UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
UNITED ROAD SERVICES, INC.
--------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
---------------------------------------
(Title of Class of Securities)
911384105
---------
(CUSIP Number)
Carl L. Reisner, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
(212) 373-3000
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
July 20, 2000
-------------
(Date of Event which Requires Filing of
this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Sections 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box: o
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 240.13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 (the "Exchange Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
This document consists of 17 pages
<PAGE>
CUSIP No. 911384105
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Blue Truck Acquisition, LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
- 0 -
NUMBER OF ---------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED
BY EACH REPORTING 6,130,732.7
PERSON ---------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
- 0 -
---------------------------------------------
10 SHARED DISPOSITIVE POWER
6,130,732.7
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,130,732.7
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
74.55%
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14 TYPE OF REPORTING PERSON
HC
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Page 2 of 17
<PAGE>
CUSIP No. 911384105
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KPS Special Situations Fund, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [_]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
00
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e) [_]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
- 0 -
NUMBER OF ---------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED
BY EACH REPORTING 6,130,732.7
PERSON ---------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
- 0 -
---------------------------------------------
10 SHARED DISPOSITIVE POWER
6,130,732.7
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,130,732.7
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
74.55%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
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Page 3 of 17
<PAGE>
INTRODUCTION
On July 20, 2000, Blue Truck Acquisition, LLC, a Delaware limited
liability company ("Blue Truck"), purchased 613,073.27 shares of Series A
Participating Convertible Preferred Stock, par value $0.001 per share (the
"Series A Preferred Stock"), of United Road Services, Inc., a Delaware
corporation (the "Issuer") (the "Blue Truck Investment"). Blue Truck paid
$25,000,000 in the aggregate for, or $40.778 per share of, the Series A
Preferred Stock purchased by it.
The purchase of the Series A Preferred Stock by Blue Truck was made
pursuant to a Stock Purchase Agreement, dated as of April 14, 2000 and amended
as of May 26, 2000 (as so amended, the "Purchase Agreement"), between the Issuer
and Blue Truck, which was described in the Issuer's definitive proxy statement
mailed by the Issuer to its stockholders on or about June 14, 2000 (the "Proxy
Statement"). At a special meeting of the Issuer's stockholders held on July 20,
2000 (the "Special Meeting"), the Company's stockholders approved the Blue Truck
Investment together with the purchase by CFE, Inc. ("CFE"), a Delaware
corporation and an affiliate of General Electric Capital Corporation, of
49,045.86 shares of Series A Preferred Stock (the "CFE Investment"). The
purchase of the Series A Preferred Stock by CFE which was described in the Proxy
Statement and approved by the Issuer's stockholders at the Special Meeting was
made pursuant to a Stock Purchase Agreement, dated as of July 20, 2000, between
the Issuer and CFE. CFE paid $2,000,000 in the aggregate for, or $40.778 per
share of, the Series A Preferred Stock purchased by it.
In connection with the acquisitions by Blue Truck and CFE of the Series
A Preferred Stock and as a result of certain agreements between Blue Truck and
CFE regarding registration and tag-along rights (as more fully described below),
Blue Truck and CFE may be deemed pursuant to Rule 13d-5 promulgated under the
Exchange Act to have acted or be acting together as a group for the purpose of
acquiring, holding or disposing of equity securities of the Issuer. Blue Truck
expressly disclaims that it was or is acting together as a group with CFE and
disclaims beneficial ownership of equity securities owned by CFE.
ITEM 1. SECURITY AND ISSUER.
The class of equity securities to which this Statement on Schedule 13D
(the "Statement") relates is the common stock, par value $0.01 per share (the
"Common Stock"), of the Issuer. The principal executive offices of the Issuer
are located at 17 Computer Drive West, Albany, New York 12205.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This Statement is being filed jointly by Blue Truck Acquisition,
LLC, a Delaware corporation, and KPS Special Situations Fund, L.P., a Delaware
limited partnership ( "KPS"), which is the holder of a controlling interest in
Blue Truck. Blue Truck and KPS are sometimes referred to herein as the
"Reporting Persons." The general partner of KPS is KPS Investors, LLC, a
Delaware limited liability company (the "General Partner").
