As filed with the Securities and Exchange Commission on July 23, 2003
Registration No. 333-96919
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
POST-EFFECTIVE
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________
HEADWATERS INCORPORATED
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(Exact Name of Registrant as Specified in Its Charter)
___________
Delaware 87-0547337 2990
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(State or Other (I.R.S. Employer (Primary Standard
Jurisdiction of Identification Industry
Incorporation or Number) Classification
Organization) Number)
10653 South River Front Parkway, Suite 300
South Jordan, Utah 84095
(801) 984-9400
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(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
___________
Kirk A. Benson
CEO and Chairman of the Board of Directors
10653 South River Front Parkway, Suite 300
South Jordan, Utah 84095
(801) 984-9400
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(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
___________
With copy to:
Linda C. Williams, Esq.
Pillsbury Winthrop LLP
50 Fremont Street
San Francisco, California 94105
Telephone: (415) 983-1000
___________
Approximate date of commencement of proposed sale to the public:
From time to time after this registration statement becomes effective, as
determined by market conditions and other factors.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, 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 of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
Explanatory Note
The purpose of this post-effective amendment is to reduce the amount of common
stock, preferred stock or debt securities of Headwaters Incorporated, either
separately or in units, in one or more offerings that Headwaters may issue or
sell under a registration statement that Headwaters filed with the Securities
and Exchange Commission using a "shelf" registration, or continuous offering,
process. This post-effective amendment reduces the maximum aggregate offering
price of sales or issuances under the "shelf" registration from $250,000,000 to
$150,000,000.
SUBJECT TO COMPLETION
DATED JULY 23, 2003
The information in this preliminary prospectus is not complete and may be
changed. We may not sell these securities until the registration statement filed
with Securities and Exchange Commission is declared effective. This preliminary
prospectus is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
$150,000,000
HEADWATERS INCORPORATED
Common Stock
Preferred Stock
Debt Securities
___________
Headwaters Incorporated may offer from time to time debt securities, preferred
stock and common stock. This prospectus provides a general description of these
securities. We will provide specific information and the terms of the securities
being offered in supplements to this prospectus. The supplements may also add,
update or change information in this prospectus. Please read this prospectus and
any prospectus supplements carefully before investing. This prospectus may not
be used to sell securities unless accompanied by a prospectus supplement.
Our common stock is traded on The Nasdaq National Market under the symbol
"HDWR." On July 22, 2003, the last reported sale price for our common stock on
The Nasdaq National Market was $13.25 per share.
Our principal executive offices are located at 10653 South River Front Parkway,
Suite 300, South Jordan, Utah 84095, and our telephone number is (801) 984-9400.
We may offer these securities directly to investors, through agents,
underwriters or dealers. See "Plan of Distribution." Each prospectus supplement
will provide the terms of the plan of distribution relating to each series of
securities.
Investing in our securities involves risks that are described in the "Risk
Factors" section on page 2 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is July 23, 2003.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS.....................................................2
RISK FACTORS..............................................................2
HEADWATERS INCORPORATED...................................................2
WHERE YOU CAN FIND MORE INFORMATION.......................................3
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS.............................4
USE OF PROCEEDS...........................................................4
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS................................................5
DIVIDEND POLICY...........................................................5
DESCRIPTION OF CAPITAL STOCK..............................................5
DESCRIPTION OF DEBT SECURITIES............................................7
PLAN OF DISTRIBUTION.....................................................16
LEGAL MATTERS............................................................16
EXPERTS..................................................................16
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission using a "shelf" registration, or
continuous offering, process. Under this shelf registration process, we may,
from time to time, over approximately the next two years, issue and sell any
combination of common stock, preferred stock or debt securities, either
separately or in units, in one or more offerings with a maximum aggregate
offering price of $150,000,000.
This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering and the offered securities. Any prospectus supplement may also
add, update or change information contained in this prospectus. Any statement
that we make in this prospectus will be modified or superseded by any
inconsistent statement made by us in a prospectus supplement. The registration
statement we filed with the SEC includes exhibits that provide more detail on
descriptions of the matters discussed in this prospectus. You should read this
prospectus and the related exhibits filed with the SEC and any prospectus
supplement, together with additional information described under the heading
"Where You Can Find More Information."
Unless the context otherwise requires, references in this prospectus
and the accompanying prospectus supplement to "we," "us" and "our" refer to
Headwaters Incorporated and its subsidiaries.
RISK FACTORS
An investment in our debt securities, common stock or preferred stock
involves a high degree of risk. You should consider carefully the risk factors
contained in our filings on Form 8-K dated October 22, 2002 and on Form 10-K for
the year ended September 30, 2002, and all other information contained in and
incorporated by reference in this prospectus before making an investment
decision. See "Where You Can Find More Information." Additional risks and
uncertainties that are not yet identified or that we think are immaterial may
also materially harm our business, operating results and financial condition and
could result in a complete loss of your investment.
HEADWATERS INCORPORATED
Headwaters Incorporated is a world leader in developing and deploying
alternative energy and related technologies to the marketplace. Headwaters is
focused on converting fossil fuels such as gas, coal and heavy oils into
alternative energy products.
Company History. Headwaters was incorporated in Delaware in 1995 under
the name Covol Technologies, Inc. In September 2000, the Company's name was
changed to Headwaters Incorporated. Our common stock trades under the Nasdaq
symbol HDWR.
Business Strategy. The future of fossil fuels is at the molecular
level. Converting natural gas and refinery off-gas to liquid fuels, coal to gas
and clean transportation fuels, and heavy oils to light fuels are all examples
of changing the physical nature of the fossil fuel at the molecular level.
Broadly speaking, this is the technology that Headwaters has developed.
Headwaters has the ability to adjust the composition of the fossil fuel
molecules, converting the low value fossil fuel into a higher value product. The
conversion from low to high value products also allows Headwaters to extract
troublesome elements, like sulfur, nitrogen, and heavy metals, out of the fuel.
The result is a higher value clean product.
Through its operating division, Covol Fuels, Headwaters has developed,
patented and commercialized an innovative chemical technology that interacts
with carbon based feedstock to produce a solid alternative fuel that is eligible
for federal tax credits. Since 1996, Headwaters has licensed this technology for
royalty payments and also sells its chemical reagent products to its licensees
and other customers. To date, this technology has provided Headwaters with most
of its revenue.
On September 19, 2002, Headwaters acquired Industrial Services Group,
Inc., or ISG. ISG, through its wholly-owned operating subsidiary, ISG Resources,
Inc., is the nation's largest manager and marketer of coal combustion products,
known as CCPs, in North America. With the ISG acquisition, Headwaters believes
it is in a position to provide a full range of value-added services to the
coal-fired electric generating industry, as well as capitalize on opportunities
to develop related energy technologies. ISG's CCPs division is a supplier of
post-combustion services and technologies to the coal-fired electric utility
industry. ISG manages approximately 20 million tons annually of CCPs for a
majority of the nation's largest coal-fired utilities, as well as for other
industrial clients. ISG markets CCPs (primarily fly ash and bottom ash) to
replace manufactured or mined materials, such as portland cement, lime,
agricultural gypsum, fired lightweight aggregate, granite aggregate and
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limestone. ISG's manufactured products division manages the production and sale
of masonry mortars, block and stucco materials, as well as some of ISG's
value-added technology products for the construction market. ISG utilizes high
volumes of CCPs as ingredients in the mortars, blocks and stuccos that ISG
produces.
