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Registration No. 333-·
As filed with the Securities and Exchange Commission on June
10, 2003 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________ FORM S-3 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 _______________ ALCAN INC. (Exact Name of Registrant as Specified in its Charter) CANADA
NOT APPLICABLE (Jurisdiction of Incorporation) (IRS Employer Identification No.) 1188 Sherbrooke Street West Montreal, Quebec, Canada H3A 3G2 514-848-8000 (Address of principal executive offices, including postal code, and telephone number, including area code) ______________ (Name, Address, including postal code, and telephone number, including area code, of agent for service) Roy Millington, Secretary ALCAN INC. 1188 Sherbrooke Street West Montreal, Quebec, Canada H3A 3G2 514-848-8000
____________
Copies to:
Donald R. Crawshaw |
Charles S. Whitman, III |
Sullivan & Cromwell LLP |
Davis Polk & Wardwell |
125 Broad Street |
450 Lexington Avenue |
New York, New York 10004 |
New York, New York 10017 |
212-558-4000 |
(212) 450-4000 |
_____________
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [ x]
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration satement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number earlier effective registration statement for the offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
CALCULATION OF REGISTRATION FEE
Title of each class of securities to be registered |
Amount to be registered (6)(7) |
Proposed maximum offering price per unit (8)(9) |
Proposed maximum aggregate offering price (5)(6)(7)(9) |
Amount of registration fee (10) |
Senior Debt Securities |
(1)(2)(5) |
|||
Subordinated Debt Securities |
(1)(2)(5) |
|||
Preference Shares |
(1)(2)(5) |
|||
Common Shares |
(1)(2)(5) |
|||
Common Share Purchase Rights |
(1)(2)(3)(5) |
|||
Warrants |
(1)(2)(4)(5) |
|||
Total |
$1,000,000,000 |
100% |
$1,000,000,000 |
$80,900 |
(1) Such indeterminate number, principal amount or liquidation amount of senior debt securities, subordinated debt securities, preference shares, common shares (including associated common share purchase rights) and warrants of Alcan Inc. as may from time to time be issued at indeterminate prices. The securities registered hereunder shall not have an aggregate offering price which exceeds $1,000,000,000 in United States dollars or the equivalent in any other currency.
(2) Also includes such indeterminate number of senior debt securities, subordinated debt securities and preference shares and common shares (including associated common share purchase rights) as may be issued upon conversion or exchange of any senior debt securities, subordinated debt securities or preference shares that provide for conversion or exchange into other securities or upon exercise of warrants for such securities.
(3) Each Common Share includes one Common Share Purchase Right as described under "Description of Common Shares". No separate consideration will be received for the common share purchase rights.
(4) Warrants may be sold separately or with senior debt securities, subordinated debt securities, preference shares or common shares.
(5) No separate consideration will be received for the senior debt securities, subordinated debt securities, preference shares or common shares issuable upon conversion of or in exchange for senior debt securities, subordinated debt securities or preference shares. In addition, no separate consideration will be received for any preference shares redeemed for subordinated debt securities in lieu of cash.
(6) In United States dollars or the equivalent thereof in any other currency, currency unit or units, or composite currency or currencies.
(7) Such amount represents the principal amount of any senior debt securities or subordinated debt securities issued at their principal amount, the issue price rather than the principal amount of any senior debt securities or subordinated debt securities issued at an original issue discount, the liquidation preference of any preference shares, the amount computed pursuant to Rule 457(c) for any common stock, the issue price of any warrants and the exercise price of any securities issuable upon exercise of warrants.
(8) Estimated solely for the purpose of computing the registration fee.
(9) Exclusive of accrued interest and distributions, if any.
(10) Calculated pursuant to Rule 457(o) of the rules and regulations under the Securities Act.
_____________________
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion. Dated June 10, 2003.
PROSPECTUS
Alcan Inc.
A
$1,000,000,000
SENIOR DEBT SECURITIES
SUBORDINATED DEBT SECURITIES
PREFERENCE SHARES
COMMON SHARES
WARRANTS
_________________
Alcan Inc. intends to offer at one or more times separately or in combination debt securities, equity securities and warrants with a total offering price not to exceed $1,000,000,000. We will provide the specific prices and other terms of these securities in supplements to this prospectus. You should read this prospectus and the applicable supplement carefully before you invest.
Alcan Inc. may sell the securities (or any combination) to or through one or more underwriters, dealers or agents. The names of the underwriters, dealers or agents will be set forth in supplements to this prospectus.
Alcan Inc.'s common shares are listed on the New York Stock Exchange and The Toronto Stock Exchange under the symbol "AL".
_________________
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Prospectus dated · , 2003.
TABLE OF CONTENTS
WHERE YOU CAN FIND MORE INFORMATION
DESCRIPTION OF DEBT SECURITIES
DESCRIPTION OF PREFERENCE SHARES
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Some statements made or incorporated by reference in this prospectus are forward-looking statements. Terms such as "believes", "expects", "may", "will", "could", "should", "anticipates", "estimates" and "plans" and the negatives of and variations on terms such as these signify forward-looking statements. Because these forward-looking statements include risks and uncertainties, we caution you that actual results may differ materially from the results expressed in or implied by the statements.
Adverse factors that could cause actual results or outcomes to differ from the results expressed or implied by forward-looking statements include, among other things:
changes in global aluminum supply and demand conditions;
changes in aluminum ingot prices;
changes in raw materials costs and availability;
changes in the relative values of various currencies;
cyclical demand and pricing within the principal markets for our products;
changes in government regulations, particularly those affecting environmental, health or safety compliance;
fluctuations in the supply of and prices for power in the areas in which we maintain production facilities;
the effect of integrating acquired businesses and the ability to attain expected benefits;
potential catastrophic damage, increased insurance and security costs and general uncertainties associated with the increased threat of terrorism or war;
the effect of international trade disputes on our ability to import materials, export our products and compete internationally;
relationships with, and financial and operating conditions of, customers and suppliers;
economic, regulatory and political factors within the countries in which we operate or sell our products; and
factors affecting our operations, such as litigation, labor relations and negotiations and fiscal regimes.
We may note additional factors in this prospectus, in an accompanying prospectus supplement and in documents incorporated by reference into this prospectus and an accompanying prospectus supplement. We undertake no obligation to release publicly the results of any future revisions we may make to forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (SEC) utilizing a "shelf" registration, or continuous, process. Under this shelf process, we may, from time to time, sell any combination of the following securities described in this prospectus in one or more offerings with a total offering price not to exceed $1,000,000,000:
senior debt securities;
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subordinated debt securities;
preference shares;
common shares (together with associated common shares purchase rights); and
warrants, rights or other securities exercisable or exchangeable for or convertible into equity securities or debt securities.
The common shares and the preference shares are referred to as the equity securities; the senior debt securities and the subordinated debt securities are referred to as the debt securities; the equity securities, the debt securities and the warrants are referred to as the securities.
Unless otherwise indicated, dollar amounts provided in this prospectus are denominated in U.S. dollars.
This prospectus provides you with a general description of the securities we may offer. Each time we sell the securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. A prospectus supplement may include a discussion of risks or other special considerations applicable to the offered securities or to us. A prospectus supplement may also add, update or change information in this prospectus. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement, you must rely on the information in the prospectus supplement. Please carefully read both this prospectus and the applicable prospectus supplement together with additional information described under the heading "WHERE YOU CAN FIND MORE INFORMATION".
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with the SEC. You may read and copy any document we file at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Our SEC filings are also available to the public over the Internet at the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file with them, 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 part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below, and filings that we will make after the date of the initial filing of the registration statement of which this prospectus forms a part and prior to the effectiveness of the registration statement and our other future filings with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until we or any underwriters sell all of the securities:
Annual Report on Form 10-K for the year ended December 31, 2002;
those portions of Alcan Inc.'s Annual Report for the year ended December 31, 2002 and Management Proxy Circular for the annual meeting of shareholders held on April 24, 2003 that are expressly incorporated by reference in the Annual Report on Form 10-K;
Quarterly Report on Form 10-Q for the quarter ended March 31, 2003; and
Current Reports on Form 8-K, dated January 17, 2003 and May 1, 2003.
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We make available free of charge through our website, accessible at www.alcan.com, all of our reports and other information filed with or furnished to the SEC by means of a hyperlink to the SEC's EDGAR database of electronic filings. We also post on our website annual and quarterly reports filed with the SEC as soon as reasonably practicable after the reports are electronically filed with the SEC. Material contained on or accessible through our website is not incorporated into this prospectus. You may also request a copy of these filings at no cost, by writing or calling us at the following address:
Alcan Inc.
1188 Sherbrooke Street West
Montreal, Quebec, Canada H3A 3G2
(514) 848-8000
Attention: Secretary
Our common shares are traded on the New York Stock Exchange under the symbol "AL". You may inspect our reports filed with or furnished to the SEC and other information concerning us at the offices of the New York Stock Exchange, 11 Wall Street, New York, New York 10005.
You should rely only on the information incorporated by reference or provided in this prospectus and any applicable supplement. We have not authorized anyone else to provide you with other or different information.
Neither we nor any underwriter or agent will make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. Unless otherwise stated in the prospectus supplement, we have not qualified the securities for sale under the securities laws of any Province or Territory of Canada and the securities are not being and may not be offered or sold in Canada in violation of the securities laws of any Province or Territory of Canada. You should assume that the information appearing in this prospectus, as well as information we have previously filed with the SEC and incorporated by reference, is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects, as well as applicable laws and regulations, may have changed since that date. You should assume that the information appearing in a prospectus supplement, as well as information contained in a document incorporated by reference in a pro spectus supplement, is accurate only as of the date of the prospectus supplement or incorporated document.
We are a Canadian corporation. Most of our directors and officers, as well as the experts named in this prospectus, are not citizens or residents of the United States and all or a substantial part of the assets of these individuals may be located outside the United States. Also, a large part of our assets are located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon these individuals or to realize against them or us within the United States upon judgments of courts of the United States predicated upon civil liabilities under the Securities Act of 1933. Roy Millington, Corporate Secretary, our Canadian counsel, has advised us, however, that the civil liability provisions of that Act may be enforced in original actions taken in the Province of Quebec against us or any such individual, but judgments of United States courts predicated on such provisions will not be enforceable in the Province of Quebec unless they meet the requirements for the recognition and enforcement of foreign judgments under the Civil Code of Quebec.
We are a Canadian corporation and the parent company of an international group operating in many aspects of the aluminum and speciality packaging businesses.
Our operations include:
the mining and processing of bauxite, the basic aluminum ore;
the refining of bauxite into alumina;
the generation of electricity for use in smelting aluminum;
the smelting of aluminum from alumina;
the recycling of used and scrap aluminum;
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the fabrication of aluminum, aluminum alloys and non-aluminum materials into semi-finished and finished products;
the production and conversion of specialty packaging and packaging products for many industries including the food, pharmaceutical, cosmetic, personal care and tobacco sectors;
the distribution and marketing of aluminum, non-aluminum and packaging products; and
in connection with our aluminum operations, the production and sale of industrial chemicals.
We have a network of operations in 41 countries with 53,000 dedicated employees, a global customer base, innovative products and advanced technologies.
Our principal executive offices are located at 1188 Sherbrooke Street West, Montreal, Quebec, Canada H3A 3G2, and our telephone number is (514) 848-8000. Unless the context otherwise indicates, the terms "Alcan Inc." or "Alcan", "we", "us" or "our" mean Alcan Inc. and its controlled subsidiaries.
Unless otherwise indicated in an accompanying prospectus supplement, we expect to use the net proceeds from the sale of securities for any general corporate purposes, which may include, among other things, working capital, capital expenditures, repurchase of our common shares or preference shares, the repayment of short-term or long-term borrowings or acquisitions. Unless otherwise indicated, funds that will not be used immediately for such purposes may be invested in short-term investments.
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND
The following table shows our consolidated ratios of earnings to fixed charges and earnings to combined fixed charges and preferred stock dividends for the periods indicated:
Three months ended March 31, 2003 |
||||||
Year Ended December 31, |
||||||
|
2002 |
2001 |
2000 |
1999 |
1998 |
|
Ratio of Earnings to Fixed Charges (Canadian GAAP) (1) |
3.81 |
4.00 |
1.08 (2) |
5.49 (2) |
5.79 (2) |
5.87 |
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (Canadian GAAP) (1) |
3.62 |
3.86 |
1. 04 (2) |
5.02 (2) |
5.22 (2) |
5.23 |
__________
(1) The ratio of earnings to fixed charges is determined by dividing fixed charges (including capitalized interest) into income before fixed charges (excluding capitalized interest) and income taxes, and eliminating undistributed income of less than 50% owned persons. The ratio of earnings to combined fixed charges and preferred stock dividends is determined by dividing the sum of fixed charges (including capitalized interest) and preferred stock dividends into income before fixed charges (excluding capitalized interest) and income taxes, and eliminating undistributed income of less than 50% owned persons. Fixed charges consist of interest expenses and amortization of debt discount and expense and premium and that portion of rental payments which is considered as being representative of the interest factor implicit in our operating leases. The ratios shown above are based on Alcan's consolidated financial statements, which were prepared in accordance with generally accepted accounting principles in Canada.
(2) Revised due to the accounting change described in Note 3, Accounting Changes, under Deferred Foreign Exchange Translation Gains and Losses, to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2002, which is incorporated by reference into this prospectus.
The following table shows our consolidated ratios of earnings to fixed charges and earnings to combined fixed charges and preferred stock dividends for the periods indicated as determined under generally accepted accounting principles in the United States.
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Three months ended March 31, 2003 |
||||||
Year Ended December 31, |
||||||
|
2002 |
2001 |
2000 |
1999 |
1998 |
|
Ratio of Earnings to Fixed Charges (U.S. GAAP) (1) |
3.89 |
4.25 |
0.84 |
5.50 |
5.85 |
6.01 |
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (U.S. GAAP) (1) |
3.70 |
4.11 |
0.81 |
5.03 |
5.26 |
5.35 |
_________
(1) Earnings consist of income before cumulative the effect of accounting changes, before fixed charges (excluding capitalized interest) and income taxes, and eliminating undistributed income of less than 50% owned persons. Fixed charges consist of interest expenses and amortization of debt discount and expense and premium and that portion of rental payments which is considered as being representative of the interest factor implicit in our operating leases.
For further information regarding differences between Canadian and United States generally accepted accounting principles, see note 7 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2002 and note 4 to the unaudited interim consolidated financial statements in our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2003, each of which is incorporated by reference into this prospectus.
DESCRIPTION OF DEBT SECURITIES
Rank and Unsecured Status
We may issue senior or subordinated debt securities from time to time. Neither the senior debt securities nor the subordinated debt securities will be secured by any of our property or assets. Thus, by owning a debt security, you are one of our unsecured creditors.
The senior debt securities will constitute part of our senior debt and will rank equally with all of our other unsecured and unsubordinated debt.
The subordinated debt securities will constitute part of our subordinated debt and will be subordinate in right of payment to all of our senior indebtedness, as that term is defined in the Indenture. The prospectus supplement for any series of subordinated debt securities will indicate the approximate amount of senior indebtedness outstanding as of the end of our most recent fiscal quarter. We will not be limited in our ability to subsequently incur additional senior indebtedness.
We use the term debt securities in this prospectus to refer to both the senior debt securities and the subordinated debt securities.
Indenture for the Debt Securities
The debt securities covered by this prospectus will be issued in one or more series under an Indenture dated as of May 15, 1983, as supplemented (as so supplemented, the Indenture), between us and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee. In the event that we issue subordinated debt securities we will enter into a supplement to the Indenture to permit issuances of subordinated debt securities under the Indenture. The Trustee can enforce the rights of the holders of the debt securities against us if we default on our obligations under the terms of the Indenture or the debt securities, subject to limitations contained in the Indenture. The Indenture is a contract governed by the laws of the State of New York. We have summarized selected provisions of the Indenture below. This is a summary and is not complete. You should read the Indenture we filed as an exhibit to the registration statement of which this prospectus forms a part. The Indenture contains the full legal text of the matters described in this section describing its terms. In the summary below (which reflects the terms of the Seventh and Eighth Supplemental Indentures, the forms of which have been filed as exhibits to the registration statement of which this prospectus forms a part), we have included references to section numbers of the Indenture so that you can easily locate the summarized provisions. Capitalized terms used in the summary have the meanings specified in the Indenture.
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General Provisions
The prospectus supplement relating to any series of the debt securities being offered will include specific terms relating to the debt securities offered. These terms will include some or all of the following:
whether the debt securities are senior debt securities or subordinated debt securities;
the series designation of the debt securities;
the total principal amount of the debt securities;
the percentage of the principal amount at which the debt securities will be issued;
the date or dates on which the debt securities will mature;
the rate or rates, if any, per year at which the debt securities will bear interest, or the method of determination of such rate or rates;
the times on which the interest, if any, on the debt securities will be payable;
if interest payments are subject to interest deferral provisions, specific information about such deferral provisions;
if we may pay interest or principal through issuances of equity or debt securities, a description of such terms;
the record dates for payments of interest, if any, and principal;
provisions for a sinking, purchase or other similar fund, if any;
the date, or dates, or circumstances, if any, triggering the right to redeem the debt securities, at our option or the option of the holder and the redemption price or prices;
if the debt securities may be converted into or exercised or exchanged for our common shares or preferred shares or any other of our securities, the terms on which conversion, exercise or exchange may occur, including whether conversion, exercise or exchange is mandatory, at the option of the holder or at our option, the period during which conversion, exercise or exchange may occur, the initial conversion, exercise or exchange price or rate and the circumstances or manner in which the amount of common shares or preferred shares or other securities issuable upon conversion, exercise or exchange may be adjusted; and
any other terms of the debt securities that are not inconsistent with the provisions of the Indenture.
