Automatic Shelf Registration Statement for Securities of a Well-Known Seasoned Issuer — Form S-3 Filing Table of Contents
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S-3ASR — Automatic Shelf Registration Statement for Securities of a Well-Known Seasoned Issuer Document Table of Contents
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. þ
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
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
“large accelerated filer,”“accelerated
filer” and “smaller reporting company” in
Rule 12b-2 of the Exchange Act.
Large accelerated
filer o
Accelerated
filer þ
Non-accelerated
filer o
Smaller reporting
company o
(Do not check if a smaller
reporting company)
CALCULATION OF REGISTRATION FEE
Amount to be
Registered/Proposed
Maximum Offering Price
Per Unit/ Proposed
Amount of
Title of Each Class of
Maximum Aggregate
Registration
Securities to be Registered
Offering Price(1)(2)(3)
Fee(1)
Common Stock, par value $0.01 per share
$0
Preferred Stock, par value $0.01 per share
$0
Depositary Shares
$0
Warrants to Purchase Shares of Common Stock, Shares of Preferred
Stock, Depositary Shares or Debt Securities
$0
Subscription Rights to Purchase Shares of Common Stock, Shares
of Preferred Stock, Depositary Shares or Debt Securities(4)
An indeterminate number or amount of the securities of each
identified class as may from time to time be offered at
indeterminate prices is being registered pursuant to this
registration statement. Securities registered hereby may be sold
separately or in combination with other securities registered
hereby. In accordance with Rules 456(b) and 457(r) under
the Securities Act of 1933, as amended (the “Securities
Act”), we are deferring payment of the entire registration
fee.
(2)
The securities being registered hereby may be convertible into
or exchangeable or exercisable for other securities of any
identified class. In addition to the securities that may be
issued directly under this registration statement, there is
being registered hereunder such indeterminate aggregate number
or amount, as the case may be, of the securities of each
identified class as may from time to time be issued upon the
conversion, exchange, settlement or exercise of other securities
offered hereby. Separate consideration may or may not be
received for securities that are issued upon the conversion or
exercise of, or in exchange for, other securities or that are
issued in units or represented by depositary shares.
(3)
This registration statement also covers the Preferred Stock
Purchase Rights issuable in accordance with the Rights
Agreement, dated as of April 3, 2006, between us and American
Stock Transfer & Trust Company, as Rights Agent, which are
presently attached to and trade with our common stock.
(4)
The subscription rights to purchase shares of common stock,
shares of preferred stock, depositary shares or debt securities
may be offered without consideration.
We or selling security holders may offer from time to time
securities described in this prospectus separately or together
in any combination. Securities may be convertible into or
exchangeable for our other securities.
This prospectus provides a general description of these
securities. We will provide you with specific information about
the offering and terms of these securities in supplements to
this prospectus. The prospectus supplement may also add to,
update, supplement or clarify information contained in this
prospectus.
You should carefully read this prospectus and any applicable
prospectus supplement, together with any documents incorporated
by reference, before you invest in our securities.
We and the selling security holders may offer and sell these
securities on a continuous or delayed basis, at prices and on
terms to be determined at the time of any particular offering,
directly to purchasers, through agents, dealers or underwriters
as designated from time to time, or through a combination of
these methods. See “Plan of Distribution.” The
prospectus supplement for each offering will describe in detail
the plan of distribution for that offering and will set forth
the names of any underwriters, dealers or agents involved in the
offering and any applicable fees or commissions payable to them.
Net proceeds from the sale of the securities also will be set
forth in the applicable prospectus supplement. Unless otherwise
set forth in a prospectus supplement, we will not receive any
proceeds from the sale of securities by any selling security
holder.
Unless otherwise stated in a prospectus supplement, none of
these securities will be listed on any securities exchange. Our
common stock is listed on the Nasdaq Global Select Market under
the symbol “GSIC.”
Investing in our securities involves risks. See
“Risk Factors” beginning on page 4 of this
prospectus. You should carefully read and consider the risk
factors described in the applicable prospectus supplement and in
the documents we incorporate by reference before you invest in
our securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
This prospectus is part of a “shelf” registration
statement on
Form S-3
that we filed with the Securities and Exchange Commission,
referred to as the “SEC,” under the Securities Act of
1933, as amended, referred to as the “Securities Act.”
Under the shelf registration statement, we or the selling
security holders may offer and sell the securities described in
this prospectus, from time to time, in one or more offerings.
This prospectus provides you with a general description of the
securities we or the selling security holders may offer. Each
time we or the selling security holders offer or sell
securities, we will provide you with a prospectus supplement
containing specific information about the terms of that
offering. The prospectus supplement may also add to, update,
supplement or clarify information contained in this prospectus.
If there is any inconsistency between the information in this
prospectus and the information in the prospectus supplement, you
should rely on the information in the prospectus supplement.
This prospectus does not contain all of the information set
forth in the registration statement and the exhibits to the
registration statement. For further information concerning us
and the securities, you should read the entire registration
statement and the additional information described under
“Documents Incorporated by Reference” below.
Unless the context requires otherwise or unless otherwise
indicated, (i) all references to “GSI,”“Company,”“we,”“our,” or
“us” refer collectively to GSI Commerce, Inc. and its
consolidated subsidiaries; and (ii) all references to
“common shares” refer to shares of our common stock
and all references to “preferred shares” refer to
shares of our preferred stock.
You should rely only on the information contained or
incorporated by reference, as applicable, in this prospectus,
any prospectus supplement, or other offering materials related
to an offering of securities described in this prospectus.
Neither we nor the selling security holders have authorized
anyone to provide you with different or additional information.
If anyone provides you with different or additional information,
you should not rely on it.
You should not assume that the information contained or
incorporated by reference, as applicable, in this prospectus,
any prospectus supplement, or other offering materials related
to an offering of securities described in this prospectus is
accurate as of any date other than the date of that document.
Neither the delivery of this prospectus, any prospectus
supplement or other offering materials related to an offering of
securities described in this prospectus, nor any distribution of
securities pursuant to this prospectus, any such prospectus
supplement, or other offering materials shall, under any
circumstances, create any implication that there has been no
change in the information set forth or incorporated by
reference, as applicable, in this prospectus, any such
prospectus supplement or other offering materials since the date
of each such document. Our business, financial condition,
results of operations and prospects may have changed since those
dates.
This prospectus does not constitute, and any prospectus
supplement or other offering materials related to an offering of
securities described in this prospectus will not constitute, an
offer to sell, or a solicitation of an offer to purchase, the
offered securities in any jurisdiction to or from any person to
whom or from whom it is unlawful to make such offer or
solicitation in such jurisdiction.
We are a leading provider of
e-commerce
and interactive marketing services to large businesses that sell
products directly to consumers (b2c). We currently have two
reportable segments —
e-commerce
services and interactive marketing services. For
e-commerce
services, we deliver customized solutions to clients through an
integrated
e-commerce
platform, which is comprised of three components: technology,
fulfillment and call center services. We offer each of the
platform’s components on a modular basis, or as part of an
integrated, end-to-end solution. For interactive marketing
services, we offer online marketing and advertising, user
experience and design, studio and
e-mail
marketing services. We provide services to approximately 200
clients, which include:
Aeropostale®,
American Eagle
Outfitters®,
Avis®,
BMG Music
Service®,
Bath & Body
Works®,
British
Airways®,
CBS®,
Christopher &
Banks®,
Dick’s Sporting
Goods®,
Estee
Lauder®,
Major League
Baseball®,
the
NFL®,
Reuters®,
RalphLauren.com®,
The Royal Bank of
Scotland®
group of companies, Sports
Authority®,
The
TJX®
Companies, Toys “R”
Us®
and
Warnaco®.
We help our clients grow their
e-commerce
and multichannel businesses faster and more profitably than they
could on their own. As retailers and brands place a greater
emphasis on developing their online channels, they are
challenged to make the level of investment required to support
high-quality, multichannel,
e-commerce
businesses. The online businesses of our clients and prospects
often account for a small but growing percentage of their
companies’ overall businesses, which makes their online
businesses too important to ignore, but often not large enough
to justify the investment required to provide a robust
e-commerce
offering.
Our core competencies are providing services that enable our
clients to build and grow their
e-commerce
and multichannel retailing businesses. By partnering with us, we
believe companies gain access to better quality technology, a
proven and integrated infrastructure along with
e-commerce,
multichannel and interactive marketing expertise. Our scale
allows us to provide our clients with a broader range of
high-quality capabilities, expertise and infrastructure than
they could justify building, implementing and maintaining on
their own and to continually invest in enhancing our service
offerings and expertise and increasing our capacity.
We are a Delaware corporation organized in 1986. Our principal
executive offices are located at 935 First Avenue, King ofPrussia, PA19406. Our telephone number is
(610) 491-7000.
On November 17, 2009, we completed our acquisition of
Retail Convergence, Inc., a Delaware corporation, referred to as
“RCI.” The acquisition was made pursuant to an
Agreement and Plan of Merger, dated as of October 27, 2009,
referred to as the “merger agreement,” by and among
us, Cola Acquisition Corporation, a Delaware corporation and our
wholly-owned subsidiary, RCI, certain of the principal
stockholders of RCI and William J. Fitzgerald, as
stockholders’ representative.
RCI operates RueLaLa.com and SmartBargains.com. Launched in
April 2008, Rue La La is a members-only,
e-commerce
destination offering premier brands at discount prices during
two-day
private sale events in the fashion, accessories, footwear, home,
jewelry and other emerging merchandise categories. Since
inception, Rue La La has featured private sale events
from more than 300 brands. SmartBargains.com, launched in 1999,
is an
e-commerce
consumer marketplace for the sale of off-price merchandise
across a wide cross-section of categories.
Under the terms of the merger agreement, Cola Acquisition
Corporation merged with and into RCI with RCI surviving the
merger as our subsidiary. At the effective time of the merger,
we acquired substantially all of the outstanding capital stock
of RCI. We have the right to acquire the remaining capital stock
of RCI on or after December 31, 2009.
Under the merger agreement, the stockholders and optionholders
of RCI were entitled to receive an initial payment of
approximately $180.0 million, consisting of
$90.0 million cash (less certain transaction expenses) and
shares of our common stock with an aggregate value of
approximately $90.0 million. Any stockholder or
optionholder who held 200,000 or fewer shares of RCI common
stock (or vested options, in the case of an optionholder)
received cash in lieu of shares of our common stock. The initial
payment disclosed above includes the initial payment payable
upon our acquisition of the remaining capital stock of RCI which
may be acquired on or after December 31, 2009.
At the closing of the merger transaction, in connection with
this initial payment, we paid approximately $89.5 million
(including certain transaction expenses) and issued
4,419,023 shares of our common stock. We anticipate paying
an additional $2.6 million and issuing an additional
152,945 shares of our common stock upon our acquisition of
the remaining capital stock of RCI that may be acquired on or
after December 31, 2009. At the closing of the merger
transaction, approximately $17.2 million of the initial
consideration was paid into escrow to secure post-closing
indemnification obligations of the stockholders and
optionholders. We anticipate that, upon our acquisition of the
remaining capital stock of RCI that may be acquired on or after
December 31, 2009, approximately $0.6 million of such
consideration will be paid into escrow to secure post-closing
indemnification obligations. The stockholders and employees of
RCI will be eligible to receive an earnout payable in cash and
shares of our common stock for each of the 2010, 2011 and 2012
fiscal years with an aggregate value of up to
$170.0 million if certain financial performance targets are
achieved. The foregoing description of the merger agreement is
qualified in its entirety by reference to the full text of the
merger agreement, which was filed as Exhibit 2.1 to our
Current Report on
Form 8-K/A
filed with the SEC on November 17, 2009. See “Where
You Can Find More Information.”