Additionally, Headwaters' subsidiary acquired in August 2001,
Hydrocarbon Technologies, Inc. ("HTI"), has developed catalyst and nano-catalyst
technologies to convert coal to liquid fuels, gas to liquid fuels, and
heavy/waste oils to clean light fuels. The development of nano-catalyst
technology by HTI places Headwaters at the forefront of applying advanced
molecular science to multiple energy and chemical processes.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-3 with the SEC under
the Securities Act of 1933. This prospectus is part of the registration
statement but the registration statement incorporates by reference additional
information and exhibits. We are a reporting company and file annual, quarterly
and current reports, proxy statements and other information with the Securities
and Exchange Commission, or SEC. You may read and copy the registration
statement and any document we file with the SEC at the public reference room
maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. You may
obtain information on the operation of the public reference room by calling the
SEC at 1-800-SEC-0330. The SEC also maintains a web site that contains reports,
proxy and information statements and other information regarding companies, such
as us, that file documents electronically with the SEC. The address of that site
on the world wide web is http://www.sec.gov. The information on the SEC's web
site is not part of this prospectus, and any references to this web site or any
other web site are inactive textual references only.
The SEC permits us to "incorporate by reference" the information
contained in documents we file with the SEC, which means that we can disclose
important information to you by referring you to those documents rather than by
including them in this prospectus. Information that is incorporated by reference
is considered to be part of this prospectus and you should read it with the same
care. Later information that we file with the SEC will automatically update and
supersede the information that is either contained herein or incorporated by
reference herein, and will be considered to be a part of this prospectus from
the date such documents are filed. We have filed with the SEC, and incorporate
by reference in this prospectus:
o our Annual Report on Form 10-K for the year ended September
30, 2002, filed with the SEC on December 24, 2002;
o the description of our common stock contained in our amended
Annual Report on Form 10-K/A, filed with the SEC on April 24,
1996;
o our Definitive Proxy Statement on Schedule 14A filed with the
SEC on January 28, 2003;
o our Quarterly Reports on Form 10-Q for the quarters ended
December 31, 2002 and March 31, 2003, filed with the SEC on
February 11, 2003 and May 7, 2003, respectively; and
o our Current Reports on Form 8-K, filed with the SEC on October
4, 2002, October 18, 2002, October 22, 2002 and April 24,
2003.
We also incorporate by reference all additional documents that we file
with the SEC under the terms of Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act, that are made after the initial filing date of the registration
statement of which this prospectus is a part and before the termination of any
offering of securities offered by this prospectus. Any statement contained in
this prospectus or in a document incorporated in, or deemed to be incorporated
by reference into, this prospectus shall be deemed to be modified or superseded,
for purposes of this prospectus, to the extent that a statement contained in
o the prospectus;
o the accompanying prospectus supplement; or
o any other subsequently filed document which also is
incorporated in, or is deemed to be incorporated by reference
into this prospectus;
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modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
Upon your written or oral request of any or all of the documents
incorporated by reference but not delivered with this prospectus, we will send
to you the copies you requested at no charge. However, we will not send exhibits
to such documents, unless such exhibits are specifically incorporated by
reference in such documents. You should direct requests for such copies to the
Corporate Secretary, Headwaters Incorporated, 10653 South River Front Parkway,
Suite 300, South Jordan, Utah 84095. Our telephone number is (801) 984-9400.
You should rely only on the information incorporated by reference or
provided in this prospectus, any prospectus supplement and the registration
statement. We have not authorized anyone else to provide you with different
information. If anyone provides you with different or inconsistent information,
you should not rely on it. We are not making an offer to sell these securities
in any state where the offer or sale is not permitted. You should assume that
the information in this prospectus and any prospectus supplement, or
incorporated by reference, is accurate only as of the dates of those documents.
Our business, financial condition, results of operations and prospects may have
changed since those dates.
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
Some of the statements in the sections entitled "About This
Prospectus," "Risk Factors," "Use of Proceeds," and elsewhere in this prospectus
constitute forward-looking statements. These statements involve known and
unknown risks, uncertainties and other factors that may cause our or our
industry's results, levels of activity, or achievements to be materially
different from any future results, levels of activity or achievements expressed
or implied by such forward-looking statements. Such factors include, among
others, those listed under "Risk Factors" and elsewhere in this prospectus.
In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "intend," "expect," "plan,"
"anticipate," "believe," "estimate," "predict," "potential" or "continue," or
the negative of such terms or other comparable terminology.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
events, levels of activity, performance or achievements. Except as may be
required by law, we undertake no obligation to publicly update any
forward-looking statements for any reason, even if new information becomes
available or other events occur in the future.
USE OF PROCEEDS
Unless otherwise indicated in the prospectus supplement, we intend to
use the net proceeds from the sale of the securities offered in the prospectus
and the prospectus supplement for future acquisitions and general corporate
purposes, which may include additions to working capital, repayment or
redemption of existing indebtedness, financing of capital expenditures, research
and development of new technologies and strategic investment opportunities. We
expect from time to time to evaluate the acquisition of businesses, products and
technologies for which a portion of the net proceeds may be used, although we
currently are not planning or negotiating any such transactions. Pending such
uses, we may also invest the net proceeds in interest bearing securities. We may
borrow additional funds from time to time from public and private sources on
both a long-term and short-term basis to fund our future capital and working
capital requirements in excess of internally generated funds.
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RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratio of earnings to combined fixed
charges and preferred stock dividends for the periods indicated.
Year Ended September 30, Six Months Ended
1998 1999 2000 2001 2002 March 31, 2003
---- ---- ---- ---- ---- --------------
Ratio of earnings to
combined fixed
charges and preferred
stock dividends(1) N/A N/A 2.23 41.53 65.38 3.86
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(1) Earnings for the years ended September 30, 1998 and 1999 were
insufficient to cover combined fixed charges and preferred stock
dividends by $12,306,000 and $28,402,000, respectively.
For purposes of calculating the ratio of earnings to combined fixed
charges and preferred stock dividends, (i) fixed charges consist of interest on
debt, including capitalized interest, amortization of discount on debt and
capitalized expenses related to indebtedness, and a reasonable approximation of
interest within rental expense; and (ii) earnings consist of pre-tax income from
operations, plus fixed charges (excluding capitalized interest), less minority
interest in pre-tax income of subsidiaries that have not incurred fixed charges.
DIVIDEND POLICY
We have paid no dividends to date on our common stock. We do not intend
to pay any cash dividends on our common stock in the foreseeable future. We
expect that we will retain any earnings to finance our operations and growth.
