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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 21, 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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CAPROCK COMMUNICATIONS CORP.
(Exact name of registrant as specified in its charter)
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TEXAS 1731 75-2765572
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
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MR. JERE W. THOMPSON, JR.
CAPROCK COMMUNICATIONS CORP. CHIEF EXECUTIVE OFFICER
15601 DALLAS PARKWAY, SUITE 700 CAPROCK COMMUNICATIONS CORP.
DALLAS, TX 75248 15601 DALLAS PARKWAY, SUITE 700
(972) 982-9500 DALLAS, TX 75248
(Address, including zip code, and telephone (972) 982-9500
number, (Name, address, including zip code, and telephone
including area code, of registrant's principal number,
executive office) including area code, of agent for service)
</TABLE>
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Copies to:
A. MICHAEL HAINSFURTHER
MARK A. KOPIDLANSKY
MUNSCH HARDT KOPF & HARR, P.C.
1445 ROSS AVENUE, 4000 FOUNTAIN PLACE
DALLAS, TEXAS 75202-2790
(214) 855-7500
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the date on which 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 to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH PROPOSED MAXIMUM PROPOSED MAXIMUM
CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED(1) REGISTERED(2) PER UNIT(3) PRICE(2)(3) REGISTRATION FEE
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Debt securities(4).......................
Preferred stock, par value $.01 per
share(5).................................
Common stock, par value $.01 per
share(6).................................
Total.................................... $900,000,000 100% $900,000,000 $237,600(7)
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</TABLE>
(1) Securities registered hereunder may be sold separately, together, or as
units with other securities registered hereunder.
(2) In U.S. Dollars or the equivalent thereof denominated in foreign currencies
or units of two or more foreign currencies or composite currencies (such as
European Currency Units). In no event will the aggregate maximum offering
price of all securities issued pursuant to this Registration Statement
exceed $900,000,000, or, if any debt securities are issued with original
issue discount, such greater amount as shall result in an aggregate offering
price of $900,000,000.
(3) Estimated solely for purposes of calculating the registration fee. The
aggregate public offering price of securities sold will not exceed
$900,000,000 (see Note (2) above). No separate consideration will be
received for common stock, preferred stock or debt securities that are
issued upon conversion or exchange of debt securities or preferred stock
registered hereunder.
(4) Subject to Note (2), such indeterminate principal amount of debt securities
(which may be senior or subordinated).
(5) Subject to Note (2), such indeterminate number of shares of preferred stock
as may from time to time be issued at indeterminate prices or issuable upon
conversion of debt securities.
(6) Subject to Note (2), there is being registered hereunder an indeterminate
number of shares of common stock as may from time to time be issued by the
registrant at indeterminate prices or issuable upon conversion or exchange
of debt securities or preferred stock registered hereunder, or as may be
sold by the selling shareholders.
(7) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o).
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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 COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is
not an offer to sell these securities and we are not soliciting offers to
buy these securities in any state where the offer or sale is not
permitted.
SUBJECT TO COMPLETION, DATED MARCH 21, 2000
PROSPECTUS
[LOGO]
CAPROCK COMMUNICATIONS CORP.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
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We may offer from time to time any combination of these securities in one
or more offerings, and certain of our shareholders may offer from time to time
shares of common stock. We will not receive any proceeds from the sale of shares
by the selling shareholders. For information on the methods of sale, you should
refer to the section entitled "Plan of Distribution."
We will provide specific terms of these securities and their offering
prices in supplements to this prospectus.
In the case of debt securities, these terms will include, as applicable,
the specific designation, aggregate principal amount, maturity, rate or formula
of interest, premium and terms for redemption. In the case of shares of
preferred stock, these terms will include, as applicable, the specific title and
stated value, any dividend, liquidation, redemption, conversion, voting and
other rights. In the case of common stock, these terms will include the
aggregate number of shares offered.
The aggregate initial offering price of all of the securities which may be
sold pursuant to this prospectus will not exceed U.S. $900,000,000, or its
equivalent based on the applicable exchange rate at the time of issue in one or
more foreign currencies or currency units as shall be designated by CapRock
Communications Corp.
Our common stock is quoted on the Nasdaq National Market under the symbol
CPRK. The applicable prospectus supplement will contain information, where
applicable, as to any other listing on the Nasdaq National Market or any
securities exchange of the securities covered by the prospectus supplement.
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You should read this prospectus and any prospectus supplement carefully
before you invest. THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE THE SALES OF
THE SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
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SEE "RISK FACTORS" ON PAGE 3 FOR A DISCUSSION OF MATTERS THAT YOU SHOULD
CONSIDER BEFORE INVESTING IN THESE SECURITIES.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is , 2000.
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TABLE OF CONTENTS
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PAGE
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About This Prospectus....................................... 1
Where You Can Find More Information......................... 1
The Company................................................. 2
Risk Factors................................................ 3
Ratio of Earnings to Fixed Charges and Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividends...... 3
Use of Proceeds............................................. 3
Description of Debt Securities.............................. 3
Description of Preferred Stock.............................. 10
Description of Common Stock................................. 11
Description of Outstanding Material Indebtedness............ 11
Description of Outstanding Capital Stock.................... 12
Selling Shareholders........................................ 13
Plan of Distribution........................................ 14
Legal Matters............................................... 16
Experts..................................................... 16
</TABLE>
(ii)
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ABOUT THIS PROSPECTUS
This prospectus provides you with a general description of the securities
we and certain of our shareholders may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add, update
or change information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with additional information
described under the heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (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. These
documents are also available at the public reference rooms at the SEC's regional
offices in New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available at the offices of the Nasdaq National Market in
Washington, D.C.
The SEC allows us to "incorporate by reference" the information we file
with it, 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. This
prospectus incorporates by reference our documents listed below and any future
filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until we sell all of the securities:
- Annual Report on Form 10-K for the year ended December 31, 1998;
- Quarterly reports on Form 10-Q for the quarters ended March 31, 1999,
June 30, 1999 and September 30, 1999;
- Current reports on Form 8-K filed June 11, 1999, October 20, 1999 and
December 13, 1999; and
- Registration statement on Form 8-A filed July 6, 1998.
Potential investors may obtain a copy of any of the agreements summarized
herein (subject to certain restrictions because of the confidential nature of
the subject matter) or any of our SEC filings without charge by written or oral
request directed to CapRock Communications Corp., Attention: Secretary, 15601
Dallas Parkway, Suite 700, Dallas, Texas 75248, (972) 982-9500. We maintain a
worldwide web site at www.caprock.com. The reference to our worldwide web
address does not constitute incorporation by reference of the information
contained at the site.
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.
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THE COMPANY
CapRock Communications Corp. ("CapRock") is a leading facilities-based
integrated communications service provider to small and medium-sized business
and communications carrier customers in the Southwestern United States. We offer
business customers an integrated bundle of communications products and services
including local exchange, local access, domestic and international long
distance, enhanced voice, data, Internet and dedicated private line services.
Additionally, we offer our communications-intensive and carrier customers dark
fiber, high bandwidth dedicated fiber infrastructure, terminating access for
domestic and international long distance and ATM, frame relay and IP data
transport services.
Our communications services are provided over our scalable fiber, voice and
data networks, which upon completion, will connect nearly every Tier I, Tier II
and Tier III markets in the six-state region of Texas, Louisiana, Arkansas,
Oklahoma, New Mexico and Arizona. At year-end 1999, our inter-city long-haul
fiber network consisted primarily of 96 fiber strands covering approximately
3,000 route miles, which we expect to expand to approximately 7,000 route miles
by year-end 2000. Additionally, at year-end 1999, we provided switch-based
competitive local exchange services to ten markets, which we expect to expand to
approximately 48 markets by year-end 2000. We currently have 11 voice and 13
data switches installed and operational on our network. We believe that our
current and planned networks will provide our customer base the most
comprehensive service alternative to the incumbent telecommunications service
providers in our region.
