As filed with the Securities and Exchange Commission on September 25, 1998
Registration No. 333-17111
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
Amendment No. 1 to
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 of (I.R.S. employer identification
incorporation or organization) number)
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401 North Wabash Avenue
Chicago, Illinois 60611
(312) 321-2299
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Mark S. Kipnis
Vice President--Law and Secretary
Hollinger International Inc.
401 North Wabash Avenue
Chicago, Illinois 60611
(312) 321-3000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------------
Copy to:
William P. Rogers, Esq.
Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019-7475
(212) 474-1000
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Approximate date of commencement of proposed sale to the 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. o
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. [ ]
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 the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
===========================================================================
<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.
Subject to Completion, Dated September 25, 1998
PROSPECTUS
HOLLINGER INTERNATIONAL INC.
DEBT SECURITIES
PREFERRED STOCK
CLASS A COMMON STOCK
---------------------------
This Prospectus relates to the offering of securities described herein
of Hollinger International Inc. ("the Company"). The Company may offer from
time to time (i) debt securities ("Debt Securities"), which may be any of
senior debt securities ("Senior Debt Securities"), senior subordinated debt
securities ("Senior Subordinated Debt Securities") or subordinated debt
securities ("Subordinated Debt Securities"), in each case consisting of
debentures, notes and/or other secured or unsecured evidences of
indebtedness, (ii) convertible securities ("Convertible Securities"), which
are exchangeable or convertible into shares of preferred stock, par value
$.01 per share of International ("Preferred Stock") or Class A Common
Stock, par value $.01 per share of International ("Class A Common Stock")
or other securities of International or its affiliates, (iii) shares of
Preferred Stock, and (iv) shares of Class A Common Stock. This Prospectus
also relates to the offer and sale of shares of Class A Common Stock that
may be offered and sold by certain selling shareholders from time to time
as described under "Plan of Distribution". The Debt Securities, the
Convertible Securities, the Preferred Stock and the Class A Common Stock
are collectively referred to as the "Securities" and will have an aggregate
offering price of up to $800.0 million. The Securities may be offered
separately or together (in any combination) and as separate series, in any
case in amounts, at prices and on terms to be determined at the time of
sale.
The form in which the Securities are to be issued, their specific
designation, aggregate principal amount or aggregate initial offering
price, maturity, if any, rate and times of payment of interest or
dividends, if any, redemption, conversion, exchange and sinking fund terms,
if any, voting or other rights, if any, exercise price and detachability,
if any, and other specific terms will be set forth in a Prospectus
Supplement (including any related term sheet) relating to such Securities
(the "Prospectus Supplement"), together with the terms of offering of such
Securities. If so specified in the applicable Prospectus Supplement, Debt
Securities of a series may be issued in whole or in part in the form of one
or more temporary or permanent global securities. The Prospectus Supplement
will also contain information, as applicable, about the material United
States Federal income tax considerations relating to the particular
Securities offered hereby. The Prospectus Supplement will also contain
information, where applicable, as to any listing on a national securities
exchange of the Securities covered by such Prospectus Supplement and, where
applicable, will contain information with respect to any selling
shareholders and their relationships with the Company.
FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT SHOULD BE CONSIDERED IN
CONNECTION WITH AN INVESTMENT IN THE SECURITIES OFFERED HEREBY, SEE "RISK
FACTORS" BEGINNING ON PAGE 2.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE. ---------------------------
The Securities may be sold directly, through agents designated from
time to time or to or through underwriters or dealers. See "Plan of
Distribution." If any agents of the issuer or any selling shareholder or
any underwriters are involved in the sale of any Securities in respect of
which this Prospectus is being delivered, the names of such agents or
underwriters and applicable commissions or discounts will be set forth in a
Prospectus Supplement. The net proceeds or to the issuer or any selling
shareholder from such sale also will be set forth in a Prospectus
Supplement.
---------------------------
The date of this Prospectus is September , 1998.
---------------------------
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
COMPANY'S CLASS A COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW
YORK STOCK EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
---------------------------
THE COMPANY
Overview
The Company, through subsidiaries and affiliated companies, is a
leading publisher of English-language newspapers in the United States, the
United Kingdom, Canada and Israel. Included among the paid daily newspapers
which the Company owns or has an interest are the Chicago Sun-Times, The
Daily Telegraph, the Ottawa Citizen and The Jerusalem Post. In addition,
the Company owns or has an interest in over two hundred other daily and
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) 321-2299.
RISK FACTORS
Prior to making an investment decision, prospective investors should
consider carefully the following factors, in addition to the other
information and financial data included or incorporated by reference in
this Prospectus or any Prospectus Supplement.
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 Securities ("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 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. See "Restrictions in Debt Agreements"
below. Substantially all of the shares of the subsidiaries of the Company
have been pledged to lenders of the Company. The Company's and Hollinger
Inc.'s combined interests in Southam are pledged to lenders of the Company
and Hollinger Inc. 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 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. See "Restrictions in Debt
Agreements," "Other Restrictive Arrangements" and "Substantial Leverage"
below.
<PAGE>
Substantial Leverage; Restrictions in Debt Agreements
The Company and its subsidiaries have substantial leverage and have
substantial debt service obligations, as well as obligations under the
PRIDES, which each represent one-half share of Series B Convertible
Preferred Stock, par value $.01 per share of the Company, ("Series B
Convertible Preferred Stock"), the Series C Convertible Preferred Stock,
par value $.01 per share of the Copmany ("Series C Convertible Preferred
Stock"), the Series D Convertible Preferred Stock, par value $.01 per share
of the Company ("Series D Convertible Preferred Stock"), and the redeemable
preferred shares of its subsidiaries. The instruments governing the terms
of the principal indebtedness and redeemable preferred stock of the Company
and its principal subsidiaries contain various covenants, events of default
and other provisions that could limit the flexibility of the Company. Such
provisions include requirements to maintain compliance with certain
financial ratios, limitations on the ability of the Company and certain of
its subsidiaries to make acquisitions or investments without the consent of
the lenders and limitations on the ability of the Company's principal
subsidiaries to incur indebtedness, make dividend and other payments to the
Company and take certain other actions. In addition, such indebtedness is
secured by, among other things, pledges of the stock of the Company's
principal subsidiaries.
The substantial leveraged position of the Company could make it
vulnerable to a downturn in the operating performance of its business or a
downturn in economic conditions and could have the following consequences:
(i) the Company's ability to obtain additional debt financing on attractive
terms for corporate or other purposes, including the financing of future
acquisitions, may be limited; (ii) the funds available to the Company for
its operations and for dividends on its Common Stock, its Preferred Stock
and its PRIDES may be reduced as a result of the use of an increased
portion of available cash flow to pay debt service; (iii) certain of the
Company's borrowings are and will continue to be at variable rates of
interest, which could result in higher interest expenses in the event of
increases in interest rates; and (iv) such indebtedness and outstanding
redeemable preferred stock contain financial and restrictive covenants
(including certain change of control provisions related to Hollinger Inc.'s
control of the Company), the failure to comply with which may result in an
event of default which, if not cured or waived, could have a material
adverse effect on the Company.
The amount available for the payment of dividends by the Company at
any time is a function of (i) restrictions in agreements binding the
Company limiting its ability to pay dividends and (ii) restrictions in
agreements binding the Company's subsidiaries limiting their ability to pay
dividends to the Company. The material effects of such limitations as in
effect at the time of any offering of securities hereunder will be
described further in any Prospectus Supplement relating thereto.
In addition, the instruments governing the terms of the principal
indebtedness of the Company and its principal United States and foreign
subsidiaries contain customary events of default, including, without
limitation, certain "change of control" provisions. Generally, a "change of
control" is defined in the instruments governing the terms of the principal
indebtedness of the Company and its principal United States and foreign
subsidiaries to include, without limitation, any person other than The Hon.
Conrad M. Black beneficially owning voting stock representing more than 50%
of the total voting power of the Company. See "Control by Hollinger Inc.
and Disproportionate Voting Rights" below.
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.
