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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 8, 1999
REGISTRATION NO. 333-81965
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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MAXWELL TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-2390133
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
9275 SKY PARK COURT
SAN DIEGO, CALIFORNIA 92123
(619) 279-5100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
----------------------
DONALD M. ROBERTS, ESQ.
GENERAL COUNSEL
MAXWELL TECHNOLOGIES, INC.
9275 SKY PARK COURT
SAN DIEGO, CALIFORNIA 92123
(619) 279-5100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------------
COPIES TO:
THOMAS A. WALDMAN, ESQ.
Riordan & McKinzie
300 South Grand Avenue
29th Floor
Los Angeles, California 90071
(213) 629-4824
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are 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. [ ]
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS (Subject to completion, dated June 30, 1999)
MAXWELL TECHNOLOGIES, INC.
244,796 SHARES OF COMMON STOCK
This prospectus relates to the public offering, which is not being
underwritten, of 244,796 shares of our common stock which are owned by some of
our current stockholders. We will not receive any of the proceeds of this
offering, as all proceeds will be received by the selling stockholders.
The prices at which such stockholders may sell the shares will be
determined by the prevailing market price for the shares or in negotiated
transactions.
Our common stock is traded on the Nasdaq National Market under the symbol
"MXWL." On June 29, 1999, the last sale price of our common stock was $24.00 per
share.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING ON PAGE 4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is _______ , 1999
The information in this prospectus is not complete and may be amended or
changed. The selling stockholders may not sell the shares of common stock
offered by this prospectus until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell the shares of common stock in any state where the offer or sale is not
permitted.
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No person has been authorized to give any information or to make any
representations other than those contained in this prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized by Maxwell Technologies, Inc. or by any other person. Neither the
delivery of this prospectus nor any sale made under this prospectus shall, under
any circumstances, create any implication that information herein is correct as
of any time subsequent to the date of this prospectus. This prospectus is not an
offer to sell or a solicitation of an offer to buy any security other than the
securities covered by this prospectus, nor is it an offer to or solicitation of
any person in any jurisdiction in which such offer or solicitation may not
lawfully be made.
TABLE OF CONTENTS
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WHERE YOU CAN FIND MORE INFORMATION.................................................. 2
THE COMPANY.......................................................................... 3
RISK FACTORS......................................................................... 4
FORWARD-LOOKING STATEMENTS........................................................... 16
USE OF PROCEEDS...................................................................... 17
SELLING STOCKHOLDERS................................................................. 17
PLAN OF DISTRIBUTION................................................................. 18
DESCRIPTION OF CAPITAL STOCK......................................................... 20
LEGAL MATTERS........................................................................ 21
EXPERTS.............................................................................. 21
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file at the SEC's public reference rooms in Washington, D.C.,
New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0300
for further information on the public reference rooms. Our SEC filings are also
available at the SEC's web site at http://www.sec.gov.
The SEC allows us to disclose important information to you by referring
you to documents which we have filed with the SEC. These documents are
considered to be part of this prospectus, and later information filed with the
SEC will update and supercede the information contained in this prospectus. The
following documents and any future filings made with the SEC under Section 13a,
13(c), 14 or 15(d) of the Securities Act of 1934 are considered a part of the
prospectus, and we encourage you to review them:
(1) annual report on Form 10-K for the fiscal year ended July 31, 1998;
(2) quarterly report on Form 10-Q for the quarter ended October 31,
1998;
(3) quarterly report on Form 10-Q for the quarter ended January 31,
1999;
(4) quarterly report on Form 10-Q for the quarter ended April 30, 1999;
(5) current report on Form 8-K filed October 15, 1998;
(6) current report on Form 8-K filed November 13, 1998;
(7) current report on Form 8-K filed February 12, 1999; and
(8) definitive proxy statement, filed on December 11, 1998, for the 1999
annual meeting of stockholders.
You may request a copy of these documents, at no cost, by writing or telephoning
us at the following address:
Maxwell Technologies, Inc.
Attention: Corporate Secretary
9275 Sky Park Court
San Diego, CA 92123
(619) 279-5100
You should rely only on the information in the documents listed above or
provided in this prospectus. We have not authorized any one to provide you with
different information. The shares offered by this prospectus are not being
offered in any state where the offer is not permitted. You should not assume
that the information in this prospectus is accurate as of any date other than
the date on the front of this prospectus.
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THE COMPANY
Maxwell Technologies, Inc. is a worldwide leader in pulsed power
technologies, the storage of electrical energy and delivery of power in brief
controlled bursts. We have leveraged our technical expertise, gained from over
30 years of experience performing research and development primarily for the
United States Department of Defense, to develop a portfolio of pulsed power
based commercial products. These products address a range of markets and
applications. Our pulsed power based products include ultracapacitors for
advanced electrical energy storage and power delivery, purification systems for
water treatment and the sterilization of medical and pharmaceutical products,
and electromagnetic interference ("EMI") filter capacitors for implantable
medical devices. In addition to pulsed power based products, we design and build
industrial computers and subsystems which we sell in the computer telephony,
medical, manufacturing automation and other markets and we design and
manufacture electronic components for use in space vehicles and satellites.
Government funded research and development projects in pulsed power continue to
be an important part of our business. These projects serve as a starting point
for developing new technologies and provide us with scientific and engineering
expertise.
In December 1998, we acquired KD Components, Inc. KD Components designs,
manufacturers and provides high reliability ceramic capacitors, primarily for
high voltage uses. To acquire KD Components, we issued 144,566 shares of common
stock to the stockholders of KD Components. In January 1999, we acquired Space
Electronics Inc. SEI designs, manufactures and provides electronic components
and related services for space and other high-reliability applications. To
acquire SEI, we issued 681,234 shares of common stock to the stockholders and
optionholders of SEI. In January 1999, we also acquired the German distributor
of our I-Bus operation in exchange for 113,500 shares of our common stock which
were issued to the sole stockholder of the acquired company.
