<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 30, 1998
REGISTRATION NO. 333-62921
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 333-4136
POST-EFFECTIVE AMENDMENT NO. 3 TO REGISTRATION STATEMENT NO. 33-42877
POST-EFFECTIVE AMENDMENT NO. 3 TO REGISTRATION STATEMENT NO. 33-42959
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
AND POST-EFFECTIVE AMENDMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE SEAGRAM COMPANY LTD. --
LA COMPAGNIE SEAGRAM LTEE
JOSEPH E. SEAGRAM & SONS, INC.
(EXACT NAMES OF REGISTRANTS AS SPECIFIED IN THEIR CHARTERS)
CANADA
(STATE OR OTHER JURISDICTION
OF INCORPORATION OR ORGANIZATION)
NONE
(I.R.S. EMPLOYER IDENTIFICATION NO.)
1430 PEEL STREET
MONTREAL, QUEBEC, CANADA H3A 1S9
(514) 849-5271
INDIANA
(STATE OR OTHER JURISDICTION
OF INCORPORATION OR ORGANIZATION)
13-1285240
(I.R.S. EMPLOYER IDENTIFICATION NO.)
375 PARK AVENUE
NEW YORK, NEW YORK 10152
(212) 572-7000
(ADDRESSES, INCLUDING ZIP CODES, AND TELEPHONE NUMBERS, INCLUDING AREA CODES, OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
ROBERT W. MATSCHULLAT
JOSEPH E. SEAGRAM & SONS, INC.
375 PARK AVENUE
NEW YORK, NEW YORK 10152
(212) 572-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANTS' AGENT FOR
SERVICE AND AUTHORIZED REPRESENTATIVE OF THE SEAGRAM COMPANY LTD. IN THE UNITED
STATES)
COPIES TO:
<TABLE>
<S> <C>
GEORGE R. KROUSE, JR., ESQ. ROBERT E. BUCKHOLZ, JR., ESQ.
SARAH E. COGAN, ESQ. SULLIVAN & CROMWELL
SIMPSON THACHER & BARTLETT 125 BROAD STREET
425 LEXINGTON AVENUE NEW YORK, NEW YORK 10004
NEW YORK, NEW YORK 10017-3909
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
other than securities offered only in connection with dividend or interest
reinvestment plans, please 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
under the Securities Act, please check the following box. [ ]
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT, UPON EFFECTIVENESS THIS
REGISTRATION STATEMENT SHALL CONTAIN A COMBINED PROSPECTUS THAT ALSO RELATES TO
$300,000,000 AGGREGATE AMOUNT OF SECURITIES REGISTERED ON FORM S-3, REGISTRATION
STATEMENT NO. 33-42877, WHICH WAS DECLARED EFFECTIVE ON SEPTEMBER 27, 1991,
$75,000,000 AGGREGATE AMOUNT OF SECURITIES REGISTERED ON FORM S-3, REGISTRATION
STATEMENT NO. 33-42959, WHICH WAS DECLARED EFFECTIVE ON OCTOBER 9, 1991, AND TO
$125,000,000 AGGREGATE AMOUNT OF SECURITIES REGISTERED ON FORM S-3, REGISTRATION
STATEMENT NO. 333-4136, WHICH WAS DECLARED EFFECTIVE ON SEPTEMBER 6, 1996. THIS
REGISTRATION STATEMENT ALSO CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 3 TO
REGISTRATION STATEMENT NO. 33-42877, POST-EFFECTIVE AMENDMENT NO. 3 TO
REGISTRATION STATEMENT NO. 33-42959 AND POST-EFFECTIVE AMENDMENT NO. 1 TO
REGISTRATION STATEMENT NO. 333-4136.
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<PAGE> 2
SUBJECT TO COMPLETION DATED OCTOBER 30, 1998
PROSPECTUS
[SEAGRAM LOGO]
$4,520,000,000
JOSEPH E. SEAGRAM & SONS, INC.
DEBT SECURITIES
CLASS A PREFERRED STOCK
WARRANTS
THE SEAGRAM COMPANY LTD.
GUARANTEES
------------------
Joseph E. Seagram & Sons, Inc. (the "Company") from time to time may offer
its (i) debt securities consisting of debentures, notes and/or other unsecured
evidences of indebtedness ("Debt Securities"), in one or more series, up to an
aggregate initial offering price of not more than $4,500,000,000 (or the
equivalent thereof in foreign denominated currencies or composite currencies),
(ii) Class A Preferred Stock of the par value of $100 per share ("Class A
Preferred Stock"), in one or more series, up to an aggregate initial offering
price of not more than $10,000,000 (or the equivalent thereof in foreign
denominated currencies or composite currencies), and (iii) warrants ("Warrants")
to purchase Debt Securities or Class A Preferred Stock, up to an aggregate
initial offering price of not more than $10,000,000 (or the equivalent thereof
in foreign denominated currencies or composite currencies) (Debt Securities,
Class A Preferred Stock and Warrants are collectively referred to as
"Securities"), or any combination of the foregoing, at prices and on terms to be
determined at or prior to the time of sale.
Specific terms of the Securities in respect of which this Prospectus is
being delivered are set forth in the accompanying Prospectus Supplement
("Prospectus Supplement"), together with the terms of the offering of such
Securities, including the initial public offering price, the currency or
currencies for which such Securities may be purchased and the net proceeds to
the Company from the sale thereof. The Prospectus Supplement also sets forth
with regard to such Securities, without limitation, the following: (i) in the
case of Debt Securities, the specific designation, aggregate principal amount,
authorized denominations, maturity, rate (which may be fixed or variable) and
time of payment of any interest, any redemption, prepayment or sinking fund
provisions, any exchange rights, any subordination provisions, and the currency
or currencies or composite currency or currencies in which principal, premium,
if any, and interest, if any, is payable; (ii) in the case of Class A Preferred
Stock, the designation, number of shares, liquidation preference per share,
dividend rate (or method of calculation thereof), dates on which dividends shall
be payable and dates from which dividends shall accrue, any redemption or
sinking fund provisions, any voting rights and any exchange rights; and (iii) in
the case of Warrants, the number and terms thereof, the designation and the
number of securities issuable upon their exercise, the exercise price, and,
where applicable, the duration and detachability thereof.
The Securities will be fully and unconditionally guaranteed (the
"Guarantees") by The Seagram Company Ltd. (the "Guarantor"). The specific terms
of the applicable Guarantees, which may be subordinated to certain liabilities
and obligations of the Guarantor, are set forth in the Prospectus Supplement.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------
The Securities may be offered for sale to or through underwriters, and may
also be offered directly to other purchasers or through agents. The Prospectus
Supplement sets forth the names of any underwriters or agents involved in the
sale of the Securities in respect of which this Prospectus is being delivered,
the principal amount, if any, to be purchased by underwriters and any
compensation of such underwriters or agents.
------------------
The date of this Prospectus is , 1998.
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.
<PAGE> 3
AVAILABLE INFORMATION
The Guarantor is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission: Chicago Regional Office, Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and New York
Regional Office, 7 World Trade Center, 13th Floor, New York, New York 10048.
Please call the Commission at 1-800-SEC-0330 for further information relating to
the public reference rooms. Copies of such material can also be obtained from
the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such material may also
be accessed electronically by means of the Commission's home page on the
Internet at http://www.sec.gov. In addition, such materials should be available
for inspection and copying at the library of the New York Stock Exchange, Inc.,
20 Broad Street, New York, New York 10005.
The Guarantor and the Company have filed with the Commission a Registration
Statement on Form S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Guarantor with the
Commission (File No. 1-2275) and are hereby incorporated herein by reference:
1. The Guarantor's Annual Report on Form 10-K for the fiscal year
ended June 30, 1998, as amended.
2. The Guarantor's Current Reports on Form 8-K dated July 20, 1998,
August 4, 1998, August 25, 1998, as amended and September 1, 1998,
as amended.
All documents filed by the Guarantor pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of the Registration Statement or this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of the Registration Statement or this Prospectus.
ANY PERSON RECEIVING A COPY OF THIS PROSPECTUS MAY OBTAIN WITHOUT CHARGE,
UPON REQUEST, A COPY OF ANY OF THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN,
EXCEPT FOR THE EXHIBITS TO SUCH DOCUMENTS (UNLESS ANY SUCH EXHIBIT IS
SPECIFICALLY INCORPORATED BY REFERENCE THEREIN). REQUESTS SHOULD BE DIRECTED TO
THE SECRETARY, JOSEPH E. SEAGRAM & SONS, INC., 375 PARK AVENUE, NEW YORK, NEW
YORK 10152, TELEPHONE (212) 572-7000.
Unless otherwise indicated, currency amounts referred to herein are stated
in U.S. dollars.
2
<PAGE> 4
THE GUARANTOR AND THE COMPANY
The Guarantor, a corporation organized under Canadian federal law on March
2, 1928, operates in two global business segments: spirits and wine and
entertainment. The Guarantor's spirits and wine businesses are engaged
principally in the production and marketing of distilled spirits, wines,
coolers, beers and mixers throughout more than 96 countries and territories. The
Guarantor's approximately 84%-owned entertainment subsidiary, Universal Studios,
Inc., produces and distributes motion picture, television and home video
products; produces and distributes recorded music; and operates theme parks and
retail stores. The Company, an Indiana corporation organized in 1933, is the
U.S. spirits and wine subsidiary of the Guarantor.
The principal executive offices of the Guarantor are located at 1430 Peel
Street, Montreal, Quebec, Canada H3A 1S9 (telephone 514-849-5271). The Company's
principal executive offices are located at 375 Park Avenue, New York, New York
10152 (telephone 212-572-7000).
RECENT DEVELOPMENTS
On June 22, 1998, the Guarantor announced that it had signed definitive
agreements with Koninklijke Philips Electronics N.V. and PolyGram N.V.
("PolyGram") to acquire PolyGram in a transaction valued at approximately $10.4
billion. The agreements call for the Guarantor to pay $8.4 billion in cash and
to issue approximately 47.9 million of its common shares (12 percent of
outstanding common shares after the transaction). The acquisition, which is
subject to the receipt of certain regulatory approvals, is expected to close
during the second quarter of the Guarantor's fiscal year ending June 30, 1999.
On August 25, 1998, the Guarantor completed the sale of Tropicana Products,
Inc. and the Guarantor's global juice business ("Tropicana") for cash proceeds
of approximately $3.3 billion. The proceeds from the sale of Tropicana will be
used by the Guarantor to pay part of the cash portion of the purchase price for
the acquisition of PolyGram.
USE OF PROCEEDS
Except as may otherwise be set forth in a Prospectus Supplement with
respect to a particular series of Securities, the net proceeds to be received by
the Company from the issue and sale from time to time of the Securities will be
added to the general funds of the Company to be used to reduce outstanding
indebtedness, to finance the Company's operations and for other general
corporate purposes, including acquisitions.
The Company expects to make additional borrowings from time to time. The
nature and amount of such borrowings can be expected to vary as a result of
business requirements, market conditions and other factors.
3
<PAGE> 5
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
the Guarantor and its subsidiaries and of the Company and its subsidiaries for
the fiscal years ended June 30, 1998 and 1997, the five-month transition period
ended June 30, 1996 and each of the three fiscal years in the period ended
January 31, 1996:
<TABLE>
<CAPTION>
FIVE-MONTH
FISCAL FISCAL TRANSITION
YEAR YEAR PERIOD
ENDED ENDED ENDED FISCAL YEARS ENDED JANUARY 31,
JUNE 30, JUNE 30, JUNE 30, ---------------------------------
1998 1997 1996 1996 1995 1994
-------- -------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges
of the Guarantor and its
subsidiaries(a).............. 4.87 3.05 1.19 1.66 1.69 1.94
Ratio of earnings to fixed
charges
of the Company and its
subsidiaries(a).............. 1.10 1.72 --(b) 1.50 1.93 2.02
</TABLE>
- ---------------
(a) For the purpose of calculating this ratio, pretax income before discontinued
activities and cumulative effect of accounting change has been increased by
fixed charges (excluding capitalized interest) and the minority interest in
income of subsidiary companies, and excludes, when applicable, unremitted
earnings of less than 50 percent owned companies accounted for under the
equity method. Fixed charges consist of interest on borrowings (including
capitalized interest), amortization of debt discount, the interest portion
of rental expense and the Guarantor's or the Company's, as the case may be,
proportionate share of 50 percent owned companies' fixed charges.
(b) Fixed charges exceeded earnings by $33 million for the five-month transition
period ended June 30, 1996.
4
<PAGE> 6
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions to which any Prospectus Supplement may
relate. The particular terms and provisions of the series of Debt Securities
offered by a Prospectus Supplement, and the extent to which the general terms
and provisions described below may apply thereto, will be described in the
Prospectus Supplement relating to such Debt Securities.