<PAGE>
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. Although the Company has from time to time implemented
measures in an attempt to offset a rise in newsprint prices, such as
reducing page width and managing its return policy, price increases, when
they occur, 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 account for a substantial
portion of the Company's operating revenues and operating income. 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 more than a majority of the combined equity and voting power
represented by the outstanding Common Stock of the Company. 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 borrowers under their outstanding
debt instruments would entitle the lenders thereunder to foreclosure 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. As an international holding company, the Company's
ability to declare and pay dividends in the future with respect to its
Common Stock, the PRIDES and any other series of preferred 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, and, in the case of the Common Stock,
the PRIDES and the Series C Convertible Preferred Stock, any stock ranking
senior to the Common Stock, the PRIDES or the Series C Convertible
Preferred Stock with respect to dividend rights, 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 (to which Publishing is also a party) and a Business
Opportunities Agreement. These agreements were developed in the context of
a parent-subsidiary relationship and, therefore, were not the result of
arm's-length negotiations between independent parties.
<PAGE>
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
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. Hollinger Inc.,
with the consent of the Company, assigned its rights and obligations under
the Business Opportunities Agreement to a wholly owned Subsidiary on
September 22, 1997. Hollinger Inc., with the consent of the Company,
assigned its rights and obligations under the Business Opportunity
Agreement to a wholly owned subsidiary on September 22, 1997.
USE OF PROCEEDS
Except as otherwise indicated in the accompanying Prospectus
Supplement, the Company intends to use the net proceeds from the sale of
the Securities for general corporate purposes, including working capital,
possible future acquisitions and the repayment or reduction of
indebtedness.
The Company will not receive any proceeds from the sale of Class A
Common Stock by the selling shareholders.
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratio of
earnings to fixed charges for the periods indicated:
<TABLE>
<CAPTION>
Six Months
Ended
Year Ended December 31, June 30,
------------------------ --------
1993 1994 1995 1996 1997 1997 1998
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
3.34 1.38 2.27
Ratio of Earnings to Fixed Charges........ x 2.26x x 1.47x x 2.33x 2.87x
Ratio of Earnings to Fixed Charges 2.79 1.14x 1.85
and Preferred Dividends................. x 1.92x x 1.20x x 1.86x 2.26x
</TABLE>
For purposes of the above ratios, "earnings" means the sum of earnings
before taxes and minority interest (excluding undistributed earnings of
affiliates) and, in the case of the ratio of earnings to combine fixed
charges and preferred stock dividends, preferred stock dividends, fixed
charges, "fixed charges" means interest expense, amortization of deferred
financing charges and preferred stock dividends of subsidiaries.
DESCRIPTION OF THE DEBT SECURITIES
The following is a description of certain general provisions of the
Debt Securities to be offered pursuant to this Prospectus. The particular
terms of the Debt Securities offered pursuant to any Prospectus Supplement
(the "Offered Debt Securities") and the extent, if any, to which such
general provisions may not apply thereto will be described in the
Prospectus Supplement relating to such Offered Debt Securities.
The Debt Securities are to be issued under an Indenture, to be entered
into between the Company and a trustee qualified under the Trust Indenture
Act of 1939 (the "Trustee").
The following summary of certain provisions to be included the Debt
Securities and the Indenture does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, all of the provisions
of the final Indenture, including the definitions therein of certain terms.
Whenever particular provisions of or defined terms in the Indenture are
referred to herein, such provisions or defined terms are incorporated by
reference herein. Section references used herein are references to the
Indenture.
General
The Debt Securities will be senior, unsecured obligations of
International.
The Debt Securities of any series will be issued in definitive form
or, if provided in the Prospectus Supplement relating thereto, will be
represented in whole or in part by a Global Security or Securities, which
will be deposited with, or on behalf of, The Depository Trust Company, New
York, New York (the "Depositary"), and registered in the name of the
Depositary's nominee. Each Debt Security represented by a Global Security
is referred to herein as a "Book-Entry Security."
The Indenture will not limit the amount of Debt Securities or of any
particular series of Offered Debt Securities that may be issued thereunder
and provides that Debt Securities may be issued thereunder from time to
time in one or more series.
Reference is made to the Prospectus Supplement relating to the
particular series of Offered Debt Securities offered thereby for the
following terms or additional provisions of the Offered Debt Securities:
(i) the title of the Offered Debt Securities; (ii) any limit on the
aggregate principal amount of Offered Debt Securities; (iii) the Person to
whom any interest on an Offered Debt Security will be payable, if other
than the Person in whose name the Offered Debt Security is registered; (iv)
the date or dates on which the principal of the Offered Debt Securities
will be payable; (v) the rate or rates (which may be fixed or variable) at
which the Offered Debt Securities will bear interest, if any, or the method
of determination of such rate or rates; (vi) the date or dates from which
such interest, if any, on the Offered Debt Securities will accrue or the
method of determination of such date or dates, the dates on which such
interest, if any, will be payable, and the regular record dates for such
interest payment dates, if any; (vii) the place or places where the
principal of and any premium and interest on the Offered Debt Securities
will be payable; (viii) the price or prices at which the Offered Debt
Securities will be issued; (ix) the period or periods within which, the
price or prices at which and the terms and conditions upon which the
Offered Debt Securities may be redeemed, in whole or in part, at the option
of International; (x) the obligation, if any, of International to redeem or
purchase Offered Debt Securities pursuant to any sinking fund or analogous
provisions or at the option of a Holder, and the periods within which, the
price or prices at which, and the terms and conditions upon which, such
Offered Debt Securities will be so redeemed or purchased; (xi) whether such
Offered Debt Securities are convertible or exchangeable into other debt or
equity securities and, if so, the terms and conditions upon which such
conversion or exchange will be effected, including the initial conversion
or exchange price or rate and any adjustments thereto, the conversion or
exchange period and other conversion or exchange provisions); (xii) any
terms applicable to such Offered Debt Securities issued at an issue price
below their stated principal amount, including the issue price thereof and
the rate or rates at which such original issue discount will occur; (xiii)
if other than denominations of $1,000 and any integral multiple thereof,
the denominations in which the Offered Debt Securities will be issuable;
(xiv) if other than U.S. dollars, the currency, currencies or currency
units in which payment of the principal of and any premium and interest on
the Offered Debt Securities will be payable and the manner of determining
the equivalent thereof in U.S. dollars for purposes of the definition of
"Outstanding" in the Indenture; (xv) if the amount of payments of principal
of or any premium or interest on the Offered Debt Securities may be
determined with reference to an index, the manner in which such amounts
will be determined; (xvi) if the principal of or any premium or interest
<PAGE>
on the Offered Debt Securities will be payable, at the election of
International or a Holder thereof, in one or more currencies or currency
units other than that in which the Offered Debt Securities are stated to be
payable, the currency, currencies or currency units in which those payments
will be payable, and the periods within which and the terms and conditions
upon which such election is to be made; (xvii) if other than the principal
amount thereof, the portion of the principal amount of the Offered Debt
Securities which will be payable upon declaration of acceleration of the
maturity thereof; (xviii) any deletions from, modifications of or additions
to the Events of Default or covenants of International with respect to such
Offered Debt Securities, whether or not such Events of Default or covenants
are consistent with the Events of Default or covenants set forth herein;
(xix) any special United States Federal income tax considerations
applicable to the Offered Debt Securities; and (xx) any other terms of the
Offered Debt Securities not inconsistent with the provisions of the
Indenture. The applicable Prospectus Supplement will also describe the
following terms of any series of Subordinated or Senior Debt Securities
offered hereby in respect of which this Prospectus is being delivered: (a)
the rights, if any, to defer payments of interest on the Subordinated or
Senior Subordinated Debt Securities of such series by extending the
interest payment period, and the duration of such extensions; and (b) the
subordination terms of the Subordinated or Senior Subordinated Debt
Securities of such series. The foregoing is not intended to be an exclusive
list of the terms that may be applicable to any Offered Debt Securities and
shall not limit in any respect the ability of International to issue Debt
Securities with terms different from or in addition to those described
above or elsewhere in this Prospectus provided that such terms are not
inconsistent with the Indenture. Any such Prospectus Supplement will also
describe any special provisions for the payment of additional amounts with
respect to the Offered Debt Securities.
The operations of International are conducted through subsidiaries.