We own the PowerCache(TM), PureBright(R), CoolPure(R) and JAMIS(R)
trademarks. All other trademarks or trade names referred to in this prospectus
or in the documents which are considered to be a part of this prospectus are the
property of their respective owners.
Our executive offices are located at 9275 Sky Park Court, San Diego,
California 92123. Our telephone number is (619) 279-5100.
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RISK FACTORS
Investing in our common stock involves a high degree of risk. Any of the
following risks could materially adversely affect our business, financial
condition and results of operations and could result in a complete loss of your
investment. You should carefully consider these risk factors, together with all
other information included in this prospectus, and in the documents which are
considered to be a part of this prospectus, before you decide whether to
purchase shares of our common stock. The risks set out below are not exhaustive.
OUR SUCCESS DEPENDS ON OUR ABILITY TO DEVELOP AND MARKET OUR PRODUCTS AND
TECHNOLOGIES
Many of our products are in the development stage. Our products are also
alternatives to established products or are new technologies that provide
capabilities that do not presently exist in the marketplace. Our products are
sold in highly competitive and rapidly changing markets. The success of our
products is significantly affected by their cost, by technology standards and
end user preferences. In addition, the success of our products depends on a
number of factors, including our ability to:
- overcome technical, financial and other risks involved in
introducing new products and technologies
- identify and develop a market for our new products and technologies;
- produce products that can be competitively priced;
- respond to technological changes by improving our existing products
and technologies;
- accurately anticipate market demand for our products and
technologies;
- demonstrate that our products have technological and/or economic
advantages over the products of our competitors; and
- respond to competitors that are more experienced, have significantly
greater resources, and a larger base of customers.
OUR SUCCESS DEPENDS ON OUR ABILITY TO TRANSITION FROM RELYING ON THE GOVERNMENT
SECTOR TO PRIVATE- SECTOR SALES
Historically, we have relied upon various government agencies to fund our
research and development, and we have derived a significant portion of our
revenues from the government sector. Our business strategy is to now concentrate
on developing, manufacturing and marketing our products to the private sector,
while maintaining steady revenues from the government sector. Our success in
this transition will depend upon a number of objectives, including the
following:
- developing and manufacturing new products at competitive prices;
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- gaining customer acceptance for our products and services;
- expanding our customer base through our sales and marketing efforts;
- increasing our manufacturing capacity; and
- developing extensions of our existing products and services into new
applications.
WE RELY EXTENSIVELY ON STRATEGIC RELATIONSHIPS THAT MAY NOT BE SUCCESSFUL
We have established and will continue to attempt to establish strategic
relationships with corporate partners and United States government agencies to
develop our products. These relationships allow us to understand and access new
markets, and provide us an opportunity to test our products. If these
relationships are not successful or not continued, it could have a material
adverse effect on our sales and growth. The success of these relationships
depends on a number of factors, including:
- the interest in our products which are still in the development
stage;
- our success in meeting the expectations of our strategic partners;
and
- our strategic partners' success in marketing or their willingness to
purchase any such products.
We may not be successful in continuing our relationships with our current
strategic partners. In addition, we may not be able to enter into new strategic
relationships on commercially reasonable terms or if we do, these relationships
may not be successful.
EVEN IF SUCCESSFUL, OUR STRATEGIC RELATIONSHIPS PRESENT SEVERAL RISKS
Although we rely extensively on our strategic relationships, these
relationships present several risks to our business, including the following:
- Our partners may require us to share control over our development,
manufacturing and marketing programs, and limit our ability to
license our technology to others. In addition, some of our partners
require that we share our proprietary technology with them and
restrict our ability to engage in some areas of product development
and marketing;
- Our strategic partners may use or disclose the technology which we
jointly develop without paying us any royalties;
- We often grant exclusivity rights to our strategic partners as an
incentive for them to participate in the development of a product.
Any exclusivity rights granted to strategic partners may decrease
our ability to find a broader market for some of our products. This
may have the effect of substantially decreasing our revenues during
the exclusivity period; and
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- Our strategic partners may seek to manufacture jointly developed
products on their own or obtain these products from third party
sources which would have the effect of decreasing our revenues from
these products.
WE DEPEND ON OEM CUSTOMERS AND AS A RESULT HAVE LONG SALES CYCLES
Sales to a few original equipment manufacturers, known as "OEMs," as
opposed to direct retail sales to customers, make up a significant part of our
revenues. The timing and volume of these sales depend upon the sales levels and
shipping schedules for the products of our OEM customers. Thus, even if we
develop a successful component, our sales will not increase unless the product
into which our component is incorporated is successful. If our OEM customers
fail to sell a sufficient quantity of products incorporating our components, or
if the OEM's sales timing and volume fluctuates, it could have a material
adverse effect on our business, financial condition and results of operations.
Our OEM customers typically require a long development and engineering process
before incorporating our products and services in their devices. This period of
time is in addition to the time we spend on basic research and product
development. As a result, we are vulnerable to changes in technology or end user
preferences.
Our opportunity to sell our products to our OEM customers typically occurs
at infrequent intervals, depending on when the OEM customer designs a new
product or enhances an existing one. If we are not aware of an OEM's product
development schedule, or if we cannot provide components or technologies when
they develop their products, we will miss an opportunity that may not reappear
for some time.
OUR ACQUISITION STRATEGY COULD ADVERSELY AFFECT OUR SUCCESS
As part of our business strategy, we regularly review possible
acquisitions of complementary companies, technologies or products, and
periodically engage in discussions regarding such possible acquisitions. During
fiscal 1999, we have acquired three businesses with strategic importance to
different areas of our operations. The businesses we acquired are geographically
dispersed, with one located in California, one in Nevada and the other in
Germany. We completed four acquisitions in fiscal 1998. The success of our
acquisition strategy depends on a number of factors, including the following:
- correctly valuing the commercial potential of technologies owned by
the companies we acquire;
- successfully integrating the operations, products, personnel and
cultures of the companies we acquire;
- effectively managing our operations in a number of locations and
foreign countries;
- our ability to focus on our day-to-day business operations while
pursuing our acquisition strategy;
- our ability to enter markets in which we have limited or no direct
experience; and
- retaining the key employees of the companies we acquire.