The Debt Securities and Guarantees with respect to such Debt Securities
(the "Debt Guarantees") will be issued under an Indenture, dated as of September
15, 1991 (the "Indenture"), among the Company, the Guarantor and The Bank of New
York, as Trustee (the "Trustee"), a copy of which Indenture has been
incorporated by reference as an exhibit to the Registration Statement of which
this Prospectus is a part. The following brief summaries of certain provisions
of the Debt Securities, the Debt Guarantees and the Indenture do not purport to
be complete and are qualified in their entirety by reference to all the
provisions of the Indenture, including the definitions therein of certain terms.
The Debt Securities will be unsecured obligations of the Company and will
be fully and unconditionally guaranteed by the Guarantor as to payment of
principal, premium, if any, and interest, if any. The Indenture does not limit
the amount of securities that may be issued thereunder and provides that debt
securities may be issued thereunder up to the aggregate principal amount from
time to time authorized by the Company and the Guarantor in one or more series.
Debt Securities of a series may be issuable in registered form without
coupons ("Registered Securities"), in bearer form with or without coupons
attached ("Bearer Securities") or in the form of one or more global securities
(each, a "Global Security"). Bearer Securities, subject to certain exceptions,
will not be offered or sold to persons who are within the United States or to
United States persons. See "Limitations on Issuance of Bearer Securities".
GENERAL
Reference is made to the Prospectus Supplement for the following terms of
the particular series of Debt Securities and Debt Guarantees being offered
thereby: (i) the designation, aggregate principal amount and authorized
denominations of the series of Debt Securities; (ii) the extent and manner, if
any, to which payment on or in respect of Debt Securities of the series and/or
Debt Guarantees thereof will be senior or will be subordinated to the prior
payment of other liabilities and obligations of the Company and/or the
Guarantor, as the case may be; (iii) the percentage or percentages of principal
amount at which the Debt Securities of the series will be issued; (iv) the date
or dates on which the Debt Securities of the series will mature (or manner of
determining the same); (v) if other than the principal amount thereof, the
portion of the principal amount of Debt Securities of the series which shall be
payable upon a declaration of acceleration of the maturities thereof; (vi) the
rate or rates per annum, if any, at which the Debt Securities of the series will
bear interest (or the manner of calculation thereof) and the date or dates from
which such interest will accrue; (vii) the dates on which any interest will be
payable (or manner of determining the same) and the regular record dates for
such Interest Payment Dates for Debt Securities which are Registered Securities;
(viii) the place or places where the principal of (and premium, if any) and
interest, if any, on the Debt Securities of the series and any amounts due under
Debt Guarantees thereof will be payable and each office or agency, as described
below under "Denominations, Registration and Transfer", where the Debt
Securities may be presented for transfer or exchange; (ix) if other than U.S.
dollars, the currency, currencies or currency unit or units, for which such Debt
Securities may be purchased and the currency, currencies or currency unit or
units in which the principal of (and premium, if any) and interest, if any, on
such Debt Securities may be payable; (x) the period or periods within which, and
the terms and conditions upon which, an election may be made by the Company or a
holder, as the case may be, for payment of the principal of (and premium, if
any) and interest, if any, on the Debt Securities of the series in the currency,
currencies or currency unit or units other than that in which the series is
stated to be payable; (xi) whether the Debt Securities are to be issuable as
Registered Securities or Bearer Securities or both, and if Bearer Securities are
issued, the
5
<PAGE> 7
circumstances and places for the exchange of Bearer Securities for Registered
Securities; (xii) whether such Debt Securities are to be issued in the form of
one or more temporary or definitive permanent Global Securities and, if so, the
identity of the Depositary for such Global Security or Securities; (xiii) if a
temporary Global Security is to be issued with respect to such series, whether
any interest thereon payable on an interest payment date prior to the issuance
of a definitive permanent Global Security or other definitive Bearer Securities
will be credited to the account of the persons entitled thereto on such Interest
Payment Date; (xiv) if a temporary Global Security is to be issued with respect
to such series, the terms upon which interests in such temporary Global Security
may be exchanged for interests in a definitive permanent Global Security or for
other definitive Debt Securities of the series and the terms upon which
interests in a definitive permanent Global Security, if any, may be exchanged
for definitive Debt Securities of the series; (xv) any mandatory or optional
sinking fund or analogous provision; (xvi) the period or periods, if any, within
which, and the price or prices in the currency, currencies or currency unit or
units in which, such Debt Securities are payable pursuant to any optional or
mandatory redemption provisions; (xvii) whether the provisions of the Indenture
relating to the defeasance of Debt Securities shall apply to the series of Debt
Securities; (xviii) the terms and conditions, if any, upon which the Debt
Securities of such series may be repayable prior to maturity at the option
(which option may be conditional) of the holder thereof (in which case the
Company will comply with the requirements of Section 14(e) and Rule 14e-1 under
the Exchange Act in connection therewith, if then applicable) and the price or
prices in the currency, currencies or currency unit or units in which such Debt
Securities are payable; (xix) any index used to determine the amount of payments
of principal of (and premium, if any) or interest, if any, on the Debt
Securities; (xx) if the amounts of payments of principal of, premium, if any, or
interest, if any, on the Debt Securities of the series may be, at the election
of the Company or a holder thereof, determined with reference to an index based
on a coin or currency (including a composite currency) other than that in which
the Debt Securities of the series are stated to be payable, the manner in which
such amounts are to be determined; (xxi) the terms for exchange, if any, of the
Debt Securities; (xxii) the extent, if any, to which payments by the Guarantor
under the Debt Guarantees will be net of taxes or other charges imposed or
levied by governmental authorities with the power so to do; (xxiii) any
provisions for payment of additional amounts for taxes and any provision for
redemption, in the event the Company must comply with reporting requirements in
respect of any Debt Security or must pay such additional amounts in respect of
any Debt Security; (xxiv) information with respect to book-entry procedures, if
any; and (xxv) any other terms of the Debt Securities not inconsistent with the
Indenture. All Debt Securities of any one series need not be issued at the same
time, and need not bear interest at the same rate or mature on the same date.
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or foreign currency unit or units or if the
principal of (and premium, if any) or interest, if any, on any series of Debt
Securities is payable in a foreign currency or currencies or foreign currency
unit or units, the restrictions, elections, tax consequences, specific terms and
other information with respect to such issue of Debt Securities and such foreign
currency or currencies or foreign currency unit or units will be set forth in
the Prospectus Supplement relating thereto.
Some of the Debt Securities may be issued as Discounted Securities
(providing that upon redemption or acceleration of the maturity thereof an
amount less than the principal thereof shall become due and payable) to be sold
at a substantial discount below their stated principal amount. Federal income
tax consequences and other special considerations applicable to any Discounted
Securities will be described in the Prospectus Supplement relating thereto.
DEBT GUARANTEES
The Guarantor will fully and unconditionally guarantee the due and punctual
payment of principal, premium, if any, and interest, if any, on the Debt
Securities and the due and punctual payment of mandatory sinking fund payments,
if any, when and as the same shall become due and payable and in the coin or
currency in which the same are payable, whether at the maturity date, by
declaration of acceleration, call for redemption or otherwise.
6
<PAGE> 8
DENOMINATIONS, REGISTRATION AND TRANSFER
The Debt Securities of a series will be issuable as Registered Securities,
Bearer Securities or both. Debt Securities of a series may be issuable in the
form of one or more Global Securities, as described below under "Global
Securities". Unless otherwise provided in the Prospectus Supplement with respect
to a series of Debt Securities, Registered Securities denominated in U.S.
dollars will be issued only in denominations of $1,000 or any integral multiple
thereof and Bearer Securities denominated in U.S. dollars will be issued only in
denominations of $5,000 with coupons attached. Unless otherwise provided in the
Prospectus Supplement with respect to a series of Debt Securities, a Global
Security will be issued in a denomination equal to the aggregate principal
amount of Outstanding Securities of the series represented by such Global
Security. The Prospectus Supplement relating to a series of Debt Securities
denominated in a foreign currency or currency unit will specify the
denominations thereof.
In connection with its sale during the "restricted period" as defined in
Section 1.163-5(c)(2)(i)(D)(7) of the United States Treasury regulations
(generally, the first 40 days after the closing date and, with respect to unsold
allotments, until sold), no Bearer Security shall be mailed or otherwise
delivered to any location in the United States (as defined below under
"Limitations on Issuance of Bearer Securities") and any such Bearer Security
(other than a temporary Global Security in bearer form) may be delivered only if
the person entitled to receive such Bearer Security furnishes written
certification, in the form required by the Indenture, to the effect that such
Bearer Security is not being acquired by or on behalf of a United States person
(as defined under "Limitations on Issuance of Bearer Securities") or resident of
Canada, or, if a beneficial interest in such Bearer Security is being acquired
by or on behalf of a United States person, that such United States person is a
person described in Section 1.163-5(c)(2)(i)(D)(6) of the United States Treasury
regulations or is a financial institution who has purchased such Bearer Security
for resale during the restricted period and who certifies that it has not
acquired such Bearer Security for purposes of resale directly or indirectly to a
United States person or resident of Canada or to a person within the United
States or its possessions or Canada. See "Global Securities" and "Limitations on
Issuance of Bearer Securities".
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations. In addition, if Debt
Securities of any series are issuable as both Registered Securities and as
Bearer Securities, at the option of the holder upon request confirmed in
writing, and subject to the terms of the Indenture, Bearer Securities (with all
unmatured coupons, except as provided below, and all matured coupons in default)
of such series will be exchangeable for Registered Securities of the same series
of any authorized denominations and of a like aggregate principal amount and
tenor. Unless otherwise indicated in an applicable Prospectus Supplement, any
Bearer Security surrendered in exchange for a Registered Security between a
Regular Record Date or a Special Record Date and the relevant date for payment
of interest shall be surrendered without the coupon relating to such date for
payment of interest and interest will not be payable in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the holder of such coupon when due in accordance with the terms
of the Indenture. Except as provided in an applicable Prospectus Supplement,
Bearer Securities will not be issued in exchange for Registered Securities.
Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than a Global Security) may be presented for
registration of transfer (with the form of transfer duly executed), at the
office of the Security Registrar or at the office of any transfer agent
designated by the Company for such purpose with respect to any series of Debt
Securities and referred to in an applicable Prospectus Supplement, without
service charge and upon payment of any taxes and other governmental charges as
described in the Indenture. Such transfer or exchange will be effected upon the
Security Registrar or such transfer agent, as the case may be, being satisfied
with the documents of title and identity of the person making the request. The
Company has initially appointed the Trustee as Security Registrar under the
Indenture. If a Prospectus Supplement refers to any transfer agents (in addition
to the Security Registrar) initially designated by the Company with respect to
any series of Debt Securities, the Company may at any time rescind the
designation of any such transfer agent or approve a change in
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the location through which any such transfer agent acts, except that, if Debt
Securities of a series are issuable only as Registered Securities, the Company
will be required to maintain a transfer agent in each Place of Payment for such
series and, if Debt Securities of a series are issuable as Bearer Securities,
the Company will be required to maintain (in addition to the Security Registrar)
a transfer agent in a Place of Payment for such series located outside the
United States. The Company may at any time designate additional transfer agents
with respect to any series of Debt Securities.
In the event of any redemption in part, the Company shall not be required
to (i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Debt Securities of that series selected
to be redeemed and ending at the close of business on (A) if Debt Securities of
the series are issuable only as Registered Securities, the day of mailing of the
relevant notice of redemption, and (B) if Debt Securities of the series are
issuable as Bearer Securities, the day of the first publication of the relevant
notice of redemption or, if Debt Securities of that series are also issuable as
Registered Securities and there is no publication, the mailing of the relevant
notice of redemption; (ii) register the transfer of or exchange any Registered
Security, or portion thereof, called for redemption, except the unredeemed
portion of any Registered Security being redeemed in part; or (iii) exchange any
Bearer Security called for redemption, except to exchange such Bearer Security
for a Registered Security of that series and like tenor which is immediately
surrendered for redemption.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of (and premium, if any) and interest, if any, on Registered
Securities (other than a Global Security) will be made at the office of such
Paying Agent or Paying Agents as the Company may designate from time to time,
except that at the option of the Company payment of any interest may be made (i)
by check mailed or delivered to the address of the Person entitled thereto as
such address shall appear in the Security Register or (ii) by wire transfer to
an account maintained by the Person entitled thereto as specified in the
Security Register. Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any instalment of interest on Registered Securities will
be made to the Person in whose name such Registered Security is registered at
the close of business on the Regular Record Date for such interest payment.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of (and premium, if any) and interest, if any, on Bearer Securities
will be payable, subject to any applicable laws and regulations, at the offices
of such Paying Agents outside the United States as the Company may designate
from time to time, except that at the option of the Company, payment of any
interest may be made by check or by transfer to an account maintained by the
payee outside the United States. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of interest on Bearer Securities on any Interest
Payment Date will be made only against surrender of the coupon relating to such
Interest Payment Date. No payment of interest on a Bearer Security will be made
unless on the earlier of the date of the first such payment by the Company or
the date of delivery by the Company of a definitive Bearer Security, including a
permanent Global Security, a written certificate, in the form required by the
Indenture, is provided to the Company stating that on such date the Bearer
Security is not owned by or on behalf of a United States person (as defined
under "Limitations on Issuance of Bearer Securities") or resident of Canada or,
if a beneficial interest in such Bearer Security is owned by or on behalf of a
United States person, that such United States person is a person described in
Section 1.163-5(c)(2)(i)(D)(6) of the United States Treasury regulations or is a
financial institution who has purchased such Bearer Security for resale during
the restricted period and who certifies that it has not acquired such Bearer
Security for purposes of resale directly or indirectly to a United States person
or resident of Canada or to a person within the United States or its possessions
or Canada. No payment with respect to any Bearer Security will be made at any
office or agency of the Company in the United States or by check mailed to any
address in the United States or by transfer to an account maintained in the
United States. Payments will not be made in respect of Bearer Securities or
coupons appertaining thereto
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<PAGE> 10
pursuant to presentation to the Company or its designated Paying Agents within
the United States or any other demand for payment to the Company or its
designated Paying Agents within the United States. Notwithstanding the
foregoing, payment of principal of (and premium, if any) and interest, if any,
on Bearer Securities denominated and payable in U.S. dollars will be made at the
office of the Company's Paying Agent in the United States if, and only if,
payment of the full amount thereof in U.S. dollars at all offices or agencies
outside the United States is illegal or effectively precluded by exchange
controls or other similar restrictions.
