As filed with the Securities and Exchange Commission on February 8, 2006
Registration no. 333-______
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
====================================
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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Rural/Metro Corporation
(Exact Name of Registrant as Specified in Its Charter)
Delaware 86-0746929
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
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9221 East Via de Ventura, Scottsdale, Arizona 85258
(480) 606-3886
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
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Michael S. Zarriello
Chief Financial Officer
Rural/Metro Corporation
9221 East Via de Ventura
Scottsdale, Arizona 85258
(480) 606-3886
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
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With copies to:
Christopher E. Kevane, Esq. Todd R. Chandler, Esq.
Rural/Metro Corporation Weil, Gotshal & Manges LLP
9221 East Via de Ventura 767 Fifth Avenue
Scottsdale, Arizona 85258 New York, NY 10153
(480) 606-3886 (212) 310-8172
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after this registration statement becomes effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement from the same offering. [ ]
___________________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] _________________
If this Form is a registration statement pursuant to General
Instruction I.D. or a post-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 Form 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. [ ]
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------- ------------------------------ -------------------------------
Title of Each Class of Securities to be Registered Proposed Maximum Aggregate Amount of Registration Fee
Offering Price
- ------------------------------------------------------- ------------------------------ -------------------------------
Debt Securities (1) N/A
- ------------------------------------------------------- ------------------------------ -------------------------------
Common Stock, $0.01 par value per share (1) N/A
- ------------------------------------------------------- ------------------------------ -------------------------------
Warrants (1) N/A
- ------------------------------------------------------- ------------------------------ -------------------------------
Units (1) N/A
- ------------------------------------------------------- ------------------------------ -------------------------------
Total $120,000,000 (2) $12,840
- ------------------------------------------------------- ------------------------------ -------------------------------
(1) There are being registered hereunder by the Registrant such indeterminate
principal amount of debt securities, such indeterminate number of shares of
common stock, and such indeterminate number of warrants to purchase common
stock, debt securities, or units, and such indeterminate number of units of
the Registrant as shall have an aggregate initial offering price not to
exceed $120,000,000. If any debt securities are issued and/or sold at an
original issue discount, then the securities registered shall include such
additional debt securities as may be necessary such that the aggregate
initial public offering price of all securities issued pursuant to this
Registration Statement will equal $120,000,000. Any securities registered
hereunder may be sold separately or as units with other securities
registered hereunder. The proposed maximum initial offering price per unit
will be determined, from time to time, by the Registrant in connection with
the issuance by the Registrant of the securities registered hereunder.
There are also being registered hereunder by the Registrant an
indeterminate number of shares of common stock as shall be issuable upon
conversion or exercise of any securities that provide for that issuance.
(2) Pursuant to Rule 457(o) and General Instruction II.D. of Form S-3, only the
maximum aggregate offering price of $120,000,000 of all securities
registered hereby is disclosed.
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The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act or until this registration statement shall become effective
on such date as the commission, acting pursuant to section 8(a), may determine.
SUBJECT TO COMPLETION, DATED February 8, 2006
PROSPECTUS
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
================================================================================
$120,000,000
Debt Securities, Common Stock, Warrants and Units
[Rural/Metro Corporation logo]
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We may offer from time to time our debt securities, shares of our common stock,
warrants to purchase any of the other securities that may be sold under this
prospectus, or any combination of these securities, individually or as units, up
to a maximum aggregate dollar amount of $120,000,000.
Our common stock is listed on the NASDAQ Capital Market under the symbol "RURL".
INVESTING IN THESE SECURITIES INVOLVES RISKS. SEE "RISK FACTORS" ON PAGE 2.
---------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------
The date of this prospectus is _____________ , 2006.
TABLE OF CONTENTS
IMPORTANT INFORMATION ABOUT THE INFORMATION PRESENTED
IN THIS PROSPECTUS............................................................ii
WHERE YOU CAN FIND MORE INFORMATION..........................................iii
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE............................iii
SUMMARY........................................................................1
RISK FACTORS...................................................................2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS...........................9
RATIO OF EARNINGS TO FIXED CHARGES............................................10
USE OF PROCEEDS...............................................................11
DESCRIPTION OF DEBT SECURITIES................................................12
DESCRIPTION OF CAPITAL STOCK..................................................21
DESCRIPTION OF WARRANTS.......................................................24
DESCRIPTION OF UNITS..........................................................27
PLAN OF DISTRIBUTION..........................................................30
LEGAL MATTERS.................................................................33
EXPERTS.......................................................................33
IMPORTANT INFORMATION ABOUT THE INFORMATION PRESENTED IN THIS PROSPECTUS
You should rely only on the information in this prospectus and the
information incorporated by reference. We have not authorized anyone to provide
you with different information. We are not offering to sell, or seeking offers
to buy securities in any state where offers or sales are not permitted. We do
not claim the accuracy of the information in this prospectus as of any date
other than the date stated on the cover or that information incorporated by
reference into this prospectus is accurate as of any date other than its
respective date of it being filed with the SEC.
ii
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is a part of a registration statement on Form S-3
that we filed with the U.S. Securities and Exchange Commission (the "SEC"), but
the registration statement includes additional information and also attaches
exhibits that are referenced in this prospectus. We also file annual, quarterly
and current reports, proxy statements and other information with the SEC. Our
SEC filings are available over the Internet at the SEC's web site at
www.sec.gov. You may also read and copy any document that we file with the SEC's
public reference room at:
U.S. Securities and Exchange Commission
Public Reference Room
100 F Street, N.E.
Room 1580
Washington, DC 20549
Please call the SEC at 1-800-SEC-0330 for more information on the
public reference rooms and their copy charges.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
We are "incorporating by reference" into this prospectus certain
information we file with the SEC, which means that we are disclosing important
information to you by referring you to those documents. The information
incorporated by reference is deemed to be part of this prospectus, except for
any information superseded by information contained directly in this prospectus
or in a document subsequently filed which is incorporated by reference into this
prospectus. This prospectus incorporates by reference:
o our Annual Report on Form 10-K for the fiscal year ended June 30,
2005, other than Item 8 and exhibits 32.1 and 32.2 thereto filed
September 28, 2005;
o our Quarterly Report on Form 10-Q for the three months ended
September 30, 2005 filed November 14, 2005;
o our Current Report on Form 8-K filed on October 28, 2005; our
Current Report on Form 8-K/A dated November 14, 2005, which
contains financial information that supersedes Item 8 of our Form
10-K for the fiscal year ended June 30, 2005; our Current Report
on Form 8-K filed on November 23, 2005; our Current Report on
Form 8-K filed on December 14, 2005; our Current Report on Form
8-K filed on December 28, 2005; and our Current Report on Form
8-K filed on January 6, 2006;
o our Proxy Statement relating to our 2005 annual meeting of
stockholders other than Item 8 thereto, filed October 28, 2005;
and
o the description of our common stock set forth in our Registration
Statement on Form 8-A filed on July 8, 1993, including any
amendments or reports filed for the purpose of updating such
description; and our Registration Statement on form 8-A/A filed
on August 29, 2005.
All documents we file with the SEC pursuant to Section 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as amended, from the date of
this prospectus to the end of the offering of securities under this document
shall also be deemed to be incorporated herein by reference and will
automatically update information in this prospectus.
Any statements contained in this prospectus or in a document
incorporated by reference in this prospectus shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus (or in any other subsequently filed document which
also is incorporated by reference in this prospectus) modifies or supersedes
such statement.
We will provide at no cost to each person, including any beneficial
owner, to whom a prospectus is delivered, a copy of these filings if requested
by writing or by calling us at the following address or telephone number:
Corporate Secretary
Rural/Metro Corporation
9221 East Via de Ventura
Scottsdale, Arizona 85258
(480) 606-3886
You should carefully read this prospectus and the documents
incorporated by reference in their entirety. They contain information that you
should consider when making your investment decision.
iii
SUMMARY
The following summary contains information about our business. You
should read this entire prospectus carefully, including the information under
"Risk Factors" and the documents incorporated by reference into this prospectus.
Founded in 1948, we are a leading provider of medical transportation
services, which consist primarily of emergency and non-emergency medical
transportation services. We believe we are the only multi-state provider of both
medical transportation and fire protection services in the United States. We
currently provide services to approximately 365 communities in 22 states,
including many of the fastest-growing states in the nation such as Arizona,
California, Florida, Georgia and New Mexico. As of September 30, 2005, we had
approximately 100 exclusive contracts to provide 911 emergency medical
transportation services and approximately 650 contracts to provide non-emergency
medical transportation services. In addition, we provide non-emergency medical
transportation services to a broad customer base, including a significant number
of hospitals, nursing homes and specialized healthcare facilities on a
non-contractual basis. We provided 1.2 million transports during our fiscal year
ended June 30, 2005. Our objective is to provide our customers with high-quality
care, efficient and reliable response times and cost-effective services.
We provide our medical transportation services under contracts with
governmental entities, hospitals, nursing homes and other healthcare facilities
and organizations. Approximately half of our medical transports are initiated by
911 calls, with the remainder consisting of a variety of non-emergency medical
transports, such as medical transports between hospitals, nursing homes and
specialized healthcare facilities. We believe that providing a mix of emergency
and non-emergency medical transportation services diversifies our revenue base
and permits us to utilize our medical transportation vehicles and workforce more
efficiently. We derive revenue from our medical transportation services through
reimbursements we receive from private insurance companies and government-funded
healthcare programs such as Medicare and Medicaid and, to a lesser extent, from
fees paid to us directly by our individual patients and from government
subsidies paid to us under our 911 contracts. During fiscal 2005, 88% of our net
revenue was generated from our medical transportation and related services.
We provide our private fire protection and related services on a
subscription-fee basis to residential and commercial property owners in three
states and under long-term contracts with fire districts, industrial sites and
airports at 16 sites located in 11 states. Our fire protection services consist
primarily of fire suppression, fire prevention and first responder medical care
which represented 12% of our fiscal 2005 net revenue.
We expanded our business significantly from the late 1970s through
the late 1990s through acquisitions and internal growth, incurring significant
debt in the process. This growth, consisting primarily of mergers and
acquisitions in the 1990s, provided us with significant market presence
throughout the United States. To manage this growth and achieve productivity
gains, we invested in the development of management and operating systems. We
believe that our acquisitions have provided us a strong domestic platform of
core operations with a substantial revenue base and a reputation for quality
service.
During the last several years, we have implemented a number of
operational initiatives designed to improve our financial performance. These
initiatives have included discontinuing operations in approximately 35 markets
that we determined did not fit with our long-term strategy and consolidating our
billing, cash management, payroll, purchasing, account payable and insurance and
risk operations and entering several select new markets.
We are a Delaware corporation. Our principal office is located at
9221 East Via de Ventura, Scottsdale, Arizona 85258, and our telephone number is
(480)-606-3886. Our common stock is traded on the NASDAQ Capital Market under
the symbol "RURL". Our website address is www.ruralmetro.com. No information on,
or accessible through, our website is incorporated into this prospectus, and you
should not consider it part of this prospectus.
1
RISK FACTORS
Investing in the securities involves a high degree of risk. The
following risks could affect our business, financial condition, results of
operations or cash flows. In such a case, you may lose all or part of your
original investment. You should carefully consider the risks described below as
well as the other information and data included in this prospectus, or
incorporated herein by reference or included in any supplement to this
prospectus before making an investment decision with respect to the securities.
WE MAY FAIL TO RECEIVE REIMBURSEMENT FROM THIRD-PARTY PAYERS.
We provide our medical transportation services on a fee-for-service
basis and collect a substantial portion of our revenue from reimbursements from
third-party payers, including government-funded healthcare programs (such as
Medicare and Medicaid) and private insurance programs. We recognize revenue when
we provide medical transportation services; however, the reimbursement process
is complex and there can be lengthy delays before we receive payment. In
addition, third-party payers may disallow, in whole or in part, requests for
reimbursement based on assertions that certain amounts and services are not
reimbursable or that additional supporting documentation is necessary.
Retroactive adjustments made by third-party payers may change amounts realized
from them. We received approximately 90 percent of our medical transportation
fee collections from third-party payers during fiscal 2005 and 2004, including
approximately 28 percent from Medicare, and approximately 14 percent from
Medicaid for both fiscal years. To the extent our claims are not reimbursed or
allowed it could have a material adverse effect on our financial condition,
results of operations and cash flows.
WE MAY NOT BE ABLE TO COLLECT AMOUNTS BILLED DIRECTLY TO UNINSURED INDIVIDUAL
PATIENTS.
We are required to provide emergency medical transportation service
regardless of the ability or willingness of the patient to pay. We face the risk
of non-payment to the extent that uninsured individuals require emergency
medical transportation service in service areas where a subsidy is not provided
by the related municipality or governing authority. Even where such a subsidy is
provided, we may not receive payment for the full amount we bill to the patient.
We also face the risk of increased rates of non-payment should the number of
uninsured individuals using our services increase in our service areas. Our
failure to receive payments with respect to a significant number of individual
patients could result in a material adverse effect on our business, financial
condition, results of operations or cash flows.