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In addition, similar to the charges that were taken in connection with two
of the acquisitions we completed in fiscal 1998, any future acquisition may
result in:
- dilutive issuances of equity securities;
- the incurrence of debt;
- a decrease in our cash balances;
- amortization expenses related to goodwill and other intangible
assets; and
- other charges to operating results, including acquired in-process
research and development charges.
Moreover, there can be no assurance that any equity or debt financing proposed
in connection with any acquisition will be available to us on acceptable terms
or at all, when, and if, we find a suitable company, technology or product to
acquire. We cannot assure that any acquisition we complete will result in
long-term benefits to us or to our stockholders or that we will be able to
effectively manage the resulting business.
WE HAVE INCURRED LOSSES HISTORICALLY AND IN THE EVENT OF FUTURE LOSSES, THE
PRICE OF OUR COMMON STOCK WILL FLUCTUATE
We have incurred net losses in three of our past five fiscal years. In the
future, we may experience significant fluctuations in our revenues and we may
incur net losses from period to period as a result of a number of factors,
including the following:
- the amounts invested in developing and marketing our products in any
period as compared to the volume of sales of those products in the
same period;
- fluctuations in the demand for our products by OEMs;
- the prices at which we sell our products and services as compared to
the prices of our competitors;
- the timing of our product introductions as compared to those of our
competitors;
- the profit margins on our mix of product sales;
- the structure and timing of new strategic relationships;
- the contraction, cancellation or suspension by the United States
government of its programs and contracts with us; and
- the dilution, debt, expenses, and/or charges we incur as part of our
acquisition strategy.
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In addition, we incur significant costs developing and marketing products based
on new technologies. If in any period these costs are more than the revenues we
derive from the sales of these products, it could have the effect of offsetting
any income derived from our other products and we could incur net losses.
We anticipate that, in order to increase our market share, we may sell our
products and services at profit margins below those we ultimately expect to
achieve and/or significantly reduce the prices of our products and services in a
particular quarter or quarters. The impact of the foregoing may cause our
operating results to be below the expectations of public market analysts and
investors. In such event, the price of our common stock would likely fluctuate.
WE MAY EXPERIENCE DIFFICULTIES MANUFACTURING OUR PRODUCTS
As described in more detail below, we may experience difficulties in
manufacturing our products in increased quantities, outsourcing the
manufacturing of our products, and customizing our manufacturing process.
Manufacturing In Increased Quantities. We have limited experience in
manufacturing our products in high volume. It may be difficult for us to:
- increase the quantity of the new products we manufacture, especially
those products that contain new technologies; and
- reduce our manufacturing costs to a level needed to produce adequate
profit margins.
It may also be difficult for us to solve management, technological, engineering
and other problems related to our manufacturing processes. These problems
include production yields, quality control and assurance, component supply, and
shortages of qualified management and other personnel. In addition, in order to
manufacture our products in high volume, we will need to continue to expand our
current facilities and/or obtain additional facilities. We may not be successful
in expanding our facilities or in obtaining additional facilities.
Outsourcing. We may elect to have some of our products manufactured by
third parties. Outsourcing involves risks with respect to quality assurance,
cost and the absence of close engineering support.
Customized Manufacturing Process. Part of our ultracapacitor manufacturing
strategy is to implement a process that will allow customization of our
ultracapacitors while retaining the benefits of volume manufacturing and
materials procurement. There can be no assurance that such a process can be
developed and implemented in time to meet our needs.
WE HAVE LIMITED MARKETING AND SALES EXPERIENCE AND OUR STRATEGY DEPENDS ON THIRD
PARTIES
We have limited experience marketing and selling our products. To sell our
products, we will need to train our marketing and sales personnel to effectively
demonstrate the advantages of our products over the products offered by our
competitors. The highly technical nature of the products we offer may limit our
ability to retain and attract adequate marketing and sales personnel. Thus, as
part of our sales
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and marketing strategy, we enter into arrangements with distributors and sales
representatives and depend upon their efforts to sell our products. These
arrangements may not be successful.
OUR SUCCESS DEPENDS UPON PROTECTING OUR INTELLECTUAL PROPERTY RIGHTS
Our success depends on the establishment and maintenance of intellectual
property rights. Although we try to protect our intellectual property rights
through patents, copyrights, trade secrets and other measures, these steps may
not prevent misappropriation by third parties. Other issues include:
- adequately protecting our intellectual property rights under the
laws of some foreign countries, which may not be as protective as
United States' laws; and
- the possibility that third parties could "reverse engineer" our
products in order to determine their method of operation and
introduce competing products or develop competing technology
independently.
As our business has expanded, we have emphasized protecting our
technologies and products through patents. Our success depends on maintaining
our patents, adding to them where appropriate, and developing products and
applications without infringing on third parties' patent and proprietary rights.
The risks involved in protecting our patents include:
- our patents may be circumvented or challenged and held unenforceable
or invalid;
- our pending or future patent applications, if any, may not be issued
with the protections we seek; and
- others may claim rights in the patented and other proprietary
technology owned or licensed by us.
If our patents are invalidated or if it is determined that we, or the
licensor of the patent, does not hold sole rights to the patent, it could have a
material adverse effect on our business, results of operations and financial
condition, particularly if we cannot design around others' proprietary rights.
Competing research and patent activity in our product areas is
substantial. Conflicting patent and other proprietary rights claims may result
in disputes or litigation. Although we do not believe that our products or
proprietary rights infringe on third party rights, infringement claims could be
asserted against us in the future. The negative effects of such claims, with or
without merit, are:
- time-consuming, costly litigation;
- product shipment delays;
- we could be required to enter into royalty or licensing agreements;
and
- possible damage payments or injunctions which prevent us from
making, using or selling the infringing product.
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Also, we may not be able to stop a third party's product from infringing on our
proprietary rights, without litigation.
