<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 31, 1998
REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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SMITH INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 95-3822631
(State or Other Jurisdiction of Incorporation (I.R.S. Employer
or Organization) Identification No.)
</TABLE>
16740 HARDY STREET
P.O. BOX 60068
HOUSTON, TEXAS 77205
(281) 443-3370
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
NEAL S. SUTTON
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
SMITH INTERNATIONAL, INC.
16740 HARDY STREET
P.O. BOX 60068
HOUSTON, TEXAS 77205
(281) 233-5060
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
Copies to:
ERIC A. BLUMROSEN
GARDERE WYNNE SEWELL & RIGGS, L.L.P.
THREE ALLEN CENTER
333 CLAY AVENUE, SUITE 800
HOUSTON, TEXAS 77002-4086
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: From time to time after the effective date of this registration
statement until such time that all of the shares registered hereunder have been
sold.
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 registered 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 number of the earlier effective
registration statement for the same offering. [ ]
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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 offering. [ ]
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If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: [ ]
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF SHARES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, $1.00 par value........... 542,198 $19.94 $10,811,428 $3,190
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</TABLE>
(1) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(c) of the Securities Act of 1933, as amended, based
upon the average of the high and low sales price for the Common Stock as
quoted on the New York Stock Exchange for August 28, 1998.
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration, qualification or filing under the securities laws of any
such jurisdiction.
SUBJECT TO COMPLETION, DATED AUGUST 31, 1998
PROSPECTUS
542,198 SHARES
SMITH INTERNATIONAL, INC.
COMMON STOCK
---------------------
This Prospectus relates to 542,198 shares (the "Shares") of common stock,
$1.00 par value (the "Common Stock"), of Smith International, Inc. ("Smith" or
the "Company"), which may be offered by or for the account of certain
stockholders of the Company named herein (the "Selling Stockholders"). The
Shares were originally issued by the Company to the Selling Stockholders in
connection with the acquisition by the Company of Safeguard Disposal Systems,
Inc. ("Safeguard") on May 27, 1998 (the "Acquisition"). See "Selling
Stockholders." The Company will not receive any of the proceeds from sales of
the Shares offered hereby.
The Selling Stockholders may from time to time sell the Shares on the New
York Stock Exchange (the "NYSE"), the Pacific Stock Exchange (the "PSE") or any
other national securities exchange on which the Common Stock may be listed or
traded, including block trades, in negotiated transactions, or by a combination
of such methods of sale, at fixed prices which may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Selling Stockholders may effect such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders and/or the purchasers of the Shares
for whom such broker-dealers may act as agents or to whom they sell as
principals, or both (which compensation to a particular broker-dealer might be
in excess of customary commissions). See "Plan of Distribution."
The Company has agreed to bear certain expenses (other than any brokerage
fees or commissions) in connection with the registration and sale of the Shares.
The Company and certain Selling Stockholders have agreed to indemnify the other
and their respective controlling persons against certain liabilities, including
certain liabilities under the Securities Act of 1933, as amended (the
"Securities Act").
The Selling Stockholders and any broker-dealers or agents that participate
with the Selling Stockholders in the distribution of the Shares may be deemed to
be "underwriters" within the meaning of Section 2(11) of the Securities Act, and
any commissions received by them and any profit on the resale of the Shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.
Shares of the Common Stock are listed on the NYSE and the PSE under the
trading symbol "SII." On August 28, 1998, the closing price of the Common Stock
on the NYSE was $19 5/8 per share.
---------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS FOR A DISCUSSION
OF CERTAIN FACTORS WHICH SHOULD BE CONSIDERED IN EVALUATING THE SECURITIES
OFFERED HEREBY.
---------------------
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 , 1998
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files periodic reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports and
other information may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington
D.C. 20549, and at the following regional offices of the Commission: Northwest
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and
Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material may also be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission maintains a site on the World Wide Web that contains reports, proxy
and information statements and other information filed electronically by the
Company with the Commission that can be accessed at http://www.sec.gov. In
addition, reports, proxy statements and other information filed by the Company
can be inspected at the offices of The New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005, and at the offices of The Pacific Stock
Exchange, 301 Pine Street, San Francisco, California 94104.