Our principal executive offices are located at 15601 Dallas Parkway, Suite
700, Dallas, Texas 75248, and our telephone number is (972) 982-9500.
RECENT DEVELOPMENTS
Please see the applicable prospectus supplement and our recent public
filings for recent developments.
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RISK FACTORS
Before you invest in our securities, you should carefully consider the
risks involved. These risks include, but are not limited to, any risks that may
be described in other filings we make with the SEC or in the prospectus
supplements relating to specific offerings of securities.
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The ratio of earnings to fixed charges and earnings to combined fixed
charges and preferred stock dividends for each of the periods indicated is as
follows:
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NINE MONTHS
ENDED
SEPTEMBER 30, FISCAL YEAR ENDED
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1999 1998 1998 1997 1996 1995 1994
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Ratio of earnings to fixed charges............... -- 1.5 1.1 2.6 1.5 1.0 --
Ratio of earnings to combined fixed charges and
preferred stock dividends...................... -- 1.5 1.1 2.6 1.5 1.0 --
</TABLE>
For this ratio, earnings consist of earnings (loss) before income taxes,
minority interest and discontinued operations plus fixed charges excluding
capitalized interest. Fixed charges consist of interest expensed and
capitalized, amortized premiums, discounts and capitalized expenses related to
indebtedness, plus the portion of rent expense under operating leases deemed by
us to be representative of the interest factor. We had deficiencies of earnings
to fixed charges of approximately $5.6 million for the nine months ended
September 30, 1999, and approximately $358,000 for 1994.
USE OF PROCEEDS
Unless the applicable prospectus supplement states otherwise, the net
proceeds from the sale of the offered securities will be used to fund the
development and growth of our communications networks and business and for
potential business acquisitions, working capital and general corporate purposes.
Until we use the net proceeds in this manner, we may temporarily use them to
make short-term investments or reduce short-term borrowings.
We will not receive any proceeds from the sale of any shares of common
stock by the selling shareholders.
DESCRIPTION OF DEBT SECURITIES
This section describes the general terms and provisions of the debt
securities. The applicable prospectus supplement will describe the specific
terms of the debt securities offered through that prospectus supplement as well
as any general terms described in this section that will not apply to those debt
securities.
The debt securities will be our direct unsecured general obligations and
may include debentures, notes, bonds and/or other evidences of indebtedness. The
debt securities will be either senior debt securities or subordinated debt
securities. The debt securities will be issued under one or more separate
indentures between us and an institution to be named in the applicable
prospectus supplement as trustee. Senior debt securities will be issued under a
senior indenture, and subordinated debt securities will be
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issued under a subordinated indenture. Together, the senior indentures and the
subordinated indentures are called indentures.
We have summarized selected provisions of the indentures below. The summary
is not complete. We have also filed the forms of the indentures as exhibits to
the registration statement. You should read the indentures for provisions that
may be important to you before you buy any debt securities.
GENERAL TERMS OF DEBT SECURITIES
The debt securities issued under any indenture may be issued in one or more
series. Each indenture may provide that there may be more than one trustee under
the indenture, each with respect to one or more series of debt securities. The
indentures may provide that any trustee under any indenture may resign or be
removed with respect to one or more series of debt securities issued under that
indenture, and a successor trustee may be appointed to act with respect to that
series.
If two or more persons are acting as trustee with respect to different
series of debt securities issued under the same indenture, each of those
trustees will be a trustee of a trust under that indenture separate and apart
from the trust administered by any other trustee. In that case, except as may
otherwise be indicated in an applicable prospectus supplement, any action
described in the applicable prospectus supplement to be taken by the trustee may
be taken by each of those trustees only with respect to the one or more series
of debt securities for which it is trustee.
A prospectus supplement relating to a series of debt securities being
offered will include specific terms relating to the offering and that series.
These terms will contain some or all of the following and may include other
terms:
- the title of the debt securities;
- any limit on the aggregate principal amount of the debt securities;
- the purchase price of the debt securities, expressed as a percentage of
the principal amount;
- the date or dates on which the principal of and any premium on the debt
securities will be payable or the method for determining the date or
dates;
- if the debt securities will bear interest, the interest rate or rates or
the method by which the rate or rates will be determined;
- if the debt securities will bear interest, the date or dates from which
any interest will accrue, the interest payment dates on which any
interest will be payable, the record dates for those interest payment
dates and the basis upon which interest shall be calculated if other than
that of a 360 day year of twelve 30-day months;
- the place or places where payments on the debt securities will be made
and the debt securities may be surrendered for registration of transfer
or exchange;
- if we will have the option to redeem all or any portion of the debt
securities, the terms and conditions upon which the debt securities may
be redeemed;
- the terms and conditions of any sinking fund or other similar provisions
obligating us or permitting a holder to require us to redeem or purchase
all or any portion of the debt securities prior to final maturity;
- the currency or currencies in which the debt securities are denominated
and payable if other than U.S. dollars;
- whether the amount of any payments on the debt securities may be
determined with reference to an index, formula or other method and the
manner in which such amounts are to be determined;
- any additions or changes to the events of default in the respective
indentures;
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- the percentage of the principal amount of debt held by the holders
necessary to require the trustee to take action;
- any terms, conditions or restrictions upon the issuance of additional
debt;
- any terms, conditions or restrictions on dividends or distribution on any
capital stock;
- any additions or changes with respect to the other covenants in the
respective indentures;
- the terms and conditions, if any, upon which the debt securities may be
convertible into common stock or preferred stock;
- whether the debt securities will be issued in certificated or book-entry
form;
- whether the debt securities will be in registered or bearer form and, if
in registered form, the denominations of the debt securities if other
than $1,000 and multiples of $1,000;
- the applicability of the defeasance and covenant defeasance provisions of
the applicable indenture;
- provisions relating to the modification of the terms of the indentures;
- any subordination provisions; and
- any other terms of the debt securities consistent with the provisions of
the applicable indenture.
Debt securities may be issued under the indentures as original issue
discount securities to be offered and sold at a substantial discount from their
stated principal amount. Special Federal income tax, accounting and other
considerations applicable to original issue discount securities will be
described in the applicable prospectus supplement.
Unless otherwise provided with respect to a series of debt securities, the
debt securities will be issued only in registered form, without coupons, in
denominations of $1,000 and multiples of $1,000.
SOME COVENANTS
Under the indentures, we will be required to:
- pay the principal, interest and any premium on the debt securities when
due;
- maintain a place of payment;
- deliver a report to the trustee at the end of each fiscal year reviewing
our obligations under the indentures; and
- deposit sufficient funds with any paying agent on or before the due date
for any payment of principal, interest or any premium.
An indenture may or may not include other covenants which will be described
in the applicable prospectus supplement.
PAYMENT AND TRANSFER
Unless we designate otherwise, we will pay principal, interest and any
premium on fully registered securities in New York, New York. We will make
interest payments by check mailed to the persons in whose names the debt
securities are registered on days specified in the indentures or any prospectus
supplement. We will make debt securities payments in other forms at a place we
designate and specify in a prospectus supplement. You may transfer or exchange
fully registered debt securities at the corporate trust office of the trustee or
at any other office or agency maintained by us for these purposes, without
having to pay any service charge except for any tax or governmental charge.
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OUR SENIOR DEBT SECURITIES
Generally speaking, our senior debt securities will rank equally with all
of our other senior debt and unsubordinated debt. As of September 30, 1999, the
total amount of our debt that would rank equally with our senior debt securities
was approximately $347.2 million, net of discount and unamortized debt issuance
costs. See "Description of Outstanding Material Indebtedness." All series of
senior debt securities will rank equally in right of payment with each other.