Some of our owned or licensed patents and patent applications have
"march-in" rights and non-exclusive, royalty-free, confirmatory licenses held by
various governmental agencies or other entities. "March-in" rights are the
United States government or agency's right to cancel agreements and require a
contractor to grant licenses to third parties if the contractor does not develop
the technology in the agreements. Confirmatory licenses permit the United States
government to select vendors other than us to make products for them which would
otherwise infringe our patent rights that are subject to the royalty-free
licenses.
In addition, the United States government can require us to grant licenses
(including exclusive licenses) of our patents and patent applications or other
inventions developed for the government to a third party if it finds that we did
not commercialize such inventions or if such action is necessary:
- to meet public health or safety needs;
- to meet requirements for public use under federal regulations; or
- because we have not made reasonable efforts to ensure products are
manufactured in the United States.
Because a number of our commercial products are derived from technology
originally developed in government funded programs, these risks may apply
outside of the work on government contracts.
THERE ARE RISKS ASSOCIATED WITH OUR INTERNATIONAL SALES AND OPERATIONS
We derive an increasing portion of our revenues from sales to customers
located outside of the United States. We expect our international sales to
continue to represent a significant and increasing portion of our future
revenues. As a result, our business will continue to be subject to certain
risks, such as foreign government regulations and export controls, as well as
changes in tax laws, tax treaties, tariffs and freight rates.
We have only recently established or acquired operations in foreign
countries. Since we are relatively inexperienced in managing our international
operations, we may be unable to focus on the operation and expansion of our
worldwide business and to manage cultural, language and legal differences
inherent in international operations. In addition, to the extent we are unable
able to effectively respond to political, economic and other conditions in these
countries, our business, results of operations and financial condition could be
materially adversely affected. Moreover, changes in the mix of income from our
foreign subsidiaries, expiration of tax holidays and changes in tax laws and
regulations could result in increased tax rates for us.
THERE ARE RISKS ASSOCIATED WITH OUR CONTINUING BUSINESS WITH THE UNITED STATES
GOVERNMENT
We derive a significant portion of our revenues, including revenues of the
newly-acquired Space Electronics unit, from contracts with the United States
government, principally agencies of the United States Department of Defense, and
from subcontracts with government suppliers. The reductions in
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defense budgets in the 1990's have adversely affected our traditional business,
particularly in the area of system survivability products and services, such as
weapons effects simulation and testing. We have also experienced increased
competition in bidding for new defense programs from contractors seeking to
replace their lost government business. In addition, defense spending in
general, and the number and size of contracts awarded to us, could be reduced in
the future. A significant loss of United States government funding would have a
material adverse effect on our business, results of operations and financial
condition.
Our business with the United States government is also subject to various
other risks, including the following:
- unilateral termination for the convenience of the government;
- reduction or modification in the event of changes in the
government's requirements or budgetary constraints;
- increased or unexpected costs causing losses or reduced profits
under fixed-price contracts or unallowable costs under cost-plus
contracts;
- risks of potential disclosure of our confidential information to
third parties;
- the failure or inability of a subcontractor or contractor to perform
its obligations under a contract in circumstances where we are the
prime contractor or subcontractor; and
- the failure of the government to exercise options provided for in
the contracts and the exercise of march-in rights or confirmatory
licenses by the government.
There can be no assurance that our contracts with the Department of Defense and
other government agencies will not be terminated, reduced or modified.
OUR SUCCESS DEPENDS ON OUR ABILITY TO OBTAIN A SUBSTANTIAL AMOUNT OF CAPITAL
We believe that in the future we will need a substantial amount of capital
for a number of purposes including the following:
- to achieve our long-term strategic objectives;
- to maintain and enhance our competitive position;
- to meet anticipated volume production requirements for several of
our product lines, in particular our ultracapacitors and
purification systems;
- to expand our manufacturing capabilities and facilities;
- to establish viable production alternatives;
- to fund our continuing expansion into commercial markets;
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- to construct and equip additional or existing facilities; and
- to acquire new or complementary businesses, product lines and
technologies.
There can be no assurance that the necessary additional financing will be
available to us on acceptable terms or at all. If adequate funds are not
available, we may be required to change, delay, reduce or eliminate our planned
product commercialization strategy or our anticipated facilities expansion plans
and expenditures. This could have a material adverse effect on our business,
results of operations and financial condition.
OUR SUCCESS DEPENDS ON OUR KEY PERSONNEL
Since we primarily focus on emerging technologies, our success depends
upon the continued service of our key technical and senior management personnel.
Some of our scientists and engineers are the key developers of our products and
technologies and are recognized as world-leaders in their area of expertise. The
loss of any of these scientists or engineers to our competitors could end our
technological and competitive advantage in some product areas and business
segments.
Our performance also depends on our ability to identify, hire, train,
retain and motivate high quality personnel, especially key manufacturing
executives and highly skilled engineers and scientists. The industries in which
we compete are characterized by a high level of employee mobility and aggressive
recruiting of skilled personnel. Our employees may terminate their employment
with us at any time.
OUR FAILURE OR THE FAILURE OF OUR PRODUCTS, CUSTOMERS, SUPPLIERS OR VENDORS TO
BE YEAR 2000 COMPLIANT COULD ADVERSELY AFFECT OUR OPERATIONS
A significant percentage of the software that runs most computers relies
on two digit date codes to perform a number of computation and decision making
functions. As the year 2000 approaches, these computer programs may fail from an
inability to interpret data codes properly, misreading "00" for the year 1900
instead of 2000.
We believe that our major computer systems and software programs are Year
2000 compliant or will be brought into compliance on a timely basis. In
addition, we have taken steps to bring many of our products which could be
impacted by Year 2000 problems into compliance. However, the failure of our
computer systems and software programs or of our products to operate properly
with regard to Year 2000 requirements could result in the following:
- unanticipated expenses to remedy any problems;
- a reduction in our sales; and
- exposure to related litigation by our customers.
In addition, our customers or third party component suppliers and vendors may
also experience business disruptions in connection with the Year 2000 problem.
Our business, operating results and financial condition could be materially
adversely affected by Year 2000 problems with our own systems and
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products or if any of our customers or vendors or other third party entities
experience a business disruption as a result of Year 2000 problems.