CLAIMS AGAINST US COULD EXCEED OUR INSURANCE COVERAGE; WE MAY NOT HAVE COVERAGE
FOR CERTAIN CLAIMS.
We are subject to a significant number of accident, injury and
patient care incident lawsuits as a result of the nature of our business and
day-to-day operations. Some of these lawsuits may involve large claim amounts
and substantial defense costs. In order to minimize the risk of our exposure, we
maintain insurance coverage for workers' compensation, general liability,
automobile liability and professional liability claims. In certain limited
instances we may not have coverage for certain claims. When we do have coverage,
the coverage limits of our policies may not be adequate. Liabilities in excess
of our insurance coverage could have a material adverse effect on our business,
financial condition, results of operations or cash flows. Claims against us,
regardless of their merit or outcome, also may have an adverse effect on our
reputation and business.
OUR CLAIM RESERVES MAY PROVE INADEQUATE.
Under our insurance programs, we are responsible for deductibles and
self-insurance retentions in varying amounts. We have established reserves for
losses and loss adjustment expenses under these policies based on our historical
experience, industry data, judgments relating to the effect of future economic
and social forces on the type of risk involved, circumstances surrounding
individual claims and trends that may affect the number and nature of claims.
Consequently, loss reserves are inherently uncertain and subject to a number of
circumstances difficult to predict. For these reasons, we cannot assure you that
our ultimate liability will not materially exceed our reserves at any point. If
our reserves prove to be inadequate, we will be required to increase our
reserves with a corresponding charge to operations in the period in which the
deficiency is identified and such charge could be material.
2
WE MAY EXPERIENCE FUTURE INCREASES IN THE COST OF OUR INSURANCE PROGRAMS THAT
COULD ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS
OR CASH FLOWS.
An increase in our claim experience may result in increases in our
insurance premiums. If we experience increases in our premiums, it could have a
material adverse effect on our business, financial condition, results of
operations or cash flows.
TWO INSURANCE COMPANIES WITH WHICH WE HAVE PREVIOUSLY DONE BUSINESS ARE IN
LIQUIDATION PROCEEDINGS, AND WE MAY BE REQUIRED TO COVER A PORTION OF CLAIMS
COVERED BY THESE INSURERS AND LOSE DEPOSITS WE HAVE WITH THEM.
Two of our previous workers' compensation and general liability
programs insurers, Reliance Insurance Company ("Reliance"), from whom we
purchased coverage for policy years 1992 through 2000, and Legion Insurance
Company ("Legion"), from whom we purchased coverage in 2001 and 2002, are
currently in liquidation proceedings in Pennsylvania. In the event that we incur
workers' compensation or general liability claims for the policy years covered
by these insurers and they are not covered by the applicable insurer or state
guaranty fund, we may be required to fund any losses related to such claims. As
of September 30, 2005, we had $1.2 million of cash on deposit with Reliance and
$2.2 million of cash on deposit with Mutual Indemnity, a Legion affiliate. The
liquidation proceedings may result in the loss of all or part of the collateral
and/or funds currently held by these insurers, and may result in restricted
access to both insurance and reinsurance proceeds relating to our general
liability program. A requirement to fund significant claims or the loss of some
or all of the amounts on deposit could have a material adverse effect on our
business, financial condition, result of operations and cash flows.
OUR REVENUES MAY DECLINE IF MEDICARE REDUCES THE REIMBURSEMENTS IT PAYS TO US OR
CHANGES ITS PROGRAMS.
Our revenues may decline if Medicare reduces its reimbursement rates
or otherwise changes its current Medicare fee schedule. We received
approximately 28 percent of our medical transportation fee collections from
Medicare during both fiscal 2005 and 2004. Any reductions in reimbursement rates
or other changes to the Medicare fee schedule could result in a reduction in
reimbursements we receive for our medical transportation services.
SOME STATE AND LOCAL GOVERNMENTS REGULATE OUR RATE STRUCTURES AND MAY LIMIT OUR
ABILITY TO INCREASE OUR RATES OR MAINTAIN A SATISFACTORY RATE STRUCTURE.
State or local government regulations or administrative policies
regulate the rates we can charge in some states for medical transportation
services. For example, the State of Arizona establishes the rates we may charge
in the various communities we serve in that state. Medical transportation
services revenue generated in Arizona accounted for approximately 24 percent and
22 percent of net revenue for fiscal 2005 and 2004, respectively. In some
service areas in other states in which we are the exclusive provider of
services, the municipality or fire district sets the rates for emergency medical
transportation services pursuant to a master contract and establishes the rates
for general medical transportation services that we are permitted to charge. In
areas where we are regulated, there is no assurance that we will receive medical
transportation service rate increases on a timely basis, or at all.
Due to budget deficits in many states, significant decreases in state
funding for Medicaid programs have occurred or are proposed. Some states have
reduced the scope of Medicaid eligibility and coverage. For example, patients
covered by Medicare are required to make a 20% co-payment for medical
transports. In most states, Medicaid makes this co-payment on behalf of its
insureds (this is called a "cross-over payment"). Indiana recently passed
legislation eliminating crossover payments by Medicaid and prohibiting medical
transportation providers from collecting the 20% co-payment from patients. Other
states have proposed taking similar steps.
If we are not able to charge and collect satisfactory rates in one or
more of the communities in which we operate it could have a material adverse
effect on our revenues, results of operations or cash flows.
OUR BUSINESS IS SUBJECT TO LAWS, RULES AND REGULATIONS THAT CAN IMPOSE FINES,
PENALTIES OR OTHER LIABILITIES, REVOKE NECESSARY LICENSES OR OTHERWISE CAUSE
MATERIAL ADVERSE EFFECTS.
Numerous laws, rules and regulations govern the medical
transportation and fire fighting service business covering matters such as
licensing, rates, employee certification, environmental matters and radio
communications. Certificates of Need that certain states may employ to award
market rights to geographic areas may change. Master contracts from governmental
authorities are subject to risks of cancellation or unenforceability as a result
of budgetary and other factors and may subject us to certain liabilities or
restrictions.
3
In addition, certain governmental actions could:
o change existing laws, rules or regulations;
o adopt new laws, rules or regulations that increase our cost of
doing business;
o lower reimbursement levels; or
o otherwise adversely affect our business, financial condition,
results of operations or cash flows.
Any failure to comply with all, or any changes in, applicable laws,
rules and regulations could result in the revocation of contracts or licenses to
conduct business in the relevant jurisdictions, fines or cause other material
adverse effects. Federal and state laws also can require the owner or operator
of real property to clean up historic contamination (or pay for that cleanup),
without regard to fault.
IF WE FAIL TO COMPLY WITH APPLICABLE LAWS AND GOVERNMENT REGULATIONS, WE COULD
SUFFER PENALTIES OR BE REQUIRED TO MAKE SIGNIFICANT CHANGES TO OUR OPERATIONS.
We are subject to extensive regulation at both the federal and state
levels. The laws that directly or indirectly affect our ability to operate our
business include the following:
o federal laws (including the Federal False Claims Act) that
prohibit entities and individuals from knowingly or recklessly
making claims to Medicare, Medicaid and other government
programs, as well as third-party payers, that contain false or
fraudulent information;
o a provision of the Social Security Act, commonly referred to as
the "anti-kickback statute," that prohibits the knowing and
willful offering, payment, solicitation or receipt of any bribe,
kickback, rebate or other remuneration in return for the referral
or recommendation of patients for items and services covered, in
whole or in part, by federal healthcare programs, such as
Medicare and Medicaid;
o a provision of the Social Security Act that imposes criminal
penalties on healthcare providers who fail to disclose or refund
known overpayments;
o similar state law provisions pertaining to anti-kickback,
self-referral and false claims issues which typically are not
limited to relationships with federal payers;
o provisions of the Health Insurance Portability and Accountability
Act of 1996 ("HIPAA") that prohibit knowingly and willfully
executing a scheme or artifice to defraud any healthcare benefit
program or falsifying, concealing or covering up a material fact
or making any material false, fictitious or fraudulent statement
in connection with the delivery of or payment for healthcare
benefits, items or services;
o federal laws that impose civil administrative sanctions for,
among other violations, inappropriate billing of services to
federally funded healthcare programs, and employing individuals
who are excluded from participation in federally funded
healthcare programs;
o reassignment of payment rules that prohibit certain types of
billing and collection practices in connection with claims
payable by the Medicare and Medicaid programs and some other
payers programs and some other payers;
o provisions of HIPAA limiting how healthcare providers may use and
disclose individually identifiable health information and the
security measures taken in connection with that information and
related systems, as well as similar state laws; and
o federal and state laws governing medical transport services,
including the licensing or certification of medical
transportation service providers, training and certification of
medical personnel, the scope of services that may be provided by
medical personnel, staffing requirements, medical control,
medical procedures, communications systems, vehicles and
equipment.
If our operations are found to be in violation of any of the laws and
regulations described above or the other laws and regulations which govern our
activities, we may be subject to penalties, including civil and criminal
penalties, exclusion from federal healthcare programs, damages, fines and the
curtailment of our operations. Any material penalties, individually or in the
4
aggregate, would adversely affect our ability to operate our business and our
financial results. The risk of our being found in violation of these laws and
regulations is increased by the fact that many of them have not been fully
interpreted by the regulatory authorities or the courts, and their provisions
are sometimes open to a variety of interpretations. Any action against us for
violation of these laws or regulations, even if we successfully defend against
it, could cause us to incur significant legal expenses and divert our
management's attention from the operation of our business.
Healthcare laws and regulations may change significantly in the
future. We monitor these developments and modify our operations from time to
time where we perceive a need to do so in response to the regulatory changes.
However, we cannot assure you that any new healthcare laws or regulations will
not materially adversely affect our business. We cannot assure you that a review
of our business by judicial, law enforcement, or regulatory authorities will not
result in a determination that could adversely affect our operations or that
healthcare regulation will not change in a way that may have a material adverse
effect on our business, financial condition, results of operations or cash
flows.
HIPAA REGULATIONS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS EITHER IF
WE FAIL TO COMPLY WITH THE REGULATIONS OR AS A RESULT OF THE COSTS ASSOCIATED
WITH COMPLIANCE.
The privacy standards under HIPAA took effect April 14, 2001 and
cover all individually identifiable health information used or disclosed by a
healthcare provider. HIPAA establishes standards concerning the privacy,
security and the electronic transmission of patients' health information. Under
the statute, there are civil penalties of up to $100 per violation (not to
exceed $25,000 per calendar year for each type of violation) and criminal
penalties for knowing violations of up to $250,000 per violation. The enforcing
agency, the Office of Civil Rights (the "OCR") of the Department of Health and
Human Services, has announced a compliance-based and compliance improvement type
of enforcement program. We believe there is not sufficient basis to understand
OCR's enforcement posture and the potential for fines which may result from
OCR's finding of a violation of the privacy regulations. The significant costs
associated with compliance and the potential penalties as a result of our
failure to comply with the rule could result in a material adverse effect on our
business, financial condition, results of operations or cash flows.
The final security rule, which became effective April 20, 2005,
requires healthcare suppliers and other entities to set security standards for
health information and to maintain reasonable and appropriate safeguards to
ensure the integrity and confidentiality of this information. It also requires
that we protect health information against unauthorized use or disclosure. We
believe we have developed the appropriate policies and procedures to comply with
the final security rule. Failure to do so could result in a material adverse
effect on our business, financial condition, results of operations or cash
flows.
We could experience a material adverse effect on our business,
financial condition, results of operations, or cash flows due to: (i)
significant costs associated with continued compliance under HIPAA or related
legislative enactments; (ii) potential fines from our noncompliance; (iii)
adverse effects on our collection cycle arising from non-compliance or delayed
HIPAA compliance by our payers, customers and other constituents; or (iv)
impacts to the healthcare industry as a whole that may directly or indirectly
cause a material adverse effect on our business.
PROVIDERS AND SUPPLIERS IN THE HEALTH CARE INDUSTRY, SUCH AS US, ARE THE SUBJECT
OF FEDERAL AND STATE INVESTIGATIONS RELATED TO BILLING AND OTHER MATTERS.
Both federal and state government agencies have pursued civil and
criminal enforcement efforts related to billing and other matters as part of
numerous ongoing investigations of healthcare companies and their executives and
managers. Although there are a number of civil and criminal statutes that can be
applied to healthcare providers, a significant number of these investigations
involve the Federal False Claims Act. These investigations can be initiated not
only by the government but also by a private party asserting direct knowledge of
fraud. These "qui tam" whistleblower lawsuits may be initiated against any
person or entity alleging such person or entity has knowingly or recklessly
presented, or caused to be presented, a false or fraudulent request for payment
from the federal government, or has made a false statement or used a false
record to get a claim approved. Penalties for False Claims Act violations
include fines ranging from $5,500 to $11,000 for each false claim, plus up to
three times the amount of damages sustained by the federal government. A False
Claims Act violation may provide the basis for exclusion from the
federally-funded healthcare programs. In addition, some states have adopted
similar insurance fraud, whistleblower and false claims provisions.