The following table sets forth our historical ratio of earnings
to fixed charges for the periods indicated. As we have no shares
of preferred stock outstanding as of the date of this
prospectus, no ratio of earnings to combined fixed charges and
preferred stock dividends is presented.
Pre-tax (loss) income from continuing operations(1)
(337
)
1,468
6,521
(3,846
)
(30,556
)
(50,675
)
Fixed charges
1,653
5,301
7,834
17,150
24,441
18,655
Total earnings (losses) and fixed charges
1,316
6,769
14,355
13,304
(6,115
)
(32,020
)
Interest expense
538
3,772
6,081
12,191
18,841
14,452
Portion of rent expense deemed to be interest expense
1,115
1,529
1,753
4,959
5,600
4,203
Total fixed charges
1,653
5,301
7,834
17,150
24,441
18,655
Ratio of earnings to fixed charges
n/a
1.28
1.83
n/a
n/a
n/a
(1)
For purposes of computing the ratio of earnings to fixed
charges, total earnings consist of pre-tax income (loss) from
continuing operations before adjustment for noncontrolling
interests in consolidated subsidiaries plus fixed charges minus
noncontrolling interests in pre-tax income of subsidiaries that
have not incurred fixed charges. Fixed charges consist of
interest expense, amortization of debt issuance costs and that
portion of rent expense that we believe to be representative of
interest expense. Earnings were not sufficient to cover fixed
charges by $50.7 million for the first nine months ended
for fiscal year 2009, $30.6 million for fiscal year 2008,
$3.8 million for fiscal year 2007, and $0.3 million
for fiscal year 2004.
(2)
On January 4, 2009 we adopted Financial Accounting
Standards Board’s accounting standards on “Accounting
for Convertible Debt Instruments That May Be Settled in Cash
upon Conversion, (Including Partial Cash Settlement).” The
impact of this adoption has been retrospectively applied to
prior period results.
(3)
In the second quarter of fiscal 2009, we discovered an
immaterial misstatement in out stock-based compensation expense
that impacted fiscal 2006, 2007, 2008, and the first fiscal
quarter of fiscal 2009. We have corrected our prior period
results as if our stock-based compensation expense had been
properly recorded in each prior period.
Investing in our securities involves risks. You should carefully
consider the risks described in any prospectus supplement and
those incorporated by reference into this prospectus before
making an investment decision. The risks and uncertainties
described in any prospectus supplement and incorporated by
reference into this prospectus are not the only ones facing our
company. Additional risks and uncertainties not presently known
to us or that we currently deem immaterial may also impair our
business operations. If any of these risks actually occur, our
business, financial condition and results of operations could be
materially affected. In that case, the value of our securities
could decline substantially.
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any
documents we file with the SEC at the SEC’s Public
Reference Room at 100 F Street, NE,
Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330.
In addition, our filings with the SEC are available to the
public through the SEC’s Internet site at
http://www.sec.gov.
Information about us is also available on our website at
http://www.gsicommerce.com.
This URL and the SEC’s URL above are intended to be
inactive textual references only. The information on our or the
SEC’s website is not part of this prospectus.
This prospectus is part of a registration statement on
Form S-3
filed with the SEC under the Securities Act. This prospectus
does not contain all of the information set forth in the
registration statement and the exhibits to the registration
statement. For further information concerning us and the
securities, you should read the entire registration statement
and the additional information described under “Documents
Incorporated by Reference” below. The registration
statement has been filed electronically and may be obtained in
any manner listed above. Any statements contained in this
prospectus concerning the provisions of any document are not
necessarily complete, and, in each instance, reference is made
to the copy of such document filed as an exhibit to the
registration statement or otherwise filed with the SEC. Each
such statement is qualified in its entirety by such reference.
The SEC rules allow us to incorporate by reference information
in this prospectus. This means that we can disclose important
information to you by referring you to another document. Any
information referred to in this way is considered part of this
prospectus from the date we file that document with the SEC.
Information that we file with the SEC in the future
automatically will update and supersede, where applicable, the
information contained in this prospectus and in the documents
previously filed with the SEC and incorporated by reference into
this prospectus.
We incorporate by reference into this prospectus the following
documents or information filed (File
No. 0-16611)
with the SEC (other than, in each case, information deemed to
have been furnished or not filed in accordance with the SEC
rules):
•
Our Annual Report on
Form 10-K
for the fiscal year ended January 3, 2009 (updated with
regard to Items 6, 7 and 8 in a
Form 8-K
filed on August 4, 2009);
•
Our Quarterly Reports on
Form 10-Q
and
Form 10-Q/A
for the quarter ended April 4, 2009;
•
Our Quarterly Report on
Form 10-Q
for the quarter ended July 4, 2009;
•
Our Quarterly Report on
Form 10-Q
for the quarter ended October 3, 2009;
•
Those portions of our proxy statement for our Annual Meeting of
Stockholders filed on May 4, 2009, which were incorporated
by reference into Part III of our Annual Report on
Form 10-K
for the fiscal year ended January 3, 2009;
The description of our common stock contained in our
registration statement on
Form 8-A
filed with the SEC on March 19, 1988, including any
amendments or reports filed for the purpose of updating such
description; and
•
The description of our preferred stock purchase rights set forth
in our registration statement on
Form 8-A
filed with the SEC on April 6, 2006, including any
amendments or reports filed for the purpose of updating such
description.
Each document filed subsequent to the date of this registration
statement pursuant to Sections 13(a), 13(c), 14 and 15(d)
of the Securities Exchange Act of 1934, as amended, so long as
the registration statement of which this prospectus is a part
remains effective, shall be deemed to be incorporated by
reference in this registration statement and to be a part hereof
from the date of the filing of such documents. Any statement
contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified
or superseded for purposes of this registration statement to the
extent that a statement contained herein (or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein) modifies or supersedes such
statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to
constitute part of this registration statement.
We will provide, without charge, to each person to whom this
prospectus is delivered, upon the written or oral request by
such person, a copy of the documents incorporated by reference
as described above (other than exhibits to such documents,
unless such exhibits are specifically incorporated by reference
into such documents). Please direct your oral or written request
to:
Some of the statements in this prospectus, the documents
incorporated by reference into this prospectus and in any
prospectus supplement may be deemed “forward-looking
statements” within the meaning of Section 21E of the
Exchange Act, and Section 27A of the Securities Act. All
statements, other than statements of historical fact, that
discuss goals, intentions and expectations as to future trends,
plans, events, results of operations or financial condition, or
state other information relating to us are forward-looking
statements. The words “look forward to,”“anticipate,”“believe,”“estimate,”“expect,”“intend,”“may,”“plan,”“will,”“would,”“should,”“could,”“guidance,”“potential,”“opportunity,”“continue,”“project,”“forecast,”“confident,”“prospects,”“schedule,”“designed,”“future,”“discussions,”“if” and similar expressions
typically are used to identify forward-looking statements.
Forward-looking statements are based on the then-current
expectations, beliefs, assumptions, estimates and forecasts
about our business. These statements are not guarantees of
future performance and involve risks, uncertainties and
assumptions which are difficult to predict. Therefore, actual
outcomes and results may differ materially from what is
expressed or implied by these forward-looking statements.
Factors which may affect our business, financial condition and
operating results include, but are not limited to:
•
the effects of changes in the economy, consumer spending, the
financial markets and the industries in which we and our clients
operate;
•
changes affecting the Internet and
e-commerce;
•
our ability to develop and maintain relationships with clients
and suppliers and the timing of our establishment, extension or
termination of our relationships with clients;
•
our ability to timely and successfully develop, maintain and
protect our technology, confidential and proprietary
information, and product and service offerings and execute
operationally;
our ability to attract and retain qualified personnel;
•
our ability to successfully integrate our acquisitions of other
businesses, and the performance of acquired businesses; and
•
other factors set forth in the sections entitled “Risk
Factors” in our most recent Annual Report on
Form 10-K
and any subsequent Quarterly Report on
Form 10-Q,
which are incorporated by reference into this prospectus.
Unpredictable or unknown factors could also have material
adverse effects on us. All forward-looking statements included,
or incorporated by reference, in this prospectus are expressly
qualified in their entirety by the foregoing cautionary
statements. Except as required under the Federal securities laws
and rules and regulations of the SEC, we undertake no obligation
to update, amend, or clarify forward-looking statements, whether
as a result of new information, future events, or otherwise.
The following description of our capital stock includes a
summary of certain provisions of our certificate of
incorporation and bylaws. The following description of the terms
of the preferred stock we may issue sets forth certain general
terms and provisions of any series of preferred stock to which
any prospectus supplement may relate. Particular terms of the
preferred stock offered by any prospectus supplement and the
extent, if any, to which these general terms and provisions
shall apply to any series of preferred stock so offered will be
described in the prospectus supplement relating to the
applicable preferred stock. The applicable prospectus supplement
may also state that any of the terms set forth in this
description are inapplicable to such series of preferred stock.
This description of our capital stock does not purport to be
complete and is subject to and qualified in its entirety by
reference to applicable Delaware law and the provisions of our
certificate of incorporation, bylaws and any applicable
certificates of designations, which have been or will be filed
with the SEC. See “Where You Can Find More
Information” for information on how to obtain copies of
these documents.
General
If the prospectus supplement so provides, offered securities may
be convertible into, exchangeable for or exercisable for shares
of our capital stock As described under “Description of
Securities We May Sell — Depository Shares”, we
may, at our option, elect to offer depository shares evidenced
by depository receipts, each representing an interest (to be
specified in the prospectus supplement relating to the
particular series of the preferred stock) in a share of the
particular series of the preferred stock issued and deposited
with a preferred stock depository.
Authorized
Capitalization
As of November 2, 2009, our authorized capital stock
consisted of (i) 90,000,000 shares of common stock,
par value $0.01 per share, of which 55,111,439 shares were
issued and outstanding, and (ii) 5,000,000 shares of
preferred stock, par value $0.01 per share, of which none was
issued and outstanding.
Common
Stock
The rights, preferences and privileges of the holders of common
stock are subject to, and may be adversely affected by, the
rights of the holders of shares of any then outstanding
preferred stock.
Dividend Rights. Subject to preferences that
may apply to shares of preferred stock outstanding at the time,
the holders of common stock are entitled to receive dividends
out of assets legally available at the times and in the amounts
as our board may from time to time determine.
Voting Rights. Each common stockholder is
entitled to one vote for each share of common stock held on all
matters submitted to a vote of stockholders and does not have
cumulative voting rights.
No Pre-emptive or Other Rights. Other than
pursuant to contractual rights described in
“— Pre-Emptive Rights,” holders of common
stock are not entitled to pre-emptive, subscription, conversion
or redemption rights.