Senior debt is defined to include all notes or other unsecured evidences of
indebtedness, including our guarantees, not expressed to be subordinate or
junior in right of payment to any other indebtedness that we have.
OUR SUBORDINATED DEBT SECURITIES
Our subordinated debt securities will have a junior position to all of our
senior debt. Under the subordinated indentures, payment of the principal,
interest and any premium on the subordinated debt securities will generally be
subordinated and junior in right of payment to the prior payment in full of all
senior debt. The subordinated indentures may provide that no payment of
principal, interest or any premium on the subordinated debt securities may be
made in the event:
- of any insolvency, bankruptcy or similar proceeding involving us or our
property until we have paid holders of our senior debt in full; or
- we fail to pay the principal, interest, any premium or any other amounts
on any senior debt when due.
Any subordinated debt securities offered pursuant to the subordinated
indentures will rank junior in right of payment to all senior debt.
The subordinated indentures may prohibit us from making for a specified
time period any payment of principal of or premium, if any, or interest on, or
sinking fund requirements for, the subordinated debt securities during the
continuance of any default in respect of some senior debt, unless and until the
default on the senior debt is cured or waived.
Upon any distribution of our assets in connection with any dissolution,
winding up, liquidation, reorganization, bankruptcy or other similar proceeding
relative to us, our creditors or our property, the holders of our senior debt
will first be entitled to receive payment in full of the principal thereof and
premium, if any, and interest due on the senior debt securities before the
holders of the subordinated debt securities are entitled to receive any payment
of the principal of and premium, if any, or interest on the subordinated debt
securities.
GLOBAL CERTIFICATES
The debt securities of a series may be issued in whole or in part in the
form of one or more global certificates that will be deposited with a depository
identified in a prospectus supplement.
The specific terms of the depository arrangements with respect to any debt
securities of a series will be described in a prospectus supplement.
Unless otherwise specified in a prospectus supplement, debt securities
issued in the form of a global certificate to be deposited with a depository
will be represented by a global certificate registered in the name of the
depository or its nominee. Upon the issuance of a global certificate in
registered form, the depository for the global certificate will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the debt securities represented by the global certificate to the accounts of
institutions that have accounts with the depository or its nominee. The
depository or its nominee are referred to in this prospectus as participants.
The accounts to be credited shall be designated by the underwriters or agents of
the debt securities, or by us if the debt securities are offered and sold
directly by us. Ownership of beneficial interests in a global certificate will
be limited to participants or persons that
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may hold interests through participants. Ownership of beneficial interests by
participants in a global certificate will be shown on, and the transfer of that
ownership interest will be effected only through, records maintained by the
depository or its nominee for the global certificate. Ownership of beneficial
interests in a global certificate by persons that hold through participants will
be shown on, and the transfer of that ownership interest within a participant
will be effected only through, records maintained by that participant. The laws
of some jurisdictions require that some purchasers of securities take physical
delivery of their securities in definitive form. These limits and laws may
impair your ability to transfer beneficial interests in a global certificate.
So long as the depository for a global certificate in registered form, or
its nominee, is the registered owner of the global certificate, the depository
or its nominee, as the case may be, will be considered the sole owner or holder
of the debt securities of the series represented by the global certificate for
all purposes under the indentures. Except as set forth below, owners of
beneficial interests in a global certificate will not be entitled to have debt
securities of the series represented by the global certificate registered in
their names, will not receive or be entitled to receive physical delivery of
debt securities in definitive form, and will not be considered the owners or
holders of the global certificate under the applicable indenture.
Payment of principal of, premium, if any, and any interest on debt
securities of a series registered in the name of or held by a depository or its
nominee will be made to the depository or its nominee, as the case may be, as
the registered owner or the holder of a global certificate representing the debt
securities. None of us, the trustee, any paying agent, or the applicable debt
security registrar for the debt securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a global certificate for debt securities or
for maintaining, supervising or reviewing any records relating to beneficial
ownership interests.
We expect that the depository for debt securities of a series, upon receipt
of any payment of principal, premium or interest in respect of a permanent
global certificate, will credit immediately participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the
principal amount of the global certificate as shown on the records of the
depository. We also expect that payments by participants to owners of beneficial
interests in a global certificate held through those participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in street name, and those payments will be the responsibility of the
participants. However, we have no control over the practices of the depository
and/or the participants and there can be no assurance that these practices will
not be changed.
Unless it is exchanged in whole or in part for debt securities in
definitive form, a global certificate may generally be transferred only as a
whole unless it is being transferred to particular nominees of the depository.
Unless otherwise stated in any prospectus supplement, an institution to be
named in the applicable prospectus supplement will act as depository. Beneficial
interests in global certificates will be shown on, and transfers of global
certificates will be effected only through, records maintained by the depository
and its participants.
EVENTS OF DEFAULT
Under the indentures an event of default, unless a prospectus supplement
provides otherwise, will mean any of the following:
- failure to pay the principal or any premium on any debt security when
due;
- failure to deposit any sinking fund payment when due;
- failure to pay interest on any debt security for 30 days;
- failure to perform any other covenant in the indenture that continues for
60 days after being given written notice;
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- some events involving our bankruptcy, insolvency or reorganization; or
- any other event of default included in any indenture or supplemental
indenture.
An event of default for a particular series of debt securities will not
necessarily constitute an event of default for any other series of debt
securities issued under an indenture.
If an event of default for any series of debt securities occurs and
continues, the trustee or the holders of at least 25% of the total principal
amount of the debt securities of the series may declare the entire principal of
that series due and payable immediately. If this happens, the holders of a
majority of the aggregate principal amount of the debt securities of that series
can waive certain past defaults and rescind and annul such acceleration, subject
to certain conditions.
The indentures will limit the right to institute legal proceedings. No
holder of any debt securities will have the right to bring a claim under an
indenture unless:
- the holder has given written notice of default to the trustee;
- the holders of not less than 25% of the aggregate principal amount of
debt securities of the series shall have made a written request to the
trustee to bring the claim and furnished the trustee reasonable
indemnification as the trustee may require;
- the trustee has not commenced an action within 60 days of receipt of the
notice and indemnification; and
- no direction inconsistent with the request has been given to the trustee
by the holders of not less than a majority of the aggregate principal
amount of the debt securities of the series then outstanding.
Subject to applicable law and any applicable subordination provisions, the
holders of debt securities may enforce payment of the principal of or premium,
if any, or interest on their debt securities.
The holders of a majority in aggregate principal amount of any series of
debt securities may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising any power
conferred on the trustee, provided, however, that the trustee may decline to
follow the holders' direction if, being advised by counsel, the trustee
determines that the action is not lawful, or if the trustee in good faith
determines that the action would unduly prejudice the holders of the debt
securities not taking part in the action or would impose personal liability on
the trustee.
Each indenture will provide that, in case an event of default in respect of
a particular series of debt securities has occurred, the trustee is to use the
degree of care of a prudent person in the conduct of such person's own affairs.
Subject to these provisions, the trustee is under no obligation to exercise any
of its rights or power under the indenture at the request of any of the holders
of the debt securities of any series unless they have furnished to the trustee
reasonable security or indemnity.
We will be required to furnish to the trustee an annual statement as to our
fulfillment of all of our obligations under the relevant indenture.
DEFEASANCE
We will be discharged from our obligations on the debt securities of any
series at any time we deposit with the trustee sufficient cash or government
securities to pay the principal, interest, any premium and any other sums due to
the stated maturity date or a redemption date of the debt securities of the
series. If this happens, the holders of the debt securities of the series will
not be entitled to the benefits of the indenture except for registration of
transfer and exchange of debt securities and replacement of destroyed, lost,
stolen or mutilated debt securities.