The Indenture provides that debt securities of a single series may be issued at various times, with different maturity dates, and may bear interest at different rates. Unless otherwise indicated in the prospectus supplement, principal, premium, if any, and interest, if any, will be payable, and the debt securities offered will be transferable, at the corporate trust office of Citibank, N.A., as registrar and paying agent, in New York, New York. The payment of interest, if any, may be made at our option by our mailing a check to the person entitled to receive the interest at the address listed in the debt security register. (Section 3.1)
We will establish a record date for the payment of interest, if any, on the debt securities of each series. If no record date is established and interest payment dates fall on the first day of a calendar month, the record date will be the fifteenth day of the calendar month preceding the interest payment date. If no record date is established and interest payment dates fall on the fifteenth day of a calendar month, the record date will be the first day of the calendar month. (Section 2.7)
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We Are Not Limited From Issuing Additional Debt and Other Securities
We may issue as many distinct series of debt securities under the Indenture as we wish. The Indenture does not limit other indebtedness or securities that we may issue, under the Indenture or otherwise, and contains no financial or similar restrictions on us except as described below. The Indenture does not limit our ability to incur additional indebtedness senior to any subordinated debt securities we may issue.
Form of Debt Securities
Unless otherwise indicated in a prospectus supplement, we will issue the debt securities in book-entry only form. This means that the debt securities will be represented by one or more permanent global certificates registered in the name of a depositary, which will be The Depository Trust Company, New York, New York (DTC), or its nominee unless otherwise indicated in a prospectus supplement. We will refer to debt securities in this form here and in the prospectus supplement as book-entry only. Alternatively, we may issue the debt securities in certificated form registered in the name of the holder. Under these circumstances, holders may receive certificates representing the debt securities. Unless otherwise indicated in a prospectus supplement, senior debt securities in certificated form will be issued only in multiples of $1,000 and subordinated debt securities in certificated form will be issued only in multiples of $25. Certificated debt securities will be exchangeable without charge except for reimbursement of taxes or other governmental charges, if any. We will refer to debt securities in this form in the prospectus supplement as certificated.
Legal Ownership and Book-Entry Only Issuance
In this section, we describe special considerations that will apply to registered debt securities issued in global - that is, "book-entry only" - form. First we describe the difference between legal ownership and indirect ownership of registered debt securities. Then we describe special provisions that apply to global securities.
Who Is the Legal Owner of a Registered Security?
Each debt security in registered form will be represented either by a certificate issued in definitive form to a particular investor or by one or more global securities representing the entire series of debt securities. We refer to those who have debt securities registered in their own names, on the books that we or the Trustee maintain for this purpose, as the holders of those debt securities. These persons are the legal holders of the debt securities. We refer to those who, indirectly through others, own beneficial interests in debt securities that are not registered in their own names as indirect owners of those debt securities. As we discuss below, indirect owners are not legal holders, and investors in debt securities issued in book-entry only form or in street name will be indirect owners.
Book-Entry Owners
Unless otherwise indicated in the applicable prospectus supplement, we will issue each debt security in book-entry only form. This means debt securities will be represented by one or more global securities registered in the name of a financial institution that holds them as depositary on behalf of other financial institutions that participate in the depositary's book-entry system. These participating institutions, in turn, hold beneficial interests in the debt securities on behalf of themselves or their customers.
Under the Indenture, only the person in whose name a debt security is registered is recognized as the holder of that debt security. Consequently, for debt securities issued in global form, we will recognize only the depositary as the holder of the series of debt securities and we will make all payments on the debt securities to the depositary. The depositary will pass along the payments it receives to its participants, which in turn will pass the payments along to their customers who are the beneficial owners. The depositary and its participants will do so under agreements they have made with one another or with their customers; they are not obligated to do so under the Indenture or the terms of the debt securities.
As a result, investors will not own debt securities directly. Instead, they will own beneficial interests in a global security, through a bank, broker or other financial institution that participates in the depositary's book-entry system or holds an interest through a participant. As long as the debt securities are issued in global form, investors will be indirect owners, and not holders, of the debt securities.
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Street Name Owners
In the future we may terminate a global security or issue debt securities initially in non-global form. In these cases, investors may choose to hold their debt securities in their own names or in street name. Debt securities held by an investor in street name would be registered in the name of a bank, broker or other financial institution that the investor chooses, and the investor would hold only a beneficial interest in those debt securities through an account he or she maintains at that institution.
For debt securities held in street name, we will recognize only the intermediary banks, brokers and other financial institutions in whose names the debt securities are registered as the holders of those debt securities and we will make all payments on those debt securities, including deliveries of any property other than cash, to them. These institutions pass along the payments they receive to their customers who are the beneficial owners, but only because they agree to do so in their customer agreements or because they are legally required to do so. Investors who hold debt securities in street name will be indirect owners, not holders, of those debt securities.
Legal Holders
Our obligations, as well as the obligations of the Trustee and any agent employed by us run only to the holders of the debt securities. We do not have obligations to investors who hold beneficial interests in global securities, in street name or by any other indirect means. This will be the case whether an investor chooses to be an indirect owner of a debt security or has no choice because we are issuing the debt securities only in global form.
For example, once we make a payment or give a notice to the holder, we have no further responsibility for that payment or notice even if that holder is required, under agreements with depositary participants or customers or by law, to pass it along to the indirect owners but does not do so. Similarly, if we want to obtain the approval of the holders for any purpose - for example, to amend the Indenture or to relieve us of the consequences of a default or of our obligation to comply with a particular provision of the Indenture -- we would seek the approval only from the holders, and not the indirect owners, of the relevant debt securities. Whether and how the holders contact the indirect owners is up to the holders.
When we refer to "you" in this prospectus, we mean those who invest in the debt securities being offered by this prospectus, whether they are the holders or only indirect owners of those debt securities. When we refer to debt securities owned or held by you in this prospectus, we mean the debt securities in which you will hold a direct or indirect interest.
Special Considerations for Indirect Owners
If you hold debt securities through a bank, broker or other financial institution, either in book-entry form or in street name, you should check with your own institution to find out:
how it handles securities payments and notices;
whether it imposes fees or charges;
whether and how you can instruct it to exercise any rights to exchange or convert a debt security for or into other property;
how it would handle a request for the holders' consent, if ever required;
whether and how you can instruct it to send you debt securities registered in your own name so you can be a holder, if that is permitted in the future;
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how it would exercise rights under the debt securities if there were a default or other event triggering the need for holders to act to protect their interests; and
What is a Book-Entry Only Security?
Each debt security issued in book-entry form will be represented by a global security that we deposit with and register in the name of one or more financial institutions or clearing systems, or their nominees, which we select. A financial institution or clearing system that we select for any debt security for this purpose is called the "depositary" for that debt security. A debt security will usually have only one depositary but it may have more.
Each series of debt securities will have one or more of the following as the depositaries:
DTC;
a financial institution holding the debt securities on behalf of Euroclear Bank S.A./N.V., as operator of the Euroclear system, which is known as "Euroclear";
a financial institution holding the debt securities on behalf of Clearstream Banking, societe anonyme, Luxembourg, which is known as "Clearstream"; and
any other clearing system or financial institution named in the applicable prospectus supplement.
The depositaries named above may also be participants in one another's systems. Thus, for example, if DTC is the depositary for a global security, investors may hold beneficial interests in that debt security through Euroclear or Clearstream, as DTC participants. If we designate a depositary other that DTC we will indicate this in the prospectus supplement, and we will enter into a supplement to the Indenture to permit the designation.
A global security may not be transferred to or registered in the name of anyone other than the depositary or its nominee, unless special termination situations arise. We describe those situations below under " - Holder's Option to Obtain a Non-Book-Entry Only Security; Special Situations When a Global Security Will Be Terminated". As a result of these arrangements, the depositary, or its nominee, will be the sole registered owner and holder of all debt securities represented by a global security, and investors will be permitted to own only indirect interests in a global security. Indirect interests must be held by means of an account with a broker, bank or other financial institution that in turn has an account with the depositary or with another institution that does. Thus, an investor whose debt security is represented by a global security will not be a holder of the debt security, but only an indirect owner of an interest in the global security.
If the prospectus supplement for a particular debt security indicates that the debt security will be issued in book-entry only form, then the debt security will be represented by a global security at all times unless and until the global security is terminated. We describe the situations in which this can occur below under "-- Holder's Option to Obtain a Non-Global Security; Special Situations When a Global Security Will Be Terminated". If termination occurs, we may issue the debt securities through another book-entry clearing system or decide that the debt securities may no longer be held through any book-entry clearing system.
Special Considerations for Book-Entry Only Securities
As an indirect owner, an investor's rights relating to a book-entry only security will be governed by the account rules of the depositary and those of the investor's financial institution or other intermediary through which it holds its interest (e.g., Euroclear or Clearstream, if DTC is the depositary), as well as general laws relating to securities transfers. We do not recognize this type of investor or any intermediary as a holder of debt securities and instead deal only with the depositary that holds the global security.
If debt securities are issued in book-entry only form, an investor should be aware of the following:
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an investor cannot cause the debt securities to be registered in his or her own name, and cannot obtain non-global certificates for his or her interest in the debt securities, except in the special situations we describe below;
an investor will be an indirect holder and must look to his or her own bank or broker for payments on the debt securities and protection of his or her legal rights relating to the debt securities, as we describe above under " - Who Is the Legal Owner of a Registered Security?";
an investor may not be able to sell interests in the debt securities to some insurance companies and other institutions that are required by law to own their debt securities in non-book-entry form;
an investor may not be able to pledge his or her interest in a global security in circumstances where certificates representing the debt securities must be delivered to the lender or other beneficiary of the pledge in order for the pledge to be effective;
the depositary's policies will govern payments, deliveries, transfers, exchanges, notices and other matters relating to an investor's interest in a global security, and those policies may change from time to time. Neither we nor the Trustee will have any responsibility for any aspect of the depositary's policies, actions or records of ownership interests in a global security. Neither we nor the Trustee supervise the depositary in any way;
the depositary will require that those who purchase and sell interests in a global security within its book-entry system use immediately available funds and your broker or bank may require you to do so as well; and
financial institutions that participate in the depositary's book-entry system and through which an investor holds its interest in the global securities, directly or indirectly, may also have their own policies affecting payments, deliveries, transfers, exchanges, notices and other matters relating to the debt securities, and those policies may change from time to time. For example, if you hold an interest in a global security through Euroclear or Clearstream, when DTC is the depositary, Euroclear or Clearstream, as applicable, will require those who purchase and sell interests in that debt security through them to use immediately available funds and comply with other policies and procedures, including deadlines for giving instructions as to transactions that are to be effected on a particular day. There may be more than one financial intermediary in the chain of ownership for an investor. We do not monitor and are not responsible for the policies or actions or records of ownership interests of any of those intermediaries.
Holder's Option to Obtain a Non-Book-Entry Only Security; Special Situations When a Global Security Will be Terminated
If we issue any series of debt securities in book-entry only form but we choose to give the beneficial owners of that series the right to obtain non-global securities, any beneficial owner entitled to obtain non-global securities may do so by following the applicable procedures of the depositary, any transfer agent or registrar for that series and that owner's bank, broker or other financial institution through which that owner holds its beneficial interest in the debt securities. If you are entitled to request a non-global certificate and wish to do so, you will need to allow sufficient lead time to enable us or our agent to prepare the requested certificate.
In addition, in a few special situations described below, a global security will be terminated and interests in it will be exchanged for certificates in non-global form representing the debt securities it represented. After that exchange, the choice of whether to hold the debt securities directly or in street name will be up to the investor. Investors must consult their own banks or brokers to find out how to have their interests in a global security transferred on termination to their own names, so that they will be holders. We have described the rights of holders and street name investors above under " - Who Is the Legal Owner of a Registered Security?".
The special situations for termination of a global security are as follows:
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the depositary notifies us that it is unwilling or unable to continue as depositary for the global security, or if the depositary is DTC, if at any time it ceases to be a clearing agency registered under the Securities Exchange Act of 1934;
we notify the Trustee that we have decided not to have the debt securities of that series represented by a global security; or
an event of default has occurred and is continuing with respect to the debt securities.
If a global security is terminated, only the depositary, and neither we nor the Trustee will be responsible for deciding the names of the institutions in whose names the debt securities represented by the global security will be registered and, therefore, who will be the holders of those debt securities. In this event certificated debt securities will be issued in exchange for the terminated global security as directed by the depositary.
Considerations Relating to Euroclear and Clearstream
Euroclear and Clearstream are securities clearance systems in Europe. Both systems clear and settle securities transactions between their participants through electronic, book-entry delivery of securities against payment.
Euroclear and Clearstream may be depositaries for a global security. In addition, if DTC is the depositary for a global security, Euroclear and Clearstream may hold interests in the global security as participants in DTC.
As long as any global security is held by Euroclear or Clearstream, as depositary, you may hold an interest in the global security only through an organization that participates, directly or indirectly, in Euroclear or Clearstream. If Euroclear or Clearstream is the depositary for a global security and there is no depositary in the United States, you will not be able to hold interests in that global security through any securities clearance system in the United States.
Payments, deliveries, transfers, exchanges, notices and other matters relating to the debt securities made through Euroclear or Clearstream must comply with the rules and procedures of those systems. Those systems could change their rules and procedures at any time. We have no control over those systems or their participants and we take no responsibility for their activities. Transactions between participants in Euroclear or Clearstream, on one hand, and participants in DTC, on the other hand, when DTC is the depositary, would also be subject to DTC's rules and procedures.
Special Timing Considerations for Transactions in Euroclear and Clearstream
Investors will be able to make and receive through Euroclear and Clearstream payments, deliveries, transfers, exchanges, notices and other transactions involving any debt securities held through those systems only on days when those systems are open for business. Those systems may not be open for business on days when banks, brokers and other institutions are open for business in the United States.
In addition, because of time-zone differences, U.S. investors who hold their interests in the debt securities through these systems and wish to transfer their interests, or to receive or make a payment or delivery or exercise any other right with respect to their interests, on a particular day may find that the transaction will not be effected until the next business day in Luxembourg or Brussels, as applicable. Thus, investors who wish to exercise rights that expire on a particular day may need to act before the expiration date. In addition, investors who hold their interests through both DTC and Euroclear or Clearstream may need to make special arrangements to finance any purchases or sales of their interests between the U.S. and European clearing systems, and those transactions may settle later than would be the case for transactions within one clearing system.
Indenture Covenants
The Indenture contains promises by us, called "covenants" for the benefit of the holders of the debt securities. The covenants described under the headings "Limitations on Liens" and "Limitation on Sale Leaseback Transactions" are made for the benefit of holders of our senior debt securities only. The holders of our subordinated debt securities will not receive the benefits of these covenants.
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Limitations on Liens
We have agreed in the Indenture that we will not, nor will we permit any Subsidiary to, mortgage, hypothecate, charge, pledge, or otherwise encumber (collectively referred to as "mortgages") any of our Principal Properties or the capital stock or Funded Indebtedness of any Subsidiary which owns a Principal Property, to secure any Indebtedness, without securing the debt securities equally and ratably with, or prior to, such Indebtedness.
This covenant has certain exceptions which permit, among other things:
the giving or assumption of any Purchase Money Mortgage;
any mortgage given by a Subsidiary to us or any other Subsidiary so long as the mortgage will be held for our benefit or for the benefit of a Subsidiary;
mortgages on property, capital stock or Indebtedness of a corporation existing at the time the corporation becomes a Subsidiary;
mortgages in favor of Canada or the United States or any Province or State thereof, or any department, agency, or instrumentality or political subdivision of Canada or the United States, to secure certain payments or other obligations;
the sale or other transfer of production payments, mineral payments, ore payments and similar arrangements unless we or a Subsidiary have personally assumed or become generally liable for any Indebtedness in connection with the sale or transfer; and
any extension, renewal or replacement, or successive extensions, renewals or replacements, in whole or in part of any mortgage permitted above, so long as the principal amount of Indebtedness secured will not exceed the principal amount of Indebtedness secured at the time of the extension, renewal or replacement, and that the extension, renewal or replacement will be limited to all or part of the property which secured the mortgage that was extended, renewed or replaced.
In addition to these exceptions, we and our Subsidiaries may create or assume mortgages without equally and ratably securing the debt securities (mortgages which have been created or assumed being referred to as "Basket Mortgages"), so long as at the time of and after giving effect to such creation or assumption, the total amount of all Indebtedness secured by our Basket Mortgages less any Indebtedness concurrently retired plus the total amount of Attributable Debt in respect of certain sale and leaseback transactions (as defined in the Indenture) existing at the time do not exceed 10% of consolidated shareholders' equity as of a date not more than 135 days prior to such time. (Section 3.6)
Defined Terms
The following terms used above have the following meanings (Section 1.1):
"Attributable Debt" means the present value of rents during the remaining term of leases.
