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As filed with the Securities and Exchange Commission on June 20, 2000
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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QUANTA SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 74-2851603
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1360 POST OAK BLVD., SUITE 2100 BRAD EASTMAN
HOUSTON, TEXAS 77056 VICE PRESIDENT, SECRETARY AND
(713) 629-7600 GENERAL COUNSEL
(Address, including zip code, 1360 POST OAK BLVD., SUITE 2100
and telephone number, HOUSTON, TEXAS 77056
including area code, (713) 629-7600
of Registrant's principal (Name, address, including zip code,
executive offices) and telephone number, including
area code, of agent for service)
Copy to:
J. PATRICK RYAN
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
1500 BANK OF AMERICA PLAZA
300 CONVENT STREET
SAN ANTONIO, TEXAS 78205
(210) 281-7000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
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 being 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, please 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, please 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. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1)(2)(3) PRICE PER OFFERING REGISTRATION FEE
UNIT (1)(3)(4)(5) PRICE(1)(3)(4)(5)
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<S> <C> <C> <C> <C>
Debt Securities..................
Preferred Stock..................
Common Stock (6).................
Depositary Shares (7)............
Warrants.........................
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Total................... $500,000,000 100% $500,000,000 (8) $132,000
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(1) Not specified as to each class of securities to be registered pursuant to
General Instruction II(D) to Form S-3.
(2) This registration statement also covers such indeterminate amount of
securities as may be issued in exchange for, or upon conversion or exercise
of, as the case may be, the Debt Securities, Preferred Stock or Depositary
Shares registered hereunder. Any securities registered hereunder may be
sold separately or as units with other securities registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o).
(4) No separate consideration will be received for any securities registered
hereunder that are issued in exchange for, or upon conversion of, as the
case may be, the Debt Securities, Preferred Stock or Depositary Shares
registered hereunder.
(5) The proposed maximum offering price per unit will be determined from time
to time by the registrant in connection with, and at the time of, the
issuance by the registrant of the securities registered hereunder.
(6) Each share of Common Stock registered hereunder includes an associated
Preferred Share Purchase Right. Until the occurrence of certain prescribed
events, none of which has occurred, the Preferred Share Purchase Rights are
not exercisable, are evidenced by certificates representing the Common
Stock and may be transferred only with the Common Stock.
(7) The Depositary Shares registered hereunder will be evidenced by depositary
receipts issued pursuant to a deposit agreement. If the registrant elects
to offer to the public fractional interests in shares of Preferred Stock,
then depositary receipts will be distributed to those persons purchasing
the fractional interests and the shares will be issued to the depositary
under the deposit agreement.
(8) The aggregate principal amount of the Debt Securities may be increased if
any Debt Securities are issued at an original issue discount by an amount
such that the gross proceeds to be received by the registrant shall be
equal to the above amount to be registered. Any offering of Debt Securities
denominated other than in U.S. dollars will be treated as the equivalent of
U.S. dollars based on the exchange rate applicable to the purchase of such
Debt Securities at the time of initial offering. In no event will the
aggregate initial offering price of all securities issued from time to time
pursuant to this Registration Statement exceed $500,000,000, or the
equivalent thereof in foreign currencies or composite currencies. The
aggregate amount of Common Stock is further limited to that which is
permissible under Rule 415(a)(4).
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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 SAID SECTION 8(a), MAY DETERMINE.
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PROSPECTUS
$500,000,000
QUANTA SERVICES, INC.
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We will offer and sell, from time to time, in one or more offerings, the
debt and equity securities described in this prospectus. The total offering
price of these securities, in the aggregate, will not exceed $500 million. We
will provide specific terms of these offerings and securities in supplements to
this prospectus.
We will offer and sell, from time to time, in one or more offerings:
o common stock
o debt securities
o preferred stock
o warrants
YOU SHOULD READ THIS PROSPECTUS AND ANY SUPPLEMENT TO THIS PROSPECTUS
CAREFULLY BEFORE YOU INVEST, INCLUDING THE RISK FACTORS WHICH BEGIN ON PAGE 4 OF
THIS PROSPECTUS.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------
This prospectus may not be used to consummate sales of securities unless
accompanied by a prospectus supplement.
This prospectus is dated , 2000.
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TABLE OF CONTENTS
<TABLE>
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About this Prospectus.............................................................................................3
Where You Can Find More Information...............................................................................3
Forward-Looking Statements........................................................................................4
The Company.......................................................................................................4
Risk Factors......................................................................................................4
Use of Proceeds...................................................................................................9
Holding Company Structure.........................................................................................9
Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Dividends................9
Description of Debt Securities....................................................................................9
Description of Capital Stock.....................................................................................20
Depositary Shares................................................................................................25
Description of Warrants..........................................................................................27
Plan of Distribution.............................................................................................28
Legal Matters....................................................................................................29
Experts ........................................................................................................29
</TABLE>
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf registration process, we may sell any combination of the
securities described in this prospectus in one or more offerings up to a total
dollar amount of $500 million. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities we will
provide a prospectus supplement that will contain specific information about the
terms of the offering and the offered securities. The prospectus supplement may
also add, update or change information contained in this prospectus. Any
statement that we make in this prospectus will be modified or superseded by any
inconsistent statement made by us in a prospectus supplement. You should read
both this prospectus and any prospectus supplement together with additional
information described under the heading "Where You Can Find More Information."
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the regional offices of the SEC located at
7 World Trade Center, Suite 1300, New York, New York 10048 and at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. You may obtain information
on the operation of the SEC's public reference room in Washington, D.C. by
calling the SEC at 1-800-SEC-0330. We also file such information with the New
York Stock Exchange, on which our common stock is listed. Such reports, proxy
statements and other information may be read and copied at 30 Broad Street, New
York, New York 10005.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents filed by us listed below and any further filings made
by us with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 until we sell all of the securities or we terminate this
offering:
o Annual Report on Form 10-K for the year ended December 31, 1999;
o Current Report on Form 8-K filed March 20, 2000;
o Quarterly Report on Form 10-Q for the period ended March 31, 2000;
o The description of our common stock contained in our Form 8-A dated
January 23, 1998, including any amendment to that form that we may have
filed in the past, or may file in the future, for the purpose of
updating the description of our common stock; and
o The description of our preferred stock purchase rights contained in our
Form 8-A dated March 21, 2000.
You may request a copy of these filings at no cost by writing or
telephoning us at the following address:
Quanta Services, Inc.
1360 Post Oak Blvd., Suite 2100
Houston, Texas 77056
Attention: Corporate Secretary
(713) 629-7600
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FORWARD-LOOKING STATEMENTS
This prospectus, including the documents that we incorporated by reference,
contains statements that constitute "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Exchange Act. These statements appear in a number of places in this prospectus
and include statements regarding our plans, beliefs or current expectations,
including those plans, beliefs and expectations of our officers and directors
with respect to, among other things:
o general economic and business conditions;
o our expectations and estimates concerning future financial performance,
financing plans and the impact of competition;
o anticipated trends in our business;
o existing and future regulations affecting our business;
o our ability to obtain additional debt and equity financing to support
our growth strategy;
o our ability to complete acquisitions; and
o other risk factors described in the section entitled "Risk Factors" in
this prospectus.
You can identify these forward-looking statements by forward-looking words
such as "believe," "may," "could," "will," "estimate," "continue," "anticipate,"
"intend," "seek," "plan," "expect," "should," "would" and similar expressions in
this prospectus.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks and uncertainties, the forward-looking events and
circumstances discussed in this prospectus may not occur and actual results
could differ materially from those anticipated or implied in the forward-looking
statements.
THE COMPANY
We are a leading provider of specialized contracting services, including
designing, installing, repairing and maintaining network infrastructure. We
offer end-to-end network solutions to the telecommunications, cable television
and electric power industries. The Internet and the resulting growth in demand
for increased bandwidth coupled with deregulation, increased outsourcing by our
customers and the convergence of the telecommunications, cable television and
electric power industries have resulted in significant growth in demand for our
services. To leverage the growth in demand for our services, we have made
strategic acquisitions that expanded our geographic presence, generated
operating synergies with existing businesses and developed new capabilities to
meet our customers' evolving needs.
Our principal offices in 37 states, as of the date of this prospectus,
provide us the presence and capability to quickly and reliably complete turnkey
projects nationwide. We perform services for many of the leading companies in
the industries we target.
Our principal executive offices are located at 1360 Post Oak Blvd., Suite
2100, Houston, Texas 77056, and our telephone number is (713) 629-7600.
Additional information concerning us and our subsidiaries is included in
our reports and other documents incorporated by reference in this prospectus.
See "Where You Can Find More Information."
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below 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. You should be aware that the occurrence of any of the events
described in the Risk Factors section and elsewhere in this prospectus could
have a material adverse effect on our business, financial condition or results
of operations.
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THE INDUSTRIES WE SERVE ARE SUBJECT TO RAPID TECHNOLOGICAL AND STRUCTURAL
CHANGES THAT COULD REDUCE THE DEMAND FOR THE SERVICES WE PROVIDE.
The telecommunications, cable television and electric power industries are
undergoing rapid change as a result of technological advances and deregulation
that could in certain cases reduce the demand for our services or otherwise
adversely affect our business. New or developing technologies could displace the
systems used for voice, video and data transmissions, and improvements in
existing technology may allow telecommunications and cable television companies
to significantly improve their networks without physically upgrading them. In
addition, consolidation in the telecommunications, cable television and electric
power industries may result in the loss of one or more of our customers.
WE MAY BE UNSUCCESSFUL AT GENERATING INTERNAL GROWTH.
Our ability to generate internal growth will be affected by, among other
factors, our success in:
o expanding the range of services we offer to customers to address their
evolving network needs;
o attracting new customers;
o increasing the number of projects performed for existing customers;
o hiring and retaining employees;
o opening additional facilities; and
o reducing operating and overhead expenses.
Many of the factors affecting our ability to generate internal growth may
be beyond our control, and we cannot be certain that our strategies will be
successful or that we will be able to generate cash flow sufficient to fund our
operations and to support internal growth. Our inability to achieve internal
growth could materially and adversely affect our business, financial condition
and results of operations.
WE MAY BE UNSUCCESSFUL AT INTEGRATING COMPANIES THAT WE ACQUIRE.
We cannot be sure that we can successfully integrate our acquired companies
with our other operations without substantial costs, delays or other operational
or financial problems. If we do not implement proper overall business controls,
our decentralized operating strategy could result in inconsistent operating and
financial practices at the companies we acquire, and our overall profitability
could be adversely affected. Integrating our acquired companies involves a
number of special risks which could materially and adversely affect our
business, financial condition and results of operations, including:
o failure of acquired companies to achieve the results we expect;
o diversion of our management's attention from operational matters;
o difficulties integrating the operations and personnel of acquired
companies;
o inability to retain key personnel of the acquired companies;
o risks associated with unanticipated events or liabilities;
o the potential disruption of our business; and
o the difficulty of maintaining uniform standards, controls, procedures
and policies.
If one of our acquired companies suffers customer dissatisfaction or
performance problems, the reputation of our entire company could be materially
and adversely affected.
WE MAY NOT HAVE ACCESS IN THE FUTURE TO SUFFICIENT FUNDING TO FINANCE DESIRED
GROWTH.
If we cannot secure additional financing from time to time in the future on
acceptable terms, we may be unable to support our growth strategy. We cannot
readily predict the timing, size and success of our acquisition efforts and
therefore the capital that we will need for these efforts. Using cash for
acquisitions limits our financial flexibility and makes us more likely to seek
additional capital through future debt or equity financings. Our existing debt
agreements contain significant restrictions on our operational and financial
flexibility, including our ability to incur additional debt if certain operating
ratios are not satisfied, and if we seek more debt we may have to agree to
additional covenants that limit our operational and financial flexibility. When
we seek additional debt or equity financings, we cannot be certain that
additional debt or equity will be available to us at all or on terms acceptable
to
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us. Our credit facility requires that we obtain the consent of the lenders for
acquisitions exceeding a certain level of cash consideration.
OUR OPERATING RESULTS MAY VARY SIGNIFICANTLY FROM QUARTER TO QUARTER.
During the winter months, demand for our services may be lower due to
inclement weather. Additionally, our quarterly results may also be materially
affected by:
o variations in the margins of projects performed during any particular
quarter;
o regional or general economic conditions;
o the budgetary spending patterns of customers;
o the timing and volume of work under new agreements;
o the termination of existing agreements;
o costs that we incur to support growth internally or through
acquisitions or otherwise;
o losses experienced in our operations not otherwise covered by
insurance;
o the change in mix of our customers, contracts and business;
o the timing of acquisitions;
o the timing and magnitude of acquisition assimilation costs; and
o increases in construction and design costs.
Accordingly, our operating results in any particular quarter may not be
indicative of the results that you can expect for any other quarter or for the
entire year.
OUR DEPENDENCE UPON FIXED PRICE CONTRACTS COULD ADVERSELY AFFECT OUR BUSINESS.
We currently generate, and expect to continue to generate, a significant
portion of our revenues under fixed price contracts. We must estimate the costs
of completing a particular project to bid for such fixed price contracts. The
cost of labor and materials, however, may vary from the costs we originally
estimated. These variations, along with other risks inherent in performing fixed
price contracts, may cause actual revenue and gross profits for a project to
differ from those we originally estimated and could result in reduced
profitability or losses on projects. Depending upon the size of a particular
project, variations from the estimated contract costs can have a significant
impact on our operating results for any fiscal quarter or year.
