1
Filed Pursuant to Rule 424(b)(2)
Registration Nos. 333-27685
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MAY 30, 1997
$600,000,000
[POTASH LOGO]
POTASH CORPORATION OF SASKATCHEWAN INC.
7 3/4% Notes due May 31, 2011
------------------
We will pay interest on the notes each May 31 and November 30. We will make
the first interest payment on November 30, 2001. Unless we redeem the notes
earlier, the notes will mature on May 31, 2011. We may redeem the notes at any
time at the redemption price described under "Description of the Notes --
Optional Redemption" beginning on page S-8 of this prospectus supplement. The
notes will rank equally in right of payment with all our other senior, unsecured
debt obligations.
The notes will not be listed on any national securities exchange.
Currently, there is no public market for the notes.
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS PCS
------------ ------------- ------------
Per Note...................................... 99.345% 0.65% 98.695%
Total......................................... $596,070,000 $3,900,000 $592,170,000
(1) Plus accrued interest, if any, from May 21, 2001.
Delivery of the notes, in book-entry form only, will be made on or about
May 21, 2001.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the prospectus to which it relates is truthful or
complete. Any representation to the contrary is a criminal offense.
CREDIT SUISSE FIRST BOSTON
SALOMON SMITH BARNEY RBC DOMINION SECURITIES
BANC OF AMERICA SECURITIES LLC SCOTIA CAPITAL
The date of this prospectus supplement is May 16, 2001
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
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WHERE YOU CAN FIND MORE INFORMATION... S-1
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE........................... S-1
PRESENTATION OF FINANCIAL
INFORMATION......................... S-1
FORWARD-LOOKING STATEMENTS............ S-2
SUMMARY OF THE OFFERING............... S-3
POTASH CORPORATION OF SASKATCHEWAN
INC................................. S-4
SELECTED CONSOLIDATED FINANCIAL
DATA................................ S-5
PAGE
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USE OF PROCEEDS....................... S-7
CAPITALIZATION........................ S-7
DESCRIPTION OF THE NOTES.............. S-8
UNITED STATES FEDERAL INCOME TAX
CONSIDERATIONS...................... S-11
CANADIAN FEDERAL INCOME TAX
CONSIDERATIONS...................... S-12
UNDERWRITING.......................... S-14
LEGAL MATTERS......................... S-15
PROSPECTUS
PAGE
----
AVAILABLE INFORMATION................. 2
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE........................... 2
ENFORCEABILITY OF CIVIL LIABILITIES
UNDER UNITED STATES FEDERAL
SECURITIES LAWS..................... 3
FINANCIAL STATEMENT PRESENTATION...... 3
THE COMPANY........................... 3
PAGE
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FINANCIAL INFORMATION................. 4
USE OF PROCEEDS....................... 5
DESCRIPTION OF SECURITIES............. 5
CERTAIN DEFINITIONS................... 14
CERTAIN INCOME TAX CONSIDERATIONS..... 17
PLAN OF DISTRIBUTION.................. 17
LEGAL MATTERS......................... 18
EXPERTS............................... 18
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.
We are not making an offer of these securities in any state where the offer
is not permitted. These securities will not be offered or sold in Canada or to
any individual or company in Canada in contravention of the securities laws of
Canada or any province or territory thereof. Each underwriter has agreed that it
will not distribute any material related to these securities in Canada in
contravention of the securities laws of Canada or any province or territory
thereof.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other information with
the Securities and Exchange Commission, or the Commission. You may read and copy
any of the information on file with the Commission at the Commission's following
locations:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, N.Y. 10048 Chicago, IL. 60661
Please call the Commission at 1-800-SEC-0330 for further information on the
public reference rooms. In addition, the Commission maintains an Internet site
at http://www.sec.gov that contains reports, information statements and other
information regarding issuers that file electronically with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to incorporate by reference information contained
in documents we file with the Commission, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be an integral part of
this prospectus supplement and the accompanying prospectus. The following
documents, which have been filed with the Commission, are incorporated by
reference:
- our Annual Report on Form 10-K for the fiscal year ended December 31,
2000;
- our Quarterly Report on Form 10-Q for the quarterly period ended March
31, 2001; and
- our Current Report on Form 8-K dated May 10, 2001.
In addition, until we sell all of the notes covered by this prospectus
supplement or otherwise terminate the offering of the notes, we also incorporate
by reference in this prospectus supplement and the accompanying prospectus all
documents that we file with the Commission in the future pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended,
including annual reports on Form 10-K, quarterly reports on Form 10-Q and
current reports on Form 8-K. The information contained in these future filings
will automatically update and supersede the information contained in this
prospectus supplement and the accompanying prospectus or incorporated by
reference to any previously filed document.
You may request copies of the documents incorporated by reference in this
prospectus supplement and the accompanying prospectus, at no cost, by writing or
telephoning us at Potash Corporation of Saskatchewan Inc., 122 - 1st Avenue
South, Suite 500, Saskatoon, Saskatchewan, Canada S7K 7G3, telephone: (306)
933-8500, attention: Corporate Secretary.
PRESENTATION OF FINANCIAL INFORMATION
We present our financial statements in United States dollars and in
accordance with accounting principles generally accepted in Canada, or Canadian
GAAP. For a discussion of certain significant differences between Canadian GAAP
and accounting principles generally accepted in the United States, or U.S. GAAP,
as they relate to PCS, we refer you to Note 31 to our audited financial
statements and Note 9 to our unaudited interim financial statements, which are
incorporated by reference into this prospectus supplement.
All references to "$" and "dollars" in this prospectus supplement and the
accompanying prospectus are to United States dollars and, except where noted,
all financial information is presented in accordance with Canadian GAAP.
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FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus, including the
documents incorporated by reference, contain "forward-looking statements" that
relate to future events or our future financial performance. Statements
containing words such as "could," "expect," "may," "anticipate," "believe,"
"intend," "estimate," "plan" and similar expressions constitute forward-looking
statements. We disclaim any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
Forward-looking statements are subject to important risks, uncertainties
and assumptions that are difficult to predict. The results or events predicted
in forward-looking statements may differ materially from actual results or
events. Some of the factors that could cause actual results or events to differ
from current expectations include the following, some of which are described in
greater detail in the documents that are incorporated by reference into this
prospectus supplement:
- fluctuations in supply and demand for fertilizer, including fluctuations
as a result of economic or political conditions in our markets, which
can cause volatility in the prices of our fertilizer products;
- changes in competitive pressures, including pricing pressures;
- unexpected or adverse weather conditions, which can impact demand for
fertilizer and timing of fertilizer sales during the year;
- volatility in the price of natural gas, which is the primary raw
material used for our nitrogen products, and risks associated with our
continued ability to manage natural gas costs in the United States
through hedging activities;
- fluctuations in the prices of other raw materials, including sulfur,
which is a primary input in our phosphate operations;
- unexpected mining conditions, which could change our costs of production
for potash and phosphates or cause changes in reserve estimates;
- changes in capital markets and in currency and exchange rates;
- the outcome of legal proceedings;
- changes in government regulations, including environmental regulations,
which could increase our costs of compliance and otherwise affect our
business; and
- acquisitions we may undertake in the future.
We sell to a diverse group of customers both by geography and by end
product. Market conditions will vary on a year-over-year basis, and sales can be
expected to shift from one period to another.
As a result of these factors, we cannot assure you that any of the events
or results anticipated by forward-looking statements included or incorporated by
reference into this prospectus supplement will occur or, if they do, what impact
they will have on our business or on our results of operations and financial
condition.
S-2
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SUMMARY OF THE OFFERING
The following summary highlights information contained elsewhere in this
prospectus supplement. You should read this summary in conjunction with the more
detailed information appearing elsewhere in this prospectus supplement and the
accompanying prospectus.
Issuer..................... Potash Corporation of Saskatchewan Inc., or PCS.
Securities Offered......... $600,000,000 principal amount of 7 3/4% Notes due
May 31, 2011.
Maturity Date.............. May 31, 2011.
Interest Rate.............. 7 3/4% per annum.
Interest Payment Dates..... May 31 and November 30 of each year, beginning
November 30, 2001.
Optional Redemption........ The notes are redeemable, at any time at our
option, at a redemption price equal to the
principal amount thereof plus accrued and unpaid
interest and a make-whole premium, as more fully
described under "Description of the Notes --
Optional Redemption" beginning on page S-8.
Use of Proceeds............ We expect to use the net proceeds from the sale of
the notes to repay short-term debt, to acquire
certain nitrogen facilities in Trinidad that we are
currently operating under lease arrangements and
for our general corporate purposes.
Form and Settlement........ We will issue the notes in the form of one or more
fully registered global securities as described
under "Description of the Notes -- Book-Entry
System" on page S-10. We will deposit these global
securities with, or on behalf of, The Depository
Trust Company, or DTC, and register these
securities in the name of DTC's nominee. Direct and
indirect participants in DTC will record beneficial
ownership of the notes by individual investors.
S-3
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POTASH CORPORATION OF SASKATCHEWAN INC.
PCS is one of the world's largest integrated fertilizer and related
industrial and feed products companies with significant market share in each of
the three primary nutrient products -- potash, phosphate and nitrogen. We are
the largest potash producer worldwide by capacity. In 2000, our potash
operations represented an estimated 17% of global production, 23% of global
potash capacity and 52% of global potash excess capacity. We are the third
largest producer of phosphates worldwide by capacity. In 2000, our phosphate
operations represented an estimated 7% of world phosphoric acid production and
6% of world phosphoric acid capacity. We are the second largest producer of
nitrogen products in the Western Hemisphere.
In 2000, we had net sales of $2,231.6 million and net income of $198.0
million, and in the first quarter of 2001, we had net sales of $602.4 million
and net income of $62.4 million. At March 31, 2001, we had total assets of
$4,220.0 million and total shareholders' equity of $2,063.4 million.
Our potash operations pull potash from six mines in Saskatchewan, five of
which we own and operate, and one mine in New Brunswick which we own. We are
also developing a potassium nitrate production facility in Chile. In 2000, our
potash operations generated net sales of $578.7 million and gross margin of
$304.0 million, representing 63% of our consolidated gross margin.
Our phosphate operations include the manufacture and sale of solid and
liquid phosphate fertilizers, animal feed supplements and purified phosphoric
acid, which is used in food products and industrial processes. We believe that
our North Carolina plant is the world's largest vertically integrated phosphate
mine and processing plant. We also have a phosphate mine and two chemical plant
complexes in northern Florida, four phosphate feed plants in the United States
and one feed plant in Brazil. In addition, we produce a variety of phosphate
products at our Geismar, Louisiana facility. In 2000, our phosphate operations
generated net sales of $782.5 million and gross margin of $74.1 million,
representing 15% of our consolidated gross margin.
Our nitrogen operations involve the production of nitrogen fertilizers and
nitrogen chemicals, including ammonia, urea, ammonium nitrate, nitric acid and
nitrogen solutions. We operate nitrogen facilities in Georgia, Louisiana, Ohio,
Tennessee and Trinidad. In 2000, our nitrogen operations generated net sales of
$870.4 million and gross margin of $104.7 million, representing 22% of our
consolidated gross margin.
Through Florida Favorite Fertilizer in Florida and Farmer's Favorite
Fertilizer in Georgia and Alabama, we manufacture, process and distribute
fertilizer and other agricultural supplies from plants located in Florida,
Alabama and Georgia.
PCS is organized under the laws of the Province of Saskatchewan, Canada.
Our principal executive offices are located at 122 - 1st Avenue South, Suite
500, Saskatoon, Saskatchewan, Canada S7K 7G3, telephone: (306) 933-8500.