"Indebtedness" means:
all indebtedness for the repayment of money borrowed;
all liabilities under leases which must be capitalized under generally accepted accounting principles in Canada on the lessee's balance sheet; and
all guarantees, endorsements, assumptions and other contingent obligations in respect of such indebtedness or liabilities.
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"Funded Indebtedness" means Indebtedness which matures by its terms or is renewable by the borrower to a date more than one year after the date of its original creation, assumption or guarantee.
"Principal Property" means any mineral property, smelter, refinery, mill, fabricating plant or similar processing or manufacturing facility, or any electric generating plant of ours or any of our Subsidiaries constituting the primary source of power for any such facility, located in the United States or Canada and having a net book value of more than 0.5 percent of Consolidated Net Tangible Assets, unless our Board of Directors by resolution declares that the property, plant or facility is not important to our business as a whole. Principal Property may also include similar property we have designated to which we have applied the proceeds of sale and leaseback transactions.
"Consolidated Net Tangible Assets" means (1) the total of all assets, including assets leased under capital lease obligations (less depreciation, obsolescence, amortization, valuation and other proper reserves), which in accordance with generally accepted accounting principles in Canada would appear on the asset side of our consolidated balance sheet as of a date not more than 135 days preceding the date on which Consolidated Net Tangible Assets are to be determined, after eliminating (A) franchises, licenses, permits, patents, patent applications, copyrights, trade names, goodwill, organizational expenses and other like intangibles and (B) unamortized debt discount and expense, less (2) the total of all consolidated current liabilities which would appear on the liability side of the balance sheet, as determined in accordance with generally accepted accounting principles in Canada.
"Subsidiary" means any corporation of which we or one or more of our Subsidiaries owns at least a majority of the outstanding voting stock.
"Purchase Money Mortgage" means any hypothec, mortgage, lien, pledge, security interest or other encumbrance (including conditional sale agreements or other title retention agreements or capital leases) upon property that has been or is to be acquired, constructed or improved by us or a Subsidiary and created prior to, contemporaneously with, or within six months after, the acquisition or the completion of the construction or improvement to secure the amount of the purchase price of the property or the cost of the construction or improvement, or any part thereof, or any hypothec, mortgage, lien, pledge, security interest or other encumbrance existing on the property at the time of the acquisition, whether the obligations secured are payable to the person from whom such property is acquired or otherwise.
Limitation on Sale and Leaseback Transactions
The Indenture imposes restrictions on our ability to enter into sale leaseback transactions. Neither we nor any Subsidiary owning a Principal Property may enter into any Sale and Leaseback Transaction (which excludes leases expiring within three years of making, leases between us and a Subsidiary or between Subsidiaries and any lease of part of a Principal Property, which has been sold, for use in connection with the winding up or termination of the business conducted on such Principal Property) unless:
we or any of our Subsidiaries could create or assume a mortgage on the Principal Property to be leased without equally and ratably securing the debt securities by reason of one of the exceptions described under "Limitation on Liens";
immediately prior to entering into such arrangement, we or a Subsidiary could create a mortgage on the Principal Property securing Indebtedness in an amount equal to the Attributable Debt relating to the particular Sale and Leaseback Transaction without equally and ratably securing the debt securities; or
an amount equal to the net proceeds of the sale of the property leased is applied to the retirement, otherwise than by payment at maturity or pursuant to mandatory sinking fund requirements, of the debt securities or other Funded Indebtedness of ours or of a Subsidiary ranking on a parity with the debt securities or to the purchase, improvement or construction of Principal Properties. (Section 3.8)
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Subordination Provisions
Direct holders of subordinated debt securities should recognize that contractual provisions in the Indenture may prohibit us from making payments on those securities. Subordinated debt securities are subordinate and junior in right of payment, to the extent and in the manner stated in the Indenture, to all of our senior indebtedness, as defined in the Indenture, including all of the senior debt securities we have issued and will issue under the Indenture.
Under the Indenture, "senior indebtedness" includes all of our obligations to pay principal, premium, interest, penalties, fees and other charges:
for borrowed money;
in the form of or evidenced by other instruments, including obligations incurred in connection with our purchase of property, assets or businesses;
under capital leases;
under letters of credit, bankers' acceptances or similar facilities;
issued or assumed in the form of a deferred purchase price of property or services, such as master leases;
under swaps and other hedging arrangements;
pursuant to our guarantee of another entity's obligations and all dividend obligations guaranteed by us; and
to satisfy the expenses and fees of the Trustee under the Indenture.
The following types of our indebtedness will not rank senior to the subordinated debt securities:
indebtedness we owe to a subsidiary of ours;
indebtedness which, by its terms, expressly provides that it does not rank senior to the subordinated debt securities;
indebtedness incurred in the form of trade accounts payable or accrued liabilities arising in the ordinary course of business; and
indebtedness we may incur in violation of the Indenture.
The Indenture provides that, unless all principal of and any premium or interest on the senior indebtedness has been paid in full, no payment or other distribution may be made in respect of any subordinated debt securities in the following circumstances:
(1) in the event and during the continuation of any default in the payment of principal, premium, if any, or interest on any senior indebtedness beyond any applicable grace period or (2) in the event that any event of default with respect to any senior indebtedness has occurred and is continuing, permitting the direct holders of that senior indebtedness (or a trustee) to accelerate the maturity of that senior indebtedness, whether or not the maturity is in fact accelerated (unless, in the case of (1) or (2), the payment default or event of default has been cured or waived or ceased to exist and any related acceleration has been rescinded) or (3) in the event that any judicial proceeding is pending with respect to a payment default or event of default described in (1) or (2).
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If the Trustee under the Indenture or any direct holders of the subordinated debt securities receive any payment or distribution that is prohibited under the subordination provisions, then the Trustee or the direct holders will have to repay that money to the direct holders of our senior indebtedness.
Even if the subordination provisions prevent us from making any payment when due on the subordinated debt securities of any series, we will be in default on our obligations under that series if we do not make the payment when due. This means that the Trustee under the Indenture and the direct holders of that series can take action against us, but they will not receive any money until the claims of the direct holders of senior indebtedness have been fully satisfied.
Consolidation or Merger
We may consolidate or merge with any other corporation or transfer all or substantially all of our assets to any other person provided that:
we are not in default under any covenant or provision under the Indenture, and
the person or successor corporation, which must be organized under the laws of Canada or any Province, the United States or any State or the District of Columbia, expressly assumes our obligations under the Indenture by supplemental indenture satisfactory to the Trustee. (Section 9.1)
Unless otherwise indicated in the prospectus supplement, certain of the covenants described above would not necessarily afford holders of debt securities protection in the event we were involved in a highly leveraged transaction, such as a leveraged buyout.
Events of Default, Waiver, and Notice
"Event of Default" means, with respect to any series of debt securities, any of the following:
failure to pay interest on that series of debt securities for 30 days after payment is due;
failure to pay principal and premium, if any, on that series of debt securities when due either at maturity, upon redemption, by declaration or otherwise;
failure to perform any other covenants or agreements in the Indenture for the benefit of the holders of the applicable series for 90 days after we are given notice of the failure; and
certain events of bankruptcy, insolvency and reorganization relating to us. (Section 5.1)
The Trustee may withhold notice to the holders of debt securities of any default, except a default in payment of principal of or interest or premium on the debt securities, if the Trustee considers it in the interest of the holders of the debt securities to do so. (Section 5.11)
The Indenture provides that:
if an Event of Default due to the default in the payment of principal, interest or premium, if any, on, or in the performance of any other of the covenants or agreements in the Indenture affecting any series of debt securities occurs and continues, the Trustee or holders of 25% of the principal amount outstanding of that series of debt securities may declare the principal of all that series of debt securities to be due and payable immediately; and
if an Event of Default resulting from certain events of bankruptcy, insolvency and reorganization occurs and continues, the Trustee or the holders of 25% of the principal amount outstanding of all debt securities may declare the principal of all debt securities to be due and payable immediately.
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Under certain conditions such declarations may be rescinded and past defaults may be waived, except defaults in payment of principal of or interest or premium on the debt securities, by the holders of a majority of that series of debt securities then outstanding, or of all series, as the case may be. (Section 5.1)
The holders of a majority in principal amount of the debt securities of any and all series affected and then outstanding, each voting as a separate class, have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee. This right is subject to certain exceptions and provided that the holders of the debt securities have offered to the Trustee reasonable indemnity against expenses and liabilities. (Sections 5.9 and 6.2)
Investors holding debt securities in book entry form should consult with their banks or brokers for information on how to give notice or direction to or make a request of the trustee and to make or cancel a declaration of acceleration.
We are required to file with the Trustee an annual certificate as to the absence of certain defaults under the Indenture. (Section 3.5)
The Indenture provides that none of the terms of the Indenture will require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such liability is not reasonably assured to the Trustee.
Defeasance and Covenant Defeasance
We may elect either:
to be discharged from all of our obligations with respect to the debt securities under the Indenture, except for the obligations to register the transfer or exchange of the debt securities, to replace temporary or mutilated, destroyed, lost or stolen debt securities, to maintain an office or agency in respect of the debt securities and to hold moneys for payment in trust (defeasance); or
to be discharged from all of our obligations with respect to the debt securities under certain sections of the Indenture, including the restrictions set forth in "Limitation on Liens" and "Limitations on Sale and Leaseback Transactions" above (covenant defeasance).
In order for us to exercise either defeasance or covenant defeasance, we must deposit with the Trustee, in trust for such purpose, money and/or U.S. Government Obligations 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 interest on such debt securities not later than one day before the scheduled due dates. A trust may only be established if, among other things, we have delivered to the Trustee an opinion of counsel to the effect that the holders of the debt securities:
will not recognize income, gain or loss for federal income tax purposes as a result of defeasance or covenant defeasance; and
will be subject to federal income tax on the same amount, in the same manner and at the same time as would have been the case if such defeasance or covenant defeasance had not occurred.
In the case of defeasance, the opinion must refer to and be based upon a ruling of the Internal Revenue Service or a change in applicable federal income tax law occurring after July 15, 1989. (Sections 13.1 through 13.4)
Modification of the Indenture
Under the Indenture our rights and the rights of the holders of debt securities may be changed. Certain changes to the rights of the holders of the debt securities in the Indenture or any Supplemental Indenture require the consent of the holders of not less than 66 2/3% in principal amount of the debt securities of all series affected by such change at the time outstanding. However, the following changes may not be made without the consent of each holder of the debt securities affected:
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extending the final maturity of any debt security, or reducing the principal amount thereof, including in the case of a discounted debt security the amount payable thereon in the event of acceleration or the amount provable in bankruptcy, or any redemption premium thereon, or reducing the rate or extending the time of payment of interest thereon, or impairing or affecting the right of any holder of debt securities to institute suit for the payment thereof or the right of repayment, if any, at the option of the holder, or
reducing the stated percentage of holders necessary to modify the Indenture. (Section 8.2)
We may enter into one or more supplemental indentures without the consent of any holder of debt securities:
to secure the debt securities;
to evidence the succession to us of another corporation and the assumption by any such successor of our covenants contained in the Indenture and the debt securities;
to add to the covenants contained in the Indenture and to add any additional Events of Default;
to cure any ambiguity or to correct or supplement any provision of the Indenture which may be defective or inconsistent with any other provision of the Indenture, or to make other provisions which do not adversely affect the interests of the holders of debt securities;
to establish the form or terms of debt securities of any series; and
to evidence and provide for a successor Trustee under the Indenture for one or more series of debt securities and to provide for or facilitate the administration of the trusts under the Indenture by more than one Trustee. (Section 8.1)
Consent to Jurisdiction
We agree that any legal suit, action or proceeding brought by the Trustee or any holder of debt securities in connection with the debt securities or the Indenture may be instituted in any state or federal court in the City or State of New York.
Regarding the Trustee
Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), Trustee under the Indenture, serves as a depositary of funds of, and performs corporate trust and commercial banking services for us and our subsidiaries from time to time in the normal course of business and also makes loans to us and our subsidiaries. In addition, we have two-long-term, global, multi-year and multi-currency borrowing facilities with a syndicate of major international banks each amounting to $1 billion. Deutsche Bank A.G., the parent of Deutsche Bank Trust Company Americas, has a $30 million participation under one long-term facility and has a $44.4 million participation under the other long-term facility. As of May 31, 2003 we did not have any amounts outstanding under either facility.
Deutsche Bank Trust Company Americas is currently trustee of six series of outstanding senior debt securities issued under the Indenture in an aggregate principal amount of $2.1 billion.
Under the Trust Indenture Act of 1939, upon the occurrence of a default under any series of debt securities under the Indenture, if the Trustee has a conflicting interest, as defined in the Trust Indenture Act, the Trustee must, within 90 days, either eliminate the conflicting interest or resign, unless the default is cured, waived or otherwise eliminated within the 90-day period. Under the Trust Indenture Act, the Trustee will be considered to have a conflicting interest if the Trustee is one of our creditors. In addition, in the event we have outstanding one or more series of senior debt securities and subordinated debt securities for which the Trustee acts as trustee and a default occurs under the terms of either or both types of series, the Trustee would be considered to
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have a conflicting interest under the Trust Indenture Act and would be required to resign as trustee in respect of either the senior debt securities or the subordinated debt securities. If the Trustee fails to either eliminate the conflicting interest or to resign within ten days after the expiration of the 90 day period, the Trustee will be required to notify the holders to this effect and any holder who has been a bona fide holder for at least six months may petition a court to remove the Trustee and to appoint a successor trustee.
Outstanding Series of Share Capital
Authorized |
Outstanding* |
|
Common Shares.......................................................................... |
Unlimited |
321,706,017 |
Preference Shares, issuable in series, of which the following series are outstanding:........................................................................... |
Unlimited |
|
Floating Rate Cumulative Redeemable Preference Shares, Series C, 1984..................................................................... |
4,200,000 |
4,200,000 |
Floating Rate Cumulative Redeemable Preference Shares, Series C, 1985..................................................................... |
1,500,000 |
1,500,000 |
Cumulative Redeemable Preference Shares, Series E............. |
3,000,000 |
3,000,000 |
* As at May 31, 2003.
The currently outstanding series of preference shares are not offered under this prospectus.
Authorized Capital
We may issue an unlimited number of additional common shares and preference shares from time to time upon approval by our Board of Directors for such consideration as the Board of Directors decides appropriate, without the need of further shareholder authorization. However, the Board of Directors is not allowed to create or issue any series of preference shares with voting rights, other than voting rights arising only in the event of non-payment of dividends, without the consent of our Common shareholders, given by way of special resolution. The terms of any preference shares, including dividend rates, conversion and voting rights, if any, redemption prices and similar matters will be determined by the Board of Directors prior to issuance.
DESCRIPTION OF PREFERENCE SHARES
Description of Terms of Preference Shares We May Offer
The terms of each series of preference shares will be determined by the Board of Directors prior to issuance. The Board of Directors may not create or issue any series of preference shares with voting rights, other than voting rights arising only in the event of non-payment of dividends, without the consent of the holders of our common shares, given in the form of a special resolution.
Unless otherwise indicated in a prospectus supplement, all preference shares to be issued from time to time under this Prospectus will be fully paid and nonassessable.
The prospectus supplement relating to the particular series of preference shares will contain a description of the specific terms of that series as fixed by our board of directors, including, as applicable:
the offering price at which we will issue the preference shares;
the title, designation of number of shares and stated value of the preference shares;
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the dividend rate or method of calculation, the payment dates for dividends and the place or places where the dividends will be paid, whether dividends will be cumulative or noncumulative, and, if cumulative, the dates from which dividends will begin to cumulate;
any conversion or exchange rights;
whether the preference shares will be subject to redemption and the redemption price and other terms and conditions relative to the redemption rights;
any liquidation rights;
any sinking fund provisions;
any voting rights; and
any other rights, preferences, privileges, limitations and restrictions that are not inconsistent with the terms of our restated articles of incorporation.
Redemption
If so specified in the applicable prospectus supplement, a series of preference shares may be redeemable at any time, in whole or in part, at our option or the holder's, and may be mandatorily redeemed by us.
Any restriction on the repurchase or redemption by us of our preference shares while we are in arrears in the payment of dividends will be described in the applicable prospectus supplement.
Any partial redemptions of preference shares will be made in the discretion of our board of directors.
Unless we default in the payment of the redemption price, dividends will cease to accrue after the redemption date on preference shares called for redemption and all rights of holders of these shares will terminate except for the right to receive the redemption price.
Dividends
Holders of each series of preference shares will be entitled to receive dividends when, as and if declared by our board of directors from funds legally available for payment of dividends. The rates and dates of payment of dividends will be set forth in the applicable prospectus supplement relating to each series of preference shares. Dividends will be payable to holders of record of preference shares as they appear on our books on the record dates fixed by the board of directors. Dividends on any series of preference shares may be cumulative or noncumulative, as set forth in the applicable prospectus supplement.
We may not declare, pay or set apart funds for payment of dividends on a particular series of preference shares unless full dividends on any other series of preference shares that ranks equally with or senior to the series of preference shares have been paid or sufficient funds have been set apart for payment for either of the following:
all prior dividend periods of the other series of preference shares that pay dividends on a cumulative basis; or
the immediately preceding dividend period of the other series of preference shares that pay dividends on a noncumulative basis.