5
From time to time, we receive requests and subpoenas for information
from government agencies in connection with their regulatory and investigative
authority, and are likely to be subject to such requests and subpoenas for
information in the future. We review such requests and subpoenas and attempt to
take appropriate action. We are also subject to requests and subpoenas for
information in independent investigations. A determination by a regulatory or
investigative authority in any of these investigations that we have violated the
Federal False Claims Act or another civil or criminal statute could result in
significant penalties or exclusion from federally-funded or other healthcare
programs, which could result in a material adverse effect on our business,
financial condition, results of operations or cash flows.
WE ARE THE SUBJECT OF CERTAIN LAWSUITS AND OTHER PROCEEDINGS, WHICH IF
DETERMINED ADVERSELY TO US, COULD HARM OUR BUSINESS.
We are a party to, or otherwise involved in, lawsuits, claims,
proceedings and other legal matters that have arisen in the ordinary course of
conducting our business. We cannot predict with certainty the ultimate outcome
of any of these actions to which we are a party to, or otherwise involved in,
due to, among other things, the inherent uncertainties of litigation and
government investigations and proceedings. An unfavorable outcome in any of the
lawsuits pending against us could result in substantial potential liabilities
and have a material adverse effect on our business, financial condition, results
of operations or cash flows. Further, these actions could result in substantial
potential liabilities, additional defense and other costs, increase our
indemnification obligations, divert management's attention, and/or adversely
affect our ability to execute our business and financial strategies.
WE ARE DEPENDENT ON MAINTAINING OUR BUSINESS RELATIONSHIPS.
We depend to a great extent on contracts with municipalities or fire
districts to provide emergency medical transportation services. The services we
provide in our ten largest contracts accounted for approximately 35 percent and
36 percent of net revenue for fiscal 2005 and 2004, respectively. Contracts or
other agreements with municipalities, counties or fire districts may have
certain budgetary approval constraints. Failure to allocate funds for a contract
may adversely affect our ability to continue to perform services without
suffering significant losses. In addition, most of our contracts are terminable
by either party upon agreed notice periods or upon the occurrence of certain
events of default. We may not be successful in retaining our existing contracts
or in obtaining new contracts for emergency medical transportation or other
services. The loss or cancellation of several of these contracts could have a
material adverse effect on our business, financial condition, results of
operations or cash flows.
AREAS IN WHICH WE PROVIDE SUBSCRIPTION FIRE PROTECTION SERVICES MAY BE CONVERTED
TO TAX-SUPPORTED FIRE DISTRICTS OR ANNEXED BY MUNICIPALITIES.
We provide residential and commercial fire protection services on a
subscription-fee basis to property owners in unincorporated areas who do not
receive services through municipal fire departments, volunteer fire departments
or fire protection districts. If several of the areas in which we provide
subscription services were to convert to tax-supported fire districts or be
annexed by municipalities, the loss of those arrangements could have a material
adverse effect on our business, financial condition, results of operations or
cash flows.
WE MAY NOT ACCURATELY ASSESS THE COSTS OF OR REVENUES GENERATED BY NEW
CONTRACTS, WHICH COULD ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITIONS,
RESULTS OF OPERATIONS OR CASH FLOWS.
Our new contracts increasingly involve a competitive bidding process.
When we obtain new contracts, we must accurately assess the costs we will incur
in providing services, as well as other factors such as expected transport
volume, geographical issues affecting response time and the implementation of
technology upgrades, in order to realize adequate profit margins or otherwise
meet our financial and strategic objectives. Increasing pressures from
healthcare payers to restrict or reduce reimbursement rates at a time when the
costs of providing medical services continue to increase make assessing the
costs associated with the pricing of new contracts, as well as maintenance of
existing contracts, more difficult. In addition, integrating new contracts,
particularly those in new geographic locations, could prove more costly, and
could require more management time, than we anticipate. Our failure to
accurately predict costs or to negotiate an adequate profit margin could have a
material adverse effect on our business, financial condition, results of
operations or cash flows. We face risks in attempting to terminate unfavorable
contracts prior to their stated termination date because of the possibility of
forfeiting performance bonds and the potential material adverse effect on our
public relations, business, financial condition, results of operations or cash
flows.
6
WE ARE IN A HIGHLY COMPETITIVE INDUSTRY. IF WE DO NOT COMPETE EFFECTIVELY, WE
COULD LOSE BUSINESS OR FAIL TO GROW.
The medical transportation service industry is highly competitive. We
compete to provide our emergency medical transportation services with
governmental entities, hospitals, local and volunteer private providers and
private providers, including national and regional providers such as American
Medical Response. In order to compete successfully, we must make continuing
investments in our fleet, facilities, and operating systems. We believe that
counties, fire districts and municipalities and health-care institutions
consider the following factors in awarding a contract:
o quality of medical care;
o historical response time performance;
o customer service;
o financial stability;
o personnel policies and practices;
o managerial strength; and
o cost
Some of our current medical transportation competitors and certain
potential competitors may have access to greater capital and other resources
than us. Counties, municipalities, fire districts and healthcare organizations
that currently contract for medical transportation services could choose to
provide medical transportation services directly in the future. We are
experiencing increased competition from fire departments in providing emergency
medical transportation service. We cannot assure you that we will be able to
compete successfully to provide our medical transportation services.
In the fire protection sector, municipal fire departments,
tax-supported fire districts and volunteer fire departments represent the
principal providers of fire protection services for residential and commercial
properties. Private companies such as us represent only a small portion of the
total fire protection market and generally provide services where a
tax-supported municipality or fire district has decided to contract for these
services or has not assumed the financial responsibility for fire protection. In
those situations, we provide services for a municipality or fire district on a
contract basis or provide fire protection services directly to residences and
businesses who subscribe for this service. Private providers, such as Wackenhut
Services, Inc., also provide fire protection services to airports and industrial
sites.
We cannot assure you that:
o we will be able to continue to maintain current contracts or
subscriptions or to obtain additional fire protection business on
a contractual or subscription-fee basis;
o fire districts or municipalities will not choose to provide fire
protection services directly in the future; or
o we will be able to compete successfully with private providers of
fire protection services.
THE DEPARTURE OF OUR KEY MANAGEMENT COULD ADVERSELY AFFECT OUR BUSINESS,
FINANCIAL CONDITION, RESULTS OF OPERATIONS OR CASH FLOWS.
Our success depends upon our ability to recruit and retain key
management personnel. We could experience difficulty in retaining our current
key management personnel or in attracting and retaining necessary additional key
management personnel. We have entered into employment agreements with some, but
not all, of our executive officers and certain other key management personnel.
Failure to retain or replace our key management may have an adverse effect on
our business, financial condition, results of operations or cash flows.
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WE MAY NOT BE ABLE TO RECRUIT AND RETAIN SUCCESSFULLY HEALTHCARE PROFESSIONALS
WITH THE QUALIFICATIONS AND ATTRIBUTES DESIRED BY US AND OUR CUSTOMERS.
Our ability to recruit and retain healthcare professionals
significantly affects our business. Medical personnel shortages in some of our
market areas currently make the recruiting, training and retention of full-time
and part-time personnel more difficult and costly. Our internal growth will
require the addition of new personnel. Failure to retain or replace our medical
personnel or to attract new personnel may have an adverse effect on our
business, financial condition, results of operations or cash flows.
WE MAY NOT PAY DIVIDENDS.
We have never paid any cash dividends on our common stock. We
currently plan to retain any earnings for use in our business rather than to pay
cash dividends. Payments of any cash dividends in the future will depend on our
financial condition, results of operations and capital requirements as well as
other factors deemed relevant by our Board of Directors. Our senior subordinated
notes due 2015, senior discount notes due 2016 and our credit facilities contain
restrictions on our ability to pay cash dividends, and any future borrowings may
contain similar restrictions.
IT MAY BE DIFFICULT FOR THIRD PARTY TO ACQUIRE US, AND THIS COULD DEPRESS OUR
STOCK PRICE.
We are a Delaware corporation which has adopted a shareholder rights
plan pursuant to which we issued one preferred stock purchase right, for each
outstanding share of common stock. See "Description of Capital Stock - Preferred
Stock" and "Description of Capital Stock - Shareholder Rights Plan." Our
shareholder rights plan could make it difficult for a third party to acquire us,
even if doing so would benefit security holders. The rights issued under the
plan have certain anti-takeover effects. The rights will cause substantial
dilution to a person or group that attempts to acquire us in a manner or on
terms not approved by our Board of Directors. Anti-takeover provisions in
Delaware corporate law, certain provisions of our charter and our shareholder
rights plan which operates as a "poison pill," could depress our stock price and
may result in entrenchment of existing management and directors, regardless of
their performance.
8
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this prospectus and the documents we
incorporate by reference that are not purely historical are forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act of 1934, as amended, including without
limitation, statements regarding our management's expectations, hopes, beliefs,
intentions or strategies regarding the future. These statements may use words
such as "anticipate," "believe," "estimate," "expect," "intend," "predict,"
"may," "will," "should," "if," "project" and similar expressions as they relate
to us or our management. These forward-looking statements are based on our
current expectations and beliefs concerning future developments and their
potential effects on us. There can be no assurance that future developments
affecting us will be those that we have anticipated. These forward-looking
statements involve a number of risks, uncertainties (some of which are beyond
our control) or other assumptions that may cause actual results or performance
to be materially different from those expressed or implied by such
forward-looking statements. As described in this prospectus, such risks and
include, among others:
o our failure to receive reimbursement by third-party payers and
payment from individual patients;
o material increases in the cost of insurance;
o insufficient or no insurance coverage for certain claims;
o inadequate claim reserves;
o the financial distress of two of our previous insurers;
o reductions in the reimbursements we receive from third-party
payers;
o state and local governmental rate structure regulation;
o other governmental regulation, including regulation under the
Health Insurance Portability and Accountability Act;
o federal and state investigations under civil and criminal statues
applicable to the healthcare industry;
o the outcome of certain lawsuits and governmental investigations
to which we are subject;
o our dependence on certain business relationships;
o the conversion of areas in which we provide subscription fire
protection services to tax-supported fire districts;
o accurately assessing the costs of revenues generated by new
contracts;
o the level of competition in our industry;
o retaining and attracting key management personnel and healthcare
professionals; and
o other risks described in "Risk Factors."
We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, after the date of this prospectus to conform them to actual
results. We do not, nor does any other person, assume responsibility for the
accuracy and completeness of those statements. All the forward-looking
statements are qualified in their entirety by reference to the factors discussed
under the caption "Risk Factors."
9
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated ratio of earnings to
fixed charges of Rural/Metro Corporation and its subsidiaries for each of the
five years in the period ended June 30, 2005 and the three months ended
September 30, 2005.
THREE ---------------------------------------------------------
MONTHS YEARS ENDED JUNE 30,
ENDED ---------------------------------------------------------
SEPTEMBER
30, 2005 2005 2004 2003 2002 2001
-------- -------- -------- -------- -------- --------
RATIO OF EARNINGS TO FIXED CHARGES(a) (unaudited)
1.88x 1.11x 1.03x * * *
(a) For purposes of computing the consolidated ratio of earnings to fixed
charges, earnings consist of pretax income from continuing operations
before minority interests and equity in net earnings (losses) of affiliated
companies, extraordinary items and cumulative effect of accounting changes
plus fixed charges. Minority interests in majority-owned subsidiaries were
not deducted from earnings as all such subsidiaries had fixed charges.
Fixed charges consist of interest (including capitalized interest) on all
indebtedness, amortization of debt discount and expense and that portion of
rental expense which we believe to be representative of interest. A
statement setting forth the computation of the unaudited consolidated
ratios of earnings to fixed charges is filed as Exhibit 12.1 to the
registration statement that includes this prospectus.
* Earnings were insufficient to cover fixed charges by $8.5 million, $7.6
million and $115.5 million for the fiscal years ended June 30, 2003, 2002
and 2001, respectively.
10
USE OF PROCEEDS
Unless otherwise indicated in the prospectus supplement, the net
proceeds from the sale of securities offered by this prospectus may be used for
the redemption or repayment of debt, the acquisition of businesses, capital
expenditures, working capital needs and other general corporate purposes. In
addition, a portion of the proceeds of any offering of securities will be used
to pay the expenses of such offering. Pending such uses, we anticipate that we
will invest the net proceeds in interest-bearing securities.
11
DESCRIPTION OF DEBT SECURITIES
This section outlines some of the indentures, and the debt securities
we may offer. This information may not be complete in all respects and is
qualified entirely by reference to the indentures under which the debt
securities are issued. These indentures are incorporated by reference as
exhibits to the registration statement of which this prospectus is a part. This
information relates to certain terms and conditions that generally apply to the
debt securities. The specific terms of any series of debt securities will be
described in a prospectus supplement. If so described in a prospectus
supplement, the terms of that series may differ from the general description of
the terms presented below.