We may only effect such a defeasance if, among other things, we have
delivered to the trustee either a ruling directed to the trustee from the
Internal Revenue Service or an opinion of counsel (as specified in
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the indenture) to the effect that the holders of the debt securities will not
recognize income, gain or loss for Federal income tax purposes as a result of
the deposit and discharge and will be subject to Federal income tax on the same
amounts and in the same manner and at the same times as would have been the case
if the deposit and defeasance had not occurred.
CONSOLIDATION, MERGER OR SALE
The indentures may limit or restrict our ability to consolidate or merge
with or into any other entity or sell all or substantially all of our assets.
These limitations or restrictions, if any, will be described in the applicable
prospectus supplement, and we expect that they generally will include that:
- we are the continuing corporation or, if not, that any successor or
purchaser is an entity organized under the laws of the United States of
America or any State thereof, and that such entity expressly assumes our
obligations on the debt securities under a supplemental indenture; and
- immediately before and after giving effect to the transaction, no event
of default shall exist and be continuing.
The remaining or acquiring entity will be substituted for us in the indentures
with the same effect as if it had been an original party to the indentures and
shall assume all of our responsibilities and liabilities under the indentures
including the payment of all amounts due on the debt securities and performance
of the covenants in the indentures. Thereafter, the successor entity may
exercise our rights and powers under any indenture, in our name or in its own
name. Any act or proceeding required or permitted to be done by our board of
directors or any of our officers may be done by the board or officers of the
successor entity.
MODIFICATION OF THE INDENTURES
Under each indenture, we may modify our rights and obligations and the
rights of the holders with the consent of the holders of a majority in aggregate
principal amount of the outstanding debt securities of each series affected by
the modification. We cannot, however, modify the principal or interest payment
terms, or reduce the percentage required for modification, against any holder
without its consent. We may also enter into supplemental indentures with the
trustee, without obtaining the consent of the holders of any series of debt
securities, to cure any ambiguity or to correct or supplement any provision of
an indenture or any supplemental indenture which may be defective or
inconsistent with any other provision, to pledge any property to or with the
trustee or to make any other provisions with respect to matters or questions
arising under the indentures, provided that the action does not materially
adversely affect the interests of the holders of the debt securities. We may
also enter into supplemental indentures without the consent of holders of any
series of debt securities to set forth the terms of additional series of debt
securities, to evidence the succession of another person to our obligations
under the indenture or to add to our covenants.
CERTIFICATES AND OPINIONS TO BE FURNISHED TO TRUSTEE
Each indenture will provide that, in addition to other certificates or
opinions that may be specifically required by other provisions of an indenture,
every time we ask the trustee to take action under the indenture, we must
provide a certificate of some of our officers and an opinion of counsel (who may
be our counsel) stating that, in the opinion of the signers, all conditions
precedent to the action have been complied with.
REPORT TO HOLDERS OF DEBT SECURITIES
We will provide audited financial statements annually to holders of debt
securities. The trustee will be required to submit an annual report to the
holders of the debt securities regarding, among other things, the trustee's
eligibility to serve as trustee, the priority of the trustee's claims regarding
unpaid advances made by it, and any action taken by the trustee materially
affecting the debt securities.
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<PAGE> 13
THE TRUSTEE
A prospectus supplement will name the trustee under the subordinated
indentures and the senior indentures.
Pursuant to applicable provisions of the indentures and the Trust Indenture
Act of 1939 governing trustee conflicts of interest, an uncured event of default
with respect to any series of debt securities may force the trustee to resign as
trustee under either the subordinated indentures or the senior indentures. Any
resignation will require the appointment of a successor trustee under the
applicable indenture in accordance with the terms and conditions of such
indenture.
The trustee may resign or be removed by us upon the occurrence of certain
events with respect to one or more series of debt securities and a successor
trustee may be appointed to act with respect to any series. The holders of a
majority in aggregate principal amount of the debt securities of any series may
remove the trustee with respect to the debt securities of that series.
GOVERNING LAW
The indenture and the debt securities will be governed by and construed in
accordance with the laws of the State of New York.
DESCRIPTION OF PREFERRED STOCK
We may issue, either separately or together with other securities, shares
of our preferred stock. See "Description of Outstanding Capital
Stock -- Preferred Stock." If we offer a series of preferred stock, we will
describe the particular terms and conditions of the series of preferred stock
offered in the prospectus supplement relating to that series of preferred stock.
The applicable prospectus supplement or prospectus supplements will describe the
following terms of each series of preferred stock being offered:
- its title;
- the number of shares offered, any liquidation preference per share and
the purchase price;
- any applicable dividend rate(s), period(s), and/or payment date(s) or
method(s) of calculation;
- if dividends apply whether they shall be cumulative or non-cumulative
and, if cumulative, the date from which dividends shall accumulate;
- any procedures for any auction and remarketing;
- any provisions for a sinking fund;
- any provisions for redemption;
- any listing of such preferred stock on any securities exchange or market;
- the terms and conditions, if applicable, upon which it will be
convertible into common stock or another series of preferred stock of
CapRock, including the conversion price (or manner of calculation
thereof) and conversion period;
- the terms and conditions, if applicable, upon which it will be
exchangeable into debt securities of CapRock, including the exchange
price (or manner of calculation thereof) and exchange period;
- any voting rights;
- a discussion of any applicable material and/or special Federal income tax
considerations;
- whether fractional interests in that series of preferred stock will be
offered by entering into a deposit agreement that will be filed with the
Securities and Exchange Commission which provides for a depositary to
issue to the public receipts of depositary shares, each of which will
represent
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<PAGE> 14
ownership of and entitlement to all rights and preferences of a
fractional interest in a share of preferred stock of a specified series;
- its relative ranking and preferences as to any dividend rights and rights
upon liquidation, dissolution or winding up of the affairs of CapRock;
- any limitations on the future issuance of any class or series of
preferred stock ranking senior to or on a parity with the series of
preferred stock being offered as to dividend rights and rights upon
liquidation, dissolution or winding up of the affairs of CapRock; and
- any other specific terms, preferences, rights, limitations or
restrictions.
DESCRIPTION OF COMMON STOCK
We may issue, either separately or together with other securities, shares
of our common stock. Under our Articles of Incorporation, we are authorized to
issue up to 200,000,000 shares of our common stock. A prospectus supplement
relating to an offering of common stock, or other securities convertible or
exchangeable for, or exercisable into, common stock, will describe the relevant
terms, including the number of shares offered, any initial offering price, and
market price and dividend information, as well as, if applicable, information on
other related securities. See "Description of Outstanding Capital Stock" below.
DESCRIPTION OF OUTSTANDING MATERIAL INDEBTEDNESS
CapRock has outstanding $150.0 million of 1998 Senior Notes due 2008
bearing interest at the rate of 12% per annum and $210.0 million of 1999 Senior
Notes due 2009 bearing interest at the rate of 11 1/2% per annum. The 1998
Senior Notes and the 1999 Senior Notes are subject to the terms and conditions
of indentures between CapRock and Chase Manhattan Trust Company, National
Association (formerly known as PNC Bank, N.A.), as Trustee. The following
summary highlights some provisions of the indentures.
The 1998 Senior Notes will mature on July 15, 2008. Interest on the 1998
Senior Notes is payable semiannually in cash on January 15 and July 15 of each
year, commencing January 15, 1999. The 1999 Senior Notes will mature on May 1,
2009. Interest on the 1999 Senior Notes is payable semiannually in cash on May 1
and November 1 of each year, commencing on November 1, 1999. The senior notes
are general senior unsecured obligations of CapRock, and as such, rank pari
passu in right of payment with all existing and future unsecured and
unsubordinated indebtedness of CapRock. The senior notes are effectively
subordinated in right of payment to all secured indebtedness of CapRock to the
extent of the value of the assets securing such indebtedness. In addition,
CapRock is a holding company, and the senior notes are effectively subordinated
to all existing and future indebtedness and other liabilities (including trade
payables) of CapRock's subsidiaries.