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SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data set forth below as of and for each
of the five years in the period ended December 31, 2000 have been derived from
our audited consolidated financial statements, which have been reported on by
Deloitte & Touche LLP. The selected annual financial data should be read in
conjunction with our audited financial statements and the related notes included
or incorporated in our Annual Report on Form 10-K for the year ended December
31, 2000, which is incorporated by reference into this prospectus supplement.
The selected consolidated financial data as of and for the three months
ended March 31, 2001 and 2000 have been derived from, and should be read in
conjunction with, our unaudited interim consolidated financial statements and
the related notes included in our Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2001, which is incorporated by reference into
this prospectus supplement. The selected consolidated interim financial data
contains all normal, recurring entries necessary for a fair presentation of our
financial position and results of operations, but is not necessarily indicative
of the results for the entire year.
Our financial statements are prepared in accordance with Canadian GAAP. For
a discussion of certain significant differences between Canadian GAAP and U.S.
GAAP as they relate to PCS, we refer you to Note 31 to our December 31, 2000
audited financial statements and Note 9 to our March 31, 2001 unaudited interim
financial statements.
S-5
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AS OF AND FOR
THE THREE MONTHS
ENDED MARCH 31, AS OF AND FOR THE YEAR ENDED DECEMBER 31,
------------------- ----------------------------------------------------
2001 2000(1) 2000(2) 1999(3) 1998 1997(4) 1996
-------- -------- -------- -------- -------- -------- --------
(IN MILLIONS EXCEPT PER SHARE DATA AND RATIOS)
STATEMENT OF OPERATIONS DATA
Canadian GAAP
Net sales.................... $ 602.4 $ 590.6 $2,231.6 $2,061.1 $2,307.8 $2,325.9 $1,403.9
Operating income (loss)...... 116.5 106.6 326.7 (353.0) 442.3 442.0 297.4
Net income (loss)............ 62.4 71.6 198.0 (412.0) 261.0 297.1 209.0
Net income (loss) per share:
Basic...................... 1.20 1.34 3.78 (7.60) 4.82 5.68 4.59
Fully diluted(5)........... 1.19 1.33 3.76 (7.60) 4.79 5.63 4.54
U.S. GAAP
Net sales.................... 678.3 675.0 2,541.0 2,350.1 2,601.7 2,610.3 1,552.9
Operating income (loss)...... 108.5 106.4 326.3 (575.5) 442.3 447.6 299.5
Net income (loss)............ 57.4 71.4 197.8 (582.6) 261.0 285.8 201.8
Net income (loss) per share:
Basic...................... 1.11 1.34 3.77 (10.74) 4.82 5.47 4.43
Fully diluted(5)........... 1.10 1.33 3.75 (10.74) 4.79 5.41 4.38
FINANCIAL POSITION DATA
Canadian GAAP
Working capital (deficit).... $ (64.3) $ (120.2) $ (148.7) $ (104.8) $ 329.2 $ 281.7 $ 278.8
Total assets................. 4,220.0 3,933.6 4,145.7 3,916.8 4,534.3 4,427.6 2,494.4
Long-term debt............... 413.7 436.9 413.7 437.0 933.3 1,130.0 620.0
Shareholders' equity......... 2,063.4 1,966.7 2,012.1 1,962.4 2,453.8 2,227.9 1,405.5
U.S. GAAP
Total assets................. 4,161.1 3,750.4 3,955.3 3,720.5 4,549.2 4,427.6 2,510.1
Long-term debt............... 413.7 436.9 413.7 437.0 933.3 1,130.0 620.0
Shareholders' equity......... 1,998.0 1,822.5 1,869.4 1,808.7 2,462.7 2,227.9 1,416.9
OTHER FINANCIAL DATA
Canadian GAAP
Cash provided by operating
activities................. $ 3.3 $ 134.3 $ 480.4 $ 343.6 $ 578.0 $ 467.8 $ 296.2
Additions to property, plant
and equipment.............. 15.9 29.4 185.6 118.8 190.2 160.3 58.9
Ratio of earnings to fixed
charges(6)(7).............. 4.74 4.60 3.50 -- 4.82 3.34 5.48
Pro forma ratio of earnings
to fixed charges(6)(8)..... 4.16 -- 3.00 -- -- -- --
---------------
(1) Data for the first quarter of 2000 includes a gain of $16.3 million on the
sale of Moab Salt Inc.
(2) Data for 2000 includes the effects of charges of $24.3 million under
Canadian GAAP ($15.3 million under U.S. GAAP) for plant closures and office
consolidation and a gain of $16.3 million on the sale of Moab Salt Inc.
(3) Data for 1999 includes the effects of charges of $591.6 million under
Canadian GAAP ($809.6 million under U.S. GAAP) for plant closures, office
consolidation and asset impairments.
(4) Data for 1997 and thereafter reflect the acquisition of Arcadian
Corporation on March 6, 1997.
(5) Fully diluted net income (loss) per share is calculated based on the
weighted average shares issued and outstanding during the period, adjusted
by the total of the additional common shares that would have been issued
assuming exercise of all share options with exercise prices at or below the
average market price for the period.
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(6) For the purpose of computing the ratio of earnings to fixed charges (a)
earnings have been calculated by adding income taxes and fixed charges to
net income and (b) fixed charges consist of the total of interest charges
and a portion of rentals determined to be representative of the interest
factor.
(7) Earnings were inadequate to cover fixed charges by $499.6 for the year
ended December 31, 1999.
(8) The pro forma ratio of earnings to fixed charges required for the first
quarter of 2001 and 2000 reflects the issuance of the notes offered hereby
and the expected use of the net proceeds from the sale of the notes,
including the use of approximately $207 million to repay short-term debt
and the use of approximately $384 million to acquire certain nitrogen
facilities in Trinidad, which would result in the termination of the lease
arrangements under which we are currently operating such facilities.
USE OF PROCEEDS
We estimate the net proceeds from the sale of the notes to be approximately
$591 million after deducting underwriting discounts and commissions and expenses
of the offering. We expect to use approximately $207 million of the net proceeds
to repay short-term debt with maturities of less than one year and bearing
interest at an average rate of 5.06%. We expect to use the remaining net
proceeds to acquire certain nitrogen facilities in Trinidad that we are
currently operating under lease arrangements (at an estimated cost of
approximately $384 million) and for our general corporate purposes.
CAPITALIZATION
The following table sets forth our unaudited cash and cash equivalents and
consolidated capitalization (including short-term debt) as of March 31, 2001 on
an actual basis and on an as adjusted basis to give effect to the sale of the
notes and the application of the net proceeds from the sale of the notes. You
should read the information in this table in conjunction with our Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 2001, which is
incorporated by reference into this prospectus supplement.
AS OF MARCH 31, 2001
-----------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN MILLIONS)
Cash and cash equivalents................................... $ 114.0 $ 114.0
======== ========
Short-term debt............................................. $ 533.2 $ 326.2
Long-term debt:
Notes offered hereby...................................... -- 600.0
7.125% notes due June 15, 2007............................ 400.0 400.0
Industrial revenue and pollution control obligations...... 13.6 13.6
Other..................................................... 5.8 5.8
Less current portion of long-term debt.................... (5.7) (5.7)
-------- --------
Total long-term debt................................... 413.7 1,013.7
-------- --------
Total debt........................................... 946.9 1,339.9
-------- --------
Shareholders' equity:
Common shares (unlimited authorization of common shares
without par value; issued and outstanding 51,863,349
shares)................................................ 1,179.3 1,179.3
Contributed surplus....................................... 264.2 264.2
Retained earnings......................................... 619.9 619.9
-------- --------
Total shareholders' equity............................. 2,063.4 2,063.4
-------- --------
Total capitalization................................. $3,010.3 $3,403.3
======== ========
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DESCRIPTION OF THE NOTES
The following description of the particular terms of the notes offered by
this prospectus supplement adds information to the description of the general
terms and provisions of debt securities under the heading "Description of
Securities" beginning on page 5 of the accompanying prospectus.
GENERAL
We will issue the notes in the aggregate principal amount of $600,000,000
pursuant to an indenture dated as of June 16, 1997 between PCS and The Bank of
Nova Scotia Trust Company of New York, the trustee for the notes. The notes will
mature on May 31, 2011. We will issue the notes only in book-entry form, in
denominations of $1,000 and integral multiples of $1,000.
The notes will bear interest at the annual rate shown on the cover of this
prospectus supplement and will accrue interest from May 21, 2001 or from the
most recent date to which interest has been paid (or provided for) to but not
including the next date upon which interest is required to be paid.
Commencing November 30, 2001, interest will be payable twice a year, on May
31 and November 30, to the person in whose name a note is registered at the
close of business on the May 15 or November 15 that precedes the date on which
interest will be paid. Interest on the notes will be paid on the basis of a
360-day year consisting of twelve 30-day months.
As contemplated by the last paragraph under "Description of Securities --
Discharge, Defeasance and Covenant Defeasance" beginning on page 13 of the
accompanying prospectus, the satisfaction of certain conditions will permit us
to omit to comply with some or all of our obligations, covenants and agreements
under the indenture with respect to the notes. In addition, we may omit to
comply with certain covenants through covenant defeasance. We refer you to the
information under "Description of Debt Securities -- Discharge, Defeasance and
Covenant Defeasance" in the accompanying prospectus for more information on how
we may do this.
Except as described in the accompanying prospectus, the indenture for the
notes does not contain any covenants or other provisions designed to protect
holders of the notes against a reduction in our creditworthiness in the event of
a highly leveraged transaction or that would prohibit other transactions that
might adversely affect holders of the notes, including through the incurrence of
additional indebtedness.
REOPENING OF THE NOTES
We are initially offering the notes in the aggregate principal amount of
$600,000,000. We may from time to time, without the consent of the holders of
the notes, create and issue further notes having the same terms and conditions
in all respects as the notes being offered hereby, except for the issue date,
the issue price and the first payment of interest thereon. Additional notes
issued in this manner will be consolidated with and will form a single series
with the notes being offered hereby.
OPTIONAL REDEMPTION
The notes will be redeemable, in whole or in part, at our option at any
time and from time to time at a redemption price equal to the greater of:
- 100% of the principal amount of the notes to be redeemed, and
- the sum of the present values of the Remaining Scheduled Payments
discounted to the date of redemption on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate plus 30 basis points,
together with, in each case, accrued interest on the principal amount of the
notes to be redeemed to the date of redemption.
S-8
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In connection with such optional redemption, the following defined terms
apply:
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to maturity (computed
as of the second business day immediately preceding that redemption date) of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for that redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the notes.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding that redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for that redemption date, after
excluding the highest and lowest of such Reference Treasury Dealer Quotations,
or (B) if the Independent Investment Banker for the notes obtains fewer than
four such Reference Treasury Dealer Quotations, the average of all such
Quotations.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by us to act as the "Independent Investment Banker".
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Salomon Smith Barney Inc. and Banc of America Securities LLC and
their respective successors and one other nationally recognized investment
banking firm that is a primary U.S. Government securities dealer in New York
City (a "Primary Treasury Dealer") specified from time to time by us; provided,
however, that if any of the foregoing shall cease to be a Primary Treasury
Dealer, we shall substitute therefor another nationally recognized investment
banking firm that is a Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker by such
Reference Treasury Dealer at 3:30 p.m., New York City time, on the third
business day preceding that redemption date.
"Remaining Scheduled Payments" means, with respect to each note to be
redeemed, the remaining scheduled payments of the principal thereof and interest
thereon that would be due after the related redemption date but for such
redemption; provided, however, that, if that redemption date is not an interest
payment date with respect to such note, the amount of the next succeeding
scheduled interest payment thereon will be reduced by the amount of interest
accrued thereon to that redemption date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of the notes to be redeemed.