Accordingly, the cash flow and the consequent ability to service debt of
International, including the Debt Securities, are dependent upon the
earnings of its subsidiaries and the distribution of those earnings to
International whether by dividends, loans or otherwise. The payment of
dividends and the making of loans and advances to International by its
subsidiaries may be subject to statutory or contractual restrictions, are
contingent upon the earnings of those subsidiaries and are subject to
various business considerations. Any right of International to receive
assets of any of its subsidiaries upon their liquidation or reorganization
(and the consequent right of the holders of the Debt Securities to
participate in those assets) will be effectively subordinated to the claim
of that subsidiary's creditors (including trade creditors), except to the
extent that International is itself recognized as a creditor of such
subsidiary, in which case the claims of International would still be
subordinate to any security interests in the assets of such subsidiary and
any indebtedness of such subsidiary senior to that held by International.
Unless otherwise provided and except with respect to Book-Entry
Securities, principal of and premium, if any, and interest, if any, on Debt
Securities will be payable, and the transfer of Debt Securities will be
registrable, at the Corporate Trust Office of the Trustee, except that, at
the option of the Company, interest may be paid by mailing a check to, or
by wire transfer to, the Holders entitled thereto. (Sections 301 and 305)
For a description of payments of principal of, and premium, if any,
and interest on, and transfer of Book-Entry Securities, and exchange of
Global Securities representing Book-Entry Securities, see "Book-Entry
Securities."
Unless otherwise indicated in the Prospectus Supplement relating
thereto and except with respect to Book-Entry Securities, Debt Securities
will be issued only in fully registered form without coupons and only in
denominations of $1,000 and any integral multiple thereof. No service
charge will be made for any registration of transfer or exchange of Debt
Securities, but International may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
(Sections 302 and 305)
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at substantial discount below
their stated principal amount. Federal income tax consequences and other
special considerations applicable to any such Original Issue Discount
Securities will be described in the Prospectus Supplement
<PAGE>
relating thereto. "Original Issue Discount Security" means any Debt
Security which provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration of the
maturity thereof. (Section 101)
Events of Default
An Event of Default with respect to the Debt Securities of any series
will be defined in the Indenture as: (a) default in payment of interest on
any Debt Security of that series, which continues for 30 days; (b) default
in payment of principal of or premium, if any, on any Debt Security of that
series at maturity; (c) default in the deposit of any sinking fund payment
when due in respect of that series; (d) default in the performance or
breach of any other covenant of International in the Indenture (other than
a default in the performance or breach of a covenant included in the
Indenture solely for the benefit of a series of Debt Securities other than
that series), which continues for 60 days after due notice (as described in
the Indenture) by the Trustee or by Holders of at least 25% in principal
amount of the Outstanding Debt Securities of that series; (e) default under
any bond, debenture, note or other evidence of indebtedness for money
borrowed by International (including a default with respect to Debt
Securities of any series other than that series) or any Subsidiary in an
aggregate principal amount of at least $25,000,000 or under any mortgage,
indenture or instrument under which there may be issued or by which there
may be secured or evidenced any indebtedness for money borrowed by
International (including the Indenture) or any Subsidiary in an aggregate
principal amount of at least $25,000,000, whether such indebtedness now
exists or hereafter is created, which default constitutes a failure to pay
any portion of the principal of such indebtedness when due and payable
after the expiration of any applicable grace period with respect thereto or
has 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, without such acceleration having been rescinded or annulled, or
such indebtedness having been discharged, within a period of 30 days after
there shall have been given, by registered or certified mail to
International by the Trustee, or to International and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding Securities
of that series, a written notice specifying such default and requiring
International to cause such acceleration to be rescinded or annulled or
such indebtedness to be discharged and stating that such notice is a Notice
of Default under the Indenture; provided, however, that, subject to the
provisions of Sections 601 and 602 of the Indenture, the Trustee will not
be deemed to have knowledge of such default unless either (i) a responsible
officer of the Trustee has actual knowledge of such default or (ii) the
Trustee has received written notice of such default from International,
from any Holder, from the holder of any such indebtedness or from the
trustee under any such mortgage, indenture or other instrument; (f) certain
events of bankruptcy, insolvency or reorganization of International; and
(g) any other Event of Default provided with respect to Debt Securities of
that series. (Section 501)
The Indenture will provide that, if any Event of Default with respect
to Debt Securities of any series at the time Outstanding occurs and is
continuing, either the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Debt Securities of that series may
declare the principal amount (or, if any of the Debt Securities of that
series are Original Issue Discount Securities, such portion of the
principal amount of such Debt Securities as may be specified in the terms
thereof) of (and all accrued and unpaid interest on) all Debt Securities of
that series to be due and payable immediately, but under certain conditions
such declaration may be rescinded and annulled and past defaults (except,
unless theretofore cured, a default in payment of principal of or premium,
if any, or interest, if any, on the Debt Securities of that series and
certain other specified defaults) may be waived by the Holders of not less
than a majority in principal amount of the Outstanding Debt Securities of
that series on behalf of the Holders of all Debt Securities of that series.
(Sections 502 and 513)
The Indenture will provide that if a default occurs under the
Indenture with respect to Debt Securities of any series at the time
Outstanding, the Trustee will give the Holders of the Outstanding Debt
Securities of that series notice of such default as and to the extent
provided by the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"); provided, however, that such notice will not be given with
respect to Outstanding Debt Securities of any series until at least 30 days
after the occurrence of that default if that default is in the performance
of a covenant in the Indenture other than for the payment of the principal
of or premium, if any, or interest on any Debt Security of such series or
the deposit of any sinking fund payment with respect to the Debt Securities
of such series. For the purpose of the provision described in this
paragraph, the term default with respect to any series of Outstanding Debt
Securities means any event which is, or after notice or lapse of time or
both would become, an "Event of Default" specified in the Indenture with
respect to Debt Securities of such series. (Section 602)
The Indenture will contain a provision entitling the Trustee to be
indemnified by the Holders of any series of Outstanding Debt Securities
before proceeding to exercise any right or power vested in it under the
Indenture at the request or direction of the Holders of such series of Debt
Securities. (Section 603) The Trustee is required, during a default, to act
with the standard of care provided in the Trust Indenture Act. (Section
601) The Indenture will provide that the Holders of a majority in principal
amount of Outstanding Debt Securities of any series may direct the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee with
respect to the Debt Securities of such series; provided, that the Trustee
may decline to act if: (a) such direction is contrary to law or the
Indenture; or (b) the Trustee in good faith determines that the action so
directed would involve the Trustee in personal liability for which it has
not been adequately indemnified or would be unduly prejudicial to Holders
not joining in such direction. (Section 512)
<PAGE>
The Indenture will include a covenant that International will file
annually with the Trustee a certificate concerning its compliance with the
Indenture. (Section 1007)
Modification of the Indenture and Waiver of Covenants
Modifications and amendments may be made by International and the
Trustee to the Indenture, without the consent of any Holder of any Debt
Security of any series, to add covenants and Events of Default, and to make
provisions with respect to other matters and issues arising under the
Indenture, provided that any such provision does not adversely affect the
rights of the Holders of Debt Securities of any series in any material
respect. (Section 901)
The Indenture will contain provisions permitting International and the
Trustee, with the consent of the Holders of not less than a majority in
principal amount of Outstanding Debt Securities of each series affected
thereby, to execute supplemental indentures adding any provisions to or
changing or eliminating any of the provisions of the Indenture or modifying
the rights of the Holders of Outstanding Debt Securities of such series,
except that no such supplemental indenture may, without the consent of the
Holder of each Outstanding Debt Security affected thereby, (a) change the
Stated Maturity of the principal of, or any installment of principal of or
interest on, any Debt Security, or reduce the principal amount thereof, the
premium, if any, thereon or the rate of interest thereon, of any Debt
Security of any series, (b) reduce the percentage in principal amount of
Outstanding Debt Securities of any series, the consent of the Holders of
which is required for any supplemental indenture or for waiver of
compliance with certain provisions of the Indenture or certain defaults
thereunder or (c) effect certain other changes. (Section 902). The
Indenture also permits International to omit compliance with certain
covenants in the Indenture with respect to the Debt Securities of any
series upon waiver by the Holders of at least a majority in principal
amount of Outstanding Debt Securities of such series. (Section 1008)
Consolidation, Merger and Sale of Assets
International may not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person and International may not permit any Person to
consolidate with or merge into International, unless: (a) in case
International consolidates with or merges into another Person or conveys,
transfers or leases its properties and assets substantially as an entirety
to any Person, the Person formed by such consolidation or into which
International is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of International
substantially as an entirety is a corporation, partnership or trust,
organized and validly existing under the laws of the United States, any
state thereof or the District of Columbia and expressly assumes
International's obligations on the Outstanding Debt Securities and under
the Indenture; (b) immediately after giving effect to such transaction and
treating any indebtedness which is an obligation of the successor Person or
becomes an obligation of International or a Subsidiary as a result of such
transaction as having been incurred by International or such Subsidiary at
the time of such transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default,
would have happened and be continuing; (c) if, as a result of any such
consolidation or merger or such conveyance, transfer or lease, properties
or assets of International would become subject to a lien which would not
be permitted by the Indenture, International or such successor Person, as
the case may be, takes such steps as are necessary effectively to secure
the Debt Securities equally and ratably with (or prior to) all indebtedness
secured thereby; and (d) International delivers to the Trustee an officers'
certificate and an opinion of counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with the transaction, such supplemental
indenture complies with the Indenture and that all conditions precedent in
the Indenture provided for relating to such transaction have been complied
with.