The filing of this Statement shall not be construed as an admission
that any Reporting Person is, for purposes of Section 13(d) or 13(g) of the
Exchange Act, the beneficial owner of any securities covered by this Statement
except for the securities stated herein to be beneficially owned by such
Reporting Person.
Page 4 of 17
<PAGE>
(b) The address of the principal office of Blue Truck is:
c/o KPS Special Situations Fund, L.P.
200 Park Avenue, 58th Floor
New York, New York 10166
The address of the principal office of KPS is:
200 Park Avenue, 58th Floor
New York, New York 10166
(c) Blue Truck was formed by KPS to invest in the Issuer and has no
other principal business. KPS is a private equity investment fund.
Attached as Schedule A to this Statement is information
concerning the executive officers, directors and control persons of Blue Truck
and the General Partner, which information is required to be disclosed in
response to Item 2 and Instruction C to Schedule 13D.
(d) To the knowledge of Blue Truck and KPS, neither Blue Truck, KPS nor
any of the persons referred to in Schedule A to this Statement has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) during the last five years.
(e) To the knowledge of Blue Truck and KPS, neither Blue Truck, KPS nor
any of the persons referred to in Schedule A to this Statement was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws during the last five years.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The funds for the purchase by Blue Truck of 613,073.27 shares of the
Issuer's Series A Preferred Stock in an aggregate amount equal to $25,000,000
were obtained by Blue Truck from a capital contribution provided by KPS, its
controlling member, and KPS Supplemental Fund, L.P. ("KPS Supplemental"), its
other member. KPS and KPS Supplemental obtained such funds from contributions by
their respective limited partners.
ITEM 4. PURPOSE OF TRANSACTION.
Blue Truck acquired the Series A Preferred Stock for investment
purposes. In connection with its investment, Blue Truck acquired control of the
Issuer.
Although the Reporting Persons believe that the shares which they
beneficially own are an attractive investment at this time, they continue to
monitor and evaluate their investment in the Issuer in light of pertinent
factors, including the following: (i) the Issuer's business, operations, assets,
financial condition and prospects; (ii) market, general economic and other
conditions; and (iii) other investment opportunities available to the Reporting
Persons. In light of the foregoing factors, and the plans and requirements of
the Reporting Persons from time to time, the Reporting Persons may determine to
(i) acquire additional securities of the Issuer, (ii) dispose of some or all of
the securities of the Issuer which they beneficially own, (iii) increase or
decrease their participation in the determination of the Issuer's management and
policies or (iv) propose a merger, consolidation, joint venture or other
business combination involving the Issuer or its subsidiaries or divisions, a
sale or purchase of assets or securities of the Issuer or its
Page 5 of 17
<PAGE>
subsidiaries or divisions, a recapitalization, reorganization or liquidation
involving the Issuer or its subsidiaries or divisions or other similar actions.
The Reporting Persons reserve the right, either individually or in any
combination among themselves or together with one or more of the other
stockholders of the Issuer, to determine in the future to take or cause to be
taken one or more of the foregoing actions. Any sale or disposition of shares by
the Reporting Persons may be made by means of privately negotiated sales,
registered offerings or other transactions or by seeking to cause the Issuer to
effect one or more of the transactions set forth above. In addition, the
Reporting Persons may determine to increase their interest in the Issuer through
one or more transactions in the open market.
Except as described in this Item 4 and in Item 6 which is incorporated
herein by reference, the Reporting Persons do not have either plans or proposals
that relate to or would result in: (i) the acquisition by any person of
additional securities of the issuer or any of its subsidiaries or the
disposition of securities of the Issuer or any of its subsidiaries; (ii) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Issuer or any of its subsidiaries; (iii) a sale or
transfer of a material amount of assets of the Issuer or of any of its
subsidiaries; (iv) any change in the present Board of Directors or management of
the Issuer or any of its subsidiaries, including any plans or proposals to
change the number or term of directors or to fill any existing vacancies on the
Board; (v) any material change in the present capitalization or dividend policy
of the Issuer; (vi) any other material change in the Issuer's business or
corporate structure (vii) any changes in the Issuer's charter, by-laws or
instruments corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any persons; (viii) causing a class of
securities of the Issuer to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association; (ix) any class of equity securities
of the Issuer becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Exchange Act; or (x) any action similar to any of those
enumerated above. The Reporting Persons reserve the right, either individually
or in any combination among themselves or together with one or more of the other
stockholders of the Issuer, to determine in the future to take or cause to be
taken one or more of the foregoing actions.