Unless otherwise indicated in an applicable Prospectus Supplement, the
principal office of the Trustee in The City of New York will be designated as
the Company's sole Paying Agent for payments with respect to Debt Securities
which are issuable solely as Registered Securities. Any Paying Agents outside
the United States and any other Paying Agents in the United States initially
designated by the Company for the Debt Securities will be named in the related
Prospectus Supplement. The Company may at any time designate additional Paying
Agents or rescind the designation of any Paying Agents or approve a change in
the office through which any Paying Agent acts, except that, if Debt Securities
of a series are issuable only as Registered Securities, the Company will be
required to maintain a Paying Agent in each Place of Payment for such series,
and if the Debt Securities of a series may be issuable as Bearer Securities, the
Company will be required to maintain (i) a Paying Agent in a Place of Payment
for that series in the United States for payments with respect to any Registered
Securities of the series (and for payments with respect to Bearer Securities of
the series in the circumstances described above, but not otherwise), (ii) a
Paying Agent in a Place of Payment located outside the United States where Debt
Securities of such series and any coupons appertaining thereto may be presented
and surrendered for payment; provided that if the Debt Securities of such series
are listed on the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, the Company
will maintain a Paying Agent in Luxembourg or any other required city located
outside the United States, as the case may be, for the Debt Securities of such
series, and (iii) a Paying Agent in a Place of Payment located outside the
United States where (subject to applicable laws) Registered Securities of such
series may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company may be served.
All moneys paid by the Company to a Paying Agent for the payment of
principal of (and premium, if any) and interest, if any, on any Debt Security
which remains unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will (subject to applicable laws) be
repaid to the Company and the holder of such Debt Security or any coupon will
thereafter look only to the Company for payment thereof.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a Depositary identified in the Prospectus Supplement relating to such
series. Global Securities may be issued in either registered or bearer form and
in either temporary or permanent form. Permanent Global Securities will be
issued in definitive form. Unless and until it is exchanged for Debt Securities
in definitive form, including a permanent Global Security, a temporary Global
Security in registered form may not be transferred except as a whole by the
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor of such
Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will apply to
all depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit the accounts of persons held with it with
the respective principal amounts of the Debt Securities represented by such
Global Security. Such accounts shall be designated by the underwriters or agents
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with respect to such Debt Securities or by the Company if such Debt Securities
are offered and sold directly by the Company. Ownership of beneficial interests
in a Global Security will be limited to persons that have accounts with the
Depositary for such Global Security or its nominee ("participants") or persons
that may hold interests through participants. Ownership of beneficial interests
in such Global Security will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the Depositary or its
nominee (with respect to interests of participants) for such Global Security and
on the records of participants (with respect to interests of persons other than
participants). The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have Debt
Securities of the series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of Debt
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture governing such Debt Securities.
Any payments of principal, premium or interest on Debt Securities
registered in the name of a Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of the
Global Security representing such Debt Securities. Neither the Company, the
Trustee for such Debt Securities, any Paying Agent nor the Security Registrar
for such Debt Securities will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the Global Security for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest, will
credit immediately participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of the Global
Security for such Debt Securities as shown on the records of such Depositary or
its nominee subject to the furnishing of the certificate described above under
"Payment and Paying Agents" in the case of a Global Security in which interests
are exchangeable for Bearer Securities. The Company also expects that payments
by participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name", and will be the
responsibility of such participants. Receipt by owners of beneficial interests
in a temporary Global Security of payments in respect of such temporary Global
Security will be subject, in the case of a Global Security in which interests
are exchangeable for Bearer Securities, to the furnishing of the certificate
described above under "Payment and Paying Agents".
If a Depositary for a series of Debt Securities is at any time unwilling or
unable to continue as depositary or if at any time a Depositary for a series of
Debt Securities ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, and in each case a successor depositary is not
appointed by the Company within 90 days, the Company will issue Debt Securities
of such series in definitive form in exchange for the Global Security
representing such series of Debt Securities. In addition, the Company may at any
time and in its sole discretion determine not to have the Registered Securities
of a series represented by a Global Security and, in such event, will issue
Registered Securities of such series in definitive form in exchange for the
Global Security representing such series of Registered Securities. Further, if
the Company so specifies with respect to the Debt Securities of a series, an
owner of a beneficial interest in a Global Security representing Debt Securities
of such series may, on terms acceptable to the Company and the Depositary for
such Global Security, receive Debt Securities of such series in definitive form.
In any such instance, an owner of a beneficial interest in a Global Security
will be entitled to physical delivery in definitive form of Debt Securities of
the
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series represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name (if
the Debt Securities of such series are issuable as Registered Securities). Debt
Securities of such series so issued in definitive form will be issued (a) as
Registered Securities in denominations, unless otherwise specified by the
Company, of $1,000 and integral multiples thereof if the Debt Securities of such
series are issuable as Registered Securities, (b) as Bearer Securities in the
denomination, unless otherwise specified by the Company, of $5,000 if the Debt
Securities of such series are issuable as Bearer Securities or (c) as either
Registered or Bearer Securities, if the Debt Securities of such series are
issuable in either form. See, however, "Limitations on Issuance of Bearer
Securities" below for a description of certain restrictions on the issuance of a
Bearer Security in definitive form in exchange for an interest in a temporary
Global Security.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities (including any Global Securities issued in bearer form) may not be
offered or sold during the restricted period (as defined under "Denominations,
Registration and Transfer") or delivered in connection with their sale during
the restricted period in the United States or its possessions or to United
States persons (each as defined below) except to the extent permitted under
Section 1.163-5(c)(2)(i)(D) of the United States Treasury regulations (the "D
Rules"), and any distributor (as defined in Section 1.163-5(c)(2)(i)(D)(4) of
the United States Treasury regulations) participating in the offering of Debt
Securities must agree that they will not offer for sale or resale, or sell,
Bearer Securities in the United States or its possessions or to United States
persons, except to the extent permitted under the D Rules, nor deliver Bearer
Securities within the United States.
Bearer Securities and any coupons appertaining thereto will bear a legend
substantially to the following effect: "Any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code". Under Sections 165(j) and 1287(a) of the United States
Internal Revenue Code of 1986, as amended, and the regulations thereunder (the
"Code"), holders that are United States persons (as defined below), with certain
exceptions, will not be entitled to deduct any loss on Bearer Securities and
must treat as ordinary income any gain realized on the sale or other disposition
(including the receipt of principal) of Bearer Securities.
As used herein, "United States person" means a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in or under the laws of the United States, an estate the income of which is
subject to United States federal income taxation regardless of its source and a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust.
"United States" means the United States of America (including the States and the
District of Columbia) and "possessions" of the United States include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
TAX REDEMPTION; SPECIAL TAX REDEMPTION
If and to the extent specified in an applicable Prospectus Supplement, the
Debt Securities of a series will be subject to redemption at any time, as a
whole but not in part, at a redemption price equal to the principal amount
thereof together with accrued and unpaid interest to the date fixed for
redemption, upon publication of a notice as described below, if (x) the Company
determined that (a) as a result of any change in or amendment to the laws (or
any regulations or rulings promulgated thereunder) of the United States or of
any political subdivision or taxing authority thereof or therein affecting
taxation, or any change in official position regarding application or
interpretation of such laws, regulations or rulings (including a holding by a
court of competent jurisdiction), which change or amendment is announced or
becomes effective on or after a date specified in the applicable Prospectus
Supplement, the Company has or will become obligated to pay on the next
succeeding Interest Payment Date additional amounts with respect to any Debt
Security of such series as described below under "Payment of Additional Amounts"
or
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(b) on or after a date specified in the applicable Prospectus Supplement, any
action has been taken by any taxing authority of, or any decision has been
rendered in a court of competent jurisdiction in, the United States or any
political subdivision or taxing authority thereof or therein, including any of
those actions specified in (a) above, whether or not such action was taken or
decision was rendered with respect to the Company, or any change, amendment,
application or interpretation shall be officially proposed, which, in any such
case, in the written opinion to the Company of independent legal counsel of
recognized standing, will result in a material probability that the Company will
become obligated to pay additional amounts with respect to any Debt Security of
such series on the next succeeding Interest Payment Date, and (y) in any such
case the Company in its business judgment determines that such obligation cannot
be avoided by the use of reasonable measures available to the Company; provided
however, that (1) no such notice of redemption may be given earlier than 90 days
prior to the earliest date on which the Company would be obligated to pay such
additional amounts were a payment in respect of the Debt Securities then due,
and (2) at the time such notice of redemption is given, such obligation to pay
such additional amounts remains in effect.
If the Company shall determine that any payment made outside the United
States by the Company or any Paying Agent of principal or interest due in
respect of any Bearer Security (an "Affected Security") or any coupon
appertaining thereto would, under any present or future laws or regulations of
the United States, be subject to any certification, information or other
reporting requirement of any kind, the effect of which requirement is the
disclosure to the Company, any Paying Agent or any governmental authority of the
nationality, residence or identity (as distinguished from, for example, status
as a United States Alien (as defined below)) of a beneficial owner of such
Affected Security of such series or coupon who is a United States Alien (other
than such a requirement which (a) would not be applicable to a payment made (i)
directly to the beneficial owner or (ii) to a custodian, nominee or other agent
of the beneficial owner, (b) can be satisfied by such custodian, nominee or
other agent certifying to the effect that such beneficial owner is a United
States Alien, provided that, in each case referred to in items (a)(ii) and (b),
payment by such custodian, nominee or other agent to such beneficial owner is
not otherwise subject to any such requirement (other than a requirement which is
imposed on a custodian, nominee or other agent described in (d) of this
sentence), (c) would not be applicable to a payment made by at least one other
Paying Agent of the Company or (d) is applicable to a payment to a custodian,
nominee or other agent of the beneficial owner who is a United States person, a
controlled foreign corporation for United States tax purposes, a foreign person
50% or more of whose gross income for the three-year period ending with the
close of its taxable year preceding the year of payment is effectively connected
with a United States trade or business, or is otherwise related to the United
States), the Company at its election shall either (x) redeem the Affected
Securities of such series, as a whole, at a redemption price equal to the
principal amount thereof, together with accrued and unpaid interest to the date
fixed for redemption, or (y) if the conditions of the next succeeding paragraph
are satisfied, pay the additional amounts specified in such paragraph. The
Company shall make such determination and election as soon as practicable and
give prompt notice thereof (the "Determination Notice") in the manner described
under "Notices" below, stating the effective date of such certification,
information or reporting requirements, whether the Company has elected to redeem
the Affected Securities of such series, or to pay the additional amounts
specified in the next succeeding paragraph, and (if applicable) the last date by
which the redemption of the Affected Securities of such series must take place,
as provided in the next succeeding sentence. If the Company elects to redeem the
Affected Securities of such series, such redemption shall take place on such
date, not later than one year after the publication of the Determination Notice,
as the Company shall elect by notice to the Trustee given not less than 45 or
more than 75 days before the date fixed for redemption. Notice of such
redemption of the Affected Securities of such series will be given to the
holders thereof not less than 30 nor more than 60 days prior to the date fixed
for redemption. Notwithstanding the foregoing, the Company shall not so redeem
the Affected Securities of such series if the Company shall subsequently
determine, not less than 30 days prior to the date fixed for redemption, that
subsequent payments would not be subject to any such requirement, in which case
the Company shall give prompt notice of such determination in the manner
described under "Notices" below and any earlier redemption notice shall be
revoked and of no
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further effect. The right of the holders of Affected Securities called for
redemption to exchange such Affected Securities for Registered Securities (which
Registered Securities will remain Outstanding following such redemption) will
terminate on the 16th day prior to the date fixed for redemption, and no further
exchanges of Affected Securities for Registered Securities shall be permitted
unless the Company shall have made the subsequent determination and given the
notice referred to in the preceding sentence.