MANY OF OUR CONTRACTS MAY BE CANCELED ON SHORT NOTICE AND WE MAY BE UNSUCCESSFUL
IN REPLACING OUR CONTRACTS AS THEY ARE COMPLETED OR EXPIRE.
Any of the following contingencies may have a material adverse effect on
our revenue, net income and liquidity:
o our customers cancel a significant number of contracts;
o we fail to win a significant number of our existing contracts upon
re-bid; or
o we complete the required work under a significant number of
non-recurring projects and cannot replace them with similar projects.
Many of our customers may cancel their contracts on short notice, typically
30 to 90 days, even if we are not in default under the contract. Certain of our
customers assign work to us on a project-by-project basis under master service
agreements. Under these agreements, our customers often have no obligation to
assign work to us. Our operations could be materially and adversely affected if
the volume of work we anticipate receiving from these customers is not assigned
to us. Many of our contracts, including our master service agreements, are
opened to public bid at the expiration of their terms. We cannot assure you that
we will be the successful bidder on our existing contracts that come up for bid.
OUR BUSINESS GROWTH COULD OUTPACE THE CAPABILITY OF OUR CORPORATE MANAGEMENT
INFRASTRUCTURE.
We cannot be certain that our systems, procedures and controls will be
adequate to support our operations as they expand. Future growth will also
impose significant additional responsibilities on members of our senior
management, including the need to recruit and integrate new senior level
managers and executives. We cannot be certain that we can recruit and retain
such additional managers and executives. To the extent that we are unable to
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manage our growth effectively, or are unable to attract and retain additional
qualified management, our financial condition and results of operations could be
materially and adversely affected.
THE DEPARTURE OF KEY PERSONNEL COULD DISRUPT OUR BUSINESS.
We depend on the continued efforts of our executive officers and on senior
management of the businesses that we acquire. Although we intend to enter into
an employment agreement with each of our executive officers and certain other
key employees, we cannot be certain that any individual will continue in such
capacity for a particular period of time. The loss of key personnel, or the
inability to hire and retain qualified employees, could adversely affect our
business, financial condition and results of operations. We do not carry
key-person life insurance on any of our employees.
OUR BUSINESS IS LABOR INTENSIVE AND WE MAY BE UNABLE TO ATTRACT AND RETAIN
QUALIFIED EMPLOYEES.
Our ability to increase our productivity and profitability will be limited
by our ability to employ, train and retain skilled personnel necessary to meet
our operating requirements. We, like many of our competitors, are currently
experiencing shortages of qualified personnel. We cannot be certain that we will
be able to maintain an adequate skilled labor force necessary to operate
efficiently and to support our growth strategy or that our labor expenses will
not increase as a result of a shortage in the supply of skilled personnel. Labor
shortages as well as increased labor costs may have a material adverse affect on
our ability to implement our growth strategy and our operations.
OUR UNIONIZED WORKFORCE COULD ADVERSELY AFFECT OUR OPERATIONS AND ACQUISITION
STRATEGY.
A significant percentage of our employees are covered by collective
bargaining agreements. Although the majority of these agreements prohibit
strikes and work stoppages, we cannot be certain that strikes or work stoppages
will not occur in the future. Strikes or work stoppages would adversely impact
our relationship with our customers and could materially and adversely affect
our business, financial condition and results of operations. In addition, our
selective acquisition strategy could be adversely affected because of our union
status for a variety of reasons. For instance, our union agreements may be
incompatible with the union agreements of a business we want to acquire and some
businesses may not want to become affiliated with a unionized company.
OUR INDUSTRY IS HIGHLY COMPETITIVE.
Our industry includes numerous small, owner-operated private companies, a
few public companies and several large regional companies. In addition, there
are few barriers to entry into our industry. As a result, any organization that
has adequate financial resources and access to technical expertise may become
one of our competitors. Competition in the industry depends on a number of
factors, including price. Certain of our competitors may have lower overhead
cost structures than we do and may therefore be able to provide their services
at lower rates than we can provide the same services. In addition, some of our
competitors are larger and have greater resources than us. We cannot be certain
that our competitors will not develop the expertise, experience and resources to
provide services that are superior in both price and quality to our services.
Similarly, we cannot be certain that we will be able to maintain or enhance our
competitive position within our industry. We may also face competition from the
in-house service organizations of our existing or prospective customers.
Telecommunications, cable television and electric power service providers
usually employ personnel who perform some of the same types of services we do.
We cannot be certain that our existing or prospective customers will continue to
outsource services in the future.
OUR RESULTS OF OPERATIONS COULD BE ADVERSELY AFFECTED AS A RESULT OF GOODWILL
AMORTIZATION.
When we acquire a business using purchase accounting, we record an asset
called "goodwill" equal to the excess amount we pay for the business, including
liabilities assumed, over the fair value of the tangible assets of the business
we acquire. Pursuant to generally accepted accounting principles, we amortize
this goodwill over its estimated useful life. We amortize goodwill over 40 years
following the acquisition, which directly impacts our earnings in those years.
Furthermore, we continually evaluate whether events or circumstances have
occurred that indicate that the remaining useful life of goodwill may warrant
revision or that the remaining balance may not be recoverable. Should we be
required to accelerate the amortization of goodwill or write it off completely
because of impairments or changes in accepted accounting principles, our results
from operations may be materially and adversely affected.
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WE COULD HAVE POTENTIAL EXPOSURE TO ENVIRONMENTAL LIABILITIES.
Our operations are subject to various environmental laws and regulations,
including those dealing with the handling and disposal of waste products,
[polychlorinated biphenyls,] fuel storage and air quality. As a result of past
and future operations at our facilities, we may incur environmental remediation
costs and other cleanup expenses. In addition, we cannot be certain that we will
be able to identify or be indemnified for all potential environmental
liabilities relating to any acquired business.
CERTAIN PROVISIONS OF OUR CORPORATE GOVERNING DOCUMENTS COULD MAKE AN
ACQUISITION OF OUR COMPANY MORE DIFFICULT.
Certain provisions in our certificate of incorporation and bylaws, our
stockholders rights plan and Delaware law could discourage potential acquisition
proposals, delay or prevent a change in control of Quanta or limit the price
that investors may be willing to pay in the future for shares of our common
stock. Our certificate of incorporation permits our board of directors to issue
"blank check" preferred stock and to adopt amendments to our bylaws. Our bylaws
restrict the right of stockholders to nominate directors and to submit proposals
to be considered at stockholder meetings. Also, our certificate of incorporation
and bylaws restrict the right of stockholders to call a special meeting of
stockholders and to act by written consent. We are also subject to provisions of
Delaware law which may prohibit us from engaging in any of a broad range of
business transactions with an "interested stockholder" for a period of three
years following the date such stockholder became classified as an interested
stockholder. In addition, in March 2000 we adopted a stockholders rights plan
that could cause substantial dilution to a person or group that attempts to
acquire us on terms not approved by our board of directors.
FUTURE SALES OF OUR COMMON STOCK MAY ADVERSELY AFFECT OUR STOCK PRICE.
We have issued a significant amount of shares of our common stock as
consideration for our acquisitions. Typically we obtain lock-up agreements from
the stockholders of companies we acquire that restrict them from selling Quanta
shares received by them in such transactions for at least one year. A
significant amount of our outstanding common stock will become available for
resale as these lock-up agreements expire. Future sales of substantial amounts
of our common stock in the public market, or the perception that such sales
could occur, could adversely affect the market price of our common stock.
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USE OF PROCEEDS
Unless otherwise provided in a prospectus supplement, we will use the net
proceeds from the sale of the securities offered by this prospectus and any
prospectus supplement for general corporate purposes, including repayment of
borrowings, working capital, capital expenditures and acquisitions.
HOLDING COMPANY STRUCTURE
Quanta Services, Inc. is a holding company and our assets consist primarily
of investments in our subsidiaries. Quanta's rights and the rights of our
creditors, including holders of our debt securities, to participate in the
distribution of assets of any person in which Quanta owns an equity interest
will be subject to prior claims of the subsidiary's creditors upon the
subsidiary's liquidation or reorganization. Although Quanta may itself be a
creditor with recognized claims against such a subsidiary, claims of Quanta
would still be subject to the prior claims of any secured creditor of such a
subsidiary and of any holder of indebtedness of such a subsidiary that is senior
to that held by Quanta. Accordingly, the holder of our debt securities may be
deemed to be effectively subordinated to those claims.
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
The following table contains our consolidated ratios of earnings to fixed
charges and earnings to combined fixed charges and preferred dividends for the
periods indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
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THREE MONTHS ENDED
1995 1996 1997 1998 1999 MARCH 31, 2000
---- ---- ---- ---- ---- --------------
(unaudited)
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Ratio of earnings to fixed charges......... 2.7 4.2 3.4 6.1 6.4 7.4
Ratio of earnings to combined fixed
charges and preferred dividends............ 2.7 4.2 3.4 6.1 6.2 6.9
</TABLE>
For purposes of computing the ratios of earnings to fixed charges and
earnings to fixed charges plus dividends:
(1) earnings consist of income before provision for income taxes plus fixed
charges (excluding capitalized interest) and
(2) "fixed charges" consist of interest expensed and capitalized,
amortization of debt discount and expense relating to indebtedness and
the portion of rental expense representative of the interest factor
attributable to leases for rental property.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be either our senior debt securities ("Senior Debt
Securities") or our subordinated debt securities ("Subordinated Debt
Securities"). The Senior Debt Securities and the Subordinated Debt Securities
will be issued under separate Indentures between Quanta and Chase Bank of Texas,
National Association (the "Trustee"). Senior Debt Securities will be issued
under a "Senior Indenture" and Subordinated Debt Securities will be issued under
a "Subordinated Indenture." Together the Senior Indenture and the Subordinated
Indenture are called "Indentures." The terms of the Debt Securities include
those stated in the Indentures and those made part of the Indentures by
reference to the Trust indenture Act of 1939, as amended. For purposes of this
Description of Debt Securities, references to "we," "us," "our," "Company" or
"Quanta" include only Quanta Services, Inc. and not its subsidiaries.
The Debt Securities may be issued from time to time in one or more series.
The particular terms of each series which are offered by a prospectus supplement
will be described in the prospectus supplement.
We have summarized selected provisions of the Indentures below. The summary
is not complete. The form of each Indenture is filed as an exhibit to the
registration statement of which this prospectus forms a part and you should read
the Indenture for provisions that may be important to you. In the summary below
we have included
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references to section numbers of the applicable Indentures so that you can
easily locate these provisions. Whenever we refer in this prospectus or in the
prospectus supplement to particular sections or defined terms of the Indenture,
such sections or defined terms are incorporated by reference herein or therein,
as applicable. Capitalized terms used in the summary have the meanings specified
in the Indentures.
GENERAL
The Indentures provide that Debt Securities in separate series may be
issued thereunder from time to time without limitation as to aggregate principal
amount. We may specify a maximum aggregate principal amount for the Debt
Securities of any series. (Section 301) We will determine the terms and
conditions of the Debt Securities, including the maturity, principal and
interest, but those terms must be consistent with the Indenture. The Debt
Securities will be our unsecured obligations.
The Subordinated Debt Securities will be subordinated in right of payment
to the prior payment in full of all of our Senior Debt (as defined) as described
under "-- Subordination of Subordinated Debt Securities" and in the prospectus
supplement applicable to any Subordinated Debt Securities. If the prospectus
supplement so indicates, the Debt Securities will be convertible into our common
stock as described under "-- Conversion of Debt Securities."
The applicable prospectus supplement will set forth the price or prices at
which the Debt Securities to be offered will be issued and will describe, among
other things, the following terms of such Debt Securities:
(1) the title of the Debt Securities;
(2) whether the Debt Securities are Senior Debt Securities
or Subordinated Debt Securities and, if Subordinated Debt
Securities, the related subordination terms;
(3) any limit on the aggregate principal amount of the Debt
Securities;
(4) the dates on which the principal of the Debt Securities
will be payable;
(5) the interest rate which the Debt Securities will bear
and the interest payment dates for the Debt Securities;
(6) the places where payments on the Debt Securities will be
payable;
(7) any terms upon which the Debt Securities may be
redeemed, in whole or in part, at our option;
(8) any sinking fund or other provisions that would obligate
us to repurchase or otherwise redeem the Debt Securities;
(9) the portion of the principal amount, if less than all,
of the Debt Securities that will be payable upon declaration of
acceleration of the Maturity of the Debt Securities;
(10) whether the Debt Securities are defeasible;
(11) any addition to or change in the Events of Default;
(12) whether the Debt Securities are convertible into our
common stock and, if so, the terms and conditions upon which
conversion will be effected, including the initial conversion
price or conversion rate ("the Conversion Price") and any
adjustments thereto in addition to or different from those
described in this prospectus, the conversion period and other
conversion provisions in addition to or in lieu of those
described in this prospectus;
(13) any addition to or change in the covenants in the
Indenture applicable to any of the Debt Securities; and
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(14) any other terms of the Debt Securities not inconsistent
with the provisions of the Indenture. (Section 301)
Debt Securities, including Original Issue Discount Securities, may be sold
at a substantial discount below their principal amount. Federal income tax
considerations, including special United States federal income tax
considerations applicable to Debt Securities sold at an original issue discount,
may be described in the applicable prospectus supplement. In addition, special
United States federal income tax or other considerations applicable to any Debt
Securities that are denominated in a currency or currency unit other than United
States dollars may be described in the applicable prospectus supplement.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
The indebtedness evidenced by the Subordinated Debt Securities will, to the
extent set forth in the Subordinated Indenture with respect to each series of
Subordinated Debt Securities, be subordinate in right of payment to the prior
payment in full of all of our Senior Debt, including the Senior Debt Securities.
