Chesapeake Utilities Corporation S-3/A
As filed with the Securities and Exchange Commission on
November 6, 2006
Registration
No. 333-135602
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
PRE-EFFECTIVE AMENDMENT NO.
1
TO
Form S-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
Chesapeake Utilities
Corporation
(Exact name of registrant as
specified in its charter)
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Delaware
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51-0064146
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(State or other jurisdiction
of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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909 Silver Lake Boulevard
Dover, Delaware 19904
(302) 734-6799
(Address, including zip code,
and telephone number,
including area code, of
registrant’s principal executive offices)
Michael P. McMasters, Senior Vice President &
Chief Financial Officer
Chesapeake Utilities Corporation
909 Silver Lake Boulevard
Dover, Delaware 19904
(302) 734-6799
(Name, address, including zip
code, and telephone number,
including area code, of agent
for service)
Copies to:
William Appleton, Esq.
Baker & Hostetler LLP
312 Walnut Street, Suite 3200
Cincinnati, Ohio 45202-4074
(513) 929-3400
Approximate date of commencement of proposed sale to the
public: From time to time after the effective
date of this Registration Statement.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box. o
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. þ
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 for the same
offering. o
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. o
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. o
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. o
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
PROSPECTUS
Chesapeake
Utilities Corporation
Common Stock and Debt
Securities
We may offer, from time to time in one or more offerings, in
amounts, at prices and on terms that we will determine at the
time of offering, shares of our common stock, par value per
share $0.4867 (the “Common Stock”),
and/or debt
securities. We will provide the specific terms of any offering
of Common Stock
and/or debt
securities in supplements to this prospectus. The prospectus
supplements will also describe the specific manner in which we
will offer these securities and may also supplement, update or
amend information contained in this prospectus. You should read
this prospectus, the applicable prospectus supplement, and any
documents incorporated by reference into this prospectus
carefully before you invest.
We may sell Common Stock
and/or debt
securities on a continuous or delayed basis directly, through
agents, dealers or underwriters as designated from time to time,
or through a combination of these methods. If any agents,
dealers or underwriters are involved in the sale of any
securities, the applicable prospectus supplement will set forth
any applicable commissions or discounts. Our net proceeds from
the sale of securities also will be set forth in the applicable
prospectus supplement.
Our Common Stock is listed on the New York Stock Exchange under
the symbol “CPK”.
These Securities have not been approved or disapproved by the
Securities and Exchange Commission or any state securities
commission, nor has the Securities and Exchange Commission or
any state securities commission passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary
is a criminal offense.
We have not authorized any dealer, salesman or other person
to give any information or to make any representation other than
those contained or incorporated by reference in this prospectus
or any applicable supplement to this prospectus. You must not
rely upon any information or representation not contained or
incorporated by reference in this prospectus or any applicable
supplement to this prospectus as if we had authorized it. This
prospectus and any applicable prospectus supplement do not
constitute an offer to sell or the solicitation of an offer to
buy any securities other than the registered securities to which
they relate. Nor do this prospectus and any accompanying
prospectus supplement constitute an offer to sell or the
solicitation of an offer to buy securities in any jurisdiction
to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. You should not assume that
the information contained in this prospectus or any applicable
prospectus supplement is correct on any date after its date,
even though this prospectus or a supplement is delivered or
securities are sold on a later date.
The date of this prospectus is November 6, 2006.
TABLE OF
CONTENTS
FORWARD-LOOKING
INFORMATION
This prospectus and the applicable prospectus supplements
include and incorporate by reference forward-looking statements
within the meaning of Section 27A of the Securities Act of
1933, as amended (the “Securities Act”), and
Section 21E of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). We intend such
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995.
Forward-looking statements are generally identifiable by use of
the words “believe,” “expect,”
“intend,” “anticipate,” “plan,”
“estimate,” “project” or similar
expressions. Our ability to predict results or the actual effect
of future plans or strategies is inherently uncertain. Actual
results could differ materially from those in forward-looking
statements because of, among other reasons, the factors
described under the caption “Risk Factors” in the
periodic reports that we file with the Securities and Exchange
Commission. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
ABOUT
THIS PROSPECTUS
This prospectus is part of a registration statement that we
filed with the Securities and Exchange Commission using a
“shelf” registration process. Under this shelf
process, we may sell any combination of our Common Stock
and/or debt
securities described in this prospectus in one or more offerings
up to a total amount of $40,000,000.00. This prospectus only
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. The prospectus supplement may
also add, update or change information contained in this
prospectus. You should read both this prospectus and the
applicable prospectus supplement together with additional
information described under the headings, “Where You Can
Find More Information” and “Incorporation of Certain
Information by Reference.”
Unless otherwise indicated or unless the context requires
otherwise, all references in this prospectus to “we,”
“us,” “our,” the “Company,” the
“Registrant” or “Chesapeake” mean Chesapeake
Utilities Corporation and all entities owned or controlled by
Chesapeake Utilities Corporation. When we refer to our
“Certificate of Incorporation,” we mean Chesapeake
Utilities Corporation’s Amended Certificate of
Incorporation, and when we refer to our “Bylaws,” we
mean Chesapeake Utilities Corporation’s Amended Bylaws.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements
and other information with the Securities and Exchange
Commission (the “SEC”) pursuant to the Exchange Act.
Such filings are available to the public from the SEC’s
website at http://www.sec.gov. You may also read and copy any
document we file with the SEC at the
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SEC’s Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. You may obtain copies of any
document filed by us at prescribed rates by writing to the
Public Reference Section of the SEC at that address. You may
obtain information about the operation of the SEC’s Public
Reference Room by calling the SEC at
1-800-SEC-0330.
You may inspect reports and other information that we file at
the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005. Information about us,
including our filings, is also available on our website at
http://www.chpk.com. Unless expressly incorporated by
reference, information contained on or made available through
our website is not a part of this prospectus or any accompanying
prospectus supplement.
We have filed a registration statement, of which this prospectus
is a part, and related exhibits with the SEC under the
Securities Act. That registration statement contains additional
information about us and the Common Stock and debt securities.
You may inspect the registration statement and exhibits without
charge at the SEC’s Public Reference Room or at the
SEC’s web site set forth above, and you may obtain copies
from the SEC at prescribed rates.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The SEC allows 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 to those documents. The information incorporated by
reference is an important part of this prospectus. Any statement
contained in a document that is incorporated by reference in
this prospectus is automatically updated and superseded if
information contained in this prospectus, or information that we
later file with the SEC, modifies or replaces that information.
Any statement made in this prospectus or any prospectus
supplement concerning the contents of any contract, agreement or
other document is only a summary of the actual contract,
agreement or other document. If we have filed or incorporated by
reference any contract, agreement or other document as an
exhibit to the registration statement, you should read the
exhibit for a more complete understanding of the document or
matter involved. Each statement regarding a contract, agreement
or other document is qualified in its entirety by reference to
the actual document.
