<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 26, 1996.
REGISTRATION NO. -
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
HEARTLAND EXPRESS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
---------------
NEVADA 4213 93-0926999
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION
INCORPORATION OR CLASSIFICATION CODE NUMBER)
ORGANIZATION) NUMBER)
2777 HEARTLAND DRIVE
CORALVILLE, IOWA 52241
(319) 645-2728
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
RUSSELL A. GERDIN
2777 HEARTLAND DRIVE
CORALVILLE, IOWA 52241
(319) 645-2728
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
MARK A. SCUDDER, ESQ. ELIZABETH GRIEB, ESQ.
EARL H. SCUDDER, JR., ESQ. PIPER & MARBURY L.L.P.
SCUDDER LAW FIRM, P.C. 36 SOUTH CHARLES STREET
411 SOUTH 13TH STREET, SUITE 200 BALTIMORE, MARYLAND 21201
LINCOLN, NEBRASKA 68508 (410) 539-2530
(402) 435-3223
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: as soon as
practicable after the effective date of the registration statement.
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. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) FEE
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<S> <C> <C> <C> <C>
Common Stock, $.10 par
value.................. 1,150,000 shares(3) $28.375(3) $32,631,250 $11,253
- ------------------------------------------------------------------------------------------------------
</TABLE>
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(1) Includes 150,000 shares of Common Stock issuable upon exercise of the
Underwriters' over-allotment option.
(2) Estimated pursuant to Rule 457(c), based on the average of the high and
low prices of the Common Stock as reported by the Nasdaq National Market
on September 23, 1996, solely for the purpose of calculating the
registration fee.
(3) The registrant has declared a stock dividend that will be paid prior to
the expected effectiveness of this registration statement. As reflected in
the prospectus, this stock dividend will result in a maximum 1,725,000
shares to be sold. The price decrease resulting from the dividend will
reduce the maximum offering price per share such that the proposed Maximum
Aggregate Offering Price and Amount of Registration Fee would remain as
stated herein.
---------------
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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- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION 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 STATE +
+IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO +
+REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
SEPTEMBER 26, 1996
1,500,000 Shares
LOGO
Common Stock
--------
All of the 1,500,000 shares of Common Stock of Heartland Express, Inc.
offered hereby are being sold by its principal stockholder (the "Selling
Stockholder"). See "Selling Stockholder." The Company will not receive any of
the proceeds from the sale of Common Stock in this offering. The Company's
Common Stock is traded on the Nasdaq National Market under the symbol "HTLD."
On September 25, 1996, the last reported sale price of the Common Stock was
$28.50 per share. The Company has declared a 50% pro rata stock dividend
payable October 4, 1996, to stockholders of record on September 23, 1996 (the
"Stock Dividend"). The Stock Dividend will increase the number of issued and
outstanding shares of Common Stock from 20 million to 30 million, and the
market price of the Common Stock will be adjusted on October 4 to approximately
two-thirds of the last sale price on October 3, 1996. If the Stock Dividend had
been effective on the date of this Prospectus, the last reported sale price on
September 25, 1996, would have been adjusted to approximately $19.00 per share.
This offering will be completed after the Stock Dividend is completed.
Accordingly, purchasers in this offering will not receive shares payable in
connection with the Stock Dividend. Unless otherwise indicated, all information
in this Prospectus, including the number of shares offered hereby, reflects the
issuance of additional shares in connection with the Stock Dividend. See "Price
Range of Common Stock" and "Stock Dividend."
--------
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.
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<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS TO
TO DISCOUNTS AND SELLING
PUBLIC COMMISSIONS STOCKHOLDER(1)
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<S> <C> <C> <C>
Per Share............ $ $ $
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Total(2)............. $ $ $
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</TABLE>
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(1) Before deducting expenses of the offering estimated at $102,500 payable by
the Selling Stockholder.
(2) The Selling Stockholder has granted the Underwriters a 30-day option to
purchase up to 225,000 additional shares of Common Stock solely to cover
over-allotments, if any. To the extent that the option is exercised, the
Underwriters will offer the additional shares at the Price to Public shown
above. If the option is exercised in full, the total Price to Public,
Underwriting Discounts and Commissions, and Proceeds to Selling Stockholder
will be $ , $ , and $ , respectively. See "Underwriting."
--------
The shares of Common Stock are offered by the Underwriters, subject to prior
sale, when, as, and if delivered to and accepted by them, and subject to the
right of the Underwriters to reject any order in whole or in part. It is
expected that delivery of the shares will be made at the offices of Alex. Brown
& Sons Incorporated, Baltimore, Maryland, on or about , 1996.
Alex. Brown & Sons Morgan Keegan & Company, Inc.
INCORPORATED
THE DATE OF THIS PROSPECTUS IS , 1996.
<PAGE>
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 reports and other information with the Securities and Exchange
Commission (the "Commission"). This Prospectus does not contain all the
information set forth in the Registration Statement and exhibits thereto which
the Company has filed with the Commission under the Securities Act and
information incorporated by reference herein. Copies of such information and
the reports, proxy statements, and other information filed by the Company
under the Exchange Act may be examined without charge at the Public Reference
Section of the Commission located at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, DC 20549, at the regional offices of the Commission
located at 7 World Trade Center, Suite 1300, New York, New York 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511, and at the Web site maintained by the Commission at http://www/sec/gov.
DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995, and the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31 and June 30, 1996, filed with the Commission pursuant to
Section 13 of the Exchange Act, are hereby incorporated by reference into this
Prospectus and made a part hereof.
All documents filed by the Company pursuant to Sections 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 made hereby shall be deemed to be
incorporated by reference in and made a part of this Prospectus from the date
of filing of such documents. See "Available Information." Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement.
The Company will furnish without charge upon written or oral request to each
person to whom this Prospectus is delivered a copy of any or all of the
documents incorporated by reference herein other than exhibits to such
documents not specifically incorporated by reference thereto. Such request
should be directed to Heartland Express, Inc., 2777 Heartland Drive,
Coralville, Iowa 52241, telephone no. (319) 645-2728, Attn: John P. Cosaert,
Vice President.
------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS, IF ANY, MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE
COMMON STOCK ON THE NASDAQ STOCK MARKET IN ACCORDANCE WITH RULE 10B-6A UNDER
THE SECURITIES EXCHANGE ACT OF 1934. SEE "UNDERWRITING."
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus.