Partial dividends declared on shares of any series of preference shares and other series of preference shares ranking on an equal basis as to dividends will be declared pro rata. A pro rata declaration means that the ratio of dividends declared per share to accrued dividends per share will be the same for each series of preference shares.
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Conversion or Exchange Rights
The prospectus supplement relating to any series of preference shares that is convertible, exercisable or exchangeable will state the terms on which shares of that series are convertible into or exercisable or exchangeable for our common shares, another series of our preference shares or our other securities or debt or equity securities of third parties.
Liquidation Preference
In the event of our voluntary or involuntary liquidation, dissolution or winding-up, holders of each series of our preference shares will have the right to receive distributions upon liquidation in the amount described in the applicable prospectus supplement relating to each series of preference shares, plus an amount equal to any accrued and unpaid dividends. These distributions will be made before any distribution is made on the common stock or on any securities ranking junior to the preference shares upon liquidation, dissolution or winding-up.
If the liquidation amounts payable relating to the preference shares of any series and any other securities ranking on a parity regarding liquidation rights are not paid in full, the holders of the preference shares of that series and the other securities will have the right to a ratable portion of our available assets, up to the full liquidation preference of each security. Holders of these series of preference shares or other securities will not be entitled to any other amounts from us after they have received their full liquidation preference.
Voting Rights
The holders of shares of preference shares will have no voting rights, except:
as otherwise stated in the applicable prospectus supplement;
as otherwise stated in the certificate of designations establishing the series; or
as required by applicable law.
Summary of Specific Provisions of Outstanding Preference Shares
We currently have the following preference shares outstanding: Floating Rate Cumulative Redeemable Preference Shares Series C, 1984 and 1985 and Cumulative Redeemable Preference Shares Series E. The holders of each class of preference shares will be entitled to receive cumulative cash dividends at the following rates:
Series C, 1984 and 1985: quarterly dividends in an amount determined by applying to C$ 25 per share 25% of the greater of (1) 72% of the average of the Canadian prime interest rates quoted by two major Canadian banks for stated periods, and (2) the lesser of 7.5% and the average of the Canadian prime interest rates quoted by two major Canadian banks for stated periods.
Series E: quarterly dividends in an amount determined by applying to C$ 25 per share 25% of 75% of the average of the Canadian prime interest rates quoted by two major Canadian banks for stated periods.
The holders of outstanding preference shares are not entitled to vote at meetings of shareholders unless we fail to pay six quarterly dividends on such preference shares. Thereafter, so long as such dividends remain in arrears, the holders will be entitled, voting separately as a class, to elect two members of the Board of Directors.
All of our outstanding preference shares are fully paid and nonassessable.
In the event that we liquidate, dissolve or wind up or distribute our assets among shareholders for the purpose of winding up our affairs, the holders of the outstanding preference shares will be entitled to receive, in preference to holders of the common shares, the sum of C$ 25 per preference share for Series C and E plus all accrued and unpaid dividends. Additionally, if such distribution is voluntary, an additional amount equal to the premium, if any, will be payable on redemption.
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The outstanding preference shares are redeemable at our option at C$ 25 per preference share plus all accrued and unpaid dividends.
Unless all dividends then payable on the outstanding preference shares have been declared and paid or set apart for payment, we will not (1) pay any dividends, other than stock dividends, or make any distributions on any shares ranking junior to the outstanding preference shares with respect to the payment of dividends or return of capital, (2) retire for value any shares ranking junior to the outstanding preference shares with respect to payment of dividends or return of capital, or (3) except in connection with the exercise of a retraction privilege, retire less than all of a series of preference shares.
The outstanding preference shares are listed on the Toronto Stock Exchange. The transfer agent for the outstanding preference shares is CIBC Mellon Trust Company.
Attributes
The common shares are subject to the rights of the holders of the preference shares, as described above, and of any other preferred securities issued in the future.
The holders of common shares are entitled to one vote per common share at all meetings of Shareholders, to participate ratably in any dividends which may be declared on common shares by our Board of Directors and, in the event of our liquidation, dissolution or winding-up or other distribution of our assets or property, to a pro rata share of our assets after payment of all liabilities and obligations. The common shares have no pre-emptive, redemption or conversion rights. All of our outstanding common shares and all common shares to be issued from time to time under this prospectus will be fully paid and nonassessable.
The provisions of the Canada Business Corporations Act (CBCA) require that the amendment of certain rights of holders of any class of shares, including the common shares, must be approved by not less than two-thirds of the votes cast by the holders of such shares. A quorum for any meeting of the holders of common shares is 40% of the common shares then outstanding. Therefore, it is possible for the rights of the holders of common shares to be changed other than by the affirmative vote of the holders of the majority of the outstanding common shares. In circumstances where certain rights of holders of common shares may be amended, however, holders of common shares will have the right, under the CBCA, to dissent from such amendment and require us to pay them the then fair value of their common shares.
The transfer agents for the common shares are CIBC Mellon Trust Company in Canada, Mellon Investor Services L.L.C. in New York, and CIBC Mellon Trust Company in England.
Shareholders are also entitled to rights and privileges under the shareholder rights plan summarized below.
23
Shareholder Rights Plan
In 1990, Shareholders approved a plan whereby each of our common shares carries one right to purchase additional common shares. The plan, with certain amendments, was reconfirmed by the Shareholders at the 1995 Annual Meeting, and further amendments were approved at the 1999 Annual Meeting. The terms of the rights are contained in an agreement called the Shareholder Rights Agreement, made as of December 14, 1989 between us and CIBC Mellon Trust Company, which is the rights agent under the agreement. The agreement is governed by the laws of Ontario and Canada. A copy of the plan, as amended to date, is attached as Schedule B of the Management Proxy Circular filed as Exhibit 99 to our Annual Report on Form 10-K for the year ended December 31, 1998. The rights expire in 2008, subject to re-confirmation at the Annual Meeting of Shareholders in 2005.
The rights under the plan are not currently exercisable, nor may they be separated from the common shares. Subject to specified exceptions and qualifications, on the tenth business day after the first to occur of:
the acquisition by a person or group of affiliated or associated persons of beneficial ownership of 20% or more of our outstanding voting shares; or
a bid to acquire 20% or more of our outstanding voting shares,
holders of rights, with the exception of the acquiring or bidding party, will be entitled to purchase from us, upon payment of the exercise price (currently U.S.$200.00), the number of common shares that can be purchased for double the exercise price, based on the market value of our common shares at the time the rights become exercisable. At and after such time the rights will also be transferable separately from the common shares. The exercise price mentioned above is subject to adjustment according to the terms of the rights plan to account for, among other things, adjustments to our common shares such as stock splits, stock dividends and distributions to shareholders.
The rights agreement has a permitted bid feature which allows a take-over bid to proceed without the rights becoming exercisable, provided that the bid meets specified minimum specified standards of fairness and disclosure, even if our Board of Directors does not support the bid.
The rights may be redeemed by our Board of Directors prior to the expiration or reauthorization of the rights agreement, with the prior consent of the holders of rights or common shares, for U.S.$0.01 per right. In addition, under specified conditions, our Board of Directors may waive the application of the rights agreement for particular share acquisitions or take-over bids, and in that event the Board of Directors will be deemed to have elected to redeem the rights at U.S.$0.01 per right.
General
We may from time to time offer warrants in one or more series to purchase our common shares, preference shares or debt securities, or any combination of these instruments. We may offer warrants either alone or together with the underlying instruments, and the warrants may be attached or separate from the underlying instruments. Each series of warrants will be issued under a separate warrant agreement, which, together with the warrants themselves, will contain the terms of the warrants. Each warrant agreement will be between us and a warrant agent we will retain for the applicable series of warrants. The warrant agent will act exclusively as our agent in connection with the warrants of the applicable series and will not have any obligation or relationship of agency for or with the holders or beneficial owners of the warrants.
The following describes some of the general terms and provisions of the warrants we may offer. Additional terms of the warrants and the applicable warrant agreement will be described in the applicable prospectus supplement. The following description of the terms of the warrants and the supplemental description contained in a prospectus supplement may not be complete and is subject to and qualified in its entirety by reference to the terms of the applicable warrant agreement. We have included a form of warrant agreement as an exhibit to the registration statement of which this prospectus forms a part.
24
The prospectus supplement relating to a series of warrants will describe the terms of the series of warrants, including the following:
the series designation of the warrants;
the price or prices at which the warrants will be offered;
the total number of warrants to be offered;
the designation and the terms of the securities to be purchased on exercise of the warrants;
the date on which the right to purchase the underlying securities will begin, and the date on which the purchase right will expire;
the exercise price of the securities to be purchased on exercise of the warrants;
information about the warrant agent;
the procedures and conditions for exercising the warrants;
if applicable, information with respect to book-entry procedures;
if applicable, the minimum or maximum number of warrants that may be exercised by an individual beneficial holder, or by all beneficial holders, at any one time;
if applicable, the designation and the terms of the underlying securities with which the warrants are issued and the number of warrants issued with each underlying security;
if applicable, the date on and after which the warrants and the related underlying securities will be separately transferable;
the governing law of the warrants and warrant agreement, if other than the law of the State of New York;
if applicable, any anti-dilution provisions; and
any other terms of the warrants, including terms, procedures limitations and conditions relating to the exchange and exercise of the warrants.
Unless otherwise indicated in a prospectus supplement, we will issue warrants in fully registered form only. The warrants will be exercisable only for cash. Warrant certificates may be exchanged for new warrant certificates of different denominations, and warrants may be exercised at the warrant agent's corporate trust office or at any other office designated for such purpose as provided in the applicable prospectus supplement.
Holders of warrants prior to exercise of the applicable purchase right will be holders of the warrants alone and will not be considered holders of the underlying securities. As a result, holders of warrants prior to exercise will not have any of the rights of holders of the underlying equity or debt securities purchasable upon exercise, and will not be entitled to payments of principal (or premium, if any) or interest, if any, or voting or other rights on any underlying debt securities, and will not be entitled to dividend, if any, voting or other rights of the common or preference shares for which the warrants may be exercised.
Warrant Exercise
Each series of warrants will entitle the holder to purchase for cash a number of underlying securities at an exercise price that will be stated in, or determined as described in, the prospectus supplement for the series. Warrants may be exercised at any time up until the close of regular business hours on the expiration date set forth in the applicable prospectus supplement. After the close of business on the applicable expiration date the warrants will be void and will no longer be exercisable for purchase of the underlying securities.
25
Warrants will be exercisable as described in the applicable prospectus supplement. Upon receipt of payment and the properly completed and duly executed warrant certificate at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus supplement as the location for warrant certificate presentment and exercise, we will, as soon as practicable, forward the securities purchasable upon exercise of the warrants. If a holder decides to exercise fewer than all of the warrants represented by the warrant certificate, we will issue to the holder a new warrant certificate representing the remaining warrants.
Enforceability of Rights and Governing Law
The holders of warrants may, on their own behalf and for their own benefit, without the consent of the warrant agent, enforce, and may institute and maintain any suit, action or proceeding against us to enforce, their rights to exercise and receive the securities purchasable upon exercise of their warrants. Unless otherwise stated in the applicable prospects supplement, each series of warrants and the applicable warrant agreement will be governed by the laws of the State of New York.
Where appropriate, the applicable prospectus supplement will describe the Canadian tax considerations, Quebec tax considerations and U.S. federal income tax considerations relevant to the securities being offered.
The financial statements incorporated in this prospectus by reference to our Annual Report on Form 10-K for the fiscal year ended December 31, 2002 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.
Roy Millington, our Corporate Secretary, will pass upon the validity of the equity securities. In connection with particular offerings of debt securities and warrants, the validity of the debt securities and warrants will be passed upon by Roy Millington, as to certain matters of Canadian law and applicable matters of Quebec law, and by Sullivan & Cromwell LLP, New York, New York, as to certain matters of New York law. Davis Polk & Wardwell, New York, New York will issue an opinion as to certain legal matters for the agents or underwriters.
We may sell any series of securities at any time after effectiveness of the registration statement of which this prospectus forms a part in one or more of the following ways from time to time:
through underwriters or dealers;
through agents; or
directly to one or more purchasers.
The offered securities may be distributed periodically in one or more transactions at:
a fixed price or prices, which may be changed;
market prices prevailing at the time of sale;
prices related to the prevailing market prices; or
negotiated prices.
26
The prospectus supplement will include:
the initial public offering price;
the names of any underwriters, dealers or agents;
the purchase price of the securities;
our proceeds from the sale of the securities;
any underwriting discounts or agency fees and other underwriters' or agents' compensation;
any discounts or concessions allowed or reallowed or paid to dealers;
the place and time of delivery of the securities; and
any securities exchange on which the securities may be listed.
If underwriters are used in the sale, they will buy the securities for their own account. The underwriters may then resell the securities in one or more transactions, at any time or times at a fixed public offering price or at varying prices. The underwriters may change from time to time any fixed public offering price and any discounts or commissions allowed or re-allowed or paid to dealers. If dealers are utilized in the sale of the securities, we will sell the securities to the dealers as principals. The dealers may then resell the securities in the public at varying prices to be determined by such dealers.
In connection with the offering of securities, we may grant to the underwriters an option to purchase additional securities to cover over-allotments, if any, at the initial public offering price (with an additional underwriting commission), as may be set forth in the prospectus supplement for such securities. If we grant any over-allotment option, the terms of the option will be set forth in the prospectus supplement for the securities.
This prospectus may be delivered by underwriters and dealers in connection with short sales undertaken to hedge exposures under commitments to acquire our securities to be issued on a delayed or contingent basis.
Underwriters, dealers and agents that participate in the distribution of the securities may be underwriters as defined in the Securities Act of 1933. Any discounts or commissions that we pay them and any profit they receive when they resell the securities may be treated as underwriting discounts and commissions under that Act. We may have agreements with underwriters, dealers and agents to indemnify them against certain civil liabilities, including liabilities under the Securities Act of 1933, to contribute with respect to payments which they may be required to make in respect of such liabilities and to reimburse them for certain expenses.
Underwriters, dealers and agents, and their affiliates or associates, may engage in transactions with us or perform services for us in the ordinary course of business and receive compensation from us.
Each series of offered securities will be a new issue of securities and will have no established trading market, other than our common shares, which are principally listed on the New York Stock Exchange and the Toronto Stock Exchange. We will apply to list any common shares sold pursuant to a prospectus supplement on the New York Stock Exchange and the Toronto Stock Exchange. Other securities may or may not be listed on a national or foreign securities exchange or automated quotation system. Any underwriters or agents to whom securities are sold for public offering or sale may but are not required to make a market in the securities, and the underwriters or agents may discontinue making a market in the securities at any time without notice. No assurance can be given as to the liquidity or the existence of trading markets for any securities other than our common shares.
27
Any underwriters utilized may engage in stabilizing transactions and syndicate covering transactions in accordance with Rule 104 of Regulation M under the Securities Exchange Act of 1934. Stabilizing transactions permit bids to purchase the offered securities or any underlying security so long as the stabilizing bids do not exceed a specified maximum. Syndicate covering transactions involve purchases of securities in the open market after the distribution has been completed in order to cover syndicate short positions. Such stabilizing transactions and syndicate covering transactions may cause the price of the offered securities to be higher than would be the case in the absence of such transactions.
28
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission registration fee |
$80,900 |
Trustee fees and expenses* |
$50,000 |
Rating agency fee* |
$1,000,000 |
Listing fees* |
$125,000 |
Printing and engraving* |
$200,000 |
Accounting fees* |
$200,000 |
Legal fees* |
$200,000 |
Miscellaneous* |
$144,100 |
Total* |
$2,000,000 |
* These expenses, all of which are to be incurred and satisfied by the Registrant in connection with the issuance and distribution of the securities being registered, have been estimated pursuant to the instructions to Item 511 of Regulation S-K, subject to future contingencies.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Canada Business Corporations Act (the "Act"), the governing act to which Alcan Inc. (the "Corporation") is subject, provides that,
(1) a corporation may indemnify a Director or Officer of the Corporation, a former Director or Officer of the Corporation or another individual who acts or acted at the Corporation's request as a Director or Officer or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of that association with the Corporation or other entity.
(2) a corporation may advance moneys to a Director, Officer or other individual for the costs, charges and expenses of a proceeding referred to paragraph (1). However, the individual shall repay the moneys if he does not fulfil the conditions of paragraph (3).
(3) a corporation may not indemnify an individual, unless the individual
(a) acted honestly and in good faith with a view to the best interests of the Corporation, or, as the case may be, to the best interests of the other entity for which the individual acted as a director or officer or in a similar capacity at the Corporation's request; and
(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that the individual's conduct was lawful.
(4) A Corporation may with the approval of a court indemnify a person referred to in paragraph (1), or advance moneys under paragraph (2), in respect of an action by or on behalf of the Corporation or other entity to procure a judgment in its favour, to which the individual is made a party because of the individual's association with the Corporation or other entity as described in paragraph (1) against all costs, charges and expenses reasonably incurred by the individual in connection with such action if the individual fulfils the conditions set out in paragraph (3).
