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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 26, 2000
REGISTRATION NUMBER 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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GRANT PRIDECO, INC. DELAWARE 76-0312499
GP EXPATRIATE SERVICES, INC. DELAWARE 76-0632330
GRANT PRIDECO HOLDING, LLC DELAWARE 76-0635560
GRANT PRIDECO, LP DELAWARE 76-0635557
GRANT PRIDECO USA, LLC DELAWARE 51-0397748
STAR OPERATING COMPANY DELAWARE 76-0655528
TA INDUSTRIES, INC. DELAWARE 76-0497435
TEXAS ARAI, INC. DELAWARE 74-2150314
TUBE-ALLOY CAPITAL CORPORATION TEXAS 76-0012315
TUBE-ALLOY CORPORATION LOUISIANA 72-0714357
XL SYSTEMS INTERNATIONAL, INC. DELAWARE 76-0602808
XL SYSTEMS, L.P. TEXAS 76-0324868
(Exact name of registrants as (States of other jurisdictions (I.R.S. Employer
specified in their charters) of incorporation or Identification Nos.)
organization)
</TABLE>
1450 LAKE ROBBINS DRIVE, SUITE 600
THE WOODLANDS, TEXAS 77380
(281) 297-8500
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
MR. PHILIP A. CHOYCE
VICE PRESIDENT AND ASSOCIATE GENERAL COUNSEL
GRANT PRIDECO, INC.
1450 LAKE ROBBINS DRIVE, SUITE 600
THE WOODLANDS, TEXAS 77380
(281) 297-8500
(Name, address, including zip code, and telephone number including area code, of
agent for service)
Copy to:
CHARLES L. STRAUSS
FULBRIGHT & JAWORSKI L.L.P.
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010-3095
(713) 651-5151
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this post effective amendment becomes effective, subject to market
conditions and other factors.
If the only Securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the Securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than Securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional Securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED OFFERING PRICE PER SHARE(1) REGISTRATION FEE(2)
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Debt Securities of Grant Prideco, Inc.......................
Preferred Stock of Grant Prideco, Inc.......................
Common Stock of Grant Prideco, Inc.......................... n/a
Depositary Shares of Grant Prideco, Inc.(3).................
Warrants of Grant Prideco, Inc.(4)..........................
Subsidiary Guarantees....................................... $500,000,000.00
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(1) Grant Prideco, Inc. registered an aggregate of $500,000,000 of Securities
consisting of indeterminate numbers or amounts of Debt Securities, Preferred
Stock, Common Stock, Depositary Shares or Warrants as Grant Prideco, Inc.
may from time to time issue at indeterminate prices on a Registration
Statement on Form S-3, Registration Statement No. 333-35272, which was
declared effective on May 31, 2000 (the "Earlier Registration Statement").
No Securities have been sold under the Earlier Registration Statement.
Pursuant to Rule 429, the full $500,000,000 of Securities registered under
the Earlier Registration Statement is being carried forward to this
registration statement. This registration statement also registers the
issuance of Subsidiary Guarantees to be issued for no additional
consideration by Grant Prideco, Inc.'s co-registrants, all of which are
direct or indirect wholly-owned subsidiaries of Grant Prideco, Inc. (the
"Subsidiary Guarantors"). The Subsidiary Guarantees will be guarantees by
the Subsidiary Guarantors of Debt Securities of Grant Prideco, Inc.
(2) Grant Prideco, Inc. paid a registration fee of $132,000 in connection with
the registration of $500,000,000 of Securities under the Earlier
Registration Statement, so no fee is required with respect to those
Securities. Pursuant to Rule 457(n), no additional fee is required for the
registration of the Subsidiary Guarantees.
(3) Such indeterminate number of Depositary Shares to be evidenced by Depositary
Receipts issued pursuant to a Deposit Agreement. If the Registrant elects to
offer to the public fractional interests in shares of Preferred Stock
registered hereunder, Depositary Receipts will be distributed to persons
purchasing those fractional interests, and shares of Preferred Stock will be
issued to the Depositary under the Deposit Agreement.
(4) Warrants to purchase Debt Securities, Preferred Stock or Common Stock may be
sold separately or with Debt Securities, Preferred Stock or Common Stock.
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.
THIS REGISTRATION STATEMENT CONTAINS A COMBINED PROSPECTUS PURSUANT TO RULE
429 UNDER THE SECURITIES ACT OF 1933. THE PROSPECTUS INCLUDED IN THIS
REGISTRATION STATEMENT RELATES TO THE SUBSIDIARY GUARANTEES REGISTERED HEREUNDER
AS WELL AS $500,000,000 OF SECURITIES REGISTERED BY GRANT PRIDECO, INC. ON FORM
S-3, REGISTRATION STATEMENT NO. 333-35272, WHICH WAS DECLARED EFFECTIVE ON MAY
31, 2000 (THE "EARLIER REGISTRATION STATEMENT"). PURSUANT TO RULE 429, THE
FILING OF THE COMBINED PROSPECTUS INCLUDED HEREIN AMENDS AND SUPERSEDES THE
PROSPECTUS INCLUDED IN THE EARLIER REGISTRATION STATEMENT, ALTHOUGH PURSUANT TO
RULE 429 THE COMBINED PROSPECTUS WILL NOT BE FILED WITH THE EARLIER REGISTRATION
STATEMENT.
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<PAGE> 2
PROSPECTUS
[GRANT PRIDECO LOGO]
$500,000,000
DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK,
DEPOSITARY SHARES AND WARRANTS
This prospectus relates the following securities of Grant Prideco, Inc (the
"Securities"):
- debt securities, which may be senior or subordinated debt securities and which
may be guaranteed by subsidiaries of Grant Prideco, Inc.;
- preferred stock, which may be issued in the form of depositary shares;
- common stock; and
- warrants.
We will provide the specific terms of the Securities in supplements to this
prospectus. This prospectus may not be used to sell Securities unless it is
accompanied by a prospectus supplement.
Selling Security holders also may offer and sell Securities under this
prospectus.
Our common stock is listed on the New York Stock Exchange under the trading
symbol "GRP". Any common stock sold pursuant to a prospectus supplement will be
listed on that exchange, subject to official notice of issuance.
YOU SHOULD CAREFULLY REVIEW AND CONSIDER THE INFORMATION UNDER THE HEADING
"RISK FACTORS" BEGINNING ON PAGE 2 OF THIS PROSPECTUS AND UNDER THE SAME HEADING
IN THE APPLICABLE PROSPECTUS SUPPLEMENT BEFORE INVESTING IN SECURITIES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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 IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS PROHIBITED.
October 26, 2000
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CONTENTS
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About this Prospectus....................................... 1
About Grant Prideco......................................... 1
Forward-Looking Statements.................................. 2
Risk Factors................................................ 2
Use Of Proceeds............................................. 2
Ratio Of Earnings To Fixed Charges And Earnings To Fixed
Charges And Preferred Stock Dividends..................... 3
Description Of Debt Securities.............................. 3
Specific Terms of Each Series of Debt Securities in a
Prospectus Supplement.................................. 3
Senior and Subordinated Debt Securities................... 4
Subsidiary Guarantees..................................... 4
Certain Covenants......................................... 4
Limitations on Liens................................... 5
Consolidation, Merger or Asset Sale.................... 5
Restriction on Sale-and-Leaseback Transactions......... 6
Additional Covenants................................... 6
Change of Control......................................... 7
Events of Default and Remedies............................ 7
Modification of Indentures................................ 7
Discharging Our Obligations; Defeasance................... 8
Registration of Notes; Minimum Denominations.............. 9
No Personal Liability of Directors, Officers, Employees
and Stockholders....................................... 9
Payment and Transfer...................................... 9
Book Entry, Delivery and Form............................. 9
The Trustee............................................... 10
Resignation or Removal of Trustee...................... 10
Limitations on Trustee if it is a Creditor of the
Company............................................... 10
Annual Trustee Report to Holders of Debt Securities.... 11
Certificates and Opinions to Be Furnished to Trustee... 11
Description Of Common Stock And Preferred Stock............. 11
Common Stock.............................................. 11
Voting Rights.......................................... 11
Dividend Rights........................................ 11
Liquidation Rights and Other Provisions................ 12
Transfer Agent And Registrar........................... 12
Preferred Stock........................................... 12
Specific Terms of Each Series of Preferred Stock in a
Prospectus Supplement................................. 12
Voting Rights.......................................... 13
Dividend Rights........................................ 13
Liquidation Rights..................................... 13
Redemption............................................. 13
Conversion and Exchange................................ 14
Transfer Agent and Registrar........................... 14
No Preemptive Rights...................................... 14
Business Combinations With Interested Stockholders........ 14
Nomination Of Directors................................... 15
Depositary Shares......................................... 15
General................................................ 15
Dividends and Other Distributions...................... 15
Redemption of Depositary Shares........................ 16
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Withdrawal of Preferred Stock.......................... 16
Voting the Preferred Stock............................. 16
Amendment and Termination of Deposit Agreement......... 16
Resignation and Removal of Depositary.................. 17
Charges of Depositary.................................. 17
Miscellaneous.......................................... 17
Description Of Warrants..................................... 18
Specific Terms of Each Series of Warrant in a Prospectus
Supplement............................................. 18
Exercise Of Warrants...................................... 19
Modifications............................................. 19
Merger, Consolidation Or Sale Of Assets................... 20
Enforceability Of Rights By Holders....................... 20
Selling Securityholders..................................... 20
Plan Of Distribution........................................ 21
Distributions By Grant Prideco............................ 21
Distribution By Selling Securityholders................... 22
Legal Matters............................................... 23
Experts..................................................... 23
Where You Can Find More Information......................... 23
Incorporation Of Certain Documents By Reference............. 23
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed with
the Securities and Exchange Commission using a "shelf" registration process.
Under the shelf process, we may offer any combination of the Securities
described in this prospectus in one or more offerings, and certain third parties
("Selling Securityholders") may sell Securities under this prospectus, with a
total initial offering price of up to $500,000,000 or its equivalent in foreign
currency as we may designate in prospectus supplements.
This prospectus provides you with a general description of the debt
securities, preferred stock, common stock, depositary shares and warrants that
may be offered. Each time we use this prospectus to offer 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.
Any Selling Securityholders will be identified, and the type and amount of
Securities to be offered by them will be specified, in a supplement to this
prospectus. We will not receive proceeds of any sale of Securities by Selling
Securityholders.