If and so long as the certification, information or other reporting
requirements referred to in the preceding paragraph would be fully satisfied by
payment of a withholding tax, backup withholding tax or similar charge, the
Company may elect to pay such additional amounts as may be necessary so that
every net payment made outside the United States following the effective date of
such requirements by the Company or any Paying Agent of principal (or premium,
if any) or interest, if any, due in respect of any Affected Securities of such
series or any coupon to a holder who certifies that the beneficial owner is a
United States Alien (but without any requirement that the nationality, residence
or identity of such beneficial owner be disclosed to the Company, any Paying
Agent or any governmental authority), after deduction or withholding for or on
account of such withholding tax, backup withholding tax or similar charge (other
than a withholding tax, backup withholding tax or similar charge which (a) is
the result of a certification, information or other reporting requirement
described in the second parenthetical clause of the first sentence of the
preceding paragraph or (b) is imposed as a result of presentation of such
Affected Security or coupon for payment more than 10 days after the date on
which such payment becomes due and payable or on which payment thereof is duly
provided for, whichever occurs later), will not be less than the amount provided
for in such Affected Security or coupon to be then due and payable. In the event
the Company elects to pay such additional amounts and as long as payments in
respect of Affected Securities of the appropriate series are subject to any
certification, information or other reporting requirement described in the
preceding paragraph, the Company will have the right, at its sole option, at any
time, to redeem the Affected Securities of such series as a whole, but not in
part, at a redemption price equal to the principal amount thereof, together with
accrued and unpaid interest to the date fixed for redemption. If the Company has
made the determination described in the preceding paragraph with respect to
certification, information or other reporting requirements applicable only to
interest and subsequently makes a determination in the manner and of the nature
referred to in such preceding paragraph with respect to such requirements
applicable to principal, the Company will redeem the Affected Securities of such
series in the manner and on the terms described in the preceding paragraph
unless the Company elects to have the provisions of this paragraph apply rather
than the provisions of the immediately preceding paragraph. If in such
circumstances the Affected Securities of such series are to be redeemed, the
Company shall have no obligation to pay additional amounts pursuant to this
paragraph with respect to principal (or premium, if any) or interest, if any,
accrued and unpaid after the date of the notice of such determination indicating
such redemption, but will be obligated to pay such additional amounts with
respect to interest accrued and unpaid to the date of such determination. If the
Company elects to pay additional amounts pursuant to this paragraph and the
condition specified in the first sentence of this paragraph should no longer be
satisfied, then the Company shall promptly redeem such Affected Securities in
whole but not in part.
In the event that the Company elects or is required to redeem the Debt
Securities of such series pursuant to the provisions set forth in the preceding
three paragraphs, the Company shall deliver to the Trustee a certificate, signed
by an authorized officer, stating that the Company is entitled to redeem the
Debt Securities of such series pursuant to their terms.
Notice of intention to redeem the Debt Securities of such series and all
other notices in accordance with the provisions of the preceding paragraphs will
be given in accordance with "Notices" below. In the case of a redemption, notice
will be given once not more than 60 nor less than 30 days prior to the date
fixed for redemption and will specify the date fixed for redemption.
The term "United States Alien" means any person who, for United States
federal income tax purposes, is a foreign corporation, a nonresident alien
individual, a nonresident alien fiduciary of a foreign estate or trust, or a
foreign partnership one or more of the members of which is, for United States
federal
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income tax purposes, a foreign corporation, a nonresident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.
PAYMENT OF ADDITIONAL AMOUNTS
If and to the extent specified in an applicable Prospectus Supplement, the
Company will, subject to the exceptions and limitation set forth below, pay to
the holder of any Debt Security or coupon who is a United States Alien such
additional amounts as may be necessary in order that every net payment on such
Debt Security or coupon, after withholding by the Company or any of its Paying
Agents for or on account of any present or future tax, assessment or other
governmental charge imposed upon or as a result of such payment by the United
States (or any political subdivision or taxing authority thereof or therein)
will not be less than the amount provided for in such Debt Security or in such
coupon to be then due and payable. However, the Company will not be required to
make any payment of additional amounts for or on account of:
(1) any tax, assessment or other governmental charge that would not
have been so imposed but for (i) the existence of any present or former
connection between such holder (or between a fiduciary, settlor or
beneficiary of, or a person holding a power over, such holder, if such
holder is an estate or trust, or a member or shareholder of such holder, if
such holder is a partnership or corporation) and the United States,
including, without limitation, such holder (or such fiduciary, settlor,
beneficiary, person holding a power, member or shareholder) being or having
been a citizen, resident or treated as a resident thereof or being or
having been engaged in a trade or business or present therein or having or
having had a permanent establishment therein, or (ii) such holder's present
or former status as a personal holding company, foreign personal holding
company, controlled foreign corporation or passive foreign investment
company with respect to the United States or as a corporation that
accumulates earnings to avoid United States federal income tax;
(2) any tax, assessment or other governmental charge which would not
have been so imposed but for the presentation by the holder of such Debt
Security or coupon for payment on a date more than 10 days after the date
on which such payment became due and payable or the date on which payment
thereof is duly provided for, whichever occurs later;
(3) any estate, inheritance, gift, sales, transfer, personal property
tax or any similar tax, assessment or other governmental charge;
(4) any tax, assessment or other governmental charge that is payable
otherwise than by withholding from a payment on a Debt Security or coupon;
(5) any tax, assessment or other governmental charge imposed on a
holder of a Debt Security or coupon that actually or constructively owns
10% or more of the total combined voting power of all classes of stock of
the Company entitled to vote within the meaning of Section 871(h)(3) of the
Code or that is a controlled foreign corporation related to the Company
through stock ownership;
(6) any tax, assessment or other governmental charge imposed as a
result of the failure to comply with applicable certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connection with the United States of the holder or
beneficial owner of a Debt Security or coupon, if such compliance is
required by statute or by regulation of the United States as a precondition
to relief or exemption from such tax, assessment or other governmental
charge;
(7) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment on a Debt Security or coupon
if such payment can be made without such withholding by at least one other
Paying Agent;
(8) any tax, assessment or other governmental charge imposed with
respect to payments on any Registered Security by reason of the failure of
the holder to fulfill the statement requirement of Sections 871(h) or
881(c) of the Code; or
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(9) any combination of items (1), (2), (3), (4), (5), (6), (7) and
(8);
nor will additional amounts be paid with respect to any payment on a Debt
Security or coupon to a holder who is a fiduciary or partnership or other than
the sole beneficial owner of such payment to the extent such payment would be
required by the laws of the United States (or any political subdivision thereof)
to be included in the income for federal income tax purposes of a beneficiary or
settlor with respect to such fiduciary or a member of such partnership or a
beneficial owner who would not have been entitled to payment of the additional
amounts had such beneficiary, settlor, member or beneficial owner been the
holder of such Debt Security or coupon.
EVENTS OF DEFAULT
The following are defined in the Indenture as Events of Default with
respect to each series of Debt Securities: (a) failure to pay principal or
premium, if any (or to make a mandatory sinking fund payment, if any), when due;
(b) failure to pay any interest within 30 days of the date when due; (c) failure
to perform any other covenant of the Company or the Guarantor contained in the
Indenture (other than a covenant included in the Indenture solely for the
benefit of series of Debt Securities other than that series) for a period of 90
days after written notice thereof is given to the Company and the Guarantor by
the Trustee, or to the Company, the Guarantor and the Trustee by the holders of
at least 25% in aggregate principal amount of the outstanding principal amount
of a series of Debt Securities; and (d) certain events of bankruptcy, insolvency
or reorganization. Additional Events of Default may be established for
particular series of Debt Securities.
If an Event of Default occurs and is continuing with respect to any series
of Debt Securities, the Trustee or the holders of at least 25% in aggregate
principal amount of the outstanding Debt Securities of such series may, subject
to any subordination provisions thereof, declare the entire principal amount (or
such lesser amount as may be provided with respect to Discounted Securities) of
all Debt Securities of such series to be due and payable immediately. However,
at any time after a declaration of acceleration with respect to any series of
Debt Securities has been made, but before a judgment or decree based on such
declaration has been obtained, the holders of a majority in principal amount of
the outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration. Holders of Debt Securities may not enforce
the Indenture, the Debt Securities or the Debt Guarantees, except as provided in
the Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture, the Debt Securities or the Debt Guarantees. Subject to
certain limitations, holders of a majority in principal amount of the
outstanding Debt Securities of a particular series may direct the Trustee in its
exercise of any trust or power. The Company and the Guarantor each will furnish
the Trustee with an annual certificate of certain of its officers certifying, to
the best of its knowledge, whether the Company or the Guarantor, as the case may
be, is in default and specifying the nature and status of any such default. The
Trustee may withhold from holders of Debt Securities notice of any continuing
default (except a default in payment) if it determines in good faith that the
withholding of such notice is in the interest of such holders.
A judgment for money damages by courts in the United States, including a
money judgment based on an obligation expressed in a foreign currency, will
ordinarily be rendered only in U.S. dollars. New York statutory law provides
that a court shall render a judgment or decree in the foreign currency of the
underlying obligation and that the judgment or decree shall be converted into
U.S. dollars at the exchange rate prevailing on the date of entry of the
judgment or decree.
If, for the purpose of obtaining a judgment in any court with respect to
any obligation of the Company or the Guarantor under any Debt Security or any
related coupon or any Debt Guarantee, as the case may be, it becomes necessary
to convert into any other currency or currency unit any amount in the currency
or currency unit due under such Debt Security or coupon or such Debt Guarantee,
as the case may be, the conversion will be made by the Currency Determination
Agent appointed pursuant to the Indenture with respect to such Debt Security at
the Market Exchange Rate in effect on the date of entry of the judgment (the
"Judgment Date"). If pursuant to any such judgment, conversion is made on a date
(the
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"Substitute Date") other than the Judgment Date and a change has occurred
between the Market Exchange Rate in effect on the Judgment Date and the Market
Exchange Rate in effect on the Substitute Date, the Indenture requires the
Company or the Guarantor, as the case may be, to pay such additional amounts (if
any) as may be necessary to ensure that the amount paid is equal to the amount
in such other currency or currency unit which, when converted at the Market
Exchange Rate in effect on the Judgment Date, is the amount then due under such
Debt Security or coupon or such Debt Guarantee, as the case may be. Neither the
Company nor the Guarantor will, however, be required to pay more in the currency
or currency unit due under such Debt Security or coupon or such Debt Guarantee
at the Market Exchange Rate in effect when payment is made than the amount of
currency or currency unit stated to be due under such Debt Security or coupon or
such Debt Guarantee, and the Company or the Guarantor, as the case may be, will
be entitled to withhold (or be reimbursed for, as the case may be) any excess of
the amount actually realized upon any such conversion over the amount due and
payable on the date of payment.
Directors, officers, employees or shareholders of the Company or the
Guarantor will not have any liability for any obligations of the Company or the
Guarantor under the Debt Securities, the Debt Guarantees or the Indenture or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each holder of Debt Securities, by accepting a Debt Security, waives
and releases all such liability. The waiver and the release are part of the
consideration for the issue of the Debt Securities.
The occurrence of an Event of Default under the Indenture may cause the
occurrence of a default under the terms of other indebtedness of the Company or
the Guarantor.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Neither the Company nor the Guarantor may consolidate or amalgamate with or
merge into any other corporation, or convey, transfer or lease its assets
substantially as an entirety to, any person, unless (a) the corporation formed
by or continuing from such consolidation or amalgamation or into which the
Company or the Guarantor is merged or the person which acquires or leases the
assets of the Company or the Guarantor substantially as an entirety (i) is
organized and existing under the laws of any United States jurisdiction or, in
the case of the Guarantor only, under the laws of any Canadian jurisdiction, and
(ii) assumes the Company's obligations on the Debt Securities and under the
Indenture or the Guarantor's obligations under the Debt Guarantees and under the
Indenture, as the case may be, (b) after giving effect to such transaction no
Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be continuing, and (c)
certain other conditions are met, provided that the Company or the Guarantor may
consolidate or amalgamate with or merge into a direct or indirect majority-owned
subsidiary of the Company or the Guarantor, as the case may be, if the Company
or the Guarantor, as the case may be, is the surviving corporation and the
condition set forth in clause (b) above is met.