(5) Despite paragraph (1), an individual referred to in paragraph (1) is entitled to indemnity from the Corporation in respect of all costs, charges and expenses reasonably incurred by the individual in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the individual is subject because of the individual's association with the Corporation or other entity as described in paragraph (1), if the individual seeking indemnity:
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(a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that the individual ought to have done; and
(b) fulfils the conditions set out in paragraph (3).
The Directors' Standing Resolution pertaining to indemnification of Directors and Officers of the Corporation represents, in general terms, the extent to which Directors and Officers may be indemnified by the Company under the Act. This resolution provides as follows:
"17. (1) INDEMNITY - Subject to the limitations contained in the governing Act but without limit to the right of the Corporation to indemnify as provided for in the Act, the Corporation shall indemnify a Director or Officer, a former Director or Officer, or a person who acts or acted at the Corporation's request as a Director or Officer of a body corporate of which the Corporation is or was a Shareholder or creditor (or a person who undertakes or has undertaken any liability on behalf of the Corporation or at the Corporation's request on behalf of any such body corporate) and his heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgement, reasonably incurred by him in respect of any civil, criminal, administrative, investigative or other proceeding to which he is made a party by reason of being or having been a Director or Officer of the Corporation or such body corporate or by reason of having undertaken such liability.
(2) ADVANCE OF COSTS - The Corporation shall advance moneys to a Director, Officer or other individual for the costs, charges and expenses of a proceeding referred to in subsection (1). The individual shall repay the moneys if the individual does not fulfill the conditions of subsection (3).
(3) LIMITATION - The Corporation may not indemnify an individual under subsection (1) unless the individual
(a) acted honestly and in good faith with a view to the best interests of the Corporation; and
(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful."
The Corporation also has an insurance policy covering Directors and Officers of the Corporation and of its subsidiaries against certain liabilities which might be incurred by them in their capacities as such, but excluding those claims for which such insured persons could be indemnified by the Corporation or its subsidiaries.
1.1 Form of Underwriting Agreement for debt securities (incorporated by reference to Exhibit 1.1 to the Company's Registration Statement on Form S-3 (No. 333-85998) filed with the Commission on April 10, 2002).
1.2 Form of Underwriting Agreement for common stock.*
1.3 Form of Underwriting Agreement for preferred stock.*
1.4 Form of Underwriting Agreement for warrants.*
3.1 Restated Articles of Incorporation of Alcan Inc., are incorporated by reference to Exhibit 3 to the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2002.
3.2 By-law No. 1A of Alcan Inc., as amended, is incorporated by reference to Exhibit 3.5 to the Annual Report on Form 10-K of the Company for the year ended December 31, 1987.
4.1 Indenture dated as of May 15, 1983 between Alcan Inc. and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-3 (No. 33-29761) filed with the Commission on July 7, 1989).
4.2 First Supplemental Indenture dated as of January 1, 1986 to the Indenture dated as of May 15, 1983 between Alcan Inc. and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee (incorporated by reference to Exhibit 4.2 to the Company's Registration Statement on Form S-3 (No. 33-29761) filed with the Commission on July 7, 1989).
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4.4 Third Supplemental Indenture dated as of July 19, 1989 to the Indenture dated as of May 15, 1983 between the Company and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee (incorporated by reference to Exhibit (4)(a) to Alcan Inc. Current Report on Form 8-K dated July 26, 1989 filed with the Commission on July 26, 1989 (Commission File Number 1-3677)).
4.5 Fourth Supplemental Indenture dated as of July 17, 1990 to the Indenture dated as of May 15, 1983 between Alcan Inc. and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee (incorporated by reference to Exhibit 4.5 to the Company's Registration Statement on Form S-3 (No. 33-35977) filed with the Commission on July 20, 1990).
4.6 Fifth Supplemental Indenture dated as of January 1, 1995 to the Indenture dated May 15, 1983 between Alcan Inc. and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee (incorporated by reference to Exhibit 4.6 to the Company's Registration Statement on Form S-3 (No 333-76535) filed with the Commission on April 19,1999).
4.7 Sixth Supplemental Indenture dated as of April 8, 2002 to the Indenture dated May 15, 1983 between Alcan Inc. and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee (incorporated by reference to Exhibit 4.7 to the Company's Registration Statement on Form S-3 (No. 333-85998) filed with the Commission on April 10, 2002).
4.8 Form of Seventh Supplemental Indenture to the Indenture dated May 15, 1983 between Alcan Inc. and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company) as Trustee.
4.9 Form of Eighth Supplemental Indenture to the Indenture dated May 15, 1983 between Alcan Inc. and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company) as Trustee.
4.10 Specimen Form of Debt Security (included in Exhibit 4.1).
4.11 Specimen Form of Common Share Certificate (incorporated by reference to Exhibit 4.2 to Alcan Inc.'s Annual Report on Form 10-K for the year ended December 31, 1989 filed with the Commission on March 29, 1990 (Commission File Number 1-3677)).
4.12 Form of Warrant Agreement (incorporated, by reference to Exhibit 4.11 to the Company's Registration Statement on Form S-3 (No. 333-85998) filed with the Commission on April 10, 2002).
4.13 Specimen Form of Warrant Certificate (included in Exhibit 4.10).
4.14 Shareholder Rights Plan dated as of December 14, 1989, as amended and restated on April 24, 1995 and on April 22, 1999 between Alcan Inc. and CIBC Mellon Trust Company, as Rights Agent (incorporated by reference to Exhibit 1 to the Company's Form 8-A/A Amendment No. 3 filed with the Commission on April 22, 1999).
5.1 Opinion of Roy Millington, as to the legality of securities.
5.2 Opinion of Sullivan & Cromwell LLP.
8.1 Opinion of Hugh Berwick, as to certain Canadian tax matters.*
8.2 Opinion of Sullivan & Cromwell LLP regarding certain matters of United States federal income tax.*
12.1 Computation of ratios of earnings to fixed charges (generally accepted accounting principles in Canada).
12.2 Computation of ratios of earnings to fixed charges (generally accepted accounting principles in the United States).
12.3 Computation of ratios of earnings to combined fixed charges and preferred stock dividends (generally accepted accounting principles in Canada).
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12.4 Computation of ratios of earnings to combined fixed charges and preferred stock dividends (generally accepted accounting principles in the United States).
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Roy Millington (included in Exhibit 5.1).
23.3 Consent of Hugh Berwick (included in Exhibit 8.1).*
23.4 Consent of Sullivan & Cromwell LLP (included in Exhibit 5.2).
24.1 Powers of Attorney executed by persons who signed this Registration Statement on behalf of Alcan Inc.
25.1 Statement of Eligibility and Qualification on Form T-1 of Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee under the Indenture.
* To be filed subsequently by amendment or as an exhibit to a document to be incorporated by reference into this registration statement in connection with an offering of applicable securities.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) shall not apply if the information required to be included in a post-effective amendment by such paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
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(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed i n the Act and will be governed by the final adjudication of such issue.
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Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Montreal, Province of Quebec, Canada on the 10th day of June, 2003.
ALCAN INC.
By: /s/ Travis Engen________________
(President and Chief Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
Signature |
Title |
Date |
/s/ Travis Engen
|
Director, President and Chief |
June 10 , 2003 |
Travis Engen |
Executive Officer |
|
(Principal Executive Officer) |
||
*
|
Director |
June 10 , 2003 |
Roland Berger |
||
*
|
Director |
June 10 , 2003 |
Clarence J. Chandran |
|
|
|
Director |
June 10 , 2003 |
L. Denis Desautels |
|
|
*
|
Chairman of the Board |
June 10 , 2003 |
L. Yves Fortier |
|
|
*
|
Director |
June 10 , 2003 |
J.E. Newall |
|
|
*
|
Director |
June 10 , 2003 |
Guy Saint-Pierre |
|
|
*
|
Director |
June 10 , 2003 |
Gerhard Schulmeyer |
|
|
|
Director |
June 10 , 2003 |
Paul M. Tellier |
|
|
|
Director |
June 10 , 2003 |
Milton K. Wong |
|
|
/s/ Geoffery Merszei
|
Executive Vice President and |
June 10 , 2003 |
Geoffery Merszei |
Chief Financial Officer |
|
(Principal Financial Officer) |
||
|
||
/s/ Thomas J. Harrington
|
Vice President and Controller |
June 10 , 2003 |
Thomas J. Harrington |
(Principal Accounting Officer) |
|
*
|
Authorized Representative in |
June 10 , 2003 |
William H. Jairrels |
the United States of America |
|
|
||
*
|
Authorized Representative in |
June 10 , 2003 |
Gordon Becker |
the United States of America |
|
|
||
* By: /s/ Roy Millington |
June 10 , 2003 |
|
Roy Millington as Attorney-in-fact |
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Description
Exhibit |
||
No. |
Page |
1.1 |
Form of Underwriting Agreement for debt securities (incorporated by reference to Exhibit 1.1 to the Company's Registration Statement on Form S-3 (No. 333-85998) filed with the Commission on April 10, 2002). |
|
1.2 |
Form of Underwriting Agreement for common stock.* |
|
1.3 |
Form of Underwriting Agreement for preferred stock.* |
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1.4 |
Form of Underwriting Agreement for warrants.* |
|
3.1 |
Restated Articles of Incorporation of Alcan Inc., are incorporated by reference to Exhibit 3 to the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2002. |
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3.2 |
By-law No. 1A of Alcan Inc., as amended, is incorporated by reference to Exhibit 3.5 to the Annual Report on Form 10-K of the Company for the year ended December 31, 1987. |
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4.1 |
Indenture dated as of May 15, 1983 between Alcan Inc. and Bankers Trust Company, as Trustee (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-3 (No. 33-29761) filed with the Commission on July 7, 1989). |
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4.2 |
First Supplemental Indenture dated as of January 1, 1986 to the Indenture dated as of May 15, 1983 between Alcan Inc. and Bankers Trust Company, as Trustee (incorporated by reference to Exhibit 4.2 to the Company's Registration Statement on Form S-3 (No. 33-29761) filed with the Commission on July 7, 1989). |
|
4.3 |
Second Supplemental Indenture dated as of June 30, 1989 to the Indenture dated as of May 15, 1983 between Alcan Inc. and Bankers Trust Company, as Trustee (incorporated by reference to Exhibit 4.3 to the Company's Registration Statement on Form S-3 (No. 33-29761) filed with the Commission on July 7, 1989). |
|
4.4 |
Third Supplemental Indenture dated as of July 19, 1989 to the Indenture dated as of May 15, 1983 between Alcan Inc. and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee (incorporated by reference to Exhibit (4)(a) to the Company's Current Report on Form 8-K dated July 26, 1989 filed with the Commission on July 26, 1989 (Commission File Number 1-3677)). |
|
4.5 |
Fourth Supplemental Indenture dated as of July 17, 1990 to the Indenture dated as of May 15, 1983 between Alcan Inc. and Bankers Trust Company, as Trustee (incorporated by reference to Exhibit 4.5 to the Company's Registration Statement on Form S-3 (No. 33-35977) filed with the Commission on July 20, 1990). |
|
4.6 |
Fifth Supplemental Indenture dated as of January 1, 1995 to the Indenture dated May 15, 1983 between Alcan Inc. and Bankers Trust Company, as Trustee (incorporated by reference to Exhibit 4.6 to Alcan Inc.'s Registration Statement on Form S-3 (No 333-76535) filed with the Commission on April 19,1999). |
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4.7 |
Sixth Supplemental Indenture dated as of April 8, 2002 to the Indenture dated May 15, 1983 between Alcan Inc. and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee (incorporated, by reference to Exhibit 4.7 to the Company's Registration Statement on Form S-3 (No. 333-85998) filed with the Commission on April 10, 2002). |
|
4.8 |
Form of Seventh Supplemental Indenture to the Indenture dated May 15, 1983 between Alcan Inc. and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company) as Trustee. |
|
4.9 | Form of Eighth Supplemental Indenture to the Indenture dated May 15, 1983 between Alcan Inc. and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company) as Trustee. | |
4.10 | Specimen Form of Debt Security (included in Exhibit 4.1). | |
4.11 |
Specimen Form of Common Share Certificate (incorporated by reference to Exhibit 4.2 to Alcan Inc.'s Annual Report on Form 10-K for the year Ended December 31, 1989 filed with the Commission on March 29, 1990 (Commission File Number 1-3677)). |
|
4.12 |
Form of Warrant Agreement (incorporated, by reference to Exhibit 4.11 to the Company's Registration Statement on Form S-3 (No. 333-85998) filed with the Commission on April 10, 2002). |
|
4.13 |
Specimen Form of Warrant Certificate (included in Exhibit 1.2).
II-7 |
|
4.14 |
Shareholder Rights Plan dated as of December 14, 1989, as amended and restated on April 24, 1995 and on April 22, 1999 between Alcan Inc. and CIBC Mellon Trust Company, as Rights Agent (incorporated by reference to Exhibit 1 to the Company's Form 8-A/A Amendment No. 3 filed with the Commission on April 22, 1999) (incorporated, by reference to Exhibit 4.13 to the Company's Registration Statement on Form S-3 (No. 333-85998) filed with the Commission on April 10, 2002). |
|
5.1 |
Opinion of Roy Millington. |
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5.2 |
Opinion of Sullivan & Cromwell LLP. |
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8.1 |
Opinion of Hugh Berwick.* |
|
8.2 |
Opinion of Sullivan & Cromwell LLP regarding certain matters of United States federal income tax.* |
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12.1 |
Computation of ratios of earnings to fixed charges (generally accepted accounting principles in Canada). |
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12.2 |
Computation of ratios of earnings to fixed charges (generally accepted accounting principles in the United States). |
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12.3 |
Computation of ratios of earnings to combined fixed charges and preferred stock dividends (generally accepted accounting principles in Canada). |
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12.4 |
Computation of ratios of earnings to combined fixed charges and preferred stock dividends (generally accepted accounting principles in the United States). |
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23.1 |
Consent of PricewaterhouseCoopers LLP. |
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23.2 |
Consent of Roy Millington (included in Exhibit 5.1). |
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23.3 |
Consent of Hugh Berwick (included in Exhibit 8.1).* |
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23.4 |
Consent of Sullivan & Cromwell LLP (included in Exhibit 5.2). |
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24.1 |
Powers of Attorney executed by persons who signed this Registration Statement on behalf of Alcan Inc. |
|
25.1 |
Statement of Eligibility and Qualification on Form T-1 of Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee under the Indenture. |
* To be filed subsequently by amendment or as an exhibit to a document to be incorporated by reference into this registration statement in connection with an offering of applicable securities.
II-8
ALCAN INC. Issuer and DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly Bankers Trust Company) Trustee |
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SEVENTH SUPPLEMENTAL INDENTURE |
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Dated as of ___, 200[ ] |
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Supplemental to the Indenture |
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THIS SEVENTH SUPPLEMENTAL INDENTURE, dated as of _____, 200[ ], between Alcan Inc., a corporation duly organized and existing under the laws of Canada (the "Issuer"), and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), a banking corporation duly organized and existing under the laws of the State of New York (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Issuer has duly authorized the issue from time to time of its unsecured debentures, notes or other evidences of indebtedness to be issued in one or more series (the "Securities") up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of the Indenture dated as of May 15, 1983 between the Issuer and the Trustee, as amended by the First Supplemental Indenture thereto, dated as of January 1, 1986, the Second Supplemental Indenture thereto dated as of June 30, 1989, the Third Supplemental Indenture thereto, dated as of July 19, 1989, the Fourth Supplemental Indenture thereto, dated as of July 17, 1990, the Fifth Supplemental Indenture thereto, dated as of January 1, 1995, and the Sixth Supplemental Indenture thereto, dated as of April 8, 2002 (as so amended, the "Indenture"), and to provide, among other things, for the authentication, delivery and administration thereof; an d the Issuer duly authorized the execution and delivery of the Indenture;
WHEREAS, [ ] series of Securities: [specify series] (such series, collectively, the "Existing Series"), have been issued pursuant to the Indenture;
WHEREAS, Section 8.1 of the Indenture provides that the Indenture may be amended without the consent of any Holder, inter alia, (i) to make provisions with respect to matters or questions arising under the Indenture as the Board of Directors may deem necessary or desirable, provided that such action shall not adversely affect the interests of the Holders of Securities of any series and (ii) to establish the form or terms of Securities of any series as permitted by Sections 2.1 and 2.3;
WHEREAS, the Issuer desires to amend, and the Trustee has consented to the amendment of, the Indenture by this Seventh Supplemental Indenture in order to add certain provisions to the Indenture with respect to future series of Securities issued under the Indenture and to add provisions for the benefit of existing series of Securities, including Securities of the Existing Series;
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WHEREAS, the Issuer is duly authorized to execute and deliver this Seventh Supplemental Indenture, and all other things necessary to make the Indenture, as hereby supplemented and amended, a valid indenture and agreement according to its terms have been done;
NOW, THEREFORE, in consideration of the premises and of the covenants contained in the Indenture, the Issuer and the Trustee hereby agree as follows:
SECTION 1. Amendments to Section 1.1 of the Indenture:
(a) The following terms and their respective meanings are hereby added to the Indenture at the end of Section 1.1 thereof:"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.