We incorporate by reference the following documents we filed,
excluding any information contained therein or attached as
exhibits thereto which has been furnished to, but not filed
with, the SEC:
(a) Our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2005, filed on
March 7, 2006;
(b) Our definitive Proxy Statement on Schedule 14A
filed on March 31, 2006;
(c) Our Current Report on
Form 8-K
dated March 11, 2006, filed on March 16, 2006;
(d) Our Current Report on
Form 8-K
dated May 2, 2006, filed on May 3, 2006;
(e) Our Current Report on
Form 8-K
dated May 1, 2006, filed on May 5, 2006;
(f) Our Quarterly Report on
Form 10-Q
for the quarterly period ended March 31, 2006, filed on
May 10, 2006;
(g) Our Current Report on
Form 8-K
dated May 31, 2006, filed on June 2, 2006;
(h) Our Current Report on
Form 8-K
dated June 13, 2006, filed on June 19, 2006;
(i) Our Current Report on
Form 8-K
dated August 1, 2006, filed on August 7, 2006;
(j) Our Quarterly Report on
Form 10-Q
for the quarterly period ended June 30, 2006, filed on
August 9, 2006;
(k) Our Current Report on
Form 8-K
dated August 31, 2006, filed on September 7, 2006;
(l) Our Current Report on
Form 8-K
dated September 19, 2006, filed on September 22, 2006;
(m) Our Current Report on
Form 8-K
dated September 26, 2006, filed on October 2, 2006;
(n) Our Current Report on
Form 8-K
dated October 12, 2006, filed on October 17, 2006;
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(o) Our Current Report on Form 8-K dated
October 31, 2006, filed on November 6, 2006;
(p) The description of our preferred stock purchase rights
contained in our Registration Statement on
Form 8-A
filed on August 24, 1999, and all amendments or reports
filed with the SEC for the purpose of updating such description,
and further described in the section, “Description of
Common Stock”; and
(q) The description of our Common Stock contained in our
registration statements filed pursuant to Section 12 of the
Exchange Act, and all amendments or reports filed with the SEC
for the purpose of updating such description, and further
described in the section, “Description of Common
Stock.”
Any documents we file pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this prospectus
and prior to the termination of the offering of the securities
to which this prospectus relates will automatically be deemed to
be incorporated by reference in this prospectus and a part of
this prospectus from the date of filing such documents; provided
however, that we are not incorporating, in each case, any
documents or information contained therein that has been
furnished to, but not filed with, the SEC.
To receive a free copy of any of the documents incorporated by
reference in this prospectus (other than exhibits, unless they
are specifically incorporated by reference in any such
documents), call or write Chesapeake Utilities Corporation, 909
Silver Lake Boulevard, Dover, Delaware 19904, Attention: Michael
P. McMasters, Senior Vice President and Chief Financial Officer,
telephone number
(302) 734-6799.
We also maintain a web site that contains additional information
about us (http://www.chpk.com).
You should rely only on the information incorporated by
reference or set forth in this prospectus or the applicable
prospectus supplement. We have not authorized anyone else to
provide you with different information. We may only use this
prospectus to sell securities if it is accompanied by a
prospectus supplement. We are offering these securities only in
states where the offer is permitted. You should not assume that
the information in this prospectus or the applicable prospectus
supplement is accurate as of any date other than the dates on
the front pages of these documents.
THE
COMPANY
We are a diversified utility company engaged directly or through
subsidiaries in natural gas distribution, transmission and
marketing, propane distribution and wholesale marketing,
advanced information services and other related businesses. We
are a Delaware corporation that was formed in 1947. As of
June 30, 2006, our three natural gas distribution divisions
served approximately 56,800 residential, commercial and
industrial customers in central and southern Delaware,
Maryland’s Eastern Shore and parts of Florida. Our natural
gas transmission subsidiary, Eastern Shore Natural Gas Company,
operates a
331-mile
interstate pipeline system that transports gas from various
points in Pennsylvania to our Delaware and Maryland distribution
divisions, as well as to other utilities and industrial
customers in southern Pennsylvania, Delaware and on the Eastern
Shore of Maryland. As of June 30, 2006, our propane
distribution operation served approximately 32,700 customers in
central and southern Delaware, the Eastern Shore of Maryland and
Virginia, southeastern Pennsylvania, and parts of Florida; and
our wholesale propane marketing subsidiary markets propane to
large independent and petrochemical companies, resellers and
retail propane companies in the United States. Our advanced
information services segment provides domestic and international
clients with information technology-related business services
and solutions for both enterprise and
e-business
applications. Our principal executive office is located at 909
Silver Lake Boulevard, Dover, Delaware 19904, and our telephone
number is
(302) 734-6799.
Our website address is http://www.chpk.com. Unless expressly
incorporated by reference, information contained on or made
available through our website is not a part of this prospectus
or any accompanying prospectus supplement.
USE OF
PROCEEDS
Unless otherwise specified in a prospectus supplement, the net
proceeds from the sale of Common Stock
and/or debt
securities will be added to our general corporate funds and may
be used for general corporate purposes including, but not
limited to, financing of capital expenditures, repayment of
short-term debt, funding share repurchases, financing
acquisitions, investing in subsidiaries and general working
capital purposes. Prior to such application, all or a portion of
the net proceeds may be invested in short-term investments.
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DESCRIPTION
OF COMMON STOCK
Our Certificate of Incorporation authorizes us to issue up to
12,000,000 shares of Common Stock, par value per share
$0.4867. As of June 30, 2006, we had 5,957,627 shares
of Common Stock outstanding. In addition, as of June 30,
2006, we have reserved 487,950 shares of Common Stock for
issuance under our equity-based compensation plans and
30,000 shares of Common Stock for issuance upon the
exercise of warrants. Our Certificate of Incorporation also
authorizes us to issue up to 2,000,000 shares of preferred
stock, par value per share $0.01; however, no shares of
preferred stock are outstanding. Our Common Stock is listed on
the New York Stock Exchange under the symbol, “CPK.”
The transfer agent and registrar of the Common Stock is
Computershare Trust Company, N.A., P.O. Box 43010,
Providence, Rhode Island
02940-3010.
The following descriptions of our Common Stock and preferred
stock set forth certain of their general terms and provisions.
The following descriptions are in all respects subject to and
qualified by reference to the applicable provisions of our
Certificate of Incorporation and our Bylaws.
Holders of our Common Stock are entitled to receive dividends
when, as and if declared by our Board of Directors, out of funds
legally available therefor. If we are liquidated, dissolved or
involved in any winding-up, the holders of our Common Stock are
entitled to receive ratably any assets legally available for
distribution to holders of Common Stock. Holders of our Common
Stock possess ordinary voting rights, with each share entitling
the holder to one vote. Directors are elected by a plurality of
the votes cast by the holders of our Common Stock present in
person or represented by proxy at the meeting and entitled to
vote for the election of directors. Holders of our Common Stock
do not have preemptive rights, which means that they have no
right to acquire any additional shares of Common Stock that we
may subsequently issue (other than pursuant to the Rights,
described below). Holders of our Common Stock also do not have
conversion or subscription rights, and the Common Stock is not
subject to redemption by the Company.
All of our shares of Common Stock currently outstanding are, and
any shares of Common Stock offered hereby when issued will be,
fully paid and nonassessable.
We may issue preferred stock from time to time, by authorization
of our Board of Directors and without the necessity of further
action or authorization by our stockholders, in one or more
series and with such voting powers, designations, preferences
and relative, participating, optional or other special rights
and qualifications as our Board may, in its discretion,
determine, including, but not limited to (a) the
distinctive designation of such series and the number of shares
to constitute such series; (b) the dividends, if any, for
such series; (c) the voting power, if any, of shares of
such series;(d) the terms and conditions (including price), if
any, upon which shares of such stock may be converted into or
exchanged for shares of stock of any other class or any other
series of the same class or any other securities or assets;
(e) our right, if any, to redeem shares of such series and
the terms and conditions of such redemption; (f) the
retirement or sinking fund provisions, if any, of shares of such
series and the terms and provisions relative to the operation
thereof;(g) the amount, if any, which the holders of the shares
of such series shall be entitled to receive in case of our
liquidation, dissolution or winding-up; (h) the limitations
and restrictions, if any, upon the payment of dividends or the
making of other distributions on, and upon our purchase,
redemption, or other acquisition of, our Common Stock; and
(i) the conditions or restrictions, if any, upon the
creation of indebtedness or upon the issuance of any additional
stock.