SATISFACTION AND DISCHARGE
Except as may otherwise be set forth in the Prospectus Supplement relating
to a series of Debt Securities, the Indenture provides that the Company shall be
discharged from its obligations under the Debt Securities of such series (with
certain exceptions) at any time prior to the Stated Maturity or redemption of
the Debt Securities of such series when (a) the Company has irrevocably
deposited with the Trustee, in trust, (i) sufficient funds in the currency,
currencies, currency unit or units in which the Debt Securities of such series
are payable to pay the principal of (and premium, if any) and interest, if any,
to Stated Maturity (or redemption) on, the Debt Securities of such series, or
(ii) such amount of direct obligations of, or obligations the principal of (and
premium, if any) and interest, if any, on which are fully guaranteed by, the
government which issued the currency, and are payable in the currency, in which
the Debt Securities of such series are payable, and which are not subject to
prepayment, redemption or call, as will, together with the predetermined and
certain income to accrue thereon without consideration of any reinvestment
thereof, be sufficient to pay when due the principal of (and premium, if any)
and interest, if any, to Stated Maturity (or redemption) on, the Debt Securities
of such series, or,
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(iii) such amount equal to the amount referred to in clause (i) or (ii) in any
combination of currency or currency unit or government obligations, (b) the
Company has paid all other sums payable with respect to the Debt Securities of
such series, (c) unless otherwise set forth in such Prospectus Supplement, the
Company has delivered to the Trustee an opinion of counsel to the effect that
(i) the Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of the Indenture there has been
a change in applicable United States federal income tax law, in either case to
the effect that, and based upon which such opinion of counsel shall confirm
that, the holders of Debt Securities of such series will not recognize income,
gain or loss for United States federal income tax purposes as a result of such
discharge and will be subject to United States federal income tax on the same
amount and in the same manner and at the same time as would have been the case
if such discharge had not occurred and (d) certain other conditions are met.
Upon such discharge, the holders of the Debt Securities of such series shall no
longer be entitled to the benefits of the Indenture, except for certain rights,
including registration of transfer and exchange of the Debt Securities of such
series and replacement of mutilated, destroyed, lost or stolen Debt Securities,
and shall look only to such deposited funds or obligations.
DEFEASANCE OF CERTAIN OBLIGATIONS
If the terms of the Debt Securities of any series so provide, the Company
and the Guarantor may omit to comply with certain designated covenants in the
Indenture and any such omission with respect to such covenants shall not be an
Event of Default with respect to the Debt Securities of such series, if (a) the
Company deposits or causes to be deposited with the Trustee for the Debt
Securities of such series in trust an amount of (i) cash in the currency or
currency unit in which the Debt Securities of such series are payable (except as
otherwise specified with respect to the Debt Securities of such series), (ii)
government obligations of the type referred to under "Satisfaction and
Discharge" or (iii) a combination of such cash and government obligations, which
amount, in the case of (ii) or (iii), together with the predetermined and
certain income to accrue on any such government obligations when due (without
the consideration of any reinvestment thereof), is sufficient to pay and
discharge when due the entire indebtedness on all such outstanding Debt
Securities of such series and any related coupons for unpaid principal (and
premium, if any) and interest, if any, to the Stated Maturity or any Redemption
Date, as the case may be and (b) certain other conditions are met. The
obligations of the Company and the Guarantor under the Indenture with respect to
the Debt Securities of such series and the related Debt Guarantees, as the case
may be, other than with respect to the covenants referred to above, shall remain
in full force and effect.
MEETINGS, MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company,
the Guarantor and the Trustee with the consent of the holders of more than 50%
in principal amount of the outstanding Debt Securities of each series issued
under the Indenture affected by such modification or amendment; provided,
however, that no such modification or amendment 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 instalment of principal of or interest, if
any, on any Debt Security, (b) reduce the principal amount of or interest, if
any, on any Debt Security, or any premium payable upon the redemption thereof,
(c) reduce the amount of principal of a Discounted Security payable upon
acceleration of the Maturity thereof, (d) change the Place of Payment, (e)
change the currency or currency unit of payment of principal of (or premium, if
any) or interest, if any, on any Debt Security, (f) impair the right to
institute suit for the enforcement of any payment on or with respect to any Debt
Security on or after the Stated Maturity thereof (or, in the case of redemption,
on or after the Redemption Date), (g) reduce the percentage in principal amount
of outstanding Debt Securities of any series, the consent of the holders of
which is required for modification or amendment of the applicable Indenture or
for waiver of compliance with certain provisions of the Indenture or for waiver
of certain defaults or (h) modify or affect in any manner adverse to a holder of
any of the Debt Securities the terms and conditions of the Debt Guarantees.
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The holders of not less than a majority in principal amount of the
outstanding Debt Securities of any series may on behalf of the holders of all
Debt Securities of that series waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the Indenture.
The holders of not less than a majority in principal amount of the outstanding
Debt Securities of any series may on behalf of the holders of all Debt
Securities of that series and any coupons appertaining thereto waive any past
default under the Indenture with respect to that series, except a default in the
payment of the principal of (or premium, if any) and interest, if any, on any
Debt Security of that series or in respect of a provision which under the
Indenture cannot be modified or amended without the consent of the holder of
each outstanding Debt Security of that series affected. The Indenture, the Debt
Securities or the Debt Guarantees may be amended or supplemented, without the
consent of any holder of Debt Securities, to cure any ambiguity or inconsistency
or to make any change that does not have a materially adverse effect on the
rights of any holder of Debt Securities.
The Indenture contains provisions for convening meetings of the holders of
Debt Securities of a series if Debt Securities of that series are issuable as
Bearer Securities. A meeting may be called at any time by the Trustee, and also,
upon request, by the Company or the holders of at least 10% in principal amount
of the outstanding Debt Securities of such series, in any such case upon notice
given in accordance with "Notices" below. Any resolution passed or decision
taken at any meeting of holders of Debt Securities of any series duly held in
accordance with the Indenture will be binding on all holders of Debt Securities
of that series and the related coupons. The quorum at any meeting called to
adopt a resolution, and at any reconvened meeting, will be persons holding or
representing a majority in principal amount of the outstanding Debt Securities
of a series.
NOTICES
Except as may otherwise be set forth in an applicable Prospectus Supplement
relating to a series of Debt Securities, notices to holders of Bearer Securities
will be given by publication in a daily newspaper in the English language of
general circulation in The City of New York and in London, and so long as such
Bearer Securities are listed on the Luxembourg Stock Exchange and the Luxembourg
Stock Exchange shall so require, in a daily newspaper of general circulation in
Luxembourg or, if not practical, elsewhere in Western Europe. Such publication
is expected to be made in The Wall Street Journal, the Financial Times and the
Luxemburger Wort. Notices to holders of Registered Securities will be given by
mail to the addresses of such holders as they appear in the Security Register.
TITLE
Title to any Global Security and Bearer Securities and any coupons
appertaining thereto will pass by delivery. The Company, the Trustee and any
agent of the Company or the Trustee may treat the bearer of any Bearer Security
and the bearer of any coupon and the registered owner of any Registered Security
as the absolute owner thereof (whether or not such Debt Security or coupon shall
be overdue and notwithstanding any notice to the contrary) for the purpose of
making payment and for all other purposes.
GOVERNING LAW
The Debt Securities and the Indenture will be governed by and construed in
accordance with the laws of the State of New York.
CONSENT TO SERVICE
Pursuant to the Indenture, the Guarantor has irrevocably designated The
Bank of New York as its authorized agent for service of process in any legal
action or proceeding arising out of or relating to the Indenture, the Debt
Securities or the Debt Guarantees brought in any federal or state court in New
York City and has irrevocably submitted to the jurisdiction of such courts. Such
designation does not
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constitute consent to service of process in any legal action or proceeding
predicated upon the Securities Act.
TRUSTEE
The Trustee acts as depository for funds of, makes loans (which may rank
senior to certain series of Debt Securities) to, and performs other services
for, Seagram in the ordinary course of business. The Trustee also acts as
trustee for the Guarantor's 6.875% Debentures due September 1, 2023, 8.35%
Debentures due January 15, 2022, 8.35% Debentures due November 15, 2006, 6.50%
Debentures due April 1, 2003 and Medium-Term Notes, Series A, that may be issued
from time to time, and as trustee for the following securities issued by the
Company: 9% Guaranteed Debentures due August 15, 2021, 9.65% Guaranteed
Debentures due August 15, 2018, 8 7/8% Guaranteed Debentures due September 15,
2011, 7% Guaranteed Debentures due April 15, 2008, 8 3/8% Guaranteed Debentures
due February 15, 2007 and Guaranteed Medium-Term Notes, Series A, that may be
issued from time to time.
DESCRIPTION OF PREFERRED STOCK
The following brief summary of the Company's preferred stock does not
purport to be complete and is qualified in its entirety by reference to all the
provisions of the Company's Restated Articles of Incorporation and its By-laws.
The particular terms and provisions of Class A Preferred Stock offered by a
Prospectus Supplement, and the extent to which the general terms and provisions
described below may apply thereto, will be described in the Prospectus
Supplement relating to such Class A Preferred Stock.
GENERAL
The authorized capital of the Company currently consists of 250,000 shares
of common stock of the par value of $1 per share ("Common Stock"), of which
250,000 shares of Common Stock were outstanding at June 30, 1998, 129,151 1/2
shares of 6% Non-Cumulative Preferred Stock of the par value of $100 per share
("6% Preferred Stock"), of which 120,694 shares of 6% Preferred Stock were
outstanding at June 30, 1998, and 1,000,000 shares of Class A Preferred Stock,
none of which was outstanding at June 30, 1998. All of the outstanding shares of
Common Stock and 6% Preferred Stock are owned by Seagram Enterprises, Inc., a
wholly owned subsidiary of the Guarantor.
CLASS A PREFERRED STOCK
Class A Preferred Stock may be issuable in one or more series, with the
Board of Directors of the Company (the "Board") vested with authority to
determine, without further shareholder approval, the designations and the
relative preferences, limitations, voting rights, if any, and other rights of
the Class A Preferred Stock and of each series of Class A Preferred Stock.
The specific terms of a particular series of Class A Preferred Stock
offered hereby will be described in a Prospectus Supplement relating to such
series and will include the following: (i) the designation of such series; (ii)
the number of shares initially constituting such series; (iii) the increase, and
the decrease to a number not less than the number of the outstanding shares of
such series, of the number of shares constituting such series theretofore fixed;
(iv) the rate or rates and the times at which dividends on the shares of such
series shall be paid and whether or not such dividends shall be cumulative and,
if such dividends shall be cumulative, the date or dates from and after which
they shall accumulate; (v) whether or not the shares of such series shall be
redeemable and, if such shares shall be redeemable, the terms and conditions of
such redemption, including but not limited to the date or dates upon or after
which such shares shall be redeemable and the amount per share which shall be
payable upon such redemption, which amount may vary under different conditions
and at different redemption dates; (vi) the amount payable on the shares of such
series in the event of the liquidation, dissolution, or winding up of the
Company, whether voluntary or involuntary; (vii) whether or not the shares of
such series shall have voting rights, in addition to the voting rights provided
by law and, if such shares shall have such voting rights, the terms and
conditions thereof, including but not limited to the right of the holders of
such
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shares to vote as a separate class either alone or with the holders of shares of
one or more other series or class of stock and the right to have more than one
vote per share; (viii) whether or not a sinking fund shall be provided for the
redemption of the shares of such series, and if such a sinking fund shall be
provided, the terms and conditions thereof; (ix) whether or not the shares of
such series shall be exchangeable for shares of stock of any other class or any
other series of this class or any other securities or series and, if so, the
terms and conditions of exchange, including but not limited to any provision for
the adjustment of the rate or rates or the price or prices of exchange; (x)
whether or not the shares of such series shall have pre-emptive rights to
subscribe to or purchase any shares of Common Stock, 6% Preferred Stock, Class A
Preferred Stock or other securities of the Company; (xi) any other relative
preferences, limitations, or rights; and (xii) a discussion of certain United
States federal and Canadian income tax considerations, if any, applicable to
shares of the series.
GUARANTEES
The Guarantor will fully and unconditionally guarantee the due and punctual
payment, as and when declared, of (i) accumulated and unpaid dividends on
outstanding shares of Class A Preferred Stock, (ii) any amounts due on
liquidation or redemption of outstanding shares of Class A Preferred Stock and
(iii) upon a voluntary or involuntary dissolution, liquidation or winding up of
the Company, the liquidation preference payable in respect of outstanding shares
of Class A Preferred Stock.
6% PREFERRED STOCK
The holders of 6% Preferred Stock are entitled to receive dividends out of
the surplus earnings of the Company, or out of its net profits or surplus paid
in cash, when and as declared by the Board, at a rate of 6% per annum from the
date of issue, payable annually from the 31st day of July in each year. The
holders of 6% Preferred Stock are entitled to no other or further dividends.