"Capital Lease Obligation" of any Person means the obligation to pay rent or make other payments under a lease of (or other Indebtedness arrangements conveying the right to use) real or personal property of such Person which is required to be classified and accounted for as a capital lease or a liability on the balance sheet of such Person in accordance with generally accepted accounting principles. The stated maturity of such obligation shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty.
"Common Stock" includes any stock of any class of the Issuer which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Issuer and which is not subject to redemption by the Issuer.
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"Guarantee" by any Person means any obligation, contingent or otherwise, of such Person guaranteeing any Indebtedness of any other Person (the "primary obligor") in any manner, whether directly or indirectly, and including, without limitation, any obligation of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness, (ii) to purchase property, securities or services for the purpose of assuring the holder of such Indebtedness of the payment of such Indebtedness, or (iii) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness (and "Guaranteed," "Guaranteeing" and "Guarantor" shall have meanings c orrelative to the foregoing); provided, however, that the Guarantee by any Person shall not include endorsements by such Person for collection or deposit, in either case, in the ordinary course of business.
"Incur" means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume, Guarantee or otherwise become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to generally accepted accounting principles or otherwise, of any such Indebtedness or other obligation as a liability on the balance sheet of such Person (and "Incurrence," "Incurred," "Incurrable" and "Incurring" shall have meanings correlative to the foregoing); provided, however, that a change in generally accepted accounting principles that results in an obligation of such Person that exists at such time becoming Indebtedness shall not be deemed an Incurrence of such Indebtedness.
"Junior Subordinated Payment" has the meaning specified in Section 14.2.
"Payment Blockage Period" has the meaning specified in Section 14.3.
"Proceeding" has the meaning specified in Section 14.2.
"Senior Indebtedness" means the principal of, premium, if any, interest on and any other payment due pursuant to any of the following, whether Incurred on or prior to the date hereof or hereafter Incurred:
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(i) all obligations of the Issuer for money borrowed;
(ii) all obligations of the Issuer evidenced by notes, debentures, bonds or other similar instruments, including obligations Incurred in connection with the acquisition of property, assets or businesses;
(iii) all Capital Lease Obligations of the Issuer;
(iv) all reimbursement obligations of the Issuer with respect to letters of credit, bankers' acceptances or similar facilities issued for the account of the Issuer;
(v) all obligations of the Issuer issued or assumed as the deferred purchase price of property or services, including all obligations under master lease transactions pursuant to which the Issuer or any of its subsidiaries have agreed to be treated as owner of the subject -property for federal income tax purposes (but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business);
(vi) all payment obligations of the Issuer under interest rate swap or similar agreements or foreign currency hedge, exchange or similar agreements at the time of determination, including any such obligations Incurred by the Issuer solely to act as a hedge against increases in interest rates that may occur under the terms of other outstanding variable or floating rate Indebtedness of the Issuer;
(vii) all obligations of the type referred to in clauses (i) through (vi) above of another Person and all dividends of another Person the payment of which, in either case, the Issuer has assumed or Guaranteed or for which the Issuer is responsible or liable, directly or indirectly, jointly or severally, as obligor, Guarantor or otherwise;
(viii) all compensation and reimbursement obligations of the Issuer pursuant to Section 6.6; and
(ix) all amendments, modifications, renewals, extensions, refinancings, replacements and refundings by the Issuer of any such Indebtedness referred to in clauses (i) through (viii) above (and of any such amended, modified, renewed, extended, refinanced, refunded or replaced Indebtedness);
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provided, however, that the following shall not constitute Senior Indebtedness: (A) any Indebtedness owed to a Person when such Person is a Subsidiary of the Issuer, (B) any Indebtedness which by the terms of the instrument creating or evidencing the same expressly provides that it is not superior in right of payment to the Subordinated Securities, (C) any Indebtedness to the extent Incurred in violation of this Indenture, or (D) all other junior subordinated debt securities of the Issuer, whether or not issued under this Indenture that are subject to subordination provisions substantially equivalent to those to which the Subordinated Securities are subject. As used in this definition, "Indebtedness" includes any obligation to pay principal, premium (if any), interest, penalties, reimbursement or indemnity amounts, fees and expenses (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to th e Issuer whether or not a claim for post-petition interest is allowed in such proceeding). Any Senior Indebtedness shall continue to be Senior Indebtedness and entitled to the benefits of the subordination provisions of Article Fourteen irrespective of any amendment, modification or waiver of any term of such Senior Indebtedness.
"Senior Payment Default" has the meaning specified in Section 14.3.
"Senior Nonmonetary Default" has the meaning specified in Section 14.3.
"Stated Maturity", when used with respect to any Subordinated Security or any installment of principal thereof or interest thereon, means the date specified in such Subordinated Security as the fixed date on which the principal of such Subordinated Security or such installment of principal or interest is due and payable.
"Subordinated Securities" means all Subordinated Securities designated as such by the Issuer after the Issuance thereof.
"Subordinated Securities Payment" has the meaning specified in Section 14.2.
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(b) The definition of the term "Security" or "Securities" is hereby deleted in its entirety and replaced by the following:
"Security" or "Securities" (except as otherwise provided in Section 6.8) has the meaning stated in the first recital of this Indenture, or, as the case may be, Securities that have been authenticated and delivered under this Indenture, and includes Subordinated Securities, unless the context otherwise requires."
SECTION 2. Amendments to Section 2.3 of the Indenture.Section 2.3 of the Indenture is hereby amended by inserting the following paragraph immediately after the last paragraph:
The second paragraph of Section 2.3 of the Indenture is hereby amended as follows:
(A) The following is added after clause (11) of such second paragraph:
"(12) whether the Securities of such series are designated as Subordinated Securities, and any provisions necessary to permit or facilitate the subordination of such series of Subordinated Securities;
(13) the option, if any, of the Issuer to delay or defer payments of interest or principal with respect to such series of Securities;
(14) the option, if any, of the Issuer to repay interest or principal on the Securities of the series, including, without limitation, interest or principal the payment of which has been deferred, other than in cash, including, without limitation in the form of equity or debt securities of the Issuer"; and
(B) Clauses (12) and (13) of such paragraph are renumbered (15) and (16), respectively.SECTION 3. Amendment to Section 13.3 of the Indenture.
Section 13.3 of the Indenture is hereby amended by deleting the phrase "Sections 3.6, 3.8 and 9.2" appearing in the fifth line of such Section and replacing therewith the following:
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"Sections 3.6, 3.8 and 9.2, or, in the case of Subordinated Securities, Section 14.13".
SECTION 4. Amendment to Section 13.5 of the Indenture.Section 13.5 of the Indenture is hereby amended by adding the following sentence at the end of the first paragraph:
"Money and U.S. Government Obligations (including the proceeds thereof) so held in trust to effect defeasance with respect to the terms of Subordinated Securities shall not be subject to the provisions of Article Fourteen, provided that the applicable conditions of Section 13.4 have been satisfied."
SECTION 5. Amendment to Section 13.4 of the Indenture.Section 13.4 of the Indenture is hereby amended as follows:
(A) The following is added after the end of the first sentence of paragraph (1) of such Section:
"Before such a deposit the Issuer may make arrangements satisfactory to the Trustee for the redemption of Subordinated Securities at a future date or dates in accordance with Article Fourteen, which shall be given effect in applying the foregoing."
(B) The following is added immediately after paragraph (7) of such Section:
"(8) if the Outstanding Securities are Subordinated Securities, no event or condition shall exist that, pursuant to the provisions of Article Fourteen, would prevent the Issuer from making payments of the principal of (and any premium) or interest on the Subordinated Securities of such series on the date of such deposit or at any time on or prior to the 90th day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 90th day).
(9) if the Outstanding Securities are Subordinated Securities, the Issuer shall have delivered to the Trustee an Opinion of Counsel substantially to the effect that (i) the trust funds deposited pursuant to this Section will not be subject to any rights of holders of Senior Indebtedness, including those arising under Article Fourteen, and (ii) after the 90th day following the deposit, the trust funds will not be subject to the
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effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally, except that if a court were to rule under any such law in any case or proceeding that the trust funds remained property of the Issuer, no opinion is given as to the effect of such laws on the trust funds except the following: (A) assuming such trust funds remained in the possession of the trustee with whom such funds were deposited prior to such court ruling to the extent not paid to Holders of such Subordinated Securities, such trustee would hold, for the benefit of such Holders, a valid and perfected security interest in such trust funds that is not avoidable in bankruptcy or otherwise, (B) such Holders would be entitled to receive adequate protection of their interests in such trust funds if such trust funds were used and (C) no property, rights in property or other interests granted to such trustee for the Trustee or such Holders in exchange for or with respect to any such funds would be subject to any prior rights of holders of Senior Indebtedness, including those arising under Article Fourteen."
(C) Paragraph (8) is renumbered paragraph (10).
SECTION 6. Addition of Article Fourteen to the Indenture.The following is hereby added to the Indenture immediately after the end of Section 13.5 thereof:
"ARTICLE FOURTEEN
SUBORDINATION OF SUBORDINATED SECURITIES
Section 14.1 Subordinated Securities Subordinate to Senior Indebtedness. The Issuer covenants and agrees, and each Holder of a Subordinated Security, by its acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article (subject to Article Ten), the payment of the principal of and interest on each and all of the Subordinated Securities are hereby expressly made subordinate and subject in right of payment to the prior payment in full in cash of all Senior Indebtedness.
This Article Fourteen shall constitute a continuing offer to all persons who become holders of, or continue to hold, Senior Indebtedness, and such provisions are made for the
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benefit of the holders of Senior Indebtedness and such holders are made obligees hereunder and any one or more of them may enforce such provisions. Holders of Senior Indebtedness need not prove reliance on the subordination provisions hereof.
Section 14.2 Payment Over of Proceeds Upon Dissolution, Etc. Upon any payment or distribution of assets of the Issuer to creditors upon (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to the Issuer or to its assets, or (b) any liquidation, dissolution or other winding up of the Issuer, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or any other marshalling of assets or liabilities of the Issuer, then and in any such event specified in (a), (b) or (c) above (each such event, if any, herein sometimes referred to as a "Proceeding");
(1) the holders of Senior Indebtedness shall be entitled to receive payment in full in cash of all amounts due on or to become due on or in respect of all Senior Indebtedness, before the Holders of the Subordinated Securities are entitled to receive any payment or distribution of any kind or character whether in cash, property or securities (including any payment or distribution which may be payable or deliverable to Holders of the Subordinated Securities made in respect of any other Indebtedness of the Issuer subordinated to the payment of the Subordinated Securities, such payment or distribution being hereinafter referred to as a "Junior Subordinated Payment"), on account of the principal of or interest on the Subordinated Securities or on account of any purchase, redemption or other acquisition of Subordinated Securities by the Issuer, any Subsidiary of the Issuer, the Trustee or any Paying Agent (all such payments, distributions, purchases, redemptions and acquisitio ns, whether or not in connection with a Proceeding, herein referred to, individually and collectively, as a "Subordinated Securities Payment"); and
(2) any payment or distribution of assets of the Issuer of any kind or character, whether in cash, property or securities, by set-off or otherwise, to which the Holders
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of the Subordinated Securities or the Trustee would be entitled but for the provisions of this Article (including, without limitation, any Junior Subordinated Payment) shall be paid by the liquidating trustee or agent or other Person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of Senior Indebtedness or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued, ratably according to the aggregate amounts remaining unpaid on account of the Senior Indebtedness held or represented by each, to the extent necessary to make payment in full in cash of all Senior Indebtedness remaining unpaid, after giving effect to any concurrent payment to the holders of such Senior Indebtedness.
In the event that, notwithstanding the foregoing provisions of this Section, the Trustee or the Holder of any Subordinated Security shall have received in connection with any Proceeding any Subordinated Securities Payment before all Senior Indebtedness is paid in full or payment thereof provided for in cash, then and in such event such Subordinated Securities Payment shall be paid over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other Person making payment or distribution of assets of the Issuer for application to the payment of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full in cash after giving effect to any concurrent payment to or for the holders of Senior Indebtedness.
For purposes of this Article only, the words "any payment or distribution of any kind or character, whether in cash, property or securities" shall not be deemed to include a payment or distribution of stock or securities of the Issuer provided for by a plan of reorganization or readjustment authorized by an order or decree of a court of competent jurisdiction in a reorganization proceeding under any applicable bankruptcy law or of any other corporation provided for by such plan of reorganization or readjustment which stock or securities are subordinated in right of payment to all then outstanding Senior Indebtedness to substantially the same extent, or to a greater extent than, the
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Subordinated Securities are so subordinated as provided in this Article. The consolidation of the Issuer with, or the merger of the Issuer into, another Person or the liquidation or dissolution of the Issuer following the conveyance or transfer of all or substantially all of its properties and assets as an entirety to another Person upon the terms and conditions set forth in Article Nine shall not be deemed a Proceeding for the purposes of this Section if the Person formed by such consolidation or into which the Issuer is merged or the Person which acquires by conveyance or transfer such properties and assets as an entirety, as the case may be, shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions set forth in Article Nine.
Section 14.3 No Payment When Senior Indebtedness in Default. In the event that any Senior Payment Default (as defined below) shall have occurred, then no Subordinated Securities Payment shall be made, nor shall any property of the Issuer or any Subsidiary of the Issuer be applied to the purchase, acquisition, retirement or redemption of the Subordinated Securities, unless and until such Senior Payment Default shall have been cured or waived in writing or shall have ceased to exist or all amounts then due and payable in respect of such Senior Indebtedness (including amounts that have become and remain due by acceleration) shall have been paid in full in cash. "Senior Payment Default" means any default in the payment of principal of (or premium, if any) or interest on any Senior Indebtedness when due, whether at the Stated Maturity of any such payment or by declaration of acceleration, call for redemption, mandatory payment or prepayment or otherwise.
In the event that any Senior Nonmonetary Default (as defined below) shall have occurred and be continuing, then, upon the receipt by the Issuer and the Trustee of written notice of such Senior Nonmonetary Default from the holder of such Senior Indebtedness (or the agent, trustee or representative thereof), no Subordinated Securities Payment shall be made, nor shall any property of the Issuer or any Subsidiary of the Issuer be applied to the purchase, acquisition, retirement or redemption of the Subordinated Securities, during the period (the "Payment Blockage Period") commencing on the date of such receipt of such written notice and ending (subject to any blockage of payments that may then or thereafter be in effect as the result of any Senior Payment Default) on the earlier of (i) the date on which the Senior Indebtedness to which such Senior Nonmonetary Default relates is discharged or such Senior Nonmonetary Default shall
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have been cured or waived in writing or shall have ceased to exist and any acceleration of Senior Indebtedness to which such Senior Nonmonetary Default relates shall have been rescinded or annulled or (ii) the 179th day after the date of such receipt of such written notice. No more than one Payment Blockage Period may be commenced with respect to the Subordinated Securities during any period of 360 consecutive days and there shall be a period of at least 181 consecutive days in each period of 360 consecutive days when no Payment Blockage Period is in effect. Following the commencement of any Payment Blockage Period, the holders of any Senior Indebtedness will be precluded from commencing a subsequent Payment Blockage Period until the conditions set forth in the preceding sentence are satisfied. For all purposes of this paragraph, no Senior Nonmonetary Default that existed or was continuing on the date of commencement of any Payment Blockage Period with respect to the Senior Indebtedness initiating such Pa yment Blockage Period shall be, or be made, the basis for the commencement of a subsequent Payment Blockage Period by holders of Senior Indebtedness or their representatives unless such Senior Nonmonetary Default shall have been cured for a period of not less than 90 consecutive days. "Senior Nonmonetary Default" means the occurrence or existence and continuance of any default (other than a Senior Payment Default) or any event which, after notice or lapse of time (or both), would become an Event of Default (other than a Senior Payment Default), under the terms of any instrument or agreement pursuant to which any Senior Indebtedness is outstanding, permitting (after notice or lapse of time or both) one or more holders of such Senior Indebtedness (or a trustee or agent on behalf of the holders thereof) to declare such Senior Indebtedness due and payable prior to the date on which it would otherwise become due and payable.
In the event that, notwithstanding the foregoing, the Issuer shall make any payment to the Trustee or the Holder of any Subordinated Security prohibited by the foregoing provisions of this Section, and if such fact shall, at or prior to the time of such payment, have been made known to the Trustee or, as the case may be, such Holder, then and in such event such payment shall be paid over and delivered forthwith to the Issuer.
The provisions of this Section shall not apply to any Subordinated Securities Payment with respect to which Section 14.2 hereof would be applicable.
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Section 14.4 Payment Permitted If No Default. Nothing contained in this Article or elsewhere in this Indenture or in any of the Subordinated Securities shall prevent the Issuer, at any time except during the pendency of any Proceeding referred to in Section 14.2 hereof or under the conditions described in Section 14.3 hereof, from making Subordinated Securities Payments.
