributed to holders of shares of any class of the
Corporation ranking with respect to the distribution of assets in such
event junior to the Retractable Shares. After payment to the holders of the
Retractable Shares of the amounts so payable to them, they shall not be
entitled to share in any further distribution of the assets of the
Corporation.
7. AMENDMENT
The rights, privileges, restrictions and conditions attached
to the Retractable Shares may be added to, changed or removed by Articles
of Amendment, but only with the
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approval of the holders of the Retractable Shares given as hereinafter
specified in addition to any vote or authorization required by law.
8. APPROVAL OF HOLDERS OF THE RETRACTABLE SHARES
The approval of the holders of the Retractable Shares to add
to, change or remove any right, privilege, restriction or condition
attaching to the Retractable Shares as a series or in respect of any other
matter requiring the consent of the holders of the Retractable Shares may
be given in such manner as may then be required by law, subject to a
minimum requirement that such approval be given by resolution signed by all
the holders of the Retractable Shares or passed by the affirmative vote of
at least 2/3 of the votes cast at a meeting of the holders of the
Retractable Shares duly called for that purpose.
The formalities to be observed with respect to the giving of
notice of any such meeting or any adjourned meeting, the quorum required
therefor and the conduct thereof shall be those from time to time
prescribed by the by-laws of the Corporation with respect to meetings of
shareholders, or if not so prescribed, as required by the Act as in force
at the time of the meeting or as otherwise required by law. On every poll
taken at every meeting of holders of Retractable Shares as a series, each
holder of Retractable Shares entitled to vote thereat shall have one vote
in respect of each Retractable Share held.
EXHIBIT 23.02
Independent Auditors' Consent
The Board of Directors
Hollinger International Inc.
We consent to incorporation by reference in the registration statement on
Form S-3 of Hollinger International Inc. of our report dated February 28,
1997, relating to the consolidated balance sheets of Hollinger
International Inc. as of December 31, 1996, and the related consolidated
statements of operaitons, stockholders' equity and cash flows for each of
the three-years ended December 31, 1996, which report appears in the
December 31, 1996, annual report on Form 10-K of Hollinger International
Inc.
/s/KPMG Peat Marwick LLP
Chicago, Illinois
September 8, 1997