THE COMPANY
Heartland is a short-to-medium haul truckload carrier based near Iowa City,
Iowa. Heartland provides nationwide transportation service to major shippers,
using late-model tractors and a uniform fleet of 53-foot aluminum plate dry
vans. The Company's primary traffic lanes are between customer locations east
of the Rocky Mountains, with selected service to the West. Management believes
that Heartland's size and service standards have enabled it to become a core
carrier to many of its major customers.
OPERATING PHILOSOPHY
Heartland focuses on two goals: providing premium service that differentiates
the Company from competitors and achieving the lowest possible cost structure.
This concentration on customer service and efficient operations overlays each
of the following operating strategies:
. Centralized operations and regional distribution. Heartland's operations
department includes a central dispatch unit at Company headquarters and four
regional distribution centers located near major customers. A computer
network and regular communication between central dispatch and the regional
distribution centers promotes system-wide load coordination. Management
believes this strategy combines the cost efficiency of centralized dispatch,
billing, and management functions with the local control over drivers and
customer service that are important to short, time-sensitive regional
freight movements.
. Short-to-medium average length of haul. Heartland concentrates primarily on
short-to-medium haul shipments (625-mile average length of haul in 1995)
because more than 70% of all over-the-road freight revenue in the
continental United States is generated in these lanes and the rate per mile
is generally higher than in longer hauls. In addition, shorter routes lessen
competition from rail and intermodal competitors, which typically compete in
the long haul market.
. Targeted customers. Heartland targets customers in its operating areas that
require multiple, time-sensitive shipments, including those customers with
just-in-time and other expedited, time-definite, or premium service
requirements. Consistent with Heartland's focus on customer service and
efficient operations, the Company's sales personnel seek to develop close
relationships with a small number of very large shippers. Accordingly, the
Company's 25, 10, and 5 largest customers accounted for 75%, 62%, and 48% of
revenue, respectively, in 1995, and 73%, 58%, and 44%, respectively, in the
first six months of 1996. Management believes this philosophy permits
Heartland to control costs through more predictable movements and allows
Heartland to offer a high level of service to customers. Management believes
that growth in revenue from Heartland's top five accounts from $36.8 million
to $91.9 million over the past five years demonstrates the success of this
strategy.
. Employee and independent contractor driver strategy. Heartland has
historically operated with both employee and independent contractor drivers.
Heartland historically has sought to obtain approximately one-half of its
tractor fleet from independent contractors, who supply the tractor and
driver and bear all associated expenses in return for a fixed rate per mile.
Management believes that using independent contractors benefits the Company
by reducing capital expenditure requirements, improving return on equity,
reducing direct exposure to fuel price fluctuations, and providing access to
an additional pool of drivers in response to the chronic, industry-wide
shortage of qualified drivers. At June 30, 1996, independent contractors
supplied approximately 60% of the Company's tractor fleet. None of
Heartland's employees, including drivers, are represented by a union or
collective bargaining association.
3
<PAGE>
. Uniform fleet. Heartland owns modern Freightliner tractors and high-capacity
Wabash 53-foot aluminum plate dry vans. Heartland's owned tractors had an
average age of 13 months at June 30, 1996, and all were covered by lifetime
warranties on major components and were equipped with Qualcomm satellite-
based tracking and communication units. This modern fleet is preferred by
many shippers and drivers and provides advantages of improved fuel mileage
and reduced breakdowns, repairs, and maintenance as compared with older
equipment.
INDUSTRY CONSOLIDATION
The truckload industry is consolidating in response to several identifiable
trends. Many major shippers are reducing the number of carriers they use in
favor of service-based, ongoing relationships with a limited group of core
carriers. These partnerships and the increasing use of equipment and drivers
dedicated to a single shipper's needs ("dedicated fleets") are designed to
ensure higher quality, more consistent service for shippers and greater
equipment utilization and more predictable revenue for core carriers. Other
shippers that own tractor-trailer fleets are outsourcing their transportation
requirements to truckload carriers to lower operating expenses and conserve
capital for core corporate purposes. This outsourcing has resulted in some
shippers eliminating their own trucks in favor of truckload specialists, which,
according to a study commissioned by the American Trucking Associations
Foundation, can provide similar service at approximately 25% less cost.
Deregulation and economies of scale also promote consolidation. Many
truckload carriers have grown rapidly since deregulation in 1980 and have
achieved the size to negotiate lifetime equipment warranties and obtain
equipment, fuel, insurance, financing, and other items for significantly less
than smaller or more leveraged competitors. All of these trends favor large
carriers with modern fleets, excellent service, in-transit communication and
load tracking, good drivers, a strong safety record, adequate insurance, and a
strong capital base. Management believes that Heartland is well-positioned to
take advantage of further industry consolidation.
MUNSON MERGER
In March 1994, Heartland merged with Munson Transportation to expand service
in strategically important Northeast lanes and gain access to Munson's high
quality shippers and favorable rate structure. Munson generated 1993 trucking
revenue of $116 million, but had been experiencing severe operational and
financial difficulties. Munson had operating ratios of 95.6%, 96.0%, and 97.2%
in 1991, 1992, and 1993, respectively, and had experienced net losses in each
of those three years. Heartland issued approximately four percent of the
Company's then outstanding stock to the former Munson stockholders in a merger
accounted for as a pooling of interests. In accordance with the principles of
pooling of interests accounting, Heartland's financial statements were restated
for all prior periods as if Munson and Heartland had been operated on a
combined basis. All financial information in this prospectus reflects such
restated information. Prior to the merger and subsequent financial restatement,
Heartland had been free of long-term debt since 1985 and had operating ratios
of 81.8%, 82.1%, and 81.5% in 1991, 1992, and 1993, respectively.
Following the merger, Heartland applied its operating philosophy to the
former Munson operations. Heartland replaced older revenue equipment, repaid
all $56.9 million in assumed long-term debt, curtailed service to shippers that
did not meet Heartland's operating strategy or rate structure, eliminated
flatbed, refrigerated, and brokerage operations, and consolidated all
duplicative operating and administrative functions at Heartland's headquarters.
This process reduced combined revenue from $236.0 million in 1993 to $191.5
million in 1995. However, as Munson was brought into alignment with Heartland's
operating philosophy, the combined operations produced an operating ratio of
83.7% in 1995 while virtually eliminating interest expense. Heartland's
management believes the Munson merger was strategically important to
Heartland's growth.
4
<PAGE>
GROWTH STRATEGY
Heartland's strategy for continuing its profitable growth includes:
. Opening additional regional distribution centers. Heartland's decision
as to when and where new regional distribution centers will be opened
will be strategically based on the Company's opportunity to acquire new
customers or the acquisition of one or more carriers that would fit into
the Company's philosophy of providing a high level of service through
close working relationships with customers.