The senior debt securities are to be issued in one or more series
under an indenture, as supplemented or amended from time to time between us and
an institution that we will name in the related prospectus supplement, as
trustee. For ease of reference, we will refer to the indenture relating to
senior debt securities as the senior indenture and we will refer to the trustee
under that indenture as the senior trustee. The subordinated debt securities are
to be issued in one or more series under an indenture, as supplemented or
amended from time to time, between us and an institution that we will name in
the related prospectus supplement, as trustee. For ease of reference, we will
refer to the indenture relating to subordinated debt securities as the
subordinated indenture and we will refer to the trustee under that indenture as
the subordinated trustee.
GENERAL
The debt securities will be issuable in one or more series pursuant
to the applicable indenture and a supplemental indenture relating to such series
of debt. Unless otherwise specified in a prospectus supplement, each series of
senior debt securities will rank equally in right of payment with all of our
other senior obligations. Each series of subordinated debt securities will be
subordinated and junior in right of payment to the extent and in the manner set
forth in the subordinated indenture and any supplemental indenture relating to
that debt. In addition, such subordinated debt securities may rank equal or
senior in right of payment to other subordinated indebtedness which may have
been issued or will be issued in the future. Except as otherwise provided in a
prospectus supplement, the indentures will not limit our incurrence or issuance
of other secured or unsecured debt, whether under the indentures, any other
indenture that we may enter into in the future or otherwise. For more
information, you should read the prospectus supplement relating to a particular
offering of securities.
The applicable prospectus supplement or prospectus supplements will
describe the following terms of each series of debt securities:
o the title of the debt securities and whether such series constitutes
senior debt securities or subordinated debt securities;
o any limit upon the aggregate principal amount of the debt securities;
o the percentage of principal amount at which the debt securities will
be issued;
o the date or dates on which the principal of the debt securities is
payable or the method of that determination or our right, if any, to
defer payment of principal;
o the rate or rates, if any, at which the debt securities will bear
interest (including reset rates, if any, and the method by which any
such rate will be determined), the interest payment dates on which
interest will be payable and our right, if any, to defer any interest
payment;
o the place or places where, subject to the terms of the indenture as
described below under the caption "Payment and Paying Agents," the
principal of and premium, if any, and interest, if any, on the debt
securities will be payable and where, subject to the terms of the
indenture as described below under the caption "Denominations,
Registration and Transfer," we will maintain an office or agency where
debt securities may be presented for registration of transfer or
exchange and the place or places where notices and demands to or upon
us in respect of the debt securities and the indenture may be made;
o any period or periods within, or date or dates on which, the price or
prices at which and the terms and conditions upon which debt
securities may be redeemed, in whole or in part, at our option
pursuant to any sinking fund or otherwise;
12
o our obligation to redeem or purchase the debt securities pursuant to
any sinking fund or analogous provisions or at the option of a holder
and the period or periods within which, the price or prices at which,
the currency or currencies including currency unit or units, in which,
and the other terms and conditions upon which, the debt securities
will be redeemed or purchased, in whole or in part, pursuant to such
obligation;
o the denominations in which any debt securities will be issuable if
other than denominations of $1,000 and any integral multiple thereof;
o if other than in United States dollars, the currency or currencies,
including currency unit or units, in which the principal of, and
premium, if any, and interest, if any, on the debt securities will be
payable, or in which the debt securities shall be denominated;
o any additions, modifications, or deletions in the events of default or
covenants specified in the indenture with respect to the debt
securities;
o if other than the principal amount, the portion of the principal
amount of debt securities that will be payable upon declaration of
acceleration of the maturity thereof;
o any additions or changes to the indenture with respect to a series of
debt securities that will be necessary to permit or facilitate the
issuance of the series in bearer form, registrable or not registrable
as to principal, and with or without interest coupons;
o any index or indices used to determine the amount of payments of
principal of and premium, if any, on the debt securities and the
manner in which such amounts will be determined;
o subject to the terms of the indenture as described below under the
caption "Global Debt Securities," whether the debt securities of the
series will be issued in whole or in part in the form of one or more
global securities and, in such case, the depositary for the global
securities;
o the appointment of any trustee, registrar, paying agent, or agents;
o the terms and conditions of any obligation or right of a holder to
convert or exchange debt securities into preferred securities or other
securities;
o whether the defeasance and covenant defeasance provisions described
under the caption "Satisfaction and Discharge; Defeasance" will be
inapplicable or modified;
o any applicable subordination provisions in addition to those set forth
herein with respect to subordinated debt securities; and
o any other terms of the debt securities not inconsistent with the
provisions of the applicable indenture.
We may sell debt securities at a substantial discount below their
stated principal amount, bearing no interest or interest at a rate which at the
time of issuance is below market rates. We will describe material United States
federal income tax consequences and special considerations applicable to those
debt securities in the applicable prospectus supplement.
If the purchase price of any of the debt securities is payable in one
or more foreign currencies or currency units or if any debt securities are
denominated in one or more foreign currencies or currency units or if the
principal of, premium, if any, or interest, if any, on any debt securities is
payable in one or more foreign currencies or currency units, we will set forth
the restrictions, elections, material United States federal income tax
considerations, specific terms, and other information with respect to such issue
of debt securities and such foreign currency or currency units in the applicable
prospectus supplement.
If any index is used to determine the amount of payments of
principal, premium, if any, or interest on any series of debt securities, we
will describe the material United States federal income tax, accounting, and
other considerations applicable thereto in the applicable prospectus supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable prospectus supplement,
the debt securities will be issuable only in registered form, without coupons,
in denominations of $1,000 and any integral multiple thereof. Debt securities of
any series will be exchangeable for other debt securities of the same issue and
series, of any authorized denominations of a like aggregate principal amount,
having the same original issue date and stated maturity and bearing the same
interest rate.
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Holders may present each series of debt securities for exchange as
provided above, and for registration of transfer, with the form of transfer
endorsed thereon, or with a satisfactory written instrument of transfer, duly
executed, at the office of the appropriate securities registrar or at the office
of any transfer agent designated by us for such purpose and referred to in the
applicable prospectus supplement, without service charge and upon payment of any
taxes and other governmental charges as described in the indenture. We will
appoint the trustee of each series of debt securities as securities registrar
for such series under the indenture. If the applicable prospectus supplement
refers to any transfer agents, in addition to the securities registrar initially
designated by us with respect to any series, we may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, provided that we maintain a transfer
agent in each place of payment for the series. We may at any time designate
additional transfer agents with respect to any series of debt securities.
In the event of any redemption, neither we nor the trustee will be
required to:
o issue, register the transfer of or exchange debt securities of any
series during a period beginning at the opening of business 15 days
before the day of mailing of a notice for redemption of debt
securities of that series, and ending at the close of business on the
day of mailing of the relevant notice of redemption; or
o transfer or exchange any debt securities so selected for redemption,
except, in the case of any debt securities being redeemed in part, any
portion not being redeemed.
GLOBAL DEBT SECURITIES
Unless otherwise specified in the applicable prospectus supplement,
the debt securities of a series may be issued in whole or in part in the form of
one or more global securities that we will deposit with, or on behalf of, a
depositary identified in the prospectus supplement relating to such series.
Global debt securities may be issued only in fully registered form and in either
temporary or permanent form. Unless and until it is exchanged in whole or in
part for the individual debt securities represented by it, a global debt
security may not be transferred except as a whole by the depositary for the
global debt security to a nominee of the depositary, or by a nominee of the
depositary to the depositary or another nominee of the depositary, or by the
depositary or any nominee to a successor depositary or any nominee of the
successor.
The specific terms of the depositary arrangement with respect to a
series of debt securities will be described in the prospectus supplement
relating to the series. We anticipate that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a global debt security and the deposit of the
global debt security with or on behalf of the applicable depositary, the
depositary for the global debt security, or its nominee, will credit on its
book-entry registration and transfer system the respective principal amounts of
the individual debt securities represented by the global debt security to the
accounts of persons, more commonly known as participants, that have accounts
with the depositary. These accounts will be designated by the dealers,
underwriters or agents with respect to the debt securities or by us if the debt
securities are offered and sold directly by us. Ownership of beneficial
interests in a global debt security will be limited to participants or persons
that may hold interests through participants. Ownership of beneficial interests
in the global debt security will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the applicable depositary
or its nominee with respect to interests of participants and the records of
participants with respect to interests of persons who hold through participants.
The laws of some states require that certain purchasers of securities take
physical delivery of the securities in definitive form. These limits and laws
may impair the ability to transfer beneficial interests in a global debt
security.
So long as the depositary for a global debt security, or its nominee,
is the registered owner of the global debt security, the depositary or its
nominee, as the case may be, will be considered the sole owner or holder of the
debt securities represented by the global debt security for all purposes under
the indenture. Except as provided below, owners of beneficial interests in a
global debt security will not be entitled to have any of the individual debt
securities of the series represented by the global debt security registered in
their names, will not receive or be entitled to receive physical delivery of any
debt securities of the series in definitive form, and will not be considered the
owners or holders of them under the indenture.
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Payments of principal of, and premium, if any, and interest on
individual debt securities represented by a global debt security registered in
the name of a depositary or its nominee will be made to the depositary or its
nominee, as the case may be, as the registered owner of the global debt security
representing the debt securities. None of us, the trustee, any paying agent or
the securities registrar for the debt securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interest of the global debt security for the debt
securities or for maintaining, supervising or reviewing any records relating to
those beneficial ownership interests.
We expect that the depositary for a series of debt securities or its
nominee, upon receipt of any payment of principal, premium, or interest in
respect of a permanent global debt security representing any of the debt
securities, immediately will credit participants' accounts with payments in
amounts proportionate to their respective beneficial interest in the principal
amount of the global debt security for the debt securities as shown on the
records of the depositary or its nominee. We also expect that payments by
participants to owners of beneficial interests in the global debt security held
through the participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of customers
in bearer form or registered in "street name." These payments will be the
responsibility of these participants.
Unless otherwise specified in the applicable prospectus supplement,
if the depositary for a series of debt securities is at any time unwilling,
unable, or ineligible to continue as depositary and a successor depositary is
not appointed by us within 90 days, we will issue individual debt securities of
the series in exchange for the global debt security representing the series of
debt securities. In addition, unless otherwise specified in the applicable
prospectus supplement, we may at any time and in our sole discretion, subject to
any limitations described in the prospectus supplement relating to the debt
securities, determine not to have any debt securities of the series represented
by one or more global debt securities and, in such event, will issue individual
debt securities of the series in exchange for such global debt securities.
Further, if we so specify with respect to the debt securities of a series, an
owner of a beneficial interest in a global debt security representing debt
securities of the series may, on terms acceptable to us, the trustee and the
depositary for the global debt security, receive individual debt securities of
the series in exchange for such beneficial interests, subject to any limitations
described in the prospectus supplement relating to the debt securities. In any
such instance, an owner of a beneficial interest in a global debt security will
be entitled to physical delivery of individual debt securities of the series
represented by the global debt security equal in principal amount to its
beneficial interest and to have the debt securities registered in its name.
Individual debt securities of the series so issued will be issued in
denominations, unless otherwise specified by us, of $1,000 and integral
multiples thereof. The applicable prospectus supplement may specify other
circumstances under which individual debt securities may be issued in exchange
for the global debt security representing any debt securities.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable prospectus supplement,
payment of principal of, and premium, if any, and any interest on debt
securities will be made at the office of the trustee or at the office of such
paying agent or paying agents as we may designate from time to time in the
applicable prospectus supplement, except that at our option, payment of any
interest may be made:
o except in the case of global debt securities, by check mailed to the
address of the person or entity entitled thereto as such address shall
appear in the securities register; or
o by transfer to an account maintained by the person or entity entitled
thereto as specified in the securities register, provided that proper
transfer instructions have been received by the regular record date.
Unless otherwise indicated in the applicable prospectus supplement,
we will make payment of any interest on debt securities to the person or entity
in whose name the debt security is registered at the close of business on the
regular record date for the interest payment, except in the case of defaulted
interest. We may at any time designate additional paying agents or rescind the
designation of any paying agent; however, we will at all times be required to
maintain a paying agent in each place of payment for each series of debt
securities.
15
Any monies deposited with the trustee or any paying agent, or held by
us in trust, for the payment of the principal of, and premium, if any, or
interest on any debt security and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable will, at
our request, be repaid to us or released from such trust, as applicable, and the
holder of the debt security will thereafter look, as a general unsecured
creditor, only to us for payment.
OPTION TO DEFER INTEREST PAYMENTS OR TO PAY-IN-KIND
If provided in the applicable prospectus supplement, we will have the
right, at any time and from time to time during the term of any series of debt
securities, to defer the payment of interest for such number of consecutive
interest payment periods as may be specified in the applicable prospectus
supplement, subject to the terms, conditions, and covenants, if any, specified
in such prospectus supplement, provided that an extension period may not extend
beyond the stated maturity of the final installment of principal of the series
of debt securities. If provided in the applicable prospectus supplement, we will
have the right, at any time and from time to time during the term of any series
of debt securities, to make payments of interest by delivering additional debt
securities of the same series. Certain material United States federal income tax
consequences and special considerations applicable to the debt securities will
be described in the applicable prospectus supplement.
