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PROSPECTUS SUPPLEMENT Filed Pursuant to Rule 424(b)(3)
To Prospectus dated May 17, 1999 Registration No. 333-60053
[Building One Logo Appears Here]
Building One Services Corporation has prepared this Prospectus Supplement to
update the description of capital stock contained in its Prospectus Supplement
dated May 17, 1999.
The date of this Prospectus Supplement is July 16, 1999.
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DESCRIPTION OF CAPITAL STOCK
Building One Services Corporation currently has 261,000,000 shares of
authorized capital stock. The following description of our capital stock is
only a summary. As a summary, it is not complete and is subject to the
detailed provisions of, and is qualified in its entirety by reference to, our
restated certificate of incorporation, which was amended on July 8, 1999, our
amended and restated bylaws and the applicable provisions of Delaware General
Corporation Law.
Common Stock
We currently have 250,000,000 shares of authorized common stock. As of July
12, 1999, there were 22,229,599 shares of common stock outstanding. Our common
stockholders of record are entitled to one vote for each share held on all
matters submitted to a vote of the stockholders. In addition, the holders of
our outstanding convertible subordinated debentures have voting rights. See
"--Convertible Subordinated Debentures." Cumulative voting is not permitted
under our amended and restated certificate of incorporation. Our common
stockholders are entitled to receive proportionately any dividends that the
board of directors declares out of legally available funds.
If we liquidate or dissolve our business, common stockholders will share
proportionately in the assets remaining after we pay our creditors and any
preferred stockholders. Common stockholders are not entitled to preemptive
rights to subscribe for additional shares of capital stock and have no right
to convert their shares into any other securities. In addition, no redemption
or sinking fund provisions are applicable to our common stock. All of the
outstanding shares of our common stock (and shares offered) are fully paid and
nonassessable.
Preferred Stock
We currently have 11,000,000 shares of authorized preferred stock. Article
Four, Section (e) of the amended and restated certificate of incorporation
authorizes the board of directors to create one or more series of preferred
stock, to fix the authorized number of shares of any series and to fix the
terms of any series, including the following:
designation (naming) of the series;
the terms upon which shares will be entitled to dividends including the
preference, if any, of such dividends payable on any other class or classes
or any other series of stock;
the rights of holders of the series in the event of our liquidation,
dissolution or winding up;
our rights, if any, to buy back (redeem) shares;
the terms of any of our obligations to purchase, redeem or retire shares or
maintain a fund for such purposes;
the voting rights, if any, of the shares of the series; and
the right, if any, to exchange or convert the shares of such series into
shares of another series of preferred stock or any other class of stock.
The issuance of preferred stock may adversely affect the voting and dividend
rights, rights upon liquidation and other rights of the holders of our common
stock. In addition, the issuance of preferred stock could be used in the
future, under certain circumstances, as a method of discouraging, delaying, or
preventing a change in control of the company. The provision authorizing the
board to create a series of preferred shares is expected to have an anti-
takeover effect, including possibly discouraging takeover attempts that might
result in a premium over the market price for the shares of our common stock.
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Convertible Subordinated Debentures
On April 30, 1999, Boss Investment LLC, an affiliate of the private
investment firm of Apollo Management, L.P., acquired $100,000,000 in aggregate
principal amount of our 7 1/2% convertible subordinated debentures. The
convertible subordinated debentures will mature on April 30, 2012. Interest is
payable quarterly. Through the fifth anniversary of their issuance, interest
is payable in additional convertible subordinated debentures or, at the option
of the company, in cash, except that from and after the third anniversary
through the fifth anniversary, interest will be paid in cash if requested by a
majority of the holders of the convertible subordinated debentures.
Thereafter, interest is payable only in cash. The payment of interest in cash
may be restricted by the terms of our other financing arrangements.
The convertible subordinated debentures are convertible into shares of our
common stock at an initial conversion price of $22.50 per $1,000 principal
amount. The conversion price is subject to customary antidilution adjustments.
Upon conversion of the convertible subordinated debentures, a holder will
receive a number of shares of common stock equal to the principal amount of
the convertible subordinated debentures being converted plus accrued interest
thereon divided by the conversion price then in effect. If the convertible
subordinated debentures are converted prior to the fifth anniversary of their
issuance, the number of shares of common stock issuable on conversion will
also give effect to the amount of interest that would have been paid on the
convertible subordinated debentures through the fifth anniversary subject to a
maximum of 30 months of additional interest unless such conversion is in
connection with a change of control of the company.