Control of the Board of Directors of the Issuer
Pursuant to the Purchase Agreement and in accordance with the terms of
an investors' agreement (the "Investors' Agreement"), dated as of July 20, 2000,
between the Issuer and Blue Truck, certain persons (the "Blue Truck Nominees")
nominated by Blue Truck have been appointed to a majority of the seats on the
board of directors of the Issuer (the "Board of Directors" or the "Board"). As a
result, a sufficient number of the Issuer's directors resigned and were replaced
with the Blue Truck Nominees so that the Blue Truck Nominees now control and
constitute a majority of the Board.
From and after the date of the closing (the "Closing") of the
transactions contemplated by the Purchase Agreement on July 20, 2000 (the
"Closing Date"), the Board will maintain an independent committee (the
"Independent Committee"), consisting of one of the directors nominated by the
vote of the holders of a majority of the outstanding shares of the Series A
Preferred Stock (the "Majority Holders") and all of the members of the Board of
Directors who are not Blue Truck Nominees. The Majority Holders will be entitled
to nominate the number of directors which the Original Holders (as defined
herein) will be entitled to designate and the remaining members of the Board of
Directors will be nominated by the Independent Committee. At each meeting of the
Issuer's stockholders at which directors are elected, the director nominees
proposed by the Issuer will include the nominees designated by the Majority
Holders and the nominees of the Independent Committee. In addition, so long as
Charter URS LLC ("Charterhouse") is entitled, pursuant to the terms of the
Amended and Restated Investors' Agreement, dated as of April 14, 2000 and
amended as of May 26, 2000 (as so amended, the "Charterhouse Investors'
Agreement"), to nominate members of the
Page 6 of 17
<PAGE>
Board of Directors then (i) the nominees of Charterhouse will be included among
the nominees of the Independent Committee and (ii) the Board will consist of
eleven members.
In accordance with the terms of the Investors' Agreement and the
certificate of powers, designations, preferences and rights of the Series A
Preferred Stock (the "Certificate of Designations") filed by the Issuer with the
Secretary of State of the State of Delaware, Blue Truck is entitled to designate
certain members of the Board of Directors as follows:
(a) For so long as Blue Truck or certain of its affiliates (the
"Original Holders") continue to own at least 50% of the Series A Preferred
Stock acquired by Blue Truck pursuant to the Purchase Agreement (and
adjusted for any shares of the Issuer's capital stock purchased directly
from the Issuer by Blue Truck following the Closing (collectively, the
"Original Holders Shares")), the Majority Holders are entitled to designate
a majority of the members of the Board of Directors.
(b) If the Original Holders ever own less than 50% of the Original
Holders Shares but at least 25% of the Original Holders Shares, and
regardless of whether the Original Holders subsequently regain ownership of
50% or more of such shares, the Majority Holders will thereafter be
entitled to designate three members of the Board of Directors.
(c) If the Original Holders ever own less than 25% of the Original
Holders Shares but at least 10% of the Original Holders Shares, and
regardless of whether the Original Holders subsequently regain ownership of
25% or more of such shares, the Majority Holders will thereafter be
entitled to designate one member of the Board of Directors.
(d) If the Original Holders ever own less than 10% of the Original
Holders Shares, and regardless of whether the Original Holders subsequently
regain ownership of 10% or more of such shares, the Original Holders will
thereafter not be entitled to designate any members of the Board of
Directors.
The foregoing provisions relating to election of directors are summarized in the
following table:
Number of Directors to
Percentage of Series A Preferred Stock be designated by the
Owned by the Original Holders Majority Holders
----------------------------------------- -----------------
50% or more A majority of the Board
At least 25% but less than 50% Three
At least 10% but less than 25% One
Less than 10% None
As a result, as long as the Original Holders continue to own at least
50% of the Original Holders Shares and a majority of the shares of the Series A
Preferred Stock, Blue Truck will continue to retain control of the Board and
decide the outcome of most matters to be determined by the Board of Directors.