Book-Entry Securities
The following description of Book-Entry Securities will apply to any
series of Debt Securities issued in whole or in part in the form of a
Global Security or Securities except as otherwise provided in the
Prospectus Supplement relating thereto.
Upon issuance, all Book-Entry Securities of like tenor and having the
same date of original issue will be represented by one or more Global
Securities. Each Global Security representing Book-Entry Securities will be
deposited with, or on behalf of, the Depositary, which will be a clearing
agent registered under the Exchange Act. The Global Security will be
registered in the name of the Depositary or a nominee of the Depositary.
Ownership of beneficial interests in a Global Security representing
Book-Entry Securities will be limited to institutions that have accounts
with the Depositary or its nominee ("participants") or persons that may
hold beneficial interests through participants. In addition, ownership of
beneficial interests by participants in such a Global Security only will be
evidenced by, and the transfer of those ownership interests only will be
effected through, records maintained by the Depositary or its nominee for
such Global Security. Ownership of beneficial interests in such a Global
Security by persons that hold through participants only will be evidenced
by, and the transfer of those ownership
<PAGE>
interests within such participant only will be effected through, records
maintained by such participant. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities
in definitive form. Such laws may impair the ability to transfer beneficial
interests in such a Global Security.
Payment of principal of and any premium and interest on Book-Entry
Securities represented by a Global Security registered in the name of or
held by the Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner and holder of the
Global Security representing such Book-Entry Securities. None of
International, the Trustee or any agent of International or the Trustee
will have any responsibility or liability for any aspect of the
Depositary's records or any participant's records relating to, or payments
made on account of, beneficial ownership interests in a Global Security
representing such Book-Entry Securities or for maintaining, supervising or
reviewing any of the Depositary's records or any participant's records
relating to such beneficial ownership interests. Payments by participants
to owners of beneficial interests in a Global Security held through such
participants will be governed by the Depositary's procedures, as is now the
case with securities held for the accounts of customers registered in
"street name," and will be the sole responsibility of such participants.
No Global Security described above may be transferred except as a
whole by the Depositary for such Global Security to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee of the
Depositary to a successor Depositary or a nominee of such successor
Depositary.
A Global Security representing Book-Entry Securities is exchangeable
for definitive Debt Securities in registered form, of like tenor and of an
equal aggregate principal amount, if (a) the Depositary notifies
International that it is unwilling or unable to continue as depositary for
such Global Security or if at any time the Depositary ceases to be a
clearing agency registered under the Exchange Act, (b) International in its
sole discretion determines that such Global Security shall be exchangeable
for definitive Debt Securities in registered form or (c) there shall have
occurred and be continuing an Event of Default with respect to the Debt
Securities of such series. Any Global Security that is exchangeable
pursuant to the preceding sentence will be exchangeable in whole for
definitive Debt Securities in registered form, of like tenor and of an
equal aggregate principal amount, and, unless otherwise specified in the
Prospectus Supplement relating thereto, in denominations of $1,000 and
integral multiples thereof. Such definitive Debt Securities will be
registered in the name or names of such person or persons as the Depositary
instructs the Trustee. It is expected that such instructions may be based
upon directions received by the Depositary from its participants with
respect to ownership of beneficial interests in such Global Security.
Except as provided above, owners of beneficial interests in a Global
Security will not be entitled to receive physical delivery of Debt
Securities in definitive form and will not be considered the Holders
thereof for any purpose under the Indenture and no Global Security
representing Book-Entry Securities will be exchangeable, except for another
Global Security of like denomination and tenor to be registered in the name
of the Depositary or its nominee. Accordingly, each person owning a
beneficial interest in a Global Security must rely on the procedures of the
Depositary 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. International understands that
under existing industry practices in the event that International requests
any action of Holders or an owner of a beneficial interest in such Global
Security desires to give or take any action that a Holder is entitled to
give or take under the Indenture, the Depositary would authorize the
participants holding the relevant beneficial interests to give or take such
action, and such participants would authorize beneficial owners owning
through such participants to give or take such action or would otherwise
act upon the instructions of beneficial owners owning through them.
Discharge or Defeasance of Debt Securities in Certain Circumstances
Defeasance and Discharge. The Indenture will cease to be of further
effect (except as to any surviving rights for the registration of the
transfer or exchange of Debt Securities expressly provided for in the
Indenture) if: (a) all Outstanding Debt Securities (other than destroyed,
lost or stolen Debt Securities which have been replaced or paid and Debt
Securities, the payment for which has been held in trust and thereafter
repaid to International or discharged from such trust) have been delivered
to the Trustee for cancellation or (b) (1) all Debt Securities not
previously delivered to the Trustee for cancellation have become due and
payable or are by their terms to become due and payable within one year or
are to be called for redemption within one year under arrangements
satisfactory to the Trustee and (2) International has deposited with the
Trustee, as trust funds, an amount sufficient to pay and discharge the
entire indebtedness on the Outstanding Debt Securities for principal and
any premium and interest to the date of such deposit or to maturity or
redemption, as the case may be. Such trust may only be established if (a)
International has paid or caused to be paid all other sums payable by
International under the Indenture and (b) International has delivered to
the Trustee an officers' certificate and an opinion of counsel, each
stating that all conditions precedent provided for in the Indenture
relating to the satisfaction and discharge of the Indenture have been
complied with.
The Indenture will provide that the terms of any series of Debt
Securities may provide International with the option to discharge its
indebtedness represented by such series of Debt Securities or to cease to
be obligated to comply with certain covenants under the Indenture.
International, in order to exercise such option, will be required to
deposit with
<PAGE>
the Trustee money and/or U.S. Government Obligations which, through
the payment of interest and principal in respect thereof in accordance with
their terms, will provide money in an amount sufficient, in the opinion of
a nationally recognized firm of independent public accountants expressed in
a written certification delivered to the Trustee, to pay the principal and
premium, if any, and interest on, and any mandatory sinking fund payments
in respect of, Debt Securities of such series at the stated maturity of
such payments in accordance with the terms of the Indenture and such Debt
Securities. Such trust may only be established if (a) in the case of Debt
Securities of any series which are then listed on the New York Stock
Exchange, International has delivered to the Trustee an opinion of counsel,
stating that International's exercise of this defeasance option will not
cause the Debt Securities to be delisted; (b) no Event of Default or event
(including such deposit in trust) that with notice or lapse of time or both
would become an Event of Default with respect to Debt Securities of a
series has occurred and is continuing on the date of such deposit; (c)
International has delivered to the Trustee (1) an opinion of counsel,
stating that the Holders of Debt Securities of such series will not
recognize income, gain or loss for Federal income tax purposes as a result
of International's exercise of this defeasance option and will be subject
to Federal income tax on the same amounts and in the same manner and at the
same times as would have been the case if International had not exercised
this option and (2) in the case of Debt Securities of such series being
discharged, either a private letter ruling to that effect received from the
U.S. Internal Revenue Service (the "IRS") or a revenue ruling pertaining to
a comparable form of transaction to that effect published by the IRS or
evidence of a change in applicable Federal income tax law occurring after
the date of the Indenture; and (d) if International is to be discharged
with respect to Debt Securities of such series, no Event of Default or
event that with notice or lapse of time or both would become an Event of
Default with respect to Debt Securities of such series has occurred and is
continuing at any time during the period ending on the 123rd day after the
date of deposit by International. (Section 1302) In the event International
exercises this option and the Debt Securities of a series are declared due
and payable because of the occurrence of any Event of Default, the amount
of money and U.S. Government Obligations, as the case may be, on deposit
with the Trustee will be sufficient to pay the amounts due on the Debt
Securities of a series at the time of their maturity but may not be
sufficient to pay the amounts due on the Debt Securities of such series at
the time of the acceleration resulting from such Event of Default. However,
International will remain liable for such payments.