The Company has filed a Registration Statement on Form S-3 (together with
all the amendments, supplements and exhibits thereto, the "Registration
Statement") with the Commission under the Securities Act with respect to the
Shares. This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits thereto, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. The
Registration Statement and any amendments hereto, including exhibits filed as a
part thereof, are available for inspection and copying as set forth above.
Statements contained in this Prospectus or in any document incorporated in this
Prospectus by reference as to the contents of any contract or other document
referred to herein or therein are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement or such other document, each such
statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company (Commission File No. 1-8514)
with the Commission pursuant to the Exchange Act are hereby incorporated herein
by reference in this Prospectus:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(2) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1998 and June 30, 1998;
(3) The Company's Current Reports on Form 8-K dated March 6, 1998, May
15, 1998, July 13, 1998 and August 31, 1998; and
(4) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, as filed with the Commission on May 20,
1959.
All documents and reports filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering described herein shall be deemed to
be incorporated by reference herein and to be a part hereof from the respective
dates of filing of such documents or reports. Any person to whom a copy of this
Prospectus is delivered may obtain, without charge, upon written or oral
request, a copy of any of the documents incorporated by reference herein, except
for the exhibits to such documents (other than exhibits expressly incorporated
by reference into such documents). Requests for such documents should be
addressed to the Investor Relations, Smith International, Inc., 16740 Hardy
Street, P.O. Box 60068, Houston, Texas, 77205, or directed to Investor Relations
at (281) 433-3370.
<PAGE> 4
THE COMPANY
Smith is a leading worldwide supplier of premium products and services to
the oil and gas exploration and production and petrochemical industries. Smith
provides a comprehensive line of technologically-advanced products and
engineering services, including drilling and completion fluid systems, solids
control equipment, waste management services, three-cone drill bits, diamond
drill bits, fishing services, drilling tools, underreamers, sidetracking systems
and liner hangers. Smith also operates an extensive network of supply branches
through which it markets pipe, valves, fittings and other capital and expendable
maintenance products. Smith operates through five business units which provide
products and services throughout the world. Smith's business units include: (i)
M-I Fluids which provides drilling and completion fluid systems and services;
(ii) M-I SWACO which provides solids control, pressure control and rig
instrumentation equipment and waste management services; (iii) Smith Bits which
manufactures and sells three-cone and diamond drill bits primarily for use in
the oil and gas industry; (iv) Smith Drilling & Completions which manufactures
and markets products and services used in drilling, workover, well completion,
fishing and well re-entry operations; and (v) Wilson Supply which operates an
extensive network of supply branches, service centers and sales offices that
market pipe, valves, fittings and other capital and expendable maintenance
products. Smith was incorporated in the State of California in January 1937 and
reincorporated under Delaware law in May 1983. Smith's executive offices are
headquartered at 16740 Hardy Street, Houston, Texas 77032 and its telephone
number at that location is (281) 443-3370.
RISK FACTORS
This Prospectus includes forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. The words
"anticipate," "believe," "expect," "plan," "intend," "estimate," "project,"
"will," "could," "may," "predict" and similar terms and phrases are intended to
identify forward-looking statements. These statements involve risks and
uncertainties that may cause actual future activities and results of operations
to be materially different from those suggested or described in this Prospectus.
These risks include changes in the level of petroleum industry exploration and
production expenditures, which may in turn be influenced by the price of and
demand for crude oil and natural gas, the policies of the Organization of
Petroleum Exporting Countries ("OPEC"), worldwide economic conditions and other
market factors, political instability in foreign counties in which the Company
operate, currency fluctuations and controls, increased competition in Smith's
markets, governmental restrictions affecting oil and gas exploration, dependence
on the ability of Smith to achieve and execute internal business plans and the
impact of any economic downturns and inflation. These risks are more
specifically described in this section and in Smith's Annual Report on Form 10-K
and Quarterly Reports on Form 10-Q, which are incorporated herein by reference.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those expected, estimated or projected.