We may offer the Securities in amounts, at prices and on terms determined
at the time of offering. We may sell the Securities directly to you, through
agents we select, or through underwriters and dealers we select. If we use
agents, underwriters or dealers to sell the Securities, we will name them and
describe their compensation in a prospectus supplement.
Please carefully read this prospectus and the prospectus supplement
together with the additional information described under the heading "Where You
Can Find More Information".
ABOUT GRANT PRIDECO
We are the world's largest manufacturer and supplier of drill pipe and
other drill stem products and are a leading North American provider of
high-performance engineered connections and premium tubing and casing used in
challenging onshore and offshore applications. Our drilling products are used in
drilling for and production of oil and gas.
We operate through two business segments:
- drill stem products and
- engineered connections and premium tubulars.
Until April 14, 2000, we were a wholly-owned subsidiary of Weatherford
International, Inc. We were spun off from Weatherford on April 14, 2000, through
a distribution by Weatherford to its stockholders of all of our common stock. As
a result of the spinoff, our stock became publicly owned and traded on the New
York Stock Exchange under the symbol "GRP".
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FORWARD-LOOKING STATEMENTS
Statements in this document and the documents incorporated by reference
that relate to matters that are not historical facts are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. When used in this document
and the documents incorporated by reference, words such as "anticipate",
"believe", "could", "estimate", "expect", "intend", "may", "plan", "predict",
"project", "will" and similar expressions are intended to identify
forward-looking statements. You should be aware that these forward looking
statements are only our predictions, and we cannot guarantee any such outcomes.
Future events and actual results may differ materially from the results set
forth in or implied in the forward-looking statements. Factors that might cause
such a difference include:
- fluctuations in worldwide prices and demand for oil and gas;
- fluctuations in levels of oil and gas exploration and development
activities;
- fluctuations in the demand for contract drilling services;
- the existence of competitors, technological changes and developments in
the industry;
- the existence of operating risks inherent in the contract drilling
industry;
- the existence of regulatory uncertainties, the possibility of political
instability in any of the countries in which Grant Prideco does business;
and
general economic conditions, in addition to the other matters discussed under
"Risk Factors".
RISK FACTORS
Please see the applicable prospectus supplement and our filings with the
Securities and Exchange Commission incorporated herein for risk factors that may
be applicable to a particular class or issuance of Securities or to us in the
future.
USE OF PROCEEDS
Except as we may described in a prospectus supplement, we will use the net
proceeds from any sale of the Securities described in this prospectus for future
business acquisitions and other general corporate purposes, such as working
capital, investment in subsidiaries, the retirement of existing debt (if
economically prudent) and/or the repurchase of shares of common stock or other
Securities. We may also invest the proceeds in certificates of deposit, United
States government Securities or certain other interest bearing Securities until
they are used for acquisitions or general corporate purposes.
The exact amounts to be used and when the net proceeds will be applied to
corporate purposes will depend on a number of factors, including our funding
requirements and the availability of alternative funding sources. We routinely
review acquisition opportunities. We will disclose in a prospectus supplement
any future proposal to use net proceeds from an offering of our Securities to
finance any specific acquisition, if applicable.
We will not receive any proceeds from an sale of shares of Securities by
Selling Shareholders.
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RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
These ratios, if applicable, will be included in the applicable prospectus
supplement.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be:
- our direct unsecured general obligations; and
- either Senior Debt Securities or Subordinated Debt Securities.
In this section, the words "we," "us" and the "Company" refer only to Grant
Prideco, the issuer of the Debt Securities, and not our subsidiaries.
Capitalized terms used in but not defined in this "Description of Debt
Securities" have the meanings specified in the applicable Indenture.
SPECIFIC TERMS OF EACH SERIES OF DEBT SECURITIES IN A PROSPECTUS SUPPLEMENT
The following describes general terms and provisions of the Debt Securities
to which any prospectus supplement may relate. Other terms, and the particular
terms of a specific series of Debt Securities (which differ from the terms
described below), will be described in the prospectus supplement relating to
that series. The terms of each series of Debt Securities will be governed by an
indenture or a supplemental indenture (each an "Indenture") that we will enter
into with a trustee. No Indenture will be restated in its entirety in a
prospectus supplement. We will file an Indenture relating to each series of Debt
Securities as an exhibit to the registration statement of which this prospectus
forms a part (or as an exhibit to a Current Report on Form 8-K) before we sell
those Debt Securities. You should read that Indenture, because it, and not this
description, controls the rights of holders of the applicable Debt Securities.
A prospectus supplement and an Indenture relating to any series of Debt
Securities being offered will include specific terms relating to the offering.
These terms will include some or all of the following:
- the form and title of the Debt Securities;
- the total principal amount of the Debt Securities;
- the date or dates on which the principal of the Debt Securities will be
payable;
- the portion of the principal amount which will be payable if the maturity
of the Debt Securities is accelerated;
- the currency or currency unit in which the Debt Securities will be paid;
- any right we may have to defer payments of interest by extending the
dates payments are due and whether interest on those deferred amounts
will be payable as well;
- the interest rate which the Debt Securities will bear and the interest
payment dates for the Debt Securities;
- any optional redemption provisions;
- any sinking fund or other provisions that would obligate us to repurchase
or otherwise redeem the Debt Securities;
- any rights of the holders of the Debt Securities to convert or exchange
the Debt Securities into or for our common stock, or another of our
Securities, and the terms and conditions of the conversion or the
exchange;
- any changes to or additions to the Events of Default;
- any changes to or additions to the covenants described below or contained
in the Indentures; and
- any other terms of the Debt Securities.
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SENIOR AND SUBORDINATED DEBT SECURITIES
The Senior Debt Securities will rank equally in right of payment with all
of our other senior and unsubordinated debt. The Subordinated Debt Securities
will rank junior in right of payment to all of our senior debt. "Senior debt"
includes all notes or other unsecured evidences of indebtedness, including
guarantees given by us, for money borrowed by us, not expressed to be
subordinate or junior in right of payment to any of our other indebtedness.
Each Indenture will allow us to issue Debt Securities up to the principal
amount that we authorize. Moreover, any Indenture relating to subordinated debt
(a "Subordinated Indenture") will not limit the amount of senior debt that we
may incur.
Each Subordinated Indenture will provide that no payment of principal,
interest and any premium on the applicable Subordinated Debt Securities may be
made if:
- we or our property are involved in any voluntary or involuntary
liquidation or bankruptcy;
- we fail to pay the principal, interest, any premium or any other amounts
on any Senior Debt when due; or
- we have a nonpayment default on any Senior Debt that imposes a payment
blockage on the Subordinated Debt Securities for a maximum of 179 days at
any one time.
SUBSIDIARY GUARANTEES
We conduct our operations through our subsidiaries. The Indentures will
require certain of our subsidiaries to guarantee, as "guarantors," any series of
Debt Securities on an equal basis. In particular, the Indentures will require
those subsidiaries who are guarantors or borrowers under our credit agreement to
equally guarantee any Debt Securities.
Initially, we expect that all of our domestic subsidiaries will be
guarantors of any series of Debt Securities. Each guarantor is obligated under
its guarantee only up to an amount that will not constitute a fraudulent
conveyance or fraudulent transfer under federal, state or foreign law. We do not
expect that any of our foreign subsidiaries that will be guarantors of any
series of Debt Securities. The debt of these non-guarantor subsidiaries, and any
future debt incurred by any of them, effectively will be senior to any series of
Debt Securities. Holders of Debt Securities will effectively have a junior
position to claims of creditors and preferred stockholders of our subsidiaries
who are not guarantors.
CERTAIN COVENANTS
Under the Indentures, we will agree that, at any time Debt Securities are
outstanding thereunder, we will:
- pay the principal, interest and premium on the Debt Securities when due;
- maintain a place of payment for the Debt Securities;
- deliver a report to the applicable trustee at the end of each fiscal year
reviewing our obligations under the applicable Indenture; and
- deposit sufficient funds with any payment agent on or before the due date
for any principal, premium or interest payment.
We have also agreed to the following covenants relating to limitations on
liens, requirements with respect to consolidations, mergers and assets sales and
restrictions on sale-and-leaseback transactions.
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Limitations on Liens
The Indentures will provide that we will not, nor will we permit any of our
subsidiaries to, create, assume, incur or otherwise cause or suffer to exist or
become effective any lien of any kind securing indebtedness or trade payables on
any of our, or their, property or assets, whether owned or leased or hereafter
acquired, unless all payments due under the Debt Securities and the applicable
Indenture are secured on an equal and ratable basis with the obligation so
secured until such time as the obligations are no longer secured by a lien,
except for Permitted Liens.
By "Permitted Liens", we mean:
- liens on our assets or the assets of any of our guarantor securing
indebtedness under any credit facility that are permitted to be incurred
by the terms of the applicable Indenture;
- liens in favor of us or any guarantor;
- liens on property of a an entity existing at the time such entity is
merged with or into or consolidated with us or any of our subsidiaries;
provided, however, that such liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any
assets other than those of the merged entity;
- liens on property existing at the time of acquisition thereof by us or
any of our subsidiaries; provided, however, that such liens were in
existence prior to the contemplation of such acquisition;
- liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds, workers' compensation, easements or
rights-of-way or other obligations of a like nature incurred in the
ordinary course of business which do not materially interfere with our
ability to perform our obligations under the applicable Indenture and
Debt Securities;
- liens to secure indebtedness covering only the assets acquired with such
indebtedness;
- liens existing on the issue date of the applicable series of Debt
Securities;
- liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded;
provided, however, that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made therefor;
and
- liens incurred by us in our ordinary course of business or any our
subsidiaries with respect to obligations that do not exceed a specified
dollar amount at any one time outstanding that do not in the aggregate
materially detract from the value of the property or materially impair
the use thereof in the operation of our business.
Consolidation, Merger or Asset Sale
Each Indenture generally will allow us to consolidate or merge with a
domestic corporation. They also will allow us to sell, lease or transfer all or
substantially all of our property and assets to a domestic corporation. If this
happens, the remaining or acquiring corporation must assume all of our
responsibilities and liabilities under the Indentures including the payment of
all amounts due on any outstanding series of Debt Securities and performance of
the covenants in the Indentures.