Trustee
The Trustee may resign or be removed with respect to one or more
series of Debt Securities and a successor Trustee may be appointed to act
with respect to such series. (Section 610) In the event that two or more
persons are acting as trustee with respect to different series of Debt
Securities, each such Trustee will be a trustee of a trust under the
Indenture separate and apart from the trust administered by any other such
Trustee (Section 611), and any action described herein to be taken by the
"Trustee" may then be taken by each such Trustee with respect to, and only
with respect to, the one or more series of Securities for which it is
Trustee.
DESCRIPTION OF CAPITAL STOCK
As of the date of this Prospectus the authorized capital stock of the
Company consists of 250,000,000 shares of Class A Common Stock, $.01 par
value per share, 50,000,000 shares of Class B Common Stock, $.01 par value
per share, and 20,000,000 shares of Preferred Stock. As of such date there
are 89,986,197 shares of Class A Common Stock outstanding and 14,990,000
shares of Class B Common Stock outstanding. See "Risk Factors--Control by
Hollinger Inc. and Disproportionate Voting Rights."
Class A and Class B Common Stock
Voting Rights. Holders of Class A Common Stock are entitled to one
vote per share and holders of Class B Common Stock are entitled to ten
votes per share. Holders of Class A Common Stock and Class B Common Stock
are not entitled to vote cumulatively for the election of Directors.
Hollinger Inc. presently retains, by virtue of its ownership of all
outstanding shares of Class B Common Stock, effective control of the
Company through its ownership of 77.8% of the combined voting power of the
outstanding Common Stock.
Directors may be removed with or without cause by the holders of the
Common Stock. A vacancy on the Board created by the removal or resignation
of a Director or by the expansion of the authorized number of Directors may
be filled by the remaining Directors then in office.
The holders of Class A Common Stock and Class B Common Stock vote
together as a single class on all matters on which stockholders may vote,
except when class voting is required by applicable law.
Dividends. Each share of Class A Common Stock and Class B Common Stock
is entitled to receive dividends if, as and when declared by the Board of
Directors of the Company. Under the Delaware General Corporation Law, the
<PAGE>
Company may declare and pay dividends only out of its surplus, or in case
there shall be no such surplus, out of its net profits for the fiscal year
in which the dividend is declared and/or the preceding year. Under the
Delaware General Corporation Law, surplus is defined as the excess, if any,
at any given time, of the net assets of the Company over the amount
determined to be capital. Capital represents the aggregate par value of the
Company's capital stock. No dividends may be declared, however, if the
capital of the Company has been diminished by depreciation, losses or
otherwise to any amount less than the aggregate amount of capital
represented by any issued and outstanding stock having a preference on
distribution. Dividends must be paid on both the Class A Common Stock and
the Class B Common Stock at any time that dividends are paid on either. Any
dividend so declared and payable in cash, capital stock of the Company
(other than Class A Common Stock or Class B Common Stock) or other property
will be paid equally, share for share, on the Class A Common Stock and
Class B Common Stock. Dividends and distributions payable in shares of
Class A Common Stock may be paid only on shares of Class A Common Stock and
dividends and distributions payable in shares of Class B Common Stock may
be paid only on shares of Class B Common Stock. If a dividend or
distribution payable in Class A Common Stock is made on the Class A Common
Stock, the Company must also make a simultaneous dividend or distribution
on the Class B Common Stock. If a dividend or distribution payable in Class
B Common Stock is made on the Class B Common Stock, the Company must also
make a simultaneous dividend or distribution on the Class A Common Stock.
Pursuant to any such dividend or distribution, each share of Class B Common
Stock will receive a number of shares of Class B Common Stock equal to the
number of shares of Class A Common Stock payable on each share of Class A
Common Stock.
Transferability and Convertibility of Class B Common Stock. Each share
of Class B Common Stock is convertible at any time at the option of the
holder into one share of Class A Common Stock and is transferable by
Hollinger Inc. to a subsidiary or an affiliate. In addition, each share of
Class B Common Stock is automatically convertible into a share of Class A
Common Stock at the time it is sold, transferred or otherwise disposed of
by Hollinger Inc. or a subsequent permitted transferee to any third party
(other than a subsidiary or an affiliate of Hollinger Inc. or such
subsequent permitted transferee) unless such purchaser or transferee offers
to purchase all shares of Class A Common Stock from the holders thereof for
an amount per share equal to the amount per share received by the holder of
the Class B Common Stock. Any such offer shall be subject to the
requirements of applicable securities laws.
Any holder of Class B Common Stock may pledge his or its shares of
Class B Common Stock to a pledgee pursuant to a bona fide pledge of such
shares as collateral security for indebtedness due to the pledgee, provided
that such shares shall not be transferred to or registered in the name of
the pledgee and shall remain subject to the transfer restrictions described
in the foregoing paragraph. In the event that shares of Class B Common
Stock are so pledged, the pledged shares shall not be converted
automatically into Class A Common Stock. However, if any such pledged
shares become subject to any foreclosure, realization or other similar
action of the pledgee, they shall be converted automatically into shares of
Class A Common Stock unless they are sold in a permitted transaction.
Hollinger Inc. has pledged all shares of Class A Common Stock, Class B
Common Stock and Series A Preferred Stock owned by it to Canadian chartered
banks as collateral for outstanding indebtedness of Hollinger Inc. and the
Southam Facility.
Other Provisions. There are no preemptive rights to subscribe for any
additional securities which the Company may issue, and there are no
redemption provisions or sinking fund provisions applicable to either
class, nor is the Class A Common Stock or the Class B Common Stock subject
to calls or assessments by the Company. All outstanding shares are, and all
shares to be outstanding upon completion of the Offerings will be, legally
issued, fully paid and nonassessable.
In the event of the liquidation, dissolution or winding up of the
Company, holders of the shares of Class A Common Stock and Class B Common
Stock are entitled to share equally, share for share, in the assets
available for distribution.
Listing of Class A Common Stock. The Class A Common Stock is listed on
the New York Stock Exchange under the trading symbol "HLR."
Preferred Stock
The Company's Amended and Restated Certificate of Incorporation, as
amended (the "Restated Certificate"), authorizes the issuance of up to
20,000,000 shares of Preferred Stock. The Board of Directors has the
authority under the Restated Certificate to establish voting rights,
liquidation preferences, redemption rights, conversion rights and other
rights with respect to such Preferred Stock without the approval of the
Company's stockholders.
PRIDES and Series B Convertible Preferred Stock
The PRIDES are depositary shares, each of which represents one-half of
a share of Series B Convertible Preferred Stock. Holders of PRIDES are
entitled to vote with holders of Common Stock on the basis of 4/5 of a vote
for each half
<PAGE>
share of Series B Convertible Preferred Stock held. The Series B
Convertible Preferred Stock ranks senior in right and priority of payment
to the Common Stock as to dividends or upon liquidation. The Series B
Convertible Preferred Stock is convertible into shares of Class A Common
Stock, as described below. In addition, the Company has the option to
redeem the shares of Series B Convertible Preferred Stock, in whole or in
part, at any time on or after August 1, 1999 and prior to the Mandatory
Conversion Date. There are currently 706,469 PRIDES outstanding. The PRIDES
are listed on the New York Stock Exchange under the trading symbol
"HLRPrP".
Holders of PRIDES will be entitled to receive quarterly cumulative
dividends on the Series B Convertible Preferred Stock represented thereby
at a rate of 9 3/4% per annum for each PRIDES. Dividends cease to accrue on
the earlier of (i) the day immediately prior to the Mandatory Conversion
Date or (ii) the day immediately prior to the earlier redemption of the
Series B Convertible Preferred Stock.