Smith's Dependence on Oil and Gas Industry. Smith's business and operations
are dependent on conditions in the oil and gas exploration and production
industry. There can be no assurance that current levels of oil and gas
exploration expenditures will be maintained or that demand for the Company's
products and services will reflect the level of such expenditures. The level of
exploration and development of oil and gas reserves is affected by both
short-term and long-term trends in oil and gas prices which, in turn, are
related to the demand for petroleum products and the current availability of oil
and gas resources. In recent years, oil and gas prices have been volatile and
have reacted to actual and perceived changes in demand and supply of oil and
natural gas, domestic and worldwide economic conditions, policies of OPEC in
setting and maintaining production levels and prices, the level of production by
non-OPEC countries and political instabilities in oil producing countries. In
this regard, there have been recent declines in the prevailing prices of oil and
natural gas as well as uncertainties as to the effect of the recent economic
downturn in Asia on world demand for oil. A significant or prolonged decline in
future oil and gas prices likely would result in reduced exploration and
development of oil and gas reserves and a decline in the demand for Smith's
products. Such reduced activity could have a material adverse effect on Smith's
financial condition and results of operations.
2
<PAGE> 5
Competition. Competition in the oilfield service and equipment segments of
the oil and gas industry is intense and, in certain markets, is dominated by a
small number of large competitors, some of which have greater financial and
other resources than Smith.
Anti-Takeover Provisions of the Smith Charter and the Smith Bylaws. Certain
provisions of the Restated Certificate of Incorporation of Smith and the Bylaws
of Smith and the adoption by the Board of Directors of Smith of a Stockholder
Rights Plan could have the effect of making it more difficult for a third party
to acquire, or discouraging a third party from acquiring, a majority of the
outstanding capital stock of Smith and could make it more difficult to
consummate certain types of transactions involving an actual or potential change
in control of Smith, such as a merger, tender offer or proxy contest.
3
<PAGE> 6
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders.
SELLING STOCKHOLDERS
This Prospectus relates to the sale by the Selling Stockholders named below
from time to time of up to 542,198 shares of Common Stock. The Shares were
originally issued in connection with the Company's acquisition of Safeguard
pursuant to the terms of a Merger Agreement dated May 12, 1998. The Shares are
being registered by the Company pursuant to a Registration Rights Agreement
entered into by and among the Company and the Selling Stockholders. Except as
described herein, the Company is unaware that any Selling Shareholder has had a
material relationship with the Company within the past three years other than as
a result of the ownership of Shares or other securities of the Company.
The following table provides certain information with respect to the number
of shares of Common Stock currently owned, offered hereby and to be owned by the
Selling Stockholders after this offering assuming all offered shares are sold in
this offering.
<TABLE>
<CAPTION>
NUMBER OF
SHARES SHARES BENEFICIALLY
BENEFICIALLY OWNED AFTER THE
OWNED SHARES OFFERING
BEFORE THE OFFERED --------------------
SELLING STOCKHOLDER OFFERING HEREBY NUMBER PERCENT
------------------- ------------ ------- -------- ---------
<S> <C> <C> <C> <C>
Gary H. Dietzen and Carolyn I. Dietzen.................. 341,585 341,585 0 0
Kenneth L. Harvey....................................... 6,018 6,018 0 0
Richard G. Harvey....................................... 6,018 6,018 0 0
Todd J. Harvey.......................................... 6,018 6,018 0 0
Belinda Turlich Harvey.................................. 90,277 90,277 0 0
Randy Lee Harvey........................................ 6,018 6,018 0 0
Ordale Dwain Harvey..................................... 6,018 6,018 0 0
Lynn Perkins Perez and Chalin O. Perez.................. 80,246 80,246 0 0
</TABLE>
PLAN OF DISTRIBUTION
The Selling Stockholders may from time to time sell all or any portion of
the Shares on the NYSE, the PSE or any other national securities exchange on
which the Common Stock is listed or traded, including block trades, in
negotiated transactions, or a combination of such methods of sale, at fixed
prices which may be changed, at market prices prevailing at the time of sale, at
prices related to prevailing market prices or at negotiated prices. The Selling
Stockholders may effect such transactions by selling the Shares to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders and/or the
purchasers of the Shares for whom such broker-dealers may act as agents or to
whom they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain 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.
The Selling Stockholders and any broker-dealers or agents that participate
with the Selling Stockholders in the distribution of the Shares may be deemed to
be "underwriters" within the meaning of the Securities Act, and any commissions
received by them and any profit on the resale of the Shares purchased by them
may be deemed to be underwriting commissions or discounts under the Securities
Act.