Under our Certificate of Incorporation, the affirmative vote of
not less than 75% of the total voting power of all outstanding
shares of our stock is required to approve our merger or
consolidation with, or the sale of all or substantially all of
our assets or business to, any other corporation (other than a
corporation 50% or more of the common stock of which we own), if
such corporation or its affiliates singly or in the aggregate
own or control directly or indirectly 5% or more of our
outstanding shares of Common Stock, unless the transaction is
approved by our Board of Directors prior to the acquisition by
such corporation or its affiliates of ownership or control of 5%
or more of our outstanding shares of Common Stock. In addition,
our Certificate of Incorporation provides for a classified Board
of Directors under which one-third of the members are elected
annually for three-year terms. The supermajority voting
requirement for certain mergers and consolidations and our
classified Board of Directors may have the effect of delaying,
deferring or preventing a change in control of the Company.
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On August 25, 1999, we filed with the SEC a Registration
Statement on
Form 8-A
with respect to Rights (defined below) to purchase our
Series A Participating Cumulative Preferred Stock, par
value per share $0.01 (the “Preferred Shares”). On
August 20, 1999, our Board of Directors declared a dividend
distribution of one preferred share purchase right (a
“Right”) for each outstanding share of our Common
Stock. The dividend was payable to the stockholders of record on
September 3, 1999 (the “Record Date”). One Right
will also be issued with each share of Common Stock issued
thereafter until the Distribution Date (defined below) and, in
certain circumstances, with each share of Common Stock issued
after the Distribution Date. Except as set forth below, each
Right, when it becomes exercisable, entitles the registered
holder to purchase from the Company one-fiftieth of a Preferred
Share at a price of $54.56 (the “Purchase Price”),
subject to adjustment. The description and terms of the Rights
and the definition of the “Distribution Date” are set
forth in a Rights Agreement (the “Rights Agreement”)
between the Corporation and Computershare Trust Company, N.A.,
successor to BankBoston, N.A., as Rights Agent (the “Rights
Agent”), dated as of August 20, 1999. The Rights are
not exercisable until the Distribution Date and will expire at
the close of business on August 20, 2009, unless earlier
redeemed by the Company. The Registration Statement on
Form 8-A,
and the Rights Agreement attached thereto as an exhibit, are
incorporated herein by reference. This description of the
Rights, the Rights Agreement and the Preferred Shares is in all
respects subject to and qualified by reference to the
Registration Statement on
Form 8-A,
the Rights Agreement attached thereto as an exhibit and the
applicable provisions of our Certificate of Incorporation and
our Bylaws.
The Preferred Shares purchasable upon exercise of the Rights
will not be redeemable. Each Preferred Share will be entitled to
a minimum preferential quarterly dividend payment equal to the
greater of (i) $13.00 per share (or $0.26 per
1/50th of a Preferred Share) and (ii) an aggregate
dividend per share of 50 times (subject to adjustment) the
dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Shares will be
entitled to a minimum preferential liquidation payment of
$900.00 per share (or $18.00 per 1/50th of a
Preferred Share); thereafter, and after the holders of the
Common Stock receive a liquidation payment of $18.00 per
share, the holders of the Preferred Shares and the holders of
the Common Stock will share the remaining assets in the ratio of
50 (subject to adjustment) to one for each Preferred Share and
share of Common Stock so held, respectively. In the event of any
merger, consolidation or other transaction in which Common Stock
is exchanged, each Preferred Share will be entitled to receive
50 times (subject to adjustment) the amount received per share
of Common Stock. The holders of Preferred Shares will be
entitled to vote on all matters submitted to a vote of the
Common Stock (with the Preferred Shares being entitled to 50
votes per share). In the event that the amount of accrued and
unpaid dividends on the Preferred Shares is equivalent to six
full quarterly dividends or more, the holders of the Preferred
Shares shall have the right, voting as a class, to elect two
directors in addition to the directors elected by the holders of
the Common Stock until all cumulative dividends on the Preferred
Shares have been paid through the last quarterly dividend
payment date. These rights are protected by customary
anti-dilution provisions. Because of the nature of the dividend,
liquidation and voting rights of the Preferred Shares, the value
of a one-fiftieth interest in a Preferred Share purchasable upon
the exercise of a Right should approximate the value of one
share of Common Stock. The Rights approved by the Board of
Directors of the Company were designed to protect the value of
the outstanding Common Stock in the event of an unsolicited
attempt by an acquirer to take over the Company in a manner or
on terms not approved by the Board of Directors. The Rights were
not intended to prevent a takeover of the Company at a fair
price and should not interfere with any merger or business
combination approved by the Board of Directors. The Rights have
no dilutive effect, nor do they affect reported earnings per
share or change the way in which the Common Stock is traded.
The Rights may have the effect of rendering more difficult or
discouraging an acquisition of the Company deemed undesirable by
the Board of Directors. If a person or group attempts to acquire
the Company on terms or in a manner not approved by the Board of
Directors, then the Rights may cause such person’s or
group’s ownership interest to become substantially diluted
unless the offer includes, as a condition to the acquisition, a
provision that the Rights will be purchased, redeemed or
otherwise effectively eliminated.
DESCRIPTION
OF THE DEBT SECURITIES
The following description of the terms of the debt securities
sets forth general terms that may apply to the debt securities
and provisions of the indentures that will govern the debt
securities. The description is not intended to be
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complete, as we will describe the particular terms of any debt
securities in the prospectus supplement relating to those debt
securities.
The debt securities will be either our senior debt securities or
our subordinated debt securities. The senior debt securities
will be issued under an indenture between us and the trustee. We
refer to this indenture as the “senior indenture.” The
subordinated debt securities will be issued under an indenture
between us and the trustee. We refer to this indenture as the
“subordinated indenture” and to the senior indenture
and the subordinated indenture together as the
“indentures.”
The following is a summary of some provisions of the indentures.
The summary does not purport to be complete, and is subject to,
and qualified in its entirety by reference to, all of the
provisions of each indenture. Copies of the entire indentures
are exhibits to the registration statement of which this
prospectus is a part. Parenthetical section references under
this heading are references to sections to each of the
indentures unless we indicate otherwise.
General
Terms
Neither indenture limits the amount of debt securities that we
may issue. (Section 301). Each indenture provides that debt
securities may be issued up to the principal amount authorized
by us from time to time. The senior debt securities will be
unsecured and will have the same rank as all of our other
unsecured and unsubordinated debt. The subordinated debt
securities will be unsecured and will be subordinated to all
senior indebtedness as set forth below. None of our subsidiaries
will have any obligations with respect to the debt securities.
Therefore, our rights and the rights of our creditors, including
holders of senior debt securities and subordinated debt
securities, to participate in the assets of any subsidiary will
be subject to the prior claims of the creditors of our
subsidiaries.