On the Mandatory Conversion Date, unless previously redeemed or
converted, each half share of Series B Convertible Preferred Stock
represented by outstanding PRIDES will mandatorily convert into (i) one
share of Class A Common Stock, subject to adjustment in certain events,
(ii) cash in lieu of fractional shares of Class A Common Stock and (iii)
the right to receive cash in an amount equal to all accrued and unpaid
dividends thereon (other than previously declared dividends payable to a
holder of record on a prior date).
Shares of Series B Convertible Preferred Stock represented by PRIDES
are not redeemable prior to August 1, 1999. At any time and from time to
time on or after August 1, 1999 until immediately prior to the Mandatory
Conversion Date, the Company may redeem any or all of the outstanding
shares of Series B Convertible Preferred Stock represented by PRIDES. Upon
any such redemption, each holder will receive, in exchange for each half
share of Series B Convertible Preferred Stock represented by PRIDES, a
number of shares of Class A Common Stock equal to the sum of (i) $9.988
declining to $9.750 on the Mandatory Conversion Date, and (ii) all accrued
and unpaid dividends thereon (other than previously declared dividends
payable to a holder of record as of a prior date) divided by the current
market price for shares of Class A Common Stock on the applicable date of
determination, but in no event less than .8439 of a share of Class A Common
Stock, subject to adjustment.
At any time prior to the Mandatory Conversion Date, unless previously
redeemed, each half share of Series B Convertible Preferred Stock
represented by a PRIDES is convertible at the option of the holder thereof
into .8439 of a share of Class A Common Stock, equivalent to a conversion
price of $11.55 per share of Class A Common Stock, subject to adjustment.
Series C Convertible Preferred Stock
The Series C Convertible Preferred Stock ranks senior in right and
priority of payment to the Common Stock and pari passu with the PRIDES as
to dividends or upon liquidation. Holders of Series C Convertible Preferred
Stock are entitled to vote with holders of common stock on the basis of ten
votes for each share of Series C Convertible Preferred Stock held. The
Series C Convertible Preferred Stock is convertible into shares of Class A
Common Stock, as described below. In addition, the Company has the option
to redeem the shares of Series C Convertible Preferred Stock, in whole or
in part, at any time on or after June 1, 1999 and prior to June 1, 2001
(the "Mandatory Conversion Date"). There are currently 1,658,818 shares of
Series C Convertible Preferred Stock outstanding, of which 50% are owned by
Hollinger Inc. and a subsidiary of Hollinger Inc.
Holders of shares of Series C Convertible Preferred Stock will be
entitled to receive quarterly cumulative dividends at a rate of 9.5% per
annum on the stated liquidation amount per share. Dividends cease to accrue
on the earlier of (i) the day immediately prior to the Mandatory Conversion
Date or (ii) the day immediately prior to the earlier redemption or
conversion of the Series C Convertible Preferred Stock.
On the Mandatory Conversion Date, unless previously redeemed or
converted, each share of Series C Convertible Preferred Stock will
mandatorily convert into (i) one share of Class A Common Stock, subject to
adjustment in certain events, (ii) cash in lieu of fractional shares of
Class A Common Stock and (iii) the right to receive cash in an amount equal
to all accrued and unpaid dividends thereon (other than previously declared
dividends payable to a holder of record on a prior date).
Shares of Series C Convertible Preferred Stock are not redeemable
prior to June 1, 2000. At any time and from time to time on or after June
1, 2000, until immediately prior to the Mandatory Conversion Date, the
Company may redeem any or all of the outstanding shares of Series C
Convertible Preferred Stock. Upon any such redemption, each holder will
receive, in exchange for each share of Series C Convertible Preferred
Stock, a number of shares of Class A Common Stock equal to the sum of (i)
$111.15 declining to $108.51 on the Mandatory Conversion Date, and (ii) all
accrued and unpaid dividends thereon (other than previously declared
dividends payable to a holder of record as of a prior date) divided by the
current market price for shares of Class A Common Stock on the applicable
date of determination, but in no event less than 8.503 of a shares of Class
A Common Stock, subject to adjustment.
<PAGE>
At any time prior to the Mandatory Conversion Date, unless previously
redeemed, each share of Series C Convertible Preferred Stock is convertible
at the option of the holder thereof into 8.503 shares of Class A Common
Stock, equivalent to a conversion price of $9.226 per share of Class A
Common Stock, subject to adjustment.
Series D Convertible Preferred Stock
The Series D Convertible Preferred Stock is non-voting and is entitled
to receive cumulative cash dividends, payable quarterly. The amount of each
quarterly dividend per share will be equal to the aggregate amount of
ordinary course cash dividends paid during the preceding calendar quarter
on 7,395,000 of the Southam Inc. shares held by Hollinger Canadian
Publishing Holdings Inc., divided by 739,500. There are currently 739,500
shares of Series D Convertible Preferred Stock outstanding, all of which is
owned by a subsidiary of Hollinger Inc.
The Series D Convertible Preferred Stock is redeemable in whole or in
part, at any time by the Company or a holder of such shares, subject to
restrictions in the Company's credit facilities In addition, the Company is
not obligated to redeem the Series D Convertible Preferred Stock held by
Hollinger Inc. in the event that clear legal title to the shares of Southam
Inc. previously transferred by Hollinger Inc. on or prior to April 1, 1999
is not delivered to Hollinger Canadian Publishing Holdings Inc. the
redemption price per share will be Cdn.$146.63 ($102.63 based on December
31, 1997 exchange rates) plus accrued dividends.
A holder of shares of the Series D Convertible Preferred Securities
may convert such shares at any time into shares of Class A Common Stock of
the Company. The conversion price will initially be $14.00 per share of
class A Common Stock, subject to adjustment upon the occurrence of certain
events.
Certain Anti-Takeover Considerations
The Company's Restated Certificate and Amended and Restated By-laws
(the "By-laws") contain certain provisions that could make more difficult a
change in control of the Company not having approval of the Board of
Directors. The Restated Certificate authorizes the issuance of "blank
check" Preferred Stock. The Board of Directors may establish voting rights,
liquidation preferences, redemption rights, conversion rights and other
rights relating to such Preferred Stock, all or some of which may be senior
to the Common Stock, without the approval of the Company's stockholders. In
some circumstances, the Preferred Stock could be issued and have the effect
of preventing a merger, tender offer or other takeover attempt which the
Board of Directors opposes. Issuance of Preferred Stock, however, may be
subject to certain rules of the Nasdaq Stock Market and upon listing with
the New York Stock Exchange to certain rules of that exchange. The
Company's By-laws also provide that a special meeting of the stockholders
of the Company may only be called by the Board of Directors, a duly
designated committee of the Board of Directors, the Chairman of the Board
of Directors, or the President of the Company. No other person may call a
special meeting of the stockholders.
In addition, the instruments governing the terms of the principal
indebtedness of the Company and its principal United States and foreign
subsidiaries contain customary events of default, including, without
limitation, certain "change of control" provisions. Generally, a "change of
control" is defined in the instruments governing the terms of the principal
indebtedness of the Company and its principal United States and foreign
subsidiaries to include, without limitation, any person other than The Hon.
Conrad M. Black beneficially owning voting stock representing more than 50%
of the total voting power of the Company. The Company's Notes contain a
provision that upon a change of control (as defined in the indenture
relating thereto), each holder will have the right to require that
Publishing purchase all or any portion of such holder's Notes.
Certain transactions with the Company may be subject to Section 203 of
the Delaware General Corporation Law. Section 203 prohibits certain
"business combinations" between an "interested stockholder" and a
corporation for three years after a stockholder becomes interested, unless
one of the statute's exceptions applies. Section 203(c)(5) defines an
interested stockholder as a person, broadly defined to include a group, who
owns at least 15% of a company's outstanding voting stock. The statute
defines business combinations expansively to include any merger or
consolidation of, with, or caused by the interested stockholder. Section
203(a) provides three exceptions to the business combination prohibition.