The prospectus supplement relating to any Subordinated Debt Securities will
summarize the subordination provisions of the Subordinated Indenture applicable
to that series including:
o the applicability and effect of such provisions upon any payment or
distribution of our assets to creditors upon any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of
creditors or marshaling of assets or any bankruptcy, insolvency or
similar proceedings;
o the applicability and effect of such provisions in the event of
specified defaults with respect to any Senior Debt, including the
circumstances under which and the periods in which we will be
prohibited from making payments on the Subordinated Debt Securities;
and
o the definition of Senior Debt applicable to the Subordinated Debt
Securities of that series and, if the series is issued on a senior
subordinated basis, the definition of Subordinated Debt applicable to
that series.
The prospectus supplement will also describe as of a recent date the approximate
amount of Senior Debt to which the Subordinated Debt Securities of that series
will be subordinated.
The failure to make any payment on any of the Subordinated Debt Securities
by reason of the subordination provisions of the Subordinated Indenture
described in the prospectus supplement will not be construed as preventing the
occurrence of an Event of Default with respect to the Subordinated Debt
Securities arising from any such failure to make payment.
The subordination provisions described above will not be applicable to
payments in respect of the Subordinated Debt Securities from a defeasance trust
established in connection with any defeasance or covenant defeasance of the
Subordinated Debt Securities as described under "-- Defeasance and Covenant
Defeasance."
CONVERSION OF DEBT SECURITIES
The Indentures may provide for a right of conversion of Debt Securities
into our common stock (or cash in lieu thereof). (Sections 301 and 1701). The
following provisions will apply to Debt Securities that are convertible Debt
Securities unless otherwise provided in the prospectus supplement for such Debt
Securities.
The Holder of any convertible Debt Securities will have the right
exercisable at any time prior to the close of business on the second Business
Day prior to their Stated Maturity, unless previously redeemed or otherwise
purchased by us, to convert such Debt Securities into shares of common stock at
the Conversion Price set forth in the prospectus supplement, subject to
adjustment. (Section 1702). The Holder of convertible Debt Securities may
convert any portion thereof which is $1,000 in principal amount or any multiple
thereof. (Section 1702).
In certain events, the Conversion Price will be subject to adjustment as
set forth in the Indenture. Such events include:
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(a) any payment of a dividend (or other distribution) payable in common
stock on any class of our Capital Stock;
(b) any subdivision, combination or reclassification of common stock;
(c) any issuance to all holders of common stock of rights, options or
warrants entitling them to subscribe for or purchase common stock at less
than the then current market price (as determined in accordance with the
Indenture) of common stock; provided, however, that if such rights, options
or warrants are only exercisable upon the occurrence of certain triggering
events relating to control and provided for in shareholders' rights plans,
then the Conversion Price will not be adjusted until such triggering events
occur, and provided further that if any such rights, options or warrants
expire unexercised, the Conversion Price will be readjusted to take into
account only the number of such rights, options or warrants actually
exercised;
(d) any distribution to all holders of common stock of evidences of
indebtedness, shares of our Capital Stock other than common stock, cash or
other assets (including securities, but excluding those dividends and
distributions referred to above for which an adjustment must be made and
excluding regular dividends and distributions paid exclusively in cash);
(e) any distribution consisting exclusively of cash (excluding any cash
portion of distributions referred to in (d) above, or cash distributed upon
a merger or consolidation to which the third succeeding paragraph applies)
to all holders of common stock in an aggregate amount that, combined
together with (1) all other such all-cash distributions made within the
then preceding 12 months in respect of which no adjustment has been made
and (2) any cash and the fair market value of other consideration paid or
payable in respect of any tender offer by us or any of our Subsidiaries for
common stock concluded within the preceding 12 months in respect of which
no adjustment has been made, exceeds 15% of our company's market
capitalization (defined as being the product of the then current market
price of the common stock times the aggregate number of shares of common
stock, Limited Vote Common Stock and Series A preferred stock, on an as
converted basis, then outstanding) on the record date of such distribution;
and
(f) the completion of a tender or exchange offer made by us or any of
our Subsidiaries for common stock that involves an aggregate consideration
that, together with (1) any cash and the fair market value of other
consideration payable in a tender or exchange offer by us or any of our
Subsidiaries for common stock expiring within the 12 months preceding the
expiration of such tender or exchange offer in respect of which no
adjustment has been made and (2) the aggregate amount of any such all-cash
distributions referred to in (e) above to all holders of common stock
within the 12 months preceding the expiration of such tender or exchange
offer in respect of which no adjustments have been made, exceeds 15% of our
market capitalization on the expiration of such tender offer.
No adjustment of the Conversion Price will be required to be made until the
cumulative adjustments amount to 1.0% or more of the Conversion Price as last
adjusted. We reserve the right to make such reductions in the Conversion Price
in addition to those required in the preceding provisions as we consider to be
advisable in order that any event treated for federal income tax purposes as a
dividend of a stock or stock rights will not be taxable to the recipients.
Should we elect to make such a reduction in the Conversion Price, we will comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder if and to the extent that such laws
and regulations are applicable in connection with the reduction of the
Conversion Price. (Section 1704).
If we distribute rights, options or warrants (other than those referred to
in (c) in the preceding paragraph) pro rata to holders of common stock, so long
as any such rights, options or warrants have not expired or been redeemed by us,
the Holder of any convertible Debt Security surrendered for conversion will be
entitled to receive upon such conversion, in addition to the shares of common
stock issuable upon such conversion (the "Conversion Shares"), a number of
rights or warrants to be determined as follows:
(1) if such conversion occurs on or prior to the date for the
distribution to the holders of rights or warrants of separate certificates
evidencing such rights or warrants (the "Distribution Date"), the same
number of rights or warrants to which a holder of a number of shares of
common stock equal to the number of Conversion Shares is entitled at the
time of such conversion in accordance with the terms and provisions of and
applicable to the rights or warrants; and
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(2) if such conversion occurs after such Distribution Date, the number
of rights or warrants to which a holder of the number of shares of common
stock into which such Debt Security was convertible immediately prior to
such Distribution Date would have been entitled on such Distribution Date
in accordance with the terms and provisions of and applicable to the rights
or warrants.
The Conversion Price will not be subject to adjustment on account of any
declaration, distribution or exercise of such rights or warrants. (Section
1704).
Fractional shares of common stock will not be issued upon conversion, but,
instead, we will pay a cash adjustment based on the then current market price
for the common stock. (Section 1703) Upon conversion, no adjustments will be
made for accrued interest or dividends, and therefore convertible Debt
Securities surrendered for conversion between the record date for an interest
payment and the Interest Payment Date (except convertible Debt Securities called
for redemption on a redemption date during such period) must be accompanied by
payment of an amount equal to the interest thereon which the Holder is to
receive. (Sections 1704 and 1702).
In the case of any reclassification of the Conversion Shares, consolidation
or merger of our company with or into another Person or any merger of another
Person with or into us (with certain exceptions), or in case of any transfer or
other disposition of all or substantially all of our assets, each convertible
Debt Security then outstanding will, without the consent of any Holder, become
convertible only into the kind and amount of securities, cash and other property
receivable upon such reclassification, consolidation, merger, conveyance,
transfer or lease by a holder of the number of shares of common stock into which
such Debt Security was convertible immediately prior thereto, after giving
effect to any adjustment event, who failed to exercise any rights of election
and received per share the kind and amount received per share by a plurality of
non-electing shares. (Section 1705).
FORM, EXCHANGE AND TRANSFER
The Debt Securities of each series will be issuable only in fully
registered form, without coupons, and, unless otherwise specified in the
applicable prospectus supplement, only in denominations of $1,000 and integral
multiples thereof. (Section 302)
At the option of the Holder, subject to the terms of the applicable
Indenture and the limitations applicable to Global Securities, Debt Securities
of each series will be exchangeable for other Debt Securities of the same series
of any authorized denomination and of a like tenor and aggregate principal
amount. (Section 305)
Subject to the terms of the applicable Indenture and the limitations
applicable to Global Securities, Debt Securities may be presented for exchange
as provided above or for registration of transfer (duly endorsed or with the
form of transfer endorsed thereon duly executed) at the office of the Security
Registrar or at the office of any transfer agent designated by us for such
purpose. No service charge will be made for any registration of transfer or
exchange of Debt Securities, but we may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith. Such
transfer or exchange will be effected upon the Security Registrar or such
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. The Security Registrar and any
other transfer agent initially designated by us for any Debt Securities will be
named in the applicable prospectus supplement. (Section 305) We may at any time
designate additional transfer agents or rescind the designation of any transfer
agent or approve a change in the office through which any transfer agent acts,
except that we will be required to maintain a transfer agent in each Place of
Payment for the Debt Securities of each series. (Section 1002).
If the Debt Securities of any series (or of any series and specified terms)
are to be redeemed in part, we will not be required to (i) issue, register the
transfer of or exchange any Debt Security of that series (or of that series and
specified terms, as the case may be) during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of any such
Debt Security that may be selected for redemption and ending at the close of
business on the day of such mailing or (ii) register the transfer of or exchange
any Debt Security so selected for redemption, in whole or in part, except the
unredeemed portion of any such Debt Security being redeemed in part.
(Section 305)
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GLOBAL SECURITIES
Some or all of the Debt Securities of any series may be represented, in
whole or in part, by one or more Global Securities which will have an aggregate
principal amount equal to that of the Debt Securities represented thereby. Each
Global Security will be registered in the name of a Depositary or its nominee
identified in the applicable prospectus supplement, will be deposited with such
Depositary or nominee or its custodian and will bear a legend regarding the
restrictions on exchanges and registration of transfer thereof referred to below
and any such other matters as may be provided for pursuant to the applicable
Indenture.
Notwithstanding any provision of the Indentures or any Debt Security
described in this prospectus, no Global Security may be exchanged in whole or in
part for Debt Securities registered, and no transfer of a Global Security in
whole or in part may be registered, in the name of any person other than the
Depositary for such Global Security or any nominee of such Depositary unless:
(1) the Depositary has notified us that it is unwilling or unable to
continue as Depositary for such Global Security or has ceased to be
qualified to act as such as required by the applicable Indenture and a
successor Depositary has not been obtained;
(2) an Event of Default with respect to the Debt Securities represented
by such Global Security has occurred and is continuing and the Security
Registrar has received a written request from the Depositary to issue
certificated Debt Securities; or
(3) other circumstances exist, in addition to or in lieu of those
described above, as may be described in the applicable prospectus
supplement.
All Debt Securities issued in exchange for a Global Security or any portion
thereof will be registered in such names as the Depositary may direct. (Sections
205 and 305)
As long as the Depositary, or its nominee, is the registered Holder of a
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner and Holder of such Global Security and the Debt
Securities that it represents for all purposes under the Debt Securities and the
applicable Indenture. Except in the limited circumstances referred to above,
owners of beneficial interests in a Global Security will not be entitled to have
such Global Security or any Debt Securities that it represents registered in
their names, will not receive or be entitled to receive physical delivery of
certificated Debt Securities in exchange therefor and will not be considered to
be the owners or Holders of such Global Security or any Debt Securities that is
represents for any purpose under the Debt Securities or the applicable
Indenture. All payments on a Global Security will be made to the Depositary or
its nominee, as the case may be, as the Holder of the security. The laws of some
jurisdictions require that some purchasers of Debt Securities take physical
delivery of such Debt Securities in definitive form. These laws may impair the
ability to transfer beneficial interests in, or pledge, a Global Security.
Ownership of beneficial interests in a Global Security will be limited to
institutions that have accounts with the Depositary or its nominee
("participants") and to persons that may hold beneficial interests through
participants. In connection with the issuance of any Global Security, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of Debt Securities represented by the Global
Security to the accounts of its participants. Ownership of beneficial interests
in a Global Security will be shown only on, and the transfer of those ownership
interests will be effected only through, records maintained by the Depositary
(with respect to participants' interests) or any such participant (with respect
to interests of persons held by such participants on their behalf). Payments,
transfers, exchanges and other matters relating to beneficial interests in a
Global Security may be subject to various policies and procedures adopted by the
Depositary from time to time. None of us, the Trustees or our agents will have
any responsibility or liability for any aspect of the Depositary's or any
participant's records relating to, or for payments made on account of,
beneficial interests in a Global Security, or for maintaining, supervising or
reviewing any records relating to such beneficial interests.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable prospectus supplement, payment
of interest on a Debt Security on any Interest Payment Date will be made to the
Person in whose name such Debt Security (or one or more Predecessor Debt
Securities) is registered at the close of business on the Regular Record Date
for such interest. (Section 307)
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Unless otherwise indicated in the applicable prospectus supplement,
principal of and any premium and interest on the Debt Securities of a particular
series will be payable at the office of such Paying Agent or Paying Agents as we
may designate for such purpose from time to time, except that at our option
payment of any interest may be made by check mailed to the address of the Person
entitled thereto as such address appears in the Security Register. Unless
otherwise indicated in the applicable prospectus supplement, the corporate trust
office of the Trustee under the Senior Indenture in The City of New York will be
designated as sole Paying Agent for payments with respect to Senior Debt
Securities of each series, and the corporate trust office of the Trustee under
the Subordinated Indenture in The City of New York will be designated as the
sole Paying Agent for payment with respect to Subordinated Debt Securities of
each series. Any other Paying Agents initially designated by us for the Debt
Securities of a particular series will be named in the applicable prospectus
supplement. We may at any time designate additional Paying Agents or rescind the
designation of any Paying Agent or approve a change in the office through which
any Paying Agent acts, except that we will be required to maintain a Paying
Agent in each Place of Payment for the Debt Securities of a particular series.