WE RELY ON A LIMITED NUMBER OF THIRD PARTY SUPPLIERS
Our ability to manufacture products depends in part on our ability to
secure qualified and adequate sources of materials, components and
sub-assemblies at prices which enable us to make our products at competitive
costs. Some of our suppliers are currently the sole source of one or more items
which we need to manufacture our products. On occasion, we have experienced
difficulty in obtaining timely delivery of supplies from outside suppliers. This
has adversely impacted our delivery time to our customers and in one
circumstance we believe such delivery problems were a contributing factor to the
loss of certain business from a major customer. There can be no assurance that
these and other similar supply problems will not recur.
Currently, a single domestic supplier provides one of the components for
our EMI filter product. This supplier has indicated that it plans to design,
build and sell a product which would compete with our EMI filter. If this
occurs, we believe that we could still obtain the component from this supplier
or, if necessary, we believe that we could replace this supplier with another
vendor or that we could manufacture the component on our own. Although we seek
to reduce our dependence on sole and limited source suppliers, the partial or
complete loss of these sources could have at least a temporary material adverse
effect on our business and results of operations and damage customer
relationships.
WE ARE EXPOSED TO SIGNIFICANT PRODUCT LIABILITY RISKS
We may be exposed to certain product liability risks. For example, our EMI
filters are components of implantable medical devices and, due to the litigious
environment surrounding the medical device industry, may subject us to an
increased risk of product liability claims that may involve significant defense
costs. Our other products may also be used in functions involving significant
product liability risks. There can be no assurance that product liability claims
will not be asserted against us in the future. Although we maintain product
liability insurance with coverage limits that we believe to be adequate, there
can be no assurance that this coverage will in fact be adequate to protect us
against future product liability claims. In addition, product liability
insurance is expensive and there can be no assurance that, in the future,
product liability insurance will be available to us in amounts or on terms
satisfactory to us, if at all. A successful product liability claim or series of
claims brought against us could have a material adverse effect on our business,
financial condition and results of operations.
WE ARE SUBJECT TO VARIOUS ENVIRONMENTAL REGULATIONS
We are subject to a variety of environmental regulations relating to the
use, storage, discharge, handling, emission, generation, manufacture and
disposal of toxic or other hazardous substances. If we fail to comply with
current or future regulations, substantial fines could be imposed against us,
our production could be suspended or stopped, or our manufacturing process could
be altered. Such regulations could require us to acquire expensive remediation
or abatement equipment or to incur substantial expenses to comply with
environmental regulations. If we fail to adequately control the use, discharge,
disposal or storage of hazardous or toxic substances, we could incur significant
liabilities.
13
<PAGE> 16
OUR FINANCIAL CONDITION COULD BE AFFECTED BY THE STOCK OPTION PLANS AT OUR
SUBSIDIARIES
Several of our principal operating subsidiaries have, or will have,
employee stock option plans which provide for the issuance of options to
purchase shares of the subsidiary's common stock. In most cases, we can grant up
to 12% or 15% of the outstanding stock of a subsidiary under its stock option
plan. Certain key employees of one of our subsidiaries, Maxwell Business
Systems, Inc., however, own an aggregate of 20%, and have the right to purchase
up to an additional 29%, of that subsidiary's common stock.
If the options granted under one of our subsidiary's stock option plans
are exercised, our ownership interest in that subsidiary will be reduced. This
will have the effect of reducing our portion of the net income and dividends
that we receive from that subsidiary, as well as reducing the proceeds if we
were to sell that subsidiary. Ultimately, we expect that our reported earnings
per share will be reduced in future quarters due to the increasing fair value of
certain subsidiaries and the dilution created by options granted under our
subsidiaries' stock option plans.
Currently, no established trading market exists for the common stock
underlying any of the subsidiary options and such options are not exchangeable
for shares of our common stock. We have no plan to offer an exchangeability
feature for options to purchase shares of our common stock or otherwise provide
liquidity for these subsidiary options, but we could consider such alternatives
in the future.
OUR FINANCIAL CONDITION COULD BE AFFECTED BY POTENTIAL PUBLIC OFFERINGS OF OUR
SUBSIDIARIES' STOCK
Due to our corporate structure of operating through separate subsidiaries,
we could engage in future public offerings of the common stock of our
subsidiaries, sales of subsidiaries or strategic acquisitions with subsidiary
stock if our board determined that it was in the best interests of the
stockholders to pursue that course of action. Some of these alternatives could
adversely effect our business, financial condition and results of operations.
For example, any public offering or other sale of a minority portion of a
subsidiary's stock would reduce that subsidiary's contribution to our net income
and earnings per share.
WE MAY FACE DIFFICULTIES IN OBTAINING FDA APPROVAL FOR OUR PRODUCTS
Some of our products are subject to the approval process of the Food and
Drug Administration (FDA) because they are used for food storage or in medical
devices. These products include our CoolPure(R) and PureBright(R) technologies
and the EMI filter. There are many aspects of the FDA approval process that
could have a material adverse effect on our business, financial condition and
results of operations, including the following:
- the FDA testing and application process is expensive and lengthy and
varies based on the type of product;
- our products may not ultimately receive FDA approval or clearance
which would prevent us from marketing such products;
14
<PAGE> 17
- the FDA may restrict a product's intended use as a condition to
approving or clearing such product or place conditions on any
approval that could restrict the commercial applications of such
products;
- the FDA may require post-marketing testing and surveillance to
monitor the effects of products it initially approves;
- the FDA may withdraw its approval or clearance of any product if
compliance with regulatory standards is not maintained or if
problems occur following initial marketing; and
- failure to comply with existing or future regulatory requirements
can result in, among other things, fines, injunctions, civil
penalties, recall or seizure of products, total or partial
suspension of production, failure of the United States government to
grant pre-market clearance or pre-market approval for products,
withdrawal of marketing clearances or approvals and criminal
prosecution.