Right to Receive Liquidation
Distributions. Upon our liquidation, dissolution
or
winding-up,
the holders of our common stock and any participating preferred
stock outstanding at that time are entitled to receive ratably
our net assets available after the payment of all debts and
other claims and payment of any liquidation preferences on any
outstanding preferred stock.
Preferred
Stock
Our board of directors may from time to time authorize the
issuance of one or more series of preferred stock without
stockholder approval. Subject to the provisions of our
certificate of incorporation and limitations prescribed by law,
our board of directors is authorized to adopt resolutions to,
among other things, issue shares of preferred stock in one or
more series, establish the number of shares constituting a
series, change the number of shares constituting any series, and
provide or change the voting powers, designations, preferences
and relative, participating, optional or other rights, and
qualifications, limitations or restrictions on shares of our
preferred stock, including dividend rights, terms of redemption,
conversion rights and liquidation preferences, in each case
without any action or vote by our stockholders. The number of
authorized shares of preferred stock may be increased or
decreased (but not below the number of shares of preferred stock
then outstanding) by the affirmative vote of the holders of a
majority of the common stock, without a vote of the holders of
the preferred stock, or of any series thereof, unless a vote of
the preferred stockholders is required pursuant to the terms of
any certificate of designation with respect to any series of
preferred stock.
One of the effects of undesignated preferred stock may be to
enable our board of directors to discourage an attempt to obtain
control of our company by means of a tender offer, proxy
contest, merger or otherwise. The issuance of such preferred
stock may adversely affect the rights of our common stockholders
by, among other things:
•
restricting the payment of dividends on our common stock;
•
diluting the voting power of our common stock;
•
reducing the amount of assets remaining for payment to holders
of shares in the event of a liquidation of assets;
•
delaying or preventing a change in control without further
action by the stockholders; or
•
decreasing the market price of our common stock.
Preferred
Share Rights
We have authorized and reserved 95,000 shares of
Series A Junior Participating Preferred Stock, referred to
as “Series A Stock,” for issuance in connection
with our stockholders’ rights plan set forth in a Rights
Agreement, dated as of April 3, 2006, between us and
American Stock Transfer & Trust Company, as
rights agent.
On April 2, 2006, our board of directors declared a
dividend distribution of one right, referred to as a
“Right,” for each outstanding share of common stock to
the stockholders of record on the close of business on
April 14, 2006. Each Right entitles the registered holder
to purchase from us a unit consisting of one one-thousandth of a
share of Series A Stock, at a price of $85 per unit,
subject to adjustment. However, the Rights are not exercisable
unless certain events occur, such as a person or group acquiring
or obtaining the right to
acquire, or making a tender offer or exchange offer for,
beneficial ownership of 20% or more of our outstanding common
stock (or, in the case of any stockholder that as of
April 2, 2006 beneficially owned 19% or more of our
outstanding shares of common stock, 25.1% or more). Subject to
certain exceptions, upon exercise of the Right, each holder of a
Right will have the right to receive shares of our common stock,
or other consideration, having a value equal to two times the
exercise price of the Right. Additionally, at certain times, we
have the right to redeem the Rights in whole, but not in part,
at a price of $.001 per Right. The Rights will expire on
April 14, 2016, unless the Rights are earlier redeemed or
exchanged or expire in accordance with the terms of the Rights
Agreement. As of November 2, 2009, no shares of
Series A Stock were issued or outstanding.
Our rights plan is designed to enhance our board of
directors’ ability to protect stockholder interests and to
ensure that stockholders receive fair treatment in the event any
coercive or unfair takeover attempt of our company is made in
the future. See “— Anti-Takeover Provisions”
for the description of the anti-takeover effects of the rights
plan.
The above description of the Rights, the Series A Stock and
the Rights Agreement is qualified in its entirety by reference
to the Rights Agreement, including the exhibits, which is filed
as an exhibit to our Current Report on
Form 8-K
filed with the SEC on April 3, 2006.
Registration
Rights
As of November 2, 2009, the holders of approximately
8.4 million shares of common stock had the right to require
us to register their shares with the SEC so that those shares
may be publicly resold, subject to conditions and limitations
set forth in the respective agreements. In addition, as of
November 2, 2009, the holders of approximately
13.8 million shares of common stock (which includes the
shares described in the preceding sentence) and the holders of
options and restricted stock units to acquire an aggregate of
approximately 1.5 million shares of common stock, upon
exercise of the options or vesting of the restricted stock
units, have “piggy back” rights to include these
shares in any registration statement on a
Form S-1
or S-3 that
we file with the SEC, subject to conditions and limitations set
forth in the respective agreements. In addition, in connection
with our acquisition of RCI, we have agreed to register for
resale the shares of our common stock issued as part of the
initial merger consideration.
Pre-Emptive
Rights
One of our stockholders, QK Holdings, Inc., an affiliate of
Liberty Media Corporation, has entered into an agreement with us
which provides it with pre-emptive rights with respect to new
issuances of our common stock or rights to acquire our commons
stock.
Anti-Takeover
Provisions
In addition to the shares of Series A Stock authorized in
connection with our rights plan, our certificate of
incorporation provides that our board of directors may issue
shares of preferred stock with voting or other rights without
stockholder action.
We are subject to the provisions of Section 203 of the
Delaware General Corporation Law regulating corporate takeovers.
This section prevents Delaware corporations, under certain
circumstances, from engaging in a “business
combination” with:
•
a stockholder who owns 15.0% or more of our outstanding voting
stock (otherwise known as an interested stockholder); or
•
our affiliate or associate that was the owner of 15.0% or more
of our outstanding voting stock at any time within the
three-year period immediately prior to the date of determination
if such person is an interested stockholder; for three years
following the date that the stockholder became an interested
stockholder. A “business combination” includes a
merger or sale of more than 10.0% of our assets.
However, the above provisions of Section 203 do not apply
if:
•
our board of directors approves the transaction that made the
stockholder an interested stockholder, prior to the date of that
transaction;
•
after the completion of the transaction that resulted in the
stockholder becoming an interested stockholder, that stockholder
owned at least 85.0% of our voting stock outstanding at the time
the transaction commenced, excluding shares owned by our
directors who are also officers and by employee stock plans in
which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer; or
•
on or subsequent to the date of the transaction, the business
combination is approved by our board of directors and authorized
at a meeting of our stockholders by an affirmative vote of at
least two-thirds of the outstanding voting stock not owned by
the interested stockholder.
This statute could prohibit or delay mergers or other change in
control attempts, and thus may discourage attempts to acquire us.
Our rights plan, the possible issuance of preferred stock and
the requirements of the Delaware General Corporation Law could
have the effect of delaying, deferring or preventing a change in
control of us, including without limitation, discouraging a
proxy contest or making more difficult the acquisition of a
substantial block of our common stock. The rights plan, the
possible issuance of preferred stock and the provisions of the
Delaware General Corporation Law could also limit the price that
investors might be willing to pay in the future for shares of
our common stock.
In addition, QK Holdings, Inc., an affiliate of Liberty Media
Corporation, contractually has veto rights over our ability to
execute any change of control transaction with, or sales of
assets or equity to, certain specified companies or their
affiliates.
Limitations
on Liability and Indemnification of Officers and
Directors
Our certificate of incorporation contains provisions permitted
under Delaware General Corporation Law relating to the liability
of directors. The provisions eliminate a director’s
liability for monetary damages for a breach of fiduciary duty,
except in circumstances involving wrongful acts, such as the
breach of a director’s duty of loyalty or acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law. In addition, our bylaws provide, with
certain exceptions, indemnification of our directors and
officers to the fullest extent not prohibited by the Delaware
General Corporation Law or any other applicable law.
Indemnification
Agreements.
We also entered into separate indemnification agreements with
our directors and some of our officers that provide them
indemnification protection that is greater than the protection
currently provided under Delaware General Corporation Law.
The indemnification agreements, among other things:
•
confirm the present indemnity provided by our bylaws which state
that we will indemnify directors and officers to the fullest
extent not prohibited by the Delaware General Corporation Law
and provide that this indemnity will continue despite future
changes in our bylaws, as the indemnification agreements will be
our contractual obligations, unlike our bylaws which may be
amended by our stockholders or our board;
•
provide further indemnification to the fullest possible extent
permitted by law against all expenses (including attorneys’
fees), judgments, fines and settlement amounts paid or incurred
by a director or officer in any action or proceeding, including
any action by us or in our own right, on account of
service as our director, officer, employee, attorney or agent or
any of our subsidiaries or any other company or enterprise at
our request;
•
cover all actions and proceedings, even if they arise from acts
or omissions by a director or officer occurring before the
execution of the agreements;
•
continue in force so long as the individual continues to serve
in such capacity on our behalf and cover liabilities related to
his activities in any such capacity regardless of future changes
to our corporate documents;
•
provide for payment of expenses in advance of a final
disposition of the action or suit, regardless of the
recipient’s ability to make repayments, and do not require
that any repayment obligations in respect of any such advances
be secured or bear interest;
•
provide protection during the determination process in the event
there is a change of control of us or our board and grant our
directors and officers rights to appeal a denial of
indemnification to a court of competent jurisdiction; and
•
except as discussed below with respect to violations of Section
16(b) of the Exchange Act and expenses or liabilities which are
covered by insurance, provide that directors or officers who
rely on our records or upon information supplied by our
officers, legal counsel, outside accountants or appraisers are
deemed to have acted in a manner which would entitle our
directors or officers to indemnification under the
indemnification agreements.
However, a director or officer is not entitled to
indemnification under these agreements unless that director or
officer acted in good faith and in a manner reasonably believed
to be in or not opposed to our best interests.
In addition, no indemnification will be provided in respect of
any suit in which judgment is rendered against a director or
officer for an accounting of profits from a purchase or sale of
our securities in violation of Section 16(b) of the
Exchange Act, or of any successor statute, or for expenses or
liabilities which have been paid directly to a director or
officer by an insurance carrier under a policy of
directors’ and officers’ liability insurance.
Employment
Agreements.
The employment agreements of certain of our officers provide for
indemnification to such officers by us to the fullest extent
permitted by our bylaws or applicable law.
Liability
Insurance.
We have obtained directors’ and officers’ liability
insurance which covers certain liabilities, including
liabilities to us and our stockholders, in the amount of
$25.0 million.
SEC
Position on Indemnification for Securities Act
Liabilities.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers or
our controlling persons pursuant to the foregoing provisions, we
have been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
Transfer
Agent and Registrar
Our transfer agent and registrar for our common stock is
American Stock Transfer & Trust Company.
Listing
Our common stock trades on the Nasdaq Global Select Market under
the symbol “GSIC”.
The following summary of certain provisions of the depositary
shares does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the provisions of the
deposit agreement and form of depositary receipt that will be
filed with the SEC in connection with the offering of such
depositary shares. See “Where You Can Find More
Information” for information on how to obtain copies of
these documents. The particular terms of any depositary shares
offered by us will be described in the applicable prospectus
supplement. To the extent the terms of the depositary shares
described in the prospectus supplement differ from the terms set
forth in this summary, the terms described in the prospectus
supplement will supersede the terms described below.