The indentures contain covenants that, among other things, limit or
prohibit us from engaging in certain transactions including the following:
- borrowing additional money,
- paying dividends or making other distributions to our shareholders,
- limiting the ability of subsidiaries to make payments to us,
- making certain investments,
- creating certain liens on our assets,
- selling certain assets and using the proceeds from those sales for
certain purposes,
- entering into transactions with affiliates, and
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<PAGE> 15
- engaging in certain mergers or consolidations.
The events of default under the senior notes include various events of
default customary for such types of agreements including, among others, the
failure to pay principal and interest when due on the senior notes,
cross-defaults on other indebtedness, certain judgments, and certain events of
bankruptcy, insolvency and reorganization.
DESCRIPTION OF OUTSTANDING CAPITAL STOCK
The following summaries highlight certain provisions of our Articles of
Incorporation and By-Laws, as amended. Copies of our Articles and Bylaws are
available from us upon request. See "Where You Can Find More Information."
AUTHORIZED CAPITAL STOCK
Under our Articles, the total number of shares of all classes of stock that
we have authority to issue is 220,000,000 shares. Each share has a par value of
$.01 per share. Of the authorized amount, 200,000,000 of the shares are common
stock and 20,000,000 are shares of preferred stock. As of March 15, 2000, there
were 33,291,547 shares of common stock issued and outstanding (and 32,728 shares
were held in treasury), and no shares of preferred stock were issued or
outstanding.
COMMON STOCK
Each share of common stock has identical rights and privileges in every
respect. The holders of CapRock common stock are entitled to vote upon all
matters submitted to a vote of our shareholders and are entitled to one vote for
each share of common stock held.
Subject to the prior rights and preferences, if any, applicable to shares
of preferred stock or any series of preferred stock, or the restrictions set
forth in any applicable indentures, the holders of common stock are entitled to
receive such dividends, payable in cash, stock or otherwise, as may be declared
by the Board out of any funds legally available for the payment of dividends.
If CapRock voluntarily or involuntarily liquidates, dissolves or winds-up,
the holders of common stock will be entitled to receive after distribution in
full of the preferential amounts, if any, to be distributed to the holders of
preferred stock or any series of preferred stock, all of the remaining assets
available for distribution ratably in proportion to the number of shares of
common stock held by them.
Holders of common stock will have no preferences or any preemptive,
conversion or exchange rights.
PREFERRED STOCK
The Board is authorized to provide for the issuance of shares of CapRock
preferred stock in one or more series, and to fix for each series, voting
powers, full or limited, or no voting powers, and such designations, preferences
and relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof as are shown in a resolution
providing for the issuance of such series adopted by the Board. The Board may
authorize the issuance of shares of preferred stock with terms and conditions
which could discourage a takeover or other transaction that holders of some or a
majority of shares of CapRock common stock might believe to be in their best
interests or in which such holders might receive a premium for their shares of
stock over the then-current market price of such shares. As of the date hereof,
no shares of preferred stock are outstanding.
PREEMPTIVE RIGHTS
No holder of any shares of our stock has any preemptive or preferential
right to acquire or subscribe for any unissued shares of any class of stock or
any authorized securities convertible into or carrying any right, option or
warrant to subscribe for or acquire shares of any class of stock.
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<PAGE> 16
TRANSFER AGENT AND REGISTRAR
The principal transfer agent and registrar for our common stock is
ChaseMellon Shareholder Services.
CERTAIN ANTI-TAKEOVER EFFECTS
As of March 15, 2000, there were 166,675,725 authorized and unissued shares
of common stock and 20,000,000 authorized and unissued shares of preferred
stock. The Board of Directors can authorize the issuance of authorized but
unissued shares of its stock to render more difficult or to discourage an
attempt to obtain control of our company by means of a merger, tender offer,
proxy solicitation or otherwise. We are also subject to prior regulatory
approval by the FCC and various state regulatory agencies for a transfer of
control or for the assignment of our (or our subsidiaries') intrastate
certification authority, its international authority and other FCC licenses and
authorizations. The 1934 Communications Act generally limits direct foreign
ownership of wireless licenses to 20%, but provides for indirect foreign
ownership holdings above 25% upon FCC approval. In addition, because we (and our
subsidiaries) hold FCC authority to provide international service, the FCC will
scrutinize an ownership interest in our company of greater than 25%, or a
controlling interest at any level, by a foreign carrier. International carriers,
such as we are, must notify the FCC 60 days in advance of an acquisition by a
foreign carrier or by an entity that controls a foreign carrier of a 25% or
greater or a controlling interest in such carriers. However, new rules allow for
up to 100% indirect ownership of wireless licenses by foreign interests from
countries that are members of the WTO. Furthermore, the indentures for our 1998
Senior Notes and 1999 Senior Notes provide for a mandatory purchase of the
senior notes upon a change of control and we expect that any credit facilities
that we enter into will provide that an event of default or redemption event
thereunder will occur if all or a controlling interest in our capital stock is
sold, assigned or otherwise transferred. Any of the foregoing factors could have
the effect of delaying, deferring or preventing a change of control of CapRock.
The Articles provide that Article 13.03 of the Texas Business Corporation Act,
which includes statutory anti-takeover measures, will not apply to us.
WARRANTS AND REGISTRATION RIGHTS
As part of its initial public offering, IWL Communications, one of our
predecessor companies, issued warrants to purchase up to 145,000 shares of IWL
Communications common stock at an exercise price of $7.20 per share to Roth
Capital Partners, Inc. (formerly known as Cruttenden Roth, Incorporated) or its
designees for nominal consideration. Following our business combination in
August 1998, the Roth warrants were converted on a one-to-one ratio to warrants
to purchase shares of our common stock and are exercisable until July 16, 2002.
Roth has certain demand and piggyback registration rights associated with our
common stock to be issued upon the exercise of the warrants.
SELLING SHAREHOLDERS
The selling shareholders may be directors, executive officers, holders of
shares of our company or holders that may be considered to be selling securities
on our behalf or having purchased securities from us with a view towards
distributing them to others.
The prospectus supplement relating to any shares of common stock offered by
the selling shareholders will set forth the names of the selling shareholders,
the number of shares of common stock being offered for each selling
shareholder's account as well as the number of such shares and the percentage,
if greater than one percent, to be owned by each selling shareholder after
completion of the offering.
All expenses incurred with the registration of the shares of common stock
owned by the selling shareholders will be borne by CapRock, but CapRock will not
be obligated to pay any underwriting fees, discounts or commissions in
connection with such registration.
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PLAN OF DISTRIBUTION
We and any selling shareholders may sell any of the securities being
offered under this prospectus in any one or more of the following ways from time
to time:
- through agents;
- to or through underwriters;
- through dealers; and
- directly by CapRock and any selling shareholders to one or more
purchasers.
The distribution of the securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. Securities may also be offered or sold
through depositary receipts issued by a depositary institution.
AGENTS
Offers to purchase securities may be solicited by agents designated by us
and/or any selling shareholders from time to time. Any agent involved in the
offer or sale of the securities under this prospectus will be named, and any
commissions payable by us to these agents will be set forth, in a related
prospectus supplement. Unless otherwise indicated in a prospectus supplement,
any agent will be acting on a reasonable best efforts basis for the period of
its appointment. Any agent may be deemed to be an underwriter, as that term is
defined in the Securities Act of 1933, as amended (the "Securities Act"), of the
securities so offered and sold.