The terms and conditions of future indebtedness may also restrict and limit
payments or distributions in respect of our common stock. Therefore, we do not
expect to pay cash dividends in the foreseeable future.
DESCRIPTION OF CAPITAL STOCK
This section describes the general terms and provisions of the shares
of our common stock, par value $0.001 per share and preferred stock, par value
$0.001 per share. The summary is not complete and is qualified in its entirety
by reference to the description of our common stock incorporated by reference in
this prospectus. We have also filed our certificate of incorporation and our
bylaws as exhibits to the registration statement, of which this prospectus is a
part. You should read our certificate of incorporation and our bylaws for
additional information before you buy any of our common stock. See "Where You
Can Find More Information."
Common Stock
As of June 30, 2003, our authorized common stock was 50,000,000 shares,
of which 27,778,919 shares were issued and outstanding. The holders of common
stock are entitled to one vote per share on all matters submitted to a vote of
our stockholders. Subject to preferences that may be applicable to any preferred
stock outstanding at the time, the holders of outstanding shares of common stock
are entitled to receive ratably any dividends out of assets legally available
therefor as our board of directors may from time to time determine. Upon
liquidation, dissolution or winding up of our company, holders of our common
stock are entitled to share ratably in all assets remaining after payment of
liabilities and the liquidation preference of any then outstanding shares of
preferred stock. Holders of common stock have no preemptive or conversion rights
or other subscription rights. There are no redemption or sinking fund provisions
applicable to the common stock. All outstanding shares of common stock are fully
paid and nonassessable.
Preferred Stock
As of June 30, 2003, our authorized preferred stock was 10,000,000
shares, of which none were issued and outstanding.
We may issue preferred stock with such designations, powers,
preferences and other rights and qualifications, limitations or restrictions as
our board of directors may authorize, without further action by our
stockholders, including but not limited to:
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o the distinctive designation of each series and the number of
shares that will constitute such series;
o the voting rights, if any, of shares of the series and the
terms and conditions of such voting rights;
o the dividend rate on the shares of the series, the dates on
which dividends are payable, any restriction, limitation or
condition upon the payment of dividends, whether dividends
will be cumulative and the dates from and after which
dividends shall accumulate;
o the prices at which, and the terms and conditions on which,
the shares of the series may be redeemed, if such shares are
redeemable;
o the terms and conditions of a sinking or purchase fund for the
purchase or redemption of shares of the series, if such a fund
is provided;
o any preferential amount payable upon shares of the series in
the event of the liquidation, dissolution or winding up of, or
upon the distribution of any of our assets; and
o the prices or rates of conversion or exchange at which, and
the terms and conditions on which, the shares of such series
may be converted or exchanged into other securities, if such
shares are convertible or exchangeable.
The particular terms of any series of preferred stock will be described
in a prospectus supplement. Any material United States federal income tax
consequences and other special considerations with respect to any preferred
stock offered under this prospectus will also be described in the applicable
prospectus supplement.
Anti-Takeover Provisions of Delaware Law and Charter Provisions
We are subject to Section 203 of the Delaware General Corporation Law,
which prohibits a publicly-held Delaware corporation from engaging in a
"business combination," except under certain circumstances, with an "interested
stockholder" for a period of three years following the date such person became
an "interested stockholder" unless:
o before such person became an interested stockholder, the board
of directors of the corporation approved either the business
combination or the transaction that resulted in the interested
stockholder becoming an interested stockholder;
o upon the consummation of the transaction that resulted in the
interested stockholder becoming an interested stockholder, the
interested stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction
commenced, excluding shares held by directors who also are
officers of the corporation and shares held by employee stock
plans; or
o at or following the time such person became an interested
stockholder, the business combination is approved by the board
of directors of the corporation and authorized at a meeting of
stockholders by the affirmative vote of the holders of 66 2/3%
of the outstanding voting stock of the corporation which is
not owned by the interested stockholder.
The term "interested stockholder" generally is defined as a person who,
together with affiliates and associates, owns, or, within the three years prior
to the determination of interested stockholder status, owned, 15% or more of a
corporation's outstanding voting stock. The term "business combination" includes
mergers, asset or stock sales and other similar transactions resulting in a
financial benefit to an interested stockholder. Section 203 makes it more
difficult for an "interested stockholder" to effect various business
combinations with a corporation for a three-year period. The existence of this
provision would be expected to have an anti-takeover effect with respect to
transactions not approved in advance by our board of directors, including
discouraging attempts that might result in a premium over the market price for
the shares of common stock held by stockholders.
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The ability of the board of directors to issue shares of preferred
stock and to set the voting rights, preferences and other terms thereof, without
further stockholder action, may be deemed to have anti-takeover effect and may
discourage takeover attempts not first approved by the board of directors,
including takeovers which stockholders may deem to be in their best interests.
If takeover attempts are discouraged, temporary fluctuations in the market price
of our common stock, which may result from actual or rumored takeover attempts,
may be inhibited. These provisions, together with the ability of our board of
directors to issue preferred stock without further stockholder action, including
adoption of a stockholders rights plan using preferred stock rights, could also
delay or frustrate the removal of incumbent directors or the assumption of
control by stockholders, even if the removal or assumption would be beneficial
to our stockholders. These provisions could also discourage or inhibit a merger,
tender offer or proxy contests, even if favorable to the interests of
stockholders, and could depress the market price of our common stock. In
addition, our bylaws provide that our board of directors is divided into three
classes, a separate class to be elected each year, making it more difficult to
replace the entire board of directors or remove individual directors. In
addition, our bylaws may be amended by action of the board of directors. Certain
provisions under consideration for amendment are notice requirements and other
procedures with respect to special meetings called by stockholders, stockholder
action by written consent and director nominations by stockholders.
Limitation of Liability and Indemnification
Delaware law permits, and our certificate of incorporation contains,
provisions eliminating a director's personal liability for monetary damages
resulting from a breach of fiduciary duty, except in certain circumstances
involving wrongful acts, such as (i) for any breach of the director's duty of
loyalty to the company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) liability under Section 174 of the Delaware General Corporation Law
for improper dividends, repurchases or redemptions of stock or (iv) for any
transaction from which the director derives an improper personal benefit. These
provisions do not limit or eliminate our rights or any stockholder's rights to
seek non-monetary relief, such as an injunction or rescission, in the event of a
breach of director's fiduciary duty. These provisions will not alter a
director's liability under federal securities law. We have put in place
agreements with our directors and executive officers containing provisions
indemnifying our directors and officers to the fullest extent permitted by
Delaware General Corporation Law. We believe that these provisions will assist
us in attracting and retaining qualified individuals to serve as our directors.
Transfer Agent
The transfer agent and registrar for our common stock is American Stock
Transfer & Trust Company.
DESCRIPTION OF DEBT SECURITIES
The following is a summary of the general terms of the debt securities.