4
<PAGE> 7
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Shares may not simultaneously engage in
market making activities with respect to the Common Stock of the Company during
a period beginning one or five business days prior to the commencement of such
distribution. In addition and without limiting the foregoing, each Selling
Stockholder will be subject to applicable provisions of the Exchange Act and the
rules and regulations thereunder, including, without limitation, Rule 102, which
provisions may limit the timing of purchases and sales of shares of Common Stock
by the Selling Stockholders.
The Company will pay all costs and expenses incurred in connection with the
registration under the Securities Act of the Shares, including, without
limitation, all registration and filing fees, printing expenses and fees and
disbursements of counsel and accountants for the Company. The Selling
Stockholders will pay any brokerage fees and commissions and stock transfer and
other taxes attributable to the sale of the Shares. The Company also has agreed
to indemnify the Selling Stockholders and their respective officers and
directors and each person who controls (within the meaning of the Securities
Act) such Selling Stockholders against certain losses, claims, damages and
expenses arising under the securities laws in connection with this offering.
Each such Selling Stockholder has agreed to indemnify the Company, its officers,
directors and each person who controls (within the meaning of the Securities
Act) the Company against other losses, claims, damages and expenses arising
under the securities laws in connection with this offering with respect to
written information furnished to the Company by such Selling Stockholder.
There is no assurance that the Selling Stockholders will sell any or all of
the Shares.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon by Gardere Wynne Sewell & Riggs, L.L.P., 333 Clay Avenue, Suite 800,
Houston, Texas 77002.
EXPERTS
The restated consolidated financial statements and schedule of the Company
included in the Company's Current Report on Form 8-K dated August 31, 1998,
incorporated by reference herein have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated herein in reliance upon the authority of said firm
as experts in giving said reports. It should be noted that the independent
public accountant's reports on financial statements and schedule previously
filed on Form 10-K and incorporated by reference in this registration statement
is no longer appropriate since restated financial statements have been presented
giving effect to a business combination accounted for as a pooling of interests.
5
<PAGE> 8
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING CONTAINED HEREIN, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION WHERE, 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 CIRCUMSTANCE CREATE AN 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.................. 1
Incorporation of Certain Documents by
Reference............................ 1
The Company............................ 2
Risk Factors........................... 2
Use of Proceeds........................ 4
Selling Stockholders................... 4
Plan of Distribution................... 4
Legal Matters.......................... 5
Experts................................ 5
</TABLE>
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542,198 SHARES
SMITH INTERNATIONAL, INC.
COMMON STOCK
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PROSPECTUS
------------------------
, 1998
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<PAGE> 9
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be paid by the
Registrant in connection with the issuance and distribution of the shares of
Common Stock being registered. All amounts shown are estimates except for the
Securities and Exchange Commission registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 3,190
Legal fees and expenses..................................... 5,000
Accounting fees and expenses................................ 3,000
Printing, EDGAR formatting and mailing expenses............. 2,000
Miscellaneous............................................... 2,000
-------
Total............................................. $15,190
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
provides that a corporation has the power, under specified circumstances, to
indemnify a director, officer, employee or agent of the corporation and certain
other persons serving at the request of the corporation in related capacities
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
an action or proceeding to which he or she is threatened to be made a party by
reason of such position, if such person shall have 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, with respect to any criminal action, that they had no
reasonable cause to believe their conduct was unlawful. With respect to suits by
or in the right of the corporation, however, indemnification is generally
limited to attorneys' fees and other expenses and is not available if such
person is adjudged to be liable to the corporation unless the court determines
that indemnification is appropriate. Additionally, a corporation is required to
indemnify its directors and officers against expenses to the extent that such
directors or officers have been successful on the merits or otherwise in any
action, suit or proceeding or in defense of any claim, issue or matter therein.
Indemnification can be made by the corporation only upon a determination that
indemnification is proper in the circumstances because the party seeking
indemnification has met the applicable standard of conduct as set forth in the
General Corporation Law of the State of Delaware. A corporation also has the
power to purchase and maintain insurance on behalf of any person, whether or not
the corporation would have the power to indemnify such person against such
liability.
