<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 19, 1996.
REGISTRATION NO. 333-17517
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
VERITAS DGC INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 76-0343152
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
3701 KIRBY DRIVE, SUITE 112
HOUSTON, TEXAS 77098
(713) 512-8300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
<TABLE>
<S> <C>
RICHARD W. MCNAIRY WITH COPIES TO:
3701 KIRBY DRIVE, SUITE 112 KATHY L. TEDORE
HOUSTON, TEXAS 77098 PORTER & HEDGES, L.L.P.
(713) 512-8300 700 LOUISIANA, 35TH FLOOR
(NAME, ADDRESS, INCLUDING ZIP CODE, AND HOUSTON, TEXAS 77002-2764
TELEPHONE NUMBER, (713) 226-0600
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the Registration Statement becomes effective.
---------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, 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
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT(1) PRICE(1) FEE(1)
<S> <C> <C> <C> <C>
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Common Stock, $.01 par value...... 113,333 $22.063 $2,500,465.98 $757.72
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 457(c), the registration fee is calculated on the basis of
the high and low sale prices for the Common Stock on the New York Stock
Exchange on December 5, 1996, $22.063 per share.
---------------------
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.
PURSUANT TO THE PROVISIONS OF RULE 429 OF THE SECURITIES ACT OF 1933, AS
AMENDED, THE PROSPECTUS CONTAINED IN THIS REGISTRATION STATEMENT ALSO RELATES TO
3,264,586 SHARES OF COMMON STOCK COVERED BY THE REGISTRANT'S REGISTRATION
STATEMENT ON FORM S-3 (REG. NO. 33-63875). THIS PREVIOUSLY FILED FORM S-3
REGISTERED 4,901,701 SHARES OF COMMON STOCK, 1,637,115 OF WHICH HAVE BEEN SOLD
OR RELATED TO SHARES UNDERLYING WARRANTS THAT LAPSED UNEXERCISED. THE
REGISTRATION FEES WITH RESPECT THERETO WERE PREVIOUSLY PAID.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
SUBJECT TO COMPLETION DATED DECEMBER 19, 1996
PROSPECTUS
3,377,919 SHARES
VERITAS DGC INC.
COMMON STOCK
---------------------
The shares of common stock offered hereby are shares of common stock, par
value $.01 per share ("Common Stock"), of Veritas DGC Inc. (the "Company") held
by certain stockholders of the Company. See "Selling Stockholders" and
"Description of Common Stock and Special Voting Stock." The Company will not
receive any of the proceeds from the sale of the Common Stock offered hereby.
The Company's Common Stock is traded on the New York Stock Exchange under
the symbol "VTS." On December 6, 1996, the reported closing sale price of the
Common Stock on the New York Stock Exchange was $21.875 per share.
The Common Stock may be offered and sold from time to time by Selling
Stockholders through brokers or dealers or directly to one or more purchasers in
negotiated transactions, at market prices prevailing at the time of sale or at
prices related to such market prices.
The Selling Stockholders and brokers executing selling orders on behalf of
the Selling Stockholders may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933, as amended (the "Securities Act"), in which event
commissions received by such brokers may be deemed to be underwriting
commissions under the Securities Act. For further information concerning the
plan of distribution of the Common Stock, see "Plan of Distribution."
The expenses of this offering, estimated at $12,257.72 will be paid by the
Company.
PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY SHOULD CAREFULLY
CONSIDER THE MATTERS SET FORTH UNDER THE CAPTION "RISK FACTORS" BEGINNING AT
PAGE 3.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
THE DATE OF THIS PROSPECTUS IS DECEMBER , 1996.
<PAGE> 3
This Prospectus incorporates by reference documents which contain certain
statements of a forward-looking nature relating to future events or the future
financial performance of the Company. Prospective investors are cautioned that
such statements are only predictions and that actual events or results may
differ materially. In evaluating such statements, prospective investors should
specifically consider the various factors identified in this Prospectus and set
forth under the caption "Risk Factors," which could cause actual results to
differ materially from those indicated by such forward-looking statements.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") in Washington, D.C., a Registration Statement on Form S-3 under
the Securities Act, with respect to the Common Stock offered by this Prospectus.