However, we will only consolidate or merge with or into any other
corporation or sell, lease or transfer all or substantially all of our assets
according to the terms and conditions of the Indentures, which include the
following requirements:
- the remaining or acquiring corporation is organized under the laws of the
United States, any state or the District of Columbia;
- the remaining or acquiring corporation assumes our obligations under the
Indentures and any outstanding Debt Securities pursuant to agreements
reasonably satisfactory to the applicable trustee;
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- immediately after giving effect to the transaction no Default or Event of
Default exists; and
- the remaining or acquiring corporation:
- will have consolidated net worth (as defined in any supplemental
indenture) immediately after the transaction equal to or greater than
our consolidated net worth immediately prior to the transaction; and
- will, on the date of such transaction after giving pro forma effect
thereto and any related financing transactions as if the same had
occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional indebtedness pursuant
to any fixed charge coverage ratio test set forth in any supplemental
indenture.
The remaining or acquiring corporation will be substituted for us in the
Indentures with the same effect as if it had been an original party to the
Indentures. Thereafter, the successor may exercise our rights and powers under
the Indentures, in our name or in its own name. If we sell or transfer all or
substantially all of our assets, we will be released from all our liabilities
and obligations under any Indenture and under the Debt Securities. If we lease
all or substantially all of our assets, we will not be released from our
obligations under the Indentures.
Restriction on Sale-and-Leaseback Transactions
The Indentures will provide that we will not, and will not permit any of
our subsidiaries to, enter into any sale-and-leaseback transactions, unless:
- We or our subsidiaries, as applicable, could have incurred indebtedness
in an amount equal to the Attributable Debt with respect to such
sale-and-leaseback transaction and incurred a lien to secure such
indebtedness pursuant to the covenant described above under the caption
"-- Limitation on Liens";
- the gross cash proceeds of such sale-and-leaseback transaction are at
least equal to the fair market value, as determined in good faith by our
Board of Directors and set forth in an officers' certificate delivered to
the applicable trustee, of the property that is the subject of such sale
and leaseback transaction; and
- the transfer of assets in the sale-and-leaseback transaction is permitted
by, and we apply the proceeds of such transaction in compliance with, the
covenant described above under the caption "-- Consolidation, Merger or
Asset Sale".
"Attributable Debt", when used with respect to any to any
sale-and-leaseback transaction, means, as at the time of determination, the
present value (discounted at the rate set forth or implicit in the terms of the
lease included in such transaction) of the total obligations of the lessee for
rental payments (other than amounts required to be paid on account of property
taxes, maintenance, repairs, insurance, assessments, utilities, operating and
labor costs and other items that do not constitute payments for property rights)
during the remaining term of the lease included in such sale-and-leaseback
transaction (including any period for which such lease has been extended). In
the case of any lease that is terminable by the lessee upon the payment of a
penalty or other termination payment, such amount shall be the lesser of the
amount determined assuming termination upon the first date such lease may be
terminated (in which case the amount shall also include the amount of the
penalty or termination payment, but no rent shall be considered as required to
be paid under such lease subsequent to the first date upon which it may be so
terminated) or the amount determined assuming no such termination.
Additional Covenants
Any series of Debt Securities may provide in the applicable Indenture for
additional covenants which may restrict the operations and activities of the
Company, including covenants which restrict our ability to make certain payments
or to incur additional indebtedness.
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CHANGE OF CONTROL
Any series of Debt Securities may provide in the Indenture that holders of
that series of Debt Securities may require us to repurchase such Securities at a
specified price upon the occurrence of a change of control of the Company (as
defined in the applicable Indenture).
EVENTS OF DEFAULT AND REMEDIES
"Event of Default" when used in an Indenture, will mean any of the
following:
- our failure to pay the principal of, or any premium on, any Debt Security
when due; or
- our failure to pay interest on any Debt Security for 30 days; or
- our failure to perform any other covenant in the Indenture that continues
for 60 days after being given written notice; or
- our default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by us or any of our subsidiaries, which
default (a) is caused by a failure to pay principal of that indebtedness
at final maturity or (b) results in the acceleration of that indebtedness
before its express maturity and, in each case, the principal amount of
all such indebtedness under which there has been a payment default or the
maturity of which has been accelerated, aggregates in excess of a
specified amount, where the default has not been cured or the
acceleration has not been rescinded within five business days after the
default or acceleration; or
- our failure to pay final judgments aggregating in excess of a specified
amount, which remain unpaid or undischarged for a period of 60 days; or
- certain events involving our bankruptcy, insolvency or reorganization; or
- any other Event of Default included in any Indenture.
The trustee may withhold notice to the holders of Debt Securities of any
default (except in the payment of principal or interest) if it considers such
withholding of notice to be in the best interests of the holders.
If an Event of Default for any series of Debt Securities occurs and
continues, the trustee or the holders of a specified percentage in aggregate
principal amount of the Debt Securities of the series may declare the entire
principal of all the Debt Securities of that series to be due and payable
immediately. If this happens, subject to certain conditions, the holders of a
majority of the aggregate principal amount of the Debt Securities of that series
can void the declaration.
Other than its duties in case of a default, a trustee is not obligated to
exercise any of its rights or powers under any Indenture at the request, order
or direction of any holders, unless the holders offer the trustee reasonable
indemnity. If they provide this reasonable indemnification, the holders of a
majority in principal amount of any series of Debt Securities may direct the
time, method and place of conducting any proceeding or any remedy available to
the trustee, or exercising any power conferred upon the trustee, for any series
of Debt Securities.
MODIFICATION OF INDENTURES
Generally, under each Indenture, we and the trustee will be permitted to
modify our rights and obligations, the guarantors' rights and obligations and
the rights of the holders under that Indenture 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, including consents obtained in
connection with a purchase of,
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or a tender offer for, a series of Debt Securities. However, without the consent
of each holder affected, no modification may:
- reduce principal amount of any series of Debt Securities;
- reduce the rate of, or change the time for payment of interest of, any
series of Debt Securities;
- alter the ranking of a series of Debt Securities relative to other
indebtedness of the Company;
- waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest on a series of Debt Securities (except a
rescission of acceleration by the holders of at least a majority in
aggregate principal amount of such series of Debt Securities and a waiver
of the payment default that resulted from such acceleration); or
- make any change in the preceding modification, amendment and waiver
provisions.
Notwithstanding the preceding, without the consent of any holder of the
Debt Securities, we and the applicable trustee may amend or supplement an
Indenture:
- to cure any ambiguity, defect or inconsistency;
- to provide for the assumption of our obligations to holders of Debt
Securities in the case of a merger or consolidation or sale of all or
substantially all of our assets;
- to make any change that would provide any additional rights or benefits
to the holders of Debt Securities or that does not adversely affect the
legal rights under the applicable Indenture of any such holder;
- to provide for a successor trustee;
- to comply with requirements of the Securities and Exchange Commission in
order to effect or maintain the qualification of the Indenture under the
Trust Indenture Act; or
- to add terms and provisions relating to a specific series of Debt
Securities.
DISCHARGING OUR OBLIGATIONS; DEFEASANCE
We may choose to either discharge all of our obligations and the
obligations of the guarantors under any series of Debt Securities in a legal
defeasance, or to release ourselves and the guarantors from the covenant
restrictions with respect to a series of Debt Securities in a covenant
defeasance. We may do so at any time on the 91st day after we irrevocably
deposit with the applicable trustee cash or government Securities in an amount
sufficient to pay the principal, interest, any premium and any other sums to the
stated maturity date or a redemption date for that series of Debt Securities. If
we choose this option, the holders of that series of Debt Securities will not be
entitled to the benefits of the applicable Indenture, except for:
- registration of transfer and exchange of Debt Securities;
- replacement of lost, stolen or mutilated Debt Securities;
- conversion or exchange of Debt Securities;
- sinking fund payments; and
- the receipt of principal and interest on the original stated due dates or
specified redemption dates.
We may discharge our obligations under an Indenture or release ourselves
from covenant restrictions only if we meet certain requirements. Among other
things, we must deliver to the applicable trustee an opinion of counsel that the
discharge will not result in the holders of that series of Debt Securities
having to recognize taxable income or loss or subject them to different tax
treatment. In the case of legal defeasance, this opinion must be based on a
letter ruling from the Internal Revenue Service or a change in
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federal tax law. In addition, no Default or Event of Default may have occurred
and be continuing at the time of such deposit, and the discharge may not result
in the breach or violation of any material agreement to which we are a party.
REGISTRATION OF NOTES; MINIMUM DENOMINATIONS
We may issue Debt Securities of a series in registered, bearer, coupon or
global form. Debt Securities will be issued in registered form in amounts of
$1,000 each or multiples of $1,000.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the Company
or any guarantor, as such, shall have any liability for any of our obligations
or obligations of the guarantors under the Debt Securities, the Indentures or
the subsidiary guarantees, or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each holder of Debt Securities by
accepting such Debt Securities will waive and release all such liability. The
waiver and release will be part of the consideration for issuance of the Debt
Securities. The waiver may not be effective to waive liabilities under the
federal Securities laws.
PAYMENT AND TRANSFER
We will pay principal and any premium and interest on Debt Securities at
the corporate trust office of the applicable trustee or at any other office or
agency maintained by us for such purpose. We may choose to make any interest
payments on a Debt Security:
- by check mailed to the address of the holder of the Debt Security as it
appears in the register for that series of Debt Securities; or
- by wire transfer to an account maintained by the holder as specified in
the register.
We will make interest payments to the person in whose name the Debt
Security is registered at the closing of business on the days specified in the
applicable Indenture.
Fully registered Debt Securities may be transferred or exchanged at the
corporate trust office of the applicable trustee or at any other office or
agency maintained by us for such purposes, without the payment of any service
charge except for any tax or governmental charge.
BOOK ENTRY, DELIVERY AND FORM
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 depositary
identified in a prospectus supplement.
Unless otherwise stated in any prospectus supplement, The Depository Trust
Company, New York, New York ("DTC") will act as depositary. Book-entry notes of
a series will be issued in the form of a global note that will be deposited with
DTC. This means that we will not issue certificates to each holder. One global
note will be issued to DTC who will keep a computerized record of its
participants (for example, your broker) whose clients have purchased the notes.
The participant will then keep a record of its clients who purchased the notes.
Unless it is exchanged in whole or in part for a certificate note, a global note
may not be transferred; except that DTC, its nominees and their successors may
transfer a global note as a whole to one another.