. Expanding core carrier relationships. Heartland's management expects to
utilize private fleet conversions and dedicated fleet operations to
increase lane density in the Company's existing service territory and
incrementally enter new territories.
. Pursuing opportunistic acquisitions. In future acquisitions, management
intends to apply the Munson model of combining with target carriers to
gain desirable customer relationships, drivers and owner-operators, and
complementary service territories.
. Maintaining a strong balance sheet. Heartland's absence of long-term
debt and $70 million of cash at June 30, 1996, provide flexibility in
acquiring target carriers or private fleets and in making other capital
investments.
Management believes that incorporating this growth strategy into Heartland's
historical operational focus on offering premium service and achieving the
lowest possible cost structure will position Heartland to continue its
profitable growth.
Heartland Express, Inc. is a holding company incorporated in Nevada which
owns, directly and indirectly, all of the stock of Heartland Express, Inc. of
Iowa, Heartland Equipment, Inc., Munson Transportation, Inc., Munson Equipment,
Inc., and Munson Transport Services, Inc. The Company's headquarters is located
at 2777 Heartland Drive, Coralville, Iowa 52241, and its telephone number is
(319) 645-2728.
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the Selling Stockholder(1)........... 1,500,000 shares
Common Stock to be outstanding before and after the
offering(2)................................................. 30,000,000 shares
Nasdaq National Market symbol................................ HTLD
</TABLE>
- --------
(1) The number of shares offered by the Selling Stockholder reflects the Stock
Dividend and corresponds to 1,000,000 shares at the date of this
Prospectus.
(2) At the date of this Prospectus, Heartland has 20,000,000 shares of issued
and outstanding Common Stock. The Stock Dividend (a 50% pro rata stock
dividend to stockholders of record on September 23, 1996) is payable
October 4, 1996, and will increase the number of issued and outstanding
shares from 20,000,000 to 30,000,000. This offering will be completed after
the Stock Dividend is completed. Accordingly, purchasers in this offering
will not receive shares payable in connection with the Stock Dividend. See
"Price Range of Common Stock" and "Stock Dividend."
5
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
------------------------------------------------ -----------------
1991 1992 1993 1994 1995 1995 1996
-------- -------- -------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Operating revenue...... $178,435 $205,214 $236,017 $224,248 $191,507 $94,557 $113,747
Operating income....... 16,922 20,463 23,023 23,741 31,155 14,966 18,087
Net income............. 7,122 9,414 10,948 10,077 20,585 9,813 12,161
Average shares
outstanding(1)........ 30,039 30,039 30,039 30,039 30,036 30,039 30,000
Net income per
share(1).............. 0.24 0.31 0.36 0.34 0.69 0.33 0.41
Operating ratio........ 90.5% 90.0% 90.2% 89.4% 83.7% 84.2% 84.1%
PRE-MERGER OPERATING
RATIOS(2):
Heartland.............. 81.8% 82.1% 81.5% -- -- -- --
Munson................. 95.6% 96.0% 97.2% -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1996
-------------
<S> <C>
BALANCE SHEET DATA:
Working capital.................................................. $ 55,421
Net property and equipment....................................... 70,818
Total assets..................................................... 176,279
Long-term debt, less current maturities --
Total stockholders' equity....................................... 110,797
</TABLE>
- --------
(1) The average shares outstanding and net income per share data have been
adjusted to reflect the Stock Dividend. At the date of this Prospectus,
Heartland has 20,000,000 shares of issued and outstanding Common Stock. The
Stock Dividend (a 50% pro rata stock dividend to stockholders of record on
September 23, 1996) is payable October 4, 1996, and will increase the
number of issued and outstanding shares from 20,000,000 to 30,000,000. At
the present 20,000,000 shares outstanding, the Company's net income per
share was $0.36, $0.47, $0.55, $0.50, and $1.03 for each of 1991 through
1995, respectively, and $0.49 and $0.61 for the six months ended June 30,
1995 and 1996, respectively. See "Price Range of Common Stock" and "Stock
Dividend."
(2) Heartland's financial statements for all periods prior to March 17, 1994,
were restated following the Munson merger to include the results of Munson
Transportation and related entities in accordance with accounting for the
transaction as a pooling of interests. See "Prospectus Summary--Munson
Merger." The pre-merger operating ratios information sets forth the stand-
alone operating expenses as a percentage of operating revenue for each of
Heartland and Munson for the fiscal years ended December 31, 1991, 1992,
and 1993, all of which were prior to the merger.
------------
Unless otherwise indicated, all information in this Prospectus (i) assumes
that all share and per share data have been adjusted to give effect to the
Stock Dividend,(ii) assumes that the Underwriters' over-allotment option is not
exercised, and (iii) reflects the restatement of the Company's consolidated
financial statements for all periods prior to March 17, 1994, to reflect the
mergers with Munson Transportation, Inc. and related entities in accordance
with accounting for such transactions as a pooling of interests. See
"Prospectus Summary--Munson Merger" and "Stock Dividend." Unless the context
otherwise requires, references to "Heartland" or the "Company" include
Heartland Express, Inc. and its consolidated subsidiaries.
6
<PAGE>
PRICE RANGE OF COMMON STOCK
The Company's Common Stock has been traded on the Nasdaq National Market
under the symbol HTLD since November 5, 1986, the date of the Company's
initial public offering. During December 1995, the Company effected a stock
dividend that increased the number of shares outstanding from 13,016,600 to
20,000,000. Effective October 4, 1996, the Company will pay the Stock
Dividend, which will increase the number of outstanding shares of Common Stock
from 20,000,000 to 30,000,000. The following tables set forth for the calendar
period indicated the range of high and low bid quotations for the Company's
Common Stock as reported by Nasdaq from January 1, 1994, to June 30, 1996. All
quotations under the column entitled "Prior to October 4, 1996 Stock Dividend"
reflect the 20,000,000 shares of Common Stock presently outstanding following
the December 1995 stock dividend. All quotations under the column entitled
"Adjusted for October 4, 1996 Stock Dividend" have been adjusted to reflect
the Stock Dividend.