SUBORDINATION
Except as set forth in the applicable prospectus supplement, the
subordinated indenture will provide that the subordinated debt securities will
be subordinated and junior in right of payment to all our senior indebtedness.
The term "senior indebtedness" will be defined in the applicable prospectus
supplement. If:
o we default in the payment of any principal, or premium, if any, or
interest on any senior indebtedness when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or
declaration or otherwise; or
o an event of default occurs with respect to any senior indebtedness
permitting the holders thereof to accelerate the maturity thereof and
written notice of such event of default, requesting that payments on
subordinated debt securities cease, is given to us by the holders of
senior indebtedness;
then unless and until the default in payment or event of default shall have been
cured or waived or shall have ceased to exist, no direct or indirect payment, in
cash, property, or securities, by set-off or otherwise, will be made or agreed
to be made on account of the subordinated debt securities or interest thereon or
in respect of any repayment, redemption, retirement, purchase or other
acquisition of subordinated debt securities.
Except as set forth in the applicable prospectus supplement, the
subordinated indenture will provide that in the event of:
o any insolvency, bankruptcy, receivership, liquidation, reorganization,
readjustment, composition or other similar proceeding relating to us,
our creditors or our property;
o any proceeding for the liquidation, dissolution or other winding-up of
the Company, voluntary or involuntary, whether or not involving
insolvency or bankruptcy proceedings;
o any assignment by us for the benefit of creditors; or
o any other marshaling of the assets of us;
all present and future senior indebtedness, including, without limitation,
interest accruing after the commencement of the proceeding, assignment or
marshaling of assets, will first be paid in full before any payment or
distribution, whether in cash, securities or other property, will be made by us
on account of subordinated debt securities. In that event, any payment or
distribution, whether in cash, securities or other property, other than our
securities or any other corporation provided for by a plan of reorganization or
a readjustment, the payment of which is subordinate, at least to the extent
provided in the subordination provisions of the indenture, to the payment of all
senior indebtedness at the time outstanding and to any securities issued in
respect thereof under any such plan of reorganization or readjustment and other
than payments made from any trust described below under the caption
"Satisfaction and Discharge; Defeasance," which would otherwise, but for the
subordination provisions, be payable or deliverable in respect of subordinated
debt securities, including any such payment or distribution which may be payable
or deliverable by reason of the payment of any of out other indebtedness being
subordinated to the payment of subordinated debt securities, will be paid or
delivered directly to the holders of senior indebtedness or to their
representative or trustee, in accordance with the priorities then existing among
such holders, until all senior indebtedness shall have been paid in full. No
present or future holder of any senior indebtedness will be prejudiced in the
right to enforce subordination of the indebtedness evidenced by subordinated
debt securities by any act or failure to act on our part.
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MODIFICATION OF INDENTURES
From time to time, we and the trustees may modify the indentures
without the consent of any holders of any series of debt securities with respect
to some matters, including, but not limited to:
o to cure any ambiguity, defect or inconsistency or to correct or
supplement any provision which may be inconsistent with any other
provision of the indenture;
o to qualify, or maintain the qualification of, the indentures under the
Trust Indenture Act of 1939, as amended; and/or
o to make any change that does not materially adversely affect the
interests of any holder of such series of debt securities.
In addition, under the indentures, we and the trustees may modify
some of our rights, covenants, and obligations and the rights of holders of any
series of debt securities with the written consent of the holders of at least a
majority in aggregate principal amount of the series of outstanding debt
securities; but no extension of the maturity of any series of debt securities,
reduction in the interest rate or extension of the time for payment of interest,
change in the optional redemption, or repurchase provisions in a manner adverse
to any holder of the series of debt securities, other modification in the terms
of payment of the principal of, or interest on, the series of debt securities,
or reduction of the percentage required for modification, will be effective
against any holder of the series of outstanding debt securities without the
holder's consent.
We and the trustees may execute, without the consent of any holder of
the debt securities, any supplemental indenture for the purpose of creating any
new series of debt securities.
EVENTS OF DEFAULT
The indentures will provide that any one or more of the following
described events with respect to a series of debt securities that has occurred
and is continuing constitutes an "event of default" with respect to that series
of debt securities:
o failure for 60 days to pay any interest or any sinking fund payment on
the series of debt securities when due (subject to the deferral of any
due date in the case of an extension period);
o failure to pay any principal or premium, if any, on the series of the
debt securities when due, whether at maturity, upon redemption, by
declaration of acceleration or otherwise;
o failure to observe or perform in any material respect certain other
covenants contained in the indenture for 90 days after written notice
has been given to us from the trustee or the holders of at least 25%
in principal amount of the series of outstanding debt securities;
o default resulting in acceleration of our other indebtedness for
borrowed money, where the aggregate principal amount so accelerated
exceeds $25 million and the acceleration is not rescinded or annulled
within 60 days after the written notice thereof to us by the trustee
or to us and the trustee by the holders of 25% in aggregate principal
amount of the debt securities of the series then outstanding, provided
that the event of default will be remedied, cured or waived if the
default that resulted in the acceleration of such other indebtedness
is remedied, cured or waived; or
o certain events in bankruptcy, insolvency, or reorganization of the
Company.
The holders of not less than a majority in outstanding principal
amount of the series of debt securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
trustee of the series. The trustee or the holders of not less than 25% in
aggregate outstanding principal amount of the series may declare the principal
due and payable immediately upon an event of default. The holders of a majority
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in aggregate outstanding principal amount of the series may annul the
declaration and waive the default if the default (other than the non-payment of
the principal of the series which has become due solely by the acceleration) has
been cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been deposited with the trustee
of the series.
The holders of a majority in outstanding principal amount of a series
of debt securities affected thereby may, on behalf of all the holders of the
series of debt securities, waive any past default, except a default in the
payment of principal or interest, unless the default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the trustee of the
series, or a default in respect of a covenant or provision which under the
related indenture cannot be modified or amended without the consent of the
holder of each outstanding debt security of the series. We are required to file
annually with the trustees a certificate as to whether or not we are in
compliance with all the conditions and covenants applicable to it under the
indentures.
In case an event of default shall occur and be continuing as to a
series of debt securities, the trustee of the series will have the right to
declare the principal of and the interest on the debt securities, and any other
amounts payable under the indenture, to be forthwith due and payable and to
enforce its other rights as a creditor with respect to the debt securities.
No holder of any debt securities will have any right to institute any
proceeding with respect to the indenture or for any remedy thereunder, unless
the holder shall have previously given to the trustee written notice of a
continuing event of default, the holders of at least 25% in aggregate principal
amount of the outstanding debt securities of the series shall have made written
request and offered reasonable indemnity to the trustee of the series to
institute the proceeding as a trustee, and the trustee shall not have received
from the holders of a majority in aggregate principal amount of the outstanding
debt securities of the class a direction inconsistent with the request and shall
have failed to institute the proceeding within 60 days. However, these
limitations do not apply to a suit instituted by a holder of a debt security for
enforcement of payment of the principal or interest on the debt security on or
after the respective due dates expressed in the debt security.
CONSOLIDATION, MERGER, SALE OF ASSETS, AND OTHER TRANSACTIONS
Unless otherwise indicated in the applicable prospectus supplement,
the indentures will provide that we will not consolidate with or merge into any
other person or entity or sell, assign, convey, transfer, or lease its
properties and assets substantially as an entity to any person or entity unless:
o either we are the continuing corporation, or any successor or
purchaser is a corporation, partnership, or trust or other entity
organized under the laws of the United States of America, any state
thereof or the District of Columbia, and the successor or purchaser
expressly assumes our obligations on the debt securities under a
supplemental indenture; and
o immediately before and after giving effect thereto, no event of
default, and no event which, after notice or lapse of time or both,
would become an event of default, shall have happened and be
continuing.
Unless otherwise indicated in the applicable prospectus supplement,
the general provisions of the indentures do not afford holders of the debt
securities protection in the event of a highly leveraged or other transaction
involving us that may adversely affect holders of the debt securities.
SATISFACTION AND DISCHARGE; DEFEASANCE
Unless otherwise indicated in the applicable prospectus supplement,
the indentures will provide that when, among other things, all debt securities
not previously delivered to the trustee for cancellation:
o have become due and payable; or
o will become due and payable at their stated maturity within one year,
and we deposit or cause to be deposited with the trustee, as trust
funds in trust for the purpose, an amount in the currency or
currencies in which the debt securities are payable sufficient to pay
and discharge the entire indebtedness on the debt securities not
previously delivered to the trustee for cancellation, for the
principal of, and premium, if any, and interest to the date of the
deposit or to the stated maturity, as the case may be;
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then the indenture will cease to be of further effect (except as to our
obligations to pay all other sums due pursuant to the indenture and to provide
the officers' certificates and opinions of counsel described therein), and we
will be deemed to have satisfied and discharged the indenture.
Unless otherwise indicated in the applicable prospectus supplement,
the indentures will provide that we may elect either:
o to terminate, and be deemed to have satisfied, all our obligations
with respect to any series of debt securities, except for the
obligations to register the transfer or exchange of such debt
securities, to replace mutilated, destroyed, lost or stolen debt
securities, to maintain an office or agency in respect of the debt
securities, and to compensate and indemnify the trustee
("defeasance"); or
o to be released from our obligations with respect to certain covenants
("covenant defeasance") upon the deposit with the trustee, in trust
for such purpose, of money and/or United States Government
Obligations, as defined in the indenture, which through the payment of
principal and interest in accordance with the term used will provide
money, in an amount sufficient (in the opinion of a nationally
recognized firm of independent public accountants) to pay the
principal of, interest on, and any other amounts payable in respect of
the outstanding debt securities of the series.
Such a trust may be established only if, among other things, we have
delivered to the trustee an opinion of counsel (as specified in the indenture)
with regard to certain matters, including an opinion to the effect that the
holders of the debt securities will not recognize income, gain or loss for
United States federal income tax purposes as a result of the deposit 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 and defeasance or covenant defeasance, as the case may be,
had not occurred.
REDEMPTION
Unless otherwise indicated in the applicable prospectus supplement,
the debt securities will not be subject to any sinking fund requirements.
Unless otherwise indicated in the applicable prospectus supplement,
we may, at our option, redeem the debt securities of any series in whole at any
time or in part from time to time, at the redemption price set forth in the
applicable prospectus supplement plus accrued and unpaid interest to the date
fixed for redemption, and debt securities in denominations larger than $1,000
may be redeemed in part but only in integral multiples of $1,000. If the debt
securities of any series are so redeemable only on or after a specified date or
upon the satisfaction of additional conditions, the applicable prospectus
supplement will specify the date or describe the conditions.
We will mail notice of any redemption at least 30 days but not more
than 60 days before the redemption date to each holder of debt securities to be
redeemed at the holder's registered address. Unless we default in the payment of
the redemption price on and after the redemption date, interest shall cease to
accrue on the debt securities or portions thereof called for redemption.
CONVERSION OR EXCHANGE
If and to the extent indicated in the applicable prospectus
supplement, the debt securities of any series may be convertible or exchangeable
into other securities. The specific terms on which debt securities of any series
may be so converted or exchanged will be set forth in the applicable prospectus
supplement. These terms may include provisions for conversion or exchange,
either mandatory, at the option of the holder, or at our option, in which case
the number of shares of other securities to be received by the holders of debt
securities would be calculated as of a time and in the manner stated in the
applicable prospectus supplement.
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CERTAIN COVENANTS
The indentures will contain certain covenants regarding, among other
matters, corporate existence, payment of taxes and reports to holders of debt
securities. If and to the extent indicated in the applicable prospectus
supplement, these covenants may be removed or additional covenants added with
respect to any series of debt securities.
GOVERNING LAW
Unless otherwise indicated in the applicable prospectus supplement,
the indentures and the debt securities will be governed by and construed in
accordance with the laws of the state of New York.
INFORMATION CONCERNING THE TRUSTEES
Each trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act of 1939, as amended. Subject to these provisions, each trustee is
under no obligation to exercise any of the powers vested in it by the indenture
at the request of any holder of the debt securities, unless offered reasonable
indemnity by the holder against the costs, expenses and liabilities which might
be incurred thereby. No trustee is required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its duties if
the trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
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DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 40,000,000 shares of common
stock, par value $0.01 per share, and 2,000,000 shares of preferred stock, par
value $0.01 per share. At September 30, 2005, there were 24,288,082 shares of
common stock outstanding and no shares of preferred stock were outstanding. The
following descriptions of our capital stock and provisions of our certificate of
incorporation and bylaws are only summaries, and we encourage you to review
complete copies of our certificate of incorporation and bylaws, which are filed
as an exhibit to the registration statement of which this prospectus is a part.