Control of the Vote on Matters Submitted to Stockholders
Page 7 of 17
<PAGE>
Except with respect to certain elections of directors (as described
below), holders of Series A Preferred Stock will be entitled to vote on all
matters presented to a vote of the stockholders of the Issuer, voting together
with holders of the Common Stock as a single class (other than matters required
to be submitted to a class or series vote pursuant to the General Corporation
Law of the State of Delaware or the Issuer's Certificate of Incorporation or
By-laws).
At any time that (i) the Majority Holders are not entitled to designate
at least three members of the Board of Directors, or (ii) any person solicits
proxies or consents in support of or seeking the election of any director who
has not been nominated by the Board of Directors, then the holders of Series A
Preferred Stock will be entitled to vote in the election of the directors of the
Issuer (so long as, in the case of clause (ii) above, such vote is in favor of
the Board's nominees).
The holder of each share of Series A Preferred Stock is entitled to the
number of votes equal to the number of full shares of Common Stock into which
such share of Series A Preferred Stock could be converted on the record date for
such vote. Fractional votes will not, however, be permitted and any fractional
votes resulting from the foregoing formula (after aggregating all shares of
Common Stock into which shares of Series A Preferred Stock held by each holder
could be converted) will be rounded to the nearest whole number. Pursuant to the
Purchase Agreement, Blue Truck has acquired approximately 613,073.27 shares of
Series A Preferred Stock, which, as of the date hereof, constitute beneficial
ownership of approximately 74.55% of the Issuer's Common Stock. As a result,
immediately after the Closing, Blue Truck will be able to control the vote on
all matters submitted to the stockholders of the Issuer other than certain
elections of directors as described above.
Terms and Other Rights of the Series A Preferred Stock
Rank
The Series A Preferred Stock rank senior to all other existing and
future classes and series of capital stock of the Issuer as to dividends,
distributions or redemptions, or as to distribution of assets and rights upon
and following a Liquidation Event (as defined below).
Dividend Rights
Prior to the eighth anniversary of the Closing, holders of the
outstanding Series A Preferred Stock are entitled to receive cumulative
dividends on the Series A Preferred Stock each quarter at the rate per annum of
(i) 5.5% until July 20, 2006, and (ii) 5.0% thereafter, of the Series A
Preferred Base Liquidation Amount (as defined below) per share of Series A
Preferred Stock. The dividends are payable in cash at the end of each quarter
or, at the election of the Issuer, will cumulate to the extent unpaid. In the
event the Issuer does not make a scheduled dividend payment (an "arrearage"),
dividends also accrue on such arrearage at the same rate. Once an arrearage
occurs, the Issuer may no longer pay such dividend in cash, other than in
connection with a Liquidation Event. In addition, holders of the Series A
Preferred Stock are entitled to participate in all dividends payable to holders
of the Common Stock.
No dividends (other than with respect to arrearages and accruals
thereon) will accrue on the Series A Preferred Stock for the period on and after
(i) July 20, 2008 or (ii) the dividend payment date next following the date on
or after July 20, 2005 upon which the average of the closing prices of the
Common Stock exceeds, for a period of 30 consecutive trading days, 313% of the
Conversion Price (as defined below).
Liquidation Rights
Page 8 of 17
<PAGE>
Upon any liquidation, dissolution or winding up of the Issuer, whether
voluntary or involuntary (a "Liquidation Event"), each holder of outstanding
shares of Series A Preferred Stock will be entitled to be paid out of the assets
of the Issuer available for distribution to stockholders, before any amount
shall be paid or distributed to the holders of any other capital stock of the
Issuer, an amount per share of Series A Preferred Stock (the "Series A Preferred
Liquidation Preference Amount") in cash equal to the sum of (i) $40.778, subject
to certain adjustments (the "Series A Preferred Based Liquidation Amount"), plus
(ii) the amount of any and all unpaid dividends on such shares of Series A
Preferred Stock. The Majority Holders may elect to treat certain mergers or
consolidations involving the Issuer, sales of securities or substantially all of
the assets of the Issuer or capital reorganizations of the Issuer (any of the
foregoing, an "Organic Change") as a Liquidation Event.