<TABLE>
<CAPTION>
ADJUSTED FOR
OCTOBER 4,
PRIOR TO 1996
OCTOBER 4, 1996 STOCK
STOCK DIVIDEND DIVIDEND
--------------- -------------
HIGH LOW HIGH LOW
--------------- ------ ------
<S> <C> <C> <C> <C>
1994 Calendar Year
First Quarter............................. $ 23.92 $ 15.78 $15.95 $10.50
Second Quarter............................ 23.27 19.20 15.51 12.80
Third Quarter............................. 23.43 18.06 15.62 12.04
Fourth Quarter............................ 20.18 17.57 13.45 11.71
1995 Calendar Year
First Quarter............................. 19.20 17.44 12.80 11.63
Second Quarter............................ 18.40 15.84 12.27 10.56
Third Quarter............................. 21.28 16.64 14.19 11.09
Fourth Quarter............................ 21.00 17.28 14.00 11.52
1996 Calendar Year
First Quarter............................. 28.00 19.76 18.67 13.17
Second Quarter............................ 31.25 25.13 20.83 16.75
</TABLE>
The prices reported reflect interdealer quotations without retail mark-ups,
mark-downs or commissions, and may not represent actual transactions. As of
September 24, 1996, the Company had 257 stockholders of record of its Common
Stock. However, the Company estimates that it has a significantly greater
number of stockholders because a substantial number of the Company's shares
are held of record by brokers or dealers for their customers in street names.
DIVIDEND POLICY
The Company has never paid a cash dividend on its Common Stock. It is the
current intention of the Company's Board of Directors to retain earnings to
finance the growth of the Company's business. Future payments of cash
dividends will depend upon the financial condition, results of operations, and
capital requirements of the Company, as well as other factors deemed relevant
by the Board of Directors.
7
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The selected consolidated financial data presented below reflect the
consolidated financial position and results of operations of Heartland
Express, Inc. and its subsidiaries. The selected consolidated financial data
are derived from the Company's consolidated financial statements, which have
been restated to reflect the March 17, 1994, merger of Munson Transportation
in a transaction accounted for as a pooling of interests.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
------------------------------------------------ -----------------
1991 1992 1993 1994 1995 1995 1996
-------- -------- -------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating revenue....... $178,435 $205,214 $236,017 $224,248 $191,507 $94,557 $113,747
Operating expenses:
Salaries, wages, and
benefits.............. 50,795 56,792 63,551 56,440 40,715 21,776 20,057
Rent and purchased
transportation........ 27,109 35,759 51,478 57,799 64,043 28,799 47,012
Operations and
maintenance........... 42,234 42,377 45,370 35,557 21,035 10,961 10,985
Taxes and licenses..... 5,760 6,606 7,790 7,347 5,246 2,508 2,762
Insurance and claims... 8,284 13,196 10,969 11,872 7,967 4,562 5,081
Communication and
utilities............. 2,368 2,696 3,077 2,618 2,562 1,314 1,032
Depreciation........... 18,542 20,705 22,818 20,061 15,066 7,968 7,005
Other operating
expenses.............. 7,134 7,564 8,301 5,468 3,745 1,725 1,915
(Gain) on sale of fixed
assets................ (713) (944) (360) (149) (27) (22) (189)
Merger consummation and
integration costs..... -- -- -- 3,494 -- -- --
-------- -------- -------- -------- -------- ------- --------
161,513 184,751 212,994 200,507 160,352 79,591 95,660
-------- -------- -------- -------- -------- ------- --------
Operating income....... 16,922 20,463 23,023 23,741 31,155 14,966 18,087
Interest (expense)
income, net............ (4,722) (4,829) (4,747) (1,930) 1,524 607 1,216
-------- -------- -------- -------- -------- ------- --------
Income before income
taxes and cumulative
effect of change in
accounting for income
taxes................. 12,200 15,634 18,276 21,811 32,679 15,573 19,303
Federal and state income
taxes.................. 5,078 6,220 8,028 8,808 12,094 5,760 7,142
Deferred income taxes--
merger................. -- -- -- 2,926 -- -- --
Cumulative effect of
change in method of
accounting for income
taxes.................. -- -- (700) -- -- -- --
-------- -------- -------- -------- -------- ------- --------
Net income.............. $ 7,122 $ 9,414 $ 10,948 $ 10,077 $ 20,585 $ 9,813 $ 12,161
======== ======== ======== ======== ======== ======= ========
Average shares
outstanding(1)......... 30,039 30,039 30,039 30,039 30,036 30,039 30,000
======== ======== ======== ======== ======== ======= ========
Net income per share(1). $ 0.24 $ 0.31 $ 0.36 $ 0.34 $ 0.69 $ 0.33 $ 0.41
======== ======== ======== ======== ======== ======= ========
BALANCE SHEET DATA:
Working capital......... $ 1,203 $ 140 $(11,084) $ 2,542 $ 40,780 $22,692 $ 55,421
Net property and
equipment.............. 93,767 102,377 108,892 90,815 73,694 81,384 70,818
Total assets............ 134,983 150,217 168,934 136,393 158,146 149,366 176,279
Long-term debt, less
current
maturities............. 40,748 38,378 21,403 705 -- -- --
Total stockholders'
equity................. 48,006 57,030 67,974 78,050 98,636 87,864 110,797
</TABLE>
- --------
(1) The average shares outstanding and net income per share data have been
adjusted to reflect the Stock Dividend. At the date of this Prospectus,
Heartland has 20,000,00 shares of issued and outstanding Common Stock. The
Stock Dividend (a 50% pro rata stock dividend to stockholders of record on
September 23, 1996), is payable October 4, 1996, and will increase the
number of issued and outstanding shares from 20,000,000 to 30,000,000. At
the present 20,000,000 shares outstanding, the Company's net income per
share was $0.36, $0.47, $0.55, $0.50, and $1.03 for each of 1991 through
1995, respectively, and $0.49 and $0.61 for the six months ended June 30,
1995 and 1996, respectively. See "Price Range of Common Stock" and "Stock
Dividend."
