As filed with the Securities and Exchange Commission on October 10, 2008March 6, 2015
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
GSI GROUP INC.
(Exact Namename of Registrantregistrant as Specifiedspecified in its Charter)charter)
New Brunswick, Canada | 98-0110412 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification |
125 Middlesex Turnpike
Bedford, Massachusetts 01730
(781) 266-5700
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Registrant’s telephone number, including area code: (781) 266-5700
Dr. Sergio Edelstein
President andJohn A. Roush, Chief Executive Officer
GSI Group Inc.
125 Middlesex Turnpike
Bedford, Massachusetts 01730
Telephone: (781) 266-5700
(Name, Address, includingIncluding Zip Code, and Telephone Number, includingIncluding Area Code, of Agent forFor Service)
Copies of all correspondenceCopy to:
Katharine A. Martin,James C. Gorton, Esq.
Robert Sanchez,Senet S. Bischoff, Esq.
Wilson Sonsini GoodrichDennis G. Craythorn, Esq.
Latham & RosatiWatkins LLP
Professional Corporation885 Third Avenue
650 Page Mill RoadNew York, New York 10022
Palo Alto, CA 94304
(650) 493-9300(212) 906-1200
Approximate Datedate of Commencementcommencement of Proposed Saleproposed sale to the Publicpublic:: From time to time after the effective date of this registration statement.
If the only securities being registered on this formForm are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ¨
If any of the securities being registered on this formForm 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 formForm is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this formForm 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 of the earlier effective registration statement for the same offering. ¨
If this formForm is a registration statement pursuant to General Instruction I.D. or a post effectivepost-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨
If this formForm is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large“large accelerated filer,” “accelerated filer,”filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one.)one):
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Non-accelerated filer | ¨ (do not check if a smaller reporting company) | Smaller reporting company | ¨ |
CALCULATION OF REGISTRATION FEE
Title of Each Class of
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| Proposed Maximum Offering
| Proposed Maximum
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Title of each class of securities to be registered | Amount to be registered | Proposed maximum offering price per unit | Proposed maximum aggregate offering price | Amount of registration fee | ||||||||||||
Debt Securities | (1) | (1) | (1) | |||||||||||||
Common Shares, no par value
| 5,882,520 | $2.63 | $15,471,027.60 | $608.01 | (1) | (1) | (1) | |||||||||
Total | $250,000,000 (2) | $5,810(3)(4) | ||||||||||||||
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(4) | The registration fee has been calculated in accordance with Rule |
The Registrantregistrant hereby amends this Registration Statementregistration statement on such date or dates as may be necessary to delay its effective date until the Registrantregistrant shall file a further amendment which specifically states that this Registration Statementregistration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, of 1933as amended, or until the Registration Statementthis registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. The selling stockholdersWe may not sell these securities until the Registration Statementregistration statement filed with the Securities and Exchange Commission becomesis effective. This prospectus is not an offer to sell these securities and we areit is not soliciting offersan offer to buy these securities in any statejurisdiction where the offer or sale is not permitted.
PROSPECTUS
SUBJECT TO COMPLETION, DATED OCTOBER 10, 2008Subject to completion, dated March 6, 2015.
PROSPECTUS
GSI GROUP INC.Group Inc.
5,882,520 $250,000,000
Debt Securities
Common Shares
The selling stockholders named in this prospectus on page 19 below are offering to sell up to an aggregate of 5,882,520 common shares, no par value, of GSI Group Inc. We issued these common shares to the selling stockholders upon the automatic exercise of warrants to purchase our common shares for $0.01 per share, which may be on a cashless basis, concurrently with the effective time of the registration statement of which this prospectus is a part. On August 20, 2008, we issued these warrants to the selling stockholders in a private placement and agreed to register the common shares issuable upon exercise of these warrants for resale under the Securities Act of 1933, as amended, pursuant to the registration statement of which this prospectus is a part. We will not receive any proceeds from the sale of the common shares that may be sold by the selling stockholders.
The selling stockholders may sell all or a portion of the common shares beneficially owned by them and offered herebyoffer, from time to time, directlyto sell any combination of debt securities and common shares described in this prospectus in one or more offerings. The aggregate initial offering price of the securities that we offer under this prospectus will not exceed $250,000,000. This prospectus provides a general description of the securities we may offer. Each time we sell securities, we will provide specific terms of the securities offered in a supplement to this prospectus. The prospectus supplement may also add, update or change information contained in this prospectus. You should read this prospectus and the applicable prospectus supplement carefully before you invest in any securities. This prospectus may not be used by us to sell securities unless accompanied by a prospectus supplement.
We may offer securities through underwriting syndicates managed or co-managed by one or more underwriters broker-dealers or agents. Ifdealers, through agents or directly to purchasers. The prospectus supplement for each offering of securities will describe in detail the common shares are sold through underwriters or broker-dealers, the selling stockholders will be responsibleplan of distribution for underwriting discounts or commissions or agent’s commissions. The common shares may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. We provide morethat offering. For general information about how the selling stockholders may sell their common shares in the section entitleddistribution of securities, please see “Plan of Distribution” beginning on page 22 ofin this prospectus. We have agreed to pay all expenses in connection with the registration of these common shares.
Our common shares are tradedlisted for trading on the NASDAQ Global Select Market under the symbol “GSIG.” On October 9, 2008,March 5, 2015, the NASDAQ official closing price of our common shares on the NASDAQ Global Select Market was $2.41$12.28 per share.
Investing in our common sharessecurities involves a high degree of risk.risks. See “Risk Factors” beginning on page 43 of this prospectus, to read about factors you should consider before buying our common shares.in the documents incorporated into this prospectus and in any applicable prospectus supplement.
Neither the Securities and Exchange Commission, also referred to herein as the “SEC” or “Commission”, nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is October [—], 2008.
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This prospectus is a part of a registration statement that we filed with the Securities and Exchange Commission, or the SEC, utilizing a “shelf” registration process. Under this shelf registration process, we may offer to sell any combination of the securities described in this prospectus in one or more offerings up to a total aggregate dollar amount of $250,000,000. This prospectus provides you with a general description of the securities we may offer. Each time we sell securities under this shelf registration, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. To the extent that any statement that we make in a prospectus supplement is inconsistent with statements made in this prospectus, the statements made in this prospectus will be deemed modified or superseded by those made in the prospectus supplement. We may only use this prospectus to sell the securities if it is accompanied by a prospectus supplement.
You should rely only on the information contained or incorporated by reference inread both this prospectus and any accompanying prospectus supplement. supplement, including all documents incorporated herein or therein by reference, together with additional information described under “Where You Can Find More Information.”
We have not, and the selling stockholders have not authorized any dealer, salesperson or other person to provide you withgive any information different from thator to make any representation other than those contained or incorporated by reference in this prospectus. The selling stockholders are offering to sell, and seeking offers to buy, our common shares only in jurisdictions where it is lawful to do so. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any saleaccompanying prospectus supplement. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus or any accompanying prospectus supplement. This prospectus and any accompanying prospectus supplement do not constitute an offer to sell or the solicitation of our common shares.an offer to buy any securities other than the registered securities to which they relate, nor do this prospectus and any accompanying prospectus supplement constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. You should not assume that the information contained in this prospectus and any accompanying prospectus supplement is accurate on any date subsequent to the date set forth on the front of the document or that any information we have incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference, even though this prospectus and any accompanying prospectus supplement is delivered or securities are sold on a later date. Our business, financial condition, results of operations and prospects may have changed since that date.
PROSPECTUS SUMMARYWHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains a web site,This summary highlightshttp://www.sec.gov, which contains reports, proxy and information statements and other information regarding registrants, including us, that file electronically with the SEC. You may read and copy any document we file with the SEC at its Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. You may also obtain these materials from us at no cost by directing a written or oral request to us at GSI Group Inc., 125 Middlesex Turnpike, Bedford, Massachusetts 01730, Attn: Investor Relations, or by calling our Investor Relations Department at (781) 266-5137, or at our website atwww.gsig.com. The information contained elsewhereon or accessible through our website is not incorporated by reference into this prospectus. Because it isprospectus or any prospectus supplement.
This prospectus and any prospectus supplement are part of a summary, it doesregistration statement that we filed with the SEC and do not contain all of the information that you should consider before investing in our common shares.the registration statement. The full registration statement may be obtained from the SEC or us, as provided below. Forms of the indenture and other documents establishing the terms of the offered securities are or may be filed as exhibits to the
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registration statement. Statements in this prospectus or any prospectus supplement about these documents are summaries and each statement is qualified in all respects by reference to the document to which it refers. You should read this entire prospectus carefully, includingrefer to the section entitled “Risk Factors” andactual documents for a more complete description of the documentsrelevant matters. You may inspect a copy of the registration statement at the SEC’s Public Reference Room in Washington, D.C. or through the SEC’s website, as provided above.
The SEC allows us to “incorporate by reference” certain information we file with the SEC, which means that we can disclose important information to you by referring to the other information we have filed with the SEC. The information that we incorporate by reference intois considered a part of this prospectus before making an investment decision. As usedand information that we file later with the SEC will automatically update and supersede the information contained in this prospectus. We incorporate by reference the following documents we filed with the SEC pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”):
Notwithstanding the foregoing, unless specifically stated to the contrary, none of the information that we disclose under Items 2.02, 7.01 or 9.01 of any Current Report on Form 8-K that we may from time to time furnish to the SEC will be incorporated by reference into, or otherwise included in, this prospectus or any prospectus supplement.
We are also incorporating by reference additional documents that we may file with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and the termination of this offering, including all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement. These documents include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as Proxy Statements.
You may request a free copy of any of the documents incorporated by reference in this prospectus (other than exhibits, unless otherwise specifiedthey are specifically incorporated by reference in the documents) by directing a written or oral request to us at GSI Group Inc., 125 Middlesex Turnpike, Bedford, Massachusetts 01730, Attn: Investor Relations, or by calling our Investor Relations Department at (781) 266-5137. Exhibits to the context requires otherwise,filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus and any accompanying prospectus supplement.
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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this prospectus or any prospectus supplement contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks and uncertainties, and typically can be identified by the use of words such as “anticipates,” “believes,” “expects,” “intends,” “future,” “could,” “estimates,” “plans,” “would,” “should,” “potential,” “continues” and similar words or expressions (as well as other words or expressions referencing future events, conditions or circumstances). Although we believe that our expectations are reasonable, we can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Factors that could cause actual results to differ materially from those contemplated above include, among others:
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Additional factors which may cause actual results to differ materially from current expectations include, but are not limited to, those set forth in the section entitled “Business” in our Annual Report on Form 10-K for the year ended December 31, 2014, the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the section titled “Risk Factors” in each of this prospectus, any prospectus supplement and in our Annual Report on Form 10-K for the year ended December 31, 2014. Please consider our forward-looking statements in light of those risks as you read this prospectus and any prospectus supplement.
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GSI Group Inc. and its subsidiaries. Referencessubsidiaries (collectively referred to “selling stockholders” referas the “Company”, “we”, “us”, or “ours” unless the context requires otherwise) design, develop, manufacture and sell precision photonic and motion control components and subsystems to original equipment manufacturers (“OEM’s”) in the holders listed herein under “Selling Stockholders” beginning on page 19, who may sell shares from time to time as described in this prospectus.
GSI GROUP INC.
Overview
GSI Group Inc. designs, develops, manufacturesmedical, industrial, electronics and sells lasers,scientific markets. Our highly engineered enabling technologies include laser systems, electro-opticalsources, scanning and beam delivery products, medical visualization and informatics solutions, and precision motion control components, air bearings, printers, color calibration devicesproducts. We specialize in collaborating with OEM customers to adapt our component and specialty optics. subsystem technologies to deliver highly differentiated performance in their applications.
Our strategy is to drive sustainable, profitable growth through short-term and long-term initiatives, including:
GSI Group Inc., was founded and initially incorporated in Massachusetts in 1968 as General Scanning, Inc., was incorporated in Massachusetts. (“General Scanning”). General Scanning developed, manufactured and sold components and subsystems used for high-speed micro positioning of laser beams. In 1999, General Scanning merged with Lumonics Inc., a Canadian company that developed, manufactured and sold lasers and laser-based, advanced manufacturing systems for electronics, semiconductor, and general industrial applications. The post-merger entity, GSI Lumonics Inc., the post-merger entity, incorporatedcontinued under the laws of the Province of New Brunswick, Canada. In 2005, the Company renamed itselfwe changed our name to GSI Group Inc. GSI has manufacturing operations in North America, the United Kingdom and China, and sales and service offices in various locations around the world. GSI also has contractual relationships with various domestic and foreign distributors and resellers. As set forth more fully below, in
In August 2008, GSIwe acquired Excel Technology, Inc., a designer, manufacturer and marketer of photonics-based solutions consisting of lasers, laser-based systems, and precision motion devices.devices and electro-optical components primarily used in industrial and scientific applications.