We will file a prospectus supplement that may contain additional terms if and
when we issue debt securities. The terms presented here, together with the terms
in a related prospectus supplement, will be a description of the material terms
of the debt securities. You should also read the indenture under which the debt
securities are to be issued. We have filed a form of indenture governing
different types of debt securities with the SEC as an exhibit to the
registration statement of which this prospectus is a part. All capitalized terms
have the meanings specified in the indenture.
We may issue, from time to time, debt securities, in one or more
series, that will consist of one or a combination of the following: our senior
debt, or Senior Debt Securities, our senior subordinated debt, or Senior
Subordinated Debt Securities, or our subordinated debt, or Subordinated Debt
Securities. We refer to the Subordinated Debt Securities and the Senior
Subordinated Debt Securities together as the Subordinated Securities. The debt
securities we offer will be issued under an indenture between us and Wilmington
Trust Company, acting as trustee, or such other bank or trust company as is
named in the prospectus supplement relating to the particular issue of debt
securities. Debt securities, whether senior, senior subordinated or
subordinated, may be issued as convertible debt securities or exchangeable debt
securities. The following is a summary of the material provisions of the
indenture filed as an exhibit to the registration statement of which this
prospectus is a part. For each series of debt securities, the applicable
prospectus supplement for the series may change and supplement the summary
below.
General Terms of the Indenture
The indenture does not limit the amount of debt securities that we may
issue. It provides that we may issue debt securities up to the principal amount
that we may authorize and may be in any currency or currency unit that we may
designate. We may, without the consent of the holders of any series, increase
the principal amount of securities in that series in the future, on the same
terms and conditions and with the same CUSIP numbers as that series. Except for
the limitations on consolidation, merger and sale of all or substantially all of
our assets contained in the indenture, the terms of the indenture do not contain
any covenants or other provisions designed to give holders of any debt
securities protection against changes in our operations, financial condition or
transactions involving us.
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We may issue the debt securities issued under the indenture as
"discount securities," which means they may be sold at a discount below their
stated principal amount. These debt securities, as well as other debt securities
that are not issued at a discount, may, for United States federal income tax
purposes, be treated as if they were issued with "original issue discount", or
OID, because of interest payment and other characteristics. Special United
States federal income tax considerations applicable to debt securities issued
with original issue discount will be described in more detail in any applicable
prospectus supplement.
The applicable prospectus supplement for a series of debt securities
that we issue will describe, among other things, the following terms of the
offered debt securities:
o the title and authorized denominations of the series of debt
securities;
o any limit on the aggregate principal amount of the series of
debt securities;
o whether such debt securities will be issued in fully
registered form without coupons or in a form registered as to
principal only with coupons or in bearer form with coupons;
o whether issued in the form of one or more global securities
and whether all or a portion of the principal amount of the
debt securities is represented thereby;
o the price or prices at which the debt securities will be
issued;
o the date or dates on which principal is payable;
o the place or places where and the manner in which principal,
premium or interest, if any, will be payable and the place or
places where the debt securities may be presented for transfer
and, if applicable, conversion or exchange;
o interest rates, and the dates from which interest, if any,
will accrue, and the dates when interest is payable and the
maturity;
o the right, if any, to extend the interest payment periods and
the duration of the extensions;
o our rights or obligations to redeem or purchase the debt
securities;
o conversion or exchange provisions, if any, including
conversion or exchange prices or rates and adjustments
thereto;
o the currency or currencies of payment of principal or
interest;
o the terms applicable to any debt securities issued at a
discount from their stated principal amount;
o the terms, if any, under which any debt securities will rank
junior to any of our other debt;
o whether and upon what terms the debt securities may be
defeased, if different from the provisions set forth in the
indenture;
o if the amount of payments of principal or interest is to be
determined by reference to an index or formula, or based on a
coin or currency other than that in which the debt securities
are stated to be payable, the manner in which these amounts
are determined and the calculation agent, if any, with respect
thereto;
o if other than the entire principal amount of the debt
securities when issued, the portion of the principal amount
payable upon acceleration of maturity as a result of a default
on our obligations;
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o the events of default and covenants relating to the debt
securities that are in addition to, modify or delete those
described in this prospectus;
o the nature and terms of any security for any secured debt
securities; and
o any other specific terms of any debt securities.
The applicable prospectus supplement will present United States federal
income tax considerations for holders of any debt securities and the securities
exchange or quotation system on which any debt securities are to be listed or
quoted.
Senior Debt Securities
Payment of the principal of, premium and interest, if any, on Senior
Debt Securities will rank on a parity with all of our other unsecured and
unsubordinated debt.
Senior Subordinated Debt Securities
Payment of the principal of, premium and interest, if any, on Senior
Subordinated Debt Securities will be junior in right of payment to the prior
payment in full of all of our unsubordinated debt, including Senior Debt
Securities and any credit facility. We will state in the applicable prospectus
supplement relating to any Senior Subordinated Debt Securities the subordination
terms of the securities as well as the aggregate amount of outstanding debt, as
of the most recent practicable date, that by its terms would be senior to the
Senior Subordinated Debt Securities. We also will state in such prospectus
supplement limitations, if any, on issuance of additional senior debt.
Subordinated Debt Securities
Payment of the principal of, premium and interest, if any, on
Subordinated Debt Securities will be subordinated and junior in right of payment
to the prior payment in full of all of our senior debt, including our Senior
Debt Securities and Senior Subordinated Debt Securities. We will state in the
applicable prospectus supplement relating to any Subordinated Debt Securities
the subordination terms of the securities as well as the aggregate amount of
outstanding indebtedness, as of the most recent practicable date, that by its
terms would be senior to the Subordinated Debt Securities. We also will state in
such prospectus supplement limitations, if any, on issuance of additional senior
indebtedness.
Conversion or Exchange Rights
Debt securities may be convertible into or exchangeable for other
securities, including, for example, shares of our equity securities. The terms
and conditions of conversion or exchange will be stated in the applicable
prospectus supplement. The terms will include, among others, the following:
o the conversion or exchange price;
o the conversion or exchange period;
o provisions regarding the ability of us or the holder to
convert or exchange the debt securities;
o events requiring adjustment to the conversion or exchange
price; and
o provisions affecting conversion or exchange in the event of
our redemption of the debt securities.
Consolidation, Merger or Sale
We cannot consolidate or merge with or into, or transfer or lease all
or substantially all of our assets to, any person, and we cannot permit any
other person to consolidate with or merge into us, unless (1) we will be the
continuing corporation or (2) the successor corporation or person to which our
assets are transferred or leased is a corporation organized under the laws of
the United States, any state of the United States or the District of Columbia
and it expressly assumes our obligations under the debt securities and the
indenture. In addition, we cannot complete such a transaction unless immediately
after completing the transaction, no event of default under the indenture, and
-9-
no event which, after notice or lapse of time or both, would become an event of
default under the indenture, shall have occurred and be continuing. When the
person to whom our assets are transferred or leased has assumed our obligations
under the debt securities and the indenture, we shall be discharged from all our
obligations under the debt securities and the indenture except in limited
circumstances.