8
<PAGE>
The following table sets forth the percentage relationship of expense items
to operating revenue for the periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
----------------------------------- ----------
1991 1992 1993 1994 1995 1995 1996
----- ----- ------ ----- ------ ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Operating revenue........... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Operating expenses:
Salaries, wages, and
benefits.................. 28.5 27.7 26.9 25.2 21.2 23.0 17.6
Rent and purchased
transportation............ 15.2 17.4 21.8 25.8 33.4 30.5 41.3
Operations and maintenance. 23.7 20.7 19.2 15.9 11.0 11.6 9.7
Taxes and licenses......... 3.2 3.2 3.3 3.3 2.7 2.7 2.4
Insurance and claims....... 4.6 6.4 4.6 5.3 4.2 4.8 4.5
Communications and
utilities................. 1.3 1.3 1.3 1.2 1.3 1.4 0.9
Depreciation............... 10.4 10.1 9.7 8.9 7.9 8.5 6.2
Other operating expenses... 4.0 3.7 3.5 2.4 2.0 1.8 1.7
(Gain) on sale of fixed
assets.................... (0.4) (0.5) (0.2) (0.1) -- -- (0.2)
Merger consummation and
integration costs......... -- -- -- 1.6 -- -- --
----- ----- ------ ----- ------ ----- -----
Total operating expenses... 90.5 90.0 90.2 89.4 83.7 84.2 84.1
----- ----- ------ ----- ------ ----- -----
Operating income........... 9.5 10.0 9.8 10.6 16.3 15.8 15.9
Interest (expense) income,
net........................ (2.6) (2.4) (2.0) (0.9) 0.8 0.6 1.1
----- ----- ------ ----- ------ ----- -----
Income before income taxes. 6.8 7.6 7.8 9.7 17.1 16.5 17.0
Federal and state income
taxes...................... 2.8 3.0 3.4 3.9 6.4 6.1 6.3
Deferred income tax--merger. -- -- -- 1.3 -- -- --
Cumulative effect of
accounting change.......... -- -- (0.2) -- -- -- --
----- ----- ------ ----- ------ ----- -----
Net income.................. 4.0% 4.6% 4.6% 4.5% 10.7% 10.4% 10.7%
===== ===== ====== ===== ====== ===== =====
</TABLE>
COMPARATIVE OPERATING RATIOS
Heartland's financial statements for all periods prior to March 17, 1994,
were restated following the Munson merger to include the results of Munson
Transportation and related entities in accordance with accounting for the
transaction as a pooling of interests. See "Prospectus Summary--Munson
Merger." The comparative operating ratios information first sets forth the
operating ratio of the combined companies for all periods, then the stand-
alone operating ratio for each of Heartland and Munson for the fiscal years
ended December 31, 1991, 1992, and 1993, all of which were prior to the
merger.
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
---------------------------- ----------
1991 1992 1993 1994 1995 1995 1996
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Operating ratio....................... 90.5% 90.0% 90.2% 89.4% 83.7% 84.2% 84.1%
Heartland Pre-Merger.................. 81.8% 82.1% 81.5% -- -- -- --
Munson Pre-Merger..................... 95.6% 96.0% 97.2% -- -- -- --
</TABLE>
SELLING STOCKHOLDER
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by the Selling Stockholder
(giving effect in each case to the Stock Dividend). Unless otherwise
indicated, the Selling Stockholder has sole voting and investment power over
the shares that he beneficially owns.
<TABLE>
<CAPTION>
BENEFICIAL BENEFICIAL
OWNERSHIP BEFORE OWNERSHIP AFTER
OFFERING SHARES OFFERING(1)
------------------ BEING ------------------
SHARES PERCENT OFFERED SHARES PERCENT
---------- ------- --------- ---------- -------
<S> <C> <C> <C> <C> <C>
Russell A. Gerdin............... 14,519,990 48.4% 1,500,000 13,019,990 43.4%
</TABLE>
- --------
(1) Assuming no exercise of the Underwriters' over-allotment option. If the
over-allotment option is exercised in full, the Selling Stockholder will
sell 225,000 additional shares to the Underwriters and will beneficially
own 12,794,990 shares (42.7% of the outstanding Common Stock) after this
offering.
9
<PAGE>
STOCK DIVIDEND
Heartland declared and paid pro rata stock dividends in 1991, 1992, 1993, and
1995. The effect of these stock dividends was to increase the number of issued
and outstanding shares from 5,000,000 to 20,000,000. On September 12, 1996, the
Company's Board of Directors declared the Stock Dividend, which will increase
the number of issued and outstanding shares of the Company's Common Stock from
20,000,000 to 30,000,000. The Stock Dividend is payable October 4, 1996, to
stockholders of record on September 23, 1996. As a result of the Stock
Dividend, each stockholder on the record date will receive one additional fully
paid and nonassessable share of Common Stock for each two shares held by such
stockholder. The percentage of all issued and outstanding Common Stock owned by
each stockholder on the record date will not change as a result of the Stock
Dividend, other than insignificant changes as a result of not issuing
fractional shares. Stockholders will receive cash in lieu of any fractional
shares. The $.10 par value of the Common Stock will be unaffected by the Stock
Dividend, and the Company will transfer $1,000,000 to capital stock from
retained earnings to reflect the increase in shares outstanding. The Board of
Directors has declared each of the stock dividends to increase liquidity for
the Company's stockholders.
The increase in shares outstanding as a result of the Stock Dividend will
cause an adjustment to the market price of the Common Stock on October 4, 1996,
which is after the date of this Prospectus but before this offering is expected
to be completed. The adjustment would be to decrease the price of each share to
approximately two-thirds of the closing price on October 3, 1996. This
corresponds with the effect of the Stock Dividend, because the number of
currently outstanding shares is two-thirds of the number that will be
outstanding after the Stock Dividend. The adjustments in share number and price
as a result of the Stock Dividend will not change the market capitalization of
all of the Company's issued and outstanding Common Stock. On the day preceding
the date of this Prospectus, the last reported sale price of the Common Stock
was $28.50. Assuming that the Stock Dividend had occurred on the date of this
Prospectus, the market price would be adjusted to $19.00.
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
underwriters named below (the "Underwriters"), through their representatives,
Alex. Brown & Sons Incorporated and Morgan Keegan & Company, Inc. (together,
the "Representatives"), have severally agreed to purchase from the Selling
Stockholder the following respective number of shares of Common Stock at the
public offering price less the underwriting discounts and commissions set forth
on the cover page of this Prospectus:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ---------
<S> <C>
Alex. Brown & Sons Incorporated.......................................
Morgan Keegan & Company, Inc..........................................
---------
Total................................................................. 1,500,000
=========
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will
purchase all of the shares of Common Stock offered hereby if any such shares
are purchased.
10
<PAGE>
The Company and the Selling Stockholder have been advised by the
Representatives that the Underwriters propose to offer the shares of Common
Stock to the public at the public offering price set forth on the cover page of
this Prospectus and to certain dealers at such price less a concession not in
excess of $ per share. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $ per share to certain other dealers.
The public offering price and other selling terms may be changed by the
Representatives.