First, there is no constraint if the interested stockholder obtains prior
board approval for the business combination or the transaction resulting in
ownership of 15% of the target's voting stock. Second, the statute does not
apply if, in completing the transaction that crosses the 15% threshold, the
stockholder becomes the owner of 85% of the corporation's voting stock
outstanding as of the time the transaction commenced. Any shares owned by
directors who are officers, and shares owned by certain stock option plans
are excluded from the calculation. This exception applies most particularly
to a tender offeror who has less than 15% of the target's stock and
receives tenders that satisfy the 85% requirement. Finally, the statute
does not apply if the interested stockholder's business combination is
approved by the board of directors and affirmed by at least 66 2/3% of the
outstanding voting stock not owned by the interested stockholder.
<PAGE>
PLAN OF DISTRIBUTION
The Company and any selling shareholder may sell Securities to one or
more underwriters for public offering and sale by them or may sell
Securities in any lawful manner to investors directly or through agents or
dealers. Any such underwriter, agent or dealer involved in the offer and
sale of the Securities will be named in an applicable Prospectus
Supplement. Securities offered pursuant to a particular Prospectus
Supplement are referred to herein as "Offered Securities."
Underwriters may offer and sell the Offered Securities at a fixed
price or prices, which may be changed, or from time to time at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. The Company also may, from time to
time, authorize underwriters acting as its agents to offer and sell the
Offered Securities upon the terms and conditions set forth in any
Prospectus Supplement. In connection with the sale of Offered Securities,
underwriters may be deemed to have received compensation from the Company
or any selling shareholder in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of Offered
Securities for whom they may act as agent. Underwriters may sell Offered
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 (which may be changed from time to time) from the
purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company or any selling
shareholder to underwriters or agents in connection with the offering of
Offered Securities, and any discounts, concessions or commissions allowed
by underwriters to participating dealers, will be set forth in an
applicable Prospectus Supplement. Underwriters, dealers and agents
participating in the distribution of the Offered Securities may be deemed
to be underwriters under the Securities Act, and any discounts and
commissions received by them and any profit realized by them on resale of
the Offered Securities may be deemed to be underwriting discounts and
commissions under the Securities Act. Underwriters, dealers and agents may
be entitled, under agreements with the Company, to indemnification against
and contribution toward certain civil liabilities, including liabilities
under the Securities Act, and to reimbursement by the Company for certain
expenses.
If a dealer is utilized in the sale of the Securities in respect of
which this Prospectus is delivered, the Company will sell such Securities
to such dealer, as principal. The dealer may then resell such Securities to
the public at varying prices to be determined by such dealer at the time of
resale.
Shares of Class A Common Stock may be offered or sold hereunder in
connection with the settlement (in whole or in part) of forward purchase
contracts entered into from time to time by the Company with one or more
financial institutions. Such shares may be acquired from the Company or
affiliates of the Company or otherwise in accordance with such forward
purchase contracts or may be acquired in open market purchase transactions
effected by such financial institutions. In connection with any such sales,
such financial institutions may be deemed to be underwriters or may be
deemed to be selling shareholders with respect to the shares sold by them.
In either such case, a Prospectus Supplement will set forth, as required,
information with respect to the identity of the underwriter or selling
shareholder, the amount of shares being sold, the aggregate number of
shares held by any such financial institution before and after the sale
thereof and any material arrangements between the Company and such
financial institutions within the past three years.
If so indicated in an applicable Prospectus Supplement, the Company
will authorize dealers acting as its agents to solicit offers by certain
institutions to purchase Offered Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to Delayed
Delivery Contracts ("Contracts") providing for payment and delivery on the
date or dates stated in such Prospectus Supplement. Each Contract will be
for an amount not less than, and the aggregate principal amount of Offered
Securities sold pursuant to Contracts shall not be less nor more than, the
respective amounts stated in such Prospectus Supplement. Institutions with
whom Contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and other institutions, but will in
all cases be subject to the approval of the Company. Contracts will not be
subject to any conditions except (i) the purchase by an institution of the
Offered Securities covered by its Contracts shall not at the time of
delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject, and (ii) if the Offered
Securities are being sold to underwriters, the Company shall have sold to
such underwriters the total principal amount of the Offered Securities less
the principal amount thereof covered by Contracts. Agents and underwriters
will have no responsibility in respect of the delivery or performance of
Contracts.
LEGAL MATTERS
Certain legal matters in connection with the Securities offered hereby
will be passed upon for the Company by Cravath, Swaine & Moore. Certain
legal matters relating to the Securities offered hereby will be passed upon
for any underwriter, dealer or agent by its legal counsel.
<PAGE>
EXPERTS
The consolidated financial statements of Hollinger International Inc.
and subsidiaries as of December 31, 1996 and 1997, and for each of the
years in the three-year period ended December 31, 1997, incorporated herein
by reference from the Company's Annual Report on Form 10-K for the year
ended December 31, 1997 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.
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 Website that contains reports, proxy,
information statements and other information regarding registrants that
file electronically with the Commission. Such reports, proxies, information
statements and other information may be found on the Commission's site
address, 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, 1997;
2. the Company's Proxy Statement for the Annual Meeting of
Stockholders held May 6, 1998;
3. the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998 and June 30, 1998;
4. the Company's Current Report on Form 8-K dated January 27, 1998;
and
5. the description of the Class A Common Stock contained in the
Company's Registration Statement on Form 8-A, as the same may be amended.
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 or any Prospectus Supplement and prior to the
termination of the offering made by this Prospectus or any Prospectus
Supplement 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 or any Prospectus Supplement 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 or any Prospectus
Supplement.
The Company will provide without charge to each person to whom a copy
of this Prospectus or any Prospectus Supplement 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
<PAGE>
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.
===========================================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, THE CLASS A COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE
IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by the Company in connection with
the distribution of the securities being registered are as follows:
Securities and Exchange Commission filing fee........... $242,425
NYSE Listing fee........................................ 7,450
Accounting fees and expenses............................ 100,000
Legal fees and expenses................................. 250,000
Printing................................................ 100,000
Miscellaneous expenses.................................. 20,000
---------------
Total.............................................. 719,875
- ------------------ ===============
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.
The forms of Underwriting Agreement included as Exhibit 1.01 and
Exhibit 1.02 provide for indemnifying the Company and certain controlling
persons under certain circumstances, including indemnification for
liabilities under the Securities Act of 1933, as amended (the "Securities
Act").
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company
has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS. The following exhibits are filed as part of this
registration statement:
Prior Filing or
Exhibit Sequential
Number Description Page Number
1.01 Form of Underwriting Agreement between the Company
and the Underwriters(s) with respect to Debt
Securities or Convertible Securities*
<PAGE>
Prior Filing or
Exhibit Sequential
Number Description Page Number
1.02 Form of Underwriting Agreement between the Company
and the Underwriter(s) with respect to Preferred
Stock or Class A Common Stock*
4.01 Form of Debt Securities Indenture*
4.04 Specimen certificate evidencing Class A Common Incorporated by
Stock reference to
Exhibit 4.1 to
Registration
Statement on
Form S-1
(No. 33-74980)
5.01 Opinion of Cravath, Swaine & Moore
12.01 Computation of Ratio of Earnings to Fixed Charges
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 (included on signature page)
25.01 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of the trustee under the
Debt Securities Indenture*
- ----------
* To be filed either by amendment or as an exhibit to an Exchange Act
Report and incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
(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 registration 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.
The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of trustees to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Securities Act.
The undersigned registrant hereby undertakes that, for the 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 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to 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
<PAGE>
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.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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.
<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 registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chicago, State of Illinois, on
September 25, 1998.
HOLLINGER INTERNATIONAL INC.