Such dividends are noncumulative, so that if any dividends upon outstanding
shares of 6% Preferred Stock are not declared for any dividend period, holders
of such 6% Preferred Stock have no right to the future payment of a dividend for
such dividend period, and dividends may be declared or paid upon Common Stock
and Class A Preferred Stock in subsequent dividend periods without paying the
holders of 6% Preferred Stock any dividends for such previous dividend period in
which dividends were not declared or paid. Subject to the terms of any Class A
Preferred Stock then outstanding, dividends may be declared and paid on Common
Stock at the same time as the annual dividend is declared and paid on 6%
Preferred Stock. Subject to the terms of any Class A Preferred Stock then
outstanding, dividends may be declared and paid at any other time on Common
Stock if simultaneously therewith a dividend at the rate of 6% per annum from
the 31st day of July next preceding such declaration is declared and paid upon
the 6% Preferred Stock then outstanding.
The 6% Preferred Stock may be redeemed at the option of the Board, in whole
or in part, on ten days' written notice to the holders thereof. The redemption
price of each share of 6% Preferred Stock to be redeemed shall be $105, plus any
and all dividends declared by the Board remaining unpaid on such date. From and
after the date fixed as the date of redemption (unless default is made by the
Company in providing funds for payment of the redemption price), all rights of
the holders of redeemed 6% Preferred Stock shall cease and terminate except the
right to receive the redemption price. Redeemed 6% Preferred Stock may not be
reissued, and no 6% Preferred Stock may be issued in lieu thereof or in exchange
therefor, and such 6% Preferred Stock shall be cancelled and deemed to have been
retired, as provided by law.
In the event of any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, the holders of 6% Preferred Stock shall be
entitled to receive out of the assets of the Company (whether from capital or
surplus or both) the full par value of such 6% Preferred Stock, plus all
dividends declared by the Board and remaining unpaid on the date of such
liquidation, dissolution or winding up of the Company, and no more, before any
distribution on assets shall be made to holders of Common Stock and, subject to
the terms of any Class A Preferred Stock then outstanding, the holders of Common
Stock shall be entitled, to the exclusion of holders of 6% Preferred Stock, to
share ratably in the
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assets of the Company remaining after such payment. Subject to the terms of any
Class A Preferred Stock then outstanding, if, upon such liquidation, dissolution
or winding up of the Company, the assets of the Company are insufficient to
permit payment in full to holders of 6% Preferred Stock, then the entire assets
of the Company shall be distributed ratably among the holders of 6% Preferred
Stock then outstanding.
Subject to exclusive rights of any series of Class A Preferred Stock, each
share of 6% Preferred Stock entitles the holder thereof to one vote at all
meetings of shareholders of the Company, which voting rights are identical to
those of holders of Common Stock.
DESCRIPTION OF WARRANTS
The following description of the terms of Warrants sets forth certain
general terms and provisions to which any Prospectus Supplement may relate. The
particular terms and provisions of Warrants offered by a Prospectus Supplement,
and the extent to which the general terms and provisions described below may
apply thereto, will be described in the Prospectus Supplement relating to such
Warrants.
The Company may issue Warrants to purchase Debt Securities ("Debt
Warrants") or Warrants to purchase Class A Preferred Stock ("Preferred Stock
Warrants"). Warrants may be issued independently of or together with any other
securities and may be attached to or separate from such securities. Each series
of Warrants will be issued under a separate Warrant Agreement (each, a "Warrant
Agreement") to be entered into between the Company and a Warrant Agent ("Warrant
Agent"). The Warrant Agent will act solely as an agent of the Company in
connection with the Warrants of such series and will not assume any obligation
or relationship of agency for or with holders or beneficial owners of Warrants.
The Guarantor will fully and unconditionally guarantee all obligations of
the Company with respect to the Warrants.
DEBT WARRANTS
Reference is made to the Prospectus Supplement for the following terms of
the particular series of Debt Warrants being offered thereby: (i) the title of
such Debt Warrants; (ii) the offering price for such Debt Warrants, if any;
(iii) the aggregate number of such Debt Warrants; (iv) the designation and terms
of the Debt Securities purchasable upon exercise of such Debt Warrants; (v) if
applicable, the designation and terms of the securities with which such Debt
Warrants are issued and the number of such Debt Warrants issued with each such
security; (vi) if applicable, the date from and after which such Debt Warrants
and any securities issued therewith will be separately transferable; (vii) the
principal amount of Debt Securities purchasable upon exercise of a Debt Warrant
and the price at which such principal amount of Debt Securities may be purchased
upon exercise; (viii) the date on which the right to exercise such Debt Warrants
shall commence and the date on which such right shall expire; (ix) if
applicable, the minimum or maximum amount of such Debt Warrants that may be
exercised at any one time; (x) whether the Debt Warrants represented by Debt
Warrant certificates or Debt Securities that may be issued upon exercise of the
Debt Warrants will be issued in registered or bearer form; (xi) information with
respect to book-entry procedures, if any; (xii) if other than U.S. dollars, the
currency, currencies or currency unit or units in which the offering price, if
any, and the exercise price are payable; (xiii) if applicable, a discussion of
certain United States federal and Canadian income tax considerations; (xiv) the
antidilution provisions of such Debt Warrants, if any; (xv) the redemption or
call provisions, if any, applicable to such Debt Warrants; and (xvi) any
additional terms of the Debt Warrants, including terms, procedures and
limitations relating to the exchange and exercise of such Debt Warrants.
PREFERRED STOCK WARRANTS
Reference is made to the Prospectus Supplement for the following terms of
the particular series of Preferred Stock Warrants being offered thereby: (i) the
title of such Preferred Stock Warrants; (ii) the
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offering price of such Preferred Stock Warrants, if any; (iii) the aggregate
number of such Preferred Stock Warrants; (iv) the designation and terms of the
Class A Preferred Stock purchasable upon exercise of such Preferred Stock
Warrants; (v) if applicable, the designation and terms of the securities with
which such Preferred Stock Warrants are issued and the number of such Preferred
Stock Warrants issued with each such security; (vi) if applicable, the date from
and after which such Preferred Stock Warrants and any securities issued
therewith will be separately transferable; (vii) the number of shares of Class A
Preferred Stock purchasable upon exercise of a Preferred Stock Warrant and the
price at which such shares may be purchased upon exercise; (viii) the date on
which the right to exercise such Preferred Stock Warrants shall commence and the
date on which such right shall expire; (ix) if applicable, the minimum or
maximum amount of such Preferred Stock Warrants that may be exercised at any one
time; (x) if other than U.S. dollars, the currency, currencies or currency unit
or units in which the offering price, if any, and the exercise price are
payable; (xi) if applicable, a discussion of certain United States federal and
Canadian income tax considerations; (xii) the antidilution provisions of such
Preferred Stock Warrants, if any; (xiii) the redemption or call provisions, if
any, applicable to such Preferred Stock Warrants; and (xiv) any additional terms
of such Preferred Stock Warrants, including terms, procedures and limitations
relating to the exchange and exercise of such Preferred Stock Warrants.
PLAN OF DISTRIBUTION
GENERAL
The Company may sell all or part of the Securities from time to time on
terms determined at the time such Securities are offered for sale to or through
underwriters or through selling agents, and also may sell such Securities
directly to other purchasers. The names of any such underwriters or selling
agents in connection with the offer and sale of the Securities will be set forth
in the Prospectus Supplement relating thereto.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Company or from purchasers of Securities for whom they may
act as agents, in the form of discounts, concessions or commissions.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the Underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution of
Securities may be deemed to be underwriters, and any discounts or commissions
received by them from the Company and any profit on the resale of Securities by
them may be deemed to be underwriting discounts and commissions, under the
Securities Act. Any such compensation received from the Company will be
described in the Prospectus Supplement.
Underwriters, dealers, selling agents and other persons may be entitled,
under agreements which may be entered into with the Company, to indemnification
by the Company against certain civil liabilities, including liabilities under
the Securities Act.
The Securities will not be qualified for sale under the securities laws of
Canada or any province or territory of Canada, unless a Prospectus Supplement
indicates otherwise with respect to a particular series of Securities, and may
not be offered or sold, directly or indirectly, in Canada or to residents of
Canada in contravention of the securities laws of Canada or any province or
territory thereof. Each underwriter, selling agent and dealer participating in
the distribution of the Securities must agree that it will not offer or sell,
directly or indirectly, any such Securities acquired by it in connection with a
distribution in Canada unless the Prospectus Supplement indicates otherwise or
to residents thereof in contravention of the securities laws of Canada or any
province or territory thereof. Any reoffers or resales in Canada must be made in
compliance with the requirements of applicable securities laws.
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The Securities sold will constitute a new issue of securities with no
established trading market. In the event that Securities of a series offered
hereunder are not listed on a national securities exchange, certain
broker-dealers may make a market in the Securities, but will not be obligated to
do so and may discontinue any market making at any time without notice. No
assurance can be given that any broker-dealer will make a market in the
Securities of any series or as to the liquidity of the trading market for the
Securities.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, the Company may authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the Company. The obligations of any purchaser under any such contract will be
subject to the condition that the purchase of the offered Securities shall not
at the time of delivery be prohibited under the laws of the jurisdiction to
which such purchaser is subject. The underwriters and such other agents will not
have any responsibility in respect of the validity or performance of such
contracts.
LEGAL MATTERS
Certain legal matters relating to the validity of the Securities will be
passed upon for the Company by Simpson Thacher & Bartlett, United States counsel
for the Company and the Guarantor, and Goodman Phillips & Vineberg S.E.N.C.,
Canadian counsel for the Guarantor, and for any underwriters or selling agents
by Sullivan & Cromwell, United States counsel for such underwriters or selling
agents. Simpson Thacher & Bartlett and Sullivan & Cromwell, who will pass only
upon matters of United States and New York law, will rely upon Goodman Phillips
& Vineberg S.E.N.C. with respect to matters of Canadian law and Barnes &
Thornburg, Indiana counsel for the Company, with respect to matters of Indiana
law. Goodman Phillips & Vineberg S.E.N.C., who will pass only upon matters of
Canadian law, will rely upon Simpson Thacher & Bartlett with respect to matters
of United States and New York law.
23
<PAGE> 25
EXPERTS
The consolidated financial statements of the Guarantor as of June 30, 1998
and 1997 and for the years ended June 30, 1998 and 1997, the five-month period
ended June 30, 1996 and the year ended January 31, 1996 incorporated in this
Prospectus by reference to the Guarantor's Current Report on Form 8-K dated
September 1, 1998 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in accounting and auditing.
The consolidated financial statements of PolyGram as of December 31, 1997
and 1996 and for each of the years in the three year period ended December 31,
1997 incorporated in this Prospectus by reference to the Guarantor's Form 8-K,
dated August 25, 1998, as amended, have been audited by KPMG Accountants N.V.,
as stated in their report, and have been so incorporated in reliance upon the
report of such firm given on the authority of said firm as experts in accounting
and auditing.
JURISDICTION RESPECTING THE GUARANTOR
The Guarantor is a Canadian corporation and certain of its directors and
officers and the experts referred to herein are citizens or residents of
countries other than the United States. A substantial portion of the assets of
the Guarantor and of such persons are located outside the United States.
Accordingly, it may be difficult for investors to obtain jurisdiction over the
Guarantor and such directors and officers and experts in courts in the United
States in actions predicated on the civil liability provisions of the United
States federal securities laws or to enforce against the Guarantor or such
persons judgments obtained in such actions; to obtain judgments against the
Guarantor or such persons in original actions in Canadian or other foreign
courts predicated solely upon the United States federal securities laws; or to
enforce against the Guarantor or such persons in Canadian or other foreign
courts judgments of courts in the United States predicated upon the civil
liability provisions of the United States federal securities laws.
24
<PAGE> 26
------------------------------------------------------
------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, THE GUARANTOR, THE UNDERWRITERS OR ANY
OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
DESCRIBED IN THIS PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION
IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF SUCH INFORMATION.
------------------
TABLE OF CONTENTS
PAGE
<TABLE>
<S> <C>
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
The Guarantor and the Company........ 3
Recent Developments.................. 3
Use of Proceeds...................... 3
Ratio of Earnings to Fixed Charges... 4
Description of Debt Securities....... 5
Description of Preferred Stock....... 19
Description of Warrants.............. 21
Plan of Distribution................. 22
Legal Matters........................ 23
Experts.............................. 24
Jurisdiction Respecting the
Guarantor.......................... 24
</TABLE>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
$4,520,000,000
JOSEPH E. SEAGRAM & SONS, INC.
DEBT SECURITIES
CLASS A PREFERRED STOCK
WARRANTS
THE SEAGRAM COMPANY LTD.