This covenant would not apply to any recapitalization transaction, a
change of control of us or a highly leveraged transaction, unless the
transaction or change of control were structured to include a merger or
consolidation or transfer or lease of all or substantially all of our assets.
Events of Default
The term "Event of Default," when used in the indenture, unless
otherwise indicated, means any of the following:
o failure to pay interest for 30 days after the date payment is
due and payable;
o failure to pay principal or premium, if any, on any debt
security when due, either at maturity, upon any redemption, by
declaration or otherwise;
o failure to make sinking fund payments when due;
o failure to perform other covenants for 60 days after notice
that performance was required;
o events in bankruptcy, insolvency or reorganization relating to
us; or
o any other Event of Default provided in the applicable
officer's certificate, resolution of our board of directors or
the supplemental indenture under which we issue a series of
debt securities.
An Event of Default for a particular series of debt securities does not
necessarily constitute an Event of Default for any other series of debt
securities issued under the indenture.
If an Event of Default with respect to any series of Senior Debt
Securities occurs and is continuing, then either the trustee for such series or
the holders of a majority in aggregate principal amount of the outstanding debt
securities of such series, by notice in writing, may declare the principal
amount of and interest on all of the debt securities of such series to be due
and payable immediately; provided, however, unless otherwise provided in the
applicable prospectus supplement, if such an Event of Default occurs and is
continuing with respect to more than one series of Senior Debt Securities under
the indenture, the trustee for such series or the holders of a majority in
aggregate principal amount of the outstanding debt securities of all such series
of Senior Debt Securities of equal ranking (or, if any of such Senior Debt
Securities are discount securities, such portion of the principal amount as may
be specified in the terms of that series), voting as one class, may make such
declaration of acceleration as to all series of such equal ranking and not the
holders of the debt securities of any one of such series of Senior Debt
Securities.
If an Event of Default with respect to any series of Subordinated
Securities occurs and is continuing, then either the trustee for such series or
the holders of a majority in aggregate principal amount of the outstanding debt
securities of such series, by notice in writing, may declare the principal
amount of and interest on all of the debt securities of such series to be due
and payable immediately; provided, however, unless otherwise provided in the
applicable prospectus supplement, if such an Event of Default occurs and is
continuing with respect to more than one series of Subordinated Securities under
the indenture, the trustee for such series or the holders of a majority in
aggregate principal amount of the outstanding debt securities of all such series
of Subordinated Securities of equal ranking (or, if any of such Subordinated
Securities are discount securities, such portion of the principal amount as may
be specified in the terms of that series), voting as one class, may make such
declaration of acceleration as to all series of equal ranking and not the
holders of the debt securities of any one of such series of Subordinated
Securities.
The holders of not less than a majority in aggregate principal amount
of the debt securities of all affected series of equal ranking may, after
satisfying certain conditions, rescind and annul any of the above-described
declarations and consequences involving such series.
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If an Event of Default relating to events in bankruptcy, insolvency or
reorganization of us occurs and is continuing, then the principal amount of all
of the debt securities outstanding, and any accrued interest, will automatically
become due and payable immediately, without any declaration or other act by the
trustee or any holder.
The indenture imposes limitations on suits brought by holders of debt
securities against us. Except for actions for payment of overdue principal or
interest, no holder of debt securities of any series may institute any action
against us under the indenture unless:
o the holder has previously given to the trustee written notice
of default and continuance of such default;
o the holders of at least 25% in principal amount of the
outstanding debt securities of the affected series of equal
ranking have requested that the trustee institute the action;
o the requesting holders have offered the trustee reasonable
indemnity for expenses and liabilities that may be incurred by
bringing the action;
o the trustee has not instituted the action within 60 days of
the request; and
o the trustee has not received inconsistent direction by the
holders of a majority in principal amount of the outstanding
debt securities of the affected series of equal ranking.
We will be required to file annually with the trustee a certificate,
signed by one of our officers, stating whether or not the officer knows of any
default by us in the performance, observance or fulfillment of any condition or
covenant of the indenture.
Registered Global Securities and Book Entry System
The debt securities of a series may be issued in whole or in part in
book-entry form and may be represented by one or more fully registered global
securities or in unregistered form with or without coupons. We will deposit any
registered global securities with a depositary or with a nominee for a
depositary identified in the applicable prospectus supplement and registered in
the name of such depositary or nominee. In such case, we will issue one or more
registered global securities denominated in an amount equal to the aggregate
principal amount of all of the debt securities of the series to be issued and
represented by such registered global security or securities. This means that we
will not issue certificates to each holder.
Unless and until it is exchanged in whole or in part for debt
securities in definitive registered form, a registered global security may not
be transferred except as a whole:
o by the depositary for such registered global security to its
nominee;
o by a nominee of the depositary to the depositary or another
nominee of the depositary; or
o by the depositary or its nominee to a successor of the
depositary or a nominee of the successor.
The prospectus supplement relating to a series of debt securities will
describe the specific terms of the depositary arrangement involving any portion
of the series represented by a registered global security. We anticipate that
the following provisions will apply to all depositary arrangements for
registered debt securities:
o ownership of beneficial interests in a registered global
security will be limited to persons that have accounts with
the depositary for such registered global security, these
persons being referred to as "participants," or persons that
may hold interests through participants;
o upon the issuance of a registered global security, the
depositary for the registered global security will credit, on
its book-entry registration and transfer system, the
participants' accounts with the respective principal amounts
of the debt securities represented by the registered global
security beneficially owned by the participants;
-11-
o any dealers, underwriters, or agents participating in the
distribution of the debt securities represented by a
registered global security will designate the accounts to be
credited; and
o ownership of beneficial interest in such registered global
security will be shown on, and the transfer of such ownership
interest will be effected only through, records maintained by
the depositary for such registered global security for
interests of participants, and on the records of participants
for interests of persons holding through participants.
The laws of some states may require that specified purchasers of
securities take physical delivery of the securities in definitive form. These
laws may limit the ability of those persons to own, transfer or pledge
beneficial interests in registered global securities.
So long as the depositary for a registered global security, or its
nominee, is the registered owner of such registered global security, the
depositary or such nominee, as the case may be, will be considered the sole
owner or holder of the debt securities represented by the registered global
security for all purposes under the indenture. Except as stated below, owners of
beneficial interests in a registered global security:
o will not be entitled to have the debt securities represented
by a registered global security registered in their names;
o will not receive or be entitled to receive physical delivery
of the debt securities in the definitive form; and
o will not be considered the owners or holders of the debt
securities under the relevant indenture.
Accordingly, each person owning a beneficial interest in a registered
global security must rely on the procedures of the depositary for the registered
global security and, if the person is not a participant, on the procedures of a
participant through which the person owns its interest, to exercise any rights
of a holder under the indenture.
We understand that under existing industry practices, if we request any
action of holders or if an owner of a beneficial interest in a registered global
security desires to give or take any action that a holder is entitled to give or
take under the indenture, the depositary for the registered global security
would authorize the participants holding the relevant beneficial interests to
give or take the action, and the participants would authorize beneficial owners
owning through the participants to give or take the action or would otherwise
act upon the instructions of beneficial owners holding through them.