By: /s/ Mark S. Kipnis
Name: Mark S. Kipnis
Title: Vice President Law & Finance
and Secretary
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mark S. Kipnis and Robert Smith, and
each of them, his true and lawful attorneys-in-fact and agents, 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 to
this Registration Statement, and to file the same, with all exhibits
thereto, and other documentation in connection therewith, with the
Securities and Exchange Commission, granted unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done in or about the premises, as fully
to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or
their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Conrad M. Black Chairman of the Board, Chief Executive September 25, 1998
- ------------------------ Officer and Director (Principal Executive
Conrad M. Black Officer)
/s/ F. David Radler
- ------------------------ President, Chief Operating Officer, Deputy September 25, 1998
F. David Radler Chairman and Director
/s/ J. A. Boltbee Executive Vice President and Chief September 24, 1998
- ------------------------ Financial Officer (Principal Financial
J. A. Boultbee Officer)
/s/ Frederick A. Creasey Group Corporate Controller (Principal September 24, 1998
- ------------------------ Accounting Officer)
Frederick A. Creasey
/s/ Barbara Amiel Black Director September 25, 1998
- ------------------------
Barbara Amiel Black
/s/ Dwayne O. Andreas Director September 24, 1998
- ------------------------
Dwayne O. Andreas
/s/ Richard R. Burt Director September 24, 1998
- ------------------------
Richard R. Burt
/s/ Raymond G. Chambers Director September 24, 1998
- ------------------------
Raymond G. Chambers
/s/ Daniel W. Colson Director and Vice Chairman September 24, 1998
- ------------------------
Daniel W. Colson
- ------------------------ Director
Henry A. Kissinger
- ------------------------ Director
Marie-Josee Kravis
- ------------------------ Director
Schmeul Meitar
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Richard N. Perle Director September 24, 1998
- -----------------------
Richard N. Perle
/s/ Robert S. Strauss Director September 24, 1998
- -----------------------
Robert S. Strauss
/s/ A. Alfred Taubman Director September 25, 1998
- -----------------------
A. Alfred Taubman
/s/ James R. Thompson Director September 24, 1998
- -----------------------
James R. Thompson
/s/ Lord Weidenfeld Director September 25, 1998
- ------------------------
Lord Weidenfeld
/s/ Leslie H. Wexner Director September 24, 1998
- ------------------------
Leslie H. Wexner
</TABLE>
<PAGE>
EXHIBIT INDEX
Prior Filing or
Exhibit Sequential
Number Description Page Number
1.01 Form of Underwriting Agreement between the Company
and the Underwriters(s) with respect to Debt
Securities or Convertible Securities*
1.02 Form of Underwriting Agreement between the Company
and the Underwriter(s) with respect to Preferred
Stock or Class A Common Stock*
4.01 Form of Debt Securities Indenture*
4.04 Specimen certificate evidencing Class A Common Incorporated by
Stock reference to
Exhibit 4.1 to
Registration
Statement on
Form S-1
(No. 33-74980)
5.01 Opinion of Cravath, Swaine & Moore
12.01 Computation of Ratio of Earnings to Fixed Charges
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 (included on signature page)
25.01 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of , the trustee
under the Debt Securities Indenture*
* To be filed by amendment.
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
September 25, 1998
HOLLINGER INTERNATIONAL INC.
REGISTRATION STATEMENT ON FORM S-3
We have acted as counsel for Hollinger
International Inc., a Delaware corporation (the "Company"),
in connection with the Registration Statement on Form S-3.
File No. 333-17111 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act') of
the Company, with respect to the following securities of the
Company: (i) unsecured senior debt securities (the "Debt
Securities"), (ii) shares of preferred stock ("Preferred
Stock"), par value $.01 per share, and (iii) shares of common
stock (the "Common Stock"), in each case, for issuance from
time to time pursuant to Rule 415 under the Securities Act.
In that connection, we have examined originals, or
copies certified or otherwise identified to our satisfaction,
of such documents, corporate records and other instruments as
we have deemed necessary or appropriate for the purposes of
this opinion, including (a) the Certificate of Incorporation
of the Company, as amended; (b) the by-laws of the Company;
(c) resolutions of the board of directors of the Company
dated October 23, 1996; and (d) a specimen certificate
representing the shares.
Based on the foregoing, we are of opinion as
follows:
1. The Company is validly existing as a corporation
in good standing under the laws of the State of Delaware.
2. When an indenture (the "Indenture") containing
the terms described under the heading "Description of the
Debt Securities" in the prospectus contained in the
Registration Statement shall have been duly authorized,
executed and delivered by each of the Company and the
<PAGE>
Trustee, the Indenture will constitute a legal, valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms (subject to applicable
bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws affecting
creditors' rights generally from time to time in effect and
of general principles of equity, including without
limitation, concepts of materiality, reasonableness, good
faith and fair dealing, regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
3. When the Indenture shall have been executed and
delivered by each of the Company and the Trustee and duly
qualified under the Trust Indenture Act of 1939, as amended,
and the Debt Securities shall have been duly authorized,
executed, authenticated and delivered against payment
therefor, the Debt Securities will constitute legal, valid
and binding obligations of the Company, enforceable against
the Company in accordance with their terms and entitled to
the benefits of the Indenture (subject to applicable
bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other laws affecting creditors' right
generally from time to time in effect and to general
principles of equity, including, without limitation, concepts
of materiality, reasonableness, good faith and fair dealing,
regardless of whether such enforceability is considered in a
proceeding in equity or at law).
4. When the Preferred Stock shall have been
authorized, issued and sold as contemplated by the
Registration Statement and the Company shall have received
consideration therefor, the Preferred Stock will be validly
issued, fully paid and non-assessable.
5. Of the Common Stock to be offered and sold under
the Registration Statement, (a) the shares of Common Stock
currently outstanding have been duly and validly authorized
and are fully paid and non-assessable, and (b) the shares of
Common Stock to be issued from time to time by the Company,
when such shares shall have been authorized, issued and sold
by the Company as contemplated by the Registration Statement
and the Agreement and the Company shall have received
consideration therefor from the Underwriters, will be validly
issued, fully paid and non-assessable. We are admitted to
practice in the State of New York, and we express no opinion
as to matters governed by any laws other than the laws of the
State of New York, the
<PAGE>
General Corporation Law of the State of Delaware and Federal
laws of the United States of America.
We hereby consent to the filing of the opinion as
an exhibit to the Registration Statement. We also consent to
the use of our name under the caption "Legal Opinions" in the
Prospectus contained in the Registration Statement.
Very truly yours,
CRAVATH, SWAINE & MOORE
Hollinger International Inc.
401 North Wabash Avenue
Chicago, Illinois 60611
EXHIBIT 12
<TABLE>
<CAPTION>
Six
($000) Year Ended Months Ended
----------------------------------------------- ------------------
1993 1994 1995 1996 1997 6/30/97 6/30/98
---- ---- ---- ---- ---- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Income 91,191 75,174 61,864 147,967 287,722 141,588 156,758
======= ======= ======= ======= ======= ======= =======
Fixed charges:
Interest expense 27,292 33,192 44,727 84,356 113,558 55,594 51,765
Deferred financing fees 168 16,640 13,466 5,149 2,927
Dividends on Preferred
Stock of Consolidated
Subsidiaries 5,428 6,055 9,278 11,876 4,838 4,838 --
------- ------- ------- ------- ------- ------- -------
Total Fixed Charges 32,720 39,247 54,173 112,872 131,862 76,581 54,692
======= ======= ======= ======= ======= ======= =======
Preferred Stock Dividend
Requirements
PRIDES -- -- -- 16,035 32,803 16,402 16,402
Series C Convertible
Preferred Stock -- -- -- -- 4,552 -- 7,125
Series D Convertible
Preferred Stock -- -- 451 1,811 1,767 892 863
------- ------- ------- ------- ------- ------- -------
Total Preferred Stock
Dividend Requirements -- -- 451 17,846 39,112 17,294 24,390
======= ======= ======= ======= ======= ======= =======
Total Fixed charges and
Preferred Stock Dividend
Requirements 32,720 39,247 54,624 130,718 170,974 93,875 79,082
======= ======= ======= ======= ======= ======= =======
Ratio of Earnings to fixed
charges 2.79 1.92 1.14 1.31 2.18 1.85 2.87
Ratio of Earnings to fixed 2.79 1.92 1.13 1.13 1.68 1.51 1.98
charges and preferred
dividend requirements
</TABLE>
EXHIBIT 23.02
The Board of Directors
Hollinger International Inc.
We consent to incorporation by reference in the registration statement
(No. 33-17111) on Form S-3 of Hollinger International Inc. of our
report dated February 23, 1998, relating to the consolidated balance
sheets of Hollinger International Inc. and subsidiaries as of December
31, 1997, and 1996, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the years
in the three-year period ended December 31, 1997, and all related
schedules, which report appears in the December 31, 1997, annual
report on Form 10-K of Hollinger International Inc.
KPMG Peat Marwich LLP
Chicago, Illinois
September 24, 1998