Beneficial interests in global notes will be shown on, and transfers of
global notes will be made only through, records maintained by DTC and its
participants.
DTC has provided us the following information: DTC is a limited-purpose
trust company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the United States
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered under the
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provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds
Securities that its participants ("Direct Participants") deposit with DTC. DTC
also records the settlement among Direct Participants of Securities
transactions, such as transfers and pledges, in deposited Securities through
computerized records for Direct Participant's accounts. This eliminates the need
to exchange certificates. Direct Participants include Securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations.
DTC's book-entry system is also used by other organizations such as trust
companies that work through a Direct Participant. The rules that apply to DTC
and its participants are on file with the SEC.
DTC is owned by a number of its Direct Participants and by the New York
Stock Exchange, Inc., The American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc.
We will wire principal and interest payments to DTC's nominee. We and the
trustee will treat DTC's nominee as the owner of the global notes for all
purposes. Accordingly, we, the trustee and any paying agent will have no direct
responsibility or liability to pay amounts due on the global notes to owners of
beneficial interests in the global notes.
It is DTC's current practice, upon receipt of any payment of principal or
interest, to credit Direct Participants' accounts on the payment date according
to their respective holdings of beneficial interests in the global notes as
shown on DTC's records. In addition, it is DTC's current practice to assign any
consenting or voting rights to Direct Participants whose accounts are credited
with notes on a record date, by using an omnibus proxy. Payments by participants
to owners of beneficial interests in the global notes, and voting by
participants, will be governed by the customary practices between the
participants and owners of beneficial interests, as is the case with notes held
for the account of customers registered in "street name." However, payments will
be the responsibility of the participants and not of DTC, the trustee or us.
Notes represented by a global note will be exchangeable for certificate
notes with the same terms in authorized denominations only if:
- DTC notifies us that it is unwilling or unable to continue as depositary
or if DTC ceases to be a clearing agency registered under applicable law
and a successor depositary is not appointed by us within 90 days; or
- we determine not to require all of the notes of a series to be
represented by a global note and notify the trustee of our decision.
THE TRUSTEE
Resignation or Removal of Trustee
Under provisions of the Indentures and the Trust Indenture Act of 1939, as
amended, governing trustee conflicts of interest, any uncured Event of Default
with respect to any series of Debt Securities will force the trustee to resign
as trustee under either the Subordinated Indenture or the Senior Indenture. Any
resignation will require the appointment of a successor trustee under the
applicable Indenture in accordance with the terms and conditions of that
Indenture. The trustee may resign or be removed by us with respect to one or
more series of Debt Securities and a successor trustee may be appointed to act
with respect to any such 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 such series.
Limitations on Trustee if it is a Creditor of the Company
Each Indenture will contain limitations on the right of the trustee
thereunder, in the event that it becomes a creditor of the Company, to obtain
payment of claims in certain cases, or to realize on certain property received
in respect of any such claim as security or otherwise.
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Annual Trustee Report to Holders of Debt Securities
The trustee will be required to submit an annual report to the holders of a
series of Debt Securities regarding, among other things, the trustee's
eligibility to serve as such, the priority of the trustee's claims regarding
certain advances made by it, and any action taken by the trustee materially
affecting the Debt Securities.
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 application by us for action by the trustee shall be accompanied by a
certificate of certain 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 such action have been complied with by us.
DESCRIPTION OF COMMON STOCK AND PREFERRED STOCK
Unless otherwise indicated in a prospectus supplement, our authorized
capital stock consists of 300 million shares of our common stock and 10 million
shares of preferred stock, par value $.01 per share, of which, approximately
109.0 million shares of our common stock are issued and outstanding. No shares
of our preferred stock are issued or outstanding (unless indicated otherwise in
a prospectus supplement). All of the shares of our common stock issued and
outstanding have been validly issued and are fully paid and nonassessable.
COMMON STOCK
Voting Rights
Holders of our common stock will be entitled to one vote for each share on
all matters voted on by stockholders. Our common stock will possess all voting
power of Grant Prideco, except as otherwise required by law or provided in any
resolution adopted by our board designating any series of our preferred stock.
The shares of our common stock will not have cumulative voting rights.
Although the holders of our common stock are generally entitled to vote for
the approval of amendments to our certificate of incorporation, the voting
rights of the holders of our common stock are limited with respect to certain
amendments to our certificate of incorporation that affect only the holders of
our preferred stock. Specifically, subject to the rights of any outstanding
shares of any series of our preferred stock, our certificate of incorporation
may be amended from time to time in any manner that would solely modify or
change the relative powers, preferences and rights and the qualifications or
restrictions of any issued shares of any series of our preferred stock then
outstanding with the only required vote or consent for approval of such
amendment being the affirmative vote or consent of the holders of a majority of
the outstanding shares of the series of our preferred stock so affected,
provided that the powers, preferences and rights and the qualifications and
limitations or restrictions of such series after giving effect to such amendment
are no greater than the powers, preferences and rights and qualifications and
limitations or restrictions permitted to be fixed and determined by the board of
directors with respect to the establishment of any new series of shares of our
preferred stock pursuant to the authority vested in the board of directors as to
such matters.
Dividend Rights
Subject to any preferential or other rights of any outstanding series of
our preferred stock that our board may designate, and subject to contractual
restrictions contained in our debt agreements, holders of our common stock will
be entitled to such dividends as may be declared from time to time by our board
from funds legally available therefor.
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Liquidation Rights and Other Provisions
Subject to the prior rights of creditors and the holders of any of our
preferred stock that may be outstanding from time to time, the holders of our
common stock are entitled in any liquidation, dissolution or winding up to share
pro rata in the distribution of all remaining assets.
Our common stock is not liable for any calls or assessments and is not
convertible into any other Securities. Our certificate of incorporation will
provide that the private property of the stockholders shall not be subject to
the payment of corporate debts. There are no redemption or sinking fund
provisions applicable to our common stock.
Transfer Agent And Registrar
The registrar and transfer agent of our common stock is American Stock
Transfer & Trust Company.
PREFERRED STOCK
Under our Certificate of Incorporation, the Board of Directors of Grant
Prideco is authorized, without further stockholder action, to issue from time to
time up to 10,000,000 shares of Preferred Stock and to fix and determine voting
powers, designations, preferences and relative, participating, optional or other
special rights and qualifications, limitations or restrictions of any series of
Preferred Stock, including, without limitation, any voting rights, any dividends
payable and any right of the shares of that series to convert into or be
exchanged for other Securities of Grant Prideco (provided, however, that any
Securities issuable upon conversion or exchange of Preferred Stock will be
subject to registration under the Securities Act or an applicable exemption
therefrom). The Board of Directors of Grant Prideco, without stockholder
approval, could authorize the issuance of Preferred Stock with voting,
conversion and other rights that could adversely affect the voting power (if
any) and other rights of other series of the Preferred Stock or of the Common
Stock. As of the date of this prospectus we have no Preferred Stock outstanding.
Specific Terms of Each Series of Preferred Stock in a Prospectus Supplement
The following describes general terms and provisions of the Preferred Stock
to which any prospectus supplement may relate. Other terms, and the particular
terms of a specific series of Preferred Stock (which differ from the terms
described below), will be described in the prospectus supplement relating to
that series. The terms of each series of Preferred Stock will be governed by our
Certificate of Incorporation (as amended from time to time) and the certificate
of designations relating to that series of Preferred Stock (the "Certificate of
Designations"). The Certificate of Incorporation and any Certificates of
Designations are not restated in their entirety below and will not be restated
in their entirety in a prospectus supplement. We will file a Certificate of
Designations as an exhibit to the registration statement of which this
prospectus forms a part (or as an exhibit to a Current Report on Form 8-K)
before we issue that series of the Preferred Stock. You should read our
Certificate of Incorporation and any applicable Certificate of Designations,
because they, and not this description, control the rights of holders of
Preferred Stock.
The Preferred Stock will have the dividend, liquidation, redemption and
voting rights set forth below, unless otherwise provided in the prospectus
supplement relating to a particular series of Preferred Stock.
The applicable prospectus supplement will describe:
- the designation and the number of shares offered;
- the amount of liquidation preference per share;
- the price at which that Preferred Stock will be issued;
- the dividend rate (or method of calculation), if any, the dates on which
dividends will be payable, whether dividends will be cumulative or
noncumulative and, if cumulative, the dates from which dividends will
begin to cumulate;
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- any redemption or sinking fund provisions;
- the terms of any rights to convert or exchange the Preferred Stock into
other Securities of Grant Prideco;
- whether we have elected to offer Depositary Shares (as defined below);
and
- any additional voting, dividend, liquidation, redemption, sinking fund
and other rights, preferences, privileges, limitations and restrictions.
Voting Rights
The holders of Preferred Stock of a series offered hereby will not have any
voting rights, except as indicated in the applicable prospectus supplement or as
required by applicable law.
Dividend Rights
Unless otherwise set forth in the applicable prospectus supplement, holders
of shares of each series of the Preferred Stock will be entitled to receive,
when, as and if declared by the Board of Directors of Grant Prideco out of funds
legally available therefor, cash dividends at such rates and on such dates as
are set forth in the prospectus supplement relating to such series of Preferred
Stock. Different series of Preferred Stock may be entitled to dividends at
different rates or based upon different methods of determination. The dividend
rate may be fixed or variable or both. Each dividend will be payable to the
holders of record as they appear on the stock books of Grant Prideco, on the
record dates fixed by the Board of Directors of Grant Prideco or a duly
authorized committee thereof. Dividends on any series of the Preferred Stock may
be cumulative or noncumulative, as provided in the related prospectus
supplement.
Liquidation Rights
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of Grant Prideco, the holders of shares of each series of Preferred
Stock will be entitled to receive liquidating distributions in the amount set
forth in the prospectus supplement relating to that series of Preferred Stock,
out of assets of Grant Prideco available for distribution to stockholders,
before any distribution of assets is made to holders of Common Stock or any
other class of stock ranking junior to that series of Preferred Stock upon
liquidation.