We will make payments of principal and premium, if any, and interest,
if any, on debt securities represented by a registered global security
registered in the name of a depositary or its nominee to the depositary or its
nominee, as the case may be, as the registered owners of the registered global
security. None of us, the trustee or any other agent of ours or the trustee will
be responsible or liable for any aspect of the records relating to, or payments
made on account of, beneficial ownership interests in the registered global
security or for maintaining, supervising or reviewing any records relating to
the beneficial ownership interests.
We expect that the depositary for any debt securities represented by a
registered global security, upon receipt of any payments of principal and
premium, if any, and interest, if any, in respect of the registered global
security, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the registered
global security as shown on the records of the depositary. We also expect that
standing customer instructions and customary practices will govern payments by
participants to owners of beneficial interests in the registered global security
held through the participants, as is now the case with the securities held for
the accounts of customers in bearer form or registered in "street name." We also
expect that any of these payments will be the responsibility of the
participants.
If the depositary for any debt securities represented by a registered
global security is at any time unwilling or unable to continue as depositary or
stops being a clearing agency registered under the Exchange Act, we will appoint
an eligible successor depositary. If we fail to appoint an eligible successor
depositary within 90 days, we will issue the debt securities in definitive form
in exchange for the registered global security. In addition, we may at any time
and in our sole discretion decide not to have any of the debt securities of a
series represented by one or more registered global securities. In that event,
we will issue debt securities of the series in a definitive form in exchange for
all of the registered global securities representing the debt securities. The
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trustee will register any debt securities issued in definitive form in exchange
for a registered global security in the name or names as the depositary, based
upon instructions from its participants, shall instruct the trustee.
We may also issue bearer debt securities of a series in the form of one
or more global securities, referred to as "bearer global securities." We will
deposit these securities with a common depositary for Euroclear System and Cedel
Bank, Societe Anonyme, or with a nominee for the depositary identified in the
prospectus supplement relating to the series. The prospectus supplement relating
to a series of debt securities represented by a bearer global security will
describe the applicable terms and procedures. These will include the specific
terms of the depositary arrangement and any specific procedures for the issuance
of debt securities in definitive form in exchange for a bearer global security,
in proportion to the series represented by a bearer global security.
Discharge, Defeasance and Covenant Defeasance
We can discharge or decrease our obligations under the indenture as
stated below.
We may discharge obligations to holders of any series of debt
securities that have not already been delivered to the trustee for cancellation
and that have either become due and payable or are by their terms to become due
and payable, or are scheduled for redemption, within sixty (60) days. We may
effect a discharge by irrevocably depositing with the trustee cash or U.S.
government obligations, as trust funds, in an amount certified to be enough to
pay when due, whether at maturity, upon redemption or otherwise, the principal
of, premium and interest, if any, on the debt securities and any mandatory
sinking fund payments.
Unless otherwise provided in the applicable prospectus supplement, we
may also discharge any and all of our obligations to holders of any series of
debt securities at any time, which we refer to as defeasance. We may also be
released from the obligations imposed by any covenants of any outstanding series
of debt securities and provisions of the indenture, and we may omit to comply
with those covenants without creating an event of default under the trust
declaration, which we refer to as covenant defeasance. We may effect defeasance
and covenant defeasance only if, among other things:
o we irrevocably deposit with the trustee cash or U.S.
government obligations, as trust funds, in an amount certified
to be enough to pay at maturity, or upon redemption, the
principal, premium and interest, if any, on all outstanding
debt securities of the series;
o we deliver to the trustee an opinion of counsel from a
nationally recognized law firm to the effect that the holders
of the series of debt securities will not recognize income,
gain or loss for U.S. federal income tax purposes as a result
of the defeasance or covenant defeasance and that defeasance
or covenant defeasance will not otherwise alter the holders'
U.S. federal income tax treatment of principal, premium and
interest, if any, payments on the series of debt securities;
and
o in the case of subordinated debt securities, no event or
condition shall exist that, based on the subordination
provisions applicable to the series, would prevent us from
making payments of principal of, premium and interest, if any,
on any of the applicable subordinated debt securities at the
date of the irrevocable deposit referred to above or at any
time during the period ending on the 91st day after the
deposit date.
In the case of a defeasance by us, the opinion we deliver must be based
on a ruling of the Internal Revenue Service issued, or a change in U.S. federal
income tax law occurring, after the date of the indenture, since such a result
would not occur under the U.S. federal income tax laws in effect on such date.
Although we may discharge or decrease our obligations under the
indenture as described in the two preceding paragraphs, we may not avoid, among
other things, our duty to register the transfer or exchange of any series of
debt securities, to replace any temporary, mutilated, destroyed, lost or stolen
series of debt securities or to maintain an office or agency in respect of any
series of debt securities.
Modification of the Indenture
The indenture provides that we and the trustee may enter into
supplemental indentures without the consent of the holders of debt securities
to:
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o secure any debt securities and provide the terms and
conditions for the release or substitution of the security;
o evidence the assumption by a successor corporation of our
obligations;
o add covenants for the protection of the holders of debt
securities;
o add any additional events of default;
o cure any ambiguity or correct any inconsistency or defect in
the indenture;
o add to, change or eliminate any of the provisions of the
indenture in a manner that will become effective only when
there is no outstanding debt security which is entitled to the
benefit of the provision as to which the modification would
apply;
o establish the forms or terms of debt securities of any series;
o eliminate any conflict between the terms of the indenture and
the Trust Indenture Act of 1939;
o evidence and provide for the acceptance of appointment by a
successor trustee and add to or change any of the provisions
of the indenture as is necessary for the administration of the
trusts by more than one trustee; and
o make any other provisions with respect to matters or questions
arising under the indenture that will not be inconsistent with
any provision of the indenture as long as the new provisions
do not adversely affect the interests of the holders of any
outstanding debt securities of any series created prior to the
modification.
The indenture also provides that we and the trustee may, with the
consent of the holders of not less than a majority in aggregate principal amount
of debt securities of all series of Senior Debt Securities or of Subordinated
Securities of equal ranking, as the case may be, then outstanding and affected,
voting as one class, add any provisions to, or change in any manner, eliminate
or modify in any way the provisions of, the indenture or modify in any manner
the rights of the holders of the debt securities. We and the trustee may not,
however, without the consent of the holder of each outstanding debt security
affected thereby:
o extend the final maturity of any debt security;
o reduce the principal amount or premium, if any;
o reduce the rate or extend the time of payment of interest;
o reduce any amount payable on redemption or impair or affect
any right of redemption at the option of the holder of the
debt security;
o change the currency in which the principal, premium or
interest, if any, is payable;
o reduce the amount of the principal of any debt security issued
with an original issue discount that is payable upon
acceleration or provable in bankruptcy;
o alter provisions of the relevant indenture relating to the
debt securities not denominated in U.S. dollars;
o impair the right to institute suit for the enforcement of any
payment on any debt security when due;
o if applicable, adversely affect the right of a holder to
convert or exchange a debt security; or
o reduce the percentage of holders of debt securities of any
series whose consent is required for any modification of the
indenture.