UNDERWRITERS
If securities are sold by us and/or any selling shareholders by means of an
underwritten offering, we and/or any selling shareholders, as applicable, will
execute an underwriting agreement with an underwriter or underwriters at the
time an agreement for such sale is reached, and the names of the specific
managing underwriter or underwriters, as well as any other underwriters, the
respective amounts underwritten and the terms of the transaction, including
commissions, discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in a related prospectus supplement. That
prospectus supplement and this prospectus will be used by the underwriters to
make resales of the securities. If underwriters are used in the sale of any
securities in connection with this prospectus, those securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at fixed public
offering prices or at varying prices determined by the underwriters and us at
the time of sale. Securities may be offered to the public either through
underwriting syndicates represented by managing underwriters or directly by one
or more underwriters. If any underwriter or underwriters are used in the sale of
securities, unless otherwise indicated in a related prospectus supplement, the
underwriting agreement will provide that the obligations of the underwriters are
subject to some conditions precedent and that with respect to a sale of these
securities the underwriters will be obligated to purchase all such securities if
any are purchased.
We and/or any selling shareholders may grant to the underwriters options to
purchase additional securities to cover over-allotments, if any, at the initial
public offering price, with additional underwriting commissions or discounts, as
may be set forth in a related prospectus supplement. The terms of any over-
allotment option will be set forth in the prospectus supplement for those
securities.
DEALERS
If a dealer is utilized by us and/or any selling shareholders in the sale
of the securities in respect of which this prospectus is delivered, we and/or
any selling shareholders, as applicable, will sell these securities to the
dealer as principal. The dealer may then resell such securities to the public at
varying prices to be determined by such dealer at the time of resale. Any such
dealer may be deemed to be an
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underwriter, as such term is defined in the Securities Act, of the securities so
offered and sold. The name of the dealer and the terms of the transaction will
be set forth in the prospectus supplement relating to those offers and sales.
DIRECT SALES
We and/or any selling shareholders may also sell offered 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 resale
of those securities. The terms of any sales of this type will be described in
the prospectus supplement.
Securities may also be offered and sold, if so indicated in the related
prospectus supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment in connection with their terms, or
otherwise, by one or more firms "remarketing firms," acting as principals for
their own accounts or as agents for us and/or any selling shareholders. Any
remarketing firm will be identified and the terms of its agreement, if any, with
us and/or any selling shareholders and its compensation will be described in a
related prospectus supplement. Remarketing firms may be deemed to be
underwriters, as that term is defined in the Securities Act, in connection with
the securities remarketed by them.
DELAYED DELIVERY CONTRACTS
If so indicated in a related prospectus supplement, we and/or any selling
shareholders may authorize agents and underwriters to solicit offers by certain
institutions to purchase securities from us and/or any selling shareholders at
the public offering price set forth in a related prospectus supplement as part
of delayed delivery contracts providing for payment and delivery on the date or
dates stated in a related prospectus supplement. Such delayed delivery contracts
will be subject to only those conditions set forth in a related prospectus
supplement. A commission indicated in a related prospectus supplement will be
paid to underwriters and agents soliciting purchases of securities pursuant to
delayed delivery contracts accepted by us and/or any selling shareholders, as
applicable.
GENERAL INFORMATION
We and/or any selling shareholders may have agreements with the agents,
underwriters, dealers and remarketing firms to indemnify them against certain
civil liabilities, including liabilities under the Securities Act, or to
contribute with respect to payments that the agents, underwriters, dealers and
remarketing firms may be required to make.
Each series of securities will be a new issue (other than shares of common
stock sold by selling shareholders or treasury shares sold by us) and, other
than the common stock, which is quoted on the Nasdaq National Market, may have
no established trading market. Unless otherwise specified in a related
prospectus supplement, we will not be obligated to list any series of securities
on an exchange or otherwise. We cannot assure you that there will be any
liquidity in the trading market for any of the securities.
Agents, underwriters, dealers and remarketing firms may be customers of,
engage in transactions with, or perform services for, us, our subsidiaries
and/or any selling shareholders in the ordinary course of their businesses.
The place, time of delivery and other terms of the sale of the offered
securities will be described in the applicable prospectus supplement.
In order to comply with the securities laws of some states, if applicable,
the securities offered hereby will be sold in those jurisdictions only through
registered or licensed brokers or dealers. In addition, in some states
securities may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirement is available and complied with.
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LEGAL MATTERS
Munsch Hardt Kopf & Harr, P.C. will issue an opinion for us and the selling
shareholders, if any, about the legality of the offered securities. As of the
date of this prospectus, certain members of Munsch Hardt Kopf & Harr, P.C.
beneficially own, in the aggregate, 1,350 shares of our Common Stock. Any
additional required information regarding ownership of our securities by lawyers
of such firm will be contained in the applicable prospectus supplement. Any
underwriters will be advised about other issues relating to any offering by
their own legal counsel named in the applicable prospectus supplement.
EXPERTS
The consolidated financial statements of CapRock Communications Corp. as of
December 31, 1997 and 1998 and for each of the years in the three year period
ended December 31, 1998, as included in our Annual Report on Form 10-K for the
year ended December 31, 1998, have been incorporated by reference herein in
reliance upon the reports of KPMG LLP and Burds, Reed & Mercer, P.C.,
independent certified public accountants, incorporated herein by reference, and
upon the authority of said firms as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses, other than underwriting discounts and commissions,
in connection with the offerings of the securities are as follows:
<TABLE>
<S> <C>
Securities Act Registration Fee............................. $237,600
Blue Sky Fees and Expenses.................................. $ *
Printing and Engraving Expenses............................. $ *
Legal Fees and Expenses..................................... $ *
Fees of Rating Agencies Accounting Fees and Expenses........ $ *
Fees of Indenture Trustees (including counsel fees)......... $ *
Miscellaneous............................................... $ *
--------
Total............................................. $ *
========
</TABLE>
- ---------------
* To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article XII of the Registrant's Articles of Incorporation provides the
following:
"A director of the Corporation shall not be liable to the Corporation
or its shareholders for monetary damages for an act or omission in the
director's capacity as a director, except that this Article shall not
authorize the elimination or limitation of the liability of a director to
the extent the director is found liable for:
(1) a breach of the director's duty of loyalty to the Corporation
or its shareholders;
(2) an act or omission not in good faith that constitutes a breach
of duty of the director to the Corporation or an act or omission that
involves intentional misconduct or a knowing violation of the law;
(3) a transaction from which the director received an improper
benefit, whether or not the benefit resulted from an action taken within
the scope of the director's office;
(4) an act or omission for which the liability of a director is
expressly provided by an applicable statute."
Article XI of the Registrant's Articles of Incorporation provides the
following:
"The directors and officers of the Corporation shall be indemnified by
the Corporation in a manner and to the maximum extent permitted by
applicable state or federal law as in effect from time to time."
Section 7.06 of the Registrant's Bylaws provides the following:
"The Corporation shall have the authority to and shall indemnify and
advance expenses to the directors, officers, employees, agents of the
Corporation or any other persons serving at the request of the Corporation
in such capacities in a manner and to the maximum extent permitted by
applicable state or federal law. The Corporation may purchase and maintain
liability insurance or make other arrangements for such obligations to the
extent permitted by the Texas Business Corporation Act."
The Texas Business Corporation Act permits, and in some cases requires,
corporations to indemnify officers, directors, agents and employees who are or
have been a party to or are threatened to be made a
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party to litigation against judgments, penalties (including excise and similar
taxes), fines, settlements and reasonable expenses under certain circumstances.
We expect that any Underwriting Agreement entered into by the Registrant in
connection with any offering of debt securities will provide for indemnification
by the underwriters specified therein of the Registrant and its officers and
directors, and by the Registrant of the underwriters specified therein, for
certain liabilities arising under the Securities Act or otherwise.