In the event that the amounts payable with respect to the Series A
Preferred Stock upon any Liquidation Event are not paid in full, the holders of
the Series A Preferred Stock will share ratably in any distribution of assets in
proportion to the amounts that would be payable to such holders if such assets
were sufficient to permit payment in full. In the event that the Series A
Preferred Liquidation Preference Amount is paid in full, the holders of the
Series A Preferred Stock will thereafter share ratably with the holders of the
Common Stock in the value received for the remaining assets and properties of
the Issuer, if any, with distributions and payments, as the case may be, to be
made to the holders of Series A Preferred Stock as if each share of Series A
Preferred Stock had been converted into shares of Common Stock immediately prior
to such Liquidation Event.
Conversion
Any holder of the Series A Preferred Stock may elect, at any time, to
convert all or any portion of such holder's Series A Preferred Stock into a
number of shares of Common Stock equal to the sum of (i) the quotient obtained
by dividing (x) the Series A Preferred Based Liquidation Amount by (y) $4.0778,
subject to certain adjustments (the "Conversion Price") plus (ii) the quotient
obtained by dividing (x) the amount, if any, by which the Series A Preferred
Liquidation Preference Amount that has accrued at any time prior to July 20,
2005 exceeds the Series A Preferred Base Liquidation Amount by (y) the product
of the Conversion Price and 0.85.
The Conversion Price is subject to adjustment from time to time in the
event that certain specified actions are taken by the Issuer as described in the
Certificate of Designations, including stock splits, declarations of dividends,
reclassification of the Common Stock, issuance of Common Stock for less than
current market price or consummation of an Organic Change of the Issuer.
In addition, all outstanding shares of Series A Preferred Stock will
automatically convert into shares of Common Stock immediately prior to the
occurrence of an Organic Change; provided, that the Majority Holders may elect,
in lieu of such conversion, to receive the Series A Preferred Liquidation
Preference Amount for their shares of Series A Preferred Stock.
No fractional shares of Common Stock will be issued upon any conversion
of the Series A Preferred Stock. In lieu of any fractional shares to which a
holder would otherwise be entitled, the Issuer will pay such holder an amount in
cash equal to the value of such fractional interest.
Restriction on Transfer of Series A Preferred Stock
Pursuant to the terms of the Investors' Agreement, the Original Holders
may not transfer any shares of Series A Preferred Stock to any person, other
than certain affiliates of Blue Truck (the "Permitted
Page 9 of 17
<PAGE>
Transferees"), unless the Independent Committee approves such transfer and the
proposed transferee (including Permitted Transferees) agrees to be bound by the
provisions of the Investors' Agreement; provided, that the Original Holders may
transfer all or any part of their shares of Series A Preferred Stock at any time
when the average of the last reported sale prices per share of the Common Stock
for the 30 immediately preceding consecutive trading days is less than the
quotient obtained by dividing the Series A Preferred Base Liquidation Amount by
ten.
Right to Redeem
Pursuant to the terms of the Investors' Agreement, except in the event
of a transfer to an affiliate, prior to any transfer of shares of Series A
Preferred Stock by an Original Holder as permitted by the Investors' Agreement,
the Original Holders are required to offer the Issuer the right to purchase the
shares to be transferred on the same terms as apply to such transfer, except
that the price for such shares to the Issuer shall be the Series A Preferred
Liquidation Preference Amount.
Restriction on Transfer of Converted Shares
Pursuant to the terms of the Investors' Agreement, the Original Holders
may not transfer any shares of Common Stock received by such holders upon
conversion of the Series A Preferred Stock (the "Converted Shares") without the
prior approval of the Independent Committee, except as follows: (a) the Original
Holders may transfer Converted Shares to Permitted Transferees who agree in
writing to be bound by the provisions of the Investors' Agreement; (b) the
Original Holders may sell Converted Shares on any national securities exchange
or on any other market in which such shares are eligible for trading; (c) the
Original Holders may sell Converted Shares in a private transaction to any
person who, immediately following such transaction, would not own more than 15%
of the then outstanding Common Stock (on a fully diluted basis); and (d) the
Original Holders may sell Converted Shares in a private transaction or in any
merger, consolidation or similar business combination in which all stockholders
of the Issuer are offered the right to participate on identical terms in
proportion to their ownership interests (a transaction would qualify under this
clause (d) even if any or all stockholders are required to retain up to 15% of
the shares of capital stock of the Issuer in such transaction, or otherwise, if
it is approved by the Independent Committee).