The Selling Stockholder has granted to the Underwriters an option,
exercisable not later than 30 days after the date of this Prospectus, to
purchase up to 225,000 additional shares of Common Stock at the public offering
price less the underwriting discounts and commissions set forth on the cover
page of this Prospectus. To the extent that the Underwriters exercise such
option, each of the Underwriters will have a firm commitment to purchase
approximately the same percentage thereof that the number of shares of Common
Stock to be purchased by it shown in the above table bears to 1,500,000, and
the Selling Stockholder will be obligated, pursuant to the option, to sell such
shares to the Underwriters. The Underwriters may exercise such option only to
cover over-allotments made in connection with the sale of the Common Stock
offered hereby. If purchased, the Underwriters will offer such additional
shares on the same terms as those on which the 1,500,000 shares are being
offered hereby.
The Underwriting Agreement contains covenants of indemnity and contribution
between the Underwriters, the Company, and the Selling Stockholder regarding
certain liabilities, including liabilities under the Securities Act.
The Company and the Selling Stockholder have agreed that until 90 days after
the date of this Prospectus, they will not, without the prior written consent
of Alex. Brown & Sons Incorporated, sell, offer to sell, issue, or otherwise
distribute any shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock.
One or more of the Underwriters currently act as market makers for the Common
Stock and may engage in "passive market making" in such securities on the
Nasdaq National Market in accordance with Rule 10b-6A under the Exchange Act.
Rule 10b-6A permits, upon the satisfaction of certain conditions, underwriters
participating in a distribution that are also Nasdaq market makers in the
security being distributed to engage in limited market making transactions
during the period when Rule 10b-6 under the Exchange Act would otherwise
prohibit such activity. Rule 10b-6A prohibits underwriters engaged in passive
market making generally from entering a bid or effecting a purchase at a price
that exceeds the highest bid for those securities displayed on the Nasdaq
National Market by a market maker that is not participating in the
distribution. Under Rule 10b-6A, each underwriter engaged in passive market
making is subject to a daily net purchase limitation equal to 30% of such
entity's average daily trading volume during the two full consecutive calendar
months immediately preceding the date of the filing of the registration
statement under the Securities Act pertaining to the security to be
distributed.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed upon
for the Company by Scudder Law Firm, P.C., Lincoln, Nebraska. A member of
Scudder Law Firm, P.C., Earl H. Scudder, Jr., has served as a director of the
Company since August 1986. Certain legal matters relating to the offering will
be passed upon for the Underwriters by Piper & Marbury L.L.P., Baltimore,
Maryland.
EXPERTS
The consolidated financial statements and schedule of Heartland Express, Inc.
incorporated by reference herein in this prospectus and elsewhere in this
registration statement, have been audited by the independent public accountants
Arthur Andersen LLP for 1995 and 1994 and McGladrey & Pullen, LLP for 1993 and
are included herein in reliance upon the authority of said firms as experts in
giving said reports.
11
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMA-
TION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN
SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR SINCE THE
DATES AS OF WHICH INFORMATION IS SET FORTH HEREIN.
------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Documents Incorporated by Reference........................................ 2
Prospectus Summary......................................................... 3
Price Range of Common Stock................................................ 7
Dividend Policy............................................................ 7
Selected Consolidated Financial Data....................................... 8
Selling Stockholder........................................................ 9
Stock Dividend............................................................. 10
Underwriting............................................................... 10
Legal Matters.............................................................. 11
Experts.................................................................... 11
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1,500,000 Shares
LOGO
Common Stock
--------------
PROSPECTUS
--------------
Alex. Brown & Sons
INCORPORATED
Morgan Keegan & Company, Inc.
, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Set forth below is an itemized statement of expenses to be incurred in
connection with the sale and distribution of the securities being registered
by this Registration Statement, other than the underwriting discounts and
commissions. All amounts are estimated except the SEC registration fee and the
NASD filing fee. The Selling Stockholder will bear all expenses of this
offering.
<TABLE>
<S> <C>
SEC registration fee............................................ $ 11,253
NASD filing fee................................................. 3,764
Blue sky fees and expenses...................................... 7,000
Accounting fees and expense..................................... 15,000
Legal fees and expenses......................................... 25,000
Printing and engraving.......................................... 25,000
Miscellaneous................................................... 15,483
--------
Total........................................................... $102,500
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Ninth of the Articles of Incorporation of the Registrant provides
indemnification for the officers, directors, and controlling persons of the
Registrant for certain liabilities which may be incurred by those individuals
in their capacities as such. Section 78.751 of the Nevada General Corporate
Law permits a corporation to indemnify any of its directors, officers,
employees, and agents against costs and expenses arising from claims, suits,
and proceedings, if such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation. No indemnification may be made in respect of claims as to which
such person is found liable for negligence or misconduct in the performance of
his duty to the corporation unless the court determines that, notwithstanding
the determination of liability, indemnification would be appropriate. The
indemnification provisions of the Nevada General Corporation Law expressly do
not exclude any other rights a person may have to indemnification under any
bylaw, among other things. The Registrant does not have liability insurance
covering its officers, directors, or controlling persons.
ITEM 16. EXHIBITS
<TABLE>
<C> <S> <C>
1 Form of Underwriting Agreement
5 Opinion, including consent of Scudder Law Firm, P.C.,
counsel to Heartland Express, Inc., as to the legality of
the securities being registered.
23.1 Consent of Scudder Law Firm, P.C. (included in their opin-
ion filed as Exhibit 5 to this Registration Statement).
23.2 Consent of Arthur Andersen LLP, independent accountants.
23.3 Consent of McGladrey & Pullen, LLP, independent accoun-
tants.
24 Power of Attorney (included on signature page of this Reg-
istration Statement).
</TABLE>
II-1
<PAGE>
ITEM 17. UNDERTAKINGS
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 provisions set forth in Item 15, or otherwise,
the Registrant has been advised in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
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 of
whether such indemnification by it is against public policy as expressed in
the Securities Act, and the Registrant will be governed by the final
adjudication of such issue.
The Registrant hereby undertakes to provide the Underwriters at the closing
specified in the Underwriting Agreement, certificates in such denominations
and registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.
The Registrant hereby undertakes that:
(a) For purposes of determining any liability under the Securities Act,
the information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and this offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED, IN THE CITY OF
CORALVILLE, STATE OF IOWA, ON THE 25TH DAY OF SEPTEMBER, 1996.
Heartland Express, Inc.