Our amended and restated certificate of incorporation entitles the holders
of the convertible subordinated debentures to elect as a class three directors
to our board of directors (or if the board has more than ten directors, no
less than 30% of the board) and otherwise to vote on an as converted basis
with the holders of shares of our common stock on all matters submitted to the
holders of common stock.
In the event of (i) a payment default, or any other default giving rise to a
right to accelerate, under any indebtedness of the company and (ii) any
material, intentional breach by the company of the agreements relating to the
investment by Boss Investment, holders of the convertible subordinated
debentures will be entitled to elect a majority of the board of directors
until such time as such event ceases to exist. However, the holders' ability
to exercise this right will be subject to certain notice and cure periods.
So long as Boss Investment owns 50% of the outstanding convertible
subordinated debentures, certain significant corporate actions will require
the prior consent of Boss Investment. The significant corporate actions
requiring such consent are:
. mergers of the company, unless in connection with a "permitted
acquisition;"
. a recapitalization, liquidation or reorganization of the company's
business or a material change in the company's business;
. acquisitions or dispositions having an aggregate value in excess of $100
million;
. dividends;
. acquisitions of capital stock or indebtedness junior to the convertible
subordinated debentures;
. the hiring, firing or amendment of the employment terms of our chief
executive officer;
. any increase in the size of the board of directors above ten directors
unless designees of Boss Investment continue to comprise at least 30% of
the board;
. transactions with affiliates not in the ordinary course of business; and
. any agreement that would restrict our ability to honor the rights of the
holders of the convertible subordinated debentures.
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In addition, Boss Investment has the preemptive right to acquire 50% of the
shares of our common stock or convertible securities that we offer to sell in
a private placement.
Delaware Anti-takeover Law and Certain Provisions of our Amended and Restated
Certificate of Incorporation
We are subject, as a Delaware corporation, to Section 203 of the Delaware
General Corporation Law. Section 203 generally prohibits a publicly-held
Delaware corporation from engaging in a "business combination" transaction
with any "interested stockholder" for a period of three years following the
date of the transaction on which the person became an "interested
stockholder." For purposes of Section 203, an "interested stockholder" is a
person who, together with its affiliates and associates, owns 15% or more of a
company's voting stock. A "business combination" includes a merger, asset sale
or other such transaction that results in a financial benefit to the
interested stockholder. Section 203 is subject to certain exceptions, such as
transactions done with persons that became interested stockholders with the
approval of your board of directors, such as Boss Investment, and transactions
approved by the board and the holders of at least a majority of the
outstanding shares of voting stock that is not owned by the "interested
stockholder."
Section 203 is designed to have an anti-takeover effect, including possibly
discouraging takeover attempts that might result in a premium over the market
price for the shares of our common stock.
Our amended and restated certificate of incorporation permits us to
eliminate the personal liability of our directors to us or you, the
stockholders, for monetary damages for a breach of the director's fiduciary
duty. However, we may not eliminate a director's personal liability for the
following:
. for breach of the director's duty of loyalty;
. for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of the law;
. for certain unlawful dividends and stock repurchases; or
. for any transaction from which the director derived an improper personal
benefit.
The effect of this provision is to eliminate our rights and the rights of
our stockholders (through stockholder derivative suits brought on our behalf)
to recover monetary damages against a director for breach of fiduciary duty
except as described in the four situations above. If the Delaware General
Corporation Law is later amended to authorize the further elimination or
limitation of the liability of a director, then the liability of our directors
shall be eliminated or limited to the fullest extent of the amended Delaware
law.
Unanimous Written Consent
Our amended and restated certificate of incorporation requires unanimous
written consent if stockholder approval of a matter is solicited by written
consent rather than at a meeting of stockholders. The requirement that
stockholder action in writing be given by all of the stockholders makes it
impractical for stockholders to act by written consent. This means that if an
acquiror wanted to attempt to take over the company, action by written consent
would be difficult for the acquiror to achieve and the acquiror would not be
able to avoid a stockholder meeting on the takeover proposal. The need to hold
a meeting provides the board with additional time to consider the takeover
proposal and, as appropriate, negotiate with the would-be acquiror.
We are not aware of any existing or planned effort on the part of any party
to accumulate material amounts of our common stock, or to acquire control of
our company by means of a merger, tender offer, solicitation in opposition to
management or otherwise, or to change our management. We are aware that a
number of unsolicited acquisition proposals in connection with takeover
activities have employed, or have sought to employ, tactics which are designed
to force a response by the target company through threats or attempts to
secure action without a meeting and without affording a reasonable opportunity
for the boards of directors of such companies to consider whether such
proposals are in the best interests of its stockholders.
Transfer Agent and Registrar
The transfer agent and registrar for the common stock is American Stock
Transfer & Trust Company.