-14-
The indenture provides that the holders of not less than a majority in
aggregate principal amount of the then outstanding debt securities of any and
all affected series of equal ranking, by notice to the relevant trustee, may on
behalf of the holders of the debt securities of any and all such series of equal
ranking waive any default and its consequences under the indenture except:
o a continuing default in the payment of interest on, premium,
if any, or principal of, any such debt security held by a
nonconsenting holder; or
o a default in respect of a covenant or provision of the
indenture that cannot be modified or amended without the
consent of the holder of each outstanding debt security of
each series affected.
Concerning the Trustee
The indenture provides that there may be more than one trustee under
the indenture, each for one or more series of debt securities. If there are
different trustees for different series of debt securities, each trustee will be
a trustee of a trust under the indenture separate and apart from the trust
administered by any other trustee under that indenture. Except as otherwise
indicated in this prospectus or any prospectus supplement, any action permitted
to be taken by a trustee may be taken by such trustee only on the one or more
series of debt securities for which it is the trustee under the indenture. Any
trustee under the indenture may resign or be removed from one or more series of
debt securities. All payments of principal of, premium and interest, if any, on,
and all registration, transfer, exchange, authentication and delivery of, the
debt securities of a series will be effected by the trustee for that series at
an office designated by the trustee in New York, New York.
If the trustee becomes a creditor of ours, the indenture places
limitations on the right of the trustee to obtain payment of claims or to
realize on property received in respect of any such claim as security or
otherwise. The trustee may engage in other transactions. If it acquires any
conflicting interest relating to any duties concerning the debt securities,
however, it must eliminate the conflict or resign as trustee.
The holders of a majority in aggregate principal amount of any and all
affected series of debt securities of equal ranking then outstanding will have
the right to direct the time, method and place of conducting any proceeding for
exercising any remedy available to the trustee concerning the applicable series
of debt securities, provided that the direction:
o would not conflict with any rule of law or with the relevant
indenture;
o would not be unduly prejudicial to the rights of another
holder of the debt securities; and
o would not involve any trustee in personal liability.
The indenture provides that in case an Event of Default shall occur,
not be cured and be known to any trustee, the trustee must use the same degree
of care as a prudent person would use in the conduct of his or her own affairs
in the exercise of the trustee's power. The trustee will be under no obligation
to exercise any of its rights or powers under the indenture at the request of
any of the holders of the debt securities, unless they shall have offered to the
trustee security and indemnity satisfactory to the trustee.
No Individual Liability of Incorporators, Stockholders, Officers or Directors
The indenture provides that no incorporator and no past, present or
future stockholder, officer or director of ours or any successor corporation in
their capacity as such shall have any individual liability for any of our
obligations, covenants or agreements under the debt securities or the indenture.
Governing Law
The indenture and the debt securities will be governed by, and
construed in accordance with, the laws of the State of New York.
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PLAN OF DISTRIBUTION
We may sell the securities separately or together:
o through one or more underwriters or dealers in a public
offering and sale by them,
o directly to investors, or
o through agents.
We may sell the securities from time to time in one or more
transactions at a fixed price or prices, which may be changed from time to time:
o at market prices prevailing at the times of sale,
o at prices related to such prevailing market prices, or
o at negotiated prices.
We will describe the method of distribution of the securities in the
prospectus supplement.
Underwriters, dealers or agents may receive compensation in the form of
discounts, concessions or commissions from us or our respective purchasers (as
their agents in connection with the sale of securities). These underwriters,
dealers or agents may be considered to be underwriters under the Securities Act
of 1933, as amended. As a result, discounts, commissions or profits on resale
received by the underwriters, dealers or agents may be treated as underwriting
discounts and commissions. The prospectus supplement will identify any such
underwriter, dealer or agent, and describe any compensation received by them
from us. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
Underwriters, dealers and agents may be entitled to indemnification by
us against certain civil liabilities, including liabilities under the Securities
Act of 1933, as amended, or to contribution with respect to payments made by the
underwriters, dealers or agents, under agreements between us and the
underwriters, dealers and agents.
We may grant underwriters who participate in the distribution of
securities an option to purchase additional securities to cover over-allotments,
if any, in connection with the distribution.
All securities will be new issues of securities with no established
trading market. Underwriters involved in the public offering and sale of any of
the securities may make a market in those securities. However, they are not
obligated to make a market and may discontinue market making activity at any
time. No assurance can be given as to the liquidity of the trading market for
any of the securities.
Underwriters or agents and their associates may be customers of, engage
in transactions with or perform services for us in the ordinary course of
business.
LEGAL MATTERS
Selected legal matters with respect to the validity of any securities
issued under this prospectus will be passed upon for us by Pillsbury Winthrop
LLP, San Francisco, California and New York, New York.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements as of and for the year ended September 30, 2002, included
in our annual report on Form 10-K for the year ended September 30, 2002, as set
forth in their report, which is incorporated by reference in this prospectus and
elsewhere in the registration statement. Ernst & Young LLP also have audited the
consolidated financial statements of Industrial Services Group, Inc. and
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Subsidiaries at December 31, 2001 and 2000 and for each of the three years in
the period ended December 31, 2001 as set forth in their report included in our
Current Report on Form 8-K filed with the Securities and Exchange Commission on
July 18, 2002. We have incorporated these consolidated financial statements by
reference in this prospectus in reliance upon Ernst & Young LLP's reports, given
on their authority as experts in accounting and auditing.
The financial statements for each of the two years ended September 30,
2001 incorporated in this Prospectus by reference to the Annual Report on Form
10-K of Headwaters Incorporated for the year ended September 30, 2002 have been
so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
-17-
PART II
Information Not Required In Prospectus
Item 14. Other Expenses of Issuance and Distribution. The following is
a statement of estimated expenses in connection with the issuance and
distribution of the securities being registered, other than underwriting
discounts and commission.
Registration fee $ 23,000
Blue Sky Qualification Fees and Expenses* 2,000
Trustee's Fees* 7,500
Transfer Agent Fees* 1,000
Printing Fees* 25,000
Legal Fees and Expenses* 200,000
Accounting Fees and Expenses* 15,000
Miscellaneous* 6,500
-----------
$ 280,000
===========
* Estimated.
Item 15. Indemnification of Directors and Officers. Section 145 of the
Delaware General Corporation Law provides that a corporation may indemnify any
person, including an officer and director, who was or is, or is threatened to be
made, a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such cooperation), by reason of the fact that
such person is or was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best interests of
such corporation, and, with respect to any criminal actions and proceedings, had
no reasonable cause to believe that his conduct was unlawful. A Delaware
corporation may indemnify any person, including an officer or director, who was
or is, or is threatened to be made, a party to any threatened, pending or
contemplated action or suit by or in the right of such corporation, under the
same conditions, except that no indemnification is permitted without judicial
approval if such person is adjudged to be liable to such corporation. Where an
officer or director of a corporation is successful, on the merits or otherwise,
in the defense of any action, suit or proceeding referred to above, or any
claim, issue or matter herein, the corporation must indemnify such person
against the expenses (including attorneys' fees) which such officer or director
actually and reasonably incurred in connection therewith.