/s/ Russell A. Gerdin
By: _________________________________
Russell A. Gerdin
President and Secretary
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints Russell A. Gerdin,
John P. Cosaert, and Earl H. Scudder, Jr., and each of them, as attorneys-in-
fact with full power of substitution, to execute in their respective names,
individually and in each capacity stated below, any and all amendments
(including post-effective amendments) to this Registration Statement as the
attorney-in-fact and to file any such amendment to the Registration Statement,
exhibits thereto and documents required in connection therewith with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
their substitutes, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in connection therewith, as
fully as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and their substitutes may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons or their duly
authorized attorney-in-fact in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Russell A. Gerdin Chairman of the Board, September 25, 1996
____________________________________ President, and Secretary
Russell A. Gerdin (principal executive
officer)
/s/ John P. Cosaert Vice President (principal September 25, 1996
____________________________________ financial and accounting
John P. Cosaert officer)
/s/ Earl H. Scudder, Jr. Director September 25, 1996
____________________________________
Earl H. Scudder, Jr.
/s/ Richard O. Jacobson Director September 25, 1996
____________________________________
Richard O. Jacobson
/s/ Benjamin J. Allen, Ph.D. Director September 25, 1996
____________________________________
Benjamin J. Allen, Ph.D.
/s/ Michael J. Gerdin Director September 25, 1996
____________________________________
Michael J. Gerdin
</TABLE>
II-3
<PAGE>
1,500,000 Shares
HEARTLAND EXPRESS, INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
_______________, 1996
Alex. Brown & Sons Incorporated
Morgan Keegan & Company, Inc.
c/o Alex. Brown & Sons Incorporated
135 East Baltimore Street
Baltimore, Maryland 21202
Gentlemen:
Russell A. Gerdin, the principal stockholder (the "Selling Shareholder") of
Heartland Express, Inc., a Nevada corporation (the "Company"), proposes to sell
to the several underwriters (the "Underwriters") named in Schedule I hereto
1,500,000 shares of the Company's Common Stock, $.10 par value (the "Firm
Shares"). The respective amounts of the Firm Shares to be so purchased by the
several Underwriters are set forth opposite their names in Schedule I hereto.
The Selling Shareholder also propose to sell at the Underwriters' option up to
225,000 additional shares of the Company's Common Stock (the "Option Shares") as
set forth below.
As the Underwriters, you have advised the Selling Shareholder that you are
willing, acting severally and not jointly, to purchase the numbers of Firm
Shares set forth opposite your names in Schedule I, plus your pro rata portion
of the Option Shares if you elect to exercise the over-allotment option in whole
or in part for the accounts of the several Underwriters. The Firm Shares and
the Option Shares (to the extent the aforementioned option is exercised) are
herein collectively called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
-1-
<PAGE>
1. Representations and Warranties of the Company and the Selling
Shareholder.
(a) The Company represents and warrants to each of the Underwriters as
follows:
(i) A registration statement on Form S-3 (File No. 33-______) with respect
to the Shares has been carefully prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
Rules and Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission. The Company has complied with the conditions for the use of Form
S-3. Copies of such registration statement, including any amendments thereto,
the preliminary prospectuses (meeting the requirements of the Rules and
Regulations) contained therein and the exhibits, financial statements and
schedules, as finally amended and revised, have heretofore been delivered by the
Company to you. Such registration statement, together with any registration
statement filed by the Company pursuant to Rule 462 (b) of the Act, herein
referred to as the "Registration Statement," which shall be deemed to include
all information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, has become effective under the Act and no
post-effective amendment to the Registration Statement has been filed as of the
date of this Agreement. "Prospectus" means (a) the form of prospectus first
filed with the Commission pursuant to Rule 424(b) or (b) the last preliminary
prospectus included in the Registration Statement filed prior to the time it
becomes effective or filed pursuant to Rule 424(a) under the Act that is
delivered by the Company to the Underwriters for delivery to purchasers of the
Shares. Each preliminary prospectus included in the Registration Statement prior
to the time it becomes effective is herein referred to as a "Preliminary
Prospectus." Any reference herein to the Registration Statement, any Preliminary
Prospectus or to the Prospectus shall be deemed to refer to and include any
documents incorporated by reference therein, and, in the case of any reference
herein to any Prospectus, also shall be deemed to include any documents
incorporated by reference therein, and any supplements or amendments thereto,
filed with the Commission after the date of filing of the Prospectus under Rules
424(b) or 430A, and prior to the termination of the offering of the Shares by
the Underwriters.
(ii) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Nevada, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement. Each of the subsidiaries of
the Company as listed in Exhibit 21 to Item 16(a) of the Registration Statement
(collectively, the "Subsidiaries") has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration Statement.
The Subsidiaries are the only subsidiaries, direct or indirect, of the Company.
The Company and each of the Subsidiaries are duly qualified to transact business
in all jurisdictions in which the conduct of their business requires such
qualification. The
-2-
<PAGE>
outstanding shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and non-assessable and are owned
by the Company or another Subsidiary free and clear of all liens, encumbrances
and equities and claims; and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership interests in the
Subsidiaries are outstanding.
(iii) The outstanding shares of Common Stock of the Company, including all
shares to be sold by the Selling Shareholder, have been duly authorized and
validly issued and are fully paid and non-assessable. Neither the filing of the
Registration Statement nor the offering or sale of the Shares as contemplated by
this Agreement gives rise to any rights, other than those which have been waived
or satisfied, for or relating to the registration of any shares of Common Stock.
(iv) All of the Shares conform to the description thereof contained or
incorporated by reference in the Registration Statement. The form of
certificates for the Shares conforms to the corporate law of the jurisdiction of
the Company's incorporation.
(v) The Commission has not issued an order preventing or suspending the
use of any Prospectus relating to the proposed offering of the Shares nor
instituted proceedings for that purpose. The Registration Statement contains,
and the Prospectus and any amendments or supplements thereto will contain, all
statements which are required to be stated therein by, and will conform, to the
requirements of the Act and the Rules and Regulations. The documents
incorporated by reference in the Prospectus, at the time filed with the
Commission conformed, in all respects to the requirements of the Securities
Exchange Act of 1934 or the Act, as applicable, and the rules and regulations of
the Commission thereunder. The Registration Statement and any amendment thereto
do not contain, and will not contain, any untrue statement of a material fact
and do not omit, and will not omit, to state any material fact required to be
stated therein or necessary to make the statements therein not misleading. The
Prospectus and any amendments and supplements thereto do not contain, and will
not contain, any untrue statement of material fact; and do not omit, and will
not omit, to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted from the
Registration Statement or the Prospectus, or any such amendment or supplement,
in reliance upon, and in conformity with, written information furnished to the
Company by or on behalf of any Underwriter, specifically for use in the
preparation thereof.