(Section 1002)
All moneys paid by us to a Paying Agent for the payment of the principal of
or any premium or interest on any Debt Security which remain unclaimed at the
end of two years after such principal, premium or interest has become due and
payable will be repaid to us, and the Holder of such Debt Security thereafter
may look only to us for payment thereof.
(Section 1003)
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may not consolidate with or merge into, or transfer, lease or otherwise
dispose of all or substantially all of our assets to, any Person (a "successor
Person"), and may not permit any Person to consolidate with or merge into us,
unless:
(1) the successor Person (if any) is a corporation, partnership, trust
or other entity organized and validly existing under the laws of any
domestic jurisdiction and assumes our obligations on the Debt Securities
and under the Indentures;
(2) immediately after giving effect to the transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing; and
(3) several other conditions, including any additional conditions with
respect to any particular Debt Securities specified in the applicable
prospectus supplement, are met. (Section 801)
EVENTS OF DEFAULT
Unless otherwise specified in the prospectus supplement, each of the
following will constitute an Event of Default under the applicable Indenture
with respect to Debt Securities of any series:
(1) failure to pay principal of or any premium on any Debt Security of
that series when due, whether or not, in the case of Subordinated Debt
Securities, such payment is prohibited by the subordination provisions of
the Subordinated Indenture;
(2) failure to pay any interest on any Debt Securities of that series
when due, continued for 30 days, whether or not, in the case of
Subordinated Debt Securities, such payment is prohibited by the
subordination provisions of the Subordinated Indenture;
(3) failure to deposit any sinking fund payment, when due, in respect
of any Debt Security of that series, whether or not, in the case of
Subordinated Debt Securities, such deposit is prohibited by the
subordination provisions of the Subordinated Indenture;
(4) failure to perform any of our other covenants in such Indenture
(other than a covenant included in such Indenture solely for the benefit of
a series other than that series), continued for 60 days after written
notice has been given by the applicable Trustee, or the Holders of at least
25% in principal amount of the Outstanding Debt Securities of that series,
as provided in such Indenture;
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(5) failure to perform or comply with the provisions described under
"Consolidation, Merger and Sale of Assets"; and
(6) certain events of bankruptcy, insolvency or reorganization
affecting us, any Significant Subsidiary or any group of Subsidiaries that
together would constitute a Significant Subsidiary. (Section 501)
If an Event of Default (other than an Event of Default described in clause
(6) above) with respect to the Debt Securities of any series at the time
Outstanding shall occur and be continuing, either the applicable Trustee or the
Holders of at least 25% in principal amount of the Outstanding Debt Securities
of that series by notice as provided in the Indenture may declare the principal
amount of the Debt Securities of that series (or, in the case of any Debt
Security that is an Original Issue Discount Debt Security or the principal
amount of which is not then determinable, such portion of the principal amount
of such Debt Security, or such other amount in lieu of such principal amount, as
may be specified in the terms of such Debt Security) to be due and payable
immediately. If an Event of Default described in clause (6) above with respect
to the Debt Securities of any series at the time Outstanding shall occur, the
principal amount of all the Debt Securities of that series (or, in the case of
any such Original Issue Discount Security or other Debt Security, such specified
amount) will automatically, and without any action by the applicable Trustee or
any Holder, become immediately due and payable. After any such acceleration, but
before a judgment or decree based on acceleration, the Holders of a majority in
principal amount of the Outstanding Debt Securities of that series may, under
certain circumstances, rescind and annul such acceleration if all Events of
Default, other than the non-payment of accelerated principal (or other specified
amount), have been cured or waived as provided in the applicable Indenture.
(Section 502) For information as to waiver of defaults, see "-- Modification and
Waiver" below.
Subject to the provisions of the Indentures relating to the duties of the
Trustees in case an Event of Default shall occur and be continuing, each Trustee
will be under no obligation to exercise any of its rights or powers under the
applicable Indenture at the request or direction of any of the Holders, unless
such Holders shall have offered to such Trustee reasonable indemnity. (Section
603) Subject to such provisions for the indemnification of the Trustees, the
Holders of a majority in principal amount of the Outstanding Debt Securities of
any series will 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 with respect to the Debt Securities
of that series. (Section 512)
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the applicable Indenture, or for the appointment
of a receiver or a trustee, or for any other remedy thereunder, unless:
(1) such Holder has previously given to the Trustee under the
applicable Indenture written notice of a continuing Event of Default with
respect to the Debt Securities of that series;
(2) the Holders of at least 25% in principal amount of the Outstanding
Debt Securities of that series have made written request, and such Holder
or Holders have offered reasonable indemnity, to the Trustee to institute
such proceeding as trustee; and
(3) the Trustee has failed to institute such proceeding, and has not
received from the Holders of a majority in principal amount of the
Outstanding Debt Securities of that series a direction inconsistent with
such request, within 60 days after such notice, request and offer. (Section
507)
However, such limitations do not apply to a suit instituted by a Holder of a
Debt Security for the enforcement of payment of the principal of or any premium
or interest on such Debt Security on or after the applicable due date specified
in such Debt Security or, if applicable, to convert such Debt Security. (Section
508)
We will be required to furnish to each Trustee annually a statement by
certain of our officers as to whether or not we, to their knowledge, are in
default in the performance or observance of any of the terms, provisions and
conditions of the applicable Indenture and, if so, specifying all such known
defaults. (Section 1004)
MODIFICATION AND WAIVER
Modifications and amendments of an Indenture may be made by us and the
applicable Trustee with the consent of the Holders of a majority in principal
amount of the Outstanding Debt Securities of each series affected by such
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modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Debt Security;
(2) reduce the principal amount of, or any premium or interest
on, any Debt Security;
(3) reduce the amount of principal of an Original Issue Discount
Security or any other Debt Security payable upon acceleration of the
Maturity thereof;
(4) change the place or currency of payment of principal of, or
any premium or interest on, any Debt Security;
(5) impair the right to institute suit for the enforcement of any
payment on or any conversion right with respect to any Debt Security;
(6) in the case of Subordinated Debt Securities, modify the
subordination provisions in a manner adverse to the Holders of the
Subordinated Debt Securities;
(7) in the case of convertible Debt Securities, modify the
conversion provisions in a manner adverse to the Holders of the
convertible Debt Securities;
(8) reduce the percentage in principal amount of Outstanding Debt
Securities of any series, the consent of whose Holders is required for
modification or amendment of the Indenture;
(9) reduce the percentage in principal amount of Outstanding Debt
Securities of any series necessary for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults;
(10) modify such provisions with respect to modification and
waiver; or
(11) following the making of an offer to purchase Debt Securities
made pursuant to a covenant contained in the Indenture, modify the
provisions of the Indenture with respect to such offer to purchase in a
manner adverse to the Holders of such Debt Securities. (Section 902)
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more supplemental indentures, for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company;
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Debt Securities or to surrender any right
or power conferred upon the Company;
(3) to add any additional Events of Default for the benefit of
the Holders of all or any series of Debt Securities;
(4) to add to or change any of the provisions of the Indenture to
permit or facilitate the issuance of Debt Securities in bearer form,
registrable or not registrable as to principal, and with or without
interest coupons, or to permit or facilitate the issuance of Debt
Securities in uncertificated form;
(5) to add to, change or eliminate any of the provisions of the
Indenture in respect of one or more series of Debt Securities, provided
that any such addition, change or elimination (A) shall neither (i) apply
to any Debt Security of any series created prior to the execution of such
supplemental indenture and entitled to the benefit of such provision nor
(ii) modify the rights of the Holder of any such Debt Security with respect
to such provision or (B) shall become effective only when there is no such
Debt Security outstanding;
(6) to secure the Debt Securities;
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(7) to establish the form or terms of Debt Securities of any
series as permitted by the Indenture;
(8) to evidence and provide for the acceptance of appointment by
a successor Trustee with respect to the Debt Securities of one or more
series and to add to or change any of the provisions of the Indenture to
provide for or facilitate the administration of the trusts by more than one
Trustee;
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision in
the Indenture, or to make any other provisions with respect to matters or
questions arising under the Indenture, provided that such action pursuant
to this Clause (9) shall not adversely affect the interests of the Holders
of Debt Securities of any series in any material respect; or
(10) to provide for the continuation of conversion rights in the
case of certain mergers, consolidations or asset sales pursuant to Section
1705 of the Indenture. (Section 901)
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series may waive compliance by us with certain restrictive
provisions of the applicable Indenture.(Section 1009) The Holders of a majority
in principal amount of the Outstanding Debt Securities of any series may waive
any past default under the applicable Indenture, except a default in the payment
of principal, premium or interest and certain covenants and provisions of the
Indenture which cannot be amended without the consent of the Holder of each
Outstanding Debt Security of such series affected. (Section 513)
The Indentures provide that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given or
taken any direction, notice, consent, waiver or other action under such
Indenture as of any date:
(1) the principal amount of an Original Issue Discount Security that
will be deemed to be Outstanding will be the amount of the principal
thereof that would be due and payable as of such date upon acceleration of
the Maturity thereof to such date;
(2) if, as of such date, the principal amount payable at the Stated
Maturity of a Debt Security is not determinable (for example, because it is
based on an index), the principal amount of such Debt Security deemed to be
Outstanding as of such date will be an amount determined in the manner
prescribed for such Debt Security; and
(3) the principal amount of a Debt Security denominated in one or more
foreign currencies or currency units that will be deemed to be Outstanding
will be the U.S. dollar equivalent, determined as of such date in the
manner prescribed for such Debt Security, of the principal amount of such
Debt Security (or, in the case of a Debt Security described in clause (1)
or (2) above, of the amount described in such clause).