On and after any redemption date, interest will cease to accrue on the notes or
any portion thereof called for redemption. On or before any redemption date, we
shall deposit with the trustee or with a paying agent money sufficient to pay
the redemption price of and accrued interest on the notes to be redeemed on such
date. If less than all the notes are to be redeemed, the notes to be redeemed
shall be selected by the trustee at our direction by such method as we and the
trustee shall deem fair and appropriate. The redemption price shall be
calculated by the Independent Investment Banker and we, the trustee and any
paying agent for the notes shall be entitled to rely on such calculation.
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BOOK-ENTRY SYSTEM
We will issue the notes in the form of one or more fully registered global
securities. We will deposit these global securities with, or on behalf of, The
Depository Trust Company, or DTC, and register these securities in the name of
DTC's nominee. Direct and indirect participants in DTC will record beneficial
ownership of the notes by individual investors. The transfer of ownership of
beneficial interests in a global security will be effected only through records
maintained by the depositary or its nominee, or by participants or persons that
hold through participants.
Upon receipt of any payment in respect of a global security, the depositary
or its nominee will immediately credit participants' accounts with amounts
proportionate to their respective beneficial interests in the principal amount
of the global security as shown in the records of the depositary or its nominee.
Payments by participants to owners of beneficial interests in a global security
held through participants will be governed by standing instructions and
customary practices and will be the responsibility of those participants.
DTC holds securities of institutions that have accounts with it or its
participants. Through its maintenance of an electronic book-entry system, DTC
facilitates the clearance and settlement of securities transactions among its
participants and eliminates the need to deliver securities certificates
physically. DTC's participants include securities brokers and dealers, including
the underwriters of this offering, banks, trust companies, clearing corporations
and other organizations. DTC is owned by a number of its participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to DTC's book-entry
system is also available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. DTC agrees with and represents to
its participants that it will administer its book-entry system in accordance
with its rules and bylaws and requirements of law. The rules applicable to DTC
and its participants are on file with the Commission.
DTC has advised us and the underwriters that it is a limited-purpose trust
company organized under the laws of the State of New York, a "banking
organization" within the meaning of the New York banking law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered under the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
CONCERNING THE TRUSTEE
The Bank of Nova Scotia Trust Company of New York, the trustee for the
notes, is an affiliate of Scotia Capital (USA) Inc., one of the underwriters for
the notes.
S-10
13
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
Andersen LLP, our U.S. tax advisor, has advised that the following is a
fair summary of the principal U.S. federal income tax consequences applicable to
a United States person who holds the notes. In general, a United States person
who holds the notes or owns a beneficial interest in the notes will be subject
to United States federal taxation. You are a United States person for U.S.
federal income tax purposes if you are:
- a citizen or resident of the United States or its territories,
possessions or other areas subject to its jurisdiction;
- a corporation, partnership or other entity organized under the laws of
the United States or any political subdivision;
- an estate, the income of which is subject to United States federal
income taxation regardless of its source; or
- a trust if (i) a United States court is able to exercise primary
supervision over the trust's administration and (ii) one or more United
States persons have the authority to control all of the trust's
substantial decisions.
If you are a United States person, the interest you receive on the notes
will generally be subject to United States taxation and will be considered
ordinary interest income. If you are a U.S. partnership or trust that is taxed
as a pass-through entity for U.S. federal income tax purposes, the interest
received will not be subject to U.S. taxation at the partnership or trust level
but will be subject to taxation if the partner or beneficiary, as the case may
be, is a United States person. Under current United States federal income tax
law, if you are not a United States person, the interest payments that you
receive on the notes generally will not be subject to United States federal
income taxes, including withholding tax. However, you may be required to satisfy
certain certification requirements (described below) of the United States
Internal Revenue Service to establish that you are not a United States person.
Even if you are not a United States person, you may still be subject to
United States federal income taxes on any interest payments you receive if:
- you are an insurance company carrying on a United States insurance
business, within the meaning of the United States Internal Revenue Code
of 1986, or
- you have an office or other fixed place of business in the United States
that receives the interest and you earn the interest in the course of
operating (i) a banking, financing or similar business in the United
States or (ii) a corporation the principal business of which is trading
in stock or securities for its own account, and certain other conditions
exist.
If you are not a United States person, any gain you realize on a sale or
exchange of the notes generally will be exempt from United States federal income
tax, including withholding tax, unless:
- your gain is effectively connected with your conduct of a trade or
business in the United States; or
- you are an individual holder and are present in the United States for
183 days or more in the taxable year of the sale, and either (i) your
gain is attributable to an office or other fixed place of business that
you maintain in the United States or (ii) you have a tax home in the
United States.
The paying agent must file information returns with the United States
Internal Revenue Service in connection with payments on the notes made to
certain United States persons. If you are a United States person, you generally
will not be subject to a 31% United States backup withholding tax on such
payments if you provide your taxpayer identification number to the paying agent.
You may also be subject to information reporting and backup withholding tax
requirements with respect to the proceeds from a sale of the notes. If you are
not a United States person, in order to avoid information reporting and backup
withholding tax requirements you may have to comply with certification
procedures to establish that you are not a United States person.
S-11
14
A note held by an individual holder who at the time of death is a
non-resident alien will not be subject to United States federal estate tax.
This summary should not be construed as tax advice to any holder of the
notes. You should consult your own tax advisor for advice with respect to the
specific tax consequences to you of acquiring, holding or disposing of the
notes, including the application of U.S. state or local taxes, or the income or
other tax laws of a foreign country, province, state or local tax authority.
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
Davies Ward Phillips & Vineberg LLP, our Canadian tax counsel, has advised
that the following is a fair summary of the principal Canadian federal income
tax consequences under the Income Tax Act (Canada) and the regulations
thereunder (which we refer to in this section as the "Act " and the
"Regulations ", respectively) in effect at the date hereof generally applicable
to a holder of the notes who:
- acquires the notes pursuant to this prospectus supplement;
- holds the notes as capital property (in general the notes will be
considered to be capital property to a holder of notes unless the holder
holds the notes as inventory in the course of carrying on a business, or
the holder acquired the notes in a transaction or transactions
considered to be an adventure or concern in the nature of trade);
- deals at arm's length with us for purposes of the Act at all times
(under the Act, related persons are deemed not to deal at arm's length
with each other, and it is a question of fact whether persons not
related to each other deal at arm's length);
- is neither resident nor deemed to be resident in Canada for purposes of
the Act, the Regulations and any applicable tax treaty at any time; and
- does not ever use or hold and is not deemed ever to use or hold the
notes in connection with a trade or business that the holder carries on,
or is deemed to carry on, in Canada at any time.
Special rules which are not discussed in this summary may apply to a
non-resident holder that is an insurer carrying on business in Canada and
elsewhere. This summary is based on the current provisions of the Act and the
Regulations, all specific proposals to amend the Act and Regulations publicly
announced by or on behalf of the Minister of Finance (Canada) prior to the date
hereof (which we refer to in this section as the "Proposals") and our Canadian
counsel's understanding of the current published administrative practices and
policies of the Canada Customs and Revenue Agency. This summary assumes that the
Act and the Regulations will be amended in accordance with the Proposals as so
announced although we cannot assure you that this will occur.
This summary does not otherwise take into account or anticipate any changes
in law or practice, whether by judicial, governmental or legislative decision or
action, nor does it take into account tax legislation of any province, territory
or foreign jurisdiction. The provisions of provincial income tax legislation
vary from province to province in Canada and in some cases differ from federal
income tax legislation.
This summary is of a general nature only and is not intended to be, nor
should it be construed to be, legal or tax advice to any particular holder, and
no representations with respect to the income tax consequences to any particular
holder are made. Accordingly, you should consult your own tax advisor for advice
with respect to the tax consequences to you of acquiring, holding and disposing
of notes, including the application and effect of the income and other tax laws
of any country, province, state or local tax authority.
TAXATION OF INTEREST AND DISPOSITIONS
Interest paid or credited, or which is deemed to be paid or credited for
purposes of the Act, on a note to a non-resident of Canada will not be subject
to Canadian withholding tax. A holder who is a non-resident of Canada will not
be subject to tax under the Act in respect of any capital gain realized by such
holder on a disposition of a note, including a disposition as the result of an
optional redemption of a note by us.
S-12
15
The discussion in this section "Canadian Federal Income Tax Considerations"
is a summary of certain material Canadian federal income tax considerations for
a holder of notes and does not purport to deal with all aspects of Canadian
income taxation. For example, the foregoing is not intended to provide any
commentary on the income tax consequences and implications to a holder of notes
following (a) any of the events or arrangements summarized under "Description of
Securities -- Discharge, Defeasance and Covenant Defeasance" beginning on page
13 of the accompanying prospectus; (b) a successor entity assuming the payments
under the notes as summarized under "Description of Securities -- Merger,
Consolidation or Sale" beginning on page 7 of the accompanying prospectus; or
(c) assumption of obligations under the notes by any other party. Accordingly,
no opinion is expressed as to the applicability of any withholding tax to or the
income tax treatment of, any payments (including proceeds of disposing of the
notes) that may be received by holders of the notes following the events or
arrangements described under (a), (b) or (c) above.
S-13
16
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting
agreement dated May 16, 2001, we have agreed to sell to the underwriters named
below the following respective principal amounts of the notes:
PRINCIPAL
UNDERWRITER AMOUNT
----------- ----------------
Credit Suisse First Boston Corporation...................... $300,000,000
Salomon Smith Barney Inc.................................... 120,000,000
Banc of America Securities LLC.............................. 60,000,000
RBC Dominion Securities Corporation......................... 60,000,000
Scotia Capital (USA) Inc.................................... 60,000,000
------------
Total..................................................... $600,000,000
============
The underwriting agreement provides that the underwriters are obligated to
purchase all of the notes if any are purchased. The underwriting agreement also
provides that if an underwriter defaults, the purchase commitments of
non-defaulting underwriters may be increased or the offering of notes may be
terminated.
The underwriters propose to offer the notes initially at the public
offering price on the cover page of this prospectus supplement and to selling
group members at that price less a selling concession of 0.40% of the principal
amount per note. The underwriters and selling group members may allow a discount
of 0.25% of the principal amount per note on sales to other brokers/dealers.
After the initial public offering, the underwriters may change the public
offering price and concession and discount to broker/dealers.
We estimate that our out-of-pocket expenses for this offering will be
approximately $540,000.
The notes are a new issue of securities with no established trading market
and will not be listed on any national securities exchange. One or more of the
underwriters intends to make a secondary market for the notes. However, they are
not obligated to do so and may discontinue making a secondary market for the
notes at any time without notice. No assurance can be given as to how liquid the
trading market for the notes will be.
Each underwriter has agreed that it will not offer or sell, directly or
indirectly, any of the notes in any jurisdiction where such offer or sale is not
permitted. Each underwriter has also agreed that it will not offer or sell,
directly or indirectly, any of the notes in Canada or to any individual or
company in Canada in contravention of the securities laws of Canada or any
province or territory thereof. In addition, each underwriter has agreed that it
will not distribute any material related to the notes in Canada in contravention
of the securities laws of Canada or any province or territory thereof.
We have agreed to indemnify the underwriters against liabilities under the
Securities Act of 1933 or contribute to payments that the underwriters may be
required to make in that respect.