COMMON STOCK
Subject to the rights of the holders of preferred stock then
outstanding, holders of our common stock are entitled to one vote for each share
on all matters submitted to a vote of stockholders and do not have cumulative
voting rights. Subject to preferences that may be applicable to any then
outstanding preferred stock, the holders of our common stock will be entitled to
receive such dividends, if any, as may be declared by our Board of Directors in
its discretion out of legally available funds. Upon our liquidation, dissolution
or winding up, the holders of our common stock will be entitled to share ratably
in all assets that are legally available for distribution, after payment of all
debts and other liabilities, and subject to the prior rights of holders of any
preferred stock then outstanding. Holders of our common stock have no
preemptive, subscription, redemption, or conversion rights. The rights,
preferences and privileges of holders of our common stock will be subject to the
rights of the holders of shares of any series of preferred stock that we may
issue in the future.
PREFERRED STOCK
Our charter authorizes the issuance of 2,000,000 shares of preferred
stock. Currently, 30,000 shares of preferred stock are designated as Series A
Junior Participating Preferred Stock in connection with the adoption of our
shareholder rights plan described below. Our authorized but unissued preferred
stock may be issued from time to time in one or more series, without stockholder
approval. Subject to limitations prescribed by law and by our charter, the Board
of Directors, without further approval of the stockholders, has the authority to
fix the rights and terms relating to dividends, conversion, voting, redemption,
liquidation preferences, sinking funds and any other rights, preferences,
privileges, and restrictions applicable to each such series of preferred stock.
While providing flexibility in connection with possible financings,
acquisitions, and other corporate purposes, the issuance of preferred stock,
among other things, could adversely affect the voting power of the holders of
our common stock and, under certain circumstances, be used as a means of
discouraging, delaying, or preventing certain business combinations with us. Any
preferred stock converted, redeemed, exchanged or otherwise acquired by us will,
upon cancellation, have the status of authorized but unissued preferred stock
undesignated as to series subject to reissuance by our Board of Directors. Other
than the shareholder rights plan, there currently are no outstanding shares of
preferred stock or any commitments or options or other rights currently
outstanding for the issuance of preferred stock. Presently, we do not have any
plan to issue shares of our preferred stock.
SHAREHOLDER RIGHTS PLAN
We have adopted a shareholder rights plan pursuant to which we issued
one preferred stock purchase right, or a Right, for each outstanding share of
common stock. Our shareholder rights plan is designed to protect our company and
our stockholders against unfair or coercive takeover tactics. It accomplishes
this goal by making it more costly and thus more difficult to gain control of us
without the consent of our Board of Directors. The description presented below
is intended as a summary only and is qualified in its entirety by reference to
the rights agreement, which is an exhibit to the registration statement of which
this prospectus is a part.
Each Right entitles the registered holder to purchase from us a unit
consisting of one one-thousandth of a share of Series A Junior Participating
Preferred Stock at a cash exercise price of $45 (subject to certain antidilution
adjustments). The Rights will expire 10 years after issuance, and will be
exercisable only if a person or group becomes the beneficial owner of 15% or
more of our common stock (such person or group, a "15% holder") or commences a
tender or exchange offer which would result in the offeror beneficially owning
15% or more of our common stock, in each case, without the approval of our Board
of Directors. If the Rights become exercisable, each Right, unless redeemed by
us, entitles the holder to purchase an amount of our common stock or in certain
circumstances a combination of securities and/or assets or the common stock of
the acquirer, having a market value of twice the then effective exercise price.
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The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire us on terms
not approved by the Board of Directors, except pursuant to an offer conditioned
on a substantial number of Rights being acquired. We may redeem the Rights at
$.01 per Right prior to the tenth day (as such period may be extended) after the
public announcement of the existence of a 15% holder.
DELAWARE ANTI-TAKEOVER LAW
We are subject to the provisions of Section 203 of the Delaware
General Corporation Law. In general, this statute prohibits a publicly held
Delaware corporation from engaging, under certain circumstances, in various
"business combination" transactions with any "interested stockholder" for a
period of three years after the date of the transaction in which the person
becomes an interested stockholder, unless:
o prior to the date at which the stockholder became an interested
stockholder, the Board of Directors approved the transaction;
o the stockholder acquires more than 85% of the outstanding voting stock
of the corporation (excluding shares held by directors who are
officers or held in certain employee stock plans) upon consummation of
the transaction in which the stockholder becomes an interested
stockholder; or
o the business combination is approved by the Board of Directors and by
two-thirds of the outstanding voting stock of the corporation
(excluding shares held by the interested stockholder) at a meeting of
stockholders (and not by written consent) held on or subsequent to the
date of the business combination.
A "business combination" is defined to include mergers, asset sales
and other transactions resulting in financial benefit to a stockholder. In
general, an "interested stockholder" is a person who, together with affiliates
or associates, owns 15% or more of a corporation's voting stock or within three
years did own 15% or more of a corporation's voting stock.
POTENTIAL ANTI-TAKEOVER EFFECT OF CERTAIN PROVISIONS OF OUR CERTIFICATE OF
INCORPORATION AND BYLAWS
Our certificate of incorporation and bylaws contain a number of other
provisions that could have an anti-takeover effect. The provisions are intended
to enhance the likelihood of continuity and stability in the composition of the
Board of Directors and in the policies formulated by the Board. These provisions
also are intended to help ensure that the board, if confronted by an unsolicited
proposal from a third party which has acquired a block of our stock, will have
sufficient time to review the proposal and appropriate alternatives to the
proposal and to act in what it believes to be the best interest of the
stockholders. The following is a summary of such provisions included in our
certificate of incorporation and by-laws:
o a classified Board of Directors;
o the authority of the Board of Directors to fill vacancies on the Board
of Directors;
o the authority of the Board of Directors to issue series of preferred
stock with such voting rights and other powers as the Board of
Directors may determine;
o notice requirements relating to nominations to the Board of Directors
and to the raising of business matters at stockholder meetings;
o a provision that special meetings of the stockholders may be called
only by the Chairman of the Board or the Board of Directors;
o a prohibition on stockholder action by written consent except with
respect to actions to which the Board of Directors has granted its
prior approval and consent;
o a fair price provision, which is intended to ensure that stockholders
receive fair consideration for shares sold at all stages of takeovers
or attempted takeovers of our company;
the authority of the Board of Directors to consider certain factors including,
without limitation, the potential impact on our employees and our other
constituents and the communities in which we operate when evaluating certain
matters such as tender offers, merger proposals or sales of our property or
assets; and the requirement that certain "anti-takeover" provisions in the
certificate of incorporation and bylaws may be amended only by super majority
vote.
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LIMITATION ON LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our certificate of incorporation, as amended, provides that no
director shall be personally liable to us or to our stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability for any
breach of the director's duty of loyalty to us or our stockholders, for acts or
omissions not in good faith, for acts or omissions involving intentional
misconduct or a knowing violation of law or for any transaction from which the
director derived an improper personal benefit. Our bylaws provide that our
directors and officers will be indemnified against liabilities that arise from
their service as directors and officers, subject to certain exceptions. We have
entered into agreements with our directors and officers that also provide for
such indemnification and expenses and liability reimbursement. We have obtained
insurance which insures our directors and officers against certain losses and
which insures us against our obligations to indemnify the directors and
officers.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for our common stock is
Computershare Trust Company.
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DESCRIPTION OF WARRANTS
This section outlines some of the provisions of each warrant
agreement, warrant and warrant certificate. This information may not be complete
in all respects and is qualified entirely by reference to the warrant agreement
with respect to the warrants of any particular series. The specific terms of any
series of warrants will be described in a prospectus supplement. If so described
in a prospectus supplement, the terms of that series of warrants may differ from
the general description of terms presented below.
We have no warrants outstanding. We may issue warrants for the
purchase of our debt securities or common stock. Warrants may be issued
independently or together with debt securities or common stock and may be
attached to or separate from those securities.
WARRANT AGREEMENTS
Each series of warrants will be evidenced by certificates issued
under a separate warrant agreement to be entered into between us and a bank that
we select as warrant agent with respect to such series. The warrant agent will
have its principal office in the United States and have a combined capital and
surplus of at least $50 million.
ISSUANCE IN SERIES
The applicable prospectus supplement relating to a series of warrants
will mention the name and address of the warrant agent. The prospectus
supplement will describe the terms of the series of warrants in respect of which
this prospectus is being delivered, including, but not limited to:
o the offering price;
o the currency for which the warrants may be purchased;
o the designation and terms of the securities with which the warrants
are issued and the number of warrants issued with each security or
each principal amount of security;
o the date, if any, on and after which warrants and the related
securities will be separately transferable;
o in the case of warrants to purchase debt securities, the principal
amount of debt securities that can be purchased upon exercise, and the
exercise price for purchasing those debt securities;
o in the case of warrants to purchase common stock, the number of shares
of common stock as the case may be, that can be purchased upon the
exercise, and the price for purchasing those shares;
o the dates on which the right to exercise the warrants will commence
and expire;
o material United States federal income tax consequences of holding or
exercising those warrants;
o the terms of the securities issuable upon exercise of those warrants;
and
o any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants.
Warrant certificates may be exchanged for new warrant certificates of
different denominations, may be presented for transfer registration, and may be
exercised at the warrant agent's corporate trust office or any other office
indicated in the prospectus supplement. If the warrants are not separately
transferable from the securities with which they were issued, this exchange may
take place only if the certificates representing the related securities are also
exchanged. Prior to warrant exercise, warrant holders will not have any rights
as holders of the underlying securities, including the right to receive any
principal, premium, interest, dividends, or payments upon our liquidation,
dissolution or winding up or to exercise any voting rights.
EXERCISE OF WARRANTS
Each warrant will entitle the holder to purchase the securities
specified in the prospectus supplement at the exercise price mentioned in, or
calculated as described in, the prospectus supplement. Unless otherwise
specified in the prospectus supplement, warrants may be exercised at any time up
to 5:00 p.m., Eastern time, on the expiration date mentioned in that prospectus
supplement. After the close of business on the expiration date, unexercised
warrants will become void.
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Warrants may be exercised by delivery of the warrant certificate
representing the warrants to be exercised, or in the case of global securities,
by delivery of an exercise notice for those warrants, together with certain
information, and payment to the warrant agent in immediately available funds, as
provided in the prospectus supplement, of the required purchase amount. The
information required to be delivered will be on the reverse side of the warrant
certificate and in the prospectus supplement. Upon receipt of payment and the
warrant certificate or exercise notice properly executed at the office indicated
in the prospectus supplement, we will, in the time period the relevant warrant
agreement provides, issue and deliver the securities purchasable upon such
exercise. If fewer than all of the warrants represented by such warrant
certificates are exercised, a new warrant certificate will be issued for the
remaining amount of warrants.
If mentioned in the prospectus supplement, securities may be
surrendered as all or part of the exercise price for warrants.
ANTI-DILUTION PROVISIONS
In the case of warrants to purchase our common stock, the exercise
price payable and the number of shares of our common stock purchasable upon
warrant exercise may be adjusted in certain events, including, but not limited
to:
o the issuance of a stock dividend to common shareholders or a
combination, subdivision or reclassification of our common stock;
o the issuance of rights, warrants or options to all common and
preferred shareholders entitling them to purchase our common stock for
an aggregate consideration per share less than the current market
price per share of our common stock;
o any distribution to our common shareholders of evidences of our
indebtedness of assets, excluding cash dividends, or distributions
referred to above; and
o any other events mentioned in the prospectus supplement.
No adjustment in the number of shares purchasable upon warrant
exercise will be required until cumulative adjustments require an adjustment of
at least 1% of such number. No fractional shares will be issued upon warrant
exercise, but we will pay the cash value of any fractional shares otherwise
issuable.
MODIFICATION
We and any warrant agent may amend any warrant agreement and the
terms of the related warrants by executing a supplemental warrant agreement,
without any such warrant holders' consent, for the purpose of:
o curing any ambiguity, any defective or inconsistent provision
contained in the warrant agreement, or making any other corrections to
the warrant agreement that are not inconsistent with the provisions of
the warrant certificates;
o evidencing the succession of another corporation to us and its
assumption of our covenants contained in the warrant agreement and the
warrants;
o appointing a successor depository, if the warrants are issued in the
form of global securities;
o evidencing a successor warrant agent's acceptance of appointment with
respect to the warrants;
o adding to our covenants for the warrant holders' benefit or
surrendering any right or power we have under the warrant agreement;
o issuing warrants in definitive form, if such warrants are initially
issued in the form of global securities; or
o amending the warrant agreement and the warrants as we deem necessary
or desirable so long as it will not adversely affect the warrant
holders' interests in any material respect.
We and the warrant agent may also amend any warrant agreement and the
related warrants by a supplemental agreement with the consent of the holders of
a majority of the unexercised warrants affected by such amendment, for the
purpose of adding, modifying or eliminating any of the warrant agreement's
provisions or of modifying the warrant holders' rights. However, no such
amendment that:
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o reduces the number or amount of securities receivable upon warrant
exercise;
o shortens the time period during which the warrants may be exercised;
o otherwise adversely affects the exercise rights of warrant holders in
any material respect; or
o reduces the number of unexercised warrants the consent of holders of
which is required for amending the warrant agreement or the related
warrants;
may be made without the consent of each holder affected by that amendment.