Section 14.5 Subrogation to Rights of Holders of Senior Indebtedness. Subject to the payment in full in cash of all Senior Indebtedness, the Holders of the Subordinated Securities shall be subrogated (equally and ratably with the holders of all indebtedness of the Issuer which by its express terms is subordinated to indebtedness of the Issuer to substantially the same extent as the Subordinated Securities are subordinated and is entitled to like rights of subrogation) to the rights of the holders of such Senior Indebtedness to receive payments and distributions of cash, property and securities applicable to the Senior Indebtedness until the principal of and interest on the Subordinated Securities shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of the Senior Indebtedness of any cash, property or securities to which the Holders of the Subordinated Securities or the Trustee would be entitled except for the provisions of this Arti cle, and no payments over pursuant to the provisions of this Article to the holders of Senior Indebtedness by Holders of the Subordinated Securities or the Trustee, shall, as among the Issuer, its creditors other than holders of Senior Indebtedness and the Holders of the Subordinated Securities, be deemed to be a payment or distribution by the Issuer to or on account of the Senior Indebtedness.
Section 14.6 Provisions Solely to Define Relative Rights. The provisions of this Article are and are intended solely for the purpose of defining the relative rights of the Holders on the one hand and the holders of Senior Indebtedness on the other hand. Nothing contained in this Article or elsewhere in this Indenture or in the Subordinated Securities is intended to or shall (a) impair, as among the Issuer, its creditors other than holders of Senior Indebtedness and the Holders of the Subordinated Securities, the obligation of the Issuer, which is absolute and unconditional (and which, subject to the rights under this Article of the holders of Senior Indebtedness, is intended to rank equally with all other general obligations of the Issuer), to pay to the Holders of the Subordinated
- 14 -
Securities the principal of and interest on the Subordinated Securities as and when the same shall become due and payable in accordance with their terms; or (b) affect the relative rights against the Issuer of the Holders of the Subordinated Securities and creditors of the Issuer other than the holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Subordinated Security from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article of the holders of Senior Indebtedness to receive cash, property and securities otherwise payable or deliverable to the Trustee or such Holder.
Section 14.7 Trustee to Effectuate Subordination. Each Holder of a Subordinated Security by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article and appoints the Trustee his attorney-in-fact for any and all such purposes, including, in the event of any dissolution, winding-up, liquidation or reorganization of the Issuer whether in bankruptcy, insolvency, receivership proceedings, or otherwise, the timely filing of a claim for the unpaid balance of the Indebtedness of the Issuer owing to such Holder in the form required in such proceedings and the causing of such claim to be approved. If the Trustee does not file a proper claim at least 30 days before the expiration of the time to file such claim, then the holders of the Senior Indebtedness and their agents, trustees or other representatives are authorized to do so (but shall in no event be liable for any failure to do so) for and on behalf of the Holders of the Subordinated Securities.
Section 14.8 No Waiver of Subordination Provisions. No right of any present or future holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Issuer or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Issuer with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders of the Subordinated Securities, without incurring responsibility to the Holders of the Subordinated Securities and without impairing or
- 15 -
releasing the subordination provided in this Article or the obligations hereunder of the Holders of the Subordinated Securities to the holders of Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness is outstanding; (ii) permit the Issuer to borrow, repay and then reborrow any or all of the Senior Indebtedness; (iii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iv) release any Person liable in any manner for the collection of Senior Indebtedness; (v) exercise or refrain from exercising any rights against the Issuer and any other Person; and (vi) apply any sums received by them to Senior Indebtedness.
Section 14.9 Notice to Trustee. The Issuer shall give prompt written notice to the Trustee of any fact known to the Issuer which would prohibit the making of any payment to or by the Trustee in respect of the Subordinated Securities. Notwithstanding the provisions of this Article or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the Subordinated Securities, unless and until a Responsible Officer of the Trustee shall have received written notice thereof from the Issuer, any holder of Senior Indebtedness or from any trustee, fiduciary or agent therefor; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 6.1 hereof, shall be entitled in all respects to assume that no such facts exist; provided, however, that if the Trustee shall not have received the notice provided for in this Se ction at least three Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of or interest on any Subordinated Security), then, anything herein contained to the contrary notwithstanding, but without limiting the rights and remedies of the holders of Senior Indebtedness or any trustee, fiduciary or agent therefor, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within two Business
- 16 -
Days prior to such date. Any notice required or permitted to be given to the Trustee by a holder of Senior Indebtedness or by any agent, trustee or representative thereof shall be in writing and shall be sufficient for every purpose hereunder if in writing and either (i) sent via facsimile to the Trustee, the receipt of which shall be confirmed via telephone, or (ii) mailed, first class postage prepaid, or sent by overnight carrier, to the Trustee addressed to its Corporate Trust Office or to any other address furnished in writing to such holder of Senior Indebtedness by the Trustee.
Subject to the provisions of Section 6.1 hereof, the Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness (or a trustee, fiduciary or agent therefor to establish that such notice has been given by a holder of Senior Indebtedness or a trustee, fiduciary or agent therefor). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.
Notwithstanding anything else contained herein, no notice, request or other communication to or with the Trustee shall be deemed given unless received by a Responsible Officer at the Corporate Trust Office.
Section 14.10 Reliance on Judicial Order or Certificate of Liquidating Agent. Upon any payment or distribution of assets of the Issuer referred to in this Article, the Trustee, subject to the provisions of Section 6.1 hereof, and the Holders of the Subordinated Securities shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders of Subordinated Securities, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior
- 17 -
Indebtedness and other Indebtedness of the Issuer, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article, provided that the foregoing shall apply only if such court has been apprised of the provisions of this Article.
Section 14.11. Trustee Not Fiduciary for Holders of Senior Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness by virtue of this Article and shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders of Subordinated Securities or to the Issuer or to any other Person cash, property or securities to which any holders of Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
Section 14.12 Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's Rights. The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.6 hereof.
Section 14.13 Covenants for the Benefit of the Holders of Subordinated Securities.
(a) The Issuer agrees that neither it nor any of its Subsidiaries will declare or pay any dividend on, or redeem, purchase, acquire for value or make a liquidation payment with respect to, any of its Common Stock or preferred stock (other than as a result of a reclassification of such Common Stock or preferred stock or the exchange or conversion of one class or series of Common Stock or preferred stock for another class or series of Common Stock or preferred stock), or make any guarantee payments with respect to the foregoing (other than dividends or guarantee payments to the Issuer from a Subsidiary) if at such time (i) there shall have occurred any event that, with the giving of notice or the lapse of time or both, would constitute an Event of Default hereunder with respect to
- 18 -
the Subordinated Securities or under the Subordinated Securities or (ii), if applicable, the Issuer shall have given notice of its election to defer interest payments with respect to Subordinated Securities and such extension period, or any extension thereof, shall be continuing.
(b) If, upon any consolidation, amalgamation, merger, sale or conveyance described in the first sentence of Section 9.1, any Principal Property of the Issuer or of any Subsidiary or any shares of stock or Funded Indebtedness of any Subsidiary which owns a Principal Property would thereupon become subject to any mortgage (as defined in Section 3.6), the Issuer, prior to such consolidation, amalgamation, merger, sale or conveyance, will by indenture supplemental hereto secure the due and punctual payment of the principal of and interest on the Subordinated Securities by a direct lien on such Principal Property, shares of stock or Funded Indebtedness equally and ratably with (or prior to) all liens other than any theretofore existing thereon.
Section 14.14 Inapplicability of Certain Indenture Covenants to Subordinated Securities. Notwithstanding anything to the contrary herein, the holders of Subordinated Securities shall not be entitled to the covenants contained in Sections 3.6, 3.8 and 9.2 of this Indenture. To the extent an Event of Default shall have occurred hereunder solely due to a violation by the Issuer of the terms of one or more of such Sections, no Event of Default shall be deemed to have occurred with respect to any series of Subordinated Securities."
SECTION 7. Ratification of the Indenture.As hereby amended and supplemented, the Indenture is hereby ratified and its provisions confirmed in all respects. The recitals contained herein shall be taken as the statements of the Issuer and the Trustee assumes no responsibility for the validity or sufficiency of such recitals.
SECTION 8. Miscellaneous.(A) Certain Capitalized Terms. Capitalized terms used but not defined in this Seventh Supplemental Indenture shall have the meanings ascribed to such terms in the Indenture, as heretofore supplemented.
- 19 -
(C) Successors and Assigns. All of the covenants, promises, stipulations and agreements of the Issuer contained in the Indenture, as supplemented and amended by this Seventh Supplemental Indenture, will bind the Issuer and its successors and assigns and will inure to the benefit of the Trustee and its successors and assigns.
(D) Governing Law. THIS SEVENTH SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.(E) Counterparts. This Seventh Supplemental Indenture may be executed in any number of separate counterparts each of which shall be an original; but such separate counterparts shall together constitute but one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
- 20 -
IN WITNESS WHEREOF, the Issuer and the Trustee hereto have caused this Seventh Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the date first above written.
ALCAN INC.
By:
Name:
Title:
(Corporate Seal)
Attest:
By:
Name:
Title:
DEUTSCHE BANK TRUST COMPANY
AMERICAS,
as Trustee
By:
Name:
Title:
Corporate Seal)
Attest:
By:
Name:
Title:
- 21 - -
Canada |
) | |
|
) | |
Province Of Quebec |
) |
s.s.: |
|
) | |
District Of Montreal |
) |
On this __th day of [ ], 200[ ] before me personally came _____________________, to me personally known, who, being by me duly sworn, did depose and say that he resides at _______________________________, that he is ________________ of Alcan Inc., one of the corporations described in and which executed the above instrument; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
(SEAL)
Commissioner of Oaths
- 22 -
State of New York |
) | |
|
) |
s.s.: |
County of New York |
) |
On this __th day of [ ], 200[ ] before me personally came _______________, to me personally known, who, being by me duly sworn, did depose and say that he resides at ___________________, that he is ________________________ of Deutsche Bank Trust Company Americas (formerly Bankers Trust Issuer), one of the corporations described in and which executed the above instrument; and that he knows the corporate seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
(NOTARIAL SEAL)
Notary Public
State of New York No._________
Qualified in New York County
Commission expires
- 23 - -
ALCAN INC. Issuer and DEUTSCHE BANK TRUST COMPANY AMERICAS Trustee |
||
Eighth Supplemental Indenture |
||
Dated as of ___, 200[ ] |
||
Supplemental to the Indenture |
||
THIS EIGHTH SUPPLEMENTAL INDENTURE, dated as of [ ], between Alcan Inc., a corporation duly organized and existing under the laws of Canada (the "Issuer"), and Deutsche Bank Trust Company Americas (formerly, Bankers Trust Company), a banking corporation duly organized and existing under the laws of the State of New York (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Issuer has duly authorized the issue from time to time of its unsecured debentures, notes or other evidences of indebtedness to be issued in one or more series (the "Securities") up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of the Indenture dated as of May 15, 1983 between the Issuer and the Trustee, as amended by the First Supplemental Indenture thereto, dated as of January 1, 1986, the Second Supplemental Indenture thereto dated as of June 30, 1989, the Third Supplemental Indenture thereto, dated as of July 19, 1989, the Fourth Supplemental Indenture thereto, dated as of July 17, 1990, the Fifth Supplemental Indenture thereto, dated as of January 1, 1995, the Sixth Supplemental Indenture thereto, dated as of April 8, 2002, and the Seventh Supplemental Indenture thereto, dated as of [ ] (as so amended, the "Indenture"), and to provide, among other thin gs, for the authentication, delivery and administration thereof; and the Issuer duly authorized the execution and delivery of the Indenture;
WHEREAS, [ ] series of Securities: [specify series] (such series, collectively, the "Existing Series"), have been issued pursuant to the Indenture;
WHEREAS, Section 8.1 of the Indenture provides that the Indenture may be amended without the consent of any Holder, inter alia, (i) to make provisions with respect to matters or questions arising under the Indenture as the Board of Directors may deem necessary or desirable, provided that such action shall not adversely affect the interests of the Holders of Securities of any series and (ii) to establish the form or terms of Securities of any series as permitted by Sections 2.1 and 2.3;
WHEREAS, the Issuer desires to amend, and the Trustee has consented to the amendment of, the Indenture by this Eighth Supplemental Indenture in order to add certain provisions to the Indenture with respect to future series of Securities issued under the Indenture;
- 2 -
WHEREAS, the Issuer is duly authorized to execute and deliver this Eighth Supplemental Indenture, and all other things necessary to make the Indenture, as hereby supplemented and amended, a valid indenture and agreement according to its terms have been done;
NOW, THEREFORE, in consideration of the premises and of the covenants contained in the Indenture, the Issuer and the Trustee hereby agree as follows:
SECTION 1. Amendment to the Indenture.
Section 1.1 of the Indenture is hereby amended by deleting the definition of "Depository" and replacing therewith the following definition: "Depository" means, when used with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities, the Person or Persons designated as Depository for such series by the Issuer pursuant to Section 2.3, and if at any time there is more than one such Person, "Depository" shall mean each Depository with respect to the Securities of that series."
SECTION 2. Ratification of the Indenture.
As hereby amended and supplemented, the Indenture is hereby ratified and its provisions confirmed in all respects. The recitals contained herein shall be taken as the statements of the Issuer and the Trustee assumes no responsibility for the validity or sufficiency of such recitals.
SECTION 3. Miscellaneous.
(A) Certain Capitalized Terms. Capitalized terms used but not defined in this Eighth Supplemental Indenture shall have the meanings ascribed to such terms in the Indenture, as heretofore supplemented.
(B) Effectiveness. This Eighth Supplemental Indenture will become effective upon its execution and delivery by the Issuer and the Trustee.
(C) Successors and Assigns. All of the covenants, promises, stipulations and agreements of the Issuer contained in the Indenture, as supplemented and amended by this Eighth Supplemental Indenture, will bind the Issuer and its successors and assigns and will inure to the benefit of the Trustee and its successors and assigns.
- 3 -
(D) Governing Law. THIS EIGHTH SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.
(E) Counterparts. This Eighth Supplemental Indenture may be executed in any number of separate counterparts each of which shall be an original; but such separate counterparts shall together constitute but one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
- 4 -
IN WITNESS WHEREOF, the Issuer and the Trustee hereto have caused this Eighth Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the date first above written.
ALCAN INC. By:
Name: Title:
(Corporate Seal)
Attest:
By:
Name:
Title:
DEUTSCHE BANK TRUST
COMPANY AMERICAS, as Trustee By:
Name: Title:
(Corporate Seal)
Attest:
By:
Name:
Title:
- 5 -
Canada | ) | |
) | ||
Province Of Quebec | ) | s.s.: |
) | ||
District Of Montreal | ) |
On this __th day of [ ], 200[ ] before me personally came ____________________, to me personally known, who, being by me duly sworn, did depose and say that [s]he resides at _______________________________, that [s]he is ________________ of Alcan Inc., one of the corporations described in and which executed the above instrument; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
(SEAL)
Commissioner of Oaths
- 6 -
State of New York | ) | |
) | s.s.: | |
County of New York | ) |
On this __th day of [ ], 200[ ] before me personally came _______________, to me personally known, who, being by me duly sworn, did depose and say that [s]he resides at ___________________, that [s]he is ________________________ of Deutsche Bank Trust Company Americas, one of the corporations described in and which executed the above instrument; and that he knows the corporate seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
(NOTARIAL SEAL)
Notary Public
State of New York No.___________
Qualified in New York County
Commission expires _________
- 7 -
Alcan Inc. | ||||
1188 Sherbrooke Street West Montreal, Quebec H3A 3G2 Canada |
Mailing Address: P.O. Box 6090 Montreal, Quebec H3C 3A7 Canada |
Tel: (514) 848-8000 Fax: (514) 848-8115 Telex: 05-25236 Cable: Alcan |
|
A |
June 10, 2003
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Registration on Form S-3
Dear Sirs:
I have acted as counsel for Alcan Inc., a Canadian corporation (the "Company"), in connection with the proposed public offering from time to time pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Act"), of up to U.S. $1,000,000,000 in aggregate offering price of debt securities (the "Debt Securities") and/or certain classes of equity securities (the "Equity Securities") of the Company together, in the case of common shares, with associated common share purchase rights (the "Rights") issued pursuant to the amended and restated Shareholder Rights Agreement, dated April 22, 1999 between the Company and CIBC Mellon Trust Company, successor to The Royal Trust Company, as Rights Agent (the "Rights Agent") , as contemplated in the Company's Registration Statement on Form S-3 being filed on the date hereof with the Securities and Exchange Commission (the "Commission") under the Act (the "Registration Statement"). The Debt Securities will be issued under an Indenture dated as of May 15, 1983, as supplemented (as so supplemented, the "Indenture"), between the Company and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee. I hereby consent to the use of this opinion in the Registration Statement and to the references on page 26 of the Prospectus forming a part of the Registration Statement and under the heading "Legal Opinions". In giving such consent I do not thereby admit that I am in the category of persons whose consent is required under Section 7 of the Act.
In reaching the conclusions expressed in this opinion, I have examined such certificates of public officials and of corporate officers and directors and such other documents and matters as I have deemed necessary or appropriate, relied upon the accuracy of facts and information set forth in all such documents, and assumed the genuineness of all signatures, the authenticity of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as copies, and the authenticity of the originals from which all such copies were made.