In the ordinary course of their respective businesses, the underwriters and
their affiliates have engaged, and may in the future engage, in commercial
banking and/or investment banking transactions with us and our affiliates. The
Bank of Nova Scotia Trust Company of New York, the trustee for the notes, is an
affiliate of Scotia Capital (USA) Inc., one of the underwriters for the notes.
In addition, we expect to use approximately $30 million of the net proceeds from
the sale of the notes to repay short-term loans provided by Royal Bank of
Canada, which is an affiliate of RBC Dominion Securities Corporation, one of the
underwriters for the notes.
S-14
17
In connection with the offering, the underwriters may engage in stabilizing
transactions, over-allotment transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Securities Exchange Act
of 1934.
- Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum.
- Over-allotment involves sales by the underwriters of notes in excess of
the principal amount of notes the underwriters are obligated to
purchase, which creates a syndicate short position.
- Syndicate covering transactions involve purchases of notes in the open
market after the distribution has been completed in order to cover
syndicate short positions.
- Penalty bids permit the underwriters to reclaim a selling concession
from a syndicate member when the notes originally sold by such syndicate
member are purchased in a stabilizing or a syndicate covering
transaction to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty bids
may have the effect of raising or maintaining the market price of the notes or
preventing or retarding a decline in the market price of the notes. As a result,
the price of the notes may be higher than the price that might otherwise exist
in the open market. These transactions, if commenced, may be discontinued at any
time.
Credit Suisse First Boston Corporation will make notes available for
distribution on the Internet through a proprietary web site and/or a third-party
system operated by Market Axess Inc., an Internet-based communications
technology provider. Market Axess Inc. is providing the system as a conduit for
communications between Credit Suisse First Boston Corporation and its customers
and is not a party to any transactions. Market Axess Inc. will not function as
an underwriter or agent of PCS, nor will Market Axess Inc. act as a broker for
any customer of Credit Suisse First Boston Corporation based on transactions the
underwriter conducts through the system. Credit Suisse First Boston Corporation
will make notes available to its customers through the Internet distributions,
whether made through a proprietary or third party system, on the same terms as
distributions made through other channels.
LEGAL MATTERS
The validity of the notes will be passed upon by Robertson Stromberg,
Saskatchewan counsel to PCS. Certain matters involving the laws of the United
States will be passed upon by Cleary, Gottlieb, Steen & Hamilton, United States
counsel to PCS, and by Skadden, Arps, Slate, Meagher & Flom LLP, United States
counsel to the underwriters. Certain matters involving the tax laws of Canada
will be passed upon by Davies Ward Phillips & Vineberg LLP, Canadian tax counsel
to PCS, and certain matters involving the tax laws of the United States will be
passed upon by Andersen LLP, United States tax advisor to PCS.
S-15
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19
[POTASH LOGO]
POTASH CORPORATION OF SASKATCHEWAN INC.
DEBT SECURITIES
Potash Corporation of Saskatchewan Inc. ("PCS") may from time to time offer
its debt securities ("Securities") up to an aggregate initial offering price not
to exceed the equivalent of $1,000,000,000, in separate series, in amounts and
at prices and on terms determined by market conditions at the time of the sale.
The Securities may be denominated in U.S. dollars or in any other currency,
currency units or composite currencies as may be designated by PCS.
The designation, aggregate principal amount, maturity date, public offering
price, interest rate or rates (which may be fixed or variable) or the method by
which such rate or rates are determined and timing of payments of interest, if
any, provision for redemption, sinking fund requirements, if any, any other
variable terms and the method of distribution in connection with the offering of
Securities in respect of which this Prospectus is being delivered, will be set
forth in a Prospectus Supplement relating thereto. The Prospectus Supplement
will contain information, where applicable, relating to certain U.S. and
Canadian federal income taxes relating to, and any listing on a securities
exchange of, the Securities covered by such Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
PCS may sell Securities to or through underwriters or groups of
underwriters or dealers, and also may sell Securities to one or more other
purchasers, directly or through agents. See "Plan of Distribution." The
Prospectus Supplement will set forth the names of any underwriters, dealers or
agents involved in the sale of any Securities offered thereunder, the principal
amounts, if any, to be purchased by underwriters and the compensation of such
underwriters, dealers or agents.
THE DATE OF THIS PROSPECTUS IS MAY 30, 1997.
20
AVAILABLE INFORMATION
PCS is subject to the information requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the Commission's Regional Offices at 7 World Trade Center,
13th Floor, New York, New York 10048, and at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials may be
obtained at the prescribed rates from the Public Reference Section of the
Commission at its principal office in Washington, D.C. The Commission maintains
a site on the World Wide Web that contains documents filed electronically with
the Commission. The address of the Commission's web site is http://www.sec.gov,
and the materials filed electronically by PCS may be inspected at such site. In
addition, the materials filed by PCS at the New York Stock Exchange may be
inspected at the Exchange's offices, 20 Broad Street, New York, New York 10005.
PCS has filed a Registration Statement on Form S-3 with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"), concerning
the Securities. This Prospectus, which constitutes a part of the Registration
Statement, omits certain of the information contained in the Registration
Statement and the exhibits thereto. Statements contained in this Prospectus, or
in any document incorporated by reference herein, as to the contents of any
document are summaries of such documents and are not necessarily complete, and
in each instance reference is made to the copy of such document filed as an
exhibit to the Registration Statement or such other document, each such
statement being hereby qualified in all respects by such reference. The
Registration Statement, including the exhibits thereto, is on file at the
offices of the Commission and may be inspected and copied as described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
PCS incorporates by reference herein the following documents, which have
been filed with the Commission pursuant to the Exchange Act (File No. 1-10351):
(a) PCS's Annual Report on Form 10-K for the year ended December 31,
1996;
(b) PCS's Current Report on Form 8-K, dated March 20, 1997, as amended
by the Current Report on Form 8-K/A dated May 15, 1997, for the event dated
March 6, 1997; and
(c) PCS's Quarterly Report on Form 10-Q for the three months ended
March 31, 1997.
All documents and reports filed by PCS pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the dates of filing of such
documents or reports.
Any statement contained herein or in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of the
Registration Statement and this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which also is
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of the Registration Statement or this
Prospectus.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. Such documents (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference) are
available, without charge, to any person to whom this Prospectus is delivered,
upon written or oral request to Potash Corporation of Saskatchewan Inc., Suite
500, 122-1st Avenue South, Saskatoon, Saskatchewan, Canada S7K 7G3, telephone
(306) 933-8500 (Attention: Corporate Secretary).
2
21
ENFORCEABILITY OF CIVIL LIABILITIES UNDER
UNITED STATES FEDERAL SECURITIES LAWS
PCS is a corporation organized under the laws of the Province of
Saskatchewan, Canada. Certain of the directors and executive officers of PCS are
residents of Canada, and certain of the experts named in this Prospectus are
residents of Canada. Substantial portions of the assets of PCS and its direct
and indirect subsidiaries and such individuals and experts are located outside
of the United States. As a result, it may be difficult or impossible for persons
who purchase the Securities to effect service of process upon such persons
within the United States in connection with matters arising under the United
States federal securities laws or to enforce against them in United States
courts judgments of United States courts predicated upon the civil liability
provisions of the United States federal securities laws. There is some doubt as
to the enforceability in Canada in original actions, or in actions for
enforcement of judgments of United States courts, of civil liabilities
predicated upon the United States federal securities laws. In addition, awards
for punitive damages in actions brought in the United States or elsewhere may be
unenforceable in Canada.
FINANCIAL STATEMENT PRESENTATION
Although PCS presents its financial statements in United States dollars,
its financial statements and financial data derived therefrom presented in this
Prospectus and in the documents incorporated by reference herein (other than pro
forma information) have been prepared in accordance with generally accepted
accounting principles in Canada ("GAAP"), and thus may not be comparable to
financial statements of United States companies. For a reconciliation of GAAP to
generally accepted accounting principles in the United States as applied to the
consolidated financial statements of PCS for the three years ended December 31,
1996 (the "Consolidated Financial Statements"), see Note 25 to the Consolidated
Financial Statements which are incorporated by reference herein.
THE COMPANY
The Company is one of the world's largest integrated fertilizer companies
with significant market share in each of the three primary fertilizer
products -- potash, phosphate and nitrogen. In 1996, PCS's potash production
represented 15% of global production, 23% of global potash capacity and an
estimated 41% of global potash excess capacity. The Company is the third largest
producer of phosphates worldwide by capacity, currently representing
approximately 9% of world production and 7% of world capacity. The Company
believes its potash and phosphate reserves to be the largest in North America.
On March 6, 1997, the Company acquired all of the outstanding capital stock
of Arcadian Corporation in exchange for cash of $555 million and 8,030,236
common shares of PCS. Since acquiring Arcadian Corporation, the Company has
become the largest producer and marketer of nitrogen fertilizer and chemical
products in the Western hemisphere. Arcadian Corporation now operates under the
name PCS Nitrogen, Inc. In 1996, sales of Arcadian Corporation were divided
approximately 60% to agricultural customers and 40% to industrial customers.
The Company's products are used for agricultural and industrial purposes as
well as for food ingredients. The Company produces and sells potash, solid
phosphate fertilizers (principally diammonium phosphate ("DAP")), liquid
phosphate fertilizers, phosphate feed supplements, purified phosphoric acid,
ammonia, urea, ammonium nitrate, nitric acid and nitrogen solutions. The Company
produces potash from six mines in Saskatchewan (five of which it owns and
operates), one in New Brunswick and one in Utah. The Company operates the
world's largest vertically integrated phosphate mine and processing plant, which
is located in North Carolina, a phosphate mine and two chemical plant complexes
in northern Florida and seven phosphate feed plants in the United States. In
addition, the Company manufactures, processes and distributes fertilizer and
other agricultural supplies from plants located in Florida, Georgia and Alabama.
As a result of the acquisition of Arcadian Corporation, the Company acquired
eight sites dedicated to the production of nitrogen-related products, one of
which also produces phosphate-related products.
The mailing address of the Company's principal executive offices is Suite
500, 122-1st Avenue South, Saskatoon, Saskatchewan, Canada S7K 7G3, and its
telephone number is (306) 933-8500. In this Prospectus, the "Company" means
Potash Corporation of Saskatchewan Inc., its predecessors and its direct and
indirect subsidiaries, unless the context otherwise indicates.
3
22
FINANCIAL INFORMATION
The following sets forth selected historical and pro forma consolidated
financial information of PCS for the periods indicated. The summary historical
consolidated financial information is presented in accordance with GAAP and
should be read in conjunction with the Consolidated Financial Statements and the
unaudited consolidated interim financial statements for each of the three-month
periods ended March 31, 1996 and 1997, incorporated by reference herein. For a
discussion of the principal differences between GAAP and U.S. generally accepted
accounting principles, see Note 25 to the Consolidated Financial Statements. The
historical consolidated financial information for each of the years in the
five-year period ended December 31, 1996 are derived from consolidated financial
statements of PCS audited by Deloitte & Touche. The historical consolidated
financial information for each of the three-month periods ended March 31, 1996
and 1997 are derived from the unaudited consolidated interim financial
statements of PCS incorporated by reference herein. The three-month results are
not necessarily indicative of the results that may be expected for any other
period or a full year. The pro forma income statement data for the year ended
December 31, 1996 gives effect to the acquisition of Arcadian Corporation (the
"Arcadian Acquisition") as if it had occurred at the beginning of such period.
The pro forma financial information does not purport to be indicative of PCS's
results of operations that would actually have been obtained if the Arcadian
Acquisition had been completed on such date or to project PCS's results of
operations at any future date or for any future period.
THREE
MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
--------------------- ---------------------------------------------------------------------
PRO FORMA
1997(1) 1996 1996 1996 1995(2) 1994 1993 1992
--------- --------- --------- --------- --------- --------- --------- -------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA AND RATIOS)
INCOME STATEMENT DATA:
Net sales.............. 464,834 366,871 2,604,608 1,403,868 856,080 363,117 212,193 214,083
Operating income....... 90,513 87,122 580,672 299,492 224,249 98,475 56,869 50,587
Net income............. 56,365 63,678 353,687 209,036 159,486 91,219 44,697 39,875
Net income per share... 1.18 1.40 6.60 4.59 3.68 2.12 1.13 1.03
FINANCIAL POSITION DATA
(AT END OF PERIOD):
Working capital........ 334,974 210,919 278,801 136,078 103,281 36,985 70,912
Total assets........... 4,446,617 2,525,099 2,494,387 2,581,817 1,027,766 1,036,490 915,049
Long-term debt......... 1,365,791 714,417 619,963 714,498 2,000 20,128 48,900
Shareholders' equity... 2,021,247 1,295,573 1,405,496 1,241,875 964,334 903,719 809,460
OTHER FINANCIAL DATA:
Operating cash flow.... 82,565 68,644 296,186 233,483 150,705 49,773 57,416
Capital expenditures... 25,282 8,384 58,939 39,596 16,751 15,796 9,872
Ratio of earnings to
fixed charges(3)..... 5.36 5.51 5.04 5.48 4.67 14.20 5.03 4.54
---------------
Notes:
(1) The Company acquired Arcadian Corporation on March 6, 1997.
(2) The Company acquired Texasgulf Inc. in April 1995 and White Springs
Agricultural Chemicals, Inc. in October 1995.
(3) For the purpose of computing the ratio of earnings to fixed charges (a)
earnings have been calculated by adding income taxes and fixed charges to
net income, and (b) fixed charges consist of the total of interest charges
and a portion of rentals determined to be representative of the interest
factor.
4
23
USE OF PROCEEDS
Except as otherwise provided in an applicable Prospectus Supplement, the
net proceeds from the sale of the Securities will be added to PCS's funds to be
used for general corporate purposes, including working capital, capital
expenditures and the repayment of debt outstanding from time to time. Pending
such application, such net proceeds may be invested in short-term marketable
securities. Specific information about the use of proceeds from the sale of
Securities will be set forth in the applicable Prospectus Supplement. PCS may
from time to time incur additional indebtedness other than through the offering
of Securities pursuant to this Prospectus.
DESCRIPTION OF SECURITIES
The Securities will be issued under an indenture (the "Indenture") between
PCS and The Bank of Nova Scotia Trust Company of New York, as trustee (the
"Indenture Trustee"). A form of the Indenture has been filed as an exhibit to
the Registration Statement of which this Prospectus is a part and is available
for inspection at the corporate trust office of the Indenture Trustee at One
Liberty Plaza, New York, N.Y. 10006. The Indenture will be subject to and
governed by the Trust Indenture Act of 1939, as amended. The statements made
under this heading relating to the Securities and the Indenture are summaries of
the provisions thereof and do not purport to be complete and are qualified in
their entirety by reference to the Indenture and the Securities. All Section
references herein are to Sections of the Indenture, which are incorporated
herein by reference. Capitalized terms used but not defined have the respective
meanings set forth in the Indenture.
GENERAL
The Securities will be direct unsecured obligations of PCS and will rank
equally with all other unsecured and unsubordinated indebtedness of PCS. The
Securities may be issued in one or more series, in each case as established from
time to time by PCS or as established in the Indenture or in one or more
indentures supplemental to the Indenture. All Securities of one series need not
be issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the holders of the Securities of such series,
for issuance of additional Securities of such series (Section 301).
The Indenture provides that there may be more than one Indenture Trustee
thereunder, each with respect to one or more series of Securities. Any Indenture
Trustee under the Indenture may resign or be removed with respect to one or more
series of Securities, and a successor Indenture Trustee may be appointed to act
with respect to such series (Section 608). If two or more persons are acting as
Indenture Trustee with respect to different series of Securities, each such
Indenture Trustee will be an Indenture Trustee of a trust under the Indenture
separate and apart from the trust administered by any other Indenture Trustee
(Section 609). In general, any action to be taken by an Indenture Trustee may be
taken by each such Indenture Trustee with respect to, and only with respect to,
the one or more series of Securities for which it is Indenture Trustee under the
Indenture.
The Prospectus Supplement relating to the series of Securities being
offered will contain the specific terms thereof, including:
(a) The designation of such Securities.
(b) The aggregate principal amount of such Securities.
(c) The percentage of the principal amount at which such Securities
will be issued and, if other than the principal amount thereof, the portion
of the principal amount thereof payable upon declaration of acceleration of
the maturity thereof, or the method by which any such portion will be
determined.
(d) The date or dates, or the method for determining such date or
dates, on which the principal of such Securities will be payable.
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(e) The rate or rates (which may be fixed or variable), or the method
by which such rate or rates will be determined, at which such Securities
will bear interest.
(f) The date or dates, or the method for determining such date or
dates, from which any such interest will accrue, the dates on which any
such interest will be payable, the record dates for such interest payment
dates, or the method by which such dates will be determined, the persons to
whom such interest will be payable, and the basis upon which interest will
be calculated if other than that of a 360-day year of twelve 30-day months.
(g) The place or places where the principal of (and premium, if any)
and interest on such Securities will be payable, where such Securities may
be surrendered for registration of transfer or exchange and where notices
or demands to or upon PCS in respect of such Securities and the Indenture
may be served.
(h) The period or periods within which, the price or prices at which
and the other terms and conditions upon which such Securities may be
redeemed, as a whole or in part, at the option of PCS, if PCS is to have
such an option.
(i) The obligation, if any, of PCS to redeem, repay or purchase such
Securities pursuant to any sinking fund or analogous provision or at the
option of a holder thereof, and the period or periods within which, the
price or prices at which and the other terms and conditions upon which such
Securities will be redeemed, repaid or purchased, as a whole or in part,
pursuant to such obligation.
(j) If other than U.S. dollars, the currency or currencies in which
such Securities are denominated and payable, which may be another currency
or units of two or more other currencies or a composite currency or
currencies, and the terms and conditions relating thereto.
(k) Whether the amount of payments of principal of (and premium, if
any) or interest on such Securities may be determined with reference to an
index, formula or other method (which index, formula or method may, but
need not, be based on a currency, currencies, currency unit or units or
composite currency or currencies) and the manner in which such amounts will
be determined.
(l) The Events of Default or covenants of such Securities, to the
extent different from those described herein.
(m) Whether such Securities will be issued in certificated or
book-entry form.
(n) Whether such Securities will be in registered or bearer form and,
if in registered form, the denominations thereof if other than $1,000 and
any integral multiple thereof and, if in bearer form, the denominations
thereof and terms and conditions relating thereto.
(o) The applicability, if any, of the defeasance and covenant
defeasance provisions described herein, or any modification thereof.
(p) Any other terms, conditions, rights and preferences of such
Securities (Section 301).
The Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities"). Special U.S. federal income tax,
accounting and other considerations applicable to Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
The Prospectus Supplement for each offering of Securities may add to or
change statements contained in this Prospectus. Except as may be set forth in
any Prospectus Supplement, the Securities will not contain any provisions that
would limit the ability of PCS to incur unsecured indebtedness or that would
afford holders of Securities protection in the event of a highly leveraged or
similar transaction involving PCS or in the event of a change of control.
Reference is made to the applicable Prospectus Supplement for information with
respect to any deletions from, modifications of or additions to the Events of
Default or covenants of PCS that are described below, including any addition of
a covenant or other provision providing event risk or similar protection.
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DENOMINATION, INTEREST, REGISTRATION OF TRANSFER
Unless specified in the applicable Prospectus Supplement, the Securities of
any series will be issuable in denominations of $1,000 and integral multiples
thereof (Section 302).
The principal of (and applicable premium, if any) and interest on any
series of Securities will be payable at the corporate trust office of the
Indenture Trustee, which initially will be One Liberty Plaza, New York, New York
10006; provided that, at the option of PCS, payment of interest may be made by
check mailed to the address of the Person entitled thereto as it appears in the
applicable register for such Securities or by wire transfer of funds to such
Person at an account maintained within the United States (Sections 301, 307 and
1002).
Any interest not punctually paid or duly provided for on any interest
payment date with respect to a Security ("Defaulted Interest") will forthwith
cease to be payable to the holder on the applicable Regular Record Date and may
either be paid to the Person in whose name such Security is registered at the
close of business on a special record date (the "Special Record Date") for the
payment of such Defaulted Interest to be fixed by the Indenture Trustee, notice
whereof will be given to the holder of such Security not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner, all as more completely described in the Indenture (Section 307).
Subject to certain limitations imposed upon Securities issued in book-entry
form, the Securities of any series will be exchangeable for other Securities of
the same series and of a like aggregate principal amount and tenor of different
authorized denominations upon surrender of such Securities at the corporate
office of the Indenture Trustee. In addition, subject to certain limitations
imposed upon Securities issued in book-entry form, the Securities of any series
may be surrendered for registration of transfer or exchange thereof at the
corporate trust office of the Indenture Trustee. Every Security surrendered for
registration of transfer or exchange must be duly endorsed or accompanied by a
written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of any Securities, but PCS may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith (Section 305). If the applicable Prospectus
Supplement refers to any transfer agent (in addition to the Indenture Trustee)
initially designated by PCS with respect to any series of Securities, PCS may at
any time rescind the designation of any such transfer agent or approve a change
in the location through which any such transfer agent acts, except that PCS will
be required to maintain a transfer agent in each place of payment for such
series. PCS may at any time designate additional transfer agents with respect to
any series of Securities (Section 1002).
Neither PCS nor the Indenture Trustee will be required to (a) issue,
register the transfer of or exchange Securities of any series during a period
beginning at the opening of business 15 days before any selection of Securities
of that series to be redeemed and ending at the close of business on the day of
mailing of the relevant notice of redemption, (b) register the transfer of or
exchange any Security, or portion thereof, called for redemption, except the
unredeemed portion of any Security being redeemed in part, or (c) issue,
register the transfer of or exchange any Security that has been surrendered for
repayment at the option of the holder, except the portion, if any, of such
Security not to be so repaid (Section 305).
MERGER, CONSOLIDATION OR SALE
PCS will be permitted to amalgamate or consolidate with, or sell, lease or
convey all or substantially all of its assets to, or merge with or into, any
other entity, provided that (a) either PCS will be the continuing entity, or the
successor entity (if other than PCS) formed by or resulting from any such
amalgamation, consolidation or merger or which will have received the transfer
of such assets is an entity organized and existing under the laws of the United
States or any state thereof or the District of Columbia or Canada or any
province thereof and will expressly assume payment of the principal of (and
premium, if any) and interest on all of the Securities and the due and punctual
performance and observance of all of the covenants and conditions contained in
the Indenture; (b) immediately after giving effect to such transaction, no Event
of Default under the Indenture, and no event which, after notice or the lapse of
time, or both, would become
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such an Event of Default, will have occurred and be continuing; and (c) an
officer's certificate and legal opinion covering such conditions will be
delivered to the Indenture Trustee (Sections 801 and 804).
CERTAIN COVENANTS
Additional Amounts. Payments made by PCS under or with respect to the
Securities will be free and clear of and without withholding or deduction for or
on account of any present or future tax, duty, levy, impost, assessment or other
governmental charge of any nature whatsoever imposed or levied by or on behalf
of the Government of Canada or of any province or territory thereof or by any
authority or agency therein or thereof having power to tax ("Taxes"), unless PCS
is required to withhold or deduct Taxes by law or by the interpretation or
administration thereof. If PCS is so required to withhold or deduct any amount
for or on account of Taxes from any payment made under or with respect to the
Securities, PCS will pay such additional interest ("Additional Amounts") as may
be necessary so that the net amount received by each Holder (including
Additional Amounts) after such withholding or deduction will not be less than
the amount the Holder would have received if such Taxes had not been withheld or
deducted; provided that no Additional Amounts will be payable with respect to a
payment made to a Holder (such Holder, an "Excluded Holder") (a) with which PCS
does not deal at arm's length (within the meaning of the Income Tax Act
(Canada)) at the time of making such payment, or (b) which is subject to such
Taxes by reason of its being connected with Canada or any province or any
territory thereof otherwise than by the mere holding of Securities or the
receipt of payments thereunder. PCS will also (a) make such withholding or
deduction and (b) remit the full amount deducted or withheld to the relevant
authority in accordance with applicable law. PCS will furnish to the Holders of
the Securities, within 30 days after the date the payment of any Taxes is due
pursuant to applicable law, certified copies of tax receipts evidencing such
payment by PCS. PCS will indemnify and hold harmless each Holder (other than an
Excluded Holder) and upon written request reimburse each such Holder for the
amount of (a) any Taxes so levied or imposed and paid by such Holder as a result
of payments made under or with respect to the Securities, (b) any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, and (c) any Taxes imposed with respect to any reimbursement under (a)
or (b) in this sentence, but excluding any such Taxes on such Holder's net
income.
At least 30 days prior to each date on which any payment under or with
respect to the Securities is due and payable, if PCS will be obligated to pay
Additional Amounts with respect to such payment, PCS will deliver to the Trustee
an Officer's Certificate stating the fact that such Additional Amounts will be
payable, the amounts so payable and such other information necessary to enable
the Trustee to pay such Additional Amounts to Holders on the payment date.
Wherever in this Prospectus or a Prospectus Supplement there is mentioned the
payment of the principal of (or premium, if any) or interest on, or in respect
of, any Security of any series or payment of any related coupon or the net
proceeds received on the sale or exchange of any Security of any series, the
payment of principal (and premium, if any), interest or any other amount payable
under or with respect to a Security, such mention shall be deemed to include
mention of the payment of Additional Amounts to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof.
The obligations of PCS to pay Additional Amounts if and when due will
survive the termination of the Indenture and the payment of all amounts under or
with respect to the Securities (Section 1009).
Limitation on Liens. PCS may not, and may not permit any Subsidiary of PCS
to, incur any Lien on or with respect to any of the Principal Property of PCS or
any such Subsidiary owned on or acquired after the date of the Indenture to
secure Debt without making, or causing such Subsidiary to make, effective
provision for securing the Securities equally and ratably with such Debt or, in
the event such Debt is subordinate in right of payment to the Securities, prior
to such Debt, as to such Principal Property for so long as such Debt will be so
secured. The foregoing restrictions will not apply to Liens in respect of Debt
existing on the date of the Indenture, to Liens on or with respect to property
that is not Principal Property, or to (a) Liens securing only Securities; (b)
Liens in favor of PCS or any of its Subsidiaries; (c) Liens on property existing
immediately prior to the time of acquisition thereof (and not created in
anticipation of the financing of such acquisition); (d) Liens to secure Debt
incurred for the purpose of financing all or any part of the purchase price or
the cost of construction or improvement of property used in the business of PCS
or any of its
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Subsidiaries and subject to such Liens, provided that (i) the principal amount
of any Debt secured by such Lien does not exceed 100% of such purchase price or
cost, (ii) such Lien does not extend to or cover any other property other than
such property and any such improvements, and (iii) such Debt is incurred within
270 days of such purchase, construction or improvement; (e) Liens on property of
a Person existing at the time such Person is merged with or into or amalgamated
or consolidated with PCS or any of its Subsidiaries that were not created in
anticipation of the acquisition of such Person, provided that such Lien does not
extend to or cover any property other than that of the Person so merged,
amalgamated or consolidated; (f) Liens on any Principal Property in favor of a
governmental body to secure partial progress, advance or other payments pursuant
to any contract or statute of such governmental body; and (g) Liens to secure
Debt incurred to extend, renew, refinance, replace or refund (or successive
extensions, renewals, refinancings, replacements or refundings), in whole or in
part, (i) any secured Debt existing on the date of this Indenture, or (ii) any
Debt secured by any Lien referred to in the foregoing clauses, so long as in
each such case the Lien does not extend to any other property and the Debt so
secured is not increased other than for reasonable costs related to such
extension, renewal, refinancing, replacement or refunding.
In addition to the foregoing, PCS and its Subsidiaries may incur a Lien or
Liens to secure Debt (excluding Debt secured by Liens permitted under the
foregoing exceptions) the aggregate amount of which, including Attributable Debt
in respect of Sale and Leaseback Transactions, does not exceed 10% of
Consolidated Net Tangible Assets. PCS and its Subsidiaries may also incur a Lien
or Liens to secure any Debt incurred pursuant to a Sale and Leaseback
Transaction, without securing the Securities equally and ratably with or prior
to such Debt, as applicable, provided that such Sale and Leaseback Transaction
is permitted by the provisions of the Indenture described below in clauses (b)
and (c) under "-- Limitation on Sale and Leaseback Transactions" (Section 1010).
Limitation on Sale and Leaseback Transactions. PCS may not, and may not
permit any Subsidiary of PCS to, enter into any Sale and Leaseback Transaction
with respect to any Principal Property (except for a period, including renewals,
not exceeding 36 months) unless (a) at the time of entering into such Sale and
Leaseback Transaction, PCS or such Subsidiary would be entitled to incur Debt,
in a principal amount equal to the Attributable Debt in respect of such Sale and
Leaseback Transaction, secured by a Lien, without equally and ratably securing
the Securities; (b) PCS or such Subsidiary applies, within 12 months after the
sale or transfer, an amount equal to the greater of (i) the net proceeds of the
Principal Property sold pursuant to the Sale and Leaseback Transaction, or (ii)
the fair value (in the opinion of an executive officer of PCS) of such Principal
Property to the acquisition of or construction on property used or to be used in
the ordinary course of business of PCS or a Subsidiary of PCS, and PCS shall
have elected to designate such amount as a credit against such Sale and
Leaseback Transaction; or (c) PCS or such Subsidiary applies, within 12 months
after the sale or transfer, an amount equal to the net proceeds of the Principal
Property sold pursuant to the Sale and Leaseback Transaction to the voluntary
defeasance or retirement of Debt, which amount will not be less than the fair
value (in the opinion of an executive officer of PCS) of such Principal Property
less an amount equal to the principal amount of such Debt voluntarily defeased
or retired by PCS or such Subsidiary within such 12-month period and not
designated as a credit against any other Sale and Leaseback Transaction (Section
1011).
Notwithstanding the foregoing, in no event shall PCS be required to defease
or retire, in the aggregate with respect to any and all such transactions, more
than 25% of the original aggregate principal amount of a series of the
Securities on or prior to the fifth anniversary of the Issue Date thereof. If
the aggregate net proceeds that would be otherwise required to defease or retire
Securities on or prior to the fifth anniversary of the Issue Date would exceed
25% of the original aggregate principal amount of such series (such excess being
"25% Excess Proceeds"), then promptly after such fifth anniversary PCS shall
defease or retire Securities in an amount equal to the 25% Excess Proceeds.
Pending such defeasing or retiring of Securities, the 25% Excess Proceeds shall
be invested and maintained in Permitted Short-Term Investments and PCS shall not
distribute such proceeds in respect of its shares (Section 1011).
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EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that the following events are "Events of Default"
with respect to any series of Securities issued thereunder: (a) default for 30
days in the payment of any installment of interest on any Security of such
series; (b) default in the payment of principal of (or premium, if any) any
Security of such series when due; (c) default in making any sinking fund payment
as required for any Security of such series; (d) default in the performance or
breach of any other covenant or warranty of PCS contained in the Indenture
(other than a covenant added to the Indenture solely for the benefit of a series
of Securities other than such series), continued for 60 days after written
notice as provided in the Indenture; (e) a default under any bond, debenture,
note or other evidence of indebtedness for money borrowed by PCS (including
obligations under leases required to be capitalized on the balance sheet of the
lessee under GAAP but not including any indebtedness or obligations for which
recourse is limited to property purchased) in an aggregate principal amount in
excess of US$ 50,000,000 or under any mortgage, indenture or other instrument
under which there may be issued or by which there may be secured or evidenced
any indebtedness for money borrowed by PCS (including such leases, but not
including such indebtedness or obligations for which recourse is limited to
property purchased) in an aggregate principal amount in excess of US$
50,000,000, whether such indebtedness now exists or is hereafter created, which
default shall have resulted in such indebtedness becoming or being declared due
and payable prior to the date on which it would otherwise have become due and
payable or such obligations being accelerated, without such acceleration having
been rescinded or annulled; (f) certain events of bankruptcy, insolvency or
reorganization, or court appointment of a receiver, liquidator or trustee of PCS
or any Significant Subsidiary of PCS; and (g) any other Event of Default
provided with respect to a particular series of Securities (Section 501).
If an Event of Default under the Indenture with respect to Securities of
any series at the time outstanding occurs and is continuing, then in every such
case the Indenture Trustee or the holders of not less than 25% in principal
amount of the outstanding Securities of that series will have the right to
declare the principal amount (or, if the Securities of that series are Original
Issue Discount Securities or Indexed Securities, such portion of the principal
amount as may be specified in the terms thereof) of all the Securities of that
series to be due and payable immediately by written notice thereof to PCS (and
to the Indenture Trustee if given by the holders). However, at any time after
such a declaration of acceleration with respect to Securities of such series (or
of all Securities then outstanding under the Indenture, as the case may be) has
been made, but before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee, the holders of not less than a majority in
principal amount of outstanding Securities of such series (or of all Securities
then outstanding under the Indenture, as the case may be) may rescind and annul
such declaration and its consequences if (a) PCS deposits with the Indenture
Trustee all required payments of the principal of (and premium, if any) and
interest on the Securities of such series (or of all Securities then outstanding
under the Indenture, as the case may be), plus certain fees, expenses,
disbursements and advances of the Indenture Trustee, and (b) all Events of
Default, other than the non-payment of accelerated principal (or specified
portion thereof), with respect to Securities of such series (or of all
Securities then outstanding under the Indenture, as the case may be) are cured
or waived as provided in the Indenture (Section 502). The Indenture also
provides that the holders of not less than a majority in principal amount of the
outstanding Securities of any series (or of all Securities then outstanding
under the Indenture, as the case may be) may waive any past default with respect
to such series and its consequences, except a default (a) in the payment of the
principal of (or premium, if any) or interest on any Security of such series, or
(b) under a covenant or provision contained in the Indenture that cannot be
modified or amended without the consent of the holder of each outstanding
Security affected thereby (Section 513).
The Indenture Trustee will be required to give notice to the holders of
Securities within 90 days of default under the Indenture unless such default is
cured or waived; provided that such Indenture Trustee may withhold notice to the
holders of any series of Securities of any default with respect to such series
(except a default in the payment of the principal of (or premium, if any) or
interest on any Security of such series or in payment of any sinking fund
installment in respect of any Security of such series) if specified responsible
officers of such Indenture Trustee consider such withholding to be in the
interest of such holders (Section 601).
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The Indenture provides that no holders of Securities of any series may
institute any proceedings, judicial or otherwise, with respect to the Indenture
or for any remedy thereunder, except in the cases of failure of the Indenture
Trustee, for 60 days, to act after it has received a written request to
institute proceedings in respect of an Event of Default from the holders of not
less than 25% in principal amount of the outstanding Securities of such series
(Section 507). This provision will not prevent, however, any holder of
Securities from instituting suit for the enforcement of payment of the principal
of (and premium, if any) and interest on such Securities at the due dates
thereof.
Subject to provisions in the Indenture relating to its duties in case of
default, the Indenture Trustee will not be under any obligation to exercise any
of its rights or powers under the Indenture at the request or direction of any
holders of any series of Securities then outstanding under such Indenture,
unless such holders offer to the Indenture Trustee reasonable security or
indemnity. The holders of not less than a majority in principal amount of the
outstanding Securities of any series (or of all Securities then outstanding
under the Indenture, as the case may be) will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Indenture Trustee, or of exercising any trust or power conferred upon such
Indenture Trustee. However, an Indenture Trustee may refuse to follow any
direction which is in conflict with any law or the Indenture, which may involve
the Indenture Trustee in personal liability or which may be unduly prejudicial
to the holders of Securities of such series not joining therein (Section 512).
Within 120 days after the close of each fiscal year, PCS will be required
to deliver to the Indenture Trustee a certificate, signed by one of several
specified officers of PCS, stating whether or not such officer has knowledge of
any default under the Indenture and, if so, specifying each such default and the
nature and status thereof (Section 1009).
MODIFICATION OF THE INDENTURE
Modifications and amendments of the Indenture will be permitted to be made
only with the consent of the holders of not less than a majority in principal
amount of all outstanding Securities issued under the Indenture which are
affected by such modification or amendment; provided that no such modification
or amendment may, without the consent of the holder of each Security affected
thereby, (a) change the stated maturity of the principal of (or premium, if
any), or any installment of interest on any Security; (b) reduce the principal
amount of any Security, or reduce the amount of principal of an Original Issue
Discount Security that would be due and payable upon declaration of acceleration
of the maturity thereof or would be provable in bankruptcy, or adversely affect
any right of repayment of the holder of any such Security; (c) change the place
of payment, or the coin or currency, for payment of principal of (or premium, if
any) or interest on any Security; (d) impair the right to institute suit for the
enforcement of any payment on or with respect to any Security; (e) reduce the
above-stated percentage of outstanding Securities of any series necessary to
modify or amend the Indenture, to waive compliance with certain provisions
thereof or certain defaults and consequences thereunder or to reduce the quorum
or voting requirements set forth in the Indenture; or (f) modify any of the
foregoing provisions or any of the provisions relating to the waiver of certain
past defaults or certain covenants, except to increase the required percentage
to effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the holder of such Security (Section
902).
The holders of not less than a majority in principal amount of outstanding
Securities issued under the Indenture will have the right to waive compliance by
PCS with certain covenants in the Indenture (Section 1013).
Modifications and amendments of the Indenture will be permitted to be made
by PCS and the Indenture Trustee thereunder without the consent of any holder of
Securities for any of the following purposes: (a) to evidence the succession of
another person to PCS as obligor under the Indenture; (b) to add to the
covenants of PCS for the benefit of the holders of all or any series of
Securities or to surrender any right or power conferred upon PCS in the
Indenture; (c) to add Events of Default for the benefit of the holders of all or
any series of Securities; (d) to add or change any provisions of the Indenture
to facilitate the issuance of, or to liberalize certain terms of, Securities in
bearer form, or to permit or facilitate the issuance of Securities in
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uncertificated form, provided that such action will not adversely affect the
interests of holders of the Securities in any material respect; (e) to change or
eliminate any provisions of the Indenture, provided that any such change or
elimination will become effective only when there are no Securities outstanding
of any series created prior thereto which are entitled to the benefit of such
provision; (f) to secure the Securities; (g) to establish the form or terms of
Securities of any series; (h) to provide for the acceptance of appointment by a
successor Indenture Trustee or facilitate the administration of the trusts under
the Indenture by more than one Indenture Trustee; (i) to cure any ambiguity,
defect or inconsistency in the Indenture, provided that such action will not
adversely affect the interests of holders of Securities of any series issued
under such Indenture in any material respect; or (j) to supplement any of the
provisions of the Indenture to the extent necessary to permit or facilitate
defeasance and discharge of any series of such Securities, provided that such
action will not adversely affect the interests of the holders of the Securities
of any series in any material respect (Section 901).
The Indenture will provide that in determining whether the holders of the
requisite principal amount of outstanding Securities of a series have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
or whether a quorum is present at a meeting of holders of Securities, (a) the
principal amount of an Original Issue Discount Security that is deemed to be
outstanding will be the amount of the principal thereof that would be due and
payable as of the date of such determination upon declaration of acceleration of
the maturity thereof, (b) the principal amount of any Security denominated in a
currency other than U.S. dollars that will be deemed outstanding will be the
U.S. dollar equivalent, determined on the issue date for such Security, of the
principal amount (or, in the case of Original Issue Discount Security, the U.S.
dollar equivalent on the issue date of such Security of the amount determined as
provided in (a) above), (c) the principal amount of an Indexed Security that
will be deemed outstanding will be the principal face amount of such Indexed
Security at original issuance, unless otherwise provided with respect to such
Indexed Security in the Indenture, and (d) Securities owned by PCS or any other
obligor upon the Securities or any Affiliate of PCS or of such other obligor
will be disregarded (Section 101).
The Indenture contains provisions for convening meetings of the holders of
Securities of a series (Section 1501). A meeting will be permitted to be called
at any time by the Indenture Trustee, and also, upon request, by PCS or the
holders of at least 10% in principal amount of the outstanding Securities of
such series, in any such case upon notice given as provided in the Indenture
(Section 1500). Except for any consent that must be given by the holder of each
Security affected by certain modifications and amendments of the Indenture, any
resolution presented at a meeting at which a quorum is present may be adopted by
the affirmative vote of the holders of a majority in principal amount of the
outstanding Securities of that series; provided, that, except as referred to
above, any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action that may be made, given or
taken by the holders of a specified percentage, which is less than a majority,
in principal amount of the outstanding Securities of a series may be adopted at
a meeting by the affirmative vote of the holders of such specified percentage in
principal amount of the outstanding Securities of that series. Any resolution
passed or decision taken at any meeting of holders of Securities of any series
duly held in accordance with the Indenture will be binding on all holders of
Securities of that series. The quorum at any meeting called to adopt a
resolution will be persons holding or representing a majority in principal
amount of the outstanding Securities of a series (Section 1504).
Notwithstanding the foregoing provision, the Indenture provides that if any
action is to be taken at a meeting of holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that the Indenture expressly provides may be made, given
or taken by the holders of a specified percentage, which is less than a
majority, in principal amount of all outstanding Securities affected thereby, or
of the holders of such series and one or more additional series: (a) there will
be no quorum requirement for such meeting, and (b) the principal amount of the
outstanding Securities of such series that vote in favor of such request,
demand, authorization, direction, notice, consent, waiver or other action will
determine whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under the
Indenture (Section 1504).
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DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
PCS is permitted under the Indenture to discharge certain obligations to
holders of any series of Securities issued thereunder that have not already been
delivered to the Indenture Trustee for cancellation and that either have become
due and payable or will become due and payable within one year (or scheduled for
redemption within one year) by irrevocably depositing with the Indenture
Trustee, in trust, funds in such currency in which such Securities are payable
in an amount sufficient to pay the entire indebtedness on such Securities in
respect of principal (and premium, if any) and interest to the date of such
deposit (if such Securities have become due and payable) or to the stated
maturity and redemption date, as the case may be (Section 401).
The Indenture provides that PCS may elect either (a) to defease and be
discharged from any and all obligations with respect to the Securities or a
series (except for the obligation to pay additional amounts, if any, upon the
occurrence of certain events of tax, assessment or governmental charge with
respect to payments on such Securities and the obligations to register the
transfer or exchange of such Securities, to replace temporary or mutilated,
destroyed, lost or stolen Securities, to maintain an office or agency in respect
of such Securities and to hold moneys for payment in trust) ("defeasance")
(Section 1402), or (b) to be released from its obligations with respect to such
Securities under the restrictions described under "-- Certain Covenants" or, if
provided pursuant to the Indenture, its obligations with respect to any other
covenant, and any omission to comply with such obligations will not constitute
an Event of Default with respect to such Securities ("covenant defeasance")
(Section 1403), in either case upon the irrevocable deposit by PCS with the
Indenture Trustee, in trust, of an amount, in such currency in which such
Securities are payable at stated maturity, or Government Obligations, or both,
applicable to such Securities which through the scheduled payment of principal
and interest in accordance with their terms will provide money in an amount
sufficient to pay the principal of (and premium, if any) and interest on such
Securities, and any mandatory sinking fund or analogous payments thereon, on the
scheduled due dates therefor (Section 1404).
Such a trust will only be permitted to be established if, among other
things, PCS has delivered to the Indenture Trustee an opinion of counsel to the
effect that the holders of such Securities will not recognize income, gain or
loss for U.S. federal income tax purposes as a result of such defeasance or
covenant defeasance and will be subject to U.S. federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such defeasance or covenant defeasance had not occurred, and such opinion of
counsel, in the case of defeasance, will be required to refer to and be based
upon a ruling of the Internal Revenue Service or a change in applicable United
States federal income tax law occurring after the date of the Indenture (Section
1404).
If after PCS has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Securities of any series, (a)
the holder of a Security of such series is entitled to, and does, elect pursuant
to the Indenture or the terms of such Security to receive payment in a currency,
currency unit or composite currency other than that in which such deposit has
been made in respect of such Security, or (b) a Conversion Event (as defined
below) occurs in respect of the currency, currency unit or composite currency in
which such deposit has been made, the indebtedness represented by such Security
will be deemed to have been, and will be, fully discharged and satisfied though
the payment of the principal of (and premium, if any) and interest on such
Security as they become due out of the proceeds yielded by converting the amount
so deposited in respect of such Security into the currency, currency unit or
composite currency in which such Security becomes payable as a result of such
election based on the applicable market exchange rate. "Conversion Event" means
the cessation of use of (a) a currency, currency unit or composite currency both
by the government of the country which issued such currency and for the
settlement of transactions by a central bank or other public institution of or
within the international banking community, (b) the ECU, both within the
European Monetary System and for the settlement of transactions by public
institutions of or within the European Communities, or (c) any currency unit or
composite currency other than the ECU for the purposes for which it was
established. All payments of principal of (and premium, if any) and interest on
any Security that is payable in a currency other than U.S. dollars that ceases
to be used by its government of issuance will be in U.S. dollars (Section 101).
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If PCS effects covenant defeasance with respect to any Securities and such
Securities are declared due and payable because of an Event of Default, the
amount in such currency in which such Securities are payable, and Government
Obligations on deposit with the Indenture Trustee, will be sufficient to pay
amounts due on such Securities at the time of their stated maturity but may not
be sufficient to pay amounts due on such Securities at the time of the
acceleration resulting from such Event of Default. However, PCS would remain
liable to make payment of such amounts due at the time of acceleration.
GLOBAL SECURITIES
The Securities of a series may be issued in whole or in part in the form of
one or more global securities (the "Global Securities") that will be deposited
with, or on behalf of, a depositary identified in the applicable Prospectus
Supplement relating to such series. The Global Securities may be issued in
either registered or bearer form and in either temporary or permanent form. The
specific terms of the depositary arrangement with respect to a series of
Securities will be described in the applicable Prospectus Supplement relating to
such series.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms, as well as other terms used herein for which no definition is
provided (Section 101).