CONSOLIDATION, MERGER, AND SALE OF ASSETS
Unless otherwise indicated in the applicable prospectus supplement,
the warrant agreement will provide that we will not consolidate with or merge
into any other person or entity or sell, assign, convey, transfer, or lease its
properties and assets substantially as an entity to any person or entity unless:
o either we are the continuing corporation, or any successor or
purchaser is a corporation, partnership or trust or other entity
organized under the laws of the United States of America, any state
thereof or the District of Columbia, and the successor or purchaser
expressly assumes our obligations under the warrant agreement; and
o immediately before and after giving effect thereto, no event of
default, and no event which, after notice or lapse of time or both,
would become an event of default, shall have happened and be
continuing.
ENFORCEABILITY OF RIGHTS BY HOLDERS OF WARRANTS
Each warrant agent will act solely as our agent under the relevant
warrant agreement and will not assume any obligation or relationship of agency
or trust for any warrant holder. A single bank or trust company may act as
warrant agent for more than one issue of warrants. A warrant agent will have no
duty or responsibility in case we default in performing our obligations under
the relevant warrant agreement or warrant, including any duty or responsibility
to initiate any legal proceedings or to make any demand upon us. Any warrant
holder may, without the warrant agent's consent or consent of any other warrant
holder, enforce by appropriate legal action its right to exercise that warrant.
REPLACEMENT OF WARRANT CERTIFICATES
We will replace any destroyed, lost, stolen or mutilated warrant
certificate upon delivery to us and the relevant warrant agent of satisfactory
evidence of the ownership of that warrant certificate and of its destruction,
loss, theft or mutilation, and (in the case of mutilation) surrender of that
warrant certificate to the relevant warrant agent, unless we have, or the
warrant agent has, received notice that the warrant certificate has been
acquired by a bona fide purchaser. That warrant holder will also be required to
provide indemnity satisfactory to us and the relevant warrant agent before a
replacement warrant certificate will be issued.
TITLE
We, the warrant agents and any of their agents may treat the
registered holder of any warrant certificate as the absolute owner of the
warrants evidenced by that certificate for any purpose and as the person
entitled to exercise the rights attaching to the warrants so requested despite
any notice to the contrary.
26
DESCRIPTION OF UNITS
This section outlines some of the provisions of the units and the
unit agreements. This information may not be complete in all respects and is
qualified entirely by reference to the unit agreement with respect to the units
of any particular series. The specific terms of any series of units will be
described in a prospectus supplement. If so described in a particular
supplement, the specific terms of any series of units may differ from the
general description of terms presented below.
We may issue units comprised of one or more debt securities, shares
of our common stock and warrants in any combination. Each unit will be issued so
that the holder of the unit is also the holder of each security included in the
unit. Thus, the holder of a unit will have the rights and obligations of a
holder of each included security. The unit agreement under which a unit is
issued may provide that the securities included in the unit may not be held or
transferred separately at any time or at any time before a specified date.
The prospectus supplement may describe:
o the designation and terms of the units and of the securities
comprising the units, including whether and under what circumstances
those securities may be held or transferred separately;
o any provisions of the governing unit agreement that differ from those
described below; and
o any provisions for the issuance, payment, settlement, transfer or
exchange of the units or of the securities comprising the units.
The provisions described in this section, as well as those described
under "Description of Debt Securities", "Description of Capital Stock" and
"Description of Warrants" will apply to each unit and to any debt security,
common stock or warrant included in each unit, respectively.
ISSUANCE IN SERIES
We may issue units in such amounts and in as many distinct series as
we wish. This section summarizes terms of the units that apply generally to all
series. Most of the financial and other specific terms of your series will be
described in the prospectus supplement.
UNIT AGREEMENTS
We will issue the units under one or more unit agreements to be
entered into between us and a bank or other financial institution as unit agent.
We may add, replace or terminate unit agents from time to time. We will identify
the unit agreement under which each series of units will be issued and the unit
agent under that agreement in the prospectus supplement.
The following provisions will generally apply to all unit agreements
unless otherwise stated in the prospectus supplement.
ENFORCEMENT OF RIGHTS
The unit agent under a unit agreement will act solely as our agent in
connection with the units issued under that agreement. The unit agent will not
assume any obligation or relationship of agency or trust for or with any holders
of those units or of the securities comprising those units. The unit agent will
not be obligated to take any action on behalf of those holders to enforce or
protect their rights under the units or the included securities.
Except as indicated in the next paragraph, a holder of a unit may,
without the consent of the unit agent or any other holder, enforce its rights as
holder under any security included in the unit, in accordance with the terms of
that security and the indenture, warrant agreement or other instrument under
which that security is issued. Those terms are described elsewhere in this
prospectus under the sections relating to debt securities, common stock and
warrants.
27
Notwithstanding the foregoing, a unit agreement may limit or
otherwise affect the ability of a holder of units issued under that agreement to
enforce its rights, including any right to bring a legal action, with respect to
those units or any securities, other than debt securities, that are included in
those units. Limitations of this kind will be described in the prospectus
supplement.
MODIFICATION WITHOUT CONSENT OF HOLDERS
We and the applicable unit agent may amend any unit or unit agreement
without the consent of any holder:
o to cure any ambiguity;
o to correct or supplement any defective or inconsistent provision; or
o to make any other change that we believe is necessary or desirable and
will not adversely affect the interests of the affected holders in any
material respect.
We do not need any approval to make changes that affect only units to
be issued after the changes take effect. We may also make changes that do not
adversely affect a particular unit in any material respect, even if they
adversely affect other units in a material respect. In those cases, we do not
need to obtain the approval of the holder of the unaffected unit; we need only
obtain any required approvals from the holders of the affected units.
MODIFICATION WITH CONSENT OF HOLDERS
We may not amend any particular unit or a unit agreement with respect
to any particular unit unless we obtain the consent of the holder of that unit,
if the amendment would:
o impair any right of the holder to exercise or enforce any right under
a security included in the unit if the terms of that security require
the consent of the holder to any changes that would impair the
exercise or enforcement of that right; or
o reduce the percentage of outstanding units or any series or class the
consent of whose holders is required to amend that series or class, or
the applicable unit agreement with respect to that series or class, as
described below.
Any other change to a particular unit agreement and the units issued
under that agreement would require the following approval:
o if the change affects only the units of a particular series issued
under that agreement, the change must be approved by the holders of a
majority of the outstanding units of that series; or
o if the change affects the units of more than one series issued under
that agreement, it must be approved by the holders of a majority of
all outstanding units of all series affected by the change, with the
units of all the affected series voting together as one class for this
purpose.
These provisions regarding changes with majority approval also apply
to changes affecting any securities issued under a unit agreement as the
governing document.
In each case, the required approval must be given by written consent.
UNIT AGREEMENTS WILL NOT BE QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS
AMENDED.
No unit agreement will be qualified as an indenture, and no unit
agent will be required to qualify as a trustee, under the Trust Indenture Act of
1939, as amended. Therefore, holders of units issued under unit agreements will
not have the protections of the Trust Indenture Act of 1939, as amended, with
respect to their units.
28
TITLE
We, the unit agents, and any of their agents may treat the registered
holder of any unit certificate as an absolute owner of the units evidenced by
that certificate for any purpose and as the person entitled to exercise the
rights attaching to the units so requested, despite any notice to the contrary.
29
PLAN OF DISTRIBUTION
TYPES OF SALE TRANSACTIONS
We may offer the securities described in this prospectus at various
times in one or more of the following transactions:
o through agents;
o through one or more underwriters or dealers;
o through a block trade in which the broker or dealer engaged to handle
the block trade will attempt to sell the securities as agent, but may
position and resell a portion of the block as principal to facilitate
the transaction;
o directly to one or more purchasers (through a specific bidding or
auction process, in negotiated sales or otherwise); or
o through a combination of any of these methods of sale.
PRICING
The distribution of the securities described in this prospectus may
be effected from time to time in one or more transactions either:
o at a fixed price or prices, which may be changed;
o at market prices prevailing at the time of sale;
o at prices relating to the prevailing market prices; or
o at negotiated prices.
PROSPECTUS SUPPLEMENT
The prospectus supplement for the securities will describe that
offering, including:
o the name or names of any underwriters;
o the purchase price and the proceeds from that sale;
o any underwriting discounts and other items constituting underwriters'
compensation; and
o any discounts or concessions allowed or reallowed or paid to dealers.
UNDERWRITERS
If we offer and sell securities through an underwriter or
underwriters, we will execute an underwriting agreement with the underwriter or
underwriters. The names of the specific managing underwriter or underwriters, as
well as any other underwriters, and the terms of the transactions, including
compensation of the underwriters and dealers, which may be in the form of
discounts, concessions or commissions, if any, will be described in the
30
applicable prospectus supplement, which will be used by the underwriters to make
resales of the securities. That prospectus supplement and this prospectus will
be used by the underwriters to make resales of the securities. If underwriters
are used in the sale of any securities in connection with this prospectus, those
securities will be acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, including negotiated
transactions, at fixed public offering prices or at varying prices determined by
the underwriters, us at the time of sale.
Securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or directly by one or more
underwriters. Unless otherwise set forth in the prospectus supplement, the
obligations of the underwriters to purchase the securities will be subject to
conditions. The underwriters will be obligated to purchase all of the securities
if any are purchased.
We may grant to the underwriters options to purchase additional
securities to cover over-allotments, if any, at the public offering price, with
additional underwriting commissions or discounts, as may be set forth in a
related prospectus supplement. The terms of any over-allotment option will be
set forth in the prospectus supplement for those securities.
If any underwriters are involved in the offer and sale, they will be
permitted to engage in transactions that maintain or otherwise affect the price
of the securities. These transactions may include over-allotment transactions,
purchases to cover short positions created by the underwriter in connection with
the offering and the imposition of penalty bids. If an underwriter creates a
short position in the securities in connection with the offering, i.e., if it
sells more securities than set forth on the cover page of the applicable
prospectus supplement, the underwriter may reduce that short position by
purchasing the securities in the open market. In general, purchases of a
security to reduce a short position could cause the price of the security to be
higher than it might be in the absence of such purchases. As noted above,
underwriters may also choose to impose penalty bids on other underwriters and/or
selling group members. This means that if underwriters purchase securities on
the open market to reduce their short position or to stabilize the price of the
securities, they may reclaim the amount of the selling concession from those
underwriters and/or selling group members who sold such securities as part of
the offering.
Neither we nor any underwriter make any representation or prediction
as to the direction or magnitude of any effect that the transactions described
above may have on the price of the securities. In addition, neither we nor any
underwriter make any representation that such underwriter will engage in such
transactions or that such transactions, once commenced, will not be discontinued
without notice.
AGENTS
Offers to purchase the securities may be solicited by agents
designated by us from time to time. Any agent involved in the offer or sale of
the securities will be named, and any commissions payable by us to the agent
will be described, in the applicable prospectus supplement. Unless otherwise
indicated in the applicable prospectus supplement, any such agent will be acting
on a best efforts basis for the period of its appointment. Any agent may be
deemed to be an underwriter, as such term is defined in the Securities Act, of
the securities so offered and sold.
DEALERS
If we offer and sell securities through a dealer, we or an
underwriter 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. Any such dealer may be deemed to be an
underwriter, as such term is defined in the Securities Act, of the securities so
offered and sold. The name of the dealer and the terms of the transactions will
be set forth in the applicable prospectus supplement.
31
DIRECT SALES
We may solicit offers to purchase the securities directly, and we may
sell the securities directly to institutional or other investors, who may be
deemed an underwriter within the meaning of the Securities Act with respect to
any resales of those securities. The terms of these sales, including the terms
of any bidding or auction process, if utilized, will be described in the
applicable prospectus supplement.
INDEMNIFICATION
We may enter into agreements with agents, underwriters and dealers
under which we may agree to indemnify the agents, underwriters and dealers
against certain liabilities, including liabilities under the Securities Act, or
to contribute to payments they may be required to make with respect to these
liabilities. The terms and conditions of this indemnification or contribution
will be described in the applicable prospectus supplement. Some of the agents,
underwriters or dealers, or their affiliates may be customers of, engage in
transactions with or perform services for us in the ordinary course of business.
DELAYED CONTRACTS
We may authorize our respective agents or underwriters to solicit
offers to purchase securities at the public offering price under delayed
contracts. The terms of these delayed delivery contracts, including when payment
for and delivery of the securities sold will be made under the contracts and any
conditions to each party's performance set forth in the contracts, will be
described in the applicable prospectus supplement. The compensation received by
underwriters or agents soliciting purchase of securities under delayed delivery
contracts will also be described in the applicable prospectus supplement.
STATE SECURITIES LAWS
In order to comply with the securities laws of some states, if
applicable, the securities offered hereby will be sold in those jurisdictions
only through registered or licensed brokers or dealers. In addition, in some
states, securities may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the resignation or
qualification requirement is available and complied with.
32
LEGAL MATTERS
Weil, Gotshal & Manges LLP, New York, New York will pass upon the
validity of the securities on our behalf.
EXPERTS
The financial statements incorporated in this prospectus by reference
to Rural/Metro Corporation's Current Report on Form 8-K/A dated November 14,
2005 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) incorporated in this prospectus by reference
to Rural/Metro Corporation's Annual Report on Form 10-K for the fiscal year
ended June 30, 2005 have been so incorporated in reliance on the report (which
contains an explanatory paragraph relating to Rural/Metro Corporation's
restatement of its consolidated financial information in Note 10 to the
consolidated financial statements and an adverse opinion on the effectiveness of
internal control over financial reporting) of PricewaterhouseCoopers LLP, an
independent registered public accounting firm, given on the authority of said
firm as experts in auditing and accounting.
33
================================================================================
[Rural/Metro Corporation logo]
$120,000,000
Debt Securities, Common Stock, Warrants and Units
----------------
PROSPECTUS
----------------
, 2006
================================================================================
PART II
INFORMATION NOT REQUIRED TO BE IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses expected to be paid by the
Registrant in connection with the distribution of the securities registered
hereby:
Nature of Expense Amount(+)
- ----------------- ---------
SEC Registration Fee $12,840
Accounting Fees and Expenses $100,000
Legal Fees and Expenses $100,000
Miscellaneous $50,000
TOTAL $262,840
+ The amounts set forth above, except for the SEC registration fee, are
estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law permits
indemnification of officers, directors and other corporate agents under specific
circumstances and subject to specific limitations. Rural/Metro's certificate of
incorporation, as amended, and restated bylaws provide that Rural/Metro shall
indemnify its directors and officers to the full extent permitted by Delaware
General Corporation Law, including in circumstances in which indemnification is
otherwise discretionary under Delaware law.
Rural/Metro has entered into indemnification agreements with its
directors and executive officers that provide the maximum indemnity allowed to
directors and executive officers by Section 145 of the Delaware General
Corporation Law, as well as certain additional procedural protections. The
indemnity agreements provide that directors will be indemnified to the fullest
extent not prohibited by law against all expenses (including attorney's fees)
and settlement amounts paid or incurred by them in any action or proceeding as
directors or executive officers of Rural/Metro, including any action on account
of their services as executive officers or directors of any other company or
enterprise when they are serving in such capacities at the request of
Rural/Metro, and including any action by or in the right of Rural/Metro. In
addition, the indemnity agreements provide for reimbursement of expenses
incurred in conjunction with being a witness in any proceeding to which the
indemnitee is not a party. Rural/Metro must pay in advance of a final
disposition of a proceeding or claim the expenses incurred by the indemnitee no
later than 10 days after receipt of an undertaking by or on behalf of the
indemnitee, to repay the amount of the expenses to the extent that it is
ultimately determined that the indemnitee is not entitled to be indemnified by
Rural/Metro. The indemnity agreements also provide the indemnitee with remedies
in the event that Rural/Metro does not fulfill its obligations under the
indemnity agreements.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
payments of unlawful dividends or unlawful stock repurchases or redemptions, or
(iv) for any transaction from which the director derived an improper personal
benefit. Rural/Metro's restated certificate of incorporation provides for that
limitation of liability.
Policies of insurance are maintained by Rural/Metro under which its
directors and officers are insured, within the limits and subject to the
limitations of the policies, against specific expenses in connection with the
defense of, and specific liabilities which might be imposed as a result of,
actions, suits or proceedings to which they are parties by reason of being or
having been directors or officers.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
1.1 Underwriting Agreement.***
4.1 Specimen Certificate representing shares of Common Stock,
par value $.01 per share. (1)
4.2 Second Restated Certificate of Incorporation of the
Registrant filed with the Secretary of State of Delaware on
January 18, 1995; as amended by the Certificate of
Designation, Preferences and Rights of Series A Junior
Participating Preferred Stock filed with the Secretary of
State of Delaware on August 23, 1995; as amended by the
Certificate of Designation, Preferences, and Rights of
Series B Preferred Stock filed with the Secretary of State
of Delaware on September 26, 2002; as amended by the
Certificate of Designation, Preferences, and Rights of
Series C Preferred Stock filed with the Secretary of State
of Delaware on September 26, 2003; as amended by that
Certificate of Amendment filed with the Secretary of State
of Delaware on June 15, 2004; as amended by the Amended and
Restated Certificate of Designation, Preference and Rights
of Series A Junior Participating Preferred filed with the
Secretary of State of Delaware on August 25, 2005. (2).
4.3 Shareholder Rights Agreement dated as of August 24, 2005
between the Registrant and Computershare Trust Company, Inc.
(3).
4.4 Amended and Restated Bylaws of the Registrant. (1)
4.5 Form of Senior Indenture.**
4.6 Form of Subordinated Indenture.**
4.7 Form of Common Stock Warrant and Warrant Certificate.**
4.8 Form of Debt Securities Warrant and Warrant Certificate.**
4.9 Form of Unit Agreement and Unit Certificate.**
5.1 Opinion of Weil, Gotshal & Manges LLP as to the legality of
the securities.**
12.1 Computation of Ratio of Earnings to Fixed Charges.*
23.1 Consent of PricewaterhouseCoopers LLP.*
23.2 Consent of Weil, Gotshal & Manges LLP (included in Exhibit
5.1 hereto).**
24.1 Powers of Attorney (included in the signature pages).*
25.1 Form of T-1 Statement of Eligibility of Indenture
Trustee.***
- -----------------
* Filed herewith.
** To be filed by amendment.
*** To be filed, if necessary, subsequent to the effectiveness of this
registration statement by a post-effective amendment to this registration
statement or incorporated by reference from a Current Report on Form 8-K in
connection with the offering of securities registered hereby.
II-2
(1) Incorporated by reference to the Registration Statement on Form S-1 of the
Registrant (Registration No. 33-63448) filed May 27, 1993 and declared
effective July 15, 1993.
(2) Incorporated by reference to the Registrant's Form 10-K Annual Report for
the year ended June 30, 2005 filed with the Commission on September 28,
2005.
(3) Incorporated by reference to the Registrant's Form 8-A/A Registration
Statement filed on August 29, 2005.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being make, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that:
(A) Paragraphs (1)(i) and (1)(ii) of this section do not apply if the
registration statement is on Form S-8, 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 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: and
(B) Paragraphs (1)(i), (1)(ii) and (1)(iii) of this section 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 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 42(b) that is part of the
registration statement.
(C) Provided further, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the registration statement is for an offering of asset-backed
securities on Form S-1 or Form S-3, and the information required to be
included in a post-effective amendment is provided pursuant to Item
1100(c) of Regulation AB.
2. That, for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-3
3. To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at termination of the offering.
4. If the registrant is a foreign private issuer, to file a post-effective
amendment to the registration statement to include any financial statements by
Item 8.A. of Form 20-F at the start of any delayed offering or throughout a
continuous offering. Financial statements and information otherwise required by
Section 10(a)(3) of the Act need not be furnished, provided, that the registrant
includes in the prospectus, by means of a post-effective amendment, financial
statements required pursuant to this paragraph (a)(4) and other information
necessary to ensure that all other information in the prospectus is at least as
current as the date of those financial statements. Notwithstanding the
foregoing, with respect to registration statements on Form F-3, a post-effective
amendment need not be filed to include financial statements and information
required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such
financial statements and information are contained in periodic 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 Form F-3.
5. That, for the purpose of determining liability under the Securities Act to
any purchaser:
(i) If the registrant is relying on Rule 430B:
(A) 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
(B) Each prospectus filed by the registrant 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 shall be deemed to be part of and included in the
registration statement as of the earlier of the date 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 the 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
initial bona 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 purchaser with a
time of contract of sale prior to such effective 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; or
(ii) If the registrant is subject to Rule 430C, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement relating to an
offering, other than registration statements relying on Rule 430B of other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and
included in the registration statement as of the date it is first used after
effectiveness. 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
purchaser with a time of contract of sale prior to such first use, 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 date of first use.
6. That, for the purpose of determining liability of the registrant under the
Securities Act 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 considered to offer or sell such securities
to such purchaser:
II-4
(i) any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering require 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
undersigned 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.
7. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
8. The undersigned registrant hereby undertakes that:
(i) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430(A) and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(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 securities at that time shall be
deemed to be the initial bona fide offering thereof.
9. The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations of the Commission under Section 305(b)(2) of the Securities Act.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described under Item 15 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 Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe it meets all of
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Scottsdale, State of Arizona, on February 8, 2006.
RURAL/METRO CORPORATION
By: /s/ Jack E. Brucker
----------------------------------------
Jack E. Brucker
President and Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Jack E. Brucker and Michael S.
Zarriello, and each of them acting individually, as his true and lawful
attorney-in-fact and agent, each with full power of substitution for him in any
and all capacities, to execute one or more Registration Statements on Form S-3
under the Securities Act of 1933, as amended, or on such other form as such
attorney-in fact, either of them, may deem necessary or desirable and any and
all amendments to this Registration Statement, including post-effective
amendments or any abbreviated registration statement and any amendments thereto
filed pursuant to Rule 462(b) increasing the number of securities for which
registration is sought, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby ratify and confirm all that said attorney-in-fact and
agent, or his or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Cor J. Clement Chairman of the Board of Directors February 8, 2006
- ----------------------------------------------
Cor J. Clement
/s/ Louis G. Jekel Vice Chairman of the February 8, 2006
- ---------------------------------------------- Board of Directors
Louis G. Jekel
/s/ Jack E. Brucker President, Chief Executive February 8, 2006
- ---------------------------------------------- Officer and Director
Jack E. Brucker (Principal Executive Officer)
/s/ Michael S. Zarriello Senior Vice President, Secretary and February 8, 2006
- ---------------------------------------------- Chief Financial Officer
Michael S. Zarriello (Principal Financial and Accounting Officer)
/s/ Mary Anne Carpenter Director February 8, 2006
- ----------------------------------------------
Mary Anne Carpenter
/s/ Henry G. Walker Director February 8, 2006
- ----------------------------------------------
Henry G. Walker
/s/ Robert E. Wilson Director February 8, 2006
- ----------------------------------------------
Robert E. Wilson
/s/ Conrad A. Conrad Director February 8, 2006
- ----------------------------------------------
Conrad A. Conrad
II-6
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
1.1 Underwriting Agreement.***
4.1 Specimen Certificate representing shares of Common Stock,
par value $.01 per share. (1)
4.2 Second Restated Certificate of Incorporation of the
Registrant filed with the Secretary of State of Delaware on
January 18, 1995; as amended by the Certificate of
Designation, Preferences and Rights of Series A Junior
Participating Preferred Stock filed with the Secretary of
State of Delaware on August 23, 1995; as amended by the
Certificate of Designation, Preferences, and Rights of
Series B Preferred Stock filed with the Secretary of State
of Delaware on September 26, 2002; as amended by the
Certificate of Designation, Preferences, and Rights of
Series C Preferred Stock filed with the Secretary of State
of Delaware on September 26, 2003; as amended by that
Certificate of Amendment filed with the Secretary of State
of Delaware on June 15, 2004; as amended by the Amended and
Restated Certificate of Designation, Preference and Rights
of Series A Junior Participating Preferred filed with the
Secretary of State of Delaware on August 25, 2005. (2).
4.3 Shareholder Rights Agreement dated as of August 24, 2005
between the Registrant and Computershare Trust Company, Inc.
(3).
4.4 Amended and Restated Bylaws of the Registrant. (1)
4.5 Form of Senior Indenture.**
4.6 Form of Subordinated Indenture.**
4.7 Form of Common Stock Warrant and Warrant Certificate.**
4.8 Form of Debt Securities Warrant and Warrant Certificate.**
4.9 Form of Unit Agreement and Unit Certificate.**
5.1 Opinion of Weil, Gotshal & Manges LLP as to the legality of
the securities.**
12.1 Computation of Ratio of Earnings to Fixed Charges.*
23.1 Consent of PricewaterhouseCoopers LLP.*
23.2 Consent of Weil, Gotshal & Manges LLP (included in Exhibit
5.1 hereto).**
24.1 Powers of Attorney (included in the signature pages).*
25.1 Form of T-1 Statement of Eligibility of Indenture
Trustee.***
- ------------------
* Filed herewith.
** To be filed by amendment.
*** To be filed, if necessary, subsequent to the effectiveness of this
registration statement by a post-effective amendment to this registration
statement or incorporated by reference from a Current Report on Form 8-K in
connection with the offering of securities registered hereby.
(1) Incorporated by reference to the Registration Statement on Form S-1 of the
Registrant (Registration No. 33-63448) filed May 27, 1993 and declared
effective July 15, 1993.
(2) Incorporated by reference to the Registrant's Form 10-K Annual Report for
the year ended June 30, 2005 filed with the Commission on September 28,
2005.
(3) Incorporated by reference to the Registrant's Form 8-A/A Registration
Statement filed on August 29, 2005.