Certain Debt Securities, including those for whose payment or redemption money
has been deposited or set aside in trust for the Holders and those that have
been fully defeased pursuant to Section 1502, will not be deemed to be
Outstanding. (Section 101)
Except in certain limited circumstances, we will be entitled to set any day
as a record date for the purpose of determining the Holders of Outstanding Debt
Securities of any series entitled to give, make or take any request, demand,
authorization, direction, notice, consent, waiver or other action under the
applicable Indenture, in the manner and subject to the limitations provided in
the Indenture. If a record date is set for any action to be taken by Holders of
a particular series, such action may be taken only by persons who are Holders of
Outstanding Debt Securities of that series on the record date. To be effective,
such action must be taken by Holders of the requisite principal amount of such
Debt Securities within a specified period following the record date. For any
particular record date, this period will be 180 days or such other period as may
be specified by us (or the Trustee, if it set the record date), and may be
shortened or lengthened (but not beyond 180 days) from time to time. (Section
104)
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DEFEASANCE AND COVENANT DEFEASANCE
If and to the extent indicated in the applicable prospectus supplement, we
may elect, at our option at any time, to have the provisions of Section 1502,
relating to defeasance and discharge of indebtedness, or Section 1503, relating
to defeasance of certain restrictive covenants applied to the Debt Securities of
any series, or to any specified part of a series. (Section 1501)
Defeasance and Discharge. The Indentures provide that, upon our exercise of
our option (if any) to have Section 1502 applied to any Debt Securities, we will
be discharged from all our obligations, and, if such Debt Securities are
Subordinated Debt Securities, the provisions of the Subordinated Indenture
relating to subordination (but not to conversion, if applicable) will cease to
be effective, with respect to such Debt Securities (except for certain
obligations to exchange or register the transfer of Debt Securities, to replace
stolen, lost or mutilated Debt Securities, to maintain paying agencies and to
hold moneys for payment in trust) upon the deposit in trust for the benefit of
the Holders of such Debt Securities of money or U.S. Government Obligations, or
both, which, through the payment of principal and interest in respect thereof in
accordance with their terms, will provide money in an amount sufficient to pay
the principal of and any premium and interest on such Debt Securities on the
respective Stated Maturities or Redemption Date in accordance with the terms of
the applicable Indenture and such Debt Securities. Such defeasance or discharge
may occur only if, among other things:
(1) we have delivered to the applicable Trustee an Opinion of Counsel
to the effect that we have received from, or there has been published by,
the United States Internal Revenue Service a ruling, or there has been a
change in tax law, in either case to the effect that Holders of such Debt
Securities will not recognize gain or loss for federal income tax purposes
as a result of such deposit, defeasance and discharge and will be subject
to federal income tax on the same amount, in the same manner and at the
same times as would have been the case if such deposit, defeasance and
discharge were not to occur;
(2) no Event of Default or event that with the passing of time or the
giving of notice, or both, shall constitute an Event of Default shall have
occurred or be continuing;
(3) such deposit, defeasance and discharge will not result in a breach
or violation of, or constitute a default under, any agreement or instrument
to which we or any Restricted Subsidiary is a party or by which we or any
Restricted Subsidiary is bound;
(4) in the case of Subordinated Debt Securities, at the time of such
deposit, no default in the payment of all or a portion of principal of (or
premium, if any) or interest on or other obligations in respect of any of
our Senior Debt shall have occurred and be continuing and no other event of
default with respect to any of our Senior Debt shall have occurred and be
continuing, permitting after notice or the lapse of time, or both, the
acceleration thereof; and
(5) we have delivered to the Trustee an Opinion of Counsel to the
effect that such deposit shall not cause the Trustee or the trust so
created to be subject to the Investment Company Act of 1940. (Sections 1502
and 1504)
Defeasance of Certain Covenants. The Indentures provide that, upon our
exercise of our option (if any) to have Section 1503 applied to any Debt
Securities, we may omit to comply with certain restrictive covenants, including
those that may be described in the applicable prospectus supplement, the
occurrence of certain Events of Default, which are described above in clause (4)
(with respect to such restrictive covenants) under "Events of Default" and any
that may be described in the applicable prospectus supplement, will not be
deemed to either be or result in an Event of Default and, if such Debt
Securities are Subordinated Debt Securities, the provisions of the Subordinated
Indenture relating to subordination (but not to conversion, if applicable) will
cease to be effective, in each case with respect to such Debt Securities. In
order to exercise such option, we must deposit, in trust for the benefit of the
Holders of such Debt Securities, money or U.S. Government Obligations, or both,
which, through the payment of principal and interest in respect thereof in
accordance with their terms, will provide money in an amount sufficient to pay
the principal of and any premium and interest on such Debt Securities on the
respective Stated Maturities or Redemption Date in accordance with the terms of
the applicable Indenture and such Debt Securities. Such covenant defeasance may
occur only if we have delivered to the applicable Trustee an Opinion of Counsel
that in effect says that Holders of such Debt Securities will not recognize gain
or loss for federal income tax purposes as a result of such deposit and
defeasance of certain obligations and will be subject to federal income tax on
the same amount, in the same manner and at the same times as would have been the
case if such deposit and defeasance were
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not to occur and the requirements set forth in clauses (2), (3), (4) and (5)
above are satisfied. If we exercise this option with respect to any Debt
Securities and such Debt Securities were declared due and payable because of the
occurrence of any Event of Default, the amount of money and U.S. Government
Obligations so deposited in trust would be sufficient to pay amounts due on such
Debt Securities at the time of their respective Stated Maturities or Redemption
Debt but may not be sufficient to pay amounts due on such Debt Securities upon
any acceleration resulting from such Event of Default. In such case, we would
remain liable for such payments. (Sections 1503 and 1504)
NOTICES
Notices to Holders of Debt Securities will be given by mail to the
addresses of such Holders as they may appear in the Security Register. (Sections
101 and 106)
TITLE
We, the Trustees and any agent of us or a Trustee may treat the Person in
whose name a Debt Security is registered as the absolute owner of the Debt
Security (whether or not such Debt Security may be overdue) for the purpose of
making payment and for all other purposes. (Section 308)
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed
in accordance with, the law of the State of New York. (Section 112)
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 100,000,000 shares of common
stock, par value $.00001 per share, 3,345,333 shares of Limited Vote Common
Stock, par value $.00001 per share, and 10,000,000 shares of preferred stock,
par value $.00001 per share.
COMMON STOCK AND LIMITED VOTE COMMON STOCK
The holders of common stock are entitled to one vote for each share on all
matters voted upon by stockholders, including the election of directors. Such
holders are not entitled to vote cumulatively for the election of directors.
Holders of a majority of the shares of common stock entitled to vote in any
election of directors may elect six members of our board of directors. Shares of
common stock are not subject to any redemption provisions and are not
convertible into any of our other securities. All outstanding shares of common
stock are fully paid and non-assessable. Any additional common stock we issue
will also be fully paid and non-assessable.
Holders of Limited Vote Common Stock, voting together as a single class,
are entitled to elect one director. Holders of Limited Vote Common Stock are not
entitled to vote on the election of any other directors. Only the holders of the
Limited Vote Common Stock may remove the director such holders are entitled to
elect. Holders of Limited Vote Common Stock are entitled to one-tenth of one
vote for each share held on all other matters on which they are entitled to
vote.
Subject to the rights of any then outstanding shares of preferred stock,
holders of common stock and Limited Vote Common Stock are together entitled to
participate pro rata in such dividends as may be declared in the discretion of
our board of directors out of funds legally available therefor. Holders of
common stock and Limited Vote Common Stock together are entitled to share
ratably in the net assets of Quanta upon liquidation after payment or provision
for all liabilities and any preferential liquidation rights of any preferred
stock then outstanding. Holders of common stock and holders of Limited Vote
Common Stock have no preemptive rights to purchase shares of stock of Quanta.
Shares of common stock are not subject to any redemption provisions and are not
convertible into any other securities of Quanta. Shares of Limited Vote Common
Stock are not subject to any redemption provisions and are convertible into
common stock as described below.
Each share of Limited Vote Common Stock will automatically convert to
common stock on a share-for-share basis in the event of a permitted disposition
of such share of Limited Vote Common Stock by the holder thereof (other than a
distribution by a holder to its partners or beneficial owners or a transfer to a
related party of such holder or to another holder of Limited Vote Common Stock
or a related party thereto (whether a party is a "related
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party" shall be determined in accordance with Sections 267, 707, 318 and/or 4946
of the Internal Revenue Code)). The holders of Limited Vote Common Stock have no
rights to convert Limited Vote Common Stock into common stock and the only
conversion feature of the Limited Vote Common Stock is the automatic conversion
upon a permitted disposition.
Our common stock is listed on the NYSE.
PREFERRED STOCK
Series A Convertible Preferred Stock
In September 1999, Quanta entered into a Securities Purchase Agreement
with UtiliCorp United and issued 1,860,000 shares of Series A convertible
preferred stock for an initial investment of $186,000,000 before transaction
costs. The holders of the Series A convertible preferred stock are entitled to
receive dividends in cash at a rate of 0.5% per annum on an amount equal to
$100.00 per share, plus all unpaid dividends accrued. In addition to the
preferred dividend, the holders are entitled to participate in any cash or
non-cash dividends or distributions declared and paid on the shares of common
stock, as if each share of Series A convertible preferred stock had been
converted at the then applicable conversion price into shares of common stock
immediately prior to the record date for payment of such dividends or
distributions. At any time after the sixth anniversary of the issuance of the
Series A convertible preferred stock, if the closing price per share of our
common stock is greater than $20.00, Quanta may terminate the preferred
dividend. If, however, the closing price per share of our common stock is equal
to or less than $20.00, then the preferred dividend may, at the option of
UtiliCorp United, be adjusted to the then "market coupon rate," which shall
equal our after-tax cost of obtaining financing, excluding common stock, to
replace UtiliCorp United's investment in Quanta.
UtiliCorp United, as the holder of the Series A convertible preferred
stock, is entitled to that number of votes equal to the number of shares of
common stock into which the outstanding shares of Series A convertible preferred
stock are then convertible. Subject to certain limitations, UtiliCorp United is
entitled to elect three of the total number of directors of Quanta. All or any
portion of the outstanding shares of Series A convertible preferred stock may,
at the option of UtiliCorp United, be converted at any time into fully paid and
nonassessable shares of common stock. The conversion price is currently $20.00
and may be adjusted under certain circumstances.
Our stockholders approved a proposal at our annual meeting on May 24,
2000 that allows UtiliCorp United to exchange up to 7,924,806 shares of common
stock for up to 1,584,961 additional shares of Series A convertible preferred
stock, at a rate of five shares of common stock for one share of Series A
convertible preferred stock. When consummated, the exchange will also reduce the
stated amount per share of Series A convertible preferred stock on which
dividends are paid to $53.99 per share. It is contemplated that the exchange
will be consummated during July 2000. The exchange will not adversely affect our
other holders of common stock or Limited Vote Common Stock. The additional
shares of Series A preferred stock to be issued to UtiliCorp United in the
exchange will not give UtiliCorp United any greater voting power than it
presently has as a holder of the common stock to be exchanged, and will not give
UtiliCorp United any additional veto power. In addition, the Series A preferred
stock has no liquidation preference, and the certificate of designation will be
amended so that the aggregate dividend payable to UtiliCorp United on the Series
A convertible preferred stock is, as a result of the change in the stated amount
per share, unaffected by the occurrence of the exchange.
Authorized but Unissued Preferred Stock
We will specify in the prospectus supplement any terms of any series of
preferred stock offered, including:
o the series, the number of shares offered and the liquidation
value of the preferred stock;
o the price at which the preferred stock will be issued;
o the dividend rate, the dates on which the dividends will be
payable and other terms relating to the payment of dividends on
the preferred stock;
o the liquidation preference of the preferred stock;
o whether the preferred stock is redeemable or subject to a sinking
fund, and the terms of any such redemption or sinking fund;
o whether the preferred stock is convertible into or exchangeable
for any other securities, and the terms of any such conversion or
exchange; and
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o any additional rights, preferences, qualifications, limitations
or restrictions of the preferred stock.
The description of the terms of the preferred stock to be set forth in
an applicable prospectus supplement will not be complete and will be subject to
and qualified in its entirety by reference to the statement of resolution
relating to the applicable series of preferred stock. The registration statement
of which this prospectus forms a part will include the statement of resolution
as an exhibit or incorporate it by reference.
Additional preferred stock may be issued from time to time by our board
of directors in one or more series. Subject to the provisions of the certificate
of incorporation and limitations prescribed by law, our board of directors is
expressly authorized to adopt resolutions to issue the shares, to fix the number
of shares and to change the number of shares constituting any series and to
provide for or change the voting powers, designations, preferences and relative,
participating, optional, exchange or other special rights, qualifications,
limitations or restrictions thereof, including dividend rights (including
whether dividends are cumulative), dividend rates, terms of redemption
(including sinking fund provisions), redemption prices, conversion rights and
liquidation preferences of the shares constituting any class or series of the
preferred stock, in each case without any further action or vote by the holders
of common stock.
In addition, the issuance of additional shares of preferred stock, or
the issuance of rights to purchase such shares, could be used to discourage an
unsolicited acquisition proposal. For example, the issuance of a series of
preferred stock might impede a business combination by including class voting
rights that would enable the holders to block such a transaction; or such
issuance might facilitate a business combination by including voting rights that
would provide a required percentage vote of the stockholders. In addition, under
certain circumstances, the issuance of preferred stock could adversely affect
the voting power of the holders of the common stock. Although our board of
directors is required to make any determination to issue such stock based on its
judgment as to the best interests of our stockholders, our board of directors
could act in a manner that would discourage an acquisition attempt or other
transaction that some or a majority of the stockholders might believe to be in
their best interests or in which stockholders might receive a premium for their
stock over the then-market price of such stock. Our board of directors does not
at present intend to seek stockholder approval prior to any issuance of
currently authorized stock, unless otherwise required by law or the rules of any
market on which our securities are traded.
UTILICORP UNITED'S PRE-EMPTIVE RIGHTS
In September 1999, we entered into an Investor's Rights Agreement with
UtiliCorp United, pursuant to which UtiliCorp United received a pre-emptive
right to participate in certain issuances of our securities to an extent that
would allow UtiliCorp United to purchase that number of shares that would
maintain the same equity interest as was represented by the initial issuance of
1,860,000 shares of Series A convertible preferred stock. UtiliCorp United's
purchase price for each share of our common stock purchased pursuant to this
right is equal to the closing price per share of our common stock on the date of
issuance or sale of the securities. UtiliCorp United will have 10 business days
after the end of any fiscal quarter in which we issue new securities to exercise
its pre-emptive right with respect to that issuance. UtiliCorp United's
pre-emptive right will terminate on the first to occur of (a) the expiration of
the 10-day exercise period after a fiscal quarter in which UtiliCorp United
fails to exercise its pre-emptive right in full, or (b) UtiliCorp United's
transfer, sale, assignment, donation, pledge or other encumbrance of any of its
shares of our Series A convertible preferred stock.
STOCKHOLDER RIGHTS PLAN
In March 2000, our board of directors adopted a stockholder rights plan
designed to protect long-term value for our stockholders in the event of any
future unsolicited acquisition attempt. In connection with the plan, our board
of directors declared a dividend of one preferred share purchase right (a
"Right") for each share of our common stock and Series A convertible preferred
stock (on an as-converted basis) outstanding on March 27, 2000. Each Right
entitles the registered holder to purchase from Quanta one one-thousandth of a
share of our Series B Junior Participating Preferred Stock, par value $.00001
per share, at a price of $153.33 per one one-thousandth of a share of Series B
preferred stock. The Rights will expire on March 8, 2010, unless we advance or
extend the expiration date or unless we redeem or exchange the Rights earlier.
The Rights are not exercisable until the earlier of (i) 10 days following a
public announcement that a person or group of affiliated or associated persons
has become an "Acquiring Person" or (ii) 10 business days (or such later date as
may be determined by action of our board of directors prior to such time as any
person or group of affiliated
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or associated persons becomes an Acquiring Person) following the commencement
of, or announcement of an intention to make, a tender offer or exchange offer
the consummation of which would result in the beneficial ownership by a person
or group of 15% or more of the outstanding shares of our common stock. Except in
certain situations, a person or group of affiliated or associated persons
becomes an "Acquiring Person" upon acquiring beneficial ownership of 15% or more
of the outstanding shares of our common stock. UtiliCorp United will not be
deemed to be an Acquiring Person unless and until (i) UtiliCorp United, or any
UtiliCorp United affiliate or associate, acquires, or announces its intention to
acquire, more than 49.9% of the total number of shares of outstanding common
stock (on an as converted basis), assuming full conversion of all securities
convertible into common stock, or (ii) there is a change in control of UtiliCorp
United and UtiliCorp United then beneficially owns or tenders for 15% or more of
our common stock.
Shares of Series B preferred stock purchasable upon exercise of the Rights
will not be redeemable. Subject to the rights of senior securities, each share
of Series B preferred stock will be entitled, when, as and if declared, to a
minimum preferential quarterly dividend payment of the greater of (a) $1.00 per
share, and (b) an amount equal to 1000 times the dividend declared per share of
common stock. In the event of our liquidation, dissolution or winding up, the
holders of the Series B preferred stock will be entitled to a minimum
preferential payment of the greater of (a) $10.00 per share (plus any accrued
but unpaid dividends), and (b) an amount equal to 1000 times the payment made
per share of common stock, subject to the rights of senior securities. Each
share of Series B preferred stock will have 1000 votes, voting together with the
common stock. Finally, in the event of any merger, consolidation or other
transaction in which outstanding shares of common stock are converted or
exchanged, each share of Series B preferred stock will be entitled to receive
1000 times the amount received per share of common stock. These rights are
protected by customary anti-dilution provisions.
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a Right that number
of shares of common stock having a market value of two times the exercise price
of the Right.
In the event that, after a person or group has become an Acquiring
Person, we are acquired in a merger or other business combination transaction or
50% or more of our consolidated assets or earning power are sold, provision will
be made so that each holder of a Right (other than Rights beneficially owned by
an Acquiring Person, which will have become void) will thereafter have the right
to receive upon the exercise of a Right that number of shares of common stock of
the person with whom we have engaged in the foregoing transaction (or its
parent) that at the time of such transaction have a market value of two times
the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and
prior to the earlier of one of the events described in the previous paragraph or
the acquisition by such Acquiring Person of beneficial ownership of 50% or more
of the outstanding shares of our common stock, our board of directors may
exchange the Rights (other than Rights owned by such Acquiring Person, which
will have become void), in whole or in part, for shares of common stock or
Series B Preferred Stock (or a series of our preferred stock having equivalent
rights, preferences and privileges), at an exchange ratio of one share of common
stock, or a fractional share of Series B Preferred Stock (or other preferred
stock) equivalent in value thereto, per Right.
At any time prior to the time an Acquiring Person becomes such, our
board of directors may redeem the Rights in whole, but not in part, at a price
of $.01 per Right (the "Redemption Price") payable, at our option, in cash,
shares of common stock or such other form of consideration as our board of
directors shall determine. The redemption of the Rights may be made effective at
such time, on such basis and with such conditions as our board of directors in
its sole discretion may establish. Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
For so long as the Rights are then redeemable, we may, except with
respect to the Redemption Price, amend the Rights Agreement in any manner. After
the Rights are no longer redeemable, we may, except with respect to the
Redemption Price, amend the Rights Agreement in any manner that does not
adversely affect the interests of holders of the Rights.
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STATUTORY BUSINESS COMBINATION PROVISION
We are a Delaware corporation and are subject to Section 203 of the
Delaware General Corporation Law. In general, Section 203 prevents a Delaware
corporation from engaging in a "business combination" (as defined) with an
"interested stockholder" (defined generally as a person owning 15% or more of a
corporation's outstanding voting stock or affiliate or associate) for three
years following the time such stockholder became an interested stockholder
unless (1) before such person became an interested stockholder, our board of
directors of the corporation approved the business combination or the
transaction in which the interested stockholder became an interested
stockholder, (2) upon consummation of the transaction which resulted in the
interested stockholder's becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding stock held by
directors who are also officers of the corporation and by employee stock plans
that do not provide employees with the rights to determine confidentially
whether shares held subject to the plan will be tendered in a tender or exchange
offer) or (3) at or subsequent to the time such person became an interested
stockholder, the business combination was approved by our board of directors of
the corporation and authorized at a meeting of stockholders by the affirmative
vote of the holders of 66 2/3% of the outstanding voting stock of the
corporation not owned by the interested stockholder. Under Section 203, the
restrictions described above also do not apply to certain business combinations
proposed by an interested stockholder following the announcement or notification
of one of certain extraordinary transactions involving the corporation and a
person who had not been an interested stockholder during the previous three
years or who became an interested stockholder with the approval of a majority of
the corporation's directors, if such extraordinary transaction is approved or
not opposed by a majority of the directors who were directors prior to any
person becoming an interested stockholder during the previous three years or
were recommended for election or elected to succeed such directors by a majority
of such directors.
LIMITATION ON DIRECTORS' LIABILITY
Delaware law authorizes corporations to limit or eliminate the personal
liability of directors to corporations and their stockholders for monetary
damages for breach of a director's fiduciary duty of care. The duty of care
requires that, when acting on behalf of the corporation, directors must exercise
an informed business judgment based on all material information reasonably
available to them. Absent the limitations authorized by Delaware law, directors
are accountable to corporations and their stockholders for monetary damages for
conduct constituting gross negligence in the exercise of their duty of care.
Delaware law enables corporations to limit available relief to equitable
remedies such as injunction or rescission. Our certificate of incorporation
limits the liability of our directors to us or our stockholders to the fullest
extent permitted by Delaware law. Specifically, our directors will not be
personally liable to us or our stockholders for monetary damages for breach of a
director's fiduciary duty as a director, except for liability for breach of the
duty of loyalty, for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, for unlawful payments of
dividends or unlawful stock repurchases or redemptions as provided in Section
174 of the Delaware General Corporation Law or for any transaction in which a
director has derived an improper personal benefit.
Our certificate of incorporation provides that each of our officers and
directors will be indemnified and held harmless, to the fullest extent permitted
by Delaware law (as amended from time to time), against all expenses,
liabilities and losses reasonably suffered in connection with any action, suit
or proceeding by reason of the fact that he or she is or was a director or
officer of us or, while being at the time a director or officer of us, is or was
serving at our request as a director, trustee, officer, employee or agent of
another entity. We are not, however, permitted to indemnify any person in
connection with a proceeding initiated by that person unless such proceeding was
authorized by our board of directors. Our bylaws also provide for mandatory
advancement of expenses of officers and directors incurred in defending any
covered proceeding in advance of its final disposition. We also carry directors'
and officers' liability insurance.
The inclusion of these provisions in our certificate of incorporation may
have the effect of reducing the likelihood of derivative litigation against
directors and may discourage or deter stockholders or management from bringing a
lawsuit against directors for breach of their duty of care, even though such an
action, if successful, might otherwise have benefited us and our stockholders.
Our bylaws provide indemnification to our officers and directors and certain
other persons with respect to certain matters.
OTHER MATTERS
Our certificate of incorporation provides that directors may be removed
only for cause, and then only by the affirmative vote of the holders of at least
a majority of the outstanding voting stock entitled to vote with respect to the
election of such director. This provision, in conjunction with the provision of
our bylaws authorizing our board
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of directors to fill vacant directorships, will prevent stockholders from
removing incumbent directors without cause and filling the resulting vacancies
with their own nominees.
Our certificate of incorporation provides that stockholders may act only at
an annual or special meeting of stockholders and may not act by written consent.
Our certificate of incorporation provides that special meetings of the
stockholders can be called only by the Chairman of the Board pursuant to a
resolution approved by a majority of the whole board of directors.
STOCKHOLDER PROPOSALS
Our bylaws contain provisions (1) requiring that advance notice be
delivered to us of any business to be brought by a stockholder before an annual
meeting of stockholders and (2) establishing certain procedures to be followed
by stockholders in nominating persons for election to our board of directors.
Generally, such advance notice provisions provide that written notice must be
given to our Secretary by a stockholder (a) in the event of business to be
brought by a stockholder before, (1) an annual meeting, not less than 90 nor
more than 180 days prior to the earlier of the date of the meeting or the
anniversary date of the immediately preceding annual meeting of stockholders and
(2) a special meeting, not less than 40 nor more than 60 days prior to the date
of such meeting of stockholders (with certain exceptions if less than 50 days
notice or prior public disclosure of the date of the special meeting is given to
stockholders) and (b) in the event of nominations of persons for election to our
board of directors by any stockholder, (1) with respect to an election to be
held at the annual meeting of stockholders, not less than 90 nor more than 180
days prior to the earlier of the date of the meeting or the anniversary date of
the immediately preceding annual meeting of stockholders and (2) with respect to
an election to be held at a special meeting of stockholders for the election of
directors, not later than the close of business on the 10th day following the
day on which notice of the date of the special meeting was mailed to
stockholders or public disclosure of the date of the special meeting was made,
whichever first occurs. Such notice must set forth specific information
regarding such stockholder and such business or director nominee, as described
in our bylaws. The foregoing summary is qualified in its entirety by reference
to our bylaws.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is American Stock
Transfer and Trust Company.
DEPOSITARY SHARES
GENERAL
We may offer fractional shares of preferred stock, rather than full shares
of preferred stock. If we decide to offer fractional shares of preferred stock,
we will issue receipts for depositary shares. Each depositary share will
represent a fraction of a share of a particular series of preferred stock. The
prospectus supplement will indicate that fraction. The shares of preferred stock
represented by depositary shares will be deposited under a depositary agreement
between us and a bank or trust company that meets certain requirements and is
selected by us (the "Bank Depositary"). Each owner of a depositary share will be
entitled to all the rights and preferences of the preferred stock represented by
the depositary share. The depositary shares will be evidenced by depositary
receipts issued pursuant to the depositary agreement. Depositary receipts will
be distributed to those persons purchasing the fractional shares of preferred
stock in accordance with the terms of the offering.
We have summarized selected provisions of a depositary agreement and the
related depositary receipts. The summary is not complete. The forms of the
deposit agreement and the depositary receipts relating to any particular issue
of depositary shares will be filed with the SEC via a Current Report on Form 8-K
prior to our offering of the depositary shares, and you should read such
documents for provisions that may be important to you.
DIVIDENDS AND OTHER DISTRIBUTIONS
If we pay a cash distribution or dividend on a series of preferred stock
represented by depositary shares, the Bank Depositary will distribute such
dividends to the record holders of such depositary shares. If the distributions
are in property other than cash, the Bank Depositary will distribute the
property to the record holders of the depositary shares. However, if the Bank
Depositary determines that it is not feasible to make the distribution of
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<PAGE> 28
property, the Bank Depositary may, with our approval, sell such property and
distribute the net proceeds from such sale to the record holders of the
depositary shares.
REDEMPTION OF DEPOSITARY SHARES
If we redeem a series of preferred stock represented by depositary shares,
the Bank Depositary will redeem the depositary shares from the proceeds received
by the Bank Depositary in connection with the redemption. The redemption price
per depositary share will equal the applicable fraction of the redemption price
per share of the preferred stock. If fewer than all the depositary shares are
redeemed, the depositary shares to be redeemed will be selected by lot or pro
rata as the Bank Depositary may determine.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the preferred
stock represented by depositary shares are entitled to vote, the Bank Depositary
will mail the notice to the record holders of the depositary shares relating to
such preferred stock. Each record holder of these depositary shares on the
record date (which will be the same date as the record date for the preferred
stock) may instruct the Bank Depositary as to how to vote the preferred stock
represented by such holder's depositary shares. The Bank Depositary will
endeavor, insofar as practicable, to vote the amount of the preferred stock
represented by such depositary shares in accordance with such instructions, and
we will take all action which the Bank Depositary deems necessary in order to
enable the Bank Depositary to do so. The Bank Depositary will abstain from
voting shares of the preferred stock to the extent it does not receive specific
instructions from the holders of depositary shares representing such preferred
stock.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT
The form of depositary receipt evidencing the depositary shares and any
provision of the depositary agreement may be amended by agreement between the
Bank Depositary and us. However, any amendment that materially and adversely
alters the rights of the holders of depositary shares will not be effective
unless such amendment has been approved by the holders of at least a majority of
the depositary shares then outstanding. The depositary agreement may be
terminated by the Bank Depositary or us only if (i) all outstanding depositary
shares have been redeemed or (ii) there has been a final distribution in respect
of the preferred stock in connection with any liquidation, dissolution or
winding up of our company and such distribution has been distributed to the
holders of depositary receipts.
CHARGES OF BANK DEPOSITARY
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. We will pay charges of
the Bank Depositary in connection with the initial deposit of the preferred
stock and any redemption of the preferred stock. Holders of depositary receipts
will pay other transfer and other taxes and governmental charges and any other
charges, including a fee for the withdrawal of shares of preferred stock upon
surrender of depositary receipts, as are expressly provided in the depositary
agreement to be for their accounts.
WITHDRAWAL OF PREFERRED STOCK
Upon surrender of depositary receipts at the principal office of the Bank
Depositary, subject to the terms of the depositary agreement, the owner of the
depositary shares may demand delivery of the number of whole shares of preferred
stock and all money and other property, if any, represented by those depositary
shares. Partial shares of preferred stock will not be issued. If the depositary
receipts delivered by the holder evidence a number of depositary shares in
excess of the number of depositary shares representing the number of whole
shares of preferred stock to be withdrawn, the Bank Depositary will deliver to
such holder at the same time a new depositary receipt evidencing the excess
number of depositary shares. Holders of preferred stock thus withdrawn may not
thereafter deposit those shares under the depositary agreement or receive
depositary receipts evidencing depositary shares therefor.
MISCELLANEOUS
The Bank Depositary will forward to holders of depositary receipts all
reports and communications from us that are delivered to the Bank Depositary and
that we are required to furnish to the holders of the preferred stock.
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<PAGE> 29
Neither the Bank Depositary nor we will be liable if we are prevented or
delayed by law or any circumstance beyond our control in performing our
obligations under the depositary agreement. The obligations of the Bank
Depositary and us under the depositary agreement will be limited to performance
in good faith of our duties thereunder, and we will not be obligated to
prosecute or defend any legal proceeding in respect of any depositary shares or
preferred stock unless satisfactory indemnity is furnished. We may rely upon
written advice of counsel or accountants, or upon information provided by
persons presenting preferred stock for deposit, holders of depositary receipts
or other persons believed to be competent and on documents believed to be
genuine.
RESIGNATION AND REMOVAL OF BANK DEPOSITARY
The Bank Depositary may resign at any time by delivering to us notice of
its election to do so, and we may at any time remove the Bank Depositary. Any
such resignation or removal will take effect upon the appointment of a successor
Bank Depositary and its acceptance of such appointment. Such successor Bank
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of our common stock. Warrants may be
issued independently or together with Debt Securities, preferred stock or common
stock offered by any prospectus supplement and may be attached to or separate
from any such offered securities. Each series of warrants will be issued under a
separate warrant agreement to be entered into between us and a bank or trust
company, as warrant agent, all as set forth in the prospectus supplement
relating to the particular issue of warrants. The warrant agent will act solely
as our agent in connection with the warrants and will not assume any obligation
or relationship of agency or trust for or with any holders of warrants or
beneficial owners of warrants. The following summary of certain provisions of
the warrants does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all provisions of the warrant agreements.
You should refer to the prospectus supplement relating to a particular
issue of warrants for the terms of and information relating to the warrants,
including, where applicable:
(1) the number of shares of common stock purchasable upon exercise of
the warrants and the price at which such number of shares of common stock
may be purchased upon exercise of the warrants;
(2) the date on which the right to exercise the warrants shall commence
and the date on which such right shall expire (the "Expiration Date");
(3) United States Federal income tax consequences applicable to the
warrants;
(4) the amount of the warrants outstanding as of the most recent
practicable date; and
(5) any other terms of the warrants.
Warrants will be offered and exercisable for U.S. dollars only. Warrants
will be issued in registered form only. Each warrant will entitle its holder to
purchase such number of shares of common stock at such exercise price as shall
in each case be set forth in, or calculable from, the prospectus supplement
relating to such warrant. The exercise price may be subject to adjustment upon
the occurrence of events described in such prospectus supplement. After the
close of business on the Expiration Date (or such later date to which we may
extend such Expiration Date), unexercised warrants will become void. The place
or places where, and the manner in which, warrants may be exercised will be
specified in the prospectus supplement relating to such warrants.
Prior to the exercise of any warrants, holders of the warrants will not
have any of the rights of holders of common stock, including the right to
receive payments of any dividends on the common stock purchasable upon exercise
of the warrants, or to exercise any applicable right to vote.
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<PAGE> 30
PLAN OF DISTRIBUTION
We may sell securities pursuant to this prospectus in or outside the United
States (a) through underwriters or dealers, (b) through agents or (c) directly
to one or more purchasers, including our existing stockholders in a rights
offering. The prospectus supplement relating to any offering of securities will
include the following information:
o the terms of the offering;
o the names of any underwriters, dealers or agents;
o the name or names of any managing underwriter or underwriters;
o the purchase price of the securities from us;
o the net proceeds to us from the sale of the securities;
o any delayed delivery arrangements;
o any underwriting discounts, commissions and other items constituting
underwriters' compensation;
o any initial public offering price;
o any discounts or concessions allowed or reallowed or paid to dealers;
and
o any commissions paid to agents.
SALE THROUGH UNDERWRITERS OR DEALERS
If we use underwriters in the sale, the underwriters will acquire the
securities for their own account. The underwriters may resell the securities
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Underwriters may offer securities to the public either
through underwriting syndicates represented by one or more managing underwriters
or directly by one or more firms acting as underwriters. Unless we inform you
otherwise in the prospectus supplement, the obligations of the underwriters to
purchase the securities will be subject to certain conditions, and the
underwriters will be obligated to purchase all the offered securities if they
purchase any of them. The underwriters may change from time to time any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers.
During and after an offering through underwriters, the underwriters may
purchase and sell the securities in the open market. These transactions may
include overallotment and stabilizing transactions and purchases to cover
syndicate short positions created in connection with the offering. The
underwriters may also impose a penalty bid, which means that selling concessions
allowed to syndicate members or other broker-dealers for the offered securities
sold for their account may be reclaimed by the syndicate if the offered
securities are repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the offered securities, which may be higher than the price that
might otherwise prevail in the open market. If commenced, the underwriters may
discontinue these activities at any time.
If we use dealers in the sale of securities, we will sell the securities to
them as principals. They may then resell those securities to the public at
varying prices determined by the dealers at the time of resale.
DIRECT SALES AND SALES THROUGH AGENTS
We may sell the securities directly. In this case, no underwriters or
agents would be involved. We may sell securities upon the exercise of rights
that we may issue to our securityholders. We may also sell the securities
directly to institutional investors or others who may be deemed to be
underwriters within the meaning of the Securities Act with respect to any sale
of those securities.
We may sell the securities through agents we designate from time to time.
Unless we inform you otherwise in the prospectus supplement, any agent will
agree to use its reasonable best efforts to solicit purchases for the period of
its appointment.
DELAYED DELIVERY CONTRACTS
If we so indicate in the prospectus supplement, we may authorize agents,
underwriters or dealers to solicit offers from certain types of institutions to
purchase securities from us at the public offering price under delayed delivery
contracts. These contracts would provide for payment and delivery on a specified
date in the future. The contracts
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<PAGE> 31
would be subject only to those conditions described in the prospectus
supplement. The prospectus supplement will describe the commission payable for
solicitation of those contracts.
GENERAL INFORMATION
We may have agreements with the agents, dealers and underwriters to
indemnify them against certain civil liabilities, including liabilities under
the Securities Act, or to contribute with respect to payments that the agents,
dealers or underwriters may be required to make. Agents, dealers and
underwriters may be customers of, engage in transactions with or perform
services for us in the ordinary course of their business.
LEGAL MATTERS
Our legal counsel, Akin, Gump, Strauss, Hauer & Feld, L.L.P., San Antonio,
Texas, will pass upon certain legal matters in connection with the offered
securities. Any underwriters will be advised about other issues relating to any
offering by their own legal counsel.
EXPERTS
The annual financial statements incorporated by reference in this
prospectus have been audited by Arthur Andersen LLP, independent public
accounts, as indicated in their reports with respect thereto, and are included
herein in reliance upon the authority of said firm as experts in accounting and
auditing in giving said reports.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses payable by Quanta Services,
Inc. (sometimes referred to as the "Company" in this Part II of the Registration
Statement) in connection with the issuance and distribution of the securities.
All the amounts shown are estimates, except the registration fee.
<TABLE>
<S> <C>
Registration fee.................................................... $132,000
Fees and expenses of accountants.................................... 35,000
Fees and expenses of legal counsel.................................. 35,000
Fees and expenses of Trustee and counsel............................ 20,000
Printing and engraving expenses..................................... 20,000
Blue Sky fees and expenses (including counsel)...................... 5,000
Miscellaneous....................................................... 53,000
-------
Total...................................................... $300,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
DELAWARE GENERAL CORPORATION LAW
Section 145(a) of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he or she 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, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person 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 reasonable cause to believe the
person's conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he or she 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 reasonable cause to believe that the
person's conduct was unlawful.
Section 145(b) of the DGCL states that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit or in the right of the
corporation to procure a judgment in its favor by reason of the fact that the
person 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,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense or settlement
of such action or suit if the person acted in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been 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 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 person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
Section 145(c) of the DGCL provides that to the extent that a present or
former director or officer of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
subsections (a) and (b) of Section 145, or in defense of any claim, issue or
matter therein, he or she shall be
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<PAGE> 33
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection therewith.
Section 145(d) of the DGCL states that any indemnification under
subsections (a) and (b) of Section 145 (unless ordered by a court) shall be made
by the corporation only as authorized in the specific case upon a determination
that indemnification of the present or former director, officer, employee or
agent is proper in the circumstances because he or she has met the applicable
standard of conduct set forth in subsections (a) and (b). Such determination
shall be made with respect to a person who is a director or officer at the time
of such determination (1) by a majority vote of the directors who are not
parties to such action, suit or proceeding, or (2) by a committee of such
directors designated by majority vote of such directors, even though less than a
quorum, or (3) if there are no such directors, or if such directors so direct,
by independent legal counsel in a written opinion, or (4) by the stockholders.
Section 145(e) of the DGCL provides that expenses (including attorneys'
fees) incurred by an officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he or she
is not entitled to be indemnified by the corporation as authorized in Section
145. Such expenses (including attorneys' fees) incurred by other employees and
agents may be so paid upon such terms and conditions, if any, as the corporation
deems appropriate. Section 145(f) of the DGCL provides that the indemnification
and advancement of expenses provided by, or granted pursuant to, the other
subsections of Section 145 shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as to action
in another capacity while holding such office.
Section 145(g) of the DGCL provides that a corporation shall have the power
to 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, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of his or her status as such, whether or
not the corporation would have the power to indemnify such person against such
liability under the provisions of Section 145.
Section 145(j) of the DGCL provides that the indemnification and
advancement of expenses provided by, or granted pursuant to, Section 145 shall,
unless otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
CERTIFICATE OF INCORPORATION
The Certificate of Incorporation provides that a director of the Company
shall not be personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability for
unlawful payments of dividends or unlawful stock repurchases or redemptions as
provided for in Section 174 of the DGCL. If the DGCL is amended to authorize the
further elimination or limitation of the liability of directors, then the
liability of a director of the Company, in addition to the limitation on
personal liability described above, shall be limited to the fullest extent
permitted by the amended DGCL. Further, any repeal or modification of such
provision of the Certificate of Incorporation by the stockholders of the Company
shall be prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the Company existing at the time of such
repeal or modification.
BYLAWS
The Bylaws of the Company provide that the Company will indemnify and hold
harmless any director or officer of the Company to the fullest extent permitted
by applicable law, as in effect as of the date of the adoption of the Bylaws or
to such greater extent as applicable law may thereafter permit, from and against
all losses, liabilities, claims, damages, judgments, penalties, fines, amounts
paid in settlement and expenses (including attorneys' fees) whatsoever arising
out of any event or occurrence related to the fact that such person is or was a
director or officer of the Company and further provide that the Company may, but
is not required to, indemnify and hold harmless any employee or agent of the
Company or a director, officer, employee or agent of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise who
is or was serving in such capacity at the written request of the Company;
provided, however, that the Company is only required to indemnify persons
serving as
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<PAGE> 34
directors, officers, employees or agents of the Company for the expenses
incurred in a proceeding if such person has met the standards of conduct that
make it permissible under the laws of the State of Delaware for the Company to
indemnify the claimant for the amount claimed, but the burden of proving such
defense will be on the Company. The Bylaws further provide that, in the event of
any threatened, or pending action, suit or proceeding in which any of the
persons referred to above is a party or is involved and that may give rise to a
right of indemnification under the Bylaws, following written request by such
person, the Company will promptly pay to such person amounts to cover expenses
reasonably incurred by such person in such proceeding in advance of its final
disposition upon the receipt by the Company of (i) a written undertaking
executed by or on behalf of such person providing that such person will repay
the advance if it is ultimately determined that such person is not entitled to
be indemnified by the Company as provided in the Bylaws and (ii)satisfactory
evidence as to the amount of such expenses.
INSURANCE
The Company maintains liability insurance for the benefit of its directors
and officers.
ITEM 16. EXHIBITS.
The following documents are filed as exhibits to this Registration
Statement, including those exhibits incorporated herein by reference to a prior
filing of the Company under the Securities Act or the Exchange Act as indicated
in parentheses:
EXHIBIT NO. EXHIBITS
----------- --------
*1.1-- Form of Underwriting Agreement (Debt Securities).
*1.2-- Form of Underwriting Agreement (Common Stock).
*1.3-- Form of Underwriting Agreement (Preferred Stock).
3.1-- Amended and Restated Certificate of Incorporation
(incorporated herein by reference to the Company's
registration statement on Form S-1, No. 333-42957).
3.2-- Amended and Restated Bylaws (incorporated herein by
reference to the Company's registration statement on Form
S-1, No. 333-42957).
3.3-- Certificate of Amendment to the Amended and Restated
Certificate of Incorporation (incorporated herein by
reference to the Company's registration statement on Form
S-3, No. 333-81419).
3.4-- Certificate of Designation for the Company's Series A
Preferred Stock (incorporated herein by reference to the
Company's registration statement on Form S-1, No.