We may issue the debt securities in one or more separate series
of senior debt securities
and/or
subordinated debt securities. (Section 301). The prospectus
supplement relating to the particular series of debt securities
being offered will specify the particular amounts, prices and
terms of those debt securities. These terms may include:
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the title of the debt securities and the series in which the
debt securities will be included;
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the authorized denominations and aggregate principal amount of
the debt securities;
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the date or dates on which the principal and premium, if any,
are payable;
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the rate or rates per annum at which the debt securities will
bear interest, if there is any interest, or the method or
methods of calculating interest and the date from which interest
will accrue;
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the place or places where the principal of and any premium and
interest on the debt securities will be payable;
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the dates on which the interest will be payable and the
corresponding record dates;
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the period or periods within which, the price or prices at
which, and the terms and conditions on which, the debt
securities may be redeemed, in whole or in part, at our option;
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any obligation to redeem, repay or purchase debt securities
pursuant to any sinking fund or analogous provisions or at the
option of a holder;
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the portion of the principal amount of the debt securities
payable upon declaration of the acceleration of the maturity of
the debt securities;
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the person to whom any interest on any debt security will be
payable if other than the person in whose name the debt security
is registered on the applicable record date;
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any events of default, covenants or warranties applicable to the
debt securities;
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if applicable, provisions related to the issuance of debt
securities in book-entry form;
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the currency, currencies or composite currency of denomination
of the debt securities;
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the currency, currencies or composite currencies in which
payments on the debt securities will be payable and whether the
holder may elect payment to be made in a different currency;
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whether and under what conditions we will pay additional amounts
to holders of the debt securities;
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the terms and conditions of any conversion or exchange
provisions in respect of the debt securities;
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the terms pursuant to which our obligation under the indenture
may be terminated through the deposit of money or government
obligations;
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whether the debt securities will be subordinated in right of
payment to senior indebtedness and the terms of any such
subordination; and
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any other specific terms of the debt securities not inconsistent
with the applicable indenture. (Section 301).
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Unless otherwise specified in the applicable prospectus
supplement, the debt securities will not be listed on any
securities exchange.
Unless the applicable prospectus supplement specifies otherwise,
we will issue the debt securities in fully registered form
without coupons. If we issue debt securities of any series in
bearer form, the applicable prospectus supplement will describe
the special restrictions and considerations, including special
offering restrictions and special federal income tax
considerations, applicable to those debt securities and to
payment on and transfer and exchange of those debt securities.
U.S. Federal
Income Tax Considerations
We may issue the debt securities as original issue discount
securities, bearing no interest or bearing interest at a rate,
which, at the time of issuance, is below market rates, to be
sold at a substantial discount below their principal amount. We
will describe some special U.S. federal income tax and
other considerations applicable to any debt securities that are
issued as original issue discount securities in the applicable
prospectus supplement. We encourage you to consult with your own
competent tax and financial advisors on these important matters.
Payment,
Registration, Transfer and Exchange
Subject to any applicable laws or regulations, we will make
payments on the debt securities at a designated office or
agency, unless the applicable prospectus supplement otherwise
sets forth. At our option, however, we may also make interest
payments on the debt securities in registered form:
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by checks mailed to the persons entitled to interest payments at
their registered addresses; or
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by wire transfer to an account maintained by the person entitled
to interest payments as specified in the security register.
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Unless the applicable prospectus supplement otherwise indicates,
we will pay any installment of interest on debt securities in
registered form to the person in whose name the debt security is
registered at the close of business on the regular record date
for that installment of interest. (Section 307). If a
holder wishes to receive a payment by wire transfer, the holder
should provide the paying agent with written wire transfer
instructions at least 15 days prior to the payment date.
Unless the applicable prospectus supplement otherwise sets
forth, debt securities issued in registered form will be
transferable or exchangeable at the agency we may designate from
time to time. Debt securities may be transferred or exchanged
without service charge, other than any tax or other governmental
charge imposed in connection with the transfer or exchange.
(Section 305).
Book-Entry
Procedures
The applicable prospectus supplement for each series of debt
securities will state whether those debt securities will be
subject to the following provisions.
8
Unless debt securities in physical form are issued, the debt
securities will be represented by one or more fully-registered
global certificates, in denominations of $1,000 or any integral
multiple of $1,000. Each global certificate will be deposited
with, or on behalf of, The Depository Trust Company
(“DTC”), and registered in its name or in the name of
Cede & Co. or other nominee of DTC. No holder of debt
securities initially issued as a global certificate will be
entitled to receive a certificate in physical form, except as
set forth below.
DTC has advised us that:
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a “banking organization” within the meaning of the New
York banking law;
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a limited purpose trust company organized under the New York
banking law;
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a member of the Federal Reserve System;
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a “clearing corporation” within the meaning of the New
York Uniform Commercial Code; and
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a “clearing agency” registered pursuant to
Section 17A of the Exchange Act.
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DTC holds securities for DTC participants and facilitates the
settlement of securities transactions between DTC participants
through electronic book-entry transfers, thereby eliminating the
need for physical movement of certificates.
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DTC participants include securities brokers and dealers, banks,
trust companies and clearing corporations.
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Access to DTC’s book-entry system is also available to
others, such as banks, brokers and dealers, and trust companies
and clearing corporations that clear through or maintain a
custodial relationship with a DTC participant, either directly
or indirectly.
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Holders that are not DTC participants but desire to purchase,
sell or otherwise transfer ownership of, or other interests in,
the debt securities may do so only through DTC participants. In
addition, holders of the debt securities will receive all
distributions of principal and interest from the trustee through
DTC participants. Under the rules, regulations and procedures
creating and affecting DTC and its operation, DTC is required to
make book-entry transfers of debt securities among DTC
participants on whose behalf it acts and to receive and transmit
distributions of principal of, and interest on, the debt
securities. Under the book-entry system, holders of debt
securities may experience some delay in receipt of payments,
since the trustee will forward such payments to Cede &
Co., as nominee for DTC, and DTC, in turn, will forward the
payments to the appropriate DTC participants.
DTC participants will be responsible for distributions to
holders of debt securities, which distributions will be made in
accordance with customary industry practices. Although holders
of debt securities will not have possession of the debt
securities, the DTC rules provide a mechanism by which those
holders will receive payments and will be able to transfer their
interests. Although the DTC participants are expected to convey
the rights represented by their interests in any global security
to the related holders, because DTC can act only on behalf of
DTC participants, the ability of holders of debt securities to
pledge the debt securities to persons or entities that are not
DTC participants or to otherwise act with respect to the debt
securities may be limited due to the lack of physical
certificates for the debt securities.
Neither we nor the trustee under the applicable indenture nor
any agent of either of them will be responsible or liable for
any aspect of the records relating to, or payments made on
account of, beneficial ownership interests in the debt
securities or for supervising or reviewing any records relating
to such beneficial ownership interests. Since the only
“holder of debt securities,” for purposes of the
indenture, will be DTC or its nominee, the trustee will not
recognize beneficial holders of debt securities as “holders
of debt securities,” and beneficial holders of debt
securities will be permitted to exercise the rights of holders
only indirectly through DTC and DTC participants. DTC has
advised us that it will take any action permitted to be taken by
a holder of debt securities under the indenture only at the
direction of one or more DTC participants to whose accounts with
DTC the related debt securities are credited.
All payments we make to the trustee will be in immediately
available funds and will be passed through to DTC in
immediately available funds.
9
Physical certificates will be issued to holders of a global
security, or their nominees, if:
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DTC advises the trustee in writing that DTC is no longer
willing, able or eligible to discharge properly its
responsibilities as depository and we are unable to locate a
qualified successor; or
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We decide in our sole discretion to terminate the book-entry
system through DTC. (Section 305).
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In such event, the trustee under the applicable indenture will
notify all holders of debt securities through DTC participants
of the availability of such physical debt securities. Upon
surrender by DTC of a definitive global note representing the
debt securities and receipt of instructions for reregistration,
the trustee will reissue the debt securities in physical form to
holders or their nominees. (Section 305).
Debt securities in physical form will be freely transferable and
exchangeable at the office of the trustee upon compliance with
the requirements set forth in the applicable indenture.