Because we are a holding company, our rights and the rights of holders of
our Securities, including the holders of Preferred Stock, to participate in the
distribution of assets of any of our subsidiaries on the subsidiary's
liquidation or recapitalization will be subject to the prior claims of the
subsidiary's creditors and preferred stockholders, except to the extent that we
may itself be a creditor with recognized claims against the subsidiary or a
holder of preferred stock of the subsidiary. The Preferred Stock will rank prior
to the Common Stock with respect to dividend rights and rights upon winding up
and dissolution of Grant Prideco.
The Preferred Stock will be issued in one or more series. The holders of
Preferred Stock will have no preemptive rights. Preferred Stock will be fully
paid and nonassessable when issued upon full payment of the purchase price
therefor. Unless otherwise specified in the prospectus supplement relating to a
particular series of Preferred Stock, each series of Preferred Stock offered
hereby will rank on a parity as to dividends and liquidation rights in all
respects with each other series of Preferred Stock. The prospectus supplement
will contain, if applicable, a description of material United States federal
income tax consequences relating to the purchase and ownership of shares of the
series of Preferred Stock offered by the prospectus supplement.
Redemption
One or more series of the Preferred Stock may be redeemable, in whole or in
part, at the option of Grant Prideco, and may be subject to mandatory redemption
pursuant to a sinking fund or otherwise, in
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each case upon terms, at the times and at the redemption prices set forth in the
applicable prospectus supplement.
Conversion and Exchange
The terms, if any, on which shares of any series of Preferred Stock will be
convertible into or exchangeable for other Securities of Grant Prideco will be
set forth in the applicable prospectus supplement (however, any Securities
issuable upon conversion or exchange of Preferred Stock will be subject to
registration under the Securities Act or an applicable exemption therefrom). The
conversion or exchange terms may include provisions for conversion or exchange,
either mandatory, at the option of the holder, or at our option, in which case
the number of other Securities of Grant Prideco to be received by the holders of
that series of Preferred Stock would be calculated as of a time and in the
manner stated in the prospectus supplement.
Transfer Agent and Registrar
The transfer agent, registrar and dividend disbursement agent for the
Preferred Stock will be designated in the applicable prospectus supplement. The
registrar for shares of Preferred Stock will send to stockholders notices of any
meetings at which holders of the applicable series of Preferred Stock will have
the right to elect directors of Grant Prideco or to vote on any other matter.
NO PREEMPTIVE RIGHTS
No holder of any stock of Grant Prideco of any class authorized at the
distribution date will have any preemptive right to subscribe to any Securities
of Grant Prideco of any kind or class.
BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS
As a Delaware corporation, we are subject to Section 203 of the Delaware
General Corporation Law. In general, Section 203 prevents an "interested
stockholder" (defined generally as a person owning 15% or more of a
corporation's outstanding voting stock) from engaging in a "business
combination" (as defined) with a Delaware corporation for three years following
the time such person became an interested stockholder unless:
- before such person became an interested stockholder, the board of
directors of the corporation approved the transaction in which the
interested stockholder became an interested stockholder or approved the
business combination;
- upon consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owns at
least 85% of the voting stock of the corporation outstanding at the time
the transaction commenced (excluding stock held by directors who are also
officers of the corporation and by employee stock plans that do not
provide employees with the rights to determine confidentially whether
shares held subject to the plan will be tendered in a tender or exchange
offer); or
- following the transaction in which such person became an interested
stockholder, the business combination is approved by the board of
directors of the corporation and authorized at a meeting of stockholders
by the affirmative vote of the holders of two-thirds of the outstanding
voting stock of the corporation not owned by the interested stockholder.
Under Section 203, the restrictions described above also do not apply to
certain business combinations proposed by an interested stockholder following
the announcement or notification of one of certain extraordinary transactions
involving the corporation and a person who had not been an interested
stockholder during the previous three years or who became an interested
stockholder with the approval of a majority of the corporation's directors, if
such extraordinary transaction is approved or not opposed by a majority of the
directors who were directors prior to any person becoming an interested
stockholder during
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the previous three years or were recommended for election or elected to succeed
such directors by a majority of such directors.
NOMINATION OF DIRECTORS
Our bylaws establish an advance notice procedure with regard to the
nomination, other than by or at the direction of the board or a committee
thereof, of candidates for election as directors.
This nomination procedure requires that a stockholder give advance written
notice, in proper form, of a planned nomination for the board to the Secretary
of Grant Prideco. The requirements as to the form and timing of that notice,
which are specified in our bylaws, are not inconsistent with the requirements of
the Securities Exchange Act of 1934 for a stockholder proposal. If a person is
not nominated in accordance with this nomination procedure, that person will not
be eligible for election as a director.
Although our bylaws do not give the board any power to approve or
disapprove stockholder nominations for the election of directors, our bylaws may
have the effect of precluding a nomination for the election of directors at a
particular meeting if the proper procedures are not followed and may discourage
a third party from soliciting proxies to elect its own slate of directors or
otherwise attempting to obtain control of Grant Prideco, even if that
solicitation or attempt might be beneficial to us and our stockholders.
DEPOSITARY SHARES
General
We may offer receipts for fractional interests ("Depositary Shares") in
Preferred Stock, rather than full shares of Preferred Stock. If we do so,
receipts ("Depositary Receipts") for Depositary Shares, each of which will
represent a fraction (which will be set forth in the prospectus supplement
relating to the applicable series of Preferred Stock) of a share of a particular
series of Preferred Stock, will be issued as described below.
The shares of any series of Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement between Grant Prideco and a
Depositary to be named by Grant Prideco in the applicable prospectus supplement.
Subject to the terms of the Deposit Agreement, each owner of a Depositary Share
will be entitled, in proportion to the applicable fraction of a share of
Preferred Stock represented by that Depositary Share, to all of the rights and
preferences of the Preferred Stock represented thereby (including dividend,
voting, redemption, subscription and liquidation rights). The following summary
of certain provisions of the Deposit Agreement does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all of the
provisions of the Deposit Agreement, including the definitions therein of
certain terms. Copies of the forms of Deposit Agreement and Depositary Receipt
are incorporated by reference as exhibits to the Registration Statement of which
this prospectus is a part, and the following summary is qualified in its
entirety by reference to those exhibits.
Dividends and Other Distributions
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the applicable series of Preferred Stock to
the record holders of Depositary Shares relating to that series in proportion to
the amount of those Depositary Shares owned by the holders.
In the event of a distribution other than in cash, then the Depositary will
distribute property received by it to the record holders of Depositary Shares in
an equitable manner, unless Grant Prideco, after consulting with the Depositary,
determines that it is not feasible to make the distribution, in which case the
Depositary may sell the distributed property and distribute the net proceeds
from the sale to the holders.
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Redemption of Depositary Shares
If a series of Preferred Stock represented by Depositary Shares is subject
to redemption, the Depositary Shares will be redeemed from the proceeds received
by the Depositary resulting from any redemption of any shares of that series of
Preferred Stock held by the Depositary. The redemption price per Depositary
Share will equal the applicable fraction of the redemption price per share
payable with respect to that series of Preferred Stock. Whenever Grant Prideco
redeems shares of Preferred Stock held by the Depositary, the Depositary will
redeem, as of the same redemption date, the number of Depositary Shares
representing shares of Preferred Stock so redeemed. If fewer than all of the
Depositary Shares are to be redeemed, then the Depositary Shares to be redeemed
will be selected by lot, pro rata or by another equitable method.
Withdrawal of Preferred Stock
Any holder of Depositary Shares may receive, upon surrender of the
corresponding Depositary Receipts to the Depositary, the number of whole shares
of the related series of Preferred Stock and any money or other property
represented by the surrendered Depositary Receipts. Holders of Depositary Shares
that surrender their Depositary Receipts will be entitled to receive whole
shares of Preferred Stock on the basis set forth in the related prospectus
supplement for the applicable series of Preferred Stock, but holders of whole
shares of that series of Preferred Stock will not be entitled to subsequently
deposit those shares of Preferred Stock under the Deposit Agreement or to
receive Depositary Receipts therefor. If the Depositary Shares surrendered by a
holder in connection with a withdrawal exceed the number of Depositary Shares
that represent the number of whole shares of Preferred Stock to be withdrawn,
then the Depositary will deliver to that holder at the same time a new
Depositary Receipt evidencing the excess number of Depositary Shares.
Voting the Preferred Stock
Upon receipt of a notice of any meeting at which the holders of a series of
Preferred Stock are entitled to vote, the Depositary will mail the information
contained in the notice to the record holders of the Depositary Shares relating
to that series of Preferred Stock. Each record holder of the Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary to exercise the
voting rights pertaining to the shares of Preferred Stock represented by that
holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to vote the amount of the Preferred Stock represented by those
Depositary Shares in accordance with the holder's instructions, and Grant
Prideco will take all reasonable action that the Depositary may deem necessary
in order to enable the Depositary to do so. The Depositary will abstain from
voting shares of the Preferred Stock to the extent that it does not receive
specific instructions from the holder of Depositary Shares representing those
shares of Preferred Stock.
Amendment and Termination of Deposit Agreement
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between Grant Prideco and the Depositary. However, any amendment that imposes
any fees, taxes or other charges payable by holders of Depositary Receipts
(other than taxes and other governmental charges, fees and other expenses
payable by such holders as stated under "-- Depositary Shares -- Charges of
Depositary"), or that otherwise prejudices any substantial existing right of
holders of Depositary Receipts, will not affect outstanding Depositary Receipts
until 90 days after notice of the amendment has been mailed to the record
holders of outstanding Depositary Receipts. Every holder of Depositary Receipts
at the time the amendment becomes effective will be deemed to consent and agree
to the amendment and to be bound by the Deposit Agreement, as so amended. No
amendment may impair the right of any owner of Depositary Shares to receive
shares of the Preferred Stock and any money or other property represented
thereby, subject to the conditions specified in the Deposit Agreement, upon
surrender of the Depositary Receipts evidencing such Depositary Shares, except
in order to comply with mandatory provisions of applicable law.
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<PAGE> 21
Whenever so directed by Grant Prideco, the Depositary will terminate the
Deposit Agreement by mailing notice of termination to the record holders of all
Depositary Receipts then outstanding at least 30 days before the termination
date stated in the notice. The Depositary also may terminate the Deposit
Agreement if 45 days have expired after the Depositary delivered to Grant
Prideco a written notice of its election to resign and a successor depositary
has not been appointed and accepted its appointment. If any Depositary Receipts
remain outstanding after the date of termination, the Depositary will
discontinue the transfer of Depositary Receipts, will suspend the distribution
of dividends to the holders of Depositary Receipts, and will not give any
further notices (other than notice of termination) or perform any further acts
under the Deposit Agreement, except that the Depositary will continue (1) to
collect dividends and any other distributions on the Preferred Stock and (2) to
deliver the Preferred Stock, together with the corresponding dividends and
distributions and the net proceeds of any sales of rights, preferences,
privileges or other property, without liability for interest thereon, in
exchange for Depositary Receipts surrendered. At any time after two years from
the date of termination, the Depositary may sell the Preferred Stock then held
by it at public or private sales, at such place or places and upon such terms as
it deems proper, and may hold the net proceeds of any sale, together with any
money and other property then held by it, without liability for interest
thereon, for the pro rata benefit of the holders of Depositary Receipts which
have not been surrendered.
Resignation and Removal of Depositary
The Depositary may resign at any time by delivering notice of its election
to do so to Grant Prideco, and Grant Prideco may at any time remove the
Depositary. Any resignation or removal will take effect upon the appointment of
a successor Depositary and its acceptance of such appointment. The successor
Depositary must be appointed within 45 days after delivery of the notice of
resignation or removal and must be a bank or trust company, or an affiliate of a
bank or trust company, having its principal office in the United States and
having a combined capital and surplus of at least $50,000,000.
Charges of Depositary
Grant Prideco will pay charges of the Depositary in connection with the
initial deposit of the Preferred Stock and issuance of Depositary Receipts, all
withdrawals of shares of Preferred Stock by owners of Depositary Shares, any
redemption of the deposited Preferred Stock and the distribution of information
to holders of the Depositary Receipts. Holders of Depositary Receipts will pay
other transfer and other taxes and governmental charges and any other charges
that are expressly provided in the Deposit Agreement to be at their expense.
Miscellaneous
The Depositary will forward to the holders of Depositary Receipts all
reports and communications from Grant Prideco that are delivered to the
Depositary and that Grant Prideco is required or otherwise determines to furnish
to the holders of the corresponding series of Preferred Stock.
Neither the Depositary nor Grant Prideco will be liable if it is prevented
or delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Depositary under
the Deposit Agreement are limited to performing its duties thereunder without
negligence or bad faith. The obligations of Grant Prideco under the Deposit
Agreement are limited to performing its duties thereunder in good faith. Neither
Grant Prideco nor the Depositary will be required to prosecute or defend any
legal proceeding regarding any Depositary Shares or Preferred Stock unless
satisfactory indemnity is furnished. Grant Prideco and the Depositary may rely
upon the advice of counsel or accountants, or upon information provided by
persons presenting Preferred Stock.
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DESCRIPTION OF WARRANTS
We may issue Warrants to purchase Debt Securities, Common Stock or
Preferred Stock (which may be represented by Depositary Shares). We may issue
Warrants independently or together with any other Securities and may attach them
to or separate them from other Securities. We will issue any Warrants under
separate Warrant Agreements to be entered into between us and a warrant agent
specified in the applicable prospectus supplement.
SPECIFIC TERMS OF EACH SERIES OF WARRANT IN A PROSPECTUS SUPPLEMENT
The following describes general terms and provisions of the Warrants to
which any prospectus supplement may relate. Other terms, and the particular
terms of a specific series of Warrants (which differ from the terms described
below), will be described in the prospectus supplement relating to that series.
The terms of each series of Warrants will be governed by a Warrant Agreement
(each a "Warrant Agreement") that we will enter into with a warrant agent. No
Warrant Agreement is restated in its entirety below, and the Warrant Agreement
relating to any specific series of Warrants will not be restated in its entirety
in a prospectus supplement. We will file a Warrant Agreement relating to each
series of Warrants as an exhibit to the registration statement of which this
prospectus forms a part (or as an exhibit to a Current Report on Form 8-K)
before we sell those Warrants. You should read that Warrant Agreement, because
it, and not this description, controls the rights of holders of the applicable
Warrants.
The Warrants will be denominated in U.S. dollars or in such foreign
currency, currency unit or composite currency as indicated in the applicable
prospectus supplement.
The applicable prospectus supplement will describe the terms of any series
of Warrants in respect of which this prospectus is being delivered, including,
where applicable, the following:
- the title of the Warrants;
- the aggregate number of the Warrants;
- the price or prices for which the Warrants will be issued;
- the currency, currency unit or composite currency in which the price for
the Warrants will be payable;
- the designation, number and terms of the Debt Securities, Common Stock or
Preferred Stock purchasable upon exercise of the Warrants, and procedures
pursuant to which such numbers may be adjusted;
- the designation and terms of the Debt Securities, Common Stock or
Preferred Stock, if any, with which the Warrants are issued and the
number of Warrants issued with each such Security;
- the date, if any, on and after which the Warrants and the related
underlying Security will be separately transferable;
- the exercise price or prices at which the Debt Securities, Common Stock
or Preferred Stock purchasable upon exercise of the Warrants may be
purchased, or provisions for determining the exercise price or prices,
procedures pursuant to which the exercise price or prices may be
adjusted, and (if not U.S. dollars) the foreign currency, currency unit
or composite currency in which the exercise price or prices are
denominated;
- the date on which the right to exercise the Warrants will commence and
the date on which that right will expire;
- whether the Warrants will be issued in bearer form;
- the minimum or maximum amount of Warrants that may be exercised at any
one time;
- information with respect to book-entry procedures, if any;
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<PAGE> 23
- a discussion of certain United States federal income tax considerations;
and
- any other terms of the Warrants, including terms, procedures and
limitations relating to the
- transferability, exchange and exercise of the Warrants.
Until they exercise their Warrants, holders of Warrants will not have any
of the rights of holders of the Securities purchasable upon exercise, and will
not be entitled to
- receive payments of principal of (or premium, if any) or interest, if
any, on any Debt Securities purchasable upon exercise,
- receive dividend payments, if any, with respect to any underlying
Securities or
- exercise the voting rights of any Common Stock or Preferred Stock
purchasable upon exercise.
EXERCISE OF WARRANTS
Unless otherwise indicated in the applicable prospectus supplement relating
thereto, the Warrants will be issued in registered form. Each Warrant will
entitle its holder to purchase for cash the principal amount or number of
Securities of Grant Prideco at the exercise price set forth in, or determinable
from, the applicable prospectus supplement relating to the Warrants offered
thereby. Warrants may be exercised as described in the applicable prospectus
supplement at any time up to the close of business on the expiration date set
forth in the prospectus supplement. After the close of business on the
expiration date (or any later expiration date, if we extend the expiration
date), unexercised Warrants will become void.
Upon receipt of payment and of the certificate evidencing a Warrant,
properly completed and duly executed, at the corporate trust office of the
warrant agent or any other office indicated in the applicable prospectus
supplement, we will, as soon as practicable, forward the Securities purchasable
upon such exercise. If less than all of the Warrants represented by a
surrendered Warrant certificate are exercised, a new Warrant certificate will be
issued for the remaining Warrants.
MODIFICATIONS
We and the warrant agent may amend the Warrant Agreements and the terms of
the Warrants, without the consent of the holders of Warrants,
- to cure any ambiguity, defect or inconsistency;
- to provide for the assumption of our obligations to holders of Warrants
in the case of a merger or consolidation or sale of all or substantially
all of our assets;
- to make any change that we deem necessary or desirable and that will not
materially and adversely affect the interests of holders of outstanding
Warrants; or
- to provide for a successor warrant agent.
We and the warrant agent also may modify or amend certain other terms of
the Warrant Agreements and the Warrants with the consent of the holders of a
majority in number of the then-outstanding unexercised Warrants affected.
However, no such modification or amendment may be made without the consent of
the affected holders if the amendment would
- shorten the period of time during which the Warrants may be exercised;
- otherwise materially and adversely affect the exercise rights of the
holders of the Warrants; or
- reduce the number of outstanding Warrants.
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MERGER, CONSOLIDATION OR SALE OF ASSETS
If at any time there occurs a merger of, consolidation of, or sale of
substantially all of the assets of, Grant Prideco, as a result of which
Securities underlying Warrants are converted into the right to receive stock,
Securities or other property, then each outstanding Warrant will thereafter only
be exercisable for the kind and amount of stock, Securities or other property
receivable upon the consummation of that transaction by a holder of the number
of Securities underlying the Warrant.
ENFORCEABILITY OF RIGHTS BY HOLDERS
The warrant agent will act solely as our agent in connection with the
issuance and exercise of any Warrants. The warrant agent will have no duty or
responsibility in case of any default by Grant Prideco in the performance of its
obligations under the Warrant Agreements or the Warrant certificates. Each
holder of Warrants may, without the consent of the warrant agent, enforce by
appropriate legal action, on its own behalf, its right to exercise its Warrants.
SELLING SECURITYHOLDERS
In addition to covering the offering of Securities by us, this prospectus
covers the offering for resale of Securities by Selling Securityholders. The
applicable prospectus supplement will set forth, with respect to each Selling
Stockholder,
- the name of the Selling Stockholder,
- the nature of any position, office or other materials relationship which
the Selling Stockholder will have had within the prior three years with
Grant Prideco or any of its predecessors or affiliates,
- the type and amount of Securities owned by the Selling Stockholder prior
to the offering,
- the type and amount of Securities to be offered for the Selling
Stockholder's account and
- the amount and (if one percent or more) the percentage of Securities to
be owned by the Selling Stockholder after completion of the offering.
The Selling Securityholders may include or consist of, from time to time,
such underwriters and/or other persons with whom we may enter into standby
arrangements from time to time as described under "Plan of Distribution".
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<PAGE> 25
PLAN OF DISTRIBUTION
DISTRIBUTIONS BY GRANT PRIDECO
We may sell Securities to one or more underwriters for public offering and
sale by them. We also may sell Securities directly to investors or to other
purchasers or through dealers or agents. We will name any underwriter, dealer or
agent involved in the offer and sale of the Securities in the applicable
prospectus supplement.
In addition, we may from time to time, redeem, repurchase or tender for
some or all of our outstanding indebtedness. In that case, we may enter into an
agreement with one or more underwriters or other persons pursuant to which that
underwriter or person would agree to act as a "standby purchaser" and purchase
from us a number of shares of our common stock or other securities of Grant
Prideco as would be required to fund some or all of the applicable redemption,
repurchase or tender offer price. Alternatively, a standby purchaser may agree
to purchase directly any redeemed, repurchased or tendered indebtedness and
receive, as compensation, Securities issued by Grant Prideco. The agreement
might also provide that the standby purchaser would resell the Securities
received from Grant Prideco. In such case, the standby purchaser may be deemed
to be an underwriter and may be required to resell such Securities pursuant to a
prospectus supplement to this prospectus. The applicable terms of any such
agreement or arrangement, including terms relating to compensation and the
identity of any such standby purchaser, would be disclosed in a prospectus
supplement.
We may distribute Securities from time to time in one or more transactions
at a fixed price or prices, which may be changed, or at market prices prevailing
at the time of sale, at prices related to those prevailing market prices or at
negotiated prices. We may sell common stock under this prospectus from time to
time in one or more transactions on the New York Stock Exchange or in negotiated
transactions or a combination of these methods.
In connection with distributions of Securities, we may enter into hedging
transactions with broker-dealers through which those broker-dealers may sell
Securities registered hereunder in the course of hedging, through short sales,
the positions they assume with us.
In connection with the sale of Securities, we may compensate underwriters,
dealers or agents or purchasers of Securities may compensate their agents, in
the form of discounts, concessions or commissions. Underwriters may sell
Securities to or through dealers, and the dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents. Underwriters,
dealers and agents that participate in a distribution of Securities may be
deemed to be underwriters, and any discounts or commissions received by them
from us (along with any profit on the resale of Securities by them) may be
deemed to be underwriting discounts and commissions under the Securities Act.
Any such underwriter, dealer or agent will be identified, and any such
compensation we pay, will be described in the applicable prospectus supplement.
Unless otherwise indicated in the applicable prospectus supplement, any agent
will be acting on a best efforts basis and any dealer will purchase Securities
as a principal, and may then resell those Securities at varying prices to be
determined by the dealer.
We may enter into agreements to provide indemnification and contribution to
underwriters, dealers and agents who participate in a distribution of Securities
against certain civil liabilities, including liabilities under the Securities
Act, and to reimburse those underwriters, dealers and agents for certain
expenses.
If we so indicated in the applicable prospectus supplement, we will
authorize agents and underwriters or dealers to solicit offers by certain
purchasers to purchase offered Securities from us, at the public offering price
set forth in the prospectus supplement, pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. These
contracts will be subject only to those conditions set forth in the prospectus
supplement, and the prospectus supplement will set forth the commission payable
for solicitation of the offers.
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Certain underwriters, dealers or agents and their associates may engage in
transactions with and perform services for us in the ordinary course of
business.
The Securities may or may not be listed on a national Securities exchange
or a foreign Securities exchange (other than the common stock, which is listed
on the New York Stock Exchange). Any common stock sold pursuant to a prospectus
supplement will be listed on the New York Stock Exchange, subject to official
notice of issuance. Any underwriters to whom we sell Securities for public
offering and sale may make a market in those Securities, but the underwriters
will not be obligated to do so and may discontinue any market making activities
at any time without notice. We cannot assure you that there will be an active
trading market for any Securities.
DISTRIBUTION BY SELLING SECURITYHOLDERS
Selling Securityholders may distribute Securities from time to time in one
or more transactions (which may involve block transactions) on the New York
Stock Exchange, in the over-the-counter market, in transactions otherwise than
on the New York Stock Exchange or in the over-the-counter market or in a
combination of any of these transactions. Selling Securityholders may sell
Securities at market prices prevailing at the time of sale, at prices related to
the prevailing market prices, at negotiated prices or at fixed prices. The
Selling Securityholders may from time to time offer their Securities through
underwriters, brokers, dealers or agents, who may receive compensation in the
form of underwriting discounts, commissions or concessions from the Selling
Securityholders and/or the purchasers of the Securities for whom they act as
agent. From time to time the Selling Securityholders may engage in short sales,
short sales against the box, puts and calls and other transactions in securities
of Grant Prideco, or derivatives thereof, and may sell and deliver their shares
in connection therewith. In addition, the Selling Securityholders may from time
to time sell their Securities in transactions permitted by Rule 144 under the
Securities Act.
As of the date of this prospectus, we have engaged no underwriter, broker,
dealer or agent in connection with any distribution of Securities pursuant to
this prospectus by the Selling Securityholders. To the extent required, the type
and amount of Securities to be sold, the purchase price, the name of any
applicable agent, broker, dealer or underwriter and any applicable commissions
with respect to a particular offer will be set forth in the applicable
prospectus supplement. The aggregate net proceeds to the Selling Securityholders
from the sale of their Securities offered hereby will be the sale price of those
shares, less any commissions, if any, and other expenses of issuance and
distribution not borne by us.
The Selling Securityholders and any brokers, dealers, agents or
underwriters that participate with the Selling Securityholders in a distribution
of Securities may be deemed to be "underwriters" within the meaning of the
Securities Act, in which event any discounts, concessions and commissions
received by such brokers, dealers, agents or underwriters and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
discounts and commissions under the Securities Act.
The applicable prospectus supplement will set forth the extent to which we
will have agreed to bear fees and expenses of the Selling Securityholders in
connection with the registration of the Securities being offered hereby by them.
We may, if so indicated in the applicable prospectus supplement, agree to
indemnify Selling Securityholders against certain civil liabilities, including
liabilities under the Securities Act.
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LEGAL MATTERS
Unless otherwise specified in a prospectus supplement relating to
particular Securities, certain legal matters with respect to the validity of the
Securities will be passed upon for the Company by Fulbright & Jaworski L.L.P.
EXPERTS
The audited financial statements incorporated by reference in this
prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
and document we file at the Securities and Exchange Commission's public
reference rooms in Washington, D.C., New York, New York and Chicago, Illinois.
Please call the Securities and Exchange Commission at (800) SEC-0330 for further
information on the public reference rooms. Our Securities and Exchange
Commission filings are also available to the public at the Securities and
Exchange Commission's wed site at http://www.sec.gov. In addition, documents
filed by Grant Prideco can be inspected at the offices of the New York Stock
Exchange, Inc., New York, New York.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" into this prospectus 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 considered to be part of
this prospectus, and later information that we file with the SEC will
automatically update and supersede this information. We incorporate by reference
our Registration Statement on Form 10 (File No. 001-15423), our Quarterly Report
on Form 10-Q for the quarters ended March 31, 2000 and June 30, 2000, our
Current Report on Form 8-K dated October 26, 2000 and any future filings we make
with the SEC under section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 until our offering is completed.
We will provide without charge to each person, including any beneficial
owner, to whom this prospectus is delivered, upon written or oral request, a
copy of any document incorporated by reference in this prospectus, other than
exhibits to any such document not specifically described above. Requests for
such documents should be directed to Philip A. Choyce, Corporate Secretary,
Grant Prideco Inc., 1450 Lake Robbins Drive, Suite 600, The Woodlands, Texas
77380; telephone number: (281) 297-8500.
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PART II INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with
the distribution of the Securities covered by this Registration Statement. We
will bear all of the expenses except as otherwise indicated.
<TABLE>
<S> <C>
Registration fee under the Securities Act.............. $132,000
Printing and engraving expenses*....................... 50,000
Legal fees and expenses*............................... 75,000
Accounting fees and expenses*.......................... 75,000
Fees and expenses of trustee and counsel*.............. 15,000
Miscellaneous*......................................... 3,000
--------
Total*......................................... $350,000
</TABLE>
---------------
* Estimated solely for the purpose of this Item. Actual expenses may be more
or less, depending on the nature of the offering and the type of security.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
State corporate laws and our charter documents include provisions designed
to limit the liability of our officers and directors and, in certain
circumstances, to indemnify our officers and directors against certain
liabilities. These provisions are designed to encourage qualified individuals to
serve as our officers and directors.
Exculpation Of Monetary Liability
Under Delaware law, a corporation may include provisions in its certificate
of incorporation that relieve its directors of monetary liability for breaches
of their fiduciary duty to the corporation, except under certain circumstances,
including
- a breach of the director's duty of loyalty,
- acts or omissions of the director not in good faith or which involve
intentional misconduct or a knowing violation of law,
- the approval of an improper payment of a dividend or an improper purchase
by the corporation of the corporation's stock or
- any transaction from which the director derived an improper personal
benefit.
Under Texas law, a corporation may provide similar exculpation provisions
except in cases of: liability for breach of the director's duty of loyalty, acts
or omissions not in good faith or involving intentional misconduct, knowing
violations of law, actions leading to improper personal benefit to the director,
and payment of dividends or approval of stock repurchases or redemptions that
are unlawful under Texas law.
Our certificates of incorporation provide that our directors are not liable
to us or our stockholders for monetary damages for breach of their fiduciary
duty, subject to the restrictions above. The limited partnership agreements of
Grant Prideco, L.P. and XL Systems, L.P. and the limited liability company
agreements of Grant Prideco USA, LLC and Grant Prideco Holding, LLC contain
provisions for similar indemnification of their officers and managers, as
applicable. These limitations of liability may not affect claims arising under
the federal securities laws.
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Indemnification
Under Section 145 of the Delaware General Corporation Law and our charter
documents, we are obligated to indemnify our present and former directors and
officers and may indemnify other employees and individuals against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection with specified actions, suits or proceedings, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation, a "derivative action"), if the person to whom
indemnity is granted acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to our best interests, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. A similar standard of care is applicable in the case of
derivative actions, except that indemnification extends only to expenses
(including attorneys' fees) incurred in connection with defense or settlement of
such an action, and the Delaware General Corporation Law requires court approval
before there can be any indemnification where the person seeking indemnification
has been found liable to us. Texas laws, and the charter documents of our Texas
entities, contain similar provisions.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors and officers and controlling persons pursuant to
the foregoing provisions, we have been advised that, in the opinion of the SEC,
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
2.1 (b) -- Distribution Agreement, dated as of March 22, 2000,
between Weatherford and Grant
3.1 (b) -- Restated Certificate of Incorporation of Grant Prideco,
Inc.
3.2 (a) -- Restated Bylaws of Grant Prideco, Inc.
3.3 -- Certificate of Incorporation of GP Expatriate Services,
Inc.
3.4 -- By-laws of GP Expatriate Services, Inc.