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" means, with respect to any Sale and Leaseback
Transaction as of any particular time, the present value (discounted at the rate
of interest implicit in the terms of the lease) of the obligations of the lessee
under such lease for net rental payments during the remaining term of the lease
(including any period for which such lease has been extended). "Net rental
payments" under any lease for any period means the sum of the rental and other
payments required to be paid in such period by the lessee thereunder, not
including, however, any amounts required to be paid by such lessee (whether or
not designated as rental or additional rental) on account of maintenance and
repairs, insurance, taxes, assessments or similar charges.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible or exchangeable for corporate stock), warrants
or options to purchase any thereof.
"Consolidated Net Tangible Assets" of PCS means, at any date, the gross
book value as shown by the accounting books and records of PCS of all property
both real and personal of PCS and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP (including appropriate deductions for any minority
interests in property of Subsidiaries of PCS) less (a) the gross book value of
all its licenses, patents, patent applications, copyrights, trademarks, trade
names, goodwill, non-compete agreements or organizational expenses and other
like intangibles, (b) gross Debt discount and expense, (c) all reserves for
depreciation, obsolescence, depletion and amortization of its properties, and
(d) all other proper reserves which in accordance with GAAP should be provided
in connection with the business conducted by PCS or its Subsidiaries.
"Debt" of PCS or any Subsidiary means any indebtedness of PCS or any
Subsidiary, whether or not contingent, in respect of (without duplication) (a)
borrowed money, whether or not evidenced by bonds, notes, debentures or similar
instruments, (b) indebtedness secured by any Lien existing on property owned by
PCS or any Subsidiary, (c) the reimbursement obligations, contingent or
otherwise, in connection with any letters of credit actually issued or amounts
representing the balance deferred and unpaid of the purchase price
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of any property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or obligations
under any title retention agreement, (d) the principal amount of all obligations
of PCS or any Subsidiary with respect to redemption, repayment or other
repurchase of any Disqualified Stock, or (e) any lease of property by PCS or any
Subsidiary as lessee which is reflected on PCS's consolidated balance sheet as a
capitalized lease in accordance with GAAP to the extent, in the case of items of
indebtedness under (a) through (c) above, that any such items (other than
letters of credit) would appear as a liability on PCS's consolidated balance
sheet in accordance with GAAP, and also includes, to the extent not otherwise
included, any obligation by PCS or any Subsidiary to be liable for, or to pay,
as obligor, guarantor or otherwise (other than for purposes of collection in the
ordinary course of business), Debt of another Person (other than PCS or any
Subsidiary).
"Disqualified Stock" means, with respect to any Person, any Capital Stock
of such Person which by the terms of such Capital Stock (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise, (a) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, (b)
is convertible into or exchangeable or exercisable for Debt or Disqualified
Stock, or (c) is redeemable at the option of the holder thereof, in whole or in
part, in each case on or prior to the Stated Maturity of the series of
Securities.
"GAAP" means generally accepted accounting principles, as in effect from
time to time, in Canada, applied on a consistent basis.
"Government Obligations" means securities which are (a) direct obligations
of the United States of America or the government which issued the other
currency in which the Securities of a particular series are payable, for the
payment of which its full faith and credit is pledged, or (b) obligations of a
person controlled or supervised by and acting as an agency or instrumentality of
the United States of America or the government which issued the other currency
in which the Securities of such series are payable, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America or such other government, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and will also
include a depository receipt issued by a bank or trust as custodian with respect
to any such Government Obligation or a specific payment of interest on or
principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
"Issue Date" means the date upon which a series of Securities was first
issued and authenticated under the Indenture.
"Lien" means any mortgage, charge, security interest, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security agreement except: (a) liens for
taxes and other governmental assessments, including utility charges and vault
rentals, (i) which are not yet delinquent, or (ii) which are being contested in
good faith by all appropriate proceedings; (b) carriers', warehousemen's,
mechanics', materialmen's, repairmen's, brokers' or other like liens (i) which
do not remain unsatisfied or undischarged for a period of more than 90 days, or
(ii) which are being contested in good faith by all appropriate proceedings; (c)
attachment or judgment liens not giving rise to a default or an Event of Default
and which are being contested in good faith by appropriate proceedings; (d)
pledges or deposits in connection with workers compensation, unemployment
insurance and other social security legislation and deposits securing liability
to insurance carriers under insurance or self-insurance arrangements; (e)
deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business; and (f) easements, rights of way, restrictions,
development orders, plats and other similar encumbrances.
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"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Permitted Short-Term Investments" means investments in obligations,
maturing not more than 180 days after the date of acquisition: (a) issued by the
Government of Canada or the United States of America, or an instrumentality or
agency thereof and guaranteed fully as to principal, premium, if any, and
interest by Canada or the United States of America; (b) issued by a province of
Canada, or an instrumentality or agency thereof, with a rating of at least R-1
(low) by Dominion Bond Rating Service Limited ("DBRS") or A-1 (low) by Canadian
Bond Rating Service ("CBRS"); (c) term deposits, guaranteed investment
certificates, certificates of deposit, bankers' acceptances or bearer deposit
notes of any Canadian chartered bank or other financial institution which have
been rated at least A-1 by Standard & Poor's ("S&P") or at least P-1 or the
equivalent thereof by Moody's Investors Service ("Moody's"), or at least A-1 by
CBRS or at least R-1 (mid) by DBRS; (d) commercial paper issued by a corporation
organized and existing under the laws of Canada or the United States of America
with a rating of at least A-1 by S&P, P-1 by Moody's, R-1 (mid) by DBRS or A-1
by CBRS; (e) any asset-backed debt securities with ratings of at least A-1 by
S&P, P-1 by Moody's, R-1 (high) by DBRS or A-1+ by CBRS; and (f) notes, bonds,
coupons, debentures or other debt securities issued by any United States or
Canadian corporation with ratings of at least A-1 by S&P, P-1 by Moody's, R-1
(mid) by DBRS or A-1 by CBRS; provided that in the event of a rating downgrade
on any Permitted Short-Term Investment by S&P, Moody's, DBRS or CBRS during the
period in which the Permitted Short-Term Investment is held, PCS acting
reasonably shall have the full discretion to retain the Permitted Short-Term
Investment to maturity.
"Principal Property" means (a) any real property interest (all such
interests forming an integral part of a single development or operation being
considered as one interest), including any mining claims and leases, and any
plants, buildings or other improvements thereon, and any part thereof, that is
held by PCS or any Subsidiary and has a gross book value (without deduction of
any reserve for depreciation), on the date as of which the determination is
being made, exceeding 3% of Consolidated Net Tangible Assets of PCS (other than
any such interest that the board of directors of PCS determines by resolution is
not material to the business of PCS and its Subsidiaries taken as a whole), or
(b) any of the Capital Stock or debt securities issued by any Significant
Subsidiary.
"Sale and Leaseback Transaction" of any Person means an arrangement with
any lender or investor or to which such lender or investor is a party providing
for the leasing by such Person of any property or asset of such Person which has
been or is being sold or transferred by such Person more than 270 days after the
acquisition thereof or the completion of construction or commencement of
operation thereof to such lender or investor or to any Person to whom funds have
been or are to be advanced by such lender or investor on the security of such
property or asset. The stated maturity of such arrangement is the date of the
last payment of rent or any other amount due under such arrangement prior to the
first date on which such arrangement may be terminated by the lessee without
payment of a penalty.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (as defined in Rule 1-02 of Regulation S-X, promulgated by the
Commission) of PCS.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means an entity a majority of the partnership interests or a
majority of the outstanding voting stock of which is owned, directly or
indirectly, by PCS and/or one or more other Subsidiaries of PCS. For the
purposes of this definition, "voting stock" means stock having voting power for
the election of directors, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.
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"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) is at the time owned by such Person
and/or one or more Wholly Owned Subsidiaries of such Person.
CERTAIN INCOME TAX CONSIDERATIONS
The applicable Prospectus Supplement will describe the principal Canadian
federal income tax consequences to an investor (a) who is not resident in Canada
for purposes of the Income Tax Act (Canada) (the "Act"), (b) who is a resident
of the United States for purposes of the Canada-United States Income Tax
Convention, and (c) who meets certain other requirements (a "U.S. Investor") of
acquiring, owning and disposing of Securities, including whether the payment by
the Company of principal (and premium, if any) and interest will be subject to
Canadian non-resident withholding tax under the Act.
The applicable Prospectus Supplement also will describe the principal
United States federal income tax considerations applicable to a U.S. Investor of
acquiring, owning and disposing of Securities, including any such considerations
relating to (a) principal (and premium, if any) and interest payable with
respect to the Securities, in a currency other than the United States dollar,
(b) the issuance of Securities with "original issue discount" (as defined for
United States federal income tax purposes), if applicable, and (c) the inclusion
of any special terms in Securities that may have a material effect for United
States federal income tax purposes.
PLAN OF DISTRIBUTION
PCS may sell Securities to or through underwriters and also may sell
Securities to one or more other purchasers directly or through agents.
The distribution of Securities may be effected from time to time in one or
more transactions at a fixed price or prices, which may be changed, or at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from PCS or from purchasers of Securities, for whom they may act as
agents, in the form of discounts, concessions or commissions. Underwriters may
sell Securities to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agents.
Underwriters, dealers and agents that participate in the distribution of
Securities may be deemed to be underwriters, and any discounts or commissions
they receive from PCS, and any profit on the resale of Securities they realize
may be deemed to be underwriting discounts and commissions under the Securities
Act. Any such underwriter or agent will be identified and any such compensation
received from PCS will be described in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, each
series of Securities will be a new issue with no established trading market. PCS
may elect to list any series of Securities on an exchange, but is not obligated
to do so. It is possible that one or more underwriters may make a market in a
series of Securities, but they will not be obligated to do so and may
discontinue any market-making at any time without notice. Therefore, no
assurance can be given as to the liquidity of the trading market for the
Securities.
Under agreements PCS may enter into, underwriters, dealers and agents, who
participate in the distribution of Securities, may be entitled to
indemnification by PCS against certain liabilities, including liabilities under
the Securities Act.
The Securities have not been and will not be qualified for sale under the
securities laws of Canada or any province or territory of Canada. The Securities
may not be offered or sold, directly or indirectly, in Canada, or to or for the
benefit of any resident thereof, in violation of the securities laws of Canada
or any province or territory thereof.
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Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be customers of, PCS in the ordinary course of
business.
LEGAL MATTERS
The legality of the Securities offered hereby will be passed upon by
Robertson Stromberg, Saskatchewan counsel to PCS. Certain matters involving the
laws of the United States will be passed upon by Arent Fox Kintner Plotkin &
Kahn, U.S. counsel to PCS.
EXPERTS
The consolidated financial statements of PCS as of December 31, 1995 and
1996, and for each of the three years in the period ended December 31, 1996,
incorporated by reference herein and in the Registration Statement of which this
Prospectus is a part, have been audited by Deloitte & Touche, independent
chartered accountants, as stated in their report incorporated by reference
herein and therein, and are so incorporated in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.
The consolidated financial statements of Arcadian Corporation as of
December 31, 1995 and 1996, and for each of the three years in the period ended
December 31, 1996, incorporated by reference herein and in the Registration
Statement of which this Prospectus is a part, have been so incorporated in
reliance upon the reports of KPMG Peat Marwick LLP, independent certified public
accountants, and Coopers & Lybrand, independent chartered accountants,
incorporated by reference herein and therein, and upon the authority of said
firms as experts in accounting and auditing.
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