We expect that any Underwriting Agreement entered into by the Registrant in
connection with any offering of equity securities will provide for
indemnification by the underwriters specified therein of the Registrant and its
officers and directors, and by the Registrant of the underwriters specified
therein, for certain liabilities arising under the Securities Act or otherwise.
The Purchase Agreement (filed as Exhibit 1.1 to the Registrant's
Registration Statement on Form S-1, as amended (File No. 333-74735)) relating to
the Registrant's May 1999 equity offering provides for indemnification by the
underwriters specified therein of the Registrant and its officers and directors,
and by the Registrant of the underwriters specified therein, for certain
liabilities arising under the Securities Act or otherwise.
The Registration Rights Agreement (Exhibit 4.6 hereto) relating to the 1998
Senior Notes provides for indemnification by each of the initial purchasers
specified therein, their successors, assigns and direct and indirect
transferees, and participating broker-dealers, in specified circumstances, of
the Registrant, the other initial purchasers, underwriters and the other selling
holders, and each of their respective directors and officers and controlling
parties, and by the Registrant of the initial purchasers specified therein,
their successors, assigns and direct and indirect transferees, and participating
broker-dealers, underwriters, and each person, if any, controlling any such
underwriter or holder, in specified circumstances, for certain liabilities
arising under the Securities Act or otherwise.
The Note Purchase Agreement (filed as Exhibit 10.49 to the Registrant's
Registration Statement on Form S-4, as amended (File No. 333-57365)) relating to
the 1998 Senior Notes provides for indemnification by the initial purchasers
specified therein of the Registrant and its officers and directors, and by the
Registrant of the initial purchasers specified therein, for certain liabilities
arising under the Securities Act or otherwise.
The Registration Rights Agreement (Exhibit 4.10 hereto) relating to the
1999 Senior Notes provides for indemnification by each of the initial purchasers
specified therein, their successors, assigns and direct and indirect
transferees, and participating broker-dealers, in specified circumstances, of
the Company, the other initial purchasers, underwriters and the other selling
holders specified therein, and each of their respective directors and officers
and controlling parties, and by the Company of the initial purchasers specified
therein, their successors, assigns and direct and indirect transferees, and
participating broker-dealers, underwriters, and each person, if any controlling
any such underwriter or holder, in specified circumstances, for certain
liabilities arising under the Securities Act or otherwise.
The Note Purchase Agreement (filed as Exhibit 10.61 to the Registrant's
Registration Statement on Form S-4, as amended (File No. 333-82557)) relating to
the 1999 Senior Notes provides for indemnification by the initial purchasers,
specified therein of the Company and its officers and directors, and by the
Company of the initial purchasers specified therein, for certain liabilities
arising under the Securities Act or otherwise.
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<PAGE> 22
ITEM 16. EXHIBITS
The following exhibits are filed herewith.
<TABLE>
<C> <S>
1.1 -- Form of Underwriting Agreement for Debt Securities.*
1.2 -- Form of Underwriting Agreement for Equity Securities.*
2.1 -- Agreement and Plan of Merger and Plan of Exchange, dated
as of February 16, 1998, by and among the Registrant, IWL
Communications, Incorporated ("IWL"), IWL Acquisition
Corp., CapRock Communications Corp. (n/k/a CapRock
Telecommunications Corp. ("CapRock Telecommunications")),
CapRock Acquisition Corp., and CapRock Fiber Network,
Ltd. ("CapRock Fiber" and Collectively, the "Parties").
The schedules to the Agreement and Plan of Merger and
Plan of Exchange and the appendices thereto have been
omitted. The Registrant will furnish supplementally to
the Securities and Exchange Commission any of the
schedules or appendices upon request. (Incorporated by
reference to Exhibit 2.1 to the Registration Statement on
Form S-4, as amended, of the Registrant, File No.
333-57365.)
2.2 -- First Amendment to Agreement and Plan of Merger and Plan
of Exchange, dated as of April 30, 1998, by and among the
Parties. (Incorporated by reference to Exhibit 2.2 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
2.3 -- Second Amendment to Agreement and Plan of Merger and Plan
of Exchange, dated as of June 19, 1998, by and among the
Parties. (Incorporated by reference to Exhibit 2.3 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
2.4 -- Third Amendment to Agreement and Plan of Merger and Plan
of Exchange, dated as of July 8, 1998, by and among the
Parties. (Incorporated by reference to Exhibit 2.4 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
4.1 -- Articles of Incorporation of the Registrant.
(Incorporated by reference to Exhibit 3.1 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
4.2 -- Bylaws of the Registrant. (Incorporated by reference to
Exhibit 3.2 to the Registration Statement on Form S-4, as
Amended, of the Registrant, File No. 333-64699.)
4.3 -- Form of Indenture.*
4.4 -- Form of Certificate of Designation for the preferred
stock (together with preferred stock certificate).*
4.5 -- Indenture dated as of July 16, 1998, among the
Registrant, CapRock Telecommunications, CapRock Fiber,
IWL and PNC Bank, National Association, Trustee.
(Incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-64699.)
4.6 -- Registration Rights Agreement dated July 16, 1998, among
the Registrant, CapRock Telecommunications, CapRock
Fiber, and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation and BancOne Capital Markets, Inc.
(Incorporated by reference to Exhibit 4.2 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-64699.)
4.7 -- Form of Warrant Agreement between IWL and Cruttenden Roth
Incorporated. (Incorporated by reference to Exhibit 1.2
to the Registration Statement on Form S-1 of IWL, as
amended, File No. 333-22801.)
</TABLE>
II-3
<PAGE> 23
<TABLE>
<C> <S>
4.8 -- Registration Rights Agreement dated January 22, 1998
between IWL and Nera Limited. (Incorporated by reference
to Exhibit 4.5 to the Registration Statement on Form S-4,
as amended, of the Registrant, File No. 333-57365.)
4.9 -- Registration Rights Agreement dated January 22, 1998 by
And among IWL, Thomas Norman Blair and Margaret Helen
Blair. (Incorporated by reference to Exhibit 4.6 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
4.10 -- Registration Rights Agreement dated May 18, 1999, among
the Registrant, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Chase Securities, Inc., Bear, Stearns & Co.
Inc., Donaldson, Lufkin & Jenrette Securities Corporation
and Goldman, Sachs & Co. (Incorporated by reference to
Exhibit 4.7 to the Registration Statement on Form S-4, as
amended, of the Registrant, File No. 333-82557.)
4.11 -- Indenture dated as of May 18, 1999, between the
Registrant and Chase Manhattan Trust Company, National
Association, Trustee. (Incorporated by reference to
Exhibit 4.7 to the Registration Statement on Form S-4, as
amended, of the Registrant, File No. 333-82557.)
5.1 -- Opinion of Munsch Hardt Kopf & Harr, P.C.*
12.1 -- Statement regarding computation of ratio of earnings to
fixed charges.*
23.1 -- Consent of KPMG LLP.
23.2 -- Consent of Burds, Reed & Mercer, P.C.
23.3 -- Consent of Munsch Hardt Kopf & Harr, P.C. (Included in
the opinion filed as Exhibit 5.1 to this Registration
Statement).
24.1 -- Power of Attorney (included in the signature page
hereto).
25.1 -- Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 on Form T-1.*
</TABLE>
- ---------------
* To be filed by amendment or as an exhibit to a Current Report on Form 8-K
pursuant to Item 601 of Regulation S-K or, where applicable, incorporated
herein by reference from a subsequent filing in accordance with Section
305(b)(2) of the Trust Indenture Act of 1939.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the 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 this registration statement
or any material change to such information in this registration
statement;
II-4
<PAGE> 24
provided, however, that subparagraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in registration statements on Form S-3, Form S-8 or
Form F-3 and the periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, 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) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. If a claim for indemnification against such
liabilities (other than payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
(d) The 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.