General
We may issue depositary shares representing fractional interests
in preferred shares of any class or series. Each depositary
share will represent a fraction of a share of a particular
series of preferred stock, and the prospectus supplement will
indicate that fraction. The shares of preferred stock
represented by depositary shares will be deposited under a
deposit agreement between our company and a depositary that is a
bank or trust company that meets certain requirements and is
selected by us. The depositary will be specified in the
applicable prospectus supplement. Subject to the terms of the
deposit agreement, each holder of a depositary share will be
entitled, proportionately, to all the rights, preferences and
privileges of the series of preferred stock represented by that
depositary share, including dividend, voting, redemption,
conversion, exchange and liquidation rights.
Dividends
and Other Distributions
The depositary will distribute all cash dividends or other cash
distributions received by it in respect of the preferred stock
to the record holders of depositary shares relating to such
preferred shares in proportion to the numbers of depositary
shares held on the relevant record date.
In the event of a distribution other than in cash, the
depositary will distribute securities or property received by it
to the record holders of depositary shares in proportion to the
numbers of depositary shares held on the relevant record date,
unless the depositary determines that it is not feasible to make
such distribution. In this event, the depositary may, with our
approval, adopt any method it deems equitable and practicable
for the purpose of effecting the distribution, including a
public or private sale of the property and distribution of the
net proceeds from the sale to the record holders of the
depositary receipts.
The amount so distributed in any of the circumstances described
above will be reduced by any amount required to be withheld by
us or the depositary on account of taxes.
Withdrawal
of Shares
Upon surrender of depositary receipts representing any number of
whole shares at the depositary’s office, unless the related
depositary shares previously have been called for redemption,
the holder of the depositary shares evidenced by the depositary
receipts will be entitled to delivery of the number of whole
shares of the related series of preferred stock and all money
and other property, if any, underlying such depositary shares.
However, once such an exchange is made, the preferred stock
cannot thereafter be redeposited in exchange for depositary
shares. Holders of depositary shares will be entitled to receive
whole shares of the related series of preferred stock on the
basis set forth in the applicable prospectus supplement. If the
depositary receipts delivered by the holder evidence a number of
depositary shares representing more than the number of whole
shares of preferred stock of the related series to be withdrawn,
the depositary will deliver to the holder at the same time a new
depositary receipt evidencing the excess number of depositary
shares.
Conversion
and Exchange
We will describe any terms relating to the conversion or
exchange of any shares of preferred stock underlying the
depositary shares in the applicable prospectus supplement. If
any shares of preferred stock
underlying the depositary shares are subject to provisions
relating to their conversion or exchange, each record holder of
depositary shares will have the right or obligation to convert
or exchange the depositary shares pursuant to the terms thereof.
Redemption
of Depositary Shares
If shares of preferred stock underlying the depositary shares
are subject to redemption, the depositary shares will be
redeemed from the proceeds received by the depositary as a
result of the redemption, in whole or in part, of the shares of
preferred stock held by the depositary. The redemption price per
depositary share will be equal to the aggregate redemption price
payable with respect to the number of shares of preferred stock
underlying that depositary share. Whenever we redeem shares of
preferred stock from the depositary, the depositary will redeem
as of the same redemption date a proportionate number of
depositary shares representing the shares of preferred stock
that were redeemed. If less than all the depositary shares are
to be redeemed, the depositary shares to be redeemed will be
selected by lot or proportionately as we may determine.
After the date fixed for redemption, the depositary shares
called for redemption will no longer be deemed to be outstanding
and all rights of the holders of the depositary shares will
cease, other than the right to receive the redemption price upon
redemption.
Voting
Upon receipt of notice of any meeting at which the holders of
any shares of preferred stock underlying the depositary shares
are entitled to vote, the depositary will mail the information
contained in the notice to the record holders of the depositary
receipts. Each record holder of depositary receipts on the
record date (which will be the same date as the record date for
the shares of preferred stock) will be entitled to instruct the
depositary as to the exercise of the voting rights pertaining to
the number of shares of preferred stock underlying that
holder’s depositary shares. The depositary will endeavor,
insofar as practicable, to vote the number of shares of
preferred stock underlying the depositary shares in accordance
with those instructions, and we will agree to take all
reasonable action which may be deemed necessary by the
depositary in order to enable the depositary to do so. The
depositary will abstain from voting the shares of preferred
stock to the extent it does not receive specific written
instructions from holders of depositary receipts representing
the shares of preferred stock.
The following summary of certain provisions of the warrants
does not purport to be complete and is subject to, and qualified
in its entirety by reference to, the provisions of the warrant
agreement and warrant certificates that will be filed with the
SEC in connection with the offering of such warrants. See
“Where You Can Find More Information” for information
on how to obtain copies of these documents. The particular terms
of any warrants offered by us will be described in the
applicable prospectus supplement. To the extent the terms of the
warrants described in the prospectus supplement differ from the
terms set forth in this summary, the terms described in the
prospectus supplement will supersede the terms described
below.
General
We may issue warrants to purchase common stock, preferred stock,
depositary shares or debt securities. We will issue each series
of warrants under a separate warrant agreement between us and a
warrant agent that is a bank or trust company. Warrants will be
represented by warrant certificates.
The terms of warrants described in the applicable prospectus
supplement may include the following:
•
the title of the warrants;
•
the aggregate number of warrants;
•
the price or prices at which the warrants will be issued;
the currency or currencies, including composite currencies, in
which the price of the warrants may be payable;
•
the designation and terms of the underlying warrant securities
purchasable upon exercise of the warrants;
•
the price at which and the currency or currencies, including
composite currencies, in which the underlying warrant securities
purchasable upon exercise of the warrants may be purchased;
•
the date on which the right to exercise the warrants will
commence and the date on which that right will expire;
•
whether the warrants will be issued in registered form or bearer
form;
•
if applicable, the minimum or maximum amount of warrants which
may be exercised at any one time;
•
if applicable, the designation and terms of the underlying
warrant securities with which the warrants are issued and the
number of warrants issued with each underlying warrant security;
•
if applicable, the date on and after which the warrants and the
related underlying warrant securities will be separately
transferable;
•
information with respect to book-entry procedures, if any;
•
if applicable, a discussion of certain U.S. federal income
tax considerations; and
•
any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the
warrants.
Exercise
of Warrants
Each warrant will entitle the holder to purchase such number of
common shares, preferred shares or depositary shares or such
amount of debt securities, as the case may be, at such exercise
price as shall be set forth in, or shall be determinable as set
forth in, the applicable prospectus supplement. Warrants may be
exercised at the times and in the manner set forth in the
applicable prospectus supplement. The applicable prospectus
supplement will specify how the exercise price of any warrants
is to be paid, which may include payment in cash or by surrender
of other warrants issued under the same warrant agreement (a
so-called “cashless exercise”). Upon receipt of
payment of the exercise price and, if required, the certificate
representing the warrants being exercised properly completed and
duly executed at the office or agency of the applicable warrant
agent or at any other office or agency designated for that
purpose, we will promptly deliver the securities to be delivered
upon such exercise.
No
Rights as Holders of Shares
Holders of warrants will not be entitled, by virtue of being
such holders, to vote, consent or receive notice as holders of
our outstanding shares in respect of any meeting of holders of
our shares for the election of our directors or any other
matter, or to exercise any other rights whatsoever as holders of
our shares, or to receive any dividends or distributions, if
any, on our shares.
The following summary of certain provisions of the
subscription rights does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the
provisions of the subscription rights agreement and the
subscription rights certificate that will be filed with the SEC
in connection with the offering of such subscription rights. See
“Where You Can Find More Information” for information
on how to obtain copies of these documents. The particular terms
of any subscription rights offered by us will be described in
the applicable prospectus supplement. To the extent the terms of
the subscription rights described in the prospectus supplement
differ from the terms set forth in this summary, the terms
described in the prospectus supplement will supersede the terms
described below.
We may issue subscription rights to purchase common stock,
preferred stock, depositary shares or debt securities. We will
issue subscription rights under a subscription rights agreement
and subscription rights will be represented by subscription
rights certificates.
The terms of subscription rights described in the applicable
prospectus supplement may include the following:
•
the price, if any, for the subscription rights;
•
the exercise price payable for each share of common stock,
preferred stock, depositary share or debt security upon the
exercise of the subscription rights;
•
the number of subscription rights issued;
•
the number and terms of the shares of common stock or shares of
preferred stock or depositary shares or the amount and terms of
the debt securities which may be purchased per subscription
right;
•
the extent to which the subscription rights are transferable;
•
the date on which the right to exercise the subscription rights
shall commence, and the date on which the subscription rights
shall expire;
•
the extent to which the subscription rights may include an
over-subscription privilege with respect to unsubscribed
securities;
•
if applicable, the material terms of any standby underwriting or
purchase arrangement entered into by us in connection with the
offering of subscription rights; and
•
any other terms of the subscription rights, including the terms,
procedures and limitations relating to the exercise of the
subscription rights.
Exercise
of Subscription Rights
Each subscription right will entitle the holder to purchase such
number of common shares, preferred shares or depositary shares
or such amount of debt securities, as the case may be, at such
exercise price as shall be set forth in, or shall be
determinable as set forth in, the applicable prospectus
supplement. Subscription rights may be exercised at the times
and in the manner set forth in the applicable prospectus
supplement. The applicable prospectus supplement will specify
how the exercise price of any subscription rights is to be paid.
Upon receipt of payment of the exercise price and, if required,
the certificate representing the subscription rights being
exercised properly completed and duly executed at the office or
agency designated for that purpose, we will promptly deliver the
securities to be delivered upon such exercise.
No
Rights as Holders of Shares
Holders of subscription rights will not be entitled, by virtue
of being such holders, to vote, consent or receive notice as
holders of our outstanding shares in respect of any meeting of
holders of our shares for the election of our directors or any
other matter, or to exercise any other rights whatsoever as
holders of our shares, or to receive any distributions, if any,
on our shares.
The summary of the material provisions of the indentures
(including the definition of certain terms used below) and the
debt securities set forth below and the summary of the material
terms of a particular series of debt securities set forth in the
applicable prospectus supplement does not purport to be complete
and is subject to, and qualified in its entirety by reference
to, the provisions of the indentures and the debt securities
which have been or will be filed with the SEC. See “Where
You Can Find More Information” for information on how to
obtain copies of these documents. This summary of the indentures
and the debt securities relates to
terms and conditions applicable to the debt securities
generally. The particular terms of any debt securities offered
by us will be described in the applicable prospectus supplement.
To the extent the terms of debt securities described in the
prospectus supplement differ from the terms set forth in this
summary, the terms described in the prospectus supplement will
supersede the terms described below.
General
We may issue senior debt securities in one or more series under
the senior indenture, dated as of November 11, 2009,
between us and The Bank of New York Mellon, as trustee, which we
refer to as the “senior indenture.” We may also issue
subordinated debt securities in one or more series under the
subordinated indenture, dated as of November 11, 2009,
between us and The Bank of New York Mellon, as trustee, which we
refer to as the “subordinated indenture” and together
with the senior indenture as the “indentures” or each
of the senior indenture and the subordinated indenture
individually, as the “applicable indenture.” For
purposes of this section, we refer to: (i) the senior debt
securities together with the subordinated debt securities as the
“debt securities;” and (ii) The Bank of New York
Mellon, or any successor or additional trustee, in its
respective capacity as trustee under the applicable indenture,
as the “trustee.” The indentures are filed as exhibits
to the registration statement that includes this prospectus. See
“Where You Can Find More Information” for information
on how to obtain copies of the indentures. The indentures have
been qualified under the Trust Indenture Act of 1939, as
amended, which we refer to as the “Trust Indenture
Act.”