The Restated Certificate of Incorporation of Smith and the Restated Bylaws
of Smith extend indemnification rights to its directors, officers, employees and
agents to the fullest extent authorized by the General Corporation Law of the
State of Delaware. The Restated Certificate of Incorporation of Smith and the
Restated Bylaws of Smith also permit Smith to maintain insurance on behalf of
any person who is or was a director, officer, employee or agent to Smith against
any liability asserted against such person and incurred by such person is such
capacity, whether or not Smith would have the power or the obligation to
indemnify such person against such liability. Reference is made to the Restated
Certificate of Incorporation and the Restated Bylaws of Smith.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision eliminating
or limiting the personal liability of a director to the corporation or its
stockholders for monetary damages for a breach of fiduciary duty as a director,
provided that such provisions may not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the corporation
or its 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 (relating to liability for unauthorized acquisitions or redemptions
of, or dividends on, capital stock) of the General Corporation Law of
II-1
<PAGE> 10
the State of Delaware or (iv) for any transaction from which the director
derived an improper personal benefit. Smith's Restated Certificate of
Incorporation contains such a provision, and further provides that if the
General Corporation Law of the State of Delaware is amended to further eliminate
or limit the personal liability of directors, then the liability of the
directors of Smith shall be eliminated or limited to the fullest extent
permitted by the General Corporation Law of the State of Delaware.
The above discussion of Smith's Restated Certificate of Incorporation and
Restated Bylaws and of Sections 102(b)(7) and 145 of the General Corporation Law
of the State of Delaware is not intended to be exhaustive and is qualified in
its entirety by such Restated Certificate of Incorporation, Restated Bylaws and
statutes.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.1 -- Restated Certificate of Incorporation of the Registrant
as amended to date (incorporated by reference to Exhibit
3.1 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993).
4.2 -- Bylaws of the Company as amended to date (incorporated by
reference to Exhibit 3.1 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998).
4.3 -- Rights Agreement dated as of June 19, 1990 between the
Company and First Chicago Trust Company of New York
(incorporated by reference to Exhibit 4.13 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991).
5.1* -- Opinion of Gardere Wynne Sewell & Riggs, L.L.P.,
regarding legality of securities.
23.1* -- Consent of Gardere Wynne Sewell & Riggs, L.L.P. (included
in Exhibit 5.1)
23.2* -- Consent of Arthur Andersen LLP with respect to the
financial statements of Smith International, Inc.
24.1* -- Powers of Attorney included in the signature page
(contained on page II-4).
</TABLE>
- ---------------
* Filed herewith.
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 to 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 to the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; and
(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 registration statement is on Form S-3, Form S-8, or Form F-3, and 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
II-2
<PAGE> 11
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) of 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act 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.
II-3
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
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 August 31, 1998.
SMITH INTERNATIONAL, INC.
By:
/s/ DOUGLAS L. ROCK
------------------------------------
Douglas L. Rock,
Chief Executive Officer, President
and
Chief Operating Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Douglas L. Rock, John J. Kennedy and Neal S.
Sutton, and each of them, each of whom may act without joinder of the other, his
or her true and lawful attorneys and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any or all pre- and post-effective amendments to
this Registration Statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully as to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, and each of them, or
the substitute or substitutes of any or all of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S> <C>
/s/ DOUGLAS L. ROCK Chief Executive Officer, August 31, 1998
- -------------------------------------------------- President and Chief Operating
Douglas L. Rock Officer (Principal Executive
Officer)
/s/ LOREN K. CARROLL Executive Vice President and August 31, 1998
- -------------------------------------------------- Director
Loren K. Carroll
/s/ JOHN J. KENNEDY Senior Vice President and Chief August 31, 1998
- -------------------------------------------------- Financial Officer (Principal
John J. Kennedy Financial and Accounting
Officer)
/s/ BENJAMIN F. BAILAR Director August 31, 1998
- --------------------------------------------------
Benjamin F. Bailar
/s/ G. CLYDE BUCK Director August 31, 1998
- --------------------------------------------------
G. Clyde Buck
/s/ JAMES R. GIBBS Director August 31, 1998
- --------------------------------------------------
James R. Gibbs
</TABLE>
II-4
<PAGE> 13
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S> <C>
/s/ JERRY W. NEELY Director August 31, 1998
- --------------------------------------------------
Jerry W. Neely
/s/ WALLACE S. WILSON Director August 31, 1998
- --------------------------------------------------
Wallace S. Wilson
</TABLE>
II-5
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
4.1 -- Restated Certificate of Incorporation of the Registrant
as amended to date (incorporated by reference to Exhibit
3.1 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993).
4.2 -- Bylaws of the Company as amended to date (incorporated by
reference to Exhibit 3.1 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998).
4.3 -- Rights Agreement dated as of June 19, 1990 between the
Company and First Chicago Trust Company of New York
(incorporated by reference to Exhibit 4.13 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991).
5.1* -- Opinion of Gardere Wynne Sewell & Riggs, L.L.P.,
regarding legality of securities.
23.1* -- Consent of Gardere Wynne Sewell & Riggs, L.L.P. (included
in Exhibit 5.1)
23.2* -- Consent of Arthur Andersen LLP with respect to the
financial statements of Smith International, Inc.
24.1* -- Powers of Attorney included in the signature page
(contained on page II-4).
</TABLE>
- ---------------
* Filed herewith.
II-6
<PAGE> 1
EXHIBIT 5.1
[Gardere Wynne Sewell & Riggs, L.L.P. Letterhead]
August 31, 1998
Smith International, Inc.
16740 Hardy Street
P. O. Box 60068
Houston, Texas 77205
Gentlemen:
As set forth in the Registration Statement (the "Registration Statement") on
Form S-3 to be filed by Smith International, Inc., a Delaware corporation (the
"Company"), with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), relating to the
registration of 542,198 shares (the "Shares") of the Company's common stock, par
value $1.00 per share ("Common Stock"), to be sold by certain stockholders
listed in the Registration Statement, certain legal matters in connection with
the Common Stock are being passed upon for the Company by us. This opinion is
being furnished to you in accordance with the requirements of Item 16 of Form
S-3 and Item 601(b)(5)(i) of Regulation S-K for filing as Exhibit 5.1 to the
Registration Statement.
In our capacity as your special counsel, we have examined the Restated
Certificate of Incorporation and Restated Bylaws of the Company and the
originals, or copies certified or otherwise identified, of corporate records of
the Company, including minute books of the Company as furnished to us by the
Company, certificates of public officials and of representatives of the
Company, statutes and other instruments and documents as a basis for the
opinions hereinafter expressed. In giving such opinions, we have relied upon
certificates of officers of the Company with respect to the accuracy of the
material factual matters contained in such certificates.
Based on the foregoing, and having regard for such legal considerations as we
have deemed relevant, we are of the opinion that the Shares have been duly
authorized, were validly issued and are fully paid and nonassessable.
The foregoing opinion is limited to the federal laws of the United States of
America and the General Corporation Law of the State of Delaware, and we are
expressing no opinion as to the effect of the laws of any other jurisdiction.
<PAGE> 2
Smith International, Inc.
August 31, 1998
Page 2
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the references to our Firm under
the caption "Legal Matters" in the Prospectus included in the Registration
Statement. In giving this consent, we do not thereby admit that we are within
the category of persons whose consent is required under Section 7 of the Act,
the rules and regulations of the Securities and Exchange Commission promulgated
thereunder, or Item 509 of Regulation S-K.
This opinion letter is rendered as the date first written above and we disclaim
any obligation to advise you of facts, circumstances, events or developments
which hereafter may be brought to our attention and which may alter, affect or
modify the opinion expressed herein. Our opinion is expressly limited to the
matters set forth above and we render no opinion, whether by implications or
otherwise, as to any other matters relating to the Company or the Shares.
Very truly yours,
GARDERE WYNNE SEWELL & RIGGS, L.L.P.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated April 30, 1998
included in the Company's Current Report on Form 8-K dated August 31, 1998 on
the consolidated financial statements and schedule of Smith International, Inc.
as of December 31, 1997 and 1996 and for each of the three years in the period
ended December 31, 1997 and to all references to our Firm included in this
registration statement. It should be noted that the independent public
accountant's reports on financial statements and schedule previously filed on
Form 10-K and incorporated by reference in this registration statement are no
longer appropriate since restated financial statements have been presented
giving effect to a business combination accounted for as a pooling of interests.
ARTHUR ANDERSEN, LLP
Houston, Texas
August 31, 1998