GUARANTEES
[SEAGRAM LOGO]
------------------------------------------------------
------------------------------------------------------
<PAGE> 27
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The amount of expenses in connection with the issuance and distribution of
the securities which are being newly registered hereby, other than underwriting
discounts and commissions, is estimated as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee............... $1,185,900
Costs of printing and engraving............................. 75,000
Legal fees and expenses..................................... 350,000
Blue Sky fees and expenses.................................. 10,000
Accounting fees and expenses................................ 40,000
Trustee's fee............................................... 25,000
Rating agencies' fees....................................... 250,000
Miscellaneous............................................... 39,100
----------
Total............................................. $1,975,000
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 124, Subsections (1) through (4), of the Canada Business
Corporations Act (the "Act") provides as follows:
"124. (1) Indemnification. -- Except in respect of an action by or on
behalf of the corporation or body corporate to procure a judgment in its
favour, a corporation may indemnify a director or officer of the
corporation, a former director or officer of the corporation or a person
who acts or acted at the corporation's request as a director or officer of
a body corporate of which the corporation is or was a shareholder or
creditor, and his heirs and legal representatives, against all costs,
charges and expenses, including an amount paid to settle an action or
satisfy a judgment, reasonably incurred by him in respect of any civil,
criminal or administrative action or proceeding to which he is made a party
by reason of being or having been a director or officer of such corporation
or body corporate, if
(a) he acted honestly and in good faith with a view to the best
interests of the corporation; and
(b) in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, he had reasonable grounds
for believing that his conduct was lawful.
(2) Indemnification in derivative actions. -- A corporation may with
the approval of a court indemnify a person referred to in subsection (1) in
respect of an action by or on behalf of the corporation or body corporate
to procure a judgment in its favour, to which he is made a party by reason
of being or having been a director or an officer of the corporation or body
corporate, against all costs, charges and expenses reasonably incurred by
him in connection with such action if he fulfils the conditions set out in
paragraphs (1)(a) and (b).
(3) Indemnity as of right. -- Notwithstanding anything in this
section, a person referred to in subsection (1) is entitled to indemnity
from the corporation in respect of all costs, charges and expenses
reasonably incurred by him in connection with the defence of any civil,
criminal or administrative action or proceeding to which he is made a party
by reason of being or having been a director or officer of the corporation
or body corporate, if the person seeking indemnity
(a) was substantially successful on the merits in his defence of the
action or proceeding; and
(b) fulfils the conditions set out in paragraphs (1)(a) and (b).
(4) Directors' and officers' insurance. -- A corporation may purchase
and maintain insurance for the benefit of any person referred to in
subsection (1) against any liability incurred by him
II-1
<PAGE> 28
(a) in his capacity as a director or officer of the corporation,
except where the liability relates to his failure to act
honestly and in good faith with a view to the best interests of
the corporation, or
(b) in his capacity as a director or officer of another body
corporate where he acts or acted in that capacity at the
corporation's request, except where the liability relates to
his failure to act honestly and in good faith with a view to
the best interests of the body corporate."
Sections 7.02 and 7.03 of the General By-Laws of The Seagram Company Ltd.
provide as follows:
"Section 7.02 -- Indemnity. Without in any manner derogating from or
limiting the mandatory provisions of the Act but subject to the conditions
contained therein, the Corporation shall indemnify a director or officer of
the Corporation, a former director or officer of the Corporation, or a
person who acts or acted at the Corporation's request as a director or
officer of a body corporate of which the Corporation is or was a
shareholder or creditor, and his heirs and legal representatives, against
all costs, charges and expenses, including an amount paid to settle an
action or satisfy a judgment, reasonably incurred by him in respect of any
civil, criminal or administrative action or proceeding to which he is made
a party by reason of being or having been a director or officer of the
Corporation or such body corporate, if
(a) he acted honestly and in good faith with a view to the best
interests of the Corporation; and
(b) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he has reasonable
grounds for believing that his conduct was lawful.
Section 7.03 -- Insurance. Subject to the limitations contained in the
Act, the Corporation may purchase and maintain such insurance for the
benefit of the persons mentioned in Section 7.02, as the board may from
time to time determine."
Chapter 37 of the Business Corporation Law of Indiana, the state of
incorporation of Joseph E. Seagram & Sons, Inc., provides that, effective August
1, 1987, (i) unless limited by its articles of incorporation, a corporation
shall indemnify a director or officer (and may indemnify an employee or agent of
the corporation) who was wholly successful, on the merits or otherwise, in the
defense of any proceeding to which such person was a party because such person
is or was a director, officer, employee or agent of the corporation, as the case
may be, against reasonable expenses incurred by such person in connection with
the proceeding and (ii) a corporation may indemnify an individual made a party
to a proceeding because the individual is or was a director, officer, employee
or agent of the corporation against liability incurred in the proceeding if (1)
the individual's conduct was in good faith; and (2) the individual reasonably
believed (A) in the case of conduct in the individual's official capacity with
the corporation, that the individual's conduct was in its best interests; and
(B) in all other cases, that the individual's conduct was at least not opposed
to its best interests; and (3) in the case of any criminal proceeding, the
individual either (A) had reasonable cause to believe the individual's conduct
was lawful; or (B) had no reasonable cause to believe the individual's conduct
was unlawful. Such indemnification shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any provision of the
articles of incorporation, by-laws, resolution, or other authorization adopted,
after notice, by a majority vote of all the voting shares then issued and
outstanding.
Sections 43 through 50 of the By-Laws of Joseph E. Seagram & Sons, Inc.
provide as follows:
"43. The corporation (1) shall indemnify any person who is or was a
director, officer, or employee of the corporation or is or was serving at
the request of the corporation as a director, officer or employee of
another corporation, and (2) may indemnify any person who is or was an
agent of the corporation or is or was serving at the request of the
corporation as an agent of or participant in another corporation or as
director, officer, employee or agent of or participant in a partnership,
joint venture, trust or other enterprise, and who by reason of such fact is
or was a witness or a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, against any and all judgments,
liabilities, assessments, fines, amounts paid in settlement, costs, charges
and expenses (including attorneys' fees) of every kind and nature which
such person may actually and reasonably incur in connection with such
action, suit or proceeding (or any appeal therein). Notwithstanding the
foregoing, (a) in the event of an action, suit or proceeding brought by or
in the right of the corporation to procure a judgment in its favor, no
indemnification shall be made with respect to any
II-2
<PAGE> 29
claim, issue or matter as to which the person seeking to be indemnified
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation, unless and only to the extent
that the court in which such action or suit was brought or to which it was
appealed shall determine upon application that, despite the adjudication of
liability, in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for any such expenses which the
court shall deem proper, and (b) no indemnification shall be made with
respect to any claim, issue or matter as to which the person seeking to be
indemnified shall have (i) been adjudged by a court or administrative
agency to have acted illegally or improperly or (ii) made or agreed to make
any payment in settlement unless it is determined in accordance with
Section 44 of these by-laws, that such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The final
disposition of any action, suit or proceeding by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its
equivalent, shall not of itself create a presumption that a person did not
act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the corporation, nor, with respect to
any criminal action or proceeding, that he had reasonable cause to believe
that his conduct was unlawful.
44. Any determination contemplated by clause (b) of Section 43 of
these by-laws shall be made (1) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or
even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (3) by the shareholders.
45. The indemnification provided herein shall not be deemed exclusive
of any other rights to which those seeking indemnification may be entitled
under any agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in any official capacity and as to action in
another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee, agent or
participant and shall inure to the benefit of the heirs, executors and
administrators of such a person.
46. The corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of or participant in another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability
under the provisions of these by-laws, Section 25-202 of the General
Corporation Act of the State of Indiana or otherwise.
47. For purposes of Sections 43 through 46 of these by-laws, (1) Any
person who, while a director, officer or employee of the corporation or
while serving at the request of the corporation as a director, officer or
employee of a 'subsidiary' as hereinafter defined, acts or acted as a
fiduciary with respect to an employee benefit plan sponsored by the
corporation or by one or more subsidiaries, or with respect to a
multi-employer employee benefit plan contributed to by the corporation or
by one or more subsidiaries, shall be conclusively deemed to occupy such
fiduciary position by reason of the fact that such person is or was such
director, officer or employee. As used herein the term 'subsidiary' means a
corporation of which a majority of the shares of capital stock have the
power ordinarily and generally in the absence of contingencies to elect a
majority of the directors thereof is held by the corporation and/or one or
more subsidiaries.
(2) Any person who is or was a director, officer or employee of a
'wholly-owned subsidiary' as hereinafter defined shall be conclusively
deemed to occupy such position at the request of the corporation. As used
herein the term 'wholly-owned subsidiary' means any corporation of which
all shares of capital stock having the power ordinarily and generally in
the absence of contingencies to vote for the election of directors,
exclusive of director's qualifying shares, are held by the corporation
and/or one or more wholly-owned subsidiaries.
48. For the purposes of Sections 43 through 48 of these by-laws,
references to 'the corporation' include all constituent corporations
absorbed in a consolidation or merger as well as the resulting or surviving
corporation so that any person who is or was a director, officer, employee
or agent of or participant in such a constituent corporation or is or was
serving at the request of such
II-3
<PAGE> 30
constituent corporation as a director, officer, employee or agent of or
participant in another corporation, partnership, joint venture, trust or
other enterprise shall stand in the same position under the provisions of
such Sections with respect to the resulting or surviving corporation as he
would if he had served the resulting or surviving corporation in the same
capacity.
49. The corporation may pay expenses incurred in appearing as a
witness in or defending any action, suit or proceeding (whether civil,
criminal, administrative or investigative) before the final disposition
thereof upon receipt of an undertaking, by or on behalf of the person for
whose benefit such payment is to be made, to repay to the corporation any
excess of such payment over the indemnification from the corporation to
which such person ultimately shall be determined to be entitled under these
by-laws.
50. The invalidity or unenforceability of any provision of Sections 43
through 48 of these by-laws shall not affect the validity or enforceability
of the remaining provisions of such Sections."
The directors and officers of the Registrants are covered by insurance
policies indemnifying against certain liabilities, including certain liabilities
arising under the Securities Act, which might be incurred by them in such
capacities and against which they cannot be indemnified by the Registrants.
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
<S> <C>
1 -- Underwriting Agreement General Terms and Provisions and
forms of a Pricing Agreement and a Delayed Delivery
Contract (incorporated by reference to Exhibit 1(a) to
Registration Statement on Form S-3 (No. 33-42877) of
The Seagram Company Ltd. and Joseph E. Seagram & Sons,
Inc.).
3(a) --Restated Articles of Incorporation of Joseph E. Seagram &
Sons, Inc. (incorporated by reference to Exhibit 4(a)
to Registration Statement on Form S-3 (No. 333-4136) of
The Seagram Company Ltd. and Joseph E. Seagram & Sons,
Inc.).
(b) --By-Laws of Joseph E. Seagram & Sons, Inc., as amended.
(incorporated by reference to Exhibit 4(b) to
Registration Statement on Form S-3 (No. 333-4136) of
The Seagram Company Ltd. and Joseph E. Seagram & Sons,
Inc.).
4(a) --Indenture dated as of September 15, 1991 among Joseph E.
Seagram & Sons, Inc., The Seagram Company Ltd. and The
Bank of New York, as Trustee (incorporated by reference
to Exhibit 4(g) of the Current Report on Form 8-K of
The Seagram Company Ltd. dated November 8, 1991, as
amended).
(b) --Form of Medium-Term Note (Floating Rate) (incorporated by
reference to Exhibit 4(b) to Registration Statement on
Form S-3 (No. 33-42877) of The Seagram Company Ltd. and
Joseph E. Seagram & Sons, Inc.).
(c) --Form of Medium-Term Note (Fixed Rate) (incorporated by
reference to Exhibit 4(c) to Registration Statement on
Form S-3 (No. 33-42877) of The Seagram Company Ltd. and
Joseph E. Seagram & Sons, Inc.).
5(a)** -- Opinion and Consent of Simpson Thacher & Bartlett.
(b)** -- Opinion and Consent of Goodman Phillips & Vineberg
S.E.N.C.
(c)** -- Opinion and Consent of Barnes & Thornburg.
12(a)* -- Computation of ratio of earnings to fixed charges -- The
Seagram
Company Ltd.
(b)* -- Computation of ratio of earnings to fixed charges --
Joseph E. Seagram
& Sons, Inc.
23(a)* -- Consent of PricewaterhouseCoopers LLP, independent
accountants, with respect to the financial statements
of The Seagram Company Ltd.
(b)* -- Consent of KPMG Accountants, N.V. independent accountants
for PolyGram N.V.
(c)** -- Consents of Simpson Thacher & Bartlett, Goodman Phillips
& Vineberg S.E.N.C. and Barnes & Thornburg are included
in their opinions filed as Exhibits 5(a), 5(b) and
5(c), respectively.
24(a)** -- Power of Attorney -- The Seagram Company Ltd.
(b)** -- Power of Attorney -- Joseph E. Seagram & Sons, Inc.
25** -- Statement of Eligibility of Trustee.
</TABLE>
- ---------------
* Filed herewith.