Wherever we refer to particular articles, sections or defined
terms of the indentures in this prospectus or in a prospectus
supplement, those articles, sections or defined terms are
incorporated in this prospectus and the prospectus supplement by
reference, and the statement with respect to which such
reference is made is qualified in its entirety by such
reference. In addition, unless specified otherwise, references
to such particular articles, sections or defined terms are
applicable to both the senior indenture and the subordinated
indenture.
The senior debt securities will be unsecured and will rank on
parity with all of our other unsecured and unsubordinated
obligations. Unless otherwise provided in the prospectus
supplement, each series of subordinated debt securities will
rank equally with all other series of subordinated debt
securities issued under the subordinated indenture and will be
unsecured and subordinate and junior in right of payment to all
of our senior debt (as defined below). See
“— Subordination Under Subordinated
Indenture.”
Unless we state otherwise in the applicable prospectus
supplement, the indentures do not limit us in incurring or
issuing other secured or unsecured debt under either of the
indentures or any other indenture or agreement that we may have
entered into or enter into in the future.
Terms
of Debt Securities
We may issue the debt securities in one or more series through
an indenture that supplements the senior indenture or the
subordinated indenture, as applicable, or through a resolution
of our board of directors or an authorized committee of our
board of directors.
We may deliver debt securities of any series executed by us to
the trustee for authentication, together with our written
request for the authentication and delivery of such debt
securities, and the trustee will authenticate and deliver such
debt securities in accordance with the procedures set forth in
the applicable indenture.
You should refer to the applicable prospectus supplement for the
specific terms of the debt securities. These terms may include
the following:
•
title of the debt securities of the series;
•
any limit upon the aggregate principal amount of the debt
securities of the series;
•
maturity date(s) or the method of determining the maturity
date(s);
•
interest rate(s), if any, or the method of determining the
interest rate(s);
place(s) where we may pay principal, premium, if any, and
interest, if any, and where you may present the debt securities
for registration of transfer or exchange;
•
place(s) where notices and demands relating to the debt
securities and the applicable indenture may be made;
•
redemption, repurchase or early payment provisions;
•
sinking fund or similar provisions;
•
attachment to the debt securities of the series of warrants,
options or other rights to purchase or sell our stock or other
securities;
•
authorized denominations if other than denominations of $1,000;
•
if other than the principal amount of the debt securities, the
portion of the principal amount of the debt securities that is
payable upon declaration of acceleration of maturity;
•
any deletions or modifications of or additions to the events of
default or covenants specified in the applicable indenture;
•
form(s) of the debt securities of the series;
•
currency, currencies, or currency unit(s), if other than
U.S. dollars, in which the debt securities are denominated
and/or in
which the principal of, premium, if any, and interest, if any,
on the debt securities is payable;
•
if the principal of and premium, if any, or interest, if any, on
any of the debt securities of the series is to be payable, at
our election or at the election of the holder of the debt
securities, in a currency or currencies, or currency unit(s),
other than that in which the debt securities are denominated,
the period(s) within which, and the terms and conditions upon
which, such election may be made, or the other circumstances
under which any of the debt securities are to be so payable;
•
if the amount of payments of principal of and premium, if any,
or interest, if any, on any of the debt securities of the series
may be determined with reference to an index or indices, the
manner in which such amounts are determined;
•
whether any debt securities of the series are to be issuable
initially in temporary global form or definitive global form
and, if so, whether beneficial owners of interests in any such
definitive global debt security may exchange such interests for
debt securities of such series and of like tenor of any
authorized form and denomination and the circumstances under
which and the place or places where any such exchanges may
occur, if other than in the manner set forth in the applicable
indenture;
•
if the debt securities of the series are to be issued upon the
exercise of warrants or subscription rights, the time, manner
and place for such debt securities to be authenticated and
delivered;
•
whether and under what circumstances and with what procedures
and documentation we will pay additional amounts on any of the
debt securities of the series to any holder who is not a
U.S. person, in respect of any tax assessment or
governmental charge withheld or deducted and, if so, whether we
will have the option to redeem such debt securities rather than
pay additional amounts;
•
the person to whom any interest on any debt security of the
series is payable, if other than the person in whose name that
debt security is registered and the extent to which any interest
payable on a temporary global debt security will be paid if
other than in the manner provided in the applicable indenture;
•
the terms and conditions of any right or obligation we would
have, or any option you would have, to convert or exchange the
debt securities into cash or any other securities or property of
our company or
any other person and any changes to the applicable indenture
with respect to the debt securities to permit or facilitate such
conversion or exchange;
•
in the case of the subordinated indenture, any provisions
regarding subordination; and
•
additional terms not inconsistent with the provisions of the
applicable indenture.
Debt securities may also be issued under the indentures upon the
exercise of warrants or subscription rights. See
“— Warrants” and
“— Subscription Rights.”
We may, in certain circumstances, without notice to or consent
of the holders of the debt securities, issue additional debt
securities having the same terms and conditions as the debt
securities previously issued under this prospectus and any
applicable prospectus supplement, so that such additional debt
securities and the debt securities previously offered under this
prospectus and any applicable prospectus supplement form a
single series, and references in this prospectus and any
applicable prospectus supplement to the debt securities shall
include, unless the context otherwise requires, any further debt
securities issued as described in this paragraph.
Special
Payment Terms of Debt Securities
We may issue one or more series of debt securities at a discount
below their stated principal amount. These may bear no interest
or interest at a rate which at the time of issuance is below
market rates. We will describe U.S. federal tax
consequences and special considerations relating to any series
in the applicable prospectus supplement.
The purchase price of any of the debt securities may be payable
in one or more foreign currencies or currency units. The debt
securities may be denominated in one or more foreign currencies
or currency units, or the principal of, premium, if any, or
interest, if any, on any debt securities may be payable in one
or more foreign currencies or currency units. We will describe
the restrictions, elections, U.S. federal income tax
considerations, specific terms and other information relating to
the debt securities and any foreign currencies or currency units
in the applicable prospectus supplement.
If we use any index to determine the amount of payments of
principal of, premium, if any, or interest, if any, on any
series of debt securities, we will also describe in the
applicable prospectus supplement the special U.S. federal
income tax, accounting and other considerations applicable to
the debt securities.
Payment
and Paying Agents
Unless we state otherwise in an applicable prospectus
supplement, we will pay principal of, premium, if any, and
interest, if any, on your debt securities at the office of the
trustee for your debt securities in the City of New York or at
the office of any other paying agent that we may designate.
Unless we state otherwise in an applicable prospectus
supplement, we will pay any interest on debt securities to the
registered owner of the debt security at the close of business
on the record date for the interest, except in the case of
defaulted interest.
Any moneys or U.S. government obligations (including the
proceeds thereof) deposited with the trustee or any paying
agent, or then held by us in trust, for the payment of the
principal of, premium, if any, or interest, if any, on any debt
security that remains unclaimed for two years after the
principal, premium or interest has become due and payable will
be repaid to us. After repayment to us, you are entitled to seek
payment only from us as a general unsecured creditor.
Denominations,
Registration and Transfer
Except as we may describe in the applicable prospectus
supplement, we will issue debt securities in fully registered
form without coupons and in denominations of $1,000 and any
integral multiple of $1,000.
Debt securities of any series will be exchangeable for other
debt securities of the same series, in any authorized
denominations, of a like tenor and aggregate principal amount
and having the same terms. You may present debt securities for
exchange, as described above, or for registration of transfer,
at the office of the
security registrar or at the office of any transfer agent we
designate for that purpose. You will not incur a service charge
but you must pay any taxes, assessments and other governmental
charges as described in the applicable indenture. We will
appoint the trustee as the initial security registrar under the
applicable indenture. We may at any time rescind the designation
of any transfer agent that we initially designate or approve a
change in the location through which the transfer agent acts. We
will specify the transfer agent in the applicable prospectus
supplement. We may at any time designate additional transfer
agents.
Global
Debt Securities
We may issue all or any part of a series of debt securities in
the form of one or more global debt securities. We will appoint
the depository holding the global debt securities. Unless we
otherwise state in the applicable prospectus supplement, the
depository will be The Depository Trust Company, or DTC. We
will issue global debt securities in registered form and in
either temporary or definitive form. Unless it is exchanged for
individual debt securities, a global debt security may not be
transferred except:
•
by the depository to its nominee;
•
by a nominee of the depository to the depository or another
nominee; or
•
by the depository or any nominee to a successor of the
depository, or a nominee of the successor.
We will describe the specific terms of the depository
arrangement in the applicable prospectus supplement. We expect
that the following provisions will generally apply to these
depository arrangements.
Beneficial
Interests in a Global Debt Security
If we issue a global debt security, the depository for the
global debt security or its nominee will credit on its
book-entry registration and transfer system the principal
amounts of the individual debt securities represented by the
global debt security to the accounts of persons that have
accounts with it. We refer to those persons as
“participants” in this prospectus. The accounts will
be designated by the dealers, underwriters or agents for the
debt securities, or by us if the debt securities are offered and
sold directly by us. Ownership of beneficial interests in a
global debt security will be limited to participants or persons
who may hold interests through participants. Ownership and
transfers of beneficial interests in the global debt security
will be shown on, and transactions can be effected only through,
records maintained by the applicable depository or its nominee,
for interests of participants, and the records of participants,
for interests of persons who hold through participants. The laws
of some states require that you take physical delivery of
securities in definitive form. These limits and laws may impair
your ability to transfer beneficial interests in a global debt
security.
So long as the depository or its nominee is the registered owner
of a global debt security, the depository or its nominee will be
considered the sole owner or holder of the debt securities
represented by the global debt security for all purposes under
the applicable indenture. Except as provided below, you:
•
will not be entitled to have any of the individual debt
securities represented by the global debt security registered in
your name;
•
will not receive or be entitled to receive physical delivery of
any debt securities in definitive form; and
•
will not be considered the registered owner or holder of the
debt securities under the applicable indenture.
Payments
of Principal, Premium and Interest
We will make principal, premium, if any, and interest, if any,
payments on global debt securities to the depository that is the
registered holder of the global debt security or its nominee.
The depository for the global debt securities will be solely
responsible and liable for all payments made on account of your
beneficial ownership interests in the global debt security and
for maintaining, supervising and reviewing any records relating
to your beneficial ownership interests.
We expect that the depository or its nominee, upon receipt of
any principal, premium, if any, or interest, if any, payment,
immediately will credit participants’ accounts with amounts
in proportion to their respective beneficial interests in the
principal amount of the global debt security as shown on the
records of the depository or its nominee. We also expect that
payments by participants to you, as an owner of a beneficial
interest in the global debt security held through those
participants, will be governed by standing instructions and
customary practices, as is now the case with securities held for
the accounts of customers in bearer form or registered in
“street name.” These payments will be the
responsibility of those participants.
Issuance
of Individual Debt Securities
Unless we state otherwise in the applicable prospectus
supplement, if a depository for a series of debt securities is
at any time unwilling, unable or ineligible to continue as
depository, we will appoint a successor depository or we will
issue individual debt securities in exchange for the global debt
security.
Redemption
Unless we state otherwise in an applicable prospectus
supplement, debt securities will not be subject to any sinking
fund, and we may, at our option, redeem all or any part of debt
securities of any series prior to their stated maturity.
Except as we may otherwise specify in the applicable prospectus
supplement, the redemption price for any debt security which we
redeem will equal 100% of the principal amount plus any accrued
and unpaid interest up to, but excluding, the redemption date.
We will mail notice of any redemption of debt securities at
least 30 days but not more than 60 days before the
redemption date to the registered holders of the debt securities
at their addresses as shown on the security register. On and
after the redemption date, interest will cease to accrue on the
debt securities or the portions of the debt securities called
for redemption.
We may also from time to time repurchase the debt securities in
open market purchases or negotiated transactions without prior
notice to holders.
Consolidation,
Merger and Transfer of Assets
As long as debt securities are outstanding, we will not
consolidate with or merge into any other person or convey or
transfer our assets substantially as an entirety to any person,
unless:
•
the person formed by such consolidation or into which we merge
or the person which acquires by conveyance or transfer our
assets substantially as an entirety is an entity that is
organized and existing under the laws of the United States of
America or any state thereof or the District of Columbia and
that expressly assumes our obligations relating to the debt
securities;
•
immediately after giving effect to the consolidation, merger,
conveyance or transfer, there exists no event of default, and no
event which, after notice or lapse of time, or both, would
become an event of default; and
•
other conditions described in the applicable indenture are met.
This covenant would not apply to the direct or indirect
conveyance or transfer of all or any portion of the stock,
assets or liabilities of any of our wholly owned subsidiaries to
us or to our other wholly owned subsidiaries.
Modification
and Waiver
Modification
We and the trustee may modify and amend the applicable indenture
by entering into a supplemental indenture 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 such
supplemental indenture (acting as one class). No modification or
amendment may, without the consent of the holder of each
outstanding debt security affected:
•
change the stated maturity of the principal of, or any
installment of principal of or interest payable on, any debt
security;
•
reduce the principal amount of, or the rate of interest on or
any premium payable upon the redemption of, or the amount of the
principal of an original issue discount security that would be
due and payable upon a declaration of acceleration of the
maturity of such debt security;
•
change any place of payment where, or the currency, currencies
or currency unit(s) in which any debt security or any premium or
the interest on any debt security is payable;
•
impair your right to institute suit for the enforcement of any
payment on any debt security on or after the stated maturity or
redemption date;
•
affect adversely the terms, if any, of conversion or exchange of
any debt security into cash, any other securities or property of
our company or any other person;
•
reduce the percentage in aggregate principal amount of
outstanding debt securities, the consent of whose holders is
necessary to modify or amend the applicable indenture, to waive
compliance with certain provisions of the applicable indenture
or certain defaults and consequences of such defaults set forth
in the applicable indenture;
•
change any of our obligations to maintain an office or agency as
set forth in the applicable indenture;
•
modify any of these provisions or any of the provisions relating
to the waiver of certain past defaults, except to increase the
required percentage to effect such action, to provide, with
respect to any particular series, the right to condition the
effectiveness of any applicable supplemental indenture as to
that series on the consent of holders of a specified percentage
of the aggregate principal amount of the outstanding debt
securities of such series, or to provide that certain other
provisions may not be modified or waived without the consent of
all of the holders of the outstanding debt securities
affected; or
•
in case of the subordinated indenture, modify the provisions
with respect to the subordination of outstanding subordinated
debt securities in a manner materially adverse to the holders of
such outstanding subordinated debt securities.
Waiver
The holders of at least a majority in aggregate principal amount
of the outstanding debt securities of a series may waive
compliance by us with a certain term, provision or condition set
forth in the securities for such series or the applicable
supplemental indenture. We will provide written notice to the
trustee upon the occurrence of any such waiver.
The holders of not less than a majority in aggregate principal
amount of the outstanding debt securities of a series may,
subject to conditions specified in the applicable indenture, on
behalf of the holders of all debt securities of that series,
waive any past default under the applicable indenture relating
to that series of debt securities and the consequences of such
default. However, a default in the payment of the principal of,
or premium, if any, or interest, if any, on any debt security of
that series or relating to a covenant or provision which under
the applicable indenture relating to that series of debt
security cannot be modified or amended without the consent of
the holder of each outstanding debt security of that series
affected cannot be so waived.
Events
of Default
Unless we state otherwise in the applicable prospectus
supplement, under the terms of the applicable indenture, each of
the following constitutes an event of default for a series of
debt securities:
•
default for 30 days in the payment of any installment of
interest, if any, when due;
default in the payment of principal, or premium, if any, when
due (subject to the bullet point below);
•
default for 30 days in the payment for a sinking, purchase
or analogous fund when due;
•
default in the performance, or breach, of any covenant or
warranty in the applicable indenture for 60 days after
written notice;
•
certain events of bankruptcy, insolvency or reorganization; and
•
any other event of default provided with respect to debt
securities of that series.
We are required to furnish the trustee annually with a statement
as to the fulfillment of our obligations under the applicable
indenture.
The indentures provide that the trustee may withhold notice to
you of any default, except in respect of the payment of the
principal of or premium, if any, or interest on any debt
securities or the payment of any sinking fund installment with
respect to debt securities, if the trustee considers the
withholding of such notice to be in the interests of the holders
of the debt securities.
Effect
of an Event of Default
If an event of default exists (other than an event of default in
the case of certain events of bankruptcy as described below),
the trustee or the holders of not less than 25% in aggregate
principal amount of a series of outstanding debt securities may
declare the principal amount, or, if the debt securities are
original issue discount securities, such portion of the
principal amount of such debt securities as may be specified in
the terms of that series, of all of the debt securities of that
series, together with accrued interest, if any, on such debt
securities, to be due and payable immediately, by a notice in
writing to us and to the trustee if given by holders. Upon that
declaration, the principal (or specified) amount, together with
accrued interest, if any, on such debt securities, will become
immediately due and payable, subject to applicable subordination
provisions in case of the subordinated indenture. However, at
any time after a declaration of acceleration has been made, but
before a judgment or decree for payment of the money due has
been obtained, the holders of not less than a majority in
aggregate principal amount of a series of outstanding debt
securities may, subject to conditions specified in the
applicable indenture, rescind and annul that declaration and its
consequences.
If an event of default in the case of certain events of
bankruptcy exists with respect to debt securities of any series
at that time outstanding, the principal amount of all debt
securities of that series or, if any debt securities of that
series are original issue discount securities, such portion of
the principal amount of such debt securities as may be specified
in the terms of that series, will automatically, and without any
declaration or other action on the part of the trustee or any
holder of such outstanding debt securities, become immediately
due and payable.
Subject to the provisions of the applicable indenture relating
to the duties of the trustee, if an event of default exists, the
trustee will be under no obligation to exercise any of its
rights or powers under the applicable indenture at your request
or direction, unless you have offered to the trustee security or
indemnity satisfactory to it against the costs, expenses and
liabilities which the trustee might incur in compliance with
such request or direction.
Subject to the provisions for the security or indemnification of
the trustee, the holders of not less than a majority in
aggregate principal amount of a series of outstanding debt
securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the
trustee, or exercising any trust or power conferred on the
trustee in connection with the debt securities of that series.
Legal
Proceedings and Enforcement of Right to Payment
You will not have any right to institute any proceeding in
connection with the applicable indenture or for any remedy under
the applicable indenture, unless you have previously given to
the trustee written notice of a continuing event of default with
respect to debt securities of that series. In addition, the
holders of at least 25% in aggregate principal amount of a
series of the outstanding debt securities or, in the case of an
event of
default in case of certain events of bankruptcy, of all series
(voting as a class) with respect to which such event of default
is continuing, must have made written request, and offered
indemnity satisfactory, to the trustee to institute that
proceeding as trustee, and, within 60 days following the
receipt of that notice, the trustee must not have received from
such holders a direction inconsistent with that request, and
must have failed to institute the proceeding.
However, you will have an absolute and unconditional right to
receive payment of the principal of, premium, if any, and
interest, if any, on that debt security on the due dates
expressed in the debt security (or, in the case of redemption,
on the redemption date) and to institute a suit for the
enforcement of that payment.
Satisfaction
and Discharge
The indentures provide that when, among other things, all debt
securities not previously delivered to the trustee for
cancellation:
•
have become due and payable; or
•
will become due and payable at their stated maturity within one
year; or
•
are to be called for redemption within one year under
arrangements satisfactory to the trustee for the giving of
notice of redemption by the trustee in our name and at our
expense, and
•
we deposit or cause to be deposited with the trustee, money or
U.S. government obligations or a combination thereof, as
trust funds, in an amount and in the currency or currency unit
in which such debt securities are payable, sufficient to pay and
discharge the entire indebtedness on the debt securities not
previously delivered to the trustee for cancellation, for the
principal, and premium, if any, and interest, if any, to the
date of the deposit or to the stated maturity or redemption
date, as the case may be,
then the applicable indenture will cease to be of further effect
with respect to a series of debt securities, and we will be
deemed to have satisfied and discharged the applicable indenture
with respect to such series. However, we will continue to be
obligated to pay all other sums due under the applicable
indenture and to provide the officer’s certificate and
opinion of counsel described in the applicable indenture.
Defeasance
and Covenant Defeasance
Unless we state otherwise in the applicable prospectus
supplement, the indentures provide that we may discharge all of
our obligations, other than as to transfers and exchanges and
certain other specified obligations, under any series of the
debt securities at any time, and that we may also be released
from our obligations described above under
“— Consolidation, Merger and Transfer of
Assets” and from certain other obligations, as applicable,
including obligations imposed by supplemental indentures with
respect to that series, if any, and elect not to comply with
those sections and obligations without creating an event of
default. Discharge under the first procedure is called
“defeasance” and under the second procedure is called
“covenant defeasance.”
Defeasance or covenant defeasance may be effected only if:
•
we irrevocably deposit with the trustee money or
U.S. government obligations or a combination thereof, as
trust funds in an amount sufficient to pay on the respective
stated maturities or the redemption date, the principal of and
any premium and interest on, all debt securities of that series
along with an opinion of a nationally recognized firm of
independent accountants expressed in a written certification as
to the sufficiency of the deposit;
•
we deliver to the trustee an opinion of counsel to the effect
that:
•
the holders of the debt securities of that series will not
recognize gain or loss for U.S. federal income tax purposes
as a result of the deposit, defeasance and discharge or as a
result of the deposit and covenant defeasance; and
the deposit, defeasance and discharge or the deposit and
covenant defeasance will not otherwise alter those holders’
U.S. federal income tax treatment of payments on the debt
securities of that series (in the case of a defeasance, this
opinion must be based on a ruling of the Internal Revenue
Service or a change in U.S. federal income tax law
occurring after the date of execution of the applicable
indenture);
•
no event of default under the applicable indenture has occurred
and is continuing;
•
such defeasance or covenant defeasance does not result in a
breach or violation of, or constitute a default under, any
indenture or other agreement or instrument for borrowed money to
which we are a party or by which we are bound;
•
such defeasance or covenant defeasance does not result in the
trust arising from such deposit constituting an investment
company within the meaning of the Investment Company Act of
1940, as amended, unless such trust will be registered under the
Investment Company Act of 1940 or exempt from registration
thereunder;
•
we deliver to the trustee an officer’s certificate and an
opinion of counsel, each stating that all conditions precedent
with respect to such defeasance or covenant defeasance have been
complied with; and
•
other conditions specified in the applicable indenture are met.
The subordinated indenture will not be discharged as described
above if we have defaulted in the payment of principal of,
premium, if any, or interest, if any, on any senior debt, as
defined below under “Subordination Under Subordinated
Indenture,” and that default is continuing or an event of
default on the senior debt then exists and has resulted in the
senior debt becoming or being declared due and payable prior to
the date it otherwise would have become due and payable.
Conversion
or Exchange
We may issue debt securities that we may convert or exchange
into cash or other securities or property of our company or any
other person. If so, we will describe the specific terms on
which the debt securities may be converted or exchanged in the
applicable prospectus supplement. The conversion or exchange may
be mandatory, at your option, or at our option. The applicable
prospectus supplement will describe the manner in which the
shares of common stock or other securities, property or cash you
would receive would be issued or delivered.
In the subordinated indenture, we have agreed, and holders of
subordinated debt securities will be deemed to have agreed, that
any subordinated debt securities are subordinate and junior in
right of payment to all senior debt to the extent provided in
the subordinated indenture.
Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment
for the benefit of creditors, marshaling of assets or any
bankruptcy, insolvency, debt restructuring or similar proceeding
in connection with our insolvency or bankruptcy, the holders of
senior debt will first be entitled to receive payment in full of
principal of, premium, if any, and interest, if any, on the
senior debt before the holders of subordinated debt securities
will be entitled to receive or retain any payment of the
principal of, premium, if any, or interest, if any, on the
subordinated debt securities.
If the maturity of any subordinated debt securities is
accelerated, the holders of all senior debt outstanding at the
time of the acceleration will first be entitled to receive
payment in full of all amounts due, including any amounts due
upon acceleration, before a holder of subordinated debt
securities will be entitled to receive any payment of the
principal of, premium, if any, or interest on the subordinated
debt securities, other than sinking fund payments.
We will not make any payments of principal of, premium, if any,
or interest, if any, on the subordinated debt securities (other
than any sinking fund payment) if:
•
a default in any payment on senior debt then exists,
•
an event of default on any senior debt resulting in the
acceleration of its maturity then exists, or
•
any judicial proceeding is pending in connection with any such
default.
When we use the term “debt” we mean, with respect to
any person, the principal of, premium, if any, and interest, if
any, on debt of such person, whether incurred on, prior to, or
after, the date of the subordinated indenture, whether recourse
is to all or a portion of the assets of that person and whether
or not contingent, which includes:
•
every obligation of, or any obligation guaranteed by, that
person for money borrowed,
•
every obligation of, or any obligation guaranteed by, that
person evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with
the acquisition of property, assets or businesses but excluding
the obligation to pay the deferred purchase price of any such
property, assets or business if payable in full within
90 days from the date such debt was created,
•
every capital lease obligation of that person,
•
leases of property or assets made as part of any sale and
lease-back transaction to which that person is a party, and
•
any amendments, renewals, extensions, modifications and
refundings of any such debt.
The term “debt” does not include trade accounts
payable or accrued liabilities arising in the ordinary course of
business.
When we use the term “senior debt” we mean the
principal of, premium, if any, and interest, if any, on debt,
whether incurred on, prior to, or after, the date of the
subordinated indenture, unless the instrument creating or
evidencing that debt or pursuant to which that debt is
outstanding states that those obligations are not superior in
right of payment to the subordinated debt securities or to other
debt which ranks equally with, or junior to, the subordinated
debt securities. Interest on this senior debt includes interest
accruing on or after the filing of any petition in bankruptcy or
for reorganization relating to us, whether or not the claim for
post-petition interest is allowed in that proceeding.
However, senior debt will not include:
•
any debt of our company which, when incurred and without regard
to any election under Section 1111(b) of Title 11 of
the United States Code, was without recourse to our company,
debt or other monetary obligations to trade creditors or assumed
by our company or any of our subsidiaries in the ordinary course
of business in connection with the obtaining of goods, materials
or services, and
•
the subordinated debt securities.
The subordinated indenture provides that we may change the
subordination provisions relating to any particular issue of
subordinated debt securities prior to issuance. We will describe
any change in the prospectus supplement relating to the
subordinated debt securities.
The indentures and the debt securities will be governed by and
construed in accordance with the laws of the State of New York.
Concerning
the Trustees
The trustee will have all the duties and responsibilities of an
indenture trustee specified in the Trust Indenture Act. The
trustee is not required to expend or risk its own funds or
otherwise incur financial liability in performing its duties or
exercising its rights and powers if it reasonably believes that
it is not reasonably assured of repayment or adequate indemnity.
We and our affiliates may maintain various commercial and
service relationships with the trustee and its affiliates in the
ordinary course of business.
The following summary of certain provisions of the share
purchase contracts and share purchase units does not purport to
be complete and is subject to, and qualified in its entirety by
reference to, the provisions of the share purchase contract,
share purchase unit agreement, pledge agreement or depositary
agreement, as applicable, that will be filed with the SEC in
connection with the offering of such securities. See “Where
You Can Find More Information” for information on how to
obtain copies of these documents. The particular terms of any
share purchase contracts and share purchase units offered by us
will be described in the applicable prospectus supplement. To
the extent the terms of the share purchase contracts and share
purchase units described in the prospectus supplement differ
from the terms set forth in this summary, the terms described in
the prospectus supplement will supersede the terms described
below.
We may issue share purchase contracts, representing contracts
obligating holders to purchase from us, and obligating us to
sell to the holders, a specified number of shares of common
stock, preferred stock, or other securities described in this
prospectus or the applicable prospectus supplement at a future
date or dates. The price per share may be fixed at the time the
share purchase contracts are issued or may be determined by
reference to a specific formula set forth in the share purchase
contracts. The share purchase contracts may be issued separately
or as a part of share purchase units consisting of a share
purchase contract and either debt securities, shares of
preferred stock, depositary shares, or debt obligations of third
parties, including U.S. Treasury securities, securing the
holder’s obligations to purchase the securities under the
share purchase contracts.
The share purchase contracts may require us to make periodic
payments to the holders of the share purchase units or vice
versa, and such payments may be unsecured or prefunded on some
basis. The share purchase contracts may require holders to
secure their obligations thereunder in a specified manner. In
certain circumstances, we may deliver newly issued prepaid share
purchase contracts upon release to a holder of any collateral
securing the holder’s obligations under the original share
purchase contract.
The following summary of certain provisions of the units does
not purport to be complete and is subject to, and qualified in
its entirety by reference to, the provisions of the unit
agreement that will be filed with the SEC in connection with the
offering of the units. See “Where You Can Find More
Information” for information on how to obtain copies of
this document. The particular terms of any units offered by us
will be described in the applicable prospectus supplement. To
the extent the terms of the units described in the prospectus
supplement differ from the terms set forth in this summary, the
terms described in the prospectus supplement will supersede the
terms described below.
We may issue units consisting of one or more of the other
securities described in this prospectus or the applicable
prospectus supplement in any combination in such amounts and in
such numerous distinct series as we determine.
Each unit will be issued so that the holder of the unit is also
the holder of each security included in the unit. Thus, the
holder of a unit will have the rights and obligations of a
holder of each included security.
The terms of units described in the applicable prospectus
supplement may include the following:
•
the designation and terms of the units and of the securities
comprising the units, including whether and under what
circumstances those securities may be held or transferred
separately;
•
a description of the terms of any unit agreement governing the
units;
•
a description of any provisions for the issuance, payment,
settlement, transfer or exchange of the units or of the
securities comprising the units; and
•
whether the units will be issued in fully registered or global
form.
We or the selling security holders may sell the securities
offered by this prospectus from time to time, in one or more
transactions, by a variety of methods, including the following:
•
to or through underwriters;
•
through dealers or agents;
•
to investors directly in negotiated sales or in competitive bid
transactions; or
•
through a combination of any of these methods of sale.
Any selling security holders will act independently of us in
making decisions with respect to the timing, manner, size of
each sale of the securities covered by this prospectus.
Registration of the securities covered by this prospectus does
not mean that those securities necessarily will be offered or
sold. Selling security holders may sell any securities covered
by this prospectus in private transactions or under
Rule 144 of, or pursuant to other exemptions from
registration under, the Securities Act rather than pursuant to
this prospectus.
We will identify the specific plan of distribution in a
prospectus supplement. The prospectus supplement for each
offering of securities will describe:
•
the terms of the offering of these securities, including the
name or names of any agent or agents or the name or names of any
underwriters;
•
the public offering or purchase price;
•
any discounts and commissions to be allowed or paid to any
agents or underwriters and all other items constituting
underwriting compensation;
•
any discounts and commissions to be allowed or paid to dealers;
and
•
other specific terms of the particular offering or sale.
Only the agents or underwriters named in a prospectus supplement
are agents or underwriters in connection with the securities
being offered by that prospectus supplement.
Underwriters, agents and dealers may be entitled, under
agreements with us, to indemnification against certain civil
liabilities, including liabilities under the Securities Act.
Underwriters, dealers or agents may engage in transactions with,
or perform services for, us, our subsidiaries or selling
security holders in the ordinary course of business.
The validity of any securities offered from time to time by this
prospectus and any related prospectus supplement will be passed
upon for us by Blank Rome LLP. If legal matters in connection
with offerings made
pursuant to this prospectus and any related prospectus
supplement are passed upon by counsel to underwriters, dealers
or agents, if any, such counsel will be named in the prospectus
supplement related to such offering.
The consolidated financial statements and financial statement
schedule for the fiscal year ended January 3, 2009,
incorporated in this prospectus by reference from our Current
Report on
Form 8-K
filed on August 4, 2009, and the effectiveness of our
internal control over financial reporting have been audited by
Deloitte & Touche LLP, an independent registered
public accounting firm, as stated in their reports, (which
reports (1) express an unqualified opinion on the
consolidated financial statements and financial statement
schedule and include an explanatory paragraph referring to the
effects of the retrospective application of Financial Accounting
Standards Board Staff Position APB
14-1,
Accounting for Convertible Debt Instruments That May Be
Settled in Cash upon Conversion (Including Partial Cash
Settlement), and (2) express an unqualified opinion on
the effectiveness of internal control over financial reporting),
which are incorporated herein by reference. Such consolidated
financial statements and financial statement schedule have been
so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
27
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth an estimate of the costs and expenses, other than the
underwriting discounts and commissions, to be incurred in connection with the issuance and
distribution of the securities being registered. All costs and expenses set forth below shall be
borne by us.
Item
Amount to be Paid
SEC registration fees
(1
)
Legal fees and expenses
(2
)
Accounting fees and expenses
(2
)
Printing fees
(2
)
Transfer Agent, Registrar, Trustee and Depositary fees
(2
)
Miscellaneous
(2
)
Total
(1)(2
)
(1)
In accordance with Rules 456(b) and 457(r) under the Securities Act of
1933, as amended (the “Securities Act”), GSI Commerce, Inc. has deferred the payment of the
applicable SEC registration fees and will pay such fees at the time of any particular offering of
securities under this registration statement.
(2)
As the amount of securities to be issued and distributed pursuant to this registration
statement is indeterminate, the fees and expenses of such issuances and distributions cannot be
determined or estimated at this time.
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law permits a corporation, under specified
circumstances, to indemnify its directors, officers, employees or agents against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlements actually and
reasonably incurred by them in connection with any action, suit or proceeding brought by third
parties by reason of the fact that they were or are directors, officers, employees or agents of the
corporation, if such directors, officers, employees or agents acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of the corporation and, with
respect to any criminal action or proceeding, had no reason to believe their conduct was unlawful.
In a derivative action, i.e., one by or in the right of the corporation, indemnification may be
made only for expenses actually and reasonably incurred by directors, officers, employees or agents
in connection with the defense or settlement of such action or suit, and only with respect to a
matter as to which they shall have acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the corporation, except that no indemnification shall
be made if such person shall have been adjudged liable to the corporation, unless and only to the
extent that the court in which the action or suit was brought shall determine upon application that
the defendant directors, officers, employees or agents are fairly and reasonably entitled to
indemnity for such expenses that the court deems proper despite such adjudication of liability in
view of all the circumstances of the case.
Section 102(b)(7) of the Delaware General Corporation Law provides that a certificate of
incorporation may contain a provision eliminating or limiting the personal liability of a director
to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provision shall not eliminate or limit the liability of a director:
(1)
for any breach of the director’s duty of loyalty to the corporation or its
stockholders;
(2)
for acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law;
under Section 174 (relating to liability for unlawful purchases or redemptions of, or
dividends on, capital stock) of the Delaware General Corporation Law; or
(4)
for any transaction from which the director derived an improper personal benefit.
As permitted by the Delaware General Corporation Law, GSI Commerce, Inc.’s amended and
restated certificate of incorporation, as amended, eliminates liability of its directors for
monetary damages to the fullest extent permitted under applicable law. GSI Commerce, Inc.’s amended
and restated bylaws also provide, with certain exceptions, for indemnification to the fullest
extent not prohibited by the Delaware General Corporation Law.
In addition, GSI Commerce, Inc. has entered into indemnification agreements with certain of
its directors and officers, the form of which was approved by its stockholders. The indemnification
agreements, among other things:
•
confirm the present indemnity provided by GSI Commerce, Inc.’s bylaws which state that
GSI Commerce, Inc. will indemnify directors and officers to the fullest extent not
prohibited by the Delaware General Corporation Law and provide that this indemnity will
continue despite future changes in its bylaws, as the indemnification agreements will be
its contractual obligations, unlike its bylaws which may be amended by its stockholders or
its board;
•
provide further indemnification to the fullest possible extent permitted by law against
all expenses (including attorneys’ fees), judgments, fines and settlement amounts paid or
incurred by a director or officer in any action or proceeding, including any action by GSI
Commerce, Inc. or in its own right, on account of service as its director, officer,
employee, attorney or agent or any of its subsidiaries or any other company or enterprise
at its request;
•
cover all actions and proceedings, even if they arise from acts or omissions by a
director or officer occurring before the execution of the agreements;
•
continue in force so long as the individual continues to serve in such capacity on GSI
Commerce, Inc.’s behalf and cover liabilities related to his activities in any such
capacity regardless of future changes to its corporate documents;
•
provide for payment of expenses in advance of a final disposition of the action or suit,
regardless of the recipient’s ability to make repayments, and do not require that any
repayment obligations in respect of any such advances be secured or bear interest;
•
provide protection during the determination process in the event there is a change of
control of GSI Commerce, Inc. or its board and grant its directors and officers rights to
appeal a denial of indemnification to a court of competent jurisdiction; and
•
except as discussed below with respect to violations of Section 16(b) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and expenses or liabilities which are
covered by insurance, provide that directors or officers who rely on GSI Commerce, Inc.’s
records or upon information supplied by its officers, legal counsel, outside accountants or
appraisers are deemed to have acted in a manner which would entitle its directors or
officers to indemnification under the indemnification agreements.
However, a director or officer is not entitled to indemnification under these agreements
unless that director or officer acted in good faith and in a manner reasonably believed to be in or
not opposed to GSI Commerce, Inc.’s best interests.
In addition, no indemnification will be provided in respect of any suit in which judgment is
rendered against a director or officer for an accounting of profits from a purchase or sale of
securities of GSI Commerce, Inc. in violation of Section 16(b) of the Exchange Act, or of any
successor statute, or for expenses or liabilities which have
been paid directly to a director or officer by an insurance carrier under a policy of
directors’ and officers’ liability insurance.
The employment agreements of certain officers of GSI Commerce, Inc. provide for
indemnification to such officers by GSI Commerce, Inc. to the fullest extent permitted by its
bylaws or applicable law.
GSI Commerce, Inc. has obtained directors’ and officers’ liability insurance which covers
certain liabilities, including liabilities to GSI Commerce, Inc. and its stockholders, in the
amount of $25.0 million.
A list of exhibits filed with the registration statement on Form S-3 is set forth in the
Exhibit Index beginning on page E-1 and is incorporated into this Item 16 by reference.
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act;
(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 this 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 SEC 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 this registration statement or any material change to such information in
this registration statement;
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) do not apply if the
information required to be included in a post-effective amendment by those paragraphs is contained
in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section
15(d) of the Exchange Act 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, 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 to any purchaser:
(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), 424(b)(5), or 424(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), 415(a)(1)(vii), or 415(a)(1)(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 the securities in the offering described
in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person
that is at that date an underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof. Provided, however, that no
statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such effective date, supersede or modify any
statement that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such effective date.
(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: the undersigned registrant
undertakes that in a primary offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the purchaser and will be considered
to offer or sell such securities to such purchaser:
(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 hereby further undertakes that, for the 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 (and, where applicable, each filing of an
employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this 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 undersigned registrant has been advised that in the opinion
of the SEC 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:
(1) For purposes of determining any liability under the Securities Act, the information
omitted from the form of prospectus filed as part of this registration statement in reliance upon
Rule 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, 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.
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the city of King of Prussia, Commonwealth of
Pennsylvania, on the 18th day of November, 2009.
Each person whose signature appears below constitutes and appoints and hereby authorizes
Michael G. Rubin and Michael R. Conn, and each of them individually, such person’s true and lawful
attorney-in-fact, with full power of substitution or resubstitution, for such person and in such
person’s name, place and stead, in any and all capacities, to sign on such person’s behalf,
individually and in each capacity stated below, any and all amendments to this registration
statement and to file or cause to be filed the same, with all exhibits thereto, and other documents
in connection therewith, with the SEC, granting unto said attorneys-in-fact, and each of them, full
power and authority to do and perform each and every act and thing requisite or necessary to be
done in connection therewith, as fully to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact, and each of them, or
his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities and on the dates indicated.
Agreement and Plan of Merger, dated as of August 16, 2007, among GSI Commerce, Inc., Blue
Route, Inc., Accretive Commerce, Inc. and certain of the principal stakeholders of
Accretive Commerce, Inc. (filed with GSI Commerce, Inc.’s Current Report on Form 8-K filed
on August 17, 2007 and incorporated herein by reference).
2.2
Agreement and Plan of Merger, dated as of January 23, 2008, by and among GSI Commerce,
Inc., Dolphin Acquisition Corporation, E-Dialog, Inc. and One Liberty Ventures 2000, L.P.
(as Stockholders’ Representative) (filed with GSI Commerce, Inc.’s Current Report on Form
8-K filed on January 29, 2008 and incorporated herein by reference).†
2.3
Agreement and Plan of Merger, dated as of October 27, 2009, by and among GSI Commerce,
Inc, Cola Acquisition Corporation, Retail Convergence, Inc., certain principal
stockholders of Retail Convergence, Inc. and William J. Fitzgerald (as Stockholders’
Representative) (filed with GSI Commerce, Inc.’s Current Report on Form 8-K/A filed on
November 17, 2009 and incorporated herein by reference). ††
Certificate of Designations, Preferences and Rights of Series A Junior Participating
Preferred Stock (filed with GSI Commerce, Inc.’s Current Report on Form 8-K filed on April3, 2006 and incorporated herein by reference).
Second Amended and Restated Registration Rights Agreement, dated as of September 13, 2000,
by and between Global Sports, Inc., Interactive Technology Holdings, LLC, SOFTBANK Capital
Advisors Fund LP and TMCT Ventures, L.P. (filed with GSI Commerce, Inc.’s Current Report
on Form 8-K filed on September 20, 2000 and incorporated herein by reference).
4.8
Second Amendment to Second Amended and Restated Registration Rights Agreement, dated as of
July 20, 2001, among Global Sports, Inc., SOFTBANK Capital Partners LP, SOFTBANK Capital
Advisors Fund LP, Rustic Canyon Ventures, LP (f/k/a TMCT Ventures, LP) and Interactive
Technology Holdings, LLC (filed with GSI Commerce, Inc.’s Current Report on Form 8-K filed
on August 27, 2001 and incorporated herein by reference).
4.9
Third Amendment to Second Amended and Restated Registration Rights Agreement, dated as of
July 25, 2003, among Global Sports, Inc. (n/k/a GSI Commerce, Inc.), SOFTBANK Capital
Partners LP, SOFTBANK Capital Advisors Fund LP, Rustic Canyon Ventures, LP (f/k/a TMCT
Ventures, LP) and Interactive Technology Holdings, Inc. (filed with GSI Commerce, Inc.’s
Current Report on Form 8-K on July 29, 2003 and incorporated herein by reference).
Fourth Amendment to Second Amended and Restated Registration Rights Agreement, dated as of
June 26, 2004, among Global Sports, Inc. (n/k/a GSI Commerce, Inc.), SOFTBANK Capital
Partners LP, SOFTBANK Capital Advisors Fund LP, Rustic Canyon Ventures, LP (f/k/a TMCT
Ventures, LP) and Interactive Technology Holdings, Inc. (filed with GSI Commerce, Inc.’s
Annual Report on Form 10-K filed on March 17, 2005 and incorporated herein by reference).
4.11
Fifth Amendment to Second Amended and Restated Registration Rights Agreement, dated as of
August 5, 2009, among Global Sports, Inc. (n/k/a GSI Commerce, Inc.), SOFTBANK Capital
Partners LP, SOFTBANK Capital Advisors Fund LP, SOFTBANK Capital LP and QK Holdings, Inc.
(filed with GSI Commerce, Inc.’s Registration Statement on Form S-3 filed on August 7,2009 and incorporated herein by reference).
4.12
Rights Agreement, dated as of April 3, 2006, between GSI Commerce, Inc. and American Stock
Transfer & Trust Company, as Rights Agent, including all exhibits thereto (filed with GSI
Commerce, Inc.’s Current Report on Form 8-K filed on April 3, 2006 and incorporated herein
by reference).
Form of 3% Convertible Note due 2025 (filed as Exhibit A to Exhibit 4.1 of GSI Commerce,
Inc.’s Current Report on Form 8-K dated June 1, 2005
and incorporated herein by reference).
To be filed by an amendment or as an exhibit to a document filed under
the Securities Exchange Act of 1934, as amended, and incorporated by
reference herein.
†
Confidential treatment has been granted for certain portions of this
exhibit. Omitted portions have been filed separately with the
Securities and Exchange Commission.
††
Certain portions of this exhibit have been omitted and filed
separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Dates Referenced Herein and Documents Incorporated by Reference