(e) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-5
<PAGE> 25
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 Dallas, State of Texas on the 20th day of March,
2000.
CAPROCK COMMUNICATIONS CORP.
By: /s/ JERE W. THOMPSON, JR.
------------------------------------
Jere W. Thompson, Jr.
Chief Executive Officer
POWER OF ATTORNEY
The undersigned directors and executive officers of CapRock Communications
Corp. hereby constitute and appoint Jere W. Thompson, Jr. and Kevin W. McAleer,
and each of them, with full power to act without the other and with full power
of substitution and resubstitution, our true and lawful attorneys-in-fact with
full power to execute in our name and behalf in the capacities indicated below
any and all amendments (including post-effective amendments and amendments
thereto) to this Registration Statement, requests to accelerate the
effectiveness of this Registration Statement, and any registration statement for
the same offering that is to be effective under Rule 462(b) of the Securities
Act, and to file the same, with all exhibits thereto and other documents in
connection therewith with the Securities and Exchange Commission and hereby
ratify and confirm all that such attorneys-in-fact, or either of them, or their
substitutes shall lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JERE W. THOMPSON Chief Executive Officer, March 20, 2000
- ----------------------------------------------------- Chairman of the Board, and
Jere W. Thompson, Jr. Director (Principal Executive
Officer)
/s/ KEVIN W. MCALEER Senior Vice President and Chief March 20, 2000
- ----------------------------------------------------- Financial Officer (Principal
Kevin W. McAleer Financial Officer)
/s/ LEO J. CYR President, Chief Operating March 20, 2000
- ----------------------------------------------------- Officer and Director
Leo J. Cyr
/s/ IGNATIUS W. LEONARDS Vice Chairman of the Board and March 20, 2000
- ----------------------------------------------------- Director
Ignatius W. Leonards
/s/ TIMOTHY W. ROGERS Executive Vice President and March 20, 2000
- ----------------------------------------------------- Director
Timothy W. Rogers
/s/ MATTHEW M. KINGSLEY Corporate Controller (Principal March 20, 2000
- ----------------------------------------------------- Accounting Officer)
Matthew M. Kingsley
</TABLE>
II-6
<PAGE> 26
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ MARK LANGDALE Director March 20, 2000
- -----------------------------------------------------
Mark Langdale
/s/ CHRISTOPHER J. AMENSON Director March 20, 2000
- -----------------------------------------------------
Christopher J. Amenson
/s/ JOHN R. HARRIS Director March 20, 2000
- -----------------------------------------------------
John R. Harris
</TABLE>
II-7
<PAGE> 27
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 -- Form of Underwriting Agreement for Debt Securities.*
1.2 -- Form of Underwriting Agreement for Equity Securities.*
2.1 -- Agreement and Plan of Merger and Plan of Exchange, dated
as of February 16, 1998, by and among the Registrant, IWL
Communications, Incorporated ("IWL"), IWL Acquisition
Corp., CapRock Communications Corp. (n/k/a CapRock
Telecommunications Corp. ("CapRock Telecommunications")),
CapRock Acquisition Corp., and CapRock Fiber Network,
Ltd. ("CapRock Fiber" and Collectively, the "Parties").
The schedules to the Agreement and Plan of Merger and
Plan of Exchange and the appendices thereto have been
omitted. The Registrant will furnish supplementally to
the Securities and Exchange Commission any of the
schedules or appendices upon request. (Incorporated by
reference to Exhibit 2.1 to the Registration Statement on
Form S-4, as amended, of the Registrant, File No.
333-57365.)
2.2 -- First Amendment to Agreement and Plan of Merger and Plan
of Exchange, dated as of April 30, 1998, by and among the
Parties. (Incorporated by reference to Exhibit 2.2 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
2.3 -- Second Amendment to Agreement and Plan of Merger and Plan
of Exchange, dated as of June 19, 1998, by and among the
Parties. (Incorporated by reference to Exhibit 2.3 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
2.4 -- Third Amendment to Agreement and Plan of Merger and Plan
of Exchange, dated as of July 8, 1998, by and among the
Parties. (Incorporated by reference to Exhibit 2.4 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
4.1 -- Articles of Incorporation of the Registrant.
(Incorporated by reference to Exhibit 3.1 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
4.2 -- Bylaws of the Registrant. (Incorporated by reference to
Exhibit 3.2 to the Registration Statement on Form S-4, as
Amended, of the Registrant, File No. 333-64699.)
4.3 -- Form of Indenture.*
4.4 -- Form of Certificate of Designation for the preferred
stock (together with preferred stock certificate).*
4.5 -- Indenture dated as of July 16, 1998, among the
Registrant, CapRock Telecommunications, CapRock Fiber,
IWL and PNC Bank, National Association, Trustee.
(Incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-64699.)
4.6 -- Registration Rights Agreement dated July 16, 1998, among
the Registrant, CapRock Telecommunications, CapRock
Fiber, and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation and BancOne Capital Markets, Inc.
(Incorporated by reference to Exhibit 4.2 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-64699.)
</TABLE>
<PAGE> 28
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.7 -- Form of Warrant Agreement between IWL and Cruttenden Roth
Incorporated. (Incorporated by reference to Exhibit 1.2
to the Registration Statement on Form S-1 of IWL, as
amended, File No. 333-22801.)
4.8 -- Registration Rights Agreement dated January 22, 1998
between IWL and Nera Limited. (Incorporated by reference
to Exhibit 4.5 to the Registration Statement on Form S-4,
as amended, of the Registrant, File No. 333-57365.)
4.9 -- Registration Rights Agreement dated January 22, 1998 by
And among IWL, Thomas Norman Blair and Margaret Helen
Blair. (Incorporated by reference to Exhibit 4.6 to the
Registration Statement on Form S-4, as amended, of the
Registrant, File No. 333-57365.)
4.10 -- Registration Rights Agreement dated May 18, 1999, among
the Registrant, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Chase Securities, Inc., Bear, Stearns & Co.
Inc., Donaldson, Lufkin & Jenrette Securities Corporation
and Goldman, Sachs & Co. (Incorporated by reference to
Exhibit 4.7 to the Registration Statement on Form S-4, as
amended, of the Registrant, File No. 333-82557.)
4.11 -- Indenture dated as of May 18, 1999, between the
Registrant and Chase Manhattan Trust Company, National
Association, Trustee. (Incorporated by reference to
Exhibit 4.7 to the Registration Statement on Form S-4, as
amended, of the Registrant, File No. 333-82557.)
5.1 -- Opinion of Munsch Hardt Kopf & Harr, P.C.*
12.1 -- Statement regarding computation of ratio of earnings to
fixed charges.*
23.1 -- Consent of KPMG LLP.
23.2 -- Consent of Burds, Reed & Mercer, P.C.
23.3 -- Consent of Munsch Hardt Kopf & Harr, P.C. (Included in
the opinion filed as Exhibit 5.1 to this Registration
Statement).
24.1 -- Power of Attorney (included in the signature page
hereto).
25.1 -- Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 on Form T-1.*
</TABLE>
- ---------------
* To be filed by amendment or as an exhibit to a Current Report on Form 8-K
pursuant to Item 601 of Regulation S-K or, where applicable, incorporated
herein by reference from a subsequent filing in accordance with Section
305(b)(2) of the Trust Indenture Act of 1939.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
CapRock Communications Corp.
(formerly IWL Holdings Corp.):
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
KPMG LLP
Dallas, Texas
March 20, 2000
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
CapRock Communications Corp.
(formerly IWL Holdings Corp.):
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
Burds, Reed and Mercer, P.C.
Dallas, Texas
March 20, 2000