OUR LONG-TERM FIXED-PRICE CONTRACTS MAY BE UNPROFITABLE
Some of our businesses, primarily those involved in government funded
research and systems development, enter into long-term fixed-price contracts for
large hardware systems or components. If we experience unanticipated delays in
program schedules, fail to anticipate costs accurately or encounter problems
with important vendors, it could adversely affect the profitability of these
contracts.
ANTI-TAKEOVER PROVISIONS IN OUR CERTIFICATE OF INCORPORATION AND BYLAWS COULD
PREVENT TRANSACTIONS WHICH ARE IN THE BEST INTEREST OF OUR STOCKHOLDERS
Certain provisions in our certificate of incorporation could make it more
difficult for a third party to acquire control of Maxwell, even if such change
in control would be beneficial to our stockholders. We have a staggered board of
directors which means that our directors are divided into three classes. The
directors in each class are elected to serve three-year terms. Since the
three-year terms of each class overlap the terms of the other classes of
directors, the entire board of directors cannot be replaced in any one year.
Furthermore, our certificate of incorporation contains a "fair price provision"
which may require a potential acquirer to obtain the consent of our board to any
business combination involving Maxwell. Our certificate of incorporation and
bylaws do not permit stockholder action by written consent or the calling by
stockholders of a special meeting.
The provisions of our certificate of incorporation and bylaws could delay,
deter or prevent a merger, tender offer, or other business combination or change
in control involving us that some, or a majority, of our stockholders might
consider to be in their best interests. This includes offers or attempted
takeovers that could result in our stockholders receiving a premium over the
market price for their shares of our common stock.
15
<PAGE> 18
OUR COMMON STOCK EXPERIENCES LIMITED TRADING VOLUME AND OUR STOCK PRICE HAS BEEN
VOLATILE
Our common stock is traded on the Nasdaq National Market. The trading
volume of our common stock each day is relatively small. This means that sales
or purchases of relatively small blocks of stock can have a significant impact
on the price at which our stock is traded. We believe factors such as quarterly
fluctuations in financial results, announcements of new technologies impacting
our products, announcements by competitors or changes in securities analysts'
recommendations may cause the price of our stock to fluctuate, perhaps
substantially. These fluctuations, as well as general economic conditions in the
United States and worldwide, such as recessions or higher interest rates, may
adversely affect the market price of our common stock.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents considered to be a part of this
prospectus may contain 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. Words such as "anticipates," "expects," "intends," "plans," "believes,"
"seeks," "estimates," variations of such words and similar expressions are
intended to identify such forward-looking statements. Such statements are
subject to a number of risks, uncertainties and assumptions. Actual results in
the future could differ materially from those described in any forward-looking
statements as a result of certain factors, including those set forth in "Risk
Factors," as well as those noted elsewhere in this prospectus and the documents
considered to be a part of this prospectus generally. We undertake no obligation
to publicly release the result of any revisions to these forward-looking
statements that may be made to reflect any future events or circumstances.
16
<PAGE> 19
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares offered by
this prospectus. All proceeds from the sale of the shares offered hereby will be
for the account of the selling stockholders.
SELLING STOCKHOLDERS
The following table sets forth the name of, and number of shares owned by,
each selling stockholder. The shares of common stock to be sold under this
prospectus were issued to the former stockholders of KD Components, Inc. and
Bressner Technology GmbH, and in connection with our acquisitions of those
companies. None of the selling stockholders has held any position or office or
has any other material relationship with us or any of our affiliates within the
past three years other than as a result of his or her beneficial ownership of
shares or the fact that some of the selling stockholders were employees of one
of the acquired companies and are now one of our employees.
The shares may be offered from time to time by the selling stockholders
named below. However, such selling stockholders are under no obligation to sell
all or any portion of such shares, nor are the selling stockholders obligated to
sell any such shares immediately under this prospectus. Because the selling
stockholders may sell all or some of their shares of common stock offered
hereby, no estimate can be given as to the number of shares of common stock that
will be held by any selling stockholder upon termination of any offering made
under this prospectus.
<TABLE>
<CAPTION>
PERCENTAGE OF SHARES
SHARES BENEFICIALLY
NUMBER OF SHARES BENEFICIALLY OWNED
BENEFICIALLY OWNED NUMBER OF OWNED AFTER AFTER THE
NAME OF SELLING STOCKHOLDER(1) PRIOR TO THE OFFERING SHARES OFFERED THE OFFERING(1) OFFERING(2)
- ------------------------------ --------------------- -------------- ---------------- ------------
<S> <C> <C> <C> <C>
Josef Bressner(3)................. 113,500 113,500 * --
Jeffrey M. Day(3)................. 42,598 42,598 * --
Michael W. Day.................... 88,698 88,698 * --
</TABLE>
- ---------------------
* Amount represents less than 1% of the issued and outstanding shares of our
common stock.
(1) Percentage is based on 9,547,942 shares of our common stock outstanding on
May 31, 1999, adjusted as required by rules promulgated by the SEC.
Information with respect to beneficial ownership is based on information
furnished to us by each stockholder included in the table or included in
filings with the Securities and Exchange Commission. We believe that each
individual person has sole voting and investment power for shares
beneficially owned by him, subject to community property laws if applicable.
(2) Assumes the sale of all of the shares offered by the selling stockholders.
(3) The stockholder is one of our employees.
17
<PAGE> 20
PLAN OF DISTRIBUTION
The shares of common stock covered by this prospectus may be offered and
sold from time to time by the selling stockholders. References in this plan of
distribution to "selling stockholders" include donees and pledgees selling
shares received from a named selling stockholder after the date of this
prospectus. The selling stockholders will act independently of us in making
decisions with respect to the timing, manner and size of each sale. The selling
stockholders may sell the shares on the Nasdaq National Market, or in private
sales at negotiated prices. The shares may be sold by one or more of the
following methods of sale, at market prices prevailing at the time of sale, or
at negotiated prices:
- a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this prospectus;
- an over-the-counter distribution in accordance with the rules of the
Nasdaq National Market;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
- in privately negotiated transactions.