** Previously filed.
II-4
<PAGE> 31
ITEM 17. UNDERTAKINGS.
The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) to include any prospectus required by section 10(a)(3) of the
Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this 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 this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by a Registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered hereby which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Act,
each filing of a Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to
the securities offered herein, 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
may be permitted to directors, officers or controlling persons of the
Registrants pursuant to the provisions described in Item 15 above, or otherwise,
the Registrants have 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
Registrants of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
against the Registrants by such director, officer or controlling person, in
connection with the securities registered hereby, the Registrants will, unless
in the opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-5
<PAGE> 32
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, JOSEPH E.
SEAGRAM & SONS, INC. 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 AND THE POST-EFFECTIVE AMENDMENTS TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK,
AND THE STATE OF NEW YORK ON OCTOBER 30, 1998.
JOSEPH E. SEAGRAM & SONS, INC.
(REGISTRANT)
By /s/ John R. Preston
-----------------------------------
JOHN R. PRESTON
VICE PRESIDENT AND TREASURER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT AND THE POST-EFFECTIVE AMENDMENTS HAVE BEEN SIGNED ON
OCTOBER 30, 1998 BY THE FOLLOWING PERSONS IN THE CAPACITIES AT JOSEPH E. SEAGRAM
& SONS, INC. INDICATED.
PRINCIPAL EXECUTIVE OFFICER:
<TABLE>
<C> <S> <C>
* Director, President and Chief
(EDGAR BRONFMAN, JR.) Executive Officer
PRINCIPAL FINANCIAL OFFICER AND AGENT FOR SERVICE:
* Director, Vice Chairman and
(ROBERT W. MATSCHULLAT) Chief Financial Officer
PRINCIPAL ACCOUNTING OFFICER:
* Senior Vice President, Finance
(NEAL B. CRAVENS)
DIRECTORS:
* Director
(EDGAR M. BRONFMAN)
* Director
(CHARLES R. BRONFMAN)
* Director
(DANIEL R. PALADINO)
</TABLE>
* By signing his name hereto, John R. Preston signs this Registration
Statement and the Post-Effective Amendments on behalf of each of the persons
indicated above pursuant to a power of attorney duly executed by such persons
and filed with the Securities and Exchange Commission.
By /s/ John R. Preston
-------------------------------
(JOHN R. PRESTON,
ATTORNEY-IN-FACT)
II-6
<PAGE> 33
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE SEAGRAM
COMPANY LTD. 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 AND THE POST-EFFECTIVE AMENDMENTS TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF MONTREAL,
PROVINCE OF QUEBEC, CANADA, ON OCTOBER 30, 1998.
THE SEAGRAM COMPANY LTD.
(REGISTRANT)
By /s/ John R. Preston
-----------------------------------
JOHN R. PRESTON
VICE PRESIDENT AND TREASURER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT AND THE POST-EFFECTIVE AMENDMENTS HAVE BEEN SIGNED ON
OCTOBER 30, 1998 BY THE FOLLOWING PERSONS IN THE CAPACITIES AT THE SEAGRAM
COMPANY LTD. INDICATED.
PRINCIPAL EXECUTIVE OFFICER:
<TABLE>
<C> <S> <C>
* Director, President and
(EDGAR BRONFMAN, JR.) Chief Executive Officer
PRINCIPAL FINANCIAL OFFICER AND AGENT FOR SERVICE:
* Director, Vice Chairman and
(ROBERT W. MATSCHULLAT) Chief Financial Officer
PRINCIPAL ACCOUNTING OFFICER:
* Senior Vice President,
(NEAL B. CRAVENS) Finance
DIRECTORS:
EDGAR M. BRONFMAN*
CHARLES R. BRONFMAN*
SAMUEL BRONFMAN II*
MATTHEW W. BARRETT*
LAURENT BEAUDOIN*
FRANK J. BIONDI, JR.*
RICHARD H. BROWN*
WILLIAM G. DAVIS*
ANDRE DESMARAIS*
BARRY DILLER*
MICHELE J. HOOPER*
DAVID L. JOHNSTON*
E. LEO KOLBER*
MARIE-JOSEE KRAVIS*
C. EDWARD MEDLAND*
SAMUEL MINZBERG*
JOHN S. WEINBERG*
</TABLE>
* By signing his name hereto, John R. Preston signs this Registration
Statement and the Post-Effective Amendments on behalf of each of the persons
indicated above pursuant to a power of attorney duly executed by such persons
and filed with the Securities and Exchange Commission.
By /s/ John R. Preston
-------------------------------
(JOHN R. PRESTON,
ATTORNEY-IN-FACT)
II-7
<PAGE> 34
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C> <C>
1 -- Underwriting Agreement General Terms and Provisions and
forms of a Pricing Agreement and a Delayed Delivery
Contract (incorporated by reference to Exhibit 1(a) to
Registration Statement on Form S-3 (No. 33-42877) of
The Seagram Company Ltd. and Joseph E. Seagram & Sons,
Inc.).
3(a) -- Restated Articles of Incorporation of Joseph E. Seagram &
Sons, Inc. (incorporated by reference to Exhibit 4(a)
to Registration Statement on Form S-3 (No. 333-4136) of
The Seagram Company Ltd. and Joseph E. Seagram & Sons,
Inc.).
(b) -- By-Laws of Joseph E. Seagram & Sons, Inc., as amended.
(incorporated by reference to Exhibit 4(b) to
Registration Statement on Form S-3 (No. 333-4136) of
The Seagram Company Ltd. and Joseph E. Seagram & Sons,
Inc.).
4(a) -- Indenture dated as of September 15, 1991 among Joseph E.
Seagram & Sons, Inc., The Seagram Company Ltd. and The
Bank of New York, as Trustee (incorporated by reference
to Exhibit 4(g) of the Current Report on Form 8-K of
The Seagram Company Ltd. dated November 8, 1991, as
amended).
(b) -- Form of Medium-Term Note (Floating Rate) (incorporated by
reference to Exhibit 4(b) to Registration Statement on
Form S-3 (No. 33-42877) of The Seagram Company Ltd. and
Joseph E. Seagram & Sons, Inc.).
(c) -- Form of Medium-Term Note (Fixed Rate) (incorporated by
reference to Exhibit 4(c) to Registration Statement on
Form S-3 (No. 33-42877) of The Seagram Company Ltd. and
Joseph E. Seagram & Sons, Inc.).
5(a)** -- Opinion and Consent of Simpson Thacher & Bartlett.
(b)** -- Opinion and Consent of Goodman Phillips & Vineberg
S.E.N.C.
(c)** -- Opinion and Consent of Barnes & Thornburg.
12(a)* -- Computation of ratio of earnings to fixed charges -- The
Seagram
Company Ltd.
(b)* -- Computation of ratio of earnings to fixed charges --
Joseph E. Seagram & Sons, Inc.
23(a)* -- Consent of PricewaterhouseCoopers LLP, independent
accountants, with respect to the financial statements
of The Seagram Company Ltd.
(b)* -- Consent of KPMG Accountants, N.V., independent
accountants for PolyGram N.V.
(c)** -- Consents of Simpson Thacher & Bartlett, Goodman Phillips
& Vineberg S.E.N.C. and Barnes & Thornburg are included
in their opinions filed as Exhibits 5(a), 5(b) and
5(c), respectively.
24(a)** -- Power of Attorney -- The Seagram Company Ltd.
(b)** -- Power of Attorney -- Joseph E. Seagram & Sons, Inc.
25* -- Statement of Eligibility of Trustee.
</TABLE>
- ---------------
* Filed herewith.
** Previously filed.
<PAGE> 1
EXHIBIT 12(A)
THE SEAGRAM COMPANY LTD.
AND SUBSIDIARY COMPANIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(MILLIONS)
<TABLE>
<CAPTION>
FIVE-MONTH
FISCAL FISCAL TRANSITION
YEAR YEAR PERIOD FISCAL YEARS ENDED
ENDED ENDED ENDED JANUARY 31,
JUNE 30, JUNE 30, JUNE 30, ---------------------
DESCRIPTION 1998 1997 1996 1996 1995 1994
----------- --------- -------- ---------- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Income (loss) from continuing operations,
before tax.............................. $1,611 $ 726 $ (6) $ 240 $ 297 $ 347
ADD (DEDUCT):
Equity in net earnings of 50% owned
affiliates.............................. 22 67 35 36 4 6
Dividends from less than 50% owned
affiliates.............................. 10 12 9 4 -- --
Fixed charges............................. 424 392 181 420 432 374
Interest capitalized, net of
amortization............................ (2) (2) (4) (2) (1) --
------ ------ ----- ----- ----- -----
EARNINGS AVAILABLE FOR FIXED CHARGES...... $2,065 $1,195 $ 215 $ 698 $ 732 $ 727
====== ====== ===== ===== ===== =====
FIXED CHARGES:
Interest expense.......................... $ 357 $ 326 $ 151 $ 378 $ 408 $ 351
Proportionate share of 50% owned companies
fixed charges........................... 18 16 8 6 -- --
Portion of rent expense deemed to
represent interest factor............... 49 50 22 36 24 23
------ ------ ----- ----- ----- -----
FIXED CHARGES............................. $ 424 $ 392 $ 181 $ 420 $ 432 $ 374
====== ====== ===== ===== ===== =====
RATIO OF EARNINGS TO FIXED CHARGES........ 4.87 3.05 1.19 1.66 1.69 1.94
------ ------ ----- ----- ----- -----
</TABLE>
<PAGE> 1
EXHIBIT 12(B)
JOSEPH E. SEAGRAM & SONS, INC.
AND SUBSIDIARY COMPANIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(MILLIONS)
<TABLE>
<CAPTION>
FIVE-MONTH
FISCAL FISCAL TRANSITION
YEAR YEAR PERIOD FISCAL YEARS ENDED
ENDED ENDED ENDED JANUARY 31,
JUNE 30, JUNE 30, JUNE 30, --------------------
DESCRIPTION 1998 1997 1996 1996 1995 1994
----------- --------- -------- ---------- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Income (loss) form continuing operations
before tax............................... $ 18 $124 $(37) $ 82 $ 172 $ 169
ADD (DEDUCT):
Fixed charges.............................. 182 172 70 165 183 165
Interest capitalized, net of
amortization............................. -- (1) -- -- (1) --
---- ---- ---- ---- ----- -----
EARNINGS AVAILABLE FOR FIXED CHARGES....... $200 $295 $ 33 $247 $ 354 $ 334
==== ==== ==== ==== ===== =====
FIXED CHARGES:
Interest expense........................... $170 $159 $ 65 $145 $ 163 $ 146
Portion of rent expense deemed to represent
interest factor.......................... 12 13 5 20 20 19
---- ---- ---- ---- ----- -----
FIXED CHARGES.............................. $182 $172 $ 70 $165 $ 183 $ 165
==== ==== ==== ==== ===== =====
RATIO OF EARNINGS TO FIXED CHARGES......... 1.10 1.72 --(a) 1.50 1.93 2.02
---- ---- ---- ---- ----- -----
</TABLE>
- ---------------
(a) Fixed charges exceeded earnings by $33 million for the five-month transition
period ended June 30, 1996.
<PAGE> 1
EXHIBIT 23(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
OF THE SEAGRAM COMPANY LTD.
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
August 12, 1998, except as to Note 1, which is as of August 25, 1998, which
appears on page 46 of Exhibit 99(a) to The Seagram Company Ltd.'s Annual Report
on Form 10-K for the fiscal year ended June 30, 1998, as amended. We also
consent to the incorporation by reference of our report on the Financial
Statement Schedule, which appears on page 20 of such Annual Report on Form 10-K,
as amended. We also consent to the reference to us under the heading "Experts"
in such Prospectus.
/s/ PricewaterhouseCoopers LLP
- ---------------------------------------------------------
PricewaterhouseCoopers LLP
New York, New York
October 30, 1998
<PAGE> 1
EXHIBIT 23(B)
CONSENT OF INDEPENDENT ACCOUNTANTS OF POLYGRAM N.V.
We consent to incorporation by reference in the Prospectus constituting
part of this Registration Statement on Form S-3 of The Seagram Company Ltd. and
Joseph E. Seagram & Sons, Inc. of our Report dated February 11, 1998, relating
to the Consolidated Balance Sheets of PolyGram N.V. as of December 31, 1996 and
1997, and the related Consolidated Statements of Income, Consolidated Statements
of Cash Flows and Consolidated Statements of Changes in Shareholders' Equity for
each of the years in the three-year period ended December 31, 1997 of PolyGram
N.V., incorporated by reference in The Seagram Company Ltd.'s Form 8-K dated
August 25, 1998, as amended. We also consent to the reference to our firm under
the heading "Experts" in such Prospectus.
/s/ KPMG Accountants N.V.
--------------------------------------
KPMG Accountants N.V.
October 30, 1998
Amsterdam, The Netherlands