Article VII of the registrant's certificate of incorporation exonerates
the Registrant's directors from personal liability for monetary damages for
breach of the fiduciary duty of care as a director, except for any breach of the
directors' duty of loyalty for acts or omissions not in good faith or which
involve intentional misconduct or knowing violations of law, for any improper
declaration of dividends or for any transaction from which the director derived
an improper personal benefit. Article VII does not eliminate a stockholder's
right to seek non-monetary, equitable remedies, such as an injunction or
rescission, to redress an action taken by the directors. However, as a practical
matter, equitable remedies may not be available in all situations, and there may
be instances in which no effective remedy is available.
The registrant maintains directors' and officers' liability insurance
policies. The registrant has entered into contracts with its directors and
executive officers providing for indemnification of the registrant's officers
and directors to the fullest extent permitted by applicable law.
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Item 16. Exhibits.
Exhibit No. Description
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1.1* Form of Underwriting Agreement relating to common stock.
1.2* Form of Underwriting Agreement relating to preferred stock.
1.3* Form of Underwriting Agreement relating to debt securities.
4.1 Restated Certificate of Incorporation of Headwaters.(1)
4.2 By-Laws of Headwaters (Originally designated as Exhibit
3.2).(2)
4.2.1 Certificate of Amendment to Bylaws of Headwaters dated January
31, 1996 (Originally designated as Exhibit 3.2.1).(2)
4.2.2 Certificate of Amendment to the Bylaws dated May 20, 1997
(Originally designated as Exhibit No. 3.2.1).(3)
4.2.3 Certificate of Amendment to the Bylaws dated June 25, 1997
(Originally designated as Exhibit No. 3.2.2).(3)
4.3** Form of Indenture relating to debt securities.
4.4* Form of supplemental indenture or other instrument
establishing the issuance of one or more series of senior debt
securities or subordinated debt securities (including the form
of such debt security).
5.1** Opinion of Pillsbury Winthrop LLP.
12.1 Statement of computation of ratios.
23.1** Consent of Pillsbury Winthrop LLP (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of PricewaterhouseCoopers LLP.
23.4 Consent of Ernst & Young LLP.
24.1 Power of Attorney (previously filed for directors Benson,
Stewart, Herickhoff, Weller and Garn); attached for directors
Dickinson, Malquist and Creamer.
25.1+ Form T-1 Statement of Eligibility of the trustee for the debt
securities.
- ---------------------
* To be filed by amendment or pursuant to a report to be filed
pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934, if applicable, and incorporated herein by reference.
** Previously filed.
+ To be filed by amendment or pursuant to Trust Indenture Act
Section 305(b)(2), if applicable.
(1) Incorporated by reference to the indicated exhibit filed with
Headwaters' Current Report on Form 8-K, filed September 12,
2001.
(2) Incorporated by reference to the indicated exhibit filed with
Headwaters' Registration Statement on Form 10, filed February
26, 1996.
(3) Incorporated by reference to the indicated exhibit filed with
Headwaters' Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1997.
Item 17. Undertakings. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement; and
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(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement; provided, however, that paragraphs (i) and (ii)
shall not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by 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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) 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 prescribed by
the Securities Exchange Act under Section 305(b)(2) of the Trust Indenture Act.
(5) That, for the purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to any charter provision, bylaw 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 of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
post-effective amendment to Registration Statement on Form S-3 to be signed on
its behalf by the undersigned, thereunto duly authorized in Salt Lake City,
State of Utah, on July 23, 2003.
HEADWATERS INCORPORATED
/s/ Kirk A. Benson
---------------------------------------
By: Kirk A. Benson,
Chief Executive Officer and
Chairman of the Board of Directors
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Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this post-effective amendment to Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, and in the
capacities and on the dates indicated.
Signature Title Date
/s/ Kirk A. Benson Chief Executive Officer July 23, 2003
----------------------- and Chairman of the
Kirk A. Benson Board of Directors
* Chief Financial and July 23, 2003
----------------------- Accounting Officer
Steven G. Stewart
*
----------------------- Director July 23, 2003
James A. Herickhoff
*
----------------------- Director July 23, 2003
Raymond J. Weller
*
----------------------- Director July 23, 2003
E.J. "Jake" Garn
*
----------------------- Director July 23, 2003
William S. Dickinson
----------------------- Director July 23, 2003
R. Sam Christensen
*
----------------------- Director July 23, 2003
Malyn K. Malquist
*
------------------------ Director July 23, 2003
R Steve Creamer
* By: /s/ Kirk A Benson
-------------------
Kirk A. Benson
Attorney in Fact
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Exhibit Index
Exhibit No. Description
----------- -----------
1.1* Form of Underwriting Agreement relating to common stock.
1.2* Form of Underwriting Agreement relating to preferred stock.
1.3* Form of Underwriting Agreement relating to debt securities.
4.1 Restated Certificate of Incorporation of Headwaters.(1)
4.2 By-Laws of Headwaters (Originally designated as Exhibit
3.2).(2)
4.2.1 Certificate of Amendment to Bylaws of Headwaters dated January
31, 1996 (Originally designated as Exhibit 3.2.1).(2)
4.2.2 Certificate of Amendment to the Bylaws dated May 20, 1997
(Originally designated as Exhibit No. 3.2.1).(3)
4.2.3 Certificate of Amendment to the Bylaws dated June 25, 1997
(Originally designated as Exhibit No. 3.2.2).(3)
4.3** Form of Indenture relating to debt securities.
4.4* Form of supplemental indenture or other instrument
establishing the issuance of one or more series of senior debt
securities or subordinated debt securities (including the form
of such debt security).
5.1** Opinion of Pillsbury Winthrop LLP.
12.1 Statement of computation of ratios.
23.1** Consent of Pillsbury Winthrop LLP (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of PricewaterhouseCoopers LLP.
23.4 Consent of Ernst & Young LLP.
24.1 Power of Attorney (previously filed for directors Benson,
Stewart, Herickhoff, Weller and Garn); attached for directors
Dickinson, Malquist and Creamer.
25.1+ Form T-1 Statement of Eligibility of the trustee for the debt
securities.
- -------------------------
* To be filed by amendment or pursuant to a report to be filed
pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934, if applicable, and incorporated herein by reference.
** Previously filed.
+ To be filed by amendment or pursuant to Trust Indenture Act
Section 305(b)(2), if applicable.
(1) Incorporated by reference to the indicated exhibit filed with
Headwaters' Current Report on Form 8-K, filed September 12,
2001.
(2) Incorporated by reference to the indicated exhibit filed with
Headwaters' Registration Statement on Form 10, filed February
26, 1996.
(3) Incorporated by reference to the indicated exhibit filed with
Headwaters' Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1997.
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