No service charge will be imposed for any registration of
transfer or exchange, but payment of a sum sufficient to cover
any tax or other governmental charge may be required.
(Section 305).
Consolidation,
Merger or Sale by the Company
Each indenture generally permits a consolidation or merger
between us and another U.S. corporation. It also permits
the sale or transfer by us of all or substantially all of our
property and assets and the purchase by us of all or
substantially all of the property and assets of another
corporation. These transactions are permitted if:
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the resulting or acquiring corporation, if other than us,
assumes all of our responsibilities and liabilities under the
indenture, including the payment of all amounts due on the debt
securities and performance of the covenants in the
indenture; and
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immediately after the transaction, no event of default exists.
(Section 801).
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Even though each indenture contains the provisions described
above, we are not required by either indenture to comply with
those provisions if we sell all of our property and assets to
another U.S. corporation if, immediately after the sale,
that corporation is one of our wholly-owned subsidiaries.
(Section 803).
If we consolidate or merge with or into any other corporation or
sell all or substantially all of our assets according to the
terms and conditions of each indenture, the resulting or
acquiring corporation will be substituted for us in the
indentures with the same effect as if it had been an original
party to the indentures. As a result, the successor corporation
may exercise our rights and powers under each indenture, in our
name or in its own name and we will be released from all our
liabilities and obligations under each indenture and under the
debt securities. (Section 802).
Events of
Default, Notice and Certain Rights on Default
Unless otherwise stated in the applicable prospectus supplement,
an “event of default,” when used with respect to any
series of debt securities, means any of the following:
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failure to pay interest on any debt security of that series for
30 days after the payment is due;
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failure to pay the principal of or any premium on any debt
security of that series when due;
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failure to deposit any sinking fund payment on debt securities
of that series when due;
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failure to perform any other covenant in the applicable
indenture that applies to debt securities of that series for
90 days after we have received written notice of the
failure to perform in the manner specified in the indenture;
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default under any debt, including other series of debt
securities, or under any mortgage, lien or other similar
encumbrance, indenture or instrument, including the indentures,
which secures any debt, and which results in acceleration of the
maturity of an outstanding principal amount of debt greater than
$50 million, unless the acceleration is rescinded, or the
debt is discharged, within 10 days after we have received
written notice of the default in the manner specified in the
indenture;
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certain events in bankruptcy, insolvency or reorganization; or
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any other event of default that may be specified for the debt
securities of that series when that series is created.
(Section 501).
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If an event of default for any series of debt securities occurs
and continues, the trustee or the holders of at least 25% in
aggregate principal amount of the outstanding debt securities of
the series may declare the entire principal of all the debt
securities of that series to be due and payable immediately. If
a declaration occurs, the holders of a majority of the aggregate
principal amount of the outstanding debt securities of that
series can, subject to certain conditions, rescind the
declaration. (Section 502).
The prospectus supplement relating to each series of debt
securities which are original issue discount securities will
describe the particular provisions that relate to the
acceleration of maturity of a portion of the principal amount of
that series when an event of default occurs and continues.
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 either indenture.
Each indenture requires us to file an officers’ certificate
with the trustee each year that states that certain defaults do
not exist under the terms of the indenture. The trustee will
transmit by mail to the holders of debt securities of a series
notice of any default.
Other than its duties in the case of a default, a trustee is not
obligated to exercise any of its rights or powers under an
indenture at the request, order or direction of any holders,
unless the holders offer the trustee indemnification
satisfactory to the trustee. (Section 603). If
indemnification satisfactory to the trustee is provided, then,
subject to certain other rights of the trustee, the holders of a
majority in principal amount of the outstanding debt securities
of any series may, with respect to the debt securities of that
series, direct the time, method and place of:
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conducting any proceeding for any remedy available to the
trustee; or
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exercising any trust or power conferred upon the trustee.
(Section 512).
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The holder of a debt security of any series will have the right
to begin any proceeding with respect to the applicable indenture
or for any remedy only if:
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the holder has previously given the trustee written notice of a
continuing event of default with respect to that series;
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the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of that series have made a written
request of, and offered reasonable indemnification to, the
trustee to begin the proceeding;
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the trustee has not started the proceeding within 60 days
after receiving the request; and
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the trustee has not received directions inconsistent with the
request from the holders of a majority in aggregate principal
amount of the outstanding debt securities of that series during
those 60 days. (Section 507).
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The holders of not less than a majority in aggregate principal
amount of any series of debt securities, by notice to the
trustee for that series, may waive, on behalf of the holders of
all debt securities of that series, any past default or event of
default with respect to that series and its consequences.
(Section 513). A default or event of default in the payment
of the principal of, or premium or interest on, any debt
security and certain other defaults may not, however, be waived.
(Sections 508 and 513).
Modification
of the Indentures
We, as well as the trustee for a series of debt securities, may
enter into one or more supplemental indentures, without the
consent of the holders of any of the debt securities, in order
to:
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evidence the succession of another corporation to us and the
assumption of our covenants by a successor;
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add to our covenants or surrender any of our rights or powers;
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add additional events of default for any series;
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add, change or eliminate any provision affecting debt securities
that are not yet issued;
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secure the debt securities;
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establish the form or terms of debt securities not yet issued;
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evidence and provide for successor trustees;
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add, change or eliminate any provision affecting registration as
to principal of debt securities;
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permit the exchange of debt securities;
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change or eliminate restrictions on payment in respect of debt
securities;
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change or eliminate provisions or add any other provisions that
are required or desirable in accordance with any amendments to
the Trust Indenture Act, on the condition that this action does
not adversely affect the interests of any holder of debt
securities of any series issued under the indenture in any
material respect; or
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cure any ambiguity or correct any mistake. (Section 901).
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In addition, with the consent of the holders of not less than a
majority in aggregate principal amount of the outstanding debt
securities of all series affected by the supplemental indenture,
we and the trustee may execute supplemental indentures adding
any provisions to or changing or eliminating any of the
provisions of the applicable indenture or any supplemental
indenture or modifying the rights of the holders of debt
securities of that series. No such supplemental indenture may,
however, without the consent of the holder of each debt security
that is affected:
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change the time for payment of principal or interest on any debt
security;
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reduce the principal of, or any installment of principal of, or
interest on, any debt security;
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reduce the amount of premium, if any, payable upon the
redemption of any debt security;
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reduce the amount of principal payable upon acceleration of the
maturity of an original issue discount debt security;
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impair the right to institute suit for the enforcement of any
payment on or for any debt security;
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reduce the percentage in principal amount of the outstanding
debt securities of any series the consent of whose holders is
required for modification or amendment of the indenture or for
waiver of compliance with certain provisions of the indenture or
for waiver of certain defaults;
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modify the provisions relating to waiver of some defaults or any
of the foregoing provisions;
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change the currency of payment;
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adversely affect the right to repayment of debt securities of
any series at the option of the holders of those debt
securities; or
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change the place of payment. (Section 902).
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Any supplemental indenture will be filed with the SEC as an
exhibit to:
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a post-effective amendment to the registration statement of
which this prospectus is a part;
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an annual report on
Form 10-K;
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a quarterly report on
Form 10-Q; or
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a current report on
Form 8-K.