333-90961).
3.5-- Certificate of Designation for the Company's Series B
Preferred Stock (incorporated herein by reference to the
Company's annual report filed on form 10-K for the year
ended December 31, 1999)
3.6-- Certificate of Correction to Certificate of Designation for
the Company's Series A Preferred Stock (incorporated herein
by reference to the Company's annual report filed on form
10-K for the year ended December 31, 1999)
**3.7-- Certificate of Amendment to Certificate of Designation for
the Company's Series A Preferred Stock
4.1-- Form of Common Stock Certificates (incorporated herein by
reference to the Company's registration statement on Form
S-1, No. 333-42957).
**4.2-- Form of Senior Indenture.
**4.3-- Form of Subordinated Indenture.
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<PAGE> 35
EXHIBIT NO. EXHIBITS
----------- --------
***4.4-- Form of Warrant Agreement.
***4.5-- Form of Securities.
***4.6-- Form of Depositary Agreement.
***4.7-- Form of Depositary Receipt.
**5.1-- Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
10.1-- Form of Employment Agreement (incorporated herein by
reference to the Company's registration statement on Form
S-1, No. 333-42957).
10.2-- 1997 Stock Option Plan (incorporated herein by reference to
the Company's registration statement on Form S-1, No.
333-42957).
10.3-- Third Amended and Restated Secured Credit Agreement dated as
of June 14, 1999 among the Company as Borrower and the
financial institutions parties thereto, as Lenders
(incorporated herein by reference to the Company's
registration statement on Form S-3, No. 333-81419).
10.4-- Securities Purchase Agreement among Quanta Services, Inc.
and Enron Capital & Trade Resources Corp. ("Enron Capital")
and Joint Energy Development Investments II Limited
Partnership ("JEDI") dated as of September 29, 1998
(incorporated herein by reference to the Company's post
effective amendment no. 1 to the Company's registration
statement on Form S-4, No. 333-47083).
10.5-- Registration Rights Agreement dated as of September 29, 1998
by and among the Company, JEDI and Enron Capital
(incorporated herein by reference to the Company's post
effective amendment no. 1 to the Company's registration
statement on Form S-4, No. 333-47083).
10.6-- Securities Purchase Agreement between the Company and
UtiliCorp United Inc. dated as of September 21, 1999
(incorporated herein by reference to the Company's
registration statement on Form S-3, No. 333-90961).
10.7-- Investor's Rights Agreement by and between the Company and
UtiliCorp United Inc. dated September 21, 1999 (incorporated
herein by reference to the Company's registration statement
on Form S-3, No. 333-90961).
10.8-- Management Services Agreement by and between the Company and
UtiliCorp United Inc. (incorporated herein by reference to
the Company's registration statement on Form S-3, No.
333-90961).
10.9-- Letter Agreement by and between the Company and UtiliCorp
United Inc. dated September 21, 1999 (incorporated herein by
reference to the Company's registration statement on Form
S-3, No. 333-90961).
10.10-- Strategic Alliance Agreement by and between the Company and
UtiliCorp United Inc. dated as of September 21, 1999
(incorporated herein by reference to the Company's
registration statement on Form S-3, No. 333-90961).
10.11-- Form of Stockholders Voting Agreement (incorporated herein
by reference to the Company's registration statement on Form
S-3, No. 333-90961).
10.12-- First Amendment to Third Amended and Restated Secured Credit
Agreement (incorporated herein by reference to the Company's
registration statement on Form S-3, No. 333-90961).
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<PAGE> 36
EXHIBIT NO. EXHIBITS
----------- --------
10.13-- Letter Agreement by and among ECT Merchant Investments
Corp., Joint Energy Development Investments II Limited
Partnership, UtiliCorp United Inc. and the Company dated
September 21, 1999 (incorporated herein by reference to the
Company's registration statement on Form S-3, No.
333-90961).
10.14-- First Amendment to Securities Purchase Agreement and
Registration Rights Agreement (incorporated herein by
reference to the Company's registration statement on Form
S-3, No. 333-90961).
10.15-- Note Purchase Agreement dated as of March 1, 2000, between
the Company and the Purchasers named therein (incorporated
herein by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1999).
10.16-- Intercreditor Agreement dated March 23, 2000 related to the
March 1, 2000 Note Purchase Agreement (incorporated herein
by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1999).
10.17-- Rights Agreement dated March 8, 2000 between the Company and
American Stock Transfer & Trust Company, as Rights Agent
(incorporated herein by reference to the Company's
registration statement on Form 8-A).
10.18-- Second Amendment to Third Amended and Restated Credit
Agreement (incorporated herein by reference to the Company's
Annual Report on Form 10-K for the year ended December 31,
1999).
**12.1-- Calculation of Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred Dividends.
**23.1-- Consent of Arthur Andersen LLP.
**23.2-- Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
(contained in Exhibit 5.1)
**24.1-- Powers of Attorney (included on the signature pages of this
Registration Statement).
**25.1-- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of the trustee under the
Senior Indenture.
**25.2-- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of the trustee under the
Subordinated Indenture.
----------
* The Company will file any underwriting agreement relating to any
securities that it may enter into as an exhibit to a Current Report on
Form 8-K.
** Filed herewith.
*** The Company will file any form of Debt Securities, depositary
agreement, warrant agreement or warrants and any depositary receipt,
preferred stock certificate or certificate of designations not
previously so filed as an exhibit to a Current Report on Form 8-K.
34
<PAGE> 37
ITEM 17. UNDERTAKINGS.
(a) Each undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii)To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% 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;
provided, however, that paragraphs (a)(l)(i) and (a)(l)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in 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.
(b) Each undersigned registrant hereby undertakes that:
(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.
(c) Each registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefits plan's annual report
35
<PAGE> 38
pursuant to Section 15(d) of the Exchange Act) 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.
(d) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to any charter provision, by-law, contract, arrangement,
statute, or otherwise, each registrant has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted against the registrant by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of 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.
36
<PAGE> 39
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on the 20th day of June,
2000.
QUANTA SERVICES, INC.
By /s/ John R. Colson
---------------------------------------
John R. Colson
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James H. Haddox and Brad Eastman, and
each of them (with full power to each of them to act alone), 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 on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective 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, and each of them, 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 to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their 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 indicated on June 20, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ John R. Colson Chief Executive Officer and Director
------------------------------------------------------ (Principal Executive Officer)
John R. Colson
/s/ James H. Haddox Chief Financial Officer
------------------------------------------------------ (Principal Financial Officer)
James H. Haddox
/s/ Derrick A. Jensen Vice President and Controller
------------------------------------------------------ (Principal Accounting Officer)
Derrick A. Jensen
/s/ Vincent D. Foster Director
------------------------------------------------------
Vincent D. Foster
/s/ John R. Wilson Director
------------------------------------------------------
John R. Wilson
/s/ John A. Martell Director
------------------------------------------------------
John A. Martell
/s/ Gary A. Tucci Director
------------------------------------------------------
Gary A. Tucci
/s/ James R. Ball Director
------------------------------------------------------
James R. Ball
/s/ Michael T. Willis Director
------------------------------------------------------
Michael T. Willis
/s/ Robert K. Green Director
------------------------------------------------------
Robert K. Green
</TABLE>
37
<PAGE> 40
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBITS
----------- --------
<S> <C> <C>
*1.1-- Form of Underwriting Agreement (Debt Securities).
*1.2-- Form of Underwriting Agreement (Common Stock).
*1.3-- Form of Underwriting Agreement (Preferred Stock).
3.1-- Amended and Restated Certificate of Incorporation
(incorporated herein by reference to the Company's
registration statement on Form S-1, No. 333-42957).
3.2-- Amended and Restated Bylaws (incorporated herein by
reference to the Company's registration statement on Form
S-1, No. 333-42957).
3.3-- Certificate of Amendment to the Amended and Restated
Certificate of Incorporation (incorporated herein by
reference to the Company's registration statement on Form
S-3, No. 333-81419).
3.4-- Certificate of Designation for the Company's Series A
Preferred Stock (incorporated herein by reference to the
Company's registration statement on Form S-1, No.
333-90961).
3.5-- Certificate of Designation for the Company's Series B
Preferred Stock (incorporated herein by reference to the
Company's annual report filed on form 10-K for the year
ended December 31, 1999).
3.6-- Certificate of Correction to Certificate of Designation for
the Company's Series A Preferred Stock (incorporated herein
by reference to the Company's annual report filed on form
10-K for the year ended December 31, 1999).
**3.7-- Certificate of Amendment to Certificate of Designation for
the Company's Series A Preferred Stock.
4.1-- Form of Common Stock Certificates (incorporated herein by
reference to the Company's registration statement on Form
S-1, No. 333-42957).
**4.2-- Form of Senior Indenture.
**4.3-- Form of Subordinated Indenture.
</TABLE>
<PAGE> 41
<TABLE>
<S> <C> <C>
***4.4-- Form of Warrant Agreement.
***4.5-- Form of Securities.
***4.6-- Form of Depositary Agreement.
***4.7-- Form of Depositary Receipt.
**5.1-- Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
10.1-- Form of Employment Agreement (incorporated herein by
reference to the Company's registration statement on Form
S-1, No. 333-42957).
10.2-- 1997 Stock Option Plan (incorporated herein by reference to
the Company's registration statement on Form S-1, No.
333-42957).
10.3-- Third Amended and Restated Secured Credit Agreement dated as
of June 14, 1999 among the Company as Borrower and the
financial institutions parties thereto, as Lenders
(incorporated herein by reference to the Company's
registration statement on Form S-3, No. 333-81419).
10.4-- Securities Purchase Agreement among Quanta Services, Inc.
and Enron Capital & Trade Resources Corp. ("Enron Capital")
and Joint Energy Development Investments II Limited
Partnership ("JEDI") dated as of September 29, 1998
(incorporated herein by reference to the Company's post
effective amendment no. 1 to the Company's registration
statement on Form S-4, No. 333-47083).
10.5-- Registration Rights Agreement dated as of September 29, 1998
by and among the Company, JEDI and Enron Capital
(incorporated herein by reference to the Company's post
effective amendment no. 1 to the Company's registration
statement on Form S-4, No. 333-47083).
10.6-- Securities Purchase Agreement between the Company and
UtiliCorp United Inc. dated as of September 21, 1999
(incorporated herein by reference to the Company's
registration statement on Form S-3, No. 333-90961).
10.7-- Investor's Rights Agreement by and between the Company and
UtiliCorp United Inc. dated September 21, 1999 (incorporated
herein by reference to the Company's registration statement
on Form S-3, No. 333-90961).
10.8-- Management Services Agreement by and between the Company and
UtiliCorp United Inc. (incorporated herein by reference to
the Company's registration statement on Form S-3, No.
333-90961).
10.9-- Letter Agreement by and between the Company and UtiliCorp
United Inc. dated September 21, 1999 (incorporated herein by
reference to the Company's registration statement on Form
S-3, No. 333-90961).
10.10-- Strategic Alliance Agreement by and between the Company and
UtiliCorp United Inc. dated as of September 21, 1999
(incorporated herein by reference to the Company's
registration statement on Form S-3, No. 333-90961).
10.11-- Form of Stockholders Voting Agreement (incorporated herein
by reference to the Company's registration statement on Form
S-3, No. 333-90961).
10.12-- First Amendment to Third Amended and Restated Secured Credit
Agreement (incorporated herein by reference to the Company's
registration statement on Form S-3, No. 333-90961).
</TABLE>
<PAGE> 42
<TABLE>
<S> <C> <C>
10.13-- Letter Agreement by and among ECT Merchant Investments
Corp., Joint Energy Development Investments II Limited
Partnership, UtiliCorp United Inc. and the Company dated
September 21, 1999 (incorporated herein by reference to the
Company's registration statement on Form S-3, No.
333-90961).
10.14-- First Amendment to Securities Purchase Agreement and
Registration Rights Agreement (incorporated herein by
reference to the Company's registration statement on Form
S-3, No. 333-90961).
10.15-- Note Purchase Agreement dated as of March 1, 2000, between
the Company and the Purchasers named therein (incorporated
herein by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1999).
10.16-- Intercreditor Agreement dated March 23, 2000 related to the
March 1, 2000 Note Purchase Agreement (incorporated herein
by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1999).
10.17-- Rights Agreement dated March 8, 2000 between the Company and
American Stock Transfer & Trust Company, as Rights Agent
(incorporated herein by reference to the Company's
registration statement on Form 8-A).
10.18-- Second Amendment to Third Amended and Restated Credit
Agreement (incorporated herein by reference to the Company's
Annual Report on Form 10-K for the year ended December 31,
1999).
**12.1-- Calculation of Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred Dividends.
**23.1-- Consent of Arthur Andersen LLP.
**23.2-- Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
(contained in Exhibit 5.1)
**24.1-- Powers of Attorney (included on the signature pages of this
Registration Statement).
**25.1-- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of the trustee under the
Senior Indenture.
**25.2-- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of the trustee under the
Subordinated Indenture.
</TABLE>
----------
* The Company will file any underwriting agreement relating to any
securities that it may enter into as an exhibit to a Current Report on
Form 8-K.
** Filed herewith.
*** The Company will file any form of Debt Securities, depositary
agreement, warrant agreement or warrants and any depositary receipt,
preferred stock certificate or certificate of designations not
previously so filed as an exhibit to a Current Report on Form 8-K.