Certain portions of the Registration Statement have not been included in this
Prospectus. For further information, reference is made to the Registration
Statement and the Exhibits thereto. Statements made in this Prospectus regarding
the contents of any contract or document filed as an exhibit to the Registration
Statement are not necessarily complete and, in each instance, reference is
hereby made to the copy of such contract or document so filed. Each such
statement is qualified in its entirety by such reference.
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. The Registration Statement (with exhibits), as well as such reports,
proxy statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and its regional offices at the
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and 7 World Trade Center, Suite 13, New York, New York 10048. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission at its principal office at Judiciary Plaza, 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549. Such materials also can be inspected at
the offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005, on which the Common Stock is listed. The Commission maintains a site on
the World Wide Web that contains certain documents filed with the Commission
electronically. The address of such site is http://www.sec.gov. and the
Registration Statement may be inspected at such site.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act (File No. 1-7427), are incorporated in
this Prospectus by reference and shall be deemed to be a part hereof:
(a) the Company's Annual Report on Form 10-K for the year ended July 31,
1996;
(b) the Company's Current Report on Form 8-K dated September 16, 1996;
(c) the Company's Current Reports on Form 8-K and Form 8-K/A dated November
20, 1996; and
(d) the Company's Quarterly Report on Form 10-Q for the quarterly period
ended October 31, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering covered hereby will be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained this Prospectus, in a document
incorporated or deemed to be incorporated by reference in this Prospectus shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in this Prospectus or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference modifies or replaces such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the documents incorporated by reference in this Prospectus,
other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates. All such requests should be directed to Veritas DGC Inc., 3701
Kirby Drive, Suite 112, Houston, Texas 77098, Attention: Corporate Secretary,
telephone number (713) 512-8300.
2
<PAGE> 4
THE COMPANY
The Company was formerly named Digicon Inc. ("Digicon"). On August 30,
1996, Digicon and Veritas Energy Services Inc. ("VES") consummated a business
combination (the "Combination") pursuant to which, among other things, (i) VES
became a wholly-owned subsidiary of Digicon and (ii) Digicon's corporate name
was changed to "Veritas DGC Inc." Unless the context otherwise requires, all
references to the "Company" are to Veritas DGC Inc. and its subsidiaries and
give effect to the consummation of the Combination.
The Company is a leading provider of seismic data acquisition, data
processing, multi-client data surveys, and exploration and development
information services to the oil and gas industry in selected markets worldwide.
The Company was incorporated in Texas in 1965 and was reincorporated in Delaware
in 1969. The Company's principal offices are located at 3701 Kirby Drive,
Houston, Texas 77098, and its telephone number is (713) 512-8300.
RISK FACTORS
Prospective investors should carefully consider the following factors.
ENERGY INDUSTRY SPENDING
Demand for the Company's seismic services depends upon the level of capital
expenditures by oil and gas companies for exploration, production, development
and field management activities. These activities depend in part on oil and gas
prices, expectations about future prices, the cost of exploring for, producing
and delivering oil and gas, the sale and expiration dates of leases in the
United States, Canada and abroad, local and international political, regulatory
and economic conditions and the ability of oil and gas companies to obtain
capital. In addition, a decrease in oil and gas expenditures could result from
such factors as unfavorable tax and other legislation or uncertainty concerning
national energy policies. No assurance can be given that current levels of oil
and gas activities will be maintained or that demand for the Company's services
will reflect the level of such activities. Decreases in oil and gas activity
could have a significant adverse effect upon the demand for the Company's
services and the Company's results of operations.
COMPETITION FOR SEISMIC BUSINESS
Competition among seismic contractors historically has been intense.
Competitive factors include price, crew experience, equipment availability,
technological expertise and reputation for quality and dependability. Certain of
the Company's major competitors operate more data acquisition crews than the
Company, have substantially greater revenues than the Company and are
subsidiaries or divisions of major industrial enterprises having far greater
financial and other resources than the Company. There can be no assurance that
the Company will be able to compete successfully against its competitors for
contracts to conduct seismic surveys and process data.
HAZARDOUS OPERATING CONDITIONS
The Company's data acquisition activities involve operating under extreme
weather and other hazardous conditions. Accordingly, these operations are
subject to risks of loss to property and injury to personnel from such causes as
fires, adverse weather and accidental explosions. The Company carries insurance
against these risks in amounts that it considers adequate. The Company may not,
however, be able to obtain insurance against certain risks or for certain
equipment located from time to time in certain areas of the world.
INVESTMENT IN MULTI-CLIENT DATA LIBRARY
The Company has invested significant amounts in acquiring and processing
multi-client data that is owned by the Company (book carrying value of $25.6
million at July 31, 1996), and it expects to continue doing so for the
foreseeable future. Although the Company normally obtains prefunding commitments
for a majority of the cost of acquiring and processing such surveys, future data
licensing to multiple customers may
3
<PAGE> 5
not fully recoup its costs. Factors affecting the Company's ability to recoup
its costs include possible technological, regulatory or other industry or
general economic developments, any of which could render all or portions of the
Company's library of multi-client data obsolete or otherwise impair its value.
In addition, the timing of multi-client data licensing is typically less
dependable from period to period than are revenues from surveys performed on an
exclusive contract basis for single customers.
HIGH FIXED COSTS; CAPITAL INTENSIVE BUSINESS; RISK OF TECHNOLOGICAL OBSOLESCENCE
Because of the high fixed costs involved in the major components of the
Company's business, downtime or low productivity due to reduced demand, weather
interruptions, equipment failures or other causes can result in significant
operating losses. In recent years, the Company's contracts for data acquisition
have been predominately on a turnkey or on a combination of turnkey/time basis.
Under the turnkey method, payments for data acquisition services are based upon
the amount of data collected, and the Company bears substantially all of the
risk of business interruption caused by inclement weather and other hazards.
When a combination of both turnkey and time methods is used, the risk of
business interruptions is shared in an agreed percentage by the Company and the
customer.
Seismic data acquisition and processing is a capital intensive business.
The development of seismic data acquisition and processing equipment has been
characterized by rapid technological advancements in recent years and the
Company expects this trend to continue. There can be no assurance that
manufacturers of seismic equipment will not develop new systems that have
competitive advantages over systems now in use that either render the Company's
current equipment obsolete or require the Company to make significant capital
expenditures to maintain its competitive position. The Company intends to
upgrade its data acquisition and processing equipment as often as necessary to
maintain its competitive position. However, to do so may require large
expenditures of capital in addition to the Company's planned capital
expenditures. There can be no assurance that the Company will have the necessary
capital or that financing will be available on favorable terms. If the Company
is unable to raise the capital necessary for its capital expenditure program and
to upgrade its data acquisition and processing equipment to the extent
necessary, it may be materially and adversely affected.
RISKS INHERENT IN INTERNATIONAL OPERATIONS
In fiscal 1995 and 1996, 61% and 62%, respectively, of the Company's
revenues were derived from international operations and export sales, which are
subject in varying degrees to risks inherent in doing business abroad. Such
risks include the possibility of unfavorable circumstances arising from host
country laws or regulations. For example, the Company has approximately 6,500
line miles of offshore Peru seismic data (book value of approximately $1.4
million at July 31, 1996) which will become saleable only upon receipt of
previously expected governmental licenses which have been delayed for more than
a year and has a $2.6 million claim for income taxes withheld by its client, a
foreign national oil company (no book carrying value), which will become
collectible only upon approval by the host country's taxation authorities. In
addition, foreign operations include risks of partial or total expropriation;
currency exchange rate fluctuations and restrictions on currency repatriation;
the disruption of operations from labor and political disturbances, insurrection
or war; and the requirements of partial local ownership of operations in certain
countries. To minimize such risks, the Company generally denominates its
contracts in U.S. dollars and other currencies it believes to be stable. The
Company also obtains insurance against war, expropriation, confiscation and
nationalization when such insurance is available and when management considers
it advisable to do so. Such coverage is not always available, and when
available, is subject to unilateral cancellation by the insuring companies on
short notice.
ENVIRONMENTAL AND OTHER REGULATIONS
The Company's operations are subject to a variety of foreign, federal,
state and local laws and regulations, including laws and regulations relating to
the protection of the environment. The Company is required to invest financial
and managerial resources to comply with such laws and related permit
requirements in its operations and anticipates that it will continue to do so in
the future. In recent years, an increased number of
4
<PAGE> 6
the Company's data acquisition contracts have required customers to obtain all
necessary permits. Customers' failure to timely obtain the required permits may
result in crew downtime and operating losses. To date, the Company's cost of
complying with governmental regulation has not been material, but the fact that
such laws or regulations are changed frequently makes it impossible for the
Company to predict the cost or impact of such laws and regulations on its future
operations. The modification of existing laws or regulations or the adoption of
new laws or regulations curtailing offshore drilling for oil and gas or imposing
more stringent restrictions on seismic operations could adversely affect the
Company.
LEVERAGE AND LIQUIDITY
The Company recently completed an offering of $75.0 million of 9 3/4%
Senior Notes due 2003 (the "Senior Notes"). The degree to which the Company is
leveraged (the ratio of total consolidated debt to total capitalization was
approximately 41.5% at July 31, 1996, after giving effect to the issuance of the
Senior Notes and the application of the net proceeds therefrom) could have
important consequences, including the following: (i) the Company's ability to
obtain financing in the future for working capital, capital expenditures and
general corporate purposes may be impaired; (ii) a substantial portion of the
Company's cash flow from operations must be dedicated to the payment of
principal and interest on its indebtedness; and (iii) a high degree of leverage
may make the Company more vulnerable to economic downturns and may limit its
ability to withstand competitive pressures.
Based on current operations, the Company expects that it will be able to
service the interest and principal obligations on its indebtedness as well as
its working capital needs and to fund its capital expenditures and other
operating expenses out of cash flow from operations and available borrowings.
However, there can be no assurance that the Company's business will continue to
generate cash flow at levels sufficient to meet these requirements. If the
Company is unable to generate sufficient cash flow from operations in the future
to service its debt and capital expenditures, it may be required to sell assets,
reduce capital expenditures, refinance all or a portion of its existing debt or
obtain additional financing. There can be no assurance that any such asset sales
or refinancing would be possible or that any additional financing could be
obtainable. The Company's ability to meet its debt service obligations will be
dependent upon its future performance which, in turn, will be subject to future
economic conditions and to financial, business and other factors, many of which
are beyond the Company's control.
SELLING STOCKHOLDERS
The following table sets forth certain information concerning the Selling
Stockholders and reflects share information adjusted for a one for three reverse
stock split (the "Reverse Split") effective January 17, 1995:
<TABLE>
<CAPTION>
SHARES
SHARES OWNED SHARES TO
AND TO BE TO BE BE
NAME AND ADDRESS OWNED SOLD OWNED
- --------------------------------------------------------- ------------ --------- ----
<S> <C> <C> <C>
Deltec Asset Management Corporation(1)................... 100,000 100,000 None
535 Madison Avenue
New York, New York 10022
Hanseatic Investments Limited Partnership(1)............. 13,333 13,333 None
375 Park Avenue
New York, New York 10152
Acorn Fund............................................... 400,000 396,000 *
c/o Wanger Asset Management L.P.(2)
227 West Monore, Suite 3000
Chicago, Illinois 60606
</TABLE>
5
<PAGE> 7
<TABLE>
<CAPTION>
SHARES
SHARES OWNED SHARES TO
AND TO BE TO BE BE
NAME AND ADDRESS OWNED SOLD OWNED
--------- --------- ----
<S> <C> <C> <C>
Christian Humann and Francois Sicart
Trustees under a deed of trust dated 2/2/88.............. 5,000 4,000 None
c/o Tocqueville Asset Management L.P.(3)
1675 Broadway
New York, New York 10019
Mellon Bank, N.A., as trustee for National Intergroup
Inc.................................................... 20,000 20,000 None
c/o Tocqueville Asset Management L.P.(3)
1675 Broadway
New York, New York 10019
Trace Inc................................................ 15,000 15,000 None
c/o Tocqueville Asset Management L.P.(3)
1675 Broadway
New York, New York 10019
Jomacim, Inc. ........................................... 12,000 12,000 None
c/o Tocqueville Asset Management L.P.(3)
1675 Broadway
New York, New York 10019
Quantum Partners LDC ("Quantum")......................... 983,820 983,820 None
Kaya Flamboyan 9, Willemstad, Curacao,
Netherlands Antilles
Soros Fund Management(4)
George Soros(4)
Soros Capital L.P.(6).................................... 43,200(5) 43,200(5) None
c/o Westbroke Limited
Richmond House
12 Par-La-Ville Road
Hamilton, Bermuda HMDX
Jupiter Management Co., Inc.(6)(7)....................... 42,000(5) 42,000(5) None
c/o Douglas B. Thompson, President
3535 Briarpark, Suite 200
Houston, TX 77042
Steven J. Gilbert(4)(5).................................. 3,573 3,573 None
Soros Capital L.P.
c/o Westbroke Limited
Richmond House
12 Par-La-Ville Road
Hamilton, Bermuda HMDX
CCF/Jupiter, L.P.(6)(8).................................. 490,288(5) 490,288(5) None
DJ Investors, L.P.(8).................................... 107,227 107,227 None
c/o Cambridge Capital Holdings, Inc.
767 Fifth Ave., Suite 2800
New York, NY 10153
Fund American Enterprise Holdings, Inc................... 115,000 115,000 None
80 South Main Street
Hanover, NH 03755
</TABLE>
6
<PAGE> 8
<TABLE>
<CAPTION>
SHARES
SHARES OWNED SHARES TO
AND TO BE TO BE BE
NAME AND ADDRESS OWNED SOLD OWNED
--------- --------- ----
<S> <C> <C> <C>
Fund American Enterprises, Inc........................... 719,895 719,895 None
The 1820 House, Main Street
Norwich, VT 05055
J/D Funding Corp.(7)..................................... 146,224 146,224 None
Jupiter Investment Company, Inc.(7)...................... 17,451 17,451 None
c/o Douglas B. Thompson, President
3701 Kirby Drive, Suite 112
Houston, TX 77098
Ingrid Morsman........................................... 8,366 8,366 None
820 Potts Lane
Bryn Mawr, PA 19010
Natalie Thompson Defined Benefit Pension Plan(7)......... 30,100 30,100 None
180 Orchard Way
Vero Beach, FL 32963
Neptune Partners-1989A, L.P.............................. 43,972 43,972 None
Neptune 1989 Investors Limited........................... 28,782 28,782 None
Neptune 1989C Offshore Investors Limited................. 30,822 30,822 None
c/o Neptune Management Company, Inc.
881 Ocean Drive, Unit 20F
Key Biscayne, FL 33149
Arik Yale Prawer......................................... 5,866 5,866 None
--------- ---------
7150 Shoreline Drive, #3306
San Diego, CA 92122
Totals......................................... 3,381,919 3,377,919
========= =========
</TABLE>
- ---------------
* Does not exceed one percent.
(1) In June 1992, Hanseatic Corporation, an affiliate of Hanseatic Investments
Limited Partnership, extended a $6,000,000 secured term loan to the
Company, with interest payable quarterly at 10.75%. This loan was repaid in
fiscal year 1996. In connection with this loan, the Company issued to
Hanseatic Corporation and Deltec Securities Corporation, as custodian,
warrants to purchase 13,333 and 100,000 shares of Common Stock,
respectively. The warrants held by Hanseatic Corporation were transferred
to Hanseatic Investment Limited Partnership. All of the warrants were
exercised at an exercise price of $6.00 per share on or before the
effective date of this Registration Statement.
(2) Wanger Asset Management, L.P. is the investment advisor to Acorn Fund.
(3) Tocqueville Asset Management L.P. is the investment advisor to these
entities.
(4) Soros Fund Management is an investment advisor to Quantum, George Soros is
the sole proprietor of Soros Fund Management. Steven J. Gilbert, a director
of the Company, may be deemed to beneficially own the shares held by
Quantum by virtue of an investment advisory contract between Mr. Gilbert
and Quantum. Mr. Gilbert expressly disclaims beneficial ownership of these
shares.
(5) Represents or includes the shares of Common Stock, which may be acquired by
the indicated stockholder (CCF/Jupiter, L.P. -- 34,800) upon exercise of
outstanding warrants. These warrants are presently exercisable through July
26, 1999 at an exercise price of $4.50 per share. Steven J. Gilbert, a
director of the Company, may be deemed to own 43,200 of such shares by
virtue of his affiliation with Soros Capital L.P. See note (6) below.
(6) In July 1994, CCF Jupiter, L.P., along with Soros Capital L.P. and Jupiter
Management Co., Inc., extended a $3,000,000 subordinated, secured credit
facility to the Company. The Company's borrowings
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<PAGE> 9
under this credit facility bear interest at Bank of America's prime
commercial lending rate plus 3% through January 26, 1995, and thereafter,
at Bank of America's prime rate plus 6%. The Company repaid all of its
borrowings under this credit facility in June 1995. In connection with this
credit facility, the Company issued to these lenders warrants exercisable
for 120,000 shares of Common Stock at an exercise price of $4.50 per share,
as adjusted for the one for three reverse stock split effective January 17,
1995. Both the number of shares purchasable under, and the exercise price
of, the warrants are subject to further adjustment in certain events,
including stock splits or dividends on, and reclassifications of, the
Common Stock. The warrants may not be redeemed by the Company. In November
1993 the Company obtained a secured credit facility from the same
affiliated lenders which provided for total borrowings of $3,386,667, an
annualized interest rate of 25%, and maturity in May 1994. The Company
repaid all of its borrowings under that credit facility in April 1994.
(7) Douglas B. Thompson, a director of the Company, is an affiliate of Jupiter
Management Co., Inc., J/D Funding Corp., Jupiter Investment Company, Inc.
and Natalie Thompson Defined Benefit Pension Plan. Mr. Thompson disclaims
beneficial interest in shares owned, controlled or deemed to be owned or
controlled by each such selling stockholders.
(8) George F. Baker, a director of the Company, is an affiliate of CCF/Jupiter,
L.P. and DJ Investors, L.P. Mr. Baker disclaims beneficial interest in
shares owned, controlled or deemed to be owned or controlled by each such
selling stockholder.
PLAN OF DISTRIBUTION
All or part of the Common Stock offered hereby may be sold by the Selling
Stockholders from time to time (i) on the New York Stock Exchange or otherwise
at prices current at the time of sale or at prices related to such market
prices, either directly or through brokers or to dealers, to the extent that
such prices are obtainable and satisfactory to the Selling Stockholders or (ii)
to the extent the same may be available, pursuant to Rule 144 under the
Securities Act. It is anticipated that any commissions with respect to such
sales will not exceed regular brokerage commissions. The Selling Stockholders,
and brokers executing selling orders on behalf of the Selling Stockholders and
dealers to whom the Selling Stockholders may sell, may be deemed "underwriters"
within the meaning of the Securities Act. Any profit represented by the excess
of the selling price over the cost of the shares sold in the case of dealers, or
any commission received in the case of brokers, may be deemed to be underwriting
discounts or commissions under the Securities Act.
DESCRIPTION OF COMMON STOCK AND SPECIAL VOTING STOCK
The Company has only one class of stock outstanding, Ordinary Shares,
consisting of a series of one share of special voting stock ("Special Voting
Stock") and all other shares being designated as common stock, par value $.01
per share ("Common Stock"). At November 1, 1996, of the 40,000,000 authorized
Ordinary Shares, there were 14,697,976 shares outstanding (including one share
of Special Voting Stock).