Preemptive Rights
Pursuant to the terms of the Investors' Agreement, the Issuer may not
issue any Common Stock or other capital stock of the Issuer (subject to certain
exceptions with respect to certain stock option plans, acquisitions, registered
offerings and other events), unless the Issuer offers in writing to the Original
Holders the right to purchase, at the same price and on the same terms, a
portion of the offered shares equal to the product of (a) the total number of
offered shares, multiplied by (b) a fraction, the numerator of which is the
number of shares of capital stock owned by the Original Holders and the
denominator of which is the total number of outstanding shares (on a fully
diluted, as converted basis).
Registration Rights
The Issuer, Blue Truck and CFE have entered into a Registration Rights
Agreement, dated as of July 20, 2000 (the "Registration Rights Agreement"),
pursuant to which (x) Blue Truck or any holders that in the aggregate own at
least 25% of (i) the shares of Common Stock issuable upon conversion of the
Series A Preferred Stock, (ii) the shares of Common Stock acquired by Blue Truck
and CFE after the Closing, and (iii) the shares of Common Stock issued to Blue
Truck and CFE as a dividend or distribution (the "Registrable Securities") or
(y) CFE, is entitled to demand that the Issuer, at any time (on up to four
occasions, no more than three of which demands may be made by Blue Truck and no
more than one of which
Page 10 of 17
<PAGE>
demands may be made by CFE), file a registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), covering the sale of Registrable
Securities by such holders. In addition, all holders of Registrable Securities
are entitled to require the Issuer to include Registrable Securities in certain
other registration statements filed by the Issuer covering the public sale of
its Common Stock.
The Registration Rights Agreement contains other customary provisions,
including indemnification provisions with respect to liabilities resulting from
materially false and misleading statements in or omissions from such
registration statements.
Antitakeover Effect
The terms of the Series A Preferred Stock and the rights of Blue Truck
in connection therewith together with the significant ownership interests of
Blue Truck could effectively deter a third party from making an offer to acquire
the Issuer, which might involve a premium over the current stock price or other
benefits for stockholders, or otherwise prevent changes in the control or
management of the Issuer. There are no restrictions, in the form of a standstill
agreement or otherwise, on the ability of Blue Truck, KPS, CFE or their
respective affiliates to purchase additional securities of the Issuer and
thereby to further consolidate their respective ownership interests in the
Issuer. In light of the Board of Directors' approval of the Blue Truck
Investment and the CFE Investment, Section 203 of the General Corporation Law of
the State of Delaware will not apply in the event that Blue Truck or CFE seek to
effect a future business combination with the Issuer.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Blue Truck is the record and beneficial owner of 613,073.27 shares
of Series A Preferred Stock valued at $40.778 per share. Based on the conversion
price of $4.0778 and assuming conversion of all such shares of Series A
Preferred Stock, Blue Truck is the beneficial owner of 6,130,732.7 shares of
Common Stock, which, based on calculations made in accordance with Rule 13d-3
promulgated under the Exchange Act and, as of July 20, 2000, there being
8,224,029.7 shares of Common Stock issued and outstanding, represents
approximately 74.55% of the issued and outstanding Common Stock of the Issuer.
KPS, as the controlling member of Blue Truck, may, pursuant to
Rule 13d-3 promulgated under the Exchange Act and based on there being
8,224,029.7 shares of Common Stock issued and outstanding, be deemed to be the
beneficial owner of 6,130,732.7 shares of Common Stock, representing
approximately 74.55% of the issued and outstanding Common Stock of the Issuer.
(b) Each of Blue Truck and KPS, as the controlling member of Blue
Truck, have shared voting power and shared dispositive power of all of the
6,130,732.7 shares of Common Stock beneficially owned, as of the date hereof, by
Blue Truck and which, pursuant to Rule 13d-3 of the Exchange Act, KPS may be
deemed to beneficially own.
To the knowledge of Blue Truck and KPS, none of the persons or entities
listed in response to this Item 5(b) nor any executive officer, director or
controlling person of any of them, has, during the last five years, been
convicted in any criminal proceeding excluding traffic violations or similar
misdemeanors.
To the knowledge of Blue Truck and KPS, none of the persons or entities
listed in response to this Item 5(b) nor any executive officer, director or
controlling person of any of them, has, during the last five years, been a party
to a civil proceeding or a judicial or administrative body of competent
jurisdiction as a result of which it was or is subject to a judgment, decree or
final order enjoining violations of, or
Page 11 of 17
<PAGE>
prohibiting or mandating activities subject to, federal or state securities
laws, or finding any violation with respect to such laws.