If required, this prospectus may be amended or supplemented from time to
time to describe a specific plan of distribution. In addition, if we are
notified by a selling stockholder that a donee or pledgee intends to sell more
than 500 shares, we will file a supplement to this prospectus. In effecting
sales, broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in the resales. The selling stockholders may enter
into hedging transactions with broker-dealers in connection with distributions
of the shares or otherwise. In such transactions, broker-dealers or other
financial institutions may engage in short sales of the shares in the course of
hedging the positions they assume with a selling stockholder. The selling
stockholders may also sell shares short and redeliver the shares to close out
such short positions. The selling stockholders may also enter into option or
other transactions with broker-dealers which require the delivery to the
broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer such shares pursuant to this prospectus. The selling stockholders may
also pledge or loan the shares to a broker-dealer. The broker-dealer may sell
the shares so loaned, or upon a default the broker-dealer may sell the pledged
shares pursuant to this prospectus. In addition, any shares that qualify for
sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to
this prospectus.
In effecting sales, broker-dealers or agents engaged by the selling
stockholders may arrange for other broker-dealers or agents to participate.
Broker-dealers or agents may receive compensation in the form of commissions,
discounts or concessions from selling stockholders. Broker-dealers or agents may
also receive compensation from the purchasers of the shares for whom they act as
agents or to whom they sell as principals, or both. We will pay all expenses
incident to the offering and sale of the shares to
18
<PAGE> 21
the public other than any commissions and discounts of underwriters, dealers or
agents and any transfer taxes.
The selling stockholders and any underwriter, broker-dealer or agent who
participate in the distribution of such shares may be underwriters under the
Securities Act of 1933, and any discount, commission or concession they receive
may be an underwriting discount or commission under the Securities Act of 1933.
In order to comply with the securities laws of some states, if applicable,
the shares must be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in some states the shares may not be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with.
We have advised the selling stockholders that the anti-manipulation rules
of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates.
In addition, we will make copies of this prospectus available to the selling
stockholders and we have informed them of the need for delivery of copies of
this prospectus to purchasers at or prior to the time of any sale of the shares
offered by this prospectus. The selling stockholders may indemnify any
broker-dealer that participates in transactions involving the sale of the shares
against some liabilities, including liabilities arising under the Securities Act
of 1933.
At the time a particular offer of shares is made, if required, a
prospectus supplement will be distributed that will set forth the number of
shares being offered and the terms of the offering, including the name of any
underwriter, dealer or agent, the purchase price paid by any underwriter, any
discount, commission and other item constituting compensation, any discount,
commission or concession allowed or reallowed or paid to any dealer, and the
proposed selling price to the public.
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<PAGE> 22
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
Our authorized capital stock consists of 40,000,000 shares of common stock
with a $.10 par value. As of May 31, 1999, there were 9,547,942 shares of common
stock outstanding, excluding shares issuable upon the exercise of outstanding
options to purchase an aggregate of 1,579,903 shares of common stock held by
employees, management and directors. Holders of common stock are entitled to one
vote for each share held of record on all matters submitted to a vote of
stockholders. There is no cumulative voting for the election of directors.
Holders of common stock are entitled to receive ratably such dividends as may be
declared by the board of directors out of funds legally available for dividends.
In the event of a liquidation, dissolution or winding up, holders of our common
stock will be entitled to share ratably in all assets remaining after payment to
all creditors. Holders of our common stock have no preemptive rights and have no
rights to convert their common stock into any other securities. All of the
outstanding shares of common stock are, and the shares being offered by this
prospectus will upon issuance and sale be, fully paid and nonassessable.
The transfer agent and registrar for the common stock is ChaseMellon
Shareholder Services, L.L.C.
ANTI-TAKEOVER PROVISIONS
The provisions of our certificate of incorporation and bylaws having
possible "anti-takeover" effects are those that:
- form a classified board of directors with staggered terms of office,
eliminate cumulative voting and permit the removal of directors only
for cause;
- impose supermajority stockholder vote or disinterested director
approval requirements in connection with certain mergers,
acquisitions and other business combinations, unless specified
minimum price and procedural requirements are satisfied in the
proposed transaction (a "fair price provision");
- eliminate the right of stockholders to call special stockholders'
meetings and limit their right to take action without a meeting by
written consent; and
- impose supermajority stockholder vote or disinterested director
approval requirements for amendments to a number of provisions in
our charter documents, including the provisions described in the
three preceding clauses.
In general, the fair price provisions may have the effect of requiring
cash payment for shares of common stock by an acquiror having accumulated 10% or
more of the common stock at a price greater than the highest market price of the
common stock within a recent date. Such a 10% or more stockholder must also meet
certain procedural requirements intended to prevent accumulations of additional
stock below the fair price.
20
<PAGE> 23
DELAWARE LAW
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law, an anti-takeover law. In general, Section 203 prohibits a
publicly held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless
either:
- prior to the date at which the person becomes an interested
stockholder, the board of directors approves such transaction or
business combination;
- the stockholder acquires more than 85% of the outstanding voting
stock of the corporation (excluding shares held by directors who are
officers or held in certain employee stock plans) upon consummation
of such transaction; or
- the business combination is approved by the board of directors and
by two-thirds of the outstanding voting stock of the corporation
(excluding shares held by the interested stockholder) at a meeting
of stockholders (and not by written consent).
A "business combination" includes a merger, asset sale or other
transaction resulting in a financial benefit to such interested stockholder. An
"interested stockholder" is a person who, together with affiliates and
associates, owns (or within three years prior, did own) 15% or more of the
corporation's voting stock.
LEGAL MATTERS
The validity of the shares of common stock offered by this prospectus will
be passed on for us by Riordan & McKinzie, a Professional Corporation, Los
Angeles, California. A principal of Riordan & McKinzie owns 6,625 shares of
common stock.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our annual report on Form 10-K for the fiscal
year ended July 31, 1998, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
The consolidated financial statements of Space Electronics Inc.
incorporated by reference in this prospectus have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect thereto, and are incorporated herein in reliance on the authority of
that firm as experts in giving said reports.