Alcan Inc. | ||||
- 2 - |
||||
A |
Based on the foregoing, I am of the opinion that (i) the Debt Securities, when executed by the Company and authenticated by or on behalf of the Trustee, pursuant to the terms of the Indenture, and issued for value, will be legally issued, binding obligations of the Company, (ii) the Equity Securities, upon due authorization by the Board of Directors of the Company, due execution by proper officers of the Company and due authentication by the Company's transfer agent and registrar of certificates representing the Equity Securities and delivery thereof against payment of the purchase price thereof, will be legally issued, fully paid and non-assessable (iii) assuming that the Rights Agreement has been duly authorized, executed and delivered by the Rights Agent, the Rights associated with the Equity Securities have been validly issued. In connection with my opinion set forth in clause (iii) above, I note that the question whether the Board of Directors of the Company might be required to redeem the Rights at some future time will depend upon the facts and circumstances existing at that time and, accordingly, is beyond the scope of such opinion.
The foregoing opinion is limited to matters involving the laws of Canada and the Province of Quebec. Insofar as the opinion expressed herein relates to or is dependent upon matters governed by the laws of the State of New York or the Federal law of the United States of America, I have relied upon the opinion of Sullivan & Cromwell LLP, United States counsel to the Company, which is being delivered to you and filed with the Commission on the date hereof as an exhibit to the Registration Statement.
Yours truly,
/s/ Roy Millington
Roy Millington
Corporate Secretary
June 10, 2003
Alcan Inc.,
1188 Sherbrooke Street West,
Montreal, Quebec,
Canada H3A 3G2.
Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933 (the "Act") of $1,000,000,000 aggregate amount of senior debt securities, subordinated debt securities (the senior debt securities and the subordinated debt securities, collectively, the "Debt Securities"), warrants (the "Warrants" and, together with the Debt Securities, the "Securities") and equity securities of Alcan Inc., a Canadian corporation (the "Company"), we, as your special United States counsel, have examined such corporate records, certificates and other documents, and such questions of law, as we have considered necessary or appropriate for the purposes of this opinion.
Alcan Inc.
Upon the basis of such examination, we advise you that, in our opinion, when the Registration Statement has become effective under the Act, the terms of the Securities and of their issuance and sale have been duly established in conformity with (i) in the case of the Debt Securities, the Indenture relating thereto and as further amended by the Seventh and the Eight Supplemental Indentures thereto each substantially in the form filed as an Exhibit to the Registration Statement on Form S-3,as amended by the First through the Sixth Supplemental Indentures thereto, and (ii) in the case of any Warrants, the warrant agreement or agreements relating thereto substantially in the form filed as an exhibit to the Registration Statement on Form S-3, so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company, and the Securities have been duly executed and authenticated in accordance with (i) in the case of the Debt Securities, the Indenture relating thereto, and (ii) in the case of any Warrants, the warrant agreement or agreements relating thereto, and issued and sold as contemplated in the Registration Statement, the Securities will constitute valid and legally binding obligations of the
- 2 -
Alcan Inc.
Company, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. The Securities covered by the opinion in this paragraph include any Securities that may be issued upon exercise or otherwise pursuant to the terms of any other Securities.
The foregoing opinion is limited to the Federal laws of the United States and the laws of the State of New York and we are expressing no opinion as to the effect of the laws of any other jurisdiction. For purposes of our opinion, we have assumed that the Company has been duly incorporated and is an existing corporation in good standing under the laws of Canada, and that each of the Indenture relating to the Debt Securities, the Seventh and Eight Supplemental Indentures thereto, and any warrant agreement relating to the Warrants, shall have been duly authorized, executed and delivered by the Company insofar as the laws of Canada and Quebec are concerned. With respect to all matters of Canadian and Quebec law, we note that you are being provided with the opinion, dated the date hereof, of Roy Millington, corporate secretary and counsel for the Company.
- 3 -
Alcan Inc.
Also, we have relied as to certain matters on information obtained from public officials, officers of the Company and other sources believed by us to be responsible, and we have assumed that the Indenture relating to the Debt Securities shall have been duly authorized, executed and delivered by the Trustee thereunder, and the warrant agreement or agreements relating to any warrants shall have been duly authorized, executed and delivered by the warrant agent or warrant agents thereunder.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the references to us under the heading "Validity of Securities" in the Prospectus. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Sullivan & Cromwell LLP
Sullivan & Cromwell LLP
- 4 -
Exhibit 12.1
Alcan Inc.
Computation of Earnings to Fixed
Charges
Canadian GAAP
(in millions of US dollars)
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YEAR | ||||||||||||||||||
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3 months |
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| ||||||||||||||||||||
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2003 |
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2002 |
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2001* |
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2000* |
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1999* |
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1998 | ||||||||||||
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|
|
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| ||||||||||||
Consolidated net income (loss) before extraordinary item |
|
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13 |
|
|
|
374 |
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|
|
2 |
|
|
|
610 |
|
|
|
448 |
|
|
|
399 |
| ||
Less: |
|
Equity income of less than 50% owned companies |
|
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0 |
|
|
|
3 |
|
|
|
3 |
|
|
|
4 |
|
|
|
(1 |
) |
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|
(48 |
) |
Plus: |
|
Dividends received from less than 50% owned companies |
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0 |
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|
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3 |
|
|
|
2 |
|
|
|
1 |
|
|
|
1 |
|
|
|
5 |
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Plus: |
|
Minority interest of subsidiaries that have fixed charges |
|
|
1 |
|
|
|
3 |
|
|
|
(13 |
) |
|
|
(1 |
) |
|
|
14 |
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|
|
(4 |
) |
Subtotal |
|
|
14 |
|
|
|
377 |
|
|
|
(12 |
) |
|
|
606 |
|
|
|
464 |
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|
|
448 |
| ||
FIXED CHARGES |
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|
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|
|
|
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| ||
Amount representative of interest factor in rentals |
|
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7 |
|
|
|
27 |
|
|
|
24 |
|
|
|
19 |
|
|
|
19 |
|
|
|
28 |
| ||
Amount representative of interest factor in rentals, 50% owned companies |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
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|
|
0 |
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|
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0 |
| ||
Interest expense - net |
|
|
49 |
|
|
|
203 |
|
|
|
254 |
|
|
|
78 |
|
|
|
76 |
|
|
|
92 |
| ||
Interest expense, 50% owned companies |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
| ||
Capitalized interest |
|
|
1 |
|
|
|
1 |
|
|
|
30 |
|
|
|
81 |
|
|
|
41 |
|
|
|
15 |
| ||
Capitalized interest, 50% owned companies |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
| ||
TOTAL FIXED CHARGES |
|
|
57 |
|
|
|
231 |
|
|
|
308 |
|
|
|
178 |
|
|
|
136 |
|
|
|
135 |
| ||
Less: |
|
Capitalized interest |
|
|
1 |
|
|
|
1 |
|
|
|
30 |
|
|
|
81 |
|
|
|
41 |
|
|
|
15 |
|
Fixed charges added to income/(loss) |
|
|
56 |
|
|
|
230 |
|
|
|
278 |
|
|
|
97 |
|
|
|
95 |
|
|
|
120 |
| ||
Plus: |
|
Amortization of capitalized interest |
|
|
6 |
|
|
|
24 |
|
|
|
25 |
|
|
|
21 |
|
|
|
18 |
|
|
|
15 |
|
Income taxes |
|
|
141 |
|
|
|
293 |
|
|
|
42 |
|
|
|
254 |
|
|
|
211 |
|
|
|
210 |
| ||
Earnings before fixed charges and income Taxes |
|
|
217 |
|
|
|
924 |
|
|
|
333 |
|
|
|
978 |
|
|
|
788 |
|
|
|
793 |
| ||
Ratio of earnings to fixed charges |
|
|
3.81 |
|
|
|
4.00 |
|
|
|
1.08 |
|
|
|
5.49 |
|
|
|
5.79 |
|
|
|
5.87 |
|
* |
|
Revised due to accounting change as described in note 3, Accounting Changes, under Deferred Foreign Exchange Translation Gains and Losses in the 2002 Annual Report. |
Exhibit 12.2
Alcan Inc.
Computation of Earnings to Fixed
Charges
US GAAP
(in millions of US dollars)
YEAR |
|||||||||||||||||||||||
3 months 2003 |
2002 | 2001 | 2000 | 1999 | 1998 | ||||||||||||||||||
|
|
|
|
| |||||||||||||||||||
Net income (loss) from continuing operations before cumulative effect of accounting change and extraordinary items |
14 |
412 | (42 |
) |
606 | 455 | 417 | ||||||||||||||||
Less: |
Equity
income of less than 50% owned companies |
0 |
3 | 3 | 4 | (1 | ) | (48 | ) | ||||||||||||||
Plus: |
Dividends
received from less than 50% owned companies |
0 |
3 | 2 | 1 | 1 | 5 | ||||||||||||||||
Plus: | Minority interest of subsidiaries that have fixed charges |
1 |
3 | (13 | ) | (1 | ) | 14 | (4 | ) | |||||||||||||
Subtotal |
15 |
415 | (56 | ) | 602 | 471 | 466 | ||||||||||||||||
FIXED
CHARGES |
|
||||||||||||||||||||||
Amount
representative of interest factor in rentals |
7 |
27 | 24 | 19 | 19 | 28 | |||||||||||||||||
Amount
representative of interest factor in rentals, 50% owned
companies |
0 |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Interest
expense - net |
49 |
203 | 254 | 78 | 76 | 92 | |||||||||||||||||
Interest
expense, 50% owned companies |
0 |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Capitalized interest |
1 |
1 | 30 | 81 | 41 | 15 | |||||||||||||||||
Capitalized interest, 50% owned companies |
0 |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
TOTAL
FIXED CHARGES |
57 |
231 | 308 | 178 | 136 | 135 | |||||||||||||||||
Less: |
Capitalized interest |
1 |
1 | 30 | 81 | 41 | 15 | ||||||||||||||||
Fixed
charges added to income/(loss) |
56 |
230 | 278 | 97 | 95 | 120 | |||||||||||||||||
Plus: |
Amortization of capitalized interest |
6 |
24 | 25 | 21 | 18 | 15 | ||||||||||||||||
Income
taxes |
145 |
313 | 13 | 259 | 211 | 210 | |||||||||||||||||
Earnings before fixed charges and income
taxes |
222 |
982 | 260 | 979 | 795 | 811 | |||||||||||||||||
Ratio
of earnings to fixed charges |
3.89 |
4.25 | 0.84 | 5.50 | 5.85 | 6.01 |
Exhibit 12.3
Alcan Inc.
Computation of Earnings to Combined
Fixed Charges and Preferred Stock Dividends
Canadian GAAP
(in millions of
US dollars)
YEAR | ||||||||||||||||||||||||||
3 months |
| |||||||||||||||||||||||||
2003 | 2002 | 2001* | 2000* | 1999* | 1998 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||
Consolidated net income (loss) before extraordinary
item |
13 | 374 | 2 | 610 | 448 | 399 | ||||||||||||||||||||
Less: |
Equity
income of less than 50% owned companies |
0 | 3 | 3 | 4 | (1 | ) | (48 | ) | |||||||||||||||||
Plus: |
Dividends
received from less than 50% owned companies |
0 | 3 | 2 | 1 | 1 | 5 | |||||||||||||||||||
Plus: |
Minority
interest of subsidiaries that have fixed charges |
1 | 3 | (13 | ) | (1 | ) | 14 | (4 | ) | ||||||||||||||||
Subtotal |
14 | 377 | (12 | ) | 606 | 464 | 448 | |||||||||||||||||||
FIXED
CHARGES |
||||||||||||||||||||||||||
Amount
representative of interest factor in rentals |
7 | 27 | 24 | 19 | 19 | 28 | ||||||||||||||||||||
Amount
representative of interest factor in rentals, 50% owned
companies |
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Interest
expense - net |
49 | 203 | 254 | 78 | 76 | 92 | ||||||||||||||||||||
Interest
expense, 50% owned companies |
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Capitalized interest |
1 | 1 | 30 | 81 | 41 | 15 | ||||||||||||||||||||
Capitalized interest, 50% owned companies |
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
TOTAL
FIXED CHARGES |
57 | 231 | 308 | 178 | 136 | 135 | ||||||||||||||||||||
Less: |
Capitalized interest |
1 | 1 | 30 | 81 | 41 | 15 | |||||||||||||||||||
Fixed
charges added to income/(loss) |
56 | 230 | 278 | 97 | 95 | 120 | ||||||||||||||||||||
Plus: |
Amortization of capitalized interest |
6 | 24 | 25 | 21 | 18 | 15 | |||||||||||||||||||
Income
taxes |
141 | 293 | 42 | 254 | 211 | 210 | ||||||||||||||||||||
Earnings before fixed charges and income
taxes |
217 | 924 | 333 | 978 | 788 | 793 | ||||||||||||||||||||
TOTAL
FIXED CHARGES |
57 | 231 | 308 | 178 | 136 | 135 | ||||||||||||||||||||
Preference
dividends |
2 | 5 | 8 | 10 | 9 | 10 | ||||||||||||||||||||
1 minus
tax rate of 40% |
0.6 | 0.6 | 0.6 | 0.6 | 0.6 | 0.6 | ||||||||||||||||||||
Preference dividends pre tax |
3 | 8 | 13 | 17 | 15 | 17 | ||||||||||||||||||||
Total |
60 | 239 | 321 | 195 | 151 | 152 | ||||||||||||||||||||
Ratio
of earnings to combined fixed charges and preferred stock
dividends |
3.62 | 3.86 | 1.04 | 5.02 | 5.22 | 5.23 |
* | Revised due to accounting change as described in note 3, Accounting Changes, under Deferred Foreign Exchange Translation Gains and Losses in the 2002 Annual Report. |
Exhibit 12.4
Alcan Inc.
Computation of Earnings to Combined
Fixed Charges and Preferred Stock Dividends
US GAAP
(in millions of US
dollars)
YEAR |
|||||||||||||||||||||||
3 months 2003 |
2002 | 2001 | 2000 | 1999 | 1998 | ||||||||||||||||||
|
|
|
|
| |||||||||||||||||||
Net income
(loss) from continuing operations before cumulative effect of
accounting change and extraordinary items |
14 |
412 | (42 | ) | 606 | 455 | 417 | ||||||||||||||||
Less: |
Equity
income of less than 50% owned companies |
0 |
3 | 3 | 4 | (1 | ) | (48 | ) | ||||||||||||||
Plus: |
Dividends
received from less than 50% owned companies |
0 |
3 | 2 | 1 | 1 | 5 | ||||||||||||||||
Plus: |
Minority
interest of subsidiaries that have fixed charges |
1 |
3 | (13 | ) | (1 | ) | 14 | (4 | ) | |||||||||||||
Subtotal |
15 |
415 | (56 | ) | 602 | 471 | 466 | ||||||||||||||||
FIXED
CHARGES |
|
||||||||||||||||||||||
Amount
representative of interest factor in rentals |
7 |
27 | 24 | 19 | 19 | 28 | |||||||||||||||||
Amount
representative of interest factor in rentals, 50% owned
companies |
0 |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Interest
expense - net |
49 |
203 | 254 | 78 | 76 | 92 | |||||||||||||||||
Interest
expense, 50% owned companies |
0 |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Capitalized interest |
1 |
1 | 30 | 81 | 41 | 15 | |||||||||||||||||
Capitalized interest, 50% owned companies |
0 |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
TOTAL
FIXED CHARGES |
57 |
231 | 308 | 178 | 136 | 135 | |||||||||||||||||
Less: |
Capitalized interest |
1 |
1 | 30 | 81 | 41 | 15 | ||||||||||||||||
Fixed
charges added to income/(loss) |
56 |
230 | 278 | 97 | 95 | 120 | |||||||||||||||||
Plus: |
Amortization of capitalized interest |
6 |
24 | 25 | 21 | 18 | 15 | ||||||||||||||||
Income
taxes |
145 |
313 | 13 | 259 | 211 | 210 | |||||||||||||||||
Earnings before fixed charges and income
taxes |
222 |
982 | 260 | 979 | 795 | 811 | |||||||||||||||||
TOTAL
FIXED CHARGES |
57 |
231 | 308 | 178 | 136 | 135 | |||||||||||||||||
Preference
dividends |
2 |
5 | 8 | 10 | 9 | 10 | |||||||||||||||||
1 minus
statutory tax rate of 40% |
0.6 |
0.6 | 0.6 | 0.6 | 0.6 | 0.6 | |||||||||||||||||
Preference dividends pre tax |
3 |
8 | 13 | 17 | 15 | 17 | |||||||||||||||||
Total |
60 |
239 | 321 | 195 | 151 | 152 | |||||||||||||||||
Ratio
of earnings to combined fixed charges and preferred stock
dividends |
3.70 |
4.11 | 0.81 | 5.03 | 5.26 | 5.35 |
PricewaterhouseCoopers
Chartered Accountants
Rene-Levesque Boulevard West
Suite 2800
Montreal, Quebec
Canada H3B 2G4
Telephone +1 (514) 205 5000
Facsimile +1 (514) 205 5675
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of Alcan Inc., of our report dated February 9, 2003 relating to the financial statements and our comments by auditors on Canada-United States Reporting Difference dated February 9, 2003, which appear on page 40 of the 2002 Annual Report to Shareholders, which is incorporated by reference in Alcan Inc.'s Annual Report on Form 10-K for the year ended December 31, 2002. We also consent to the references to us under the heading "Experts" in such Registration Statement and related prospectus.
June 10, 2003
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP