<PAGE> 1
As filed with the Securities and Exchange Commission on January 8, 1998
Registration No. 333-______
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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SERVICE EXPERTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C> <C>
DELAWARE 7623 62-1639453
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
111 WESTWOOD PLACE, SUITE 420
BRENTWOOD, TENNESSEE 37027
(615) 371-9990
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
ALAN R. SIELBECK
CHAIRMAN OF THE BOARD,
CHIEF EXECUTIVE OFFICER AND PRESIDENT
SERVICE EXPERTS, INC.
111 WESTWOOD PLACE, SUITE 420
BRENTWOOD, TENNESSEE 37027
(615) 371-9990
------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------
Copy to:
J. CHASE COLE, ESQ.
WALLER LANSDEN DORTCH & DAVIS,
A PROFESSIONAL LIMITED LIABILITY COMPANY
2100 NASHVILLE CITY CENTER
511 UNION STREET
NASHVILLE, TENNESSEE 37219
(615) 244-6380
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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: [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]____________________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ] ________________________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Proposed Maximum Aggregate
Securities to be Registered Amount to be Registered Offering Price (1) Amount of Registration Fee
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<S> <C> <C> <C>
Common Stock, $.01 par value 500,000 shares $14,250,000 $4,204
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</TABLE>
(1) Pursuant to Rule 457(c), the proposed maximum aggregate offering price is
estimated solely for the purpose of calculating the registration fee and is
based on the average of the high and low sales prices of the Common Stock
of the Registrant reported on the New York Stock Exchange on January 5,
1998.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
PROSPECTUS
500,000 SHARES
SERVICE EXPERTS, INC.
COMMON STOCK
In accordance with the applicable rules of the Securities and Exchange
Commission, this Prospectus may be used in connection with separate offerings of
the Common Stock, $.01 par value per share ("Common Stock"), of Service Experts,
Inc. (the "Company").
This Prospectus relates to the resale by the holders thereof (the
"Selling Stockholders") of up to 500,000 shares (the "Shares") of the Company's
Common Stock issued without registration under the Securities Act of 1933, as
amended (the "Securities Act"), in transactions not involving public offerings
in connection with the acquisition of the assets or securities of heating,
ventilating and air conditioning ("HVAC") service and replacement businesses. In
addition, this Prospectus relates to the resale of shares of Common Stock issued
upon exercise of options and warrants and the conversion into shares of Common
Stock of convertible securities issued in connection with acquisitions,
financing activities and related transactions. The Common Stock may be resold by
the Selling Stockholders in such amounts and on such terms to be set forth in a
supplement to this Prospectus (a "Supplement") or a post-effective amendment (a
"Post-Effective Amendment") to the Registration Statement in which this
Prospectus is included. The specific terms upon which the Common Stock is being
offered for resale in connection with the delivery of this Prospectus will be
set forth in the Supplement or Post-Effective Amendment, as applicable, and will
include the specific number of shares of Common Stock to be sold and other
information concerning the Selling Stockholder or Stockholders. The Company's
Common Stock may not be resold through this Prospectus without delivery of the
applicable Supplement or Post-Effective Amendment.
The Shares held by the Selling Stockholders may be reoffered from time
to time in transactions on the open market, in negotiated transactions, through
the writing of options on Common Stock, or a combination of such methods of
sale, at fixed prices which may be changed, at market prices prevailing at the
time of sale, at prices relating to the prevailing market prices, or negotiated
prices. The Selling Stockholders may effect such transactions by selling the
Common Stock to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholders or the purchasers of shares for whom such broker-dealer may
act as agent or to whom they may sell as principal or both.
The Company will not receive any part of the proceeds from the resale
by the Selling Stockholders of any Common Stock thereof pursuant hereto. The
Company will bear all expenses (other than selling discounts and commissions and
fees and expenses of the Selling Stockholders) in connection with the
registration of the Common Stock being reoffered by the Selling Stockholders.
The terms for the issuance of Common Stock may include provisions for the
indemnification of the Selling Stockholders for certain civil liabilities,
including liabilities under the Securities Act.
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THE COMMON STOCK OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" APPEARING ON PAGES 3 THROUGH 6.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-----------------------
THE DATE OF THIS PROSPECTUS IS _______________ ____, 1998
<PAGE> 3
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-3, including
amendments thereto, if any, with respect to the Common Stock (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission"). This
Prospectus and any accompanying Prospectus Supplement do not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto. Statements contained in this Prospectus and any accompanying
Prospectus Supplement concerning the contents of any contract or other document
referred to are not necessarily complete and in each instance reference is made
to the copy of such contract or other document filed as an exhibit to the
Registration Statement or as previously filed with the Commission and
incorporated herein by reference. For further information with respect to the
Company and the Common Stock, reference is made to the Registration Statement,
exhibits and schedules. A copy of the Registration Statement may be inspected by
anyone without charge at the Commission's principal office at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part
thereof may be obtained from the Commission upon payment of certain fees
prescribed by the Commission.
The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information may be
inspected and copied at the public reference facilities maintained by the
Commission, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549, as well as the following Commission Regional Offices:
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material also can be obtained from the Public Reference Section
of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission maintains an Internet Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission, and the address of such site is
http//www.sec.gov. The Company's Common Stock is listed on the New York Stock
Exchange (the "NYSE"), and such reports, proxy statements and other information
can also be inspected at the offices of the NYSE, located at 20 Broad Street,
New York, New York 10005, at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are
incorporated herein by reference as of the dates thereof:
(1) Annual Report on Form 10-K for the year ended December
31, 1996;
(2) Quarterly Report on Form 10-Q for the quarter ended March
31, 1997;
(3) Quarterly Report on Form 10-Q for the quarter ended June
30, 1997;
(4) Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997, as amended by the Company's Quarterly Report on
Form 10-Q/A;
(5) Current Reports on Form 8-K dated April 9, 1997,
September 4, 1997, September 26, 1997, October 15, 1997, November 24,
1997, November 26, 1997 and January 8, 1998; and
(6) The description of the Common Stock contained in the
Registration Statement on Form 8-A, filed pursuant to Section 12 of the
Exchange Act on May 23, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Common Stock shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in this Prospectus or
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
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THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY
OF THIS PROSPECTUS IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH
PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN
OR MAY BE INCORPORATED BY REFERENCE HEREIN (OTHER THAN EXHIBITS TO SUCH
DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE IN
SUCH DOCUMENTS). REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO ANTHONY M.
SCHOFIELD, SERVICE EXPERTS, INC., 111 WESTWOOD PLACE, SUITE 420, BRENTWOOD,
TENNESSEE 37027 (TELEPHONE NUMBER 615-371-9990).
BUSINESS
The Company is one of the leading providers of residential HVAC
services and replacement equipment in the United States. The Company currently
operates Service Centers across the country. The Service Centers install,
service and maintain central air conditioners, furnaces and heat pumps,
primarily in existing homes. The Company focuses on the service and replacement
segment of the HVAC industry rather than the new construction segment because
management believes that the service and replacement segment offers higher
margins and exposes the Company to less credit risk.
RISK FACTORS
In addition to the other information contained or incorporated by
reference in this Prospectus, the following risk factors should be considered
carefully in evaluating an investment in the Common Stock offered hereby and any
accompanying Prospectus Supplement or Post-Effective Amendment, as applicable.
This discussion also identifies important cautionary factors that could
cause the Company's actual results to differ materially from those expressed in
forward-looking statements included or incorporated by reference herein by, or
on behalf of the Company. In particular, the Company's forward-looking
statements included or incorporated by reference in this Prospectus, including
those regarding the successful integration of the businesses of the Company's
subsidiaries (the "Subsidiaries"), the effective implementation of the Company's
strategy, the availability of additional HVAC businesses for acquisition, the
adequacy of the Company's capital resources and other statements regarding
trends relating to the HVAC industry and various revenue and expense items,
could be affected by a number of risks and uncertainties including those
described below.
The term "Service Centers" as used herein refers to HVAC service and
replacement businesses operated by the Company.
LIMITED COMBINED OPERATING HISTORY
The Company was incorporated in March 1996 and, simultaneously with
the closing of the Company's initial public offering of Common Stock on August
21, 1996 (the "IPO"), consummated the acquisition of 12 HVAC service and
replacement businesses and Contractor Success Group, Inc. (collectively, the
"Predecessor Companies") in exchange for shares of Common Stock and cash (the
"Combination"). Since the IPO, the Company has acquired numerous additional
Service Centers. Because of the limited operating history of the Company as a
combined entity, there can be no assurance that the Company will be able to
integrate successfully the businesses of the Subsidiaries or to operate
profitably. There can be no assurance that the Company's management will be
able to manage effectively the combined entity and implement effectively the
Company's operating and acquisition strategies. Failure to integrate
successfully the Subsidiaries and to implement successfully the Company's
operating and acquisition strategies could have a material adverse effect on
the Company's net revenue and earnings.
RISKS ASSOCIATED WITH ACQUISITION STRATEGY AND FINANCING
The success of the Company's acquisition strategy will depend on a
number of factors, including (i) the Company's ability to locate and
successfully negotiate the acquisition of HVAC businesses and to successfully
integrate the operations of acquired Service Centers into the Company's
operations and (ii) the availability of adequate financing to develop or acquire
additional HVAC businesses. In addition, the Company competes with other HVAC
and residential service companies for desirable acquisition candidates. Some of
these companies may have access to capital, personnel and other resources equal
to or greater than those of the Company. The Company expects that its capital
needs over the next several years, primarily for acquisitions, will exceed
capital generated from operations. The Company plans to incur indebtedness and
to issue, from time to time, additional debt or
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equity securities, including the issuance of Common Stock in connection with the
types of transactions identified on the cover page of this Prospectus. In the
event that the Common Stock does not maintain a sufficient market value, or
potential acquisition candidates are unwilling to accept Common Stock as part of
the consideration for the sale of their businesses, the Company may be required
to utilize more of its cash resources, if available, in order to maintain its
acquisition program. There can be no assurance that the Company's acquisition
strategy will be successful, that modifications to the Company's strategy will
not be required, that the Company will be able to manage effectively and enhance
the profitability of additional Service Centers or that the Company will be able
to obtain adequate financing on reasonable terms to develop or acquire
additional HVAC service businesses.
RISKS ASSOCIATED WITH DEVELOPMENT, IMPLEMENTATION, AND INTEGRATION OF OPERATING
SYSTEMS AND POLICIES
As a rapidly growing provider of HVAC services, the Company is faced
with the development, implementation and integration of Company-wide policies
and systems related to its operations. Each of the Subsidiaries and companies to
be acquired may need, to some extent, to modify or adopt certain systems and
policies they have utilized historically in order to implement the Company's
systems and policies, which management is continuing to formulate. The Company
is implementing a uniform general ledger system and electronic mail system at
each of the Service Centers. The Company plans to implement and integrate
certain other information and operating systems and procedures for the Service
Centers including, but not limited to, uniform purchasing programs and certain
centralized marketing programs. The Company may experience delays, complications
and expenses in implementing, integrating and operating such systems, any of
which could have a material adverse effect on the Company's operations, net
revenue and earnings.
COMPETITION
The HVAC service and replacement industry is highly competitive. The
Company's Service Centers compete with other full-service HVAC businesses
primarily on the basis of quality, reliability, customer service and price.
Several companies have been organized to pursue the acquisition of businesses
that offer HVAC services. Some of these competitors have access to capital,
personnel, marketing and technological resources that are equal to or greater
than those of the Company. In certain markets, the Company competes with utility
companies which have access to capital, personnel, marketing and technological
resources that are equal to or greater than those of the Company. Because of the
fragmented nature of the industry and relatively low barriers to entry,
additional competitors, including companies that offer other home improvement
services in addition to HVAC services, may emerge with greater access than the
Company to capital, personnel and technological resources. There can be no
assurance that the Company will be able to compete successfully or that such
competition will not make it more difficult to acquire HVAC businesses on terms
beneficial to the Company.
DEPENDENCE ON KEY PERSONNEL
The success of the Company is dependent upon the continued services of
the Company's senior management, particularly upon its Chairman of the Board,
Chief Executive Officer and President, Alan R. Sielbeck. The loss of the
services of Mr. Sielbeck or any of the Company's senior management would have a
material adverse effect upon the Company's business and prospects.
LABOR AVAILABILITY
The timely provision of high-quality service by the Service Centers
requires an adequate supply of skilled labor. In addition, the operating costs
of each Service Center may be adversely affected by high turnover in skilled
positions. Accordingly, the Company's ability to increase productivity and net
earnings is limited to a degree by its ability to employ the skilled laborers
necessary to meet the Company's service requirements. There can be no assurance
that the Company will be able to maintain an adequate skilled labor force
necessary to operate efficiently its Services Centers or that the Company's
labor expenses will not increase as a result of a shortage in the supply of
skilled workers.
SEASONAL AND CYCLICAL NATURE OF THE INDUSTRY
The HVAC service industry generally experiences increased demand during
the summer and winter months. The Company may, in certain periods, be affected
by these seasonal trends. The residential HVAC service
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and replacement industry historically has been highly cyclical and is influenced
by many of the same national and regional economic and demographic factors which
affect demand for durable consumer goods, including consumer confidence,
interest rates, availability of financing, regional population and employment
trends, and general economic conditions. There can be no assurance that the HVAC
service and replacement industry will not experience future declines or that
such declines will not have a material adverse effect on the Company.
CONTROL BY MANAGEMENT AND PRINCIPAL STOCKHOLDERS
As of January 7, 1998, directors, officers and 5% stockholders of the
Company beneficially owned approximately 8.8% of the outstanding Common Stock.
Accordingly, these persons have substantial influence over the affairs of the
Company, including the ability to influence the election of directors and other
matters requiring stockholder approval.
REGULATION
HVAC systems are subject to various environmental statutes and
regulations, including, but not limited to, laws and regulations implementing
the Clean Air Act, as amended (the "Clean Air Act"), relating to minimum energy
efficiency standards of HVAC systems and the production, servicing and disposal
of certain ozone depleting refrigerants used in such systems. In connection with
the entry into new markets, the Company may become subject to compliance with
additional regulations, and there can be no assurance that the regulatory
environment in which the Company operates will not change significantly in the
future.
Various local, state and federal laws and regulations, including those
implementing the Clean Air Act, impose licensing standards on technicians who
service heating and air conditioning units. While the installers and technicians
employed by the Service Centers are duly certified by applicable local, state
and federal agencies and have been able to meet or exceed such standards to
date, there can be no assurance that they will be able to meet future standards.
In some states, warranties provided for in the Company's service
agreements may be deemed insurance contracts by applicable state insurance
regulatory agencies thereby subjecting the Company and the service agreements to
the insurance laws and regulations of such state.
CERTAIN ANTI-TAKEOVER PROVISIONS
Certain provisions of the Company's Restated Certificate of
Incorporation ("Restated Certificate") and Bylaws and Delaware law may make a
change in the control of the Company more difficult to effect, even if a change
in control were in the stockholders' interest. Section 203 of the Delaware
General Corporation Law would prevent an "interested stockholder" (defined in
Section 203, generally, as a person owning 15% or more of the Company's
outstanding voting stock) from engaging in a "business combination" (as defined
in Section 203) with the Company for three years following the date such person
became an interested stockholder unless certain conditions, including approval
by the Company's Board of Directors, are met. The Company's Restated Certificate
and Bylaws include certain super-majority voting requirements. The Restated
Certificate also allows the Board to determine the terms of preferred stock
which may be issued by the Company without approval of the holders of the Common
Stock. The ability of the Company to issue preferred stock in this manner could
enable the Board to prevent changes in management and control of the Company.
The Board of the Company is divided into three classes of directors, with
directors being elected for staggered three-year terms. Such staggered terms may
affect the ability of the holders of the Common Stock to change control of the
Company. In addition, certain provisions of the employment agreements between
the Company and the executive officers of the Company may make a change of
control more difficult. Pursuant to these employment agreements, upon a change
in control of the Company, each executive officer is to be paid as severance pay
such officer's base salary for the remaining term of the employment agreement.
VOLATILITY OF MARKET PRICE
From time to time, there may be significant volatility in the market
price of the Common Stock. Quarterly operating results of the Company, changes
in earnings estimated by analysts, changes in general conditions in the economy
or the financial markets or other developments affecting the Company could cause
the market price of the Common Stock to fluctuate substantially. In addition, in
recent years the stock market has experienced extreme
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price and volume fluctuations. This volatility has had a significant effect on
the market prices of securities issued by many companies for reasons unrelated
to their operating performance.
SELLING STOCKHOLDERS
The Company has issued, and intends to continue to issue, unregistered
shares of Common Stock in connection with the Company's acquisition of the
assets and securities of HVAC service and replacement businesses. The Company
has in the past or may in the future issue options or warrants to purchase
shares of Common Stock or securities convertible into shares of Common Stock in
connection with financing activities, acquisitions and related transactions.
Upon exercise or conversion of such securities, the Selling Stockholders will
receive unregistered shares of Common Stock.
The Selling Stockholders may determine to reoffer the Shares to the
public. The identity of the Selling Stockholders, the number of Shares to be
sold by the Selling Stockholders and the price per Share will be determined at
the time of the consummation of the particular transaction. Specific information
regarding the transaction, the identity of the Selling Stockholders and the
number of Shares to be resold will be provided at the time of such transaction
by means of a Supplement or a Post-Effective Amendment, as applicable.
PLAN OF OFFERING BY THE SELLING STOCKHOLDERS
The sale of the Shares by the Selling Stockholders may be effected from
time to time in transactions on the NYSE, in negotiated transactions, through
the writing of options on the Shares, or through a combination of such methods
of sale, at prices related to such prevailing market prices prevailing at the
time of sale, or at negotiated prices. The Selling Stockholders may effect such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders and/or the purchasers of the Shares
for which such broker-dealers may act as agent or to whom they sell as
principal, or both (which compensation as to a particular broker-dealer may be
in excess of customary commissions).
The Selling Stockholders and any broker-dealers who act in connection
with the sale of the Shares hereunder may be deemed to be an "underwriter"
within the meaning of Section 2(11) of the Securities Act, and any commissions
received by them and profit on any resale of the Shares as principal may be
deemed to be underwriting discounts and commissions under the Securities Act.
The Company intends to make available public information concerning
itself in compliance with the Securities Act and the regulations thereunder, and
accordingly, Rule 144 or 145 adopted under the Securities Act may be available
for use by holders of Common Stock to effect transfers of such securities,
subject to compliance with the applicable provisions of such rules. The terms of
particular acquisitions by the Company may require the holder of Common Stock to
use Rule 144 or 145, if available, for the resale of Common Stock rather than to
effect resales pursuant to this Prospectus.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Common Stock
offered hereby will be passed upon for the Company by Waller Lansden Dortch &
Davis, A Professional Limited Liability Company, Nashville, Tennessee.
EXPERTS
The consolidated financial statements of Service Experts, Inc. at
December 31, 1996 and 1995, and for each of the three years in the period ended
December 31, 1996, as filed on the Current Report on Form 8-K on January 8,
1998 and incorporated herein by reference, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon incorporated
herein by reference, and are included in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
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NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE
HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY SELLING
SHAREHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON OR BY ANYONE IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH
OFFEROR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
DATE SUBSEQUENT TO THE DATE HEREOF.
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TABLE OF CONTENTS
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Page
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<S> <C>
Available Information...........................2
Incorporation Of Certain Documents By
Reference.....................................2
Business........................................3
Risk Factors....................................3
Selling Stockholders............................6
Plan Of Offering By The Selling Stockholders....6
Legal Matters...................................6
Experts.........................................6
</TABLE>
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500,000 SHARES
SERVICE EXPERTS, INC.
COMMON STOCK
-----------------------------------
PROSPECTUS
-----------------------------------
_____________ ___, 1998
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<PAGE> 9
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses to be incurred in connection with this Registration Statement
are as follows:
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<S> <C>
Commission Registration Fee $ 4,204
State Qualification Expenses (including legal fees) --
Auditor's Fees and Expenses 20,000
Legal Fees and Expenses 20,000
Miscellaneous Expenses 796
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Total $ 45,000
=========
</TABLE>
The Company has agreed to bear all expenses (other than underwriting
discounts and selling commissions, and fees and expenses of counsel and other
advisors to the Selling Stockholders) in connection with the registration and
sale of the Common Stock being offered by the Selling Stockholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a)The Delaware General Corporation Law ("DGCL") provides that a
corporation may indemnify any person made party to an action by reason of such
person's status as a director, officer, employee or agent of the corporation
against expenses, judgments, fines and settlements provided such person acted
(i) in good faith, (ii) in a manner reasonably believed to be in or not opposed
to the best interests of the Corporation and (iii) with respect to a criminal
action, had no reasonable cause to believe such person's conduct was unlawful.
The termination of an action by a judgment, order, settlement, conviction or
plea of nolo contendere shall not create a presumption that a person did not
meet the standard of conduct set forth above. In actions brought by or in the
right of the corporation, however, the DGCL provides that no indemnification may
be made if the person was adjudged to be liable to the corporation unless and
only to the extent that the Court of Chancery or the court in which such action
was brought shall determine upon application that, despite the adjudication of
liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which the court shall
deem proper. To the extent that a person is successful, on the merits or
otherwise, in the defense of any proceeding instigated because of his or her
status as a director, officer, employee or agent of a corporation, the DGCL
mandates that the corporation indemnify such person against reasonable expenses
incurred in the proceeding. A corporation may advance litigation expenses,
including attorneys' fees, to a person who is a party to a proceeding upon such
person undertaking to repay such amount if it shall ultimately be determined
that such person is not entitled to indemnification. The indemnification and
advancement of expenses under the DGCL are not deemed exclusive of any other
rights to which a person may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise.
(b) Article VII of the Registrant's Restated Certificate of
Incorporation provides as follows:
(i) The Corporation shall indemnify, and upon request shall
advance expenses (including attorneys' fees) to, in the manner and to
the fullest extent permitted by law, any officer or director (or the
estate of any such person) who was or is a party to, any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative, investigative or otherwise, by reason of the
fact that such person is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as
a director, officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust, other enterprise or
employee benefit plan (an "indemnitee"). The Corporation may, to the
fullest extent permitted by law, purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, partner, trustee, employee or agent
of another corporation, partnership, joint venture, trust, other
enterprise or employee benefit plan against any liability which may be
asserted against such person. To the fullest extent permitted by law,
the indemnification and advances provided for herein shall include
expenses (including attorneys' fees), judgments, penalties, fines and
amounts paid in settlement. The
II-1
<PAGE> 10
indemnification provided herein shall not be deemed to limit the right
of the Corporation to indemnify and any other person for any such
expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement to the fullest extent permitted by law, both as to action
in his official capacity and as to action in another capacity while
holding such office.
(ii) Notwithstanding the foregoing, the Corporation shall not
indemnify any such indemnitee who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit
by or in the right of the Corporation to secure a judgment in its favor
against such indemnitee with the Corporation, unless and only to the
extent that, the Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, such indemnitee is fairly and reasonably entitled to indemnity
for such expenses which the Court of Chancery or such other court shall
deem proper.
(iii) The rights to indemnification and advancement of
expenses set forth in this Article VII are intended to be greater than
those which are otherwise provided for in the General Corporation Law
of the State of Delaware, are contractual between the Corporation and
the person being indemnified, his heirs, executors and administrators,
and, with respect to this Article VII are mandatory, notwithstanding a
person's failure to meet the standard of conduct required for
permissive indemnification under the General Corporation Law of the
State of Delaware, as amended from time to time. The rights to
indemnification and advancement of expenses set forth in this Article
VII are nonexclusive of other similar rights which may be granted by
law, this Certificate, the Bylaws, a resolution of the Board of
Directors or stockholders or an agreement with the Corporation, which
means of indemnification and advancement of expenses are hereby
specifically authorized.
(iv) Any repeal or modification of the provisions of this
Article VII, either directly or by the adoption of an inconsistent
provision of this Certificate, shall be prospective only and shall not
adversely affect any right or protection set forth herein existing in
favor of a particular individual at the time of such repeal or
modification. In addition, if an amendment to the General Corporation
Law of the State of Delaware limits or restricts in any way the
indemnification rights permitted by law as of the date hereof, such
amendment shall apply only to the extent mandated by law and only to
activities of persons subject to indemnification under this Article VII
which occur subsequent to the effective date of such amendment.
(c) The Company has obtained insurance for its directors and executive
officers in amounts of $5,000,000 per claim and $5,000,000 for aggregate claims.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------ -----------------------
<S> <C>
3.1 Restated Certificate of Incorporation of the Registrant(a)
3.2 Bylaws of the Registrant(a)
4 Form of Common Stock Certificate(b)
5 Opinion of Waller Lansden Dortch & Davis, A Professional Limited Liability Company
23.1 Consent of Ernst & Young LLP
23.2 Consent of Waller Lansden Dortch & Davis, A Professional Limited Liability Company (included in
Exhibit 5)
24 Power of Attorney (set forth on page II-4)
</TABLE>
- -------------------
(a) Incorporated by reference to the exhibits filed with the Registrant's
Registration Statement on Form S-1, Registration No. 333-07037.
(b) Incorporated by reference to the exhibits filed with the Registrant's
Registration Statement on Form 8-A, File No. 000-21173.
II-2
<PAGE> 11
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the 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 Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Nashville,
State of Tennessee, on December 31, 1997.
SERVICE EXPERTS, INC.
By: /s/ ALAN R. SIELBECK
---------------------------------------
Alan R. Sielbeck
Chairman, Chief Executive Officer
and President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of Alan R. Sielbeck and Anthony M.
Schofield his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully and to all intents and purposes as each might or
could do in person hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE(S) DATE
---- -------- ----
<S> <C> <C>
/s/ ALAN R. SIELBECK Chairman of the Board December 31, 1997
- ---------------------------------- Chief Executive Officer and President
Alan R. Sielbeck (principal executive officer)
Director
- ----------------------------------
James D. Abrams
/s/ ANTHONY M. SCHOFIELD Chief Financial Officer December 31, 1997
- ---------------------------------- (principal financial and
Anthony M. Schofield accounting officer)
/s/ RAYMOND J. DERIGGI Director December 31, 1997
- ----------------------------------
Raymond J. DeRiggi
/s/ NORMAN T. ROLF Director December 31, 1997
- ----------------------------------
Norman T. Rolf
/s/ WILLIAM G. ROTH Director December 31, 1997
- ----------------------------------
William G. Roth
/s/ TIMOTHY G. WALLACE Director December 31, 1997
- ----------------------------------
Timothy G. Wallace
</TABLE>
II-4
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------ -----------------------
<S> <C>
3.1 Restated Certificate of Incorporation of the Registrant(a)
3.2 Bylaws of the Registrant(a)
4 Form of Common Stock Certificate(b)
5 Opinion of Waller Lansden Dortch & Davis, A Professional Limited Liability Company
23.1 Consent of Ernst & Young LLP
23.2 Consent of Waller Lansden Dortch & Davis, A Professional Limited Liability Company (included in
Exhibit 5)
24 Power of Attorney (set forth on page II-4)
</TABLE>
<PAGE> 1
EXHIBIT 5
[Waller Lansden Dortch & Davis Letterhead]
January 8, 1998
Service Experts, Inc.
111 Westwood Place, Suite 420
Brentwood, Tennessee 37027
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Service Experts, Inc., a Delaware
corporation (the "Company"), in connection with the preparation of a
registration statement on Form S-3 (the "Registration Statement") to be filed
with the Securities and Exchange Commission on January 8, 1998 relating to up
to 500,000 shares of Common Stock, $.01 par value per share, of the Company (the
"Shares"). The Shares will be resold by the holders thereof from time to time as
set forth in the prospectus which forms a part of the Registration Statement
(the "Prospectus"), and as set forth in the applicable supplement to the
Prospectus. The Shares were originally issued, or will be issued, to the holders
thereof without registration under the Securities Act of 1933, as amended, in
transactions not involving a public offering.
In connection with this opinion, we have examined and relied upon such
records, documents and other instruments as in our judgment are necessary and
appropriate in order to express the opinions hereinafter set forth and have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, and the conformity to original documents of all
documents submitted to us as certified or photostatic copies.
Based upon the foregoing, we are of the opinion that the Shares, when
issued and delivered in the manner and on the terms described in the
Registration Statement and the applicable supplement, will be duly authorized,
validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and further consent to the reference to this firm under
the caption "Legal Matters" in the Prospectus.
Very truly yours,
/s/ Waller Lansden Dortch & Davis,
A Professional Limited Liability Company
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-____) and related Prospectus of Service
Experts, Inc. related to the resale by the holders thereof of up to 500,000
shares of the Company's $.01 par value common stock issued without registration
under the Securities Act of 1933 and to the incorporation by reference therein
of our report dated December 9, 1997, with respect to the consolidated
financial statements of Service Experts, Inc. at December 31, 1996 and 1995, and
for each of the three years in the period ended December 31, 1996 included in
the Current Report on Form 8-K dated January 8, 1998, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Nashville, Tennessee
January 8, 1998