Recent Transactions
Excel Technology, Inc.In January 2013, we acquired NDS Surgical Imaging (“Excel”NDS”) develops,for a final purchase price of $75.4 million in cash, net of closing working capital adjustments and escrow recovery. NDS is a San Jose, California-based company that designs, manufactures, and sells lasers, laser-based systemsmarkets high definition visualization solutions and precision motion devices. Excel manufactures itsimaging informatics products in plants located infor the United Statessurgical, radiology and sells its products to customers worldwide, both directlypatient monitoring end markets.
In March 2014, we acquired JADAK LLC, JADAK Technologies Inc. and indirectly through resellers and distributors. On June 30, 2008, the Company formed Eagle AcquisitionAdvanced Data Capture Corporation (“EAC”(together, “JADAK”), a Delaware corporationNorth Syracuse, New York-based provider of optical data collection and an indirect wholly owned subsidiary. On July 9, 2008, the Company and EAC entered into a merger agreement with Excel. On July 23, 2008, the Company commenced a tender offermachine vision technologies to have EAC acquire all of Excel’s outstanding common stockOEM medical device manufacturers, for $32 per share, and thereafter to merge with and into Excel, with Excel surviving the merger and becoming an indirect wholly owned subsidiary of the Company. On August 29, 2008, the Company completed the Excel acquisition for approximately $360$93.7 million exclusive of transaction costs.
On July 9, 2008, the Company and GSI Group Corporation, a wholly owned subsidiary, entered into a securities purchase agreement with the selling stockholders pursuant to which: (1) the Company issued and sold warrants to purchase up to an aggregate of 5,882,520 of GSI common shares at an exercise price of $0.01 per share,
payable in cash, ornet of working capital adjustments.
In February 2015, GSI acquired Applimotion Inc., a Loomis, California-based provider of advanced precision motor and motion control technology to OEMs for advanced industrial and medical markets, for $13.9 million in cash, subject to customary working capital adjustments. The acquisition enhances the Company’s strategic position in precision motion control by withholding of a certain number of common shares; and (2) GSI Group Corporation issued and sold $210,000,000 aggregate principal amount of 11.0% Senior Notes due 2013. The financing transaction closed on August 20, 2008, and the net proceeds were used to partially fund the Excel cash tender offer. The warrants were issued to the selling stockholders pursuant to a warrant agreement dated August 20, 2008. The Company intends to issue the common shares to the selling stockholders upon the automatic exercise of their warrants, which is expected to happen concurrently with the effective time of the registration statement of which this prospectus forms a part.
On August 20, 2008, the Company also entered into a registration rights agreement with the selling stockholders. The registration rights agreement requiresenabling the Company to fileoffer a registration statementbroader range of which this prospectus is a partmotion control technologies and to use reasonable best efforts to cause the registration statement to become or be declared effective by October 28, 2008, or, if the SEC elects to review this registration statement, by November 12, 2008.integrated solutions.
The merger agreement, the securities purchase agreement, the notes, the warrants, the warrant agreement and the registration rights agreement are more fully described in the Company’s Current Reports on Form 8-K filed with the SEC on July 11, 2008 and August 21, 2008. The foregoing description of the merger agreement, the securities purchase agreement, the notes, the warrants, the warrant agreement and the registration rights agreement is qualified in its entirety by reference to the actual agreements, each of which was included as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on July 11, 2008 and/or August 21, 2008, as applicable.
Company Information
Our principal executive offices are located at 125 Middlesex Turnpike, Bedford, Massachusetts 01730, and our main telephone number is (781) 266-5700. Our website address ishttp://www.gsig.com. We do not incorporate by reference into this prospectus theThe information on, or accessible through, our website and you shouldis not consider it as part of this prospectus.
THE OFFERING
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RISKRISK FACTORS
Investing in our common sharessecurities involves risks. Prior to making a high degree of risk. Youdecision about investing in our securities, you should carefully consider carefully the risk factors described below, and all other information contained in or incorporated by reference in this prospectus before deciding to investor in any accompanying prospectus supplement, including, without limitation, the risks described in our common shares. IfAnnual Report on Form 10-K for the year ended December 31, 2014, which is incorporated herein by reference, the risk factors described under the caption “Risk Factors” in any applicable prospectus supplement and any risk factors set forth in our other filings with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the following risks actually occur,Exchange Act. Each of these risk factors could have a material adverse effect on our business, results of operations, financial position or cash flows, which may result in the market priceloss of our common shares could decline, and you could lose all or a part of your investment. AdditionalPlease read “Where You Can Find More Information” and “Disclosure Regarding Forward-Looking Statements” included elsewhere in this prospectus. Please note that additional risks not presently known to us, or that we currently believe aredeem immaterial, may also significantly impair our business operations and could result in a complete loss of your investment.operations.
We intend to Risks RelatedGSI Group
Merger with Excel
Our failure to successfully integrate Excel into our business may cause us to fail to realizeuse the expected synergies and other benefitsnet proceeds from the sale of the acquisition, which could adversely affect our future results.securities as set forth in the applicable prospectus supplement.
RATIO OF EARNINGS TO FIXED CHARGES
The integrationfollowing table sets forth our ratios of Excel into our business presents significant challenges and risksearnings to our businesses, including:fixed charges for the periods shown.
distraction of management from regular business concerns;
Year Ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Ratio of Earnings to Fixed Charges(1) | — | 4.0x | 5.0x | 2.8x | 0.6x |
assimilation and retention of employees and customers of both GSI and Excel;
integration of technologies, services and products; and
achievement of appropriate internal control over financial reporting.
We may fail to successfully complete the integration of Excel into our business and, as a result, may fail to realize the synergies, cost savings and other benefits expected from the acquisition. We may fail to grow and build revenues and profits in Excel’s business lines or achieve sufficient cost savings through the integration of customers or administrative and other operational activities. Furthermore, we must achieve these objectives without adversely affecting our revenues. If we are not able to successfully achieve these objectives, the anticipated benefits of the acquisition may not be realized fully or at all, or it may take longer to realize them than expected, and our results of operations could be materially adversely affected.
Excel’s performance may not be in accordance with our expectations.
Despite our due diligence efforts, our assessment of the prospects for Excel’s business are subject to the risk associated with those businesses as described in Excel’s filings with the SEC, many of which are similar to the risks we face in our businesses and which are described below. Also, our ability to maintain and increase profitability of Excel’s business lines will depend on our ability to manage and control operating expenses and to generate and sustain increased levels of revenue. Our expectations to achieve more consistent and predictable levels of revenue and to increase Excel’s profitability may not be realized, and such revenues and profitability may decline as we integrate Excel’s operations into our business. If Excel’s revenues grow more slowly than we anticipate, or if its operating expenses are higher than we expect, we may not be able to sustain or increase its profitability, in which case our financial condition will suffer and our stock price could decline.
(1) | The ratio of fixed charges is computed by dividing earnings by fixed charges. For the purpose of computing this ratio, “earnings” consist of pretax income (loss) from continuing operations before adjustments for income from an equity method investment and income attributable to a noncontrolling interest, plus fixed charges. “Fixed charges” consist of interest expense (which includes interest on outstanding debt obligations, amortization of deferred financing fees, and losses on extinguishment of debt attributable to the write-offs of unamortized deferred financing fees at the time of extinguishment) and 25% of rental expense, which is a reasonable approximation of the interest factor. Earnings were insufficient to cover fixed charges for the year ended December 31, 2014 by approximately $14.4 million as a result of a goodwill and intangible assets impairment charge of $41.4 million. |
Our substantial indebtedness could adversely affect our business and limit our ability to plan for or respond to changes in our business or in the competitive landscape.DESCRIPTION OF COMMON SHARES
As of September 26, 2008, the Company had consolidated indebtedness of approximately $210 million, all of which represents the debt incurred by GSI Group Corporation in connection with the Excel transaction. The Company’s consolidated debt could have important and potentially materially adverse consequences on the Company’s business, including the following:
increasing our vulnerability to general adverse economic and industry conditions;
requiring us to dedicate a substantial portion or, depending on our operating results, virtually all, of our cash flow from operations to payments on our indebtedness, thereby reducing or eliminating the availability of our cash flow for other purposes, and possibly requiring us to dispose of assets to obtain cash for other uses to the extent permitted under the terms of the indenture pursuant to which the notes were issued;
limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate, thereby placing us at a competitive disadvantage compared to our competitors that may have less debt;
limiting, by the financial and other restrictive covenants in the trust indenture under which the notes were issued, our ability to borrow additional funds; and
if we are unable to pay interest or principal amounts when due or we fail to comply with the covenants in the trust indenture under which the notes were issued, that failure could result in an event of default which, if not cured or waived, could make the Excel acquisition debt immediately due and payable, which would materially and adversely affect our business and financial condition.
Market Volatility
Our business depends significantly upon capital expenditures which are subject to cyclical market fluctuations.
The semiconductor and electronics materials processing industries are cyclical and have historically experienced periods of oversupply, resulting in downturns in demand for capital equipment, including the products that we manufacture. The timing, length and severity of these cycles, and their impact on our business, are difficult to predict. Further, our order levels or results of operations for a given period may not be indicative of order levels or results of operations for subsequent periods. We can not assure investors that demand for our products will increase or that demand will not decrease. For the foreseeable future, our operations will continue to depend upon industries that are subject to market cycles, which, in turn, could adversely affect the market for the Company’s products.
Cyclical variations may have the most pronounced effect on our semiconductor systems segment, which has a concentration in the semiconductor and electronics industries.
There is no assurance that we will not be impacted from a slowdown as we have experienced in previous cyclical fluctuations or that the impact will be more or less significant compared to historical fluctuations.
Our business success depends upon our ability to respond to fluctuations in product demand.
If business declines, we may be required to reduce costs while at the same time maintaining the ability to motivate and retain key employees. We must also continually invest in research and development which may inhibit our ability to reduce costs in a down cycle. Additionally, long product lead-times create a risk that we may purchase or manufacture inventories of products that we are unable to sell. While we practice inventory management, we can offer no assurances that our efforts to mitigate this risk will be successful.
During a period of increasing demand and rapid growth, we must be able to increase manufacturing capacity quickly.
Our inability to quickly increase production in response to a surge in demand could harm our reputation and prompt customers to look for alternative sources of supply.
New Product Introduction
The success of our business requires that we continually innovate.
Technology requirements in our markets are consistently advancing. We must continually introduce new products that meet evolving customer needs. Our ability to grow depends on the successful development, introduction and market acceptance of new or enhanced products that address our customer’s requirements. Developing new technology is a complex and uncertain process requiring us to accurately anticipate technological and market trends and meet those trends with responsive products. Additionally, this requires that we manage the transition from older products to minimize disruption in customer ordering patterns, avoid excess inventory and ensure adequate supplies of new products. Failed market acceptance of new products or problems associated with new product transitions could harm our business.
Delays in delivery of new products could have a negative impact on our business.
Our research and development efforts may not lead to the successful introduction of products within the time period our customers demand. Additionally, our competitors may introduce new or improved products, processes or technologies that make our current or proposed products obsolete or less competitive.
In addition, we may encounter delays or problems in connection with our research and development efforts. Product development delays may result from numerous factors, including:
changing product specifications and customer requirements;
the inability to manufacture products cost effectively;
difficulties in reallocating engineering resources and overcoming resource limitations;
changing market or competitive product requirements; and
unanticipated engineering complexities.
New products often take longer to develop, have fewer features than originally considered desirable and achieve higher cost targets than initially estimated. There may be delays in starting volume production of new products and/or new products may not be commercially successful.
Financial Matters
There may be a failure to properly identify when revenue should be recognized, leading to a material adverse effect on financial results.
The Company has multiple locations, in various countries, where orders are entered. Entry, shipment and invoicing of an order that is premature may result in revenue being recognized earlier than required by generally accepted accounting principles. To mitigate this risk, the Company reviews large systems orders for revenue recognition issues before they are booked. Additionally, the Company is putting in place more stringent processes to identify revenue recognition treatment on all orders.
Failure of internal controls or inability to identify or manage a key internal control could have a material adverse effect on our operating results.
We mitigate this risk by employing internal auditors to document and test our internal control procedures pursuant to Section 404 of the Sarbanes-Oxley Act. If we fail to achieve and maintain the adequacy of our internal controls, we may not be able to conclude that we have effective internal controls over financial reporting in accordance with Section 404. Effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to prevent financial fraud. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, as investors could lose confidence in our reported financial information.
Our effective tax rates are subject to fluctuation, which could impact our financial position, and our estimates of tax liabilities may be subject to audit, which could result in additional tax assessments.
Our effective tax rates are subject to fluctuation as the income tax rates for each year are a function of taxable income levels in numerous tax jurisdictions, our ability to utilize recorded deferred tax assets, taxes or penalties resulting from tax audits and credits and deductions as a percentage of total taxable income. Further, tax law changes may cause our effective tax rates to fluctuate between periods.
Customer order timing and other factors beyond our control may lead to an inability to meet our financial forecasts.
Changes in customer order timing and the existence of certain other factors beyond our control may lead to our inability to meet financial forecasts. Such factors include:
fluctuations in our customers’ businesses;
timing and recognition of revenues from customer orders;
timing and market acceptance of new products or enhancements introduced by us or our competitors;
availability of parts from our suppliers and the manufacturing capacity of our subcontractors;
timing and level of expenditures for sales, marketing and product development;
changes in the prices of our products or of our competitors’ products; and
fluctuations in exchange rates for foreign currency.
A large percentage of our sales come from products with high selling prices and significant lead times. We may receive several large orders in one quarter from a customer and then receive no orders from that customer in the next quarter. As a result, the timing and recognition of sales from customer orders can cause significant fluctuations in our operating results from quarter to quarter.
A delay in a shipment or failure to meet our revenue recognition criteria near the end of a reporting period due, for example, to rescheduling or cancellations by customers or to unexpected difficulties experienced by us, may cause sales in the period to fall significantly below expectations and may have materially adverse effects on our operations for that period. Our inability to adjust quickly enough could magnify the adverse effects of that revenue shortfall on our results of operations.
As a result of these factors, our results of operations for any quarter are not necessarily indicative of results to be expected in future periods. We believe that fluctuations in quarterly results may cause the market prices of our common shares traded on the NASDAQ Global Select Stock Market to fluctuate, perhaps substantially.
GSIG maintains cash balances and foreign exchange contracts where significant changes in interest rates, credit ratings or foreign currency rates could result in materially adverse effects to income.
The Company has cash, cash equivalents and foreign exchange contracts that total in the millions of dollars. These balances create financial exposure to changing interest and currency rates. The Company has attempted to mitigate these risks by both purchasing foreign exchange contracts and investing in government issued treasury bills. However, if long term interest rates or foreign currency rates were to change rapidly, the Company could incur material losses. Further, if management chooses to invest in less risk adverse investment vehicles, the risk of losing principle and/or interest could increase. Additionally, Excel owns certain auction rate securities for which there is no current market. Until such time as the auction rate securities market reopens, there is no assurance that these investments can become liquid.
International Operations
Our operations in foreign countries subject us to risks not faced by companies operating exclusively in the United States.
During the year ended December 31, 2007, approximately 68% of our revenue was derived from operations outside North America. International operations are an expanding part of our business both from a sales focus and an operating base.
Because of the scope of our international operations, we are subject to risks, which could materially impact our results of operations, including:
foreign exchange rate fluctuations;
social unrest in countries where we operate;
climatic or other natural disasters in regions where we operate;
increases in shipping costs or increases in fuel costs;
longer payment cycles;
acts of terrorism;
greater difficulty in collecting accounts receivable;
use of incompatible systems and equipment;
problems staffing and managing foreign operations in diverse cultures;
protective tariffs;
trade barriers and export/import controls;
transportation delays and interruptions;
reduced protection for intellectual property rights in some countries; and
the impact of recessionary foreign economies.
We cannot predict whether the United States or any other country will impose new quotas, tariffs, taxes or other trade barriers upon the importation of our products or supplies or gauge the effect that new barriers would have on our financial position or results of operations.
There are inherent risks as we increase our focus on overseas operations.
GSI currently manufactures certain of its products in plants in the United Kingdom and China. Manufacturing in overseas locations creates risks to the Company, including that we may not be able to produce products to the quality standards or deliver products on time as our customers have come to expect. This possibility may come about due to an inability to find qualified personnel overseas. It is also possible that after an overseas transition, we may find that we have been producing products with latent defects that come to light only after a long period of operation. Transitioning a business to an overseas location has many additional risks such as developing solid financial, enterprise resource planning (ERP) and customer relationship management (CRM) systems.
Economic, political or trade problems with foreign countries could negatively impact our business.
We are increasingly outsourcing the manufacture of sub assemblies to suppliers based in China and elsewhere overseas. Economic, political or trade problems with foreign countries could substantially impact our ability to obtain critical parts needed in the timely manufacture of our products.
Customs rules are complex and vary within legal jurisdictions in which we operate. Failure to comply with local customs regulations could be found during a foreign government customs audit that may produce a substantial penalty.
Customs rules are complex and vary within legal jurisdictions in which we operate and there can be no assurance that there will be no control failure around customs enforcement despite the precautions we take. A failure with local customs regulations could be found during a foreign government customs audit and could result in a substantial penalty and a material impact on our financial results. We seek to mitigate this risk by maintaining export control systems and an internal customs staff charged with the responsibility of strictly complying with all applicable import/export laws. Further, we maintain arms length transactions with our foreign subsidiaries and their customers.
Economic Conditions
A halt in economic growth or a slowdown will put pressure on our ability to meet anticipated revenue levels.
A large portion of our sales is dependent on the need for increased capacity or replacement of inefficient manufacturing processes, because of the capital-intensive nature of our customers’ businesses. These sales also tend to lag behind in an economic recovery longer than other businesses. If a down turn lasts longer than expected, if a recovery does not begin or if a general economic slowdown commences, we may not be able to meet anticipated revenue levels on a quarterly or annual basis.
Debt Service
If the Company is unable to retire debt early, it may affect strategic options.
In connection with the acquisition of Excel, GSI borrowed $210 million, the proceeds of which were used to partially fund the Excel transaction. The loan agreement pursuant to which such funds were borrowed requires GSI to make twice annual debt service payments, and to retire the debt fully after five years. While GSI hopes to retire the debt in advance of that date, it is possible that this will not happen, and that GSI will be required to continue making substantial debt service payments throughout the term of the loan, affecting the Company’s business and strategic options.
Sustainable Profitability
If the Company is not able to grow, the business will be at greater risk to operate independently.
As a publicly traded company, GSIG is competing for capital and investment against larger companies. As a company with a relatively low level of stock capitalization, GSIG is at a disadvantage. Its cost of capital is higher than larger companies and it has less of a base to spread the operating costs that all public companies face. Examples of these costs include Sarbanes-Oxley and audit costs. If GSIG can not grow its revenues and spread these costs across a larger revenue base, it will be at a competitive disadvantage and potentially subject to a takeover bid from a larger company. We can not assure investors such a situation would be in stockholders’ best interests.
GSIG has a history of operating losses. The Company may not be able to sustain or grow the current level of profitability.
Since the second half of 2003, we have generated profits from operations. However, we incurred operating losses on an annual basis from 1998 through 2003. No assurances can be given that we will sustain or increase the level of profitability in the future based on extrinsic market forces, and the market price of our common shares may decline as a result.
We could lose some or all of the benefit of our deferred tax assets if our future profitability comes into question.
In determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets require subjective judgment and analysis. We consistently evaluate our current deferred tax assets based on profitability in 2008 and beyond. Our ability to maintain our deferred tax assets depends upon our ability to continue to generate future profits in the United States, Canada, Germany, Japan and United Kingdom tax jurisdictions. If actual results differ from our plans or we do not achieve the desired level of profitability in a given jurisdiction, we may be required to increase the valuation allowance on our tax assets by taking a charge to the Statement of Operations, which could have a material negative result on our financial results.
Business Partnerships
Our reliance upon third party distribution channels subjects us to credit, inventory, business concentration and business failure risks beyond our control.
We sell products through resellers, distributors, original equipment manufacturers (“OEMs”) and system integrators. Excel sells certain of its lasers through a 50% owned Indian joint venture. Selling products through third parties can subject the Company to credit and business risks. Our sales also depend upon the ability of our OEM customers to develop and sell systems that incorporate our products. Adverse economic conditions, large inventory positions, limited marketing resources and other factors influencing these OEM customers could have a substantial impact upon our financial results. We can not assure investors that our OEM customers will not experience financial or other difficulties that could adversely affect their operations and, in turn, our financial condition or results of operations.
Intellectual Property
We are exposed to the risks that others may violate our intellectual property rights.
Our future success depends in part upon our intellectual property rights, including trade secrets, know-how and continuing technological innovation. There can be no assurance that the steps we take to protect our intellectual property rights will be adequate to prevent misappropriation, or that others will not develop competitive technologies or products outside of our patented property. There can be no assurance that other companies are not investigating or developing other technologies that are similar to ours, that any patents will issue from any application filed by us or that, if patents do issue, the claims allowed will be sufficiently broad to deter or prohibit others from marketing similar products. In addition, there can be no assurance that any patents issued to us will not be challenged, invalidated or circumvented in a legal or administrative proceeding, or that our patents and know how will provide a competitive advantage to us.
Our intellectual property rights may not be protected in foreign countries.
Our efforts to protect our intellectual property rights may not be effective in some foreign countries where we operate or sell. Many U.S. companies have encountered substantial problems in protecting their property rights against infringement in foreign countries. If we fail to adequately protect our intellectual property in these countries, it could be easier for our competitors to sell competing products in foreign countries.
Our success depends upon our ability to protect our intellectual property and to successfully defend against claims of infringement by third parties.General
We have receivedauthority to issue an unlimited number of common shares, no par value. As of February 20, 2015, 34,239,720 common shares were issued and outstanding. As of February 20, 2015, we had an aggregate of 707,327 common shares reserved for issuance upon vesting of restricted stock unit awards granted under our 2010 Incentive Award Plan, as amended (“Amended 2010 Plan”), 228,962 common shares reserved for issuance upon settlement of deferred stock units granted to our directors pursuant either to stand-alone award agreements that are independent from an equity plan or the Amended 2010 Plan, and 2,265,134 common shares reserved for issuance pursuant to future grants under our Amended 2010 Plan.
Terms
Each outstanding common share is entitled to one vote at all meetings of our shareholders, to participate ratably in the past, and could receive in the future, notices from third parties alleging that our products infringe patent or other proprietary rights. We believe that our products are non-infringing or that we have the patents and/or licenses to allow us to lawfully sell our products throughout the world. However, weany dividends which may be sued for infringement. Indeclared by the event any third party makes a valid claim against us or our customers for which a license was not available to us on commercially reasonable terms, we would be adversely affected. Adverse consequences may also apply to our failure to avoid litigation for infringement or misappropriationboard of proprietary rights of third parties.
Competition
We operate in highly competitive industries,directors and, if we lose competitive advantages, our business would suffer adverse consequences.
Some of our competition comes from established competitors, some of which have greater financial, engineering, manufacturing and marketing resources than we do. Our competitors will continue to improve the design and performance of their products and introduce new products. It is possible that we may not successfully differentiate our current and proposed products from the products of our competitors, or that the marketplace will not consider our products to be superior to competing products. To remain competitive, we will be required to invest heavily in research and development, marketing and customer service and support. It is also possible that we may not be able to make the technological advances necessary to maintain our competitive position, or our products will not receive market acceptance. We may not be able to compete successfully in the future, and increased competition may result in price reductions, reduced profit margins, loss of market share and an inability to generate cash flows that are sufficient to maintain or expand our development of new products.
Mergers and Acquisitions
Our business strategy includes finding and making strategic acquisitions and divestitures. There can be no assurance that we will be able to continue to make acquisitions that provide business benefit.
In 2007, we acquired an optics business in the United Kingdom. We acquired Excel in August 2008 and sold a U.S. optics business in September 2008. We expect to continue to evaluate potential acquisitions and divestitures as part of our long-term strategic plan. Our identification of suitable acquisition candidates involves risks inherent in assessing the values, strengths, weaknesses, risks, synergy and profitability of acquisition candidates, including the effects of the possible acquisition on our business, diversion of management’s attention from our core businesses and risks associated with unanticipated problems or liabilities. We cannot assure investors our efforts will be sufficient, or that acquisition candidates will be receptive to our advances or that any acquisition we may make would be accretive to earnings. We also cannot assure investors that we will find suitable purchasers in the event that we identifyof liquidation, dissolution or winding-up or other distribution of our assets or property, to a potential divestiture candidatepro rata share of our assets after payment of all our liabilities and obligations. We have never declared or paid cash dividends on our common shares. We currently do not anticipate paying any cash dividends in the foreseeable future.
Integrating an acquisition couldShareholders have significant disruptive consequences on our existing operations.cumulative voting rights in the election of directors. Cumulative voting rights permit each shareholder entitled to vote at a meeting of shareholders called for the election of directors to cast a number of votes equal to the number of shares held by the shareholder multiplied by the number of directors to be elected. The shareholder is entitled to cast all such votes in favor of one candidate for director or distribute them among the candidates in any manner.
As withThe common shares are not liable to any acquisition, those persons selling have an advantage in better understandingcalls or assessments and are not convertible into any other securities. There are no redemption or sinking fund provisions applicable to the specific marketscommon shares, and their associated direction. They also better know the strengths and weaknessesthere are no preemptive rights held by holders of the business theycommon shares.
All outstanding common shares are selling. We attemptfully paid and nonassessable, and common shares offered pursuant to mitigate these risks by focusing our attention on the acquisition of businesses, technologiesthis prospectus will, when issued, be fully paid and products that have current relevancy to our existing lines of business and that are complementary to our existing product lines. However, we may not be successful in addressing these risks, or the risks associated with the potential entrance into markets in which we have limited or no prior experience. We could lose key employees, particularly those of the acquired business, in connection with an acquisition.nonassessable.
Key Personnel
GSIG is undergoing a leadership transition.
Subsequent to the Excel transaction, GSI has been reviewing its management structure, and has reviewed, and may continue to review, its business and organizational structure. There are risks associated with changes in strategy and management at the executive and/or director level, and changes in product or operational focus. There can be no assurance that prospective management changes will not have a material effect on the Company.
Our operations could be negatively affected if we lose key executives or employees or are unable to attract and retain skilled executives and employees as needed.Anti-Takeover Considerations
Our business and future operating results depend in part upon our ability to attract, groom and retain qualified management, technical, sales and support personnel for our operations on a worldwide basis. The loss of key personnel could negatively impact our operations. Competition for qualified personnel is intense and we cannot guarantee that we will be able to continue to attract, train and retain qualified personnel.
Our reputation and our ability to do business may be impaired by improper conduct by any of our employees, agents or business partners.
We cannot provide assurance that our internal controls will always protect us from reckless or criminal acts committed by our employees, agents or business partners that would violate US and/or non-US laws, including the laws governing payments to government officials, competition, money laundering and data privacy. Any such improper actions could subject us to civil or criminal investigations in the US and in other jurisdictions, and could lead to substantial civil or criminal, monetary and non monetary penalties against us or our subsidiaries.
Operations
We expect to be consolidating some of our operations for greater efficiency.
There is execution risk in these plans. We can not assure investors that economies of scale will or can be realized as a result of any planned consolidation. This move will take time and will include substantial operational risks, including the possible disruption of manufacturing lines. We can not assure investors that any moves would not disrupt business operations or have a material impact on results.
In addition, any decision to limit investment in, dispose of or otherwise exit business activities may result in the recording of special charges, such as technology write-offs, workforce reduction costs, or charges relating to consolidation of excess facilities. Our estimates with respect to the useful life or ultimate recoverability of our carrying basis of assets, including intangible assets, could change as a result of such decisions. Further, our estimates related to the liabilities for excess facilities are affected by changes in real estate market conditions. Additionally, we are required to perform goodwill impairment tests on an annual basis and during the year in certain circumstances. There can be no assurance that future goodwill impairment tests will not result in a change to earnings.
We have recently undergone a significant restructuring and we will continue to change our management structure.
Our ability to reduce operating expenses is dependent upon the nature of the actions we take to reduce expense and subsequent ability to implement those actions and realize expected cost savings. In the past year, management took significant actions to expand our operations in China and to reduce expenses, particularly within GSI’s U.S.-based organization and in the United Kingdom. There can be no assurance that these actions will provide economic benefit to the Company. Further, there is a risk that these actions may ultimately prove detrimental to operations and sales, or to our intellectual property protections.
Product defects or problems with integrating our products with other vendors’ products may seriously harm our business and reputation.
Complex products that we produce canArticles contain latent errors or performance problems. There have been instances where we have found errors immediately after launch of new products, and there have been instances where we have also found latent errors in our products. We cannot always resolve all errors that we believe would be considered serious by our customers before implementation, thus our products are not error-free. These errors or performance problems could be detrimental to our business and reputation. In addition, customers frequently integrate our products with other vendor’s products. When problems occur in a combined environment, it may be difficult to identify the source of the problem. These problems may cause us to incur significant warranty and repair costs, divert the attention of our engineering personnel from our product development efforts and cause significant customer relations problems. To date, defects in our products or those of other vendors’ products with which our products are used by our customers have not had a material negative effect on our business. However, we cannot be certain that a material negative impact will not occur in the future.
We depend on limited source suppliers that could cause substantial manufacturing delays if supply disruption occurs.
Many of our products are manufactured with components that are designed by an outside supplier to our specifications. While we attempt to mitigate risks associated with our reliance on single suppliers by actively managing our supply chain, we still source some components from single vendors. We also rely on a limited number of independent contractors to manufacture subassemblies for some of our products, particularly in our Semiconductor Systems. There can be no assurance that our current or alternative sources will be able to continue to meet all of our demands on a timely basis. If suppliers or subcontractors experience difficulties, or fail to meet any
of our manufacturing requirements, our business would be harmed until we are able to secure alternative sources, if any, on commercially reasonable terms.
We also depend on suppliers that provide high precision parts.
Any of these parts that have latent or known defects, may materially impact relations with our customers if they cause us to miss our scheduled shipment deadlines. If latent defects are incorporated into our products and discovered later, there could be a material impact on our revenues. We seek to reduce the risk of defects by selecting and qualifying alternative suppliers for key parts, and by monitoring the quality of products coming from key suppliers.
Production difficulties and product delivery delays could materially adversely affect our business.
We assemble our products at our facilities in the United States, the United Kingdom and China. If use of any of our manufacturing facilities was interrupted by a natural disaster or otherwise, our operations could be negatively impacted until we could establish alternative production and service operations. In addition, we may experience production difficulties and product delivery delays in the future as a result of:
mistakes made while transferring manufacturing processes between locations;
changing process technologies;
ramping production;
installing new equipment at our manufacturing facilities; and
shortage of key components.
Governance
Certain provisions of our articles of incorporation may delay or prevent a change in control of our company.
Our corporate documents and our existence as a corporation under the laws of New Brunswick subject us to provisions of Canadian law that may enable our board of directors to resist a change in control of our company. These provisions include:
limitations on persons
advance notice procedures required for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders; and
a shareholder rights plan.
These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for stockholdersshareholders to elect directors of their choosing andor cause us to take other corporate actions that stockholdersshareholders desire.
Canadian Law Matters There is no limitation imposed by Canadian law or by our Articles on the right of Compliance with changing regulationcorporate governance and public disclosure maya non-resident to hold or vote common shares, other than as provided in the Investment Canada Act (the “ICA”). Unless a transaction falls within an available exemption, the ICA requires a non-Canadian making an investment which would result in additional expenses.
ChangingThe notification procedure involves a brief statement of information about the investment on a prescribed form which is required to be filed with the IRD by the investor at any time up to 30 days following implementation of the investment. It is intended that investments requiring only notification will proceed without government intervention unless the investment is in a specific type of business activity related to Canada’s cultural heritage and national identity.
If an investment is reviewable under the ICA, an application for review in the form prescribed is normally required to be filed with the IRD prior to the investment taking place and the investment may not be implemented until the review has been completed and the Minister of Industry (“Minister”) (the Minister responsible for Investment Canada) is satisfied that the investment is likely to be of net benefit to Canada (and, if applicable, is satisfied that the investment would not be injurious to Canadian national security). The Minister has up to 75 days to make this determination, though this period can be extended by agreement between the IRD and the investor (a national security review can take up to 130 days). If the Minister is not satisfied that the investment is likely to be of net benefit to Canada, the non-Canadian must not implement the investment or, if the investment has been implemented, may be required to divest himself of control of the business that is the subject of the investment. If the Governor in Council considers that it is advisable to protect national security, she may prohibit the investment, authorize it to proceed on conditions, or require divestiture.
Canada has no system of exchange controls. There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident investors. There are no laws in Canada or exchange restrictions affecting the remittance of dividends, profits, interest, royalties or other payments to non-resident holders of Common Shares, except as described under “Canadian Taxation Matters”.
Canadian Taxation Matters
The following summary is based upon the current provisions of theIncome Tax Act (Canada) (the “Tax Act”), the current provisions of the regulations promulgated thereunder (the “Regulations”) and standardsthe current provisions of the Canada-United States Tax Convention (the “Treaty”), as at the date hereof and counsel’s understanding of the current administrative practices of the Canada Revenue Agency (the “CRA”). This summary takes into account all specific proposals to amend the Tax Act and the Regulations that have been publicly announced by, or on behalf of, the Minister of Finance (Canada) prior to the date of this registration statement on Form S-3 (the “Tax Proposals”), but does not otherwise take into account or anticipate any changes in law, whether by judicial, governmental or legislative decision or action, or changes in administrative practices of the CRA. No assurances can be given that the Tax Proposals will be enacted as proposed, if at all. This summary does not take into account the tax legislation of any province or territory of Canada or any non-Canadian jurisdiction. Provisions of provincial income tax legislation vary from province to province in Canada and in some cases differ from federal income tax legislation.
The Tax Act contains certain provisions relating to corporate governancesecurities held by certain financial institutions (the “mark-to-market rules”). This summary does not take into account the mark-to-market rules and public disclosure,investors that are financial institutions for the purposes of those rules should consult their own tax advisors. This summary is not applicable to investors an interest in which would be a “tax shelter investment”, as defined in the Tax Act, and any such investor should consult their own tax advisors.
The following summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular investor. This summary is not exhaustive of all Canadian federal income tax considerations. Accordingly, investors should consult their own tax advisors with respect to their particular circumstances, including the Sarbanes-Oxleyapplication and effect of the income and other taxes of any country, province, territory, state or local tax authority.
The following summary is generally applicable to an investor who, at all relevant times, for purposes of the Tax Act of 2002, new regulations promulgated byand any applicable income tax treaty or convention, is neither resident nor deemed to be resident in Canada, is not affiliated with the SEC andCompany for the rulespurposes of the Tax Act, deals at arm’s length with the Company for the purposes of the Tax Act, holds common shares as capital property and does not use or hold, and is not deemed to use or hold common shares in connection with carrying on business in Canada (a “non-resident shareholder”). Special rules, which are not discussed in this summary, may apply to a non-resident shareholder that is an insurer that carries on an insurance business in Canada and elsewhere.
Dividends on Common Shares
Generally, dividends (including stock dividends) paid or credited (including amounts on account of or in lieu of dividends) by Canadian corporations to non-resident shareholders are subject to a withholding tax of 25 percent. However, the Treaty provides for a 15 percent withholding tax on dividends paid to all individuals and corporate residents of the United States that qualify for benefits under the Treaty. Dividends paid to any non-resident company that qualifies for benefits under the Treaty and that beneficially owns at least 10 percent of the voting stock of the payer company are subject to withholding tax at 5 percent.
Dividends (including stock dividends) paid or credited to a holder that is a United States tax-exempt organization, as described in Article XXI of the Treaty, and is entitled to the benefits of Article XXI(2) of the Treaty will not have to pay any Canadian withholding tax in respect of the amount of the dividend.
Disposition of Common Shares
A non-resident shareholder will not be subject to tax under the Tax Act on any capital gain realized on a disposition of a Common Share unless the common shares constitute “taxable Canadian property” to the non-resident shareholder. Generally, common shares will not constitute “taxable Canadian property” to a non-resident shareholder at a particular time provided that (a) the common shares are listed on a designated stock exchange at that time, (b) the non-resident shareholder, persons with whom the non-resident shareholder does not deal at arm’s length, or the non-resident shareholder together with persons with whom the non-resident shareholder does not deal at arm’s length, have not owned 25% or more of the issued shares of any of the classes (or of any series within a class) of the Company at any time during the 60-month period that ends at that time, and (c) less than 50% of the fair market value of the share is derived, directly or indirectly, from one or any combination of real or immovable property in Canada, Canadian resource properties, timber resource properties or options in respect of, or interests or rights in, such properties. Common shares may also be taxable Canadian property in certain other
circumstances, including where the non-resident shareholder elected to have them treated as taxable Canadian property upon ceasing to be resident in Canada. Notwithstanding the foregoing, in certain circumstances set out in the Tax Act, common shares could be deemed taxable Canadian property. Non-resident shareholders should consult their own tax advisors to determine whether the common shares will constitute taxable Canadian property in their particular circumstances.
Even if the common shares are taxable Canadian property to a non-resident shareholder, a taxable capital gain or an allowable capital loss resulting from the disposition of the shares will not be included in computing the non-resident shareholder’s income for the purposes of the Tax Act if the common shares constitute “treaty-protected property”. Common shares owned by a non-resident shareholder will generally be treaty-protected property if the gain from the disposition of such property would, because of an applicable income tax treaty or convention to which Canada is a signatory, be exempt from tax under the Tax Act. Non-resident shareholders should consult their own tax advisors to determine whether the common shares constitute treaty-protected property in their particular circumstances.
Under the Tax Act, the disposition of a common share by a holder may occur in a number of circumstances including on a sale or gift of the common share or upon the death of the holder. There are no Canadian federal estate or gift taxes on the purchase or ownership of the common shares.
All non-resident shareholders who dispose of “taxable Canadian property” are required to file a Canadian tax return reporting their gain or loss on the disposition and, subject to an applicable tax treaty exemption, pay the Canadian federal tax due on the disposition.
All non-resident shareholders who dispose of “taxable Canadian property” are also required to obtain an advance clearance certificate in respect of their disposition under section 116 of the Tax Act (the “Section 116 Certificate”). The purchaser of the common shares is obligated to withhold 25% of the gross proceeds on the acquisition of the common shares from a non-resident shareholder except to the extent of the certificate limit on the Section 116 Certificate. A Section 116 Certificate is required even where the gain is exempt from Canadian income tax under a provision of an income tax treaty with Canada, such as the Treaty. If thenon-resident shareholder does not provide a Section 116 Certificate to the purchaser, then the purchaser will be required to withhold and remit to the CRA 25% of the proceeds on account of the non-resident shareholder’s tax obligation, on or before the end of the month following the date of the sale. The non-resident shareholder may then file a Canadian tax return to obtain a refund of excess withholding tax, if any.
Transfer Agent
The registrar and transfer agent for our common shares is Computershare Investor Services Inc.
Listing
Our common shares are listed on The NASDAQ Global Select Market are resulting in increased general and administrative expenses for companies such as ours. These new or changed laws, regulations and standards are subject to varying interpretations in many cases, and as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies,under the symbol “GSIG.”
DESCRIPTION OF DEBT SECURITIES
The following description, together with the additional information we include in any applicable prospectus supplement, summarizes certain general terms and provisions of the debt securities that we may offer under this prospectus. When we offer to sell a particular series of debt securities, we will describe the specific terms of the series in a supplement to this prospectus. We will also indicate in the prospectus supplement the extent to which could resultthe general terms and provisions described in higher costs necessitated by ongoing revisionsthis prospectus apply to disclosurea particular series of debt securities.
We may issue debt securities either separately, or together with, or upon the conversion or exercise of or in exchange for, other securities described in this prospectus. Debt securities may be our senior, senior subordinated or subordinated obligations and, governance practices. We are committedunless otherwise specified in a supplement to maintaining high standards of corporate governancethis prospectus, the debt securities will be our direct, unsecured obligations and public disclosure. As a result, we intend to invest resources to comply with evolving laws, regulations and standards, and this investment may resultbe issued in increased general and administrative expensesone or more series.
The debt securities will be issued under an indenture between us and a diversion of management time and attention from revenue-generating activitiestrustee to compliance activities. If our efforts to comply with new or changed laws, regulations and standards differ frombe identified in the activities intended by regulatory or governing bodies, our business may be harmed.
Regulation
Increased governmental regulation of our business could materially adversely affect our business.
applicable prospectus supplement. We are subject to many governmental regulations, including but not limited to the laser radiation safety regulationshave summarized select portions of the Radiation Control for Health and Safety Act administered by the National Center for Devices and Radiological Health, a branchindenture below. The summary is not complete. The form of the United States Food and Drug Administration, and certain health regulations relatedindenture has been filed as an exhibit to the manufacture of products using beryllium, an element used in some of our structures and mirrors. Among other things, these regulations require us to file annual reports, to maintain quality control and sales records, to perform product testing, to distribute appropriate operating manuals, to incorporate design and operating features in products sold to end-users and to certify and label our products. Various warning labels must be affixed and certain protective devices installed depending on the class of product. We are subject to regulatory oversight, including comparable enforcement remedies, in the markets we serve.
Changes in governmental regulations may reduce demand for our products or increase our expenses.
We compete in many markets in which we and our customers must comply with federal, state, local and international regulations, such as environmental, health and safety and food and drug regulations. We develop, configure and market our products to meet customer needs created by those regulations. Any significant change in regulations could reduce demand for our products, which in turn could materially adversely affect our business, operating results and financial condition.
Risks Relating to Ownership of Our Common Shares
Holders of our common shares are subject to the risk of additional and substantial dilution to their interests as a result of future issuances of common shares.
Upon the effectiveness of the registration statement of which this prospectus forms a part warrantsand you should read the indenture for provisions that may be important to you. In the summary below, we have included references to the section numbers of the indenture so that you can easily locate these provisions. Capitalized terms used in the summary and not defined herein have the meanings specified in the indenture.
As used in this section only, “GSI Group,” “we,” “our” or “us” refer to GSI Group Inc. excluding our subsidiaries, unless expressly stated or the context otherwise requires.
General
The terms of each series of debt securities will be established by or pursuant to a resolution of our board of directors and set forth or determined in the manner provided in a resolution of our board of directors, in an officer’s certificate or by a supplemental indenture. (Section 2.2) The particular terms of each series of debt securities will be described in a prospectus supplement relating to such series (including any pricing supplement or term sheet).
We can issue an unlimited amount of debt securities under the indenture that may be in one or more series with the same or various maturities, at par, at a premium, or at a discount. (Section 2.1) We will set forth in a prospectus supplement (including any pricing supplement or term sheet) relating to any series of debt securities being offered, the aggregate principal amount and the following terms of the debt securities, if applicable:
We may issue debt securities that provide for an amount less than their stated principal amount to be due and payable upon declaration of acceleration of their maturity pursuant to the terms of the indenture. We will provide you with information on the federal income tax considerations and other special considerations applicable to any of these debt securities in the applicable prospectus supplement.
If we denominate the purchase price of any of the debt securities in a foreign currency or currencies or a foreign currency unit or units, or if the principal of and any premium and interest on any series of debt securities is payable in a foreign currency or currencies or a foreign currency unit or units, we will provide you with information on the restrictions, elections, general tax considerations, specific terms and other information with respect to that issue of debt securities and such foreign currency or currencies or foreign currency unit or units in the applicable prospectus supplement.
Transfer and Exchange
Each debt security will be represented by either (i) one or more global securities registered in the name of The Depository Trust Company, or the Depositary, or a nominee of the Depositary (we will refer to any debt security represented by a global debt security as a “book-entry debt security”), or (ii) a certificate issued in definitive registered form (we will refer to any debt security represented by a certificated security as a “certificated debt security”) as set forth in the applicable prospectus supplement. Except as set forth under the heading “Global Debt Securities and Book-Entry System” below, book-entry debt securities will not be issuable in certificated form.
Certificated Debt Securities. You may transfer or exchange certificated debt securities at any office we maintain for this purpose in accordance with the terms of the indenture. (Section 2.4) No service charge will be made for any transfer or exchange of certificated debt securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with a transfer or exchange. (Section 2.7)
You may effect the transfer of certificated debt securities and the right to receive the principal of, premium and interest on certificated debt securities only by surrendering the certificate representing those certificated debt securities and either reissuance by us or the trustee of the certificate to the new holder or the issuance by us or the trustee of a new certificate to the new holder.
Global Debt Securities and Book-Entry System. Each global debt security representing book-entry debt securities will be deposited with, or on behalf of, the Depositary, and registered in the name of the Depositary or a nominee of the Depositary. Please see “Global Securities.”
Covenants
We will set forth in the applicable prospectus supplement any restrictive covenants applicable to any issue of debt securities. (Article IV)
No Protection In the Event of a Change of Control
Unless we state otherwise in the applicable prospectus supplement, the debt securities will not contain any provisions which may afford holders of the debt securities protection in the event we have a change in control or in the event of a highly leveraged transaction (whether or not such transaction results in a change in control) which could adversely affect holders of debt securities.
Consolidation, Merger and Sale of Assets
We may not consolidate with or merge with or into, or convey, transfer or lease all or substantially all of our properties and assets to any person (a “successor person”) unless:
Notwithstanding the above, any of our subsidiaries may consolidate with, merge into or transfer all or part of its properties to us. (Section 5.1)
Events of Default
“Event of Default” means with respect to any series of debt securities, any of the following:
No Event of Default with respect to a particular series of debt securities (except as to certain events of bankruptcy, insolvency or reorganization) necessarily constitutes an Event of Default with respect to any other series of debt securities. (Section 6.1) The occurrence of certain Events of Default or an acceleration under the indenture may constitute an event of default under certain of our indebtedness or that of our subsidiaries outstanding from time to time.
If an Event of Default with respect to debt securities of any series at the time outstanding occurs and is continuing, then the trustee or the holders of not less than 25% in principal amount of the outstanding debt securities of that series may, by a notice in writing to us (and to the trustee if given by the holders), declare to be due and payable immediately the principal of (or, if the debt securities of that series are discount securities, that portion of the principal amount as may be specified in the terms of that series) and accrued and unpaid interest, if any, on all debt securities of that series. In the case of an Event of Default resulting from certain events of bankruptcy, insolvency or reorganization, the principal (or such specified amount) of and accrued and unpaid interest, if any, on all outstanding debt securities will become and be immediately due and payable without any declaration or other act on the part of the trustee or any holder of outstanding debt securities. At any time after a declaration of acceleration with respect to debt securities of any series has been made, but before a judgment or decree for payment of the money due has been obtained by the trustee, the holders of a majority in principal amount of the outstanding debt securities of that series may rescind and annul the acceleration if all Events of Default, other than the non-payment of accelerated principal and interest, if any, with respect to debt securities of that series, have been cured or waived as provided in the indenture. (Section 6.2) We refer you to the prospectus supplement relating to any series of debt securities that are discount securities for the particular provisions relating to acceleration of a portion of the principal amount of such discount securities upon the occurrence of an Event of Default.
The indenture provides that the trustee will be under no obligation to exercise any of its rights or powers under the indenture unless the trustee receives indemnity satisfactory to it against any cost, liability or expense which might be incurred by it in exercising such right or power. (Section 7.1(e)) Subject to certain rights of the trustee, the holders of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the debt securities of that series. (Section 6.12)
No holder of any debt security of any series will have any right to institute any proceeding, judicial or otherwise, with respect to the indenture or for the appointment of a receiver or trustee, or for any remedy under the indenture, unless:
Notwithstanding any other provision in the indenture, the holder of any debt security will have an absolute and unconditional right to receive payment of the principal of, premium and any interest on that debt security on or after the due dates expressed in that debt security and to institute suit for the enforcement of payment. (Section 6.8)
The indenture requires us, within 120 days after the end of our fiscal year, to furnish to the trustee a statement as to compliance with the indenture. (Section 4.3) If a Default or Event of Default occurs and is continuing with respect to the debt securities of any series and if it is known to a responsible officer of the trustee, the trustee shall mail to each holder of the debt securities of that series notice of a Default or Event of Default within 90 days after it occurs. The indenture provides that the trustee may withhold notice to the holders of debt securities of any series of any Default or Event of Default (except in payment on any debt securities of that series) with respect to debt securities of that series if the trustee determines in good faith that withholding notice is in the interest of the holders of those debt securities. (Section 7.5)
Modification and Waiver
We and the trustee may modify, amend or supplement the indenture or the debt securities of any series without the consent of any holder of any debt security:
We may also modify and amend the indenture with the consent of the holders of at least a majority in principal amount of the outstanding debt securities of each series affected by the modifications or amendments. We may not make any modification or amendment without the consent of the holders of each affected debt security then outstanding if that amendment will:
Except for certain specified provisions, the holders of at least a majority in principal amount of the outstanding debt securities of any series may on behalf of the holders of all debt securities of that series waive our compliance with provisions of the indenture. (Section 9.2) The holders of a majority in principal amount of the outstanding debt securities of any series may on behalf of the holders of all the debt securities of such series waive any past default under the indenture with respect to that series and its consequences, except a default in the payment of the principal of, premium or any interest on any debt security of that series; provided, however, that the holders of a majority in principal amount of the outstanding debt securities of any series may rescind an acceleration and its consequences, including any related payment default that resulted from the acceleration. (Section 6.13)
Defeasance of Debt Securities and Certain Covenants in Certain Circumstances
Legal Defeasance. The indenture provides that, unless otherwise provided by the terms of the applicable series of debt securities, we may be discharged from any and all obligations in respect of the debt securities of any series (subject to certain exceptions). We will be so discharged upon the deposit with the trustee, in trust, of money and/or U.S. government obligations or, in the case of debt securities denominated in a single currency other than U.S. Dollars, government obligations of the government that issued or caused to be issued such currency, that, through the payment of interest and principal in accordance with their terms, will provide money in an amount sufficient in the opinion of a nationally recognized firm of independent public accountants or investment bank to pay and discharge each installment of principal, premium and interest on and any mandatory sinking fund payments in respect of the debt securities of that series on the stated maturity of those payments in accordance with the terms of the indenture and those debt securities.
This discharge may occur only if, among other things, we have delivered to the trustee an opinion of counsel stating that we have received from, or there has been published by, the United States Internal Revenue Service a ruling or, since the date of execution of the indenture, there has been a change in the applicable United States federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the holders of the debt securities of that series will not recognize income, gain or loss for United States federal income tax purposes as a result of the deposit, defeasance and discharge and will be subject to United States federal income tax on the same amounts and in the same manner and at the same times as would have been the case if the deposit, defeasance and discharge had not occurred. (Section 8.3)
Defeasance of Certain Covenants. The indenture provides that, unless otherwise provided by the terms of the applicable series of debt securities, upon compliance with certain conditions:
The conditions include:
Covenant Defeasance and Events of Default. In the event we exercise our option to effect covenant defeasance with respect to any series of debt securities and the debt securities of that series are declared due and payable because of the occurrence of any Event of Default, the amount of money and/or U.S. government obligations or foreign government obligations on deposit with the trustee will be sufficient to pay amounts due on the debt securities of that series at the time of their stated maturity but may not be sufficient to pay amounts due on the debt securities of that series at the time of the acceleration resulting from the Event of Default. However, we shall remain liable for those payments. (Section 8.4).
Conversion Rights
If applicable, the terms of the debt securities of any series that are convertible into or exchangeable for our common shares for $0.01 per shareor our other securities will be automatically exercised and 5,882,520described in an applicable prospectus supplement. These terms will describe whether conversion or exchange is mandatory, at the option of the Company’sholder, or at our option. These terms may include provisions pursuant to which the number of common shares or our other securities to be received by the holders of debt securities would be subject to adjustment. Any such conversion or exchange will comply with applicable law, our Articles and By-Laws.
Governing Law
The indenture and the debt securities, including any claim or controversy arising out of or relating to the indenture or the securities, will be governed by the laws of the State of New York (Section 10.10).
Book-Entry, Delivery and Form
Unless we indicate differently in a prospectus supplement, the securities initially will be issued in book-entry form and represented by one or more global notes or global securities, or, collectively, global securities. The global securities will be deposited with, or on behalf of, The Depository Trust Company, New York, New York, as depositary, or DTC, and registered in the name of Cede & Co., the nominee of DTC. Unless and until it is exchanged for individual certificates evidencing securities under the limited circumstances described below, a global security may not be transferred except as a result. This issuance will be dilutivewhole by the depositary to existing stockholders.
Inits nominee or by the future, we may issue additional equity securitiesnominee to raise capital and our stock option holders may exercise allthe depositary, or someby the depositary or its nominee to a successor depositary or to a nominee of the optionssuccessor depositary.
DTC has advised us that are outstanding or may be outstanding. These additional issuances would also dilute existing share ownership.
The market price of our common shares has been and may continue to be subject to wide fluctuations, and this may make it difficult for you to resell the common shares when you want or at prices you find attractive.
Our stock price historically has been, and may continue to be, volatile. Various factors contribute to the volatility of the stock price, including:is:
announcements of quarterly operating results and revenue and earnings forecasts by us, our competitors or our customers;
failure to achieve financial forecasts, either because expected sales do not occur or because they occur at lower prices or on terms that are less favorable to us;
rumors, announcements or press articles regarding changes in our management, organization, operations or prior financial statements;
changes in revenue and earnings estimates by securities analysts;
announcements of planned acquisitions by us or by our competitors;
announcements of new or planned products by us, our competitors or our customers;
gain or loss of a significant customer;
inquiries by the SEC, NASDAQ, law enforcement or other regulatory bodies; and
acts of terrorism, the threat of war and economic slowdowns in general.
While we cannot predict the individual effect that these factors may have on the market price of our common shares, these factors, either individually or in the aggregate, could result in significant volatility in our stock price during any given period of time. Additionally, the stock market has recently experienced extreme price volatility, which has adversely affected and may continue to adversely affect the market price of our common shares for reasons unrelated to our business or operating results.
Future sales of a substantial number of our common shares in the public market, including the shares offered pursuant to this prospectus, could adversely affect the trading price of our shares and impair our ability to raise funds in future stock offerings.
Future sales of a substantial number of our common shares in the public market, including the shares to be offered pursuant to this prospectus and other resale prospectuses and shares available for resale under Rule 144 under the Securities Act, or the perception that such sales could occur, could adversely affect the prevailing market price of our common shares and could make it more difficult for us to raise additional capital through the sale of equity securities.
This prospectus and the information we incorporate by reference into this prospectus contain certain forward-looking statements“banking organization” within the meaning of the New York Banking Law;
DTC holds securities that its participants deposit with DTC. DTC also facilitates the settlement among its participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in participants’ accounts, thereby eliminating the need for physical movement of securities certificates. “Direct participants” in DTC include securities brokers and dealers, including underwriters, banks, trust companies, clearing corporations and other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation, or DTCC. DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others, which we sometimes refer to as indirect participants, that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly. The rules applicable to DTC and its participants are on file with the SEC.
Purchases of securities under the DTC system must be made by or through direct participants, which will receive a credit for the securities on DTC’s records. The ownership interest of the actual purchaser of a security, which we sometimes refer to as a beneficial owner, is in turn recorded on the direct and indirect participants’ records. Beneficial owners of securities will not receive written confirmation from DTC of their purchases. However, beneficial owners are expected to receive written confirmations providing details of their transactions, as well as periodic statements of their holdings, from the direct or indirect participants through which they purchased securities. Transfers of ownership interests in global securities are to be accomplished by entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in the global securities, except under the limited circumstances described below.
To facilitate subsequent transfers, all global securities deposited by direct participants with DTC will be registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be
requested by an authorized representative of DTC. The deposit of securities with DTC and their registration in the name of Cede & Co. or such other nominee will not change the beneficial ownership of the securities. DTC has no knowledge of the actual beneficial owners of the securities. DTC’s records reflect only the identity of the direct participants to whose accounts the securities are credited, which may or may not be the beneficial owners. The participants are responsible for keeping account of their holdings on behalf of their customers.
So long as the securities are in book-entry form, you will receive payments and may transfer securities only through the facilities of the depositary and its direct and indirect participants. We will maintain an office or agency in the location specified in the prospectus supplement for the applicable securities, where notices and demands in respect of the securities and the indenture may be delivered to us and where certificated securities may be surrendered for payment, registration of transfer or exchange.
Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants and by direct participants and indirect participants to beneficial owners will be governed by arrangements among them, subject to any legal requirements in effect from time to time.
Redemption notices will be sent to DTC. If less than all of the securities of a particular series are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each direct participant in the securities of such series to be redeemed.
Neither DTC nor Cede & Co. (or such other DTC nominee) will consent or vote with respect to the securities. Under its usual procedures, DTC will mail an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns the consenting or voting rights of Cede & Co. to those direct participants to whose accounts the securities of such series are credited on the record date, identified in a listing attached to the omnibus proxy.
So long as securities are in book-entry form, we will make payments on those securities to the depositary or its nominee, as the registered owner of such securities, by wire transfer of immediately available funds. If securities are issued in definitive certificated form under the limited circumstances described below, we will have the option of making payments by check mailed to the addresses of the persons entitled to payment or by wire transfer to bank accounts in the United States Private Securities Litigation Reformdesignated in writing to the applicable trustee or other designated party at least 15 days before the applicable payment date by the persons entitled to payment, unless a shorter period is satisfactory to the applicable trustee or other designated proxy.
Redemption proceeds, distributions and dividend payments on the securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit direct participants’ accounts upon DTC’s receipt of funds and corresponding detail information from us on the payment date in accordance with their respective holdings shown on DTC records. Payments by participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for the account of customers in bearer form or registered in “street name.” Those payments will be the responsibility of participants and not of DTC or us, subject to any statutory or regulatory requirements in effect from time to time. Payment of redemption proceeds, distributions and dividend payments to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC, is our responsibility, disbursement of payments to direct participants is the responsibility of DTC, and disbursement of payments to the beneficial owners is the responsibility of direct and indirect participants.
Except under the limited circumstances described below, purchasers of securities will not be entitled to have securities registered in their names and will not receive physical delivery of securities. Accordingly, each beneficial owner must rely on the procedures of DTC and its participants to exercise any rights under the securities and the indenture.
The laws of some jurisdictions may require that some purchasers of securities take physical delivery of securities in definitive form. Those laws may impair the ability to transfer or pledge beneficial interests in securities.
DTC may discontinue providing its services as securities depositary with respect to the securities at any time by giving reasonable notice to us. Under such circumstances, in the event that a successor depositary is not obtained, securities certificates are required to be printed and delivered.
As noted above, beneficial owners of a particular series of securities generally will not receive certificates representing their ownership interests in those securities. However, if:
we will prepare and deliver certificates for such securities in exchange for beneficial interests in the global securities. Any beneficial interest in a global security that is exchangeable under the circumstances described in the preceding sentence will be exchangeable for securities in definitive certificated form registered in the names that the depositary directs. It is expected that these directions will be based upon directions received by the depositary from its participants with respect to ownership of beneficial interests in the global securities.
We have obtained the information in this section and elsewhere in this prospectus concerning DTC and DTC’s book-entry system from sources that are believed to be reliable, but we take no responsibility for the accuracy of this information.
We may sell the securities from time to time pursuant to underwritten public offerings, negotiated transactions, block trades or a combination of these methods. We may sell the securities separately or together:
We may distribute the securities from time to time in one or more transactions:
We may solicit directly offers to purchase the securities being offered by this prospectus. We may also designate agents to solicit offers to purchase the securities from time to time. We may sell the securities being offered by this prospectus by any method permitted by law, including sales deemed to be an “at the market” offering as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended, (the “Securities Act”)or the Securities Act, including without limitation sales made directly on the NASDAQ Global Select Market, on any other existing trading market for our securities or to or through a market maker. We will name in a prospectus supplement any agent involved in the offer or sale of our securities to the extent required by law.
If we utilize a dealer in the sale of the securities being offered by this prospectus, we will sell the securities to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale.
If we utilize an underwriter in the sale of the securities being offered by this prospectus, we will execute an underwriting agreement with the underwriter at the time of sale and Section 21Ewe will provide the name of any underwriter in the prospectus supplement that the underwriter will use to make resales of the securities to the public. In connection with the sale of the securities, we, or the purchasers of securities for whom the underwriter may act as agent, may compensate the underwriter in the form of underwriting discounts or commissions. The underwriter may sell the securities to or through dealers, and the underwriter may compensate those dealers in the form of discounts, concessions or commissions.
We will provide in the applicable prospectus supplement any compensation we will pay to underwriters, dealers or agents in connection with the offering of the securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers. Underwriters, dealers and agents participating in the distribution of the securities may be deemed to be underwriters within the meaning of the Securities Exchange Act, of 1934, as amended (the “Exchange Act”). These forward-looking statements may relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions, tax issuesany discounts and other matters. All statements contained or incorporatedcommissions received by reference in this prospectus that do not relate to matters of historical fact should be considered forward-looking statements,them and are generally identifiedany profit realized by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “objective” and other similar expressions. Investors should not place undue reliancethem on the forward-looking statements contained or incorporated by reference in this prospectus. Such statements are based on management’s beliefs and assumptions and on information currently available to management and are subject to risks, uncertainties and changes in condition, significance, value and effect. Someresale of the risks and uncertainties thatsecurities may cause actual results to differ materially from those contained in the statements include the following:
the risk that anticipated synergies and opportunities as a result of the merger with Excel will not be realized;
difficulty or unanticipated expenses in connection with integrating Excel into GSIG;
the risk that the acquisition does not perform as planned, including the risk that GSIG will not achieve revenue projections;
the inability to retain key employees of either company;
the fact that each of the companies’ sales have been and are expected to continuedeemed to be dependent upon customer capital equipment expenditures, which are, in turn, affected by business cycles in the markets served by those customers;
volatility in the semiconductorunderwriting discounts and printed circuit board industries;
the risk of order delayscommissions. We may enter into agreements to indemnify underwriters, dealers and cancellations;
the risk of delays by customers in introducing their new products and market acceptance of products incorporating subsystems supplied by the companies;
risks of currency fluctuations;
risks to the companies of delays in new products;
our ability to continue to reduce costs and capital expenditures;
our ability to focus R&D investment and integrate acquisitions;
changes in applicable accounting standards;
tax regulations or other external regulatory rules and standards; and
other risks detailed in reports and documents filed by the companies with the SEC and by GSIG with securities regulatory authorities in Canada.
Such risks, uncertainties and changes in condition, significance, value and effect, many of which are beyond GSIG’s control, could cause the company’s actual results and other future events to differ materially from those anticipated. GSIG does not, however, assume any obligation to update these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements. The risks and uncertainties under the captions “Risk Factors” contained herein, among other things, should be considered in evaluating our prospects and future financial performance. All forward-looking statements included in this prospectus are made as of the date hereof.
We will not receive any of the proceeds from the sale of common shares by the selling stockholders pursuant to this prospectus. We will incur all costs associated with this registration statement, which are currently estimated to be approximately $99,608.01.
On August 20, 2008, we completed a private placement in which we sold to the selling stockholders warrants to purchase up to an aggregate of 5,882,520 of our common shares for $0.01 per share. Pursuant to a registration rights agreement that we entered into with the selling stockholders on the same date, we agreed to file the registration statement of which this prospectus is a part with the SEC in order to register the resale by the selling stockholders of the common shares issued upon exercise of these warrantsagents against civil liabilities, including liabilities under the Securities Act, or to contribute to payments they may be required to make in respect thereof and to reimburse those persons for certain expenses. In the event that an offering made pursuant to this prospectus is subject to FINRA Rule 5121, the prospectus supplement will comply with the prominent disclosure provisions of that rule.
The securities may or may not be listed on a national securities exchange. To facilitate the offering of securities, certain persons participating in the offering may engage in transactions that stabilize, maintain or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involves the sale by persons participating in the offering of more securities than we sold to them. In these circumstances, these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option, if any. In addition, these persons may stabilize or maintain the effectivenessprice of this registration statement until the earlier of: (i) 12 months aftersecurities by bidding for or purchasing securities in the date thatopen market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the registration statement becomes effective; (ii) such time as all such common shares have beenoffering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the selling stockholders;market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.
We may authorize underwriters, dealers or (iii)agents to solicit offers by certain purchasers to purchase the date upon which all of common shares are eligible to be sold tosecurities from us at the public by a non-affiliate of us without restriction pursuant to Rule 144 under the Securities Act.
We are registering a total of 5,882,520 common shares in order to permit the selling stockholders to offer the common shares for resale from time to time. Except for: (1) the ownership of the number of common sharesoffering price set forth in the following table;prospectus supplement pursuant to delayed delivery contracts providing for payment and (2)delivery on a specified date in the ownershipfuture. The contracts will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement will set forth any commissions we pay for solicitation of a portion ofthese contracts.
We may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the $210,000,000 aggregate principal amount of 11% Senior Notes due 2013 issuedapplicable prospectus supplement so indicates, in connection with any derivative transaction, the third parties may sell securities covered by our wholly owned subsidiary, GSI Group Corporation, on August 20, 2008,this prospectus and the selling stockholders have not had any material relationship withapplicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings of our predecessors or affiliates within the past three years.
stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock. The table below lists the selling stockholdersthird party in such sale transactions will be an underwriter and, other information regarding the beneficial ownership of our common shares by each of the selling stockholders as a result of the automatic exercise of the warrants.
The selling stockholders may sell all, some or none of their common sharesif not identified in this offering. See “Plan of Distribution” beginning on page 22 of this prospectus, for further details. The informationwill be identified in the table below is based on information suppliedapplicable prospectus supplement or a post-effective amendment to us by the selling stockholders named in the table, and we have not sought to verify such information. The first column in the below table lists the selling stockholders. The second column in the below table lists the number of common shares beneficially owned by each selling stockholder as of October 10, 2008 (unless otherwise specified below), assuming the automatic exercise of the warrants to purchase an aggregate of up to 5,882,520 common shares concurrently with the effective time of the registration statement of which this prospectus is a part. The third column in the below table lists the common shares being offered by this prospectus by the selling stockholders. The fourth and fifth columns in the below table reflect the number and percentage of common shares beneficially owned by each of the selling stockholders subsequent to the offering, assuming the sale of all common shares offered by each selling stockholder pursuant to this prospectus. Information concerning the selling stockholdersIn addition, we may change from time to time and any changed information will be set forth in prospectus supplements or post-effective amendments, if required by applicable law.
Name of Selling Stockholder | Number of Common Shares Beneficially Owned Prior to Offering (1) | Maximum Number of Common Shares to be Sold Pursuant to this Prospectus | Number of Common Shares Beneficially Owned After Offering (2) | Percentage of Common Shares Beneficially Owned After Offering (2) | ||||
Tempo Master Fund LP (3) | 420,180 | 420,180 | — | — | ||||
Hale Capital Partners, LP (4) | 140,060 | 140,060 | — | — | ||||
Interlachen Convertible Investments Limited (5) | 420,180 | 420,180 | — | — | ||||
Special Value Opportunities Fund, LLC (6) | 373,876 | 373,876 | — | — | ||||
Special Value Expansion Fund, LLC (7) | 157,764 | 157,764 | — | — | ||||
Special Value Continuation Partners, LP (8) | 217,877 | 217,877 | — | — | ||||
Tennenbaum Opportunities Partners V, LP (9) | 581,053 | 581,053 | — | — | ||||
Silver Oak Capital, L.L.C. (10) | 280,120 | 280,120 | — | — | ||||
Highbridge International LLC (11) | 1,330,570 | 1,330,570 | — | — | ||||
UBS O’Connor LLC F/B/O: O’Connor Global Convertible Arbitrage Master Limited (12) | 378,162 | 378,162 | — | — | ||||
UBS O’Connor LLC F/B/O: O’Connor Global Convertible Arbitrage II Master Limited (13) | 42,018 | 42,018 | — | — | ||||
Liberty Harbor Master Fund I, L.P. (14) | 1,540,660 | 1,540,660 | — | — | ||||
Total: | 5,882,520 | 5,882,520 | — | — |
We are registering a total of 5,882,520 common shares which are issuable to the selling stockholders in order to permit the resale of these common shares by the selling stockholders from time to time after the effective date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of these common shares. We will bear all fees and expenses incident to our obligation to register the common shares.
The selling stockholders may sell all or a portion of the common shares beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the common shares are sold through underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The common shares may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, through:
any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
the over-the-counter market;
transactions otherwise than on these exchanges or systems or in the over-the-counter market;
the writing of options, whether such options are listed on an options exchange or otherwise;
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
an exchange distribution in accordance with the rules of the applicable exchange;
privately negotiated transactions;
short sales;
sales pursuant to Rule 144;
transactions in which broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
a combination of any such methods of sale; and
any other method permitted pursuant to applicable law.
If the selling stockholders sell their common shares to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholders or commissions from purchasers of the common shares for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the common shares or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the common shares in the course of hedging in positions they assume. The selling stockholders may also sell common shares short and deliver common shares covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge common sharessecurities to broker-dealersa financial institution or other third party that in turn may sell such shares.the securities short using this prospectus. Such financial institution or other third party may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
The specific terms of any lock-up provisions in respect of any given offering will be described in the applicable prospectus supplement.
The underwriters, dealers and agents may engage in transactions with us, or perform services for us, in the ordinary course of business for which they receive compensation and may have certain expenses reimbursed by us.
The selling stockholders may pledge or grant a security interest in some or all of the warrants, or common shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the common shares from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate the common shares in other circumstances in which case the transferees, donees, pledgees or other successors in interestLEGAL MATTERS
Latham & Watkins LLP, New York, New York will be the selling beneficial owners for purposes of this prospectus.
The selling stockholders and any broker-dealer participating in the distribution of the common shares may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the common shares is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of common shares being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.
Under the securities laws of some states, the common shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the common shares may not be sold unless such shares have been registered or qualified for sale in such state orissue an exemption from registration or qualification is available and is complied with.
There can be no assurance that any selling stockholders will sell any or all of the common shares registered pursuant to the registration statement of which this prospectus forms a part.
The selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the common shares by the selling stockholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the common shares to engage in market-making activitiesopinion about certain legal matters with respect to the common shares. Allenforceability of the foregoing may affectdebt securities for us. Certain matters relating to New Brunswick law regarding the marketabilityvalidity of the common shares and the ability of any person or entity to engage in market-making activities with respect to the common shares.
We will pay all expenses of the registration of the common shares pursuant to the registration rights agreement dated as of August 20, 2008, estimated to be $99,608.01 in total, including, without limitation, SEC filing fees and expenses of compliance with state securities or “blue sky” laws; provided however, that a selling stockholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreement, or the selling stockholders will be entitled to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the registration rights agreement referenced above, or we may be entitled to contribution.
Once sold under the registration statement of which this prospectus forms a part, the common shares will be freely tradable in the hands of persons other than our affiliates.
The validity of the securities being offered hereby will be passed uponon by Stewart McKelvey, New Brunswick, Canada. In connection with any particular offering of the securities in the future, the validity of those securities may be passed upon for us by Latham & Watkins LLP, our special counsel regarding New York matters; Stewart McKelvey, our special counsel in New Brunswick; or such other counsel as may be specified in the applicable prospectus supplement. Any underwriters will be advised about the other issues relating to any offering by their own legal counsel.
The consolidated financial statements and schedule of GSI Group Inc. at December 31, 2007 and December 31, 2006, and for each of the three years in the period ended December 31, 2007, appearing in GSI Group Inc.’s Annual Report (Form 10-K) incorporated by referenceas of and for the years ended December 31, 2014 and 2013, and management’s assessment of the effectiveness of internal control over financial reporting (which is included in Management’s Report on Internal Control over Financial Reporting) as of December 31, 2014, included in this prospectusRegistration Statement have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and registration statementaccounting.
The consolidated financial statements of GSI Group Inc. for the year ended December 31, 2012 appearing in GSI Group Inc.’s Annual Report (Form 10-K) for the year ended December 31, 2014 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
ENFORCEMENT OF CIVIL LIABILITIES
The consolidated financial statements and scheduleCompany is a corporation existing under the laws of Excel Technology, Inc. and subsidiaries asNew Brunswick, Canada. As a result, it may be difficult for investors to effect service of December 31, 2007 and 2006, and for eachprocess within the United States upon the Company, or to realize upon judgments of courts of the years inUnited States predicated upon civil liability of the three-year period ended December 31, 2007, have been incorporated by reference herein in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.Company under U.S. federal securities laws.
The audit report covering the December 31, 2007 consolidated financial statements refers to the adoption of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an Interpretation of SFAS No. 109”, effective January 1, 2007, and Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment”, effective January 1, 2006.
WHERE YOU CAN FIND MORE INFORMATIONLIMITATION ON LIABILITY AND DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The SEC allows us to ‘incorporate by reference’ certain information into this prospectus. This meansOur by-laws require that we can disclose important information to you by referring you to another document filed separately with the SEC. The information that we incorporate by reference should be considered to be part of this prospectus. Because we are incorporating by referencewill indemnify our future filings with the SEC, this prospectus will be continually updated by those future filings, and those future filings may modify or supersede some or all of the information included or incorporated in this prospectus. This means that you should look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus or in any document previously incorporated by reference have been modified or superseded.
We electronically file with the SEC our annual reports on Form 10-K, quarterly interim reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. We also make available on or through our website, free of charge, copies of these reports as soon as reasonably practicable after we electronically file or furnish it to the SEC. You can also request copies of such documents free of charge by contacting our Investor Relations Department by phone at (781) 266-5700 or in writing to the attention of Investor Relations, 125 Middlesex Turnpike, Bedford, MA 01730. You may read and copy any document we file at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the Public Reference Room. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. The SEC’s website can be found athttp://www.sec.gov.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
All documents filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the initial filing of the registration statement, whether before or after it is declared effective, and before the end of any offering made under this prospectus will be incorporated by reference into this prospectus and will automatically update and supersede the information in this prospectus and any previously filed document. We incorporate by reference the following information that has been filed with the SEC:
our annual report on Form 10-K for the year ended December 31, 2007, filed with the SEC on March 10, 2008;
the annual report of Excel Technology, Inc. on Form 10-K for the year ended December 31, 2007, filed with the SEC on February 14, 2008;
the information specifically incorporated by reference into our December 31, 2007 Form 10-K from our definitive proxy statement on Schedule 14A, filed with the SEC on April 14, 2008;
our quarterly report on Form 10-Q for the quarterly period ended March 31, 2008, filed with the SEC on May 5, 2008;
our quarterly report on Form 10-Q for the quarterly period ended June 30, 2008, filed with the SEC on July 31, 2008;
our current reports on Form 8-K filed with the SEC on March 20, 2008, April 30, 2008, July 3, 2008, July 11, 2008, July 18, 2008, July 31, 2008, August 21, 2008, August 29, 2008, September 2, 2008, October 9, 2008 and October 10, 2008; and
the description of our common shares, which is contained in the registration statement on Form 8-A filed with the SEC on January 24, 2002.
Any information in any of the foregoing documents will automatically be deemed to be modified or superseded to the extent that information in this prospectus or in a later filed document that is incorporated or deemed to be incorporated herein by reference modifies or replaces such information.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
The following table sets forth the estimated costs and expenses payable by GSI Group Inc. (the “Registrant”) in connection with the common shares being registered. The selling stockholders will not bear any portion of such expenses. All the amounts shown are estimates, except for the SEC registration fee.
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The by-laws of the Registrant require the Registrant to indemnify current or former directors and officers and each person who acts or acted at the Company’s request as a director or officer of a body corporate of which the Company is or was a shareholder or creditor against all costs, charges and expenses incurred by them in connection with each proceeding in which such officer, director or directorperson is involved as a result of serving or having served at the Registrant’sour request. The Registrant’sOur indemnification obligation covers all costs, charges and expenses, including amounts paid to settle an action or satisfy a judgment reasonably incurred by such officer or director by reason of having been an officer or director. Indemnification is not available with respect to a proceeding as to which it has been adjudicated that such person did not act honestly and in good faith with a view to theour best interests, of the Registrant, and, with the reasonable belief that his or her action was lawful. The above provisions are intended to follow and are subject to the limitations set forth in section 81 of the New Brunswick Business Corporations Act.
The Registrant also has director and officer insurance policies that will indemnify its officers and directors against non-indemnifiable costs, charges and expenses, and may also enable the Registrant to recover some or all of any future amounts paid pursuant to the registrant’s indemnity obligations.
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Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, set forth in Item 15 above, or otherwise, the Registrant haswe have been advisedinformed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In
GSI Group Inc.
Common Shares
Debt Securities
PROSPECTUS
, 2015
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. | Other expenses of issuance and distribution. |
The following table sets forth the event that a claim for indemnification against such liabilities (other than the paymentestimated costs and fees payable 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 personGSI Group Inc. in connection with the sale of the securities being registered hereby. With the Registrant will, unlessexception of the Securities and Exchange Commission registration fee, all amounts shown are estimates.
Securities and Exchange Commission registration fee | $ | 28,730 | ||
Blue sky qualification fees and expenses | $ | 5,000 | ||
Printing and engraving expenses | $ | 10,000 | ||
Legal fees and expenses | $ | 200,000 | ||
Accounting fees and expenses | $ | 100,000 | ||
Transfer agent and listing fees | $ | 10,000 | ||
Trustee fees and expenses | $ | 5,000 | ||
Miscellaneous expenses | $ | 5,000 | ||
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Total | $ | 363,730 |
Item 15. | Indemnifications of directors and officers. |
Our by-laws require that we indemnify current or former directors and officers against expenses incurred by them in connection with each proceeding in which such officer or director is involved as a result of serving or having served at our request. Our indemnification obligation covers all costs, charges and expenses, including amounts paid to settle an action or satisfy a judgment reasonably incurred by such officer or director by reason of having been an officer or director. Indemnification is not available with respect to a proceeding as to which it has been adjudicated that such person did not act honestly and in good faith with a view to our best interests, and, with the reasonable belief that his or her action was lawful. The above provisions are intended to follow and are subject to the limitations set forth in section 81 of the New Brunswick Business Corporations Act (“NB BCA”).
Section 81(1) of the NB BCA provides that except in respect of an action by or on behalf of us or a body corporate to procure a judgment in its favor, we may indemnify a former or current director or officer or other person who acts or acted at our request as a director or officer of a body corporate of which we are or were a shareholder or creditor, and that person’s heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by that person in respect of any civil, criminal or administrative action or proceeding to which that person is made a party by reason of being or having been a director or officer of the Company or body corporate, if (a) that person acted honestly and in good faith with a view to our best interests, and (b) in the opinioncase of a criminal or administrative action or proceeding that is enforced by a monetary penalty, that person had reasonable grounds for believing that that person’s conduct was lawful.
Section 81(2) of the NB BCA provides that we may with court approval indemnify a former or current director or officer or other person who acts or acted at our request as a director or officer of a body corporate of which we are or were a shareholder or creditor, and that person’s heirs and legal representatives in respect of an action by or on behalf of us or body corporate to procure a judgment in its counselfavor, to which he is made a party by reason of being or having been a director or an officer of the Company or body corporate, against all costs, charges and expenses reasonably incurred by him in connection with such action if (a) that person acted honestly and in good faith with a view to our best interests, and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, that person had reasonable grounds for believing that that person’s conduct was lawful.
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Section 81(3) of the NB BCA provides that notwithstanding anything in section 81 of the NB BCA, a former or current director or officer or other person who acts or acted at our request as a director or officer of a body corporate of which we are or were a shareholder or creditor, and that person’s heirs and legal representatives is entitled to indemnity from us in respect of all costs, charges and expenses reasonably incurred by him in connection with the defense of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the Company or body corporate, if the person seeking indemnity (a) was substantially successful on the merits of his defense of the action or proceeding, (b) acted honestly and in good faith with a view to our best interests, (c) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that that person’s conduct was lawful and (d) is fairly and reasonably entitled to indemnity.
Section 81(4) of the NB BCA provides that we may purchase and maintain insurance for the benefit of any former or current director or officer or other person who acts or acted at our request as a director or officer of a body corporate of which we are or were a shareholder or creditor, and that person’s heirs and legal representatives against any liability incurred by him (a) in his capacity as our director or officer, except where the liability relates to his failure to act honestly and in good faith with a view to our best interests; or (b) in his capacity as a director or officer of another body corporate if he acts or acted in that capacity at our request, except where the liability relates to his failure to act honestly and in good faith with a view to the best interests of that body corporate.
We and our wholly owned subsidiary, GSI Group Corporation, have also entered into indemnification agreements with our chief executive officer and chief financial officer. The indemnification agreements provide that we will indemnify such persons if they are, or are threatened to be made, a party to or a participant in any proceeding, other than a proceeding by or in the right of us to procure a judgment in our favor. Such persons are indemnified to the fullest extent permitted by applicable law against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by them or on their behalf in connection with such proceeding or any claim, issue or matter has been settledtherein, if they acted honestly and in good faith with a view to our best interests, and in the case of a criminal or administrative proceeding that is enforced by controlling precedent, submita monetary penalty, such persons had reasonable grounds for believing that their conduct was lawful. With the leave of the court, we also indemnify such persons to the fullest extent permitted by applicable law against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by them or on their behalf if they are, or are threatened to be made, a party to or a participant in any proceeding by us or in our right to procure a judgment in our favor, provided that such persons acted honestly and in good faith with a view to our best interests, and in the case of a criminal or administrative proceeding that is enforced by a monetary penalty, such persons had reasonable grounds for believing that their conduct was lawful. To the extent that such persons are a party to or a participant in and are successful (on the merits or otherwise) in defense of any proceeding or any claim, issue or matter therein, we will indemnify them against all expenses actually and reasonably incurred in connection with the proceedings. To the extent permitted by applicable law, if such persons are not wholly successful in such proceeding but are successful, on the merits or otherwise, in defense of one or more but less than all claims, issues or matters in such proceeding, we will indemnify them against all expenses actually and reasonably incurred in connection with (a) each successfully resolved claim, issue or matter and (b) any claim, issue or matter related to any such successfully resolved claim, issuer or matter.
We also have director and officer insurance policies that will insure our officers and directors against unindemnifiable costs, charges and expenses, and may also enable us to recover some or all of any future amounts paid pursuant to our indemnity obligations.
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Item 16. | Exhibits. |
The attached Exhibit Index is incorporated herein by reference.
Item 17. | Undertakings. |
(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 Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
(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 this registration statement.
Provided,however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) above do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement or is contained in a form of prospectus filed pursuant to Rule 424(b) that is a part of 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 initialbona 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.
(b) The undersigned registrant hereby further undertakes that, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(1) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(2) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date
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such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initialbona fide offering thereof.Provided,however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a courtpurchaser with a time of appropriate jurisdiction the question whethercontract of sale prior to such indemnification by it is against public policy as expressedeffective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(c) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be governedconsidered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the final adjudicationundersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(d) The undersigned registrant hereby undertakes that: (i) for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of the registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of the registration statement as of the time it was declared effective; and (ii) for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such issue.securities at that time shall be deemed to be the initialbona fide offering thereof.
(e) The undersigned Registrantregistrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’sregistrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fide offering thereof.
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:
PROVIDED, HOWEVER, that paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That,(f) Insofar as indemnification for the purpose of determining any liabilityliabilities arising under the Securities Act of 1933 each such post-effective amendment shallmay be deemedpermitted to be a new registration statement relatingdirectors, officers and controlling persons of the registrant pursuant to the securities offered therein,foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the offeringSecurities 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 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 ofdirector, officer or controlling person in connection with the securities being registered, which remain unsold at the terminationregistrant will, unless in the opinion of its counsel the offering.matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
(4) That,(g) If and when applicable, the undersigned registrant, hereby undertakes to file an application for the purpose of determining liabilitythe eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Securities Actand Exchange Commission under Section 305(b)(2) of 1933 to any purchaser:the Act.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrantregistrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Bedford, state of Massachusetts, on October 9, 2008.March 6, 2015.
GSI GROUP INC. | ||||
By: | / | |||
| Robert J. Buckley | |||
Title: | Chief |
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each individualThe individuals whose signature appearssignatures appear below constitutesconstitute and appoints Daniel J. Lyneappoint John A. Roush and Robert L. Bowen,Buckley, and each of them, his or her true and lawful attorneys-in-fact and agents with full and several power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Form S-3, including post-effective amendments,registration statement, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.done.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Form S-3registration statement has been signed below by the following persons on behalf of the Registrant andregistrant in the capacities and on the dates indicated.indicated:
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/s/ Thomas N. Secor Thomas N. Secor | Director | March 6, 2015 |
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EXHIBIT INDEX
Exhibit |
| |
1.1* | Form of Underwriting Agreement | |
2.1 | Agreement and Plan of Merger, | |
2.3 | Final Fourth Modified Joint Chapter 11 Plan of Reorganization for the Registrant, GSI Group Corporation, and MES International, Inc., dated as of May 24, 2010, as supplemented on May 27, 2010, and as confirmed by the United States Bankruptcy Court for the District of Delaware on May 27, 2010 (incorporated by reference to Exhibit 99.2 to our Current Report on Form 8-K filed on May 28, 2010). | |
2.4 | Master Purchase and Sale Agreement, dated | |
2.5 | Securities Purchase Agreement dated January 15, 2013, between NDSSI Holdings, LLC, NDS Surgical Imaging, Inc., GSI Group Inc. and GSI Group Limited UK. (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on January 15, 2013). | |
2.3 | Equity Purchase Agreement dated February 18, 2014, between JADAK, LLC, JADAK Technologies, Inc., Advanced Data Capture Corporation, GSI Group Inc. and GSI Group Corporation. (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on February 18, 2014). | |
2.4 | Asset and Equity Purchase Agreement, dated June 24, 2014, by and among GSI Group Inc., | |
Articles of Amendment of the Registrant, dated May 26, 2005. | ||
3.3 | Articles of Reorganization of the Registrant, dated July 23, 2010 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on July 23, 2010). | |
3.4 | Articles of Amendment of the Registrant, dated December 29, 2010 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on December 29, 2010). |
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Exhibit | Description | |
3.5 | By-Laws of the Registrant, as amended (incorporated by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q filed on April 13, 2010). | |
4.1 | Reference is made to Exhibits 3.1, 3.2, 3.3, 3.4 and 3.5. | |
4.2+ | Form of Common Share Certificate | |
4.3+ | Form of Indenture, to be entered into between GSI Group Inc. and Wilmington Trust, National Association. | |
4.4* | Form of Debt Security. | |
5.1+ | Opinion of Stewart | |
Opinion of Latham & Watkins LLP. | ||
12.1+ | Statement regarding computation of ratio of earnings to fixed charges | |
23.1+ | Consent of Ernst & Young | |
Consent of | ||
Consent of Stewart McKelvey (included in Exhibit 5.1). | ||
Consent of Latham & Watkins LLP (included in Exhibit 5.2). | ||
24.1+ | Power of Attorney (included on the signature | |
25.1+ | Statement of Eligibility of Trustee on Form T-1 |
Filed |
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