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Defeasance
and Covenant Defeasance
When we use the term defeasance, we mean discharge from some or
all of our obligations under an indenture. If we deposit with
the trustee sufficient cash or government obligations to pay the
principal, interest, any premium
12
and any mandatory sinking fund or analogous payments due to the
stated maturity or a redemption date of the debt securities of a
particular series, then at our option:
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we will be discharged from our obligations for the debt
securities of that series, the holders of the debt securities of
the affected series will no longer be entitled to the benefits
of the indenture, except for registration of transfer and
exchange of debt securities and replacement of lost, stolen or
mutilated debt securities, and those holders may look only to
the deposited funds or obligations for payment, which is
referred to as “defeasance”; or
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we will no longer be under any obligation to comply with certain
covenants under the applicable indenture as it relates to that
series, and some events of default will no longer apply to us,
which is referred to as “covenant defeasance.”
(Sections 403 and 1501).
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Unless the applicable prospectus supplement specifies otherwise
and except as described below, the conditions to both defeasance
and covenant defeasance are as follows:
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it must not result in a breach or violation of, or constitute a
default or event of default under, the applicable indenture, or
result in a breach or violation of, or constitute a default
under, any other of our material agreements or instruments;
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certain bankruptcy-related defaults or events of default with
respect to us must not have occurred and be occurring during the
period commencing on the date of the deposit of the trust funds
to defease the debt securities and ending on the 91st day
after that date;
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we must deliver to the trustee an officer’s certificate and
an opinion of counsel addressing compliance with the conditions
of the defeasance or covenant defeasance; and
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we must comply with any additional conditions to the defeasance
or covenant defeasance that the applicable indenture may impose
on us. (Sections 403 and 1501).
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In the event that government obligations deposited with the
trustee for the defeasance of such debt securities decrease in
value or default subsequent to their being deposited, we will
have no further obligation, and the holders of the debt
securities will have no additional recourse against us, for any
decrease in value or default. If indicated in the prospectus
supplement, in addition to obligations of the United States or
an agency or instrumentality of the United States, government
obligations may include obligations of the government or an
agency or instrumentality of the government issuing the currency
in which debt securities of such series are payable.
We may exercise our defeasance option for the debt securities
even if we have already exercised our covenant defeasance
option. If we exercise our defeasance option, payment of the
debt securities may not be accelerated because of default or an
event of default. If we exercise our covenant defeasance option,
payment of the debt securities may not be accelerated because of
default or an event of default with respect to the covenants to
which the covenant defeasance is applicable. If, however,
acceleration occurs, the realizable value at the acceleration
date of the money and government obligations in the defeasance
trust could be less than the principal and interest then due on
the debt securities, because the required deposit in the
defeasance trust is based on scheduled cash flow rather than
market value, which will vary depending on interest rates and
other factors.
Conversion
and Exchange Rights
The debt securities of any series may be convertible into or
exchangeable for other securities of our company or another
issuer or property or cash on the terms and subject to the
conditions set forth in the applicable prospectus supplement.
(Section 301).
Governing
Law
The indentures and the debt securities will be governed by, and
construed under, the laws of the State of New York without
regard to conflicts of laws principles thereof.
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Regarding
the Trustee
We may from time to time maintain lines of credit, and have
other customary banking relationships, with the trustee under
the senior indenture or the trustee under the subordinated
indenture.
The indentures and provisions of the Trust Indenture Act of
1939, which we refer to in this prospectus as the Trust
Indenture Act, that are incorporated by reference therein,
contain limitations on the rights of the trustee, should it
become one of our creditors, to obtain payment of claims in
certain cases or to realize on certain property received by it
in respect of any such claim as security or otherwise. The
trustee is permitted to engage in other transactions with us or
any of our affiliates; provided, however, that if it acquires
any conflicting interest (as defined under the Trust Indenture
Act), it must eliminate such conflict or resign.
Additional
Terms Applicable to Subordinated Debt Securities
The subordinated debt securities will be unsecured. The
subordinated debt securities will be subordinate to the prior
payment in full in cash of all senior indebtedness.
The term “senior indebtedness” is defined as:
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any of our indebtedness, whether outstanding on the issue date
of the subordinated debt securities of a series or incurred
later;
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accrued and unpaid interest, including interest accruing on or
after the filing of any petition in bankruptcy or for
reorganization relating to us to the extent post-filing interest
is allowed in such proceeding, in respect of:
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our indebtedness for money borrowed; and
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indebtedness evidenced by notes, debentures, bonds or other
similar instruments for the payment of which we are responsible
or liable;
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contingent reimbursement obligations with respect to letters of
credit issued or supported by our working capital lenders for
our account; and
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obligations, liabilities, fees and expenses that we owe to our
working capital lenders;
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unless the instrument creating or evidencing these obligations
provides that these obligations are not senior or prior in right
of payment to the subordinated debt securities. Notwithstanding
the foregoing, “senior indebtedness” will not include:
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any of our obligations to our subsidiaries;
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any liability for Federal, state, local or other taxes that we
owe;
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any accounts payable or other liability to trade creditors
arising in the ordinary course of business, including guarantees
of these obligations or instruments evidencing such liabilities;
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any of our indebtedness, and any accrued and unpaid interest in
respect of our indebtedness, that is subordinate or junior in
any respect to any other of our indebtedness or other
obligations; or
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the subordinated debt securities. (Section 101 of the
subordinated indenture).
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There is no limitation on our ability to issue additional senior
indebtedness. The senior debt securities constitute senior
indebtedness under the subordinated indenture.
Under the subordinated indenture, no payment may be made on the
subordinated debt securities and no purchase, redemption or
retirement of any subordinated debt securities may be made in
the event:
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any senior indebtedness is not paid in full in cash when due; or
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the maturity of any senior indebtedness is accelerated as a
result of a default, unless the default has been cured or waived
and the acceleration has been rescinded or that senior
indebtedness has been paid in full in cash.
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We may, however, pay the subordinated debt securities without
regard to the above restriction if the representatives of the
holders of the applicable senior indebtedness approve the
payment in writing to us and the trustee. (Section 1603 of
the subordinated indenture).
The representatives of the holders of senior indebtedness may
notify us and the trustee in writing (a “payment blockage
notice”) of a default which can result in the acceleration
of that senior indebtedness’ maturity without further
notice, except such notice as may be required to effect such
acceleration, or the expiration of any grace periods. In this
event, we may not pay the subordinated debt securities for
179 days after receipt of that notice. The payment blockage
period will end earlier if such payment blockage period is
terminated:
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by written notice to the trustee and us from the person or
persons who gave such payment blockage notice;
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because the default giving rise to such payment blockage notice
is cured, waived or otherwise no longer continuing; or
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because such senior debt has been discharged or repaid in full
in cash.
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Notwithstanding the foregoing, if the holders of senior
indebtedness or their representatives have not accelerated the
maturity of the senior indebtedness at the end of the
179-day
period, we may resume payments on the subordinated debt
securities. Not more than one payment blockage notice may be
given in any consecutive
360-day
period, irrespective of the number of defaults with respect to
senior indebtedness during that period. No default existing on
the beginning date of any payment blockage period initiated by a
person or persons may be the basis of a subsequent payment
blockage period with respect to the senior indebtedness held by
that person unless that default has been cured or waived for a
period of not fewer than 90 consecutive days.
If we pay or distribute our assets to creditors upon a total or
partial liquidation, dissolution or reorganization of or similar
proceeding relating to us or our property, then:
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•
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the holders of senior indebtedness will be entitled to receive
payment in full in cash of the senior indebtedness before the
holders of subordinated debt securities are entitled to receive
any payment; and
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•
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until the senior indebtedness is paid in full in cash, any
payment or distribution to which holders of subordinated debt
securities would be entitled but for the subordination
provisions of the subordinated indenture will be made to holders
of the senior indebtedness, except that holders of subordinated
debt securities may receive certain capital stock and
subordinated debt. (Section 1602 of the subordinated
indenture).
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If a distribution is made to holders of subordinated debt
securities that, due to the subordination provisions, should not
have been made to them, those holders of subordinated debt
securities are required to hold it in trust for the holders of
senior indebtedness, and pay it over to them as their interests
may appear. (Section 1605 of the subordinated indenture).
After all senior indebtedness is paid in full and until the
subordinated debt securities are paid in full, holders of
subordinated debt securities will be subrogated to the rights of
holders of senior indebtedness to receive distributions
applicable to such senior indebtedness. (Section 1606 of
the subordinated indenture).
As a result of the subordination provisions contained in the
subordinated indenture, in the event of insolvency, our
creditors who are holders of senior indebtedness may recover
more, ratably, than the holders of subordinated debt securities.
In addition, our creditors who are not holders of senior
indebtedness may recover less, ratably, than holders of senior
indebtedness and may recover more, ratably, than the holders of
subordinated indebtedness. Furthermore, claims of our
subsidiaries’ creditors generally will have priority with
respect to the assets and earnings of the subsidiaries over the
claims of our creditors, including holders of the subordinated
debt securities, even though those obligations may not
constitute senior indebtedness. The subordinated debt
securities, therefore, will be effectively subordinated to
creditors, including trade creditors, of our subsidiaries. It is
important to keep this in mind if you decide to hold our
subordinated debt securities.
The terms of the subordination provisions described above will
not apply to payments from money or the proceeds of government
securities held in trust by the trustee for any series of
subordinated debt securities for the
15
payment of principal and interest on such subordinated debt
securities pursuant to the defeasance procedures described under
“Defeasance and Covenant Defeasance.”
RATIO OF
EARNINGS TO FIXED CHARGES
Our ratios of earnings to fixed charges for the fiscal years
ended December 31, 2001 - 2005, were as follows:
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Time Period
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Ratio
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2001
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3.23
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2002
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3.26
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2003
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3.66
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2004
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3.73
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2005
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4.10
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Our ratio of earnings to fixed charges for the six months ended
June 30, 2006 was 4.76. The ratio of earnings to fixed
charges is computed by dividing fixed charges into earnings plus
fixed charges. For purposes of computing this ratio, earnings
have been calculated as pretax income from continuing operations
before adjustment for minority interests in consolidated
subsidiaries. Fixed charges include a portion of rents
representative of the interest factor, interest on indebtedness
and the amortization of debt discounts and expenses.
PLAN OF
DISTRIBUTION
We may sell securities offered pursuant to any applicable
prospectus supplement to one or more underwriters for public
offering and sale by them or we may sell such securities to
investors directly or through agents, some of which may be
dealers. We may also sell the securities through a combination
of these methods. The name of any underwriter or agent involved
in the offer and sale of such securities will be included in the
applicable prospectus supplement. The distribution of securities
offered pursuant to any applicable prospectus supplement may
occur:
(a) at a fixed price or prices, which may be changed;
(b) at market prices prevailing at the time of sale;
(c) at prices related to prevailing market prices; or
(d) at negotiated prices.
From time to time, we may also authorize underwriters acting as
our agents to offer and sell securities upon the terms and
conditions set forth in an applicable prospectus supplement.
Underwriters may be deemed to have received compensation from us
in the form of underwriting discounts or commissions in
connection with the sale of securities offered pursuant to any
applicable prospectus supplement. Underwriters may also receive
commissions from purchasers of securities for whom such
underwriters may act as agent. Underwriters may sell securities
offered pursuant to any applicable prospectus supplement to or
through dealers. Such dealers may receive compensation in the
form of discounts, concessions from the underwriters or
commissions from the purchasers for whom such dealers may act as
agent.
We may enter into derivative transactions with third parties, or
sell securities not covered by this prospectus to third parties
in privately negotiated transactions. If the applicable
prospectus supplement so indicates, in connection with those
derivatives, the third parties may sell securities covered by
this prospectus and the applicable prospectus supplement,
including short sale transactions. If so, the third party may
use securities pledged by us or borrowed from us or others to
settle those sales or to close out any related open borrowings
of common shares, and may use securities received from us in
settlement of those derivatives to close out any related open
borrowings of common shares. The third party in such sale
transactions will be an underwriter and, if not identified in
this prospectus, will be identified in the applicable prospectus
supplement or a post-effective amendment to this registration
statement.
We will describe in the applicable prospectus supplement any
underwriting compensation we pay to underwriters or agents in
connection with any offering of securities. Likewise, we will
also describe any discounts, concessions or commissions allowed
by underwriters to participating dealers in the applicable
prospectus
16
supplement. Underwriters, dealers and agents participating in
the distribution of the securities may be deemed to be
underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the securities may
be deemed to be underwriting discounts and commissions. We may
enter into agreements to indemnify underwriters, dealers and
agents against certain civil liabilities, including liabilities
under the Securities Act, and to reimburse these persons for
certain expenses. We will describe any indemnification
agreements in the applicable prospectus supplement.
If indicated in the applicable prospectus supplement, we may
authorize dealers acting as our agents to solicit offers by
certain institutions to purchase the securities from us at the
public offering price set forth in such prospectus supplement
pursuant to delayed delivery contracts providing for payment and
delivery on the date or dates stated in the prospectus
supplement. Each delayed delivery contract will be for an amount
not less than the respective amounts stated in the applicable
prospectus supplement. Likewise, the aggregate principal amount
of the securities sold pursuant to delayed delivery contracts
will not be less or more than the respective amounts stated in
the applicable prospectus supplement. We may make delayed
delivery contracts with various institutions, including
commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable
institutions, and other institutions. Delayed delivery contracts
will always be subject to our approval. Delayed delivery
contracts will not be subject to any conditions except the
following:
(a) The purchase by an institution of the securities
covered by its delayed delivery contracts shall not at the time
of delivery be prohibited under the laws of any jurisdiction in
the United States to which such institution is subject; and
(b) If the securities are being sold to underwriters, we
shall have sold to such underwriters the total principal amount
of the offered securities less the principal amount covered by
the delayed delivery contracts.
Certain of the underwriters or their affiliates may, but will
not necessarily, be customers of, engage in transactions with or
perform services for us or one or more of our subsidiaries in
the ordinary course of our
and/or their
business. It is also possible that certain of the underwriters
or their affiliates may be affiliates of banking institutions or
other financial services firms with which we or one or more of
our subsidiaries has a pre-existing business relationship.
EXPERTS
The consolidated financial statements 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 the Annual
Report on
Form 10-K
for the year ended December 31, 2005, have been so
incorporated in reliance on the report of PricewaterhouseCoopers
LLP, an independent registered public accounting firm, given on
the authority of said firm as experts in auditing and accounting.
LEGAL
MATTERS
The validity of the Common Stock and debt securities will be
passed upon for the Company by Baker & Hostetler LLP,
Orlando, Florida. Any underwriters will also be advised about
the validity of the securities and other legal matters by their
own counsel, which will be named in the prospectus supplement.
17
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
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Item 14.
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Other
Expenses of Issuance and Distribution.
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The following table sets forth the fees and expenses in
connection with the issuance and distribution of the securities
being registered hereunder. Except for the SEC registration fee,
all amounts are estimates. Certain amounts that cannot be
presently estimated will be provided in amendments to this
registration statement.
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SEC registration fee
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$
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4,280.00
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NYSE listing fee
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5,000.00
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Accounting fees and expenses
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70,000.00
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Legal fees and expenses (other
than Blue Sky)
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125,000.00
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Blue Sky fees and expenses
(including counsel fees)
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10,000.00
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Printing and engraving expenses
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30,000.00
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Transfer agent’s and
registrar’s fees and expenses
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10,000.00
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Rating Agency fees
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50,000.00
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Miscellaneous expenses
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20,720.00
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Total
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$
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325,000.00
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Item 15.