Each share of Common Stock has one vote on all matters presented to the
stockholders. Subject to the rights and preferences of any preferred stock which
may be designated and issued, the holders of Common Stock are entitled to
receive dividends, if and when declared by the board of directors, and are
entitled on liquidation to all assets remaining after the payment of
liabilities. The Common Stock has no preemptive or other subscription rights.
Outstanding shares of Common Stock, including the shares of Common Stock offered
hereby, are fully paid and nonassessable.
Except as otherwise required by law or the Company's certificate of
incorporation, the share of Special Voting Stock will possess a number of votes
equal to the number of outstanding VES exchangeable shares (the "Exchangeable
Shares") not owned by the Company or any entity controlled by the Company, on
all matters submitted to a vote of the Company's Common Stock holders. At
November 1, 1996, there were 3,746,405 Exchangeable Shares outstanding. The
Exchangeable Shares were issued upon consummation of the Combination as
consideration for the Company's acquisition of all of VES' voting securities.
8
<PAGE> 10
Since the Common Stock and the Exchangeable Shares do not have cumulative
voting rights, the holders of more than 50% of such shares may, if they choose
to do so, elect all of the directors and, in that event, the holders of the
remaining shares of Common Stock and Exchangeable Shares will not be able to
elect any directors. ChaseMellon Shareholder Services Group, Inc., Dallas,
Texas, is the transfer agent and registrar for the Common Stock.
COUNSEL
The validity of the Common Stock offered hereby has been passed upon for
the Company by Porter & Hedges, L.L.P., Houston, Texas.
EXPERTS
The financial statements incorporated in this Prospectus by reference from
the Company's Annual Report on Form 10-K for the year ended July 31, 1996 have
been audited by Deloitte and Touche LLP, independent auditors as stated in their
report, which is incorporated herein by reference, and has been so incorporated
in reliance upon the report of such firm given their authority as experts in
accounting and auditing.
9
<PAGE> 11
- ------------------------------------------------------
------------------------------------------------------
- ------------------------------------------------------
------------------------------------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS PROSPECTUS; ANY INFORMATION OR REPRESENTATION NOT
CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER
THAN THOSE TO WHICH IT RELATES OR AN OFFER TO ANY PERSON IN ANY STATE WHERE SUCH
OFFER WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
The Company............................ 3
Risk Factors........................... 3
Selling Stockholders................... 5
Plan of Distribution................... 8
Description of Common Stock and Special
Voting Stock......................... 8
Counsel................................ 9
Experts................................ 9
</TABLE>
3,377,919 SHARES
VERITAS DGC INC.
COMMON STOCK
------------------------------
P R O S P E C T U S
------------------------------
DECEMBER 19, 1996
- ------------------------------------------------------
------------------------------------------------------
- ------------------------------------------------------
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<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTIONS.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.............. $ 757.72
Legal Fees and Expenses.......................................... 6,000.00
Accounting Fees and Expenses..................................... 2,500.00
Blue Sky and Related Expenses.................................... 1,000.00
Miscellaneous.................................................... 2,000.00
----------
Total.................................................. $12,257.72
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware permits
a corporation to indemnify any person who was or is a party or is threatened to
be made a party to any threatened pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was a director, officer, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action.
In a suit brought to obtain a judgment in the corporation's favor, whether
by the corporation itself or derivatively by a stockholder, the corporation may
only indemnify for expenses, including attorney's fees, actually and reasonably
incurred in connection with the defense or settlement of the case, and the
corporation may not indemnify for amounts paid in satisfaction of a judgment or
in settlement of the claim. In any such action, no indemnification may be paid
in respect of any claim, issue or matter as to which such persons shall have
been adjudged liable to the corporation except as otherwise approved by the
Delaware Court of Chancery or the court in which the claim was brought. In any
other type of proceeding, the indemnification may extend to judgments, fines and
amounts paid in settlement, actually and reasonably incurred in connection with
such other proceeding, as well as to expenses (including attorneys' fees).