21
<PAGE> 24
================================================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS IN CONNECTION WITH THIS OFFERING MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY US OR BY ANY SELLING STOCKHOLDER. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF THIS PROSPECTUS.
-----------------------------
244,796 SHARES
MAXWELL TECHNOLOGIES, INC.
COMMON STOCK
-----------------------------
PROSPECTUS
-----------------------------
, 1999
================================================================================
<PAGE> 25
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is a statement of estimated expenses to be paid by the
Registrant in connection with the issuance and distribution of the securities
being registered. All of the amounts shown are estimated, except the SEC
registration fee.
<TABLE>
<S> <C>
SEC Registration Fee.................................................. $ 1,583
Legal fees............................................................ 10,000
Accountants' fees..................................................... 5,000
Blue Sky qualification fees and expenses.............................. --
Transfer Agent fees................................................... 1,000
Miscellaneous......................................................... 5,000
Total............................................................. $ 22,583
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Maxwell Technologies, Inc. is a Delaware corporation. Article V of our
Bylaws provides that we may indemnify our officers and Directors to the full
extent permitted by law. Section 145 of the General Corporation Law of the State
of Delaware ("GCL") provides that a Delaware corporation has the power to
indemnify its officers and directors in certain circumstances.
Subsection (a) of Section 145 of the GCL empowers a corporation to
indemnify any director or officer, or former director or officer, who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation),
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding provided that such director or officer acted in good faith
and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, provided that such director or officer had no cause to believe his
or her conduct was unlawful.
Subsection (b) of Section 145 of the GCL empowers a corporation to
indemnify any director or officer, or former director or officer, who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that such person acted in any of the
capacities set forth above, against expenses actually and reasonably incurred in
connection with the defense or settlement of such action or suit, provided that
such director or officer acted in good faith and in a manner reasonably believed
to be in or not opposed to the best interests of the corporation, except that no
indemnification may be made in respect of any claim, issue or matter as to which
such director or officer shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action was brought shall determine that despite the
adjudication of liability, such director or officer is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
Section 145 of the GCL further provides that to the extent a director or
officer of a corporation has been successful in the defense of any action, suit
or proceeding referred to in subsections (a) and (b) or in the defense of any
claim, issue or matter therein, he or she shall be indemnified against expenses
(including attorneys' fees)
II-1
<PAGE> 26
actually and reasonably incurred by him or her in connection therewith; that
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; and that the
corporation shall have power to purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him or her or incurred by him or her in any such capacity or arising out of his
or her status as such whether or not the corporation would have the power to
indemnify him or her against such liabilities under Section 145.
Article Seventeenth of our Certificate of Incorporation currently provides
that each Director shall not be personally liable to Maxwell or our stockholders
for monetary damages for breach of fiduciary duty as a Director, except for
liability (i) for any breach of the Director's duty of loyalty to Maxwell or our
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the GCL, or (iv) for any transaction from which the Director derived an improper
benefit.
We have entered into indemnity agreements with each of our Directors and
executive officers. The indemnity agreements generally indemnify such persons
against liabilities arising out of their service in their capacities as our
Directors, officers, employees or agents. We may from time to time enter into
indemnity agreements with additional individuals who become our officers or
Directors.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4.1+ Registration Rights Agreement dated as of December 31, 1998 by and
among the Company and certain shareholders of KD Components.
4.2* Registration Rights Agreement dated as of January 23, 1999, by and
among the Company and certain shareholders of Bressner Technology
GmbH.
5.1* Opinion of Riordan & McKinzie, a Professional Corporation.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Arthur Andersen LLP, Independent Auditors.
23.3* Consent of Riordan & McKinzie (included in Exhibit 5.1).
24.1* Powers of Attorney with respect to the Company (included in Part II).
</TABLE>
- -----------------------
+ Incorporated by reference from the Company's Registration Statement
on Form S-3 filed with the SEC on March 29, 1999 (Registration No.
333-75227).
* Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement.
II-2
<PAGE> 27
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; and
(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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered 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.
That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act of 1934, and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the 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.
II-3
<PAGE> 28
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that is has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of San Diego, State of California on the 7th day of
July, 1999.
MAXWELL TECHNOLOGIES, INC.
By: /s/ Thomas L. Horgan
----------------------------------------------
Thomas L. Horgan
Chief Executive Officer and President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Thomas L. Horgan President, Chief Executive Officer and Director July 7, 1999
-------------------- (Principal Executive Officer and Principal
Thomas L. Horgan Financial Officer)
* Corporate Manager of Financial Reporting July 7, 1999
-------------------- (Principal Accounting Officer)
William A. Long
* Director July 7, 1999
-------------------
Carlton J. Eibl
* Director July 7, 1999
-------------------
Mark Rossi
* Chairman of the Board and Director July 7, 1999
- ------------------------
Kenneth F. Potashner
* Director July 7, 1999
---------------------
Karl M. Samuelian
* By: /s/ Thomas L. Horgan
-----------------------
Thomas L. Horgan
Attorney-in-Fact
</TABLE>
II-4
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Amendment No. 1 to Registration Statement (Form S-3) and related Prospectus of
Maxwell Technologies, Inc. for the registration of 244,796 shares of its common
stock and to the incorporation by reference therein of our report dated
September 15, 1998, with respect to the consolidated financial statements of
Maxwell Technologies, Inc. included in its Annual Report (Form 10-K) for the
year ended July 31, 1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
San Diego, California
July 7, 1999
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Amendment No. 1 to Registration Statement on Form S-3 of
Maxwell Technologies, Inc. of our report on the financial statements of Space
Electronics Inc., dated January 23, 1998 included in Maxwell Technologies, Inc.
Form 8-K, dated February 12, 1999 and to all references to our firm included in
this Amendment No. 1 to Registration Statement. It should be noted that we have
not audited any financial statements of Space Electronics Inc. subsequent to
December 31, 1997 or performed any audit procedures subsequent to the date of
our report.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
San Diego, California
July 7, 1999