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Indemnification
of Directors and Officers.
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Under the Company’s Bylaws, each person who was or is made
a party or is threatened to be made a party to any action, suit
or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact he is or was a director or
officer of the Company, or is or was serving at the request of
the Company as a director or officer of another corporation or
of a partnership, joint venture, trust or other enterprise
(including employee benefit plans), is entitled to
indemnification and to be held harmless by the Company to the
fullest extent permitted by the General Corporation Law of the
State of Delaware (the “DGCL”) against all expense,
liabilities and loss (including attorneys’ fees, judgments,
fines or penalties and amounts paid in settlement) reasonably
incurred or suffered by such person in connection therewith,
including liabilities arising under the Securities Act. These
indemnification rights include the right to be paid by the
Company the expenses incurred in defending any action, suit or
proceeding in advance of its final disposition, subject to the
receipt by the Company of an undertaking by or on behalf of such
person to repay all amounts so advanced if it is ultimately
determined that such person is not entitled to be indemnified.
These indemnification rights under the Bylaws are not exclusive
of any other indemnification right which any person may have or
acquire under any law, bylaw, agreement, vote of stockholders,
disinterested directors or otherwise.
Under Section 145 of the DGCL, a corporation may indemnify
any person who was or is a party, or is threatened to be made a
party, to any action, suit, or proceeding by reason of the fact
that he is or was a director or officer of such corporation if
such person acted in good faith and in a manner he reasonably
believed to be in and not opposed to the best interest of the
corporation and, with respect to a criminal action or
proceeding, such person had no reasonable cause to believe that
his conduct was unlawful, except that, in the case of any action
or suit by or in the right of the corporation (such as a
derivative action), no indemnification is permitted if the
person shall be adjudged liable to the corporation (other than
indemnification for such expenses as a court shall determine
such person is fairly and reasonably entitled).
Article Eleven of the Company’s Certificate of
Incorporation provides that a director of the Company shall not
be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director,
except for liability (a) for breach of the director’s
duty of loyalty to the Company or its stockholders, (b) for
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (c) under
Section 174 of the DGCL, or (d) for any transaction
from which the director derived an improper personal benefit.
The Company has in effect liability insurance policies covering
certain claims against any director or officer of the Company by
reason of certain breaches of duty, neglect, error,
misstatement, omission or other act committed by such person in
his capacity as director or officer.
II-1
A list of exhibits filed herewith or incorporated by reference
is contained in the Exhibit Index, which is incorporated
herein by reference.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(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 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
(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), (ii) and
(iii) do not apply if the Registration Statement is on
Form S-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 424(b) that is part of the
Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the 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) That, for the purpose of determining liability under
the Securities Act of 1933 to any purchaser:
(i) (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 required to be filed pursuant to
Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii) or
(x) for the purpose of providing the information required
by Section 10(a) of the Securities Act 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 that date an underwriter, such date
shall be deemed to be a new effective date of the registration
statement relating to the securities in the registration
statement to which the 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
II-2
the registration statement or prospectus that was part of the
registration statement or made in any such document immediately
prior to such effective date; and
(5) That, for the purpose of determining liability of the
Registrant under the Securities Act to any purchaser in the
initial distribution of the securities, 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:
(i) Any preliminary prospectus or prospectus of the
undersigned Registrant relating to the offering required to be
filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned Registrant or used
or referred to by the 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.
(b) The undersigned Registrant 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 Section 15(d) of the 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.
(c) 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 foregoing provisions, or otherwise, the Registrant has been
advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as
expressed in the 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 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 and
will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance on Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to
be part of this registration statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, 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.
(e) 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 prescribed by the Commission under
Section 305(b)(2) of the Trust Indenture Act.
II-3
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 Pre-Effective Amendment No. 1 to
the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Dover,
State of Delaware, on November 6, 2006.
CHESAPEAKE UTILITIES CORPORATION
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By:
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/s/ John
R. Schimkaitis
|
John R. Schimkaitis
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registration Statement
has been signed below by the following persons on behalf of the
Registrant in the capacities indicated, on November 6, 2006.
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*
Ralph
J. Adkins, Chairman of the Board
and Director
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/s/ John
R. Schimkaitis
John
R. Schimkaitis, President,
Chief Executive Officer and Director
Date: November 6, 2006
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*
Michael
P. McMasters, Senior Vice President
and Chief Financial Officer
(Principal Financial and Accounting Officer)
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*
Eugene
H. Bayard, Director
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*
Richard
Bernstein, Director
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*
Thomas
J. Bresnan, Director
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*
Walter
J. Coleman, Director
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*
Thomas
P. Hill, Jr., Director
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*
J.
Peter Martin, Director
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*
Joseph
E. Moore, Esq., Director
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*
Calvert
A. Morgan, Jr., Director
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* |
|
John R. Schimkaitis, by signing his name hereto, does sign this
Registration Statement on behalf of the persons indicated above
pursuant to the powers of attorney duly executed by such persons
and filed as one or more Exhibits to this Registration Statement. |
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By:
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/s/ John
R. Schimkaitis
|
John R. Schimkaitis
Attorney-in-Fact
CHESAPEAKE
UTILITIES CORPORATION
EXHIBIT INDEX
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Exhibit
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No.
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|
Description
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1
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.1
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Form of Underwriting Agreement for
Common Stock*
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1
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.2
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Form of Underwriting Agreement for
debt securities*
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4
|
.1
|
|
Amended Certificate of
Incorporation of Chesapeake Utilities Corporation is
incorporated herein by reference to Exhibit 3.1 of the
Company’s Quarterly Report on
Form 10-Q
for the period ended June 30, 1998, File
No. 001-11590.
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4
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.2
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Amended Bylaws of Chesapeake
Utilities Corporation, effective February 24, 2005, are
incorporated herein by reference to Exhibit 3 of the
Company’s Annual Report on
Form 10-K
for the year ended December 31, 2004, File
No. 001-11590.
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4
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.3.1
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Form of Senior Debt Trust
Indenture between Chesapeake Utilities Corporation and the
trustee for the debt securities**
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4
|
.3.2
|
|
Form of Subordinated Debt Trust
Indenture between Chesapeake Utilities Corporation and the
trustee for the debt securities**
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4
|
.4
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Form of debt securities**
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5
|
.1
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Opinion of Baker &
Hostetler LLP**
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12
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.1
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Computation of Ratio of Earnings
to Fixed Charges is incorporated herein by reference to
Exhibit 12 of each of the Company’s Annual Reports on
Form 10-K
for the years ended December 31, 2005, 2004, 2003, 2002 and
2001, File
No. 001-11590.
Computation of Ratio of Earnings to Fixed Charges for the six
months ended June 30, 2006 is filed herewith.**
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23
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.1
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Consent of PricewaterhouseCoopers
LLP**
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23
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.2
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Consent of Baker &
Hostetler LLP (included in Exhibit 5.1)
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24
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.1
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Power of Attorney***
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25
|
.1
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Statement of Eligibility on
Form T-1
of Trustee for the Chesapeake Utilities Corporation debt
securities****
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* |
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To be filed by amendment or as an exhibit to a document
incorporated by reference into the registration statement. |
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** |
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Filed herewith. |
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**** |
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To be filed in accordance with the requirements of
Section 305(b)(2) of the Trust Indenture Act of 1939 and
Rule 5b-3
thereunder. |