The statute does not permit indemnification unless the person seeking
indemnification has acted in good faith and in a manner he reasonably believed
to be in, or not opposed to, the best interests of the corporation and, in the
case of criminal actions or proceedings, the person had no reasonable cause to
believe his conduct was unlawful. There are additional limitations applicable to
criminal actions and to actions brought by or in the name of the corporation.
The determination as to whether a person seeking indemnification has met the
required standard of conduct is to be made (1) by a majority vote of a quorum of
disinterested members of the board of directors, or (2) by independent legal
counsel in a written opinion, if such a quorum does not exist or if the
disinterested directors so direct, or (3) by the stockholders.
The Certificate of Incorporation and bylaws of the Company require the
Company to indemnify the Company's directors and officers to the fullest extent
permitted under Delaware law, and to implement such provisions the Company has
entered into contractual indemnity agreement with its directors and executive
officers. The Company's Certificate of Incorporation limits the personal
liability of a director to the corporation or its stockholders to damages for
breach of the director's fiduciary duty.
The Company has purchased insurance on behalf of its directors and officers
against certain liabilities that may be asserted against, or incurred by, such
persons in their capacities as directors or officers of the registrant, or that
may arise out of their status as directors or officers of the registrant,
including liabilities under the federal and state securities laws.
II-1
<PAGE> 13
ITEM 16. EXHIBITS.
The following is a list of all exhibits filed as part of the Registration
Statement:
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ---------------------------------------------------------------------------------------------
<S> <C>
*5 -- Opinion of Porter & Hedges, L.L.P. with respect to legality of
securities.
*23-A -- Consent of Porter & Hedges, L.L.P. (included in Exhibit 5).
*23-B -- Consent of Deloitte & Touche LLP.
*24 -- Powers of Attorney (included on signature page of this Registration
Statement).
</TABLE>
* Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the Calculation of
Registration Fee table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act 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.
II-2
<PAGE> 14
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company 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 Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on December 19, 1996.
VERITAS DGC INC.
By: /s/ RICHARD W. McNAIRY
------------------------------------
Richard W. McNairy,
Executive Vice President
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the indicated capacities
and on the 19th day of December, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- -----------------------------
<S> <C>
/s/ DAVID B. ROBSON* Director, Chairman of the
- --------------------------------------------- Board and Chief Executive
David B. Robson Officer
/s/ RICHARD W. McNAIRY Executive Vice President and
- --------------------------------------------- Chief Accounting and
Richard W. McNairy Financial Officer
Director
- ---------------------------------------------
George F. Baker
/s/ CLAYTON P. CORMIER* Director
- ---------------------------------------------
Clayton P. Cormier
/s/ RALPH M. EESON* Director
- ---------------------------------------------
Ralph M. Eeson
/s/ LAWRENCE C. FICHTNER* Director
- ---------------------------------------------
Lawrence C. Fichtner
/s/ STEVEN J. GILBERT* Director
- ---------------------------------------------
Steven J. Gilbert
/s/ STEPHEN J. LUDLOW* Director
- ---------------------------------------------
Stephen J. Ludlow
/s/ BRIAN F. MacNEILL* Director
- ---------------------------------------------
Brian F. MacNeill
/s/ DOUGLAS B. THOMPSON* Director
- ---------------------------------------------
Douglas B. Thompson
/s/ JACK C. THREET* Director
- ---------------------------------------------
Jack C. Threet
*By: /s/ RICHARD W. McNAIRY
- ---------------------------------------------
Richard W. McNairy,
(individually and as Attorney-in-Fact)
</TABLE>
II-4
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
-------- ------------
<S> <C>
* 5 -- Opinion of Porter & Hedges, L.L.P. with respect to
legality of securities.
*23-A -- Consent of Porter & Hedges, L.L.P. (included in Exhibit
5).
*23-B -- Consent of Deloitte & Touche LLP
*24 -- Powers of Attorney (included on signature page).
</TABLE>
- ---------------
* Previously filed.