(c) Neither Blue Truck, KPS nor, to the knowledge of Blue Truck and
KPS, any of the persons identified on Schedule A to this Statement has effected
any transactions in the Issuer's Common Stock during the past 60 days, except as
set forth herein.
(d) To the knowledge of Blue Truck and KPS, only Blue Truck and KPS
have the right to receive, or the power to direct the receipt of dividends from,
or the proceeds from the sale of the shares of Common Stock of the Issuer
reported herein as beneficially owned by Blue Truck and KPS.
(e) Paragraph (e) of Item 5 is inapplicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Reference is made to Item 4 of this Statement, which is incorporated by
reference herein, for the description of the contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons named in
Item 2 of this Statement and between such persons and any person with respect to
any securities of the Issuer, including but not limited to the transfer or
voting of any of the securities, finder's fees, joint ventures, loan or option
agreements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
Pursuant to the terms of a letter, dated July 20, 2000 (the "Letter
Agreement"), between CFE and Blue Truck, Blue Truck has agreed that in the event
Blue Truck or any of its Permitted Transferees shall sell shares of Series A
Preferred Stock or Common Stock receivable upon conversion of the Series A
Preferred Stock (other than sales pursuant to Rule 144 of the Securities Act or
sales to Permitted Transferees), then CFE will have the right to participate in
such a sale on a pro rata basis with Blue Truck.
Blue Truck and KPS have entered into an assignment agreement, dated as
of July 20, 2000, pursuant to which Blue Truck has assigned to KPS Blue Truck's
rights to elect and designate directors to the Board of Directors pursuant to
the Investors' Agreement.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 Stock Purchase Agreement, dated as of April 14, 2000, by and
among the Issuer and Blue Truck, which is incorporated herein by
reference to Appendix A to the Issuer's Definitive Proxy
Statement, dated June 13, 2000.
Exhibit 2 Amendment No. 1 to Stock Purchase Agreement, dated as of May 26,
2000, by and among the Issuer and Blue Truck, which is
incorporated herein by reference to Appendix F to the Issuer's
Definitive Proxy Statement, dated June 13, 2000.
Exhibit 3 Certificate of Powers, Designations, Preferences and Rights of
the Series A Participating Convertible Preferred Stock, par value
$0.001 per share of the Issuer.
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<PAGE>
Exhibit 4 Certificate of Correction of Certificate of Powers, Designations,
Preferences and Rights of the Series A Participating Convertible
Preferred Stock, par value $0.001 per share, of the Issuer.
Exhibit 5 Investors' Agreement, dated as of July 20, 2000, between the
Issuer and Blue Truck.
Exhibit 6 Registration Rights Agreement, dated as of July 20, 2000, between
the Issuer, Blue Truck and CFE.
Exhibit 7 Side Letter, dated as of July 20, 2000, between Blue Truck and
CFE re: Tag Along Rights.
Exhibit 8 Assignment Agreement, dated as of July 20, 2000, by and among
Blue Truck and KPS.
Page 13 of 17
<PAGE>
SIGNATURE
After reasonable inquiry and to my best knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: July 28, 2000
BLUE TRUCK ACQUISITION, LLC
By: /s/ Michael Psaros
----------------------------------
Michael Psaros
President
KPS SPECIAL SITUATIONS FUND, L.P.
By: KPS Investors, LLC
its general partner
By: /s/ Michael Psaros
----------------------------------
Michael Psaros
Member
Page 14 of 17
<PAGE>
SCHEDULE A
----------
INFORMATION WITH RESPECT TO MEMBERS AND
EXECUTIVE OFFICERS OF BLUE TRUCK ACQUISITION, LLC
-------------------------------------------------
The following information sets forth the name, business address and
present principal occupation of each of the members and executive officers of
Blue Truck. Except as indicated below, the business address of each director and
executive officer of Blue Truck is c/o KPS Special Situations Fund, L.P., 200
Park Avenue, 58th Floor, New York, New York 10166. Each of the executive
officers of Blue Truck is a citizen of the United States.