3.5 -- Limited Liability Company Agreement of Grant Prideco
Holding, LLC
3.6 -- Agreement of Limited Partnership of Grant Prideco, LP
3.7 -- Limited Liability Company Agreement of Grant Prideco USA,
LLC
3.8 -- Certificate of Incorporation of Star Operating Company
3.9 -- By-laws of Star Operating Company
3.10 -- Certificate of Incorporation of TA Industries, Inc.
3.11 -- By-laws of TA Industries, Inc.
3.12 -- Certificate of Incorporation of Texas Arai, Inc.
3.13 -- By-laws of Texas Arai, Inc.
3.14 -- Restated Articles of Incorporation of Tube-Alloy Capital
Corporation
3.15 -- Amended and Restated By-laws of Tube-Alloy Capital
Corporation
3.16 -- Articles of Incorporation of Tube-Alloy Corporation and
Amendment thereto
3.17 -- Amended and Restated By-laws of Tube-Alloy Corporation
3.18 -- Certificate of Incorporation of XL Systems International,
Inc.
3.19 -- Amended and Restated By-laws of XL Systems International,
Inc.
3.20 -- Agreement of Limited Partnership of XL Systems, L.P.
4.1 (b) -- Subordinated Promissory Note to Weatherford, dated April
14, 2000
4.2 (b) -- Subordination Agreement, dated April 14, 2000, among
Grant Prideco, Inc., Weatherford and Transamerica
Business Credit Corporation, as agent
4.3 (b) -- Loan and Security Agreement, dated April 14, 2000, among
Grant Prideco, Inc. and certain of its subsidiaries, the
Lenders identified therein and Transamerica Business
Credit Corporation, as agent
4.4 (b) -- Guaranty, dated April 14, 2000, by Grant Prideco, Inc.'s
subsidiaries in favor of Transamerica Business Credit
Corporation, as agent
</TABLE>
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<PAGE> 30
<TABLE>
<C> <S>
4.5 (b) -- Pledge Agreement, dated April 14, 2000, by Grant Prideco,
Inc.'s subsidiaries in favor of Transamerica Business
Credit Corporation, as agent
12.1 (b) -- Statement of Computation of Ratios
21.1 (a) -- List of Subsidiaries of Grant Prideco, Inc.
23.1 -- Consent of Arthur Andersen LLP
</TABLE>
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(a) Incorporated by reference to Grant Prideco, Inc.'s Registration Statement
on Form 10 (file No. 00115423).
(b) Incorporated by reference to Grant Prideco, Inc.'s Registration Statement
on Form S-3 (Registration No. 333-35272).
We will file, as an exhibit to a Current Report on Form 8-K, (a) any
underwriting agreement relating to Securities offered hereby, (b) the
instruments setting forth the terms of any debt securities, preferred stock,
depositary shares or warrants and (c) any required opinion of counsel as to the
validity of any Securities and as to certain tax matters relative to Securities.
ITEM 17. UNDERTAKINGS.
The registrants hereby undertake:
- To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
- to include any prospectus required by section 10(a)(3) of the Act of
1933;
- to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
- to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that the undertakings set forth in the previous two
clauses do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic
reports filed with or furnished to the Securities and Exchange
Commission by the Company pursuant to section 13 or section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
- That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the Securities offered therein,
and the offering of such Securities at that time shall be deemed to be
the initial bona fide offering thereof.
- 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.
- That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the Company's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the Securities offered
therein, and the offering of such Securities at that time shall be deemed
to be the initial bona fide offering thereof.
- That, for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as
part of a registration statement in reliance upon
II-3
<PAGE> 31
Rule 430A and contained in a form of prospectus filed by the registrants
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of
1933 shall be deemed to be part of this registration statement as of the
time it was declared effective.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrants pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the Securities being
registered, the registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE> 32
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrants
certify that they have reasonable grounds to believe that they meet all of the
requirements for filing on Form S-3 and have duly caused this Registration
Statement to be signed on their behalf by the undersigned, thereunto duly
authorized, on October 26, 2000.
in the City of The Woodlands, State of Texas:
GRANT PRIDECO, INC.
GP EXPATRIATE SERVICES, INC.
GRANT PRIDECO HOLDING, LLC
GRANT PRIDECO, L.P.
STAR OPERATING COMPANY
TA INDUSTRIES, INC.
TEXAS ARAI, INC.
TUBE-ALLOY CAPITAL CORPORATION
TUBE-ALLOY CORPORATION
XL SYSTEMS INTERNATIONAL, INC.
XL SYSTEMS, L.P.
By: /s/ JOHN C. COBLE
------------------------------------
John C. Coble
President and Chief Executive
Officer
or President of each
in the City of Wilmington, State of Delaware:
GRANT PRIDECO USA, LLC
By: /s/ SAL SEGRETO
------------------------------------
Sal Segreto,
President
Know all men by these presents, that each individual whose signature
appears below constitutes and appoints John C. Coble and Philip A. Choyce and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same and all
exhibits thereto, and all documents in connection therewith, with the Securities
and Exchange Commission, granting said attorney-in-fact and agent, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or either of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on October 26, 2000.
With respect to Grant Prideco, Inc.:
<TABLE>
<C> <S>
/s/ JOHN C. COBLE Chief Executive Officer, President and
--------------------------------------------- Director (principal executive officer)
John C. Coble
</TABLE>
II-5
<PAGE> 33
<TABLE>
<C> <S>
/s/ FRANCES R. POWELL Chief Financial Officer, Vice President and
--------------------------------------------- Treasurer (principal financial and accounting
Frances R. Powell officer)
/s/ BERNARD J. DUROC-DANNER Chairman of the Board, Director
---------------------------------------------
Bernard J. Duroc-Danner
/s/ ELIOT M. FRIED Director
---------------------------------------------
Eliot M. Fried
/s/ SHELDON B. LUBAR Director
---------------------------------------------
Sheldon B. Lubar
/s/ WILLIAM E. MACAULAY Director
---------------------------------------------
William E. Macaulay
/s/ ROBERT K. MOSES, JR. Director
---------------------------------------------
Robert K. Moses, Jr.
/s/ ROBERT A. RAYNE Director
---------------------------------------------
Robert A. Rayne
</TABLE>
With respect to GP Expatriate Services, Inc., Grant Prideco Holding, LLC,
Grant Prideco, L.P. Star Operating Company, TA Industries, Inc., Texas Arai,
Inc., Tube-Alloy Capital Corporation, Tube-Alloy Corporation, XL Systems
International, Inc. and XL Systems, L.P.:
<TABLE>
<C> <S>
/s/ JOHN C. COBLE President (principal executive officer) of
--------------------------------------------- each and Director of each corporation and
John C. Coble manager of Grant Prideco Holding, LLC
/s/ FRANCES R. POWELL Treasurer (principal financial officer) of
--------------------------------------------- each and Director of each corporation and
Frances R. Powell manager of Grant Prideco Holding, LLC
/s/ PHILIP A. CHOYCE Director of each corporation and manager of
--------------------------------------------- Grant Prideco Holding, LLC
Philip A. Choyce
</TABLE>
With respect to Grant Prideco USA, LLC:
<TABLE>
<C> <S>
/s/ SAL SEGRETO President (principal executive officer) and
--------------------------------------------- manager
Sal Segreto
/s/ LINDA BUBACZ Treasurer (principal financial officer) and
--------------------------------------------- manager
Linda Bubacz
/s/ DAVE WEIGEL Manager
---------------------------------------------
Dave Weigel
</TABLE>
II-6
<PAGE> 34
INDEX TO EXHIBITS
<TABLE>
<C> <S>
2.1 (b) -- Distribution Agreement, dated as of March 22, 2000,
between Weatherford and Grant
3.1 (b) -- Restated Certificate of Incorporation of Grant Prideco,
Inc.
3.2 (a) -- Restated Bylaws of Grant Prideco, Inc.
3.3 -- Certificate of Incorporation of GP Expatriate Services,
Inc.
3.4 -- By-laws of GP Expatriate Services, Inc.
3.5 -- Limited Liability Company Agreement of Grant Prideco
Holding, LLC
3.6 -- Agreement of Limited Partnership of Grant Prideco, LP
3.7 -- Limited Liability Company Agreement of Grant Prideco USA,
LLC
3.8 -- Certificate of Incorporation of Star Operating Company
3.9 -- By-laws of Star Operating Company
3.10 -- Certificate of Incorporation of TA Industries, Inc.
3.11 -- By-laws of TA Industries, Inc.
3.12 -- Certificate of Incorporation of Texas Arai, Inc.
3.13 -- By-laws of Texas Arai, Inc.
3.14 -- Restated Articles of Incorporation of Tube-Alloy Capital
Corporation
3.15 -- Amended and Restated By-laws of Tube-Alloy Capital
Corporation
3.16 -- Articles of Incorporation of Tube-Alloy Corporation and
Amendment thereto
3.17 -- Amended and Restated By-laws of Tube-Alloy Corporation
3.18 -- Certificate of Incorporation of XL Systems International,
Inc.
3.19 -- Amended and Restated By-laws of XL Systems International,
Inc.
3.20 -- Agreement of Limited Partnership of XL Systems, L.P.
4.1 (b) -- Subordinated Promissory Note to Weatherford, dated April
14, 2000
4.2 (b) -- Subordination Agreement, dated April 14, 2000, among
Grant Prideco, Inc., Weatherford and Transamerica
Business Credit Corporation, as agent
4.3 (b) -- Loan and Security Agreement, dated April 14, 2000, among
Grant Prideco, Inc. and certain of its subsidiaries, the
Lenders identified therein and Transamerica Business
Credit Corporation, as agent
4.4 (b) -- Guaranty, dated April 14, 2000, by Grant Prideco, Inc.'s
subsidiaries in favor of Transamerica Business Credit
Corporation, as agent
4.5 (b) -- Pledge Agreement, dated April 14, 2000, by Grant Prideco,
Inc.'s subsidiaries in favor of Transamerica Business
Credit Corporation, as agent
12.1 (b) -- Statement of Computation of Ratios
21.1 (a) -- List of Subsidiaries of Grant Prideco, Inc.
23.1 -- Consent of Arthur Andersen LLP
</TABLE>
---------------
(a) Incorporated by reference to Grant Prideco, Inc.'s Registration Statement
on Form 10 (file No. 00115423).
(b) Incorporated by reference to Grant Prideco, Inc.'s Registration Statement
on Form S-3 (Registration No. 333-35272).