BUSINESS ADDRESS AND PRESENT
NAME PRINCIPAL OCCUPATION
--------- -------------------------------------------------
Members of
Blue Truck
----------
KPS Special A private equity fund.
Situations Fund, L.P.
KPS Supplemental A private equity fund.
Fund, L.P.
Executive Officers
of Blue Truck
-------------
Michael Psaros Principal of KPS Special Situations Fund, L.P., a
(President) private equity fund.
Stephen Presser General Counsel of KPS Special Situations Fund,
(Vice President) L.P., a private equity fund.
Eugene Keilin Principal of KPS Special Situations Fund, L.P., a
(Vice President) private equity fund.
David Shapiro Principal of KPS Special Situations Fund, L.P., a
(Treasurer) private equity fund.
Raquel Palmer Associate of KPS Special Situations Fund, L.P., a
(Secretary) private equity fund.
Chris Lenzi Associate of KPS Special Situations Fund, L.P., a
(Assistant Secretary) private equity fund.
Page 15 of 17
<PAGE>
INFORMATION WITH RESPECT TO MEMBERS
AND MANAGERS OF KPS INVESTORS, LLC
----------------------------------
The following information sets forth the name, business address and
present principal occupation of each of the members and managers of the General
Partner. Except as indicated below, the business address of each director and
executive officer of the General Partner is c/o KPS Special Situations Fund,
L.P., 200 Park Avenue, 58th Floor, New York, New York 10166. Each of the members
and managers of the General Partner is a citizen of the United States.
Pursuant to Rule 13d-3 promulgated pursuant the Exchange Act, KPS
Investors, LLC, as the General Partner of KPS, and Messrs. Psaros, Keilin and
Shapiro may be deemed to be control persons of the Reporting Persons and may be
deemed to have voting and/or investment power over the shares of Series A
Preferred Stock held by the Reporting Persons. The General Partner and each of
Messrs. Psaros, Keilin and Shapiro disclaim such control and power and the
beneficial ownership of any securities of the Issuer.
BUSINESS ADDRESS AND PRESENT
NAME PRINCIPAL OCCUPATION
--------- -------------------------------------------------
Members of the
General Partner
---------------
Michael Psaros Principal of KPS Special Situations Fund, L.P., a
private equity fund.
Stephen Presser General Counsel of KPS Special Situations Fund,
L.P., a private equity fund.
Eugene Keilin Principal of KPS Special Situations Fund, L.P., a
private equity fund.
David Shapiro Principal of KPS Special Situations Fund, L.P., a
private equity fund.
Raquel Palmer Associate of KPS Special Situations Fund, L.P., a
private equity fund.
Brian Riley Associate of KPS Special Situations Fund, L.P., a
private equity fund.
Managers of the
General Partner
---------------
Michael Psaros Principal of KPS Special Situations Fund, L.P., a
private equity fund.
Eugene Keilin Principal of KPS Special Situations Fund, L.P., a
private equity fund.
David Shapiro Principal of KPS Special Situations Fund, L.P., a
private equity fund.
Page 16 of 17
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
No. Description
--- -----------
1 Stock Purchase Agreement, dated as of April 14, 2000, by and
among the Issuer and Blue Truck, which is incorporated
herein by reference to Appendix A to the Issuer's Definitive
Proxy Statement, dated June 13, 2000.
2 Amendment No. 1 to Stock Purchase Agreement, dated as of May
26, 2000, by and among the Issuer and Blue Truck, which is
incorporated herein by reference to Appendix F to the
Issuer's Definitive Proxy Statement, dated June 13, 2000.
3 Certificate of Powers, Designations, Preferences and Rights
of the Series A Participating Convertible Preferred Stock,
par value $0.001 per share of the Issuer.
4 Certificate of Correction of Certificate of Powers,
Designations, Preferences and Rights of the Series A
Participating Convertible Preferred Stock, par value $0.001
per share of the Issuer.
5 Investors' Agreement, dated as of July 20, 2000, between the
Issuer and Blue Truck.
6 Registration Rights Agreement, dated as of July 20, 2000,
between the Issuer, Blue Truck and CFE.
7 Side Letter, dated as of July 20, 2000, between Blue Truck
and CFE re: Tag Along Rights.
8 Assignment Agreement, dated as of July 20, 2000, by and
among Blue Truck and KPS.
Page 17 of 17