(vi) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules as set forth or
incorporated by reference in the Registration Statement, present fairly the
financial position and the results of operations and cash flows of the Company
and the consolidated Subsidiaries, at the indicated dates and for the indicated
periods.
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Such financial statements and related schedules have been prepared in accordance
with generally accepted principles of accounting, consistently applied
throughout the periods involved, except as disclosed herein, and all adjustments
necessary for a fair presentation of results for such periods have been made.
The summary financial and statistical data included or incorporated by reference
in the Registration Statement presents fairly the information shown therein and
such data has been compiled on a basis consistent with the financial statements
presented therein and the books and records of the Company.
(vii) Arthur Andersen LLP and McGladrey & Pullen, LLP, who have certified
certain of the financial statements filed with the Commission and incorporated
by reference in the Registration Statement, are independent public accountants
as required by the Act and the Rules and Regulations.
(viii) There is no action, suit, claim or proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of the
Subsidiaries before any court or administrative agency or otherwise which if
determined adversely to the Company or any of its Subsidiaries might result in
any material adverse change in the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of
the Company and of the Subsidiaries taken as a whole or to prevent the
consummation of the transactions contemplated hereby, except as set forth in the
Registration Statement.
(ix) The Company and the Subsidiaries have good and marketable title to
all of the properties and assets reflected in the financial statements (or as
described in the Registration Statement) hereinabove described, subject to no
lien, mortgage, pledge, charge or encumbrance of any kind except those reflected
in such financial statements (or as described in the Registration Statement) or
which are not material in amount. The Company and the Subsidiaries occupy their
leased properties under valid and binding leases.
(x) The Company and the Subsidiaries have filed all Federal, State,
local and foreign income tax returns which have been required to be filed and
have paid all taxes indicated by said returns and all assessments received by
them or any of them to the extent that such taxes have become due and are not
being contested in good faith. All tax liabilities have been adequately provided
for in the financial statements of the Company.
(xi) Since the respective dates as of which information is given in the
Registration Statement, as it may be amended or supplemented, there has not been
any material adverse change or any development involving a prospective material
adverse change in or affecting the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise), or prospects of
the Company and its Subsidiaries taken as a whole, whether or not occurring in
the ordinary course of business, and there has not been any material transaction
entered into or any material transaction that is probable of being entered into
by the Company or
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<PAGE>
the Subsidiaries, other than transactions in the ordinary course of business and
changes and transactions described in the Registration Statement, as it may be
amended or supplemented. The Company and the Subsidiaries have no material
contingent obligations which are not disclosed in the Company's financial
statements which are included in the Registration Statement .
(xii) Neither the Company nor any of the Subsidiaries is or with the
giving of notice or lapse of time or both, will be, in violation of or in
default under its Charter or By-Laws or under any agreement, lease, contract,
indenture or other instrument or obligation to which it is a party or by which
it, or any of its properties, is bound and which default is of material
significance in respect of the condition, financial or otherwise of the Company
and its Subsidiaries taken as a whole or the business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of
the Company and the Subsidiaries taken as a whole. The execution and delivery of
this Agreement and the consummation of the transactions herein contemplated and
the fulfillment of the terms hereof will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or other agreement or instrument to which the
Company or any Subsidiary is a party, or of the Charter or By-Laws of the
Company or any order, rule or regulation applicable to the Company or any
Subsidiary of any court or of any regulatory body or administrative agency or
other governmental body having jurisdiction.
(xiii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the Commission,
the National Association of Securities Dealers, Inc. (the "NASD") or such
additional steps as may be necessary to qualify the Shares for public offering
by the Underwriters under state securities or Blue Sky laws) has been obtained
or made and is in full force and effect.
(xiv) The Company and each of the Subsidiaries holds all material
licenses, certificates and permits from governmental authorities which are
necessary to the conduct of their businesses; and neither the Company nor any of
the Subsidiaries has infringed any patents, patent rights, trade names,
trademarks or copyrights, which infringement is material to the business of the
Company and the Subsidiaries taken as a whole. The Company knows of no material
infringement by others of patents, patent rights, trade names, trademarks or
copyrights owned by or licensed to the Company.
(xv) Neither the Company, nor to the Company's best knowledge, any of its
affiliates, has taken or may take, directly or indirectly, any action designed
to cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
shares of Common Stock to facilitate the sale or resale of the Shares. The
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<PAGE>
Company acknowledges that the Underwriters may engage in passive market making
transactions in the Shares on The Nasdaq Stock Market in accordance with Rule
10b-6A under the Exchange Act.
(xvi) Neither the Company nor any Subsidiary is an "investment company"
within the meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
(xvii) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xviii) The Company and each of its Subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their respective properties and
as is customary for companies engaged in similar industries.
(xix) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the loss of
such qualification.
(xx) The Company confirms as of the date hereof that it is in compliance
with all provisions of Section 1 of Laws of Florida, Chapter 92-198, An Act
Relating to Disclosure of doing Business with Cuba, and the Company further
agrees that if it commences engaging in business with the government of Cuba or
with any person or affiliate located in Cuba after the date the Registration
Statement becomes or has become effective with the Commission or with the
Florida Department of Banking and Finance (the "Department"), whichever date is
later, or if the information reported or incorporated by reference in the
Prospectus, if any, concerning the
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<PAGE>
Company's business with Cuba or with any person or affiliate located in Cuba
changes in any material way, the Company will provide the Department notice of
such business or change, as appropriate, in a form acceptable to the Department.
(b) The Selling Shareholder severally represents and warrants as
follows:
(i) Such Selling Shareholder now has and at the Closing Date and the
Option Closing Date, as the case may be (as such dates are hereinafter defined)
will have good and marketable title to the Firm Shares and the Option Shares to
be sold by such Selling Shareholder, free and clear of any liens, encumbrances,
equities and claims, and full right, power and authority to effect the sale and
delivery of such Firm Shares and Option Shares; and upon the delivery of,
against payment for, such Firm Shares and Option Shares pursuant to this
Agreement, the Underwriters will acquire good and marketable title thereto, free
and clear of any liens, encumbrances, equities and claims.
(ii) Such Selling Shareholder has full right, power and authority to
execute and deliver this Agreement, the Power of Attorney, and the Custodian
Agreement referred to below and to perform its obligations under such
Agreements. The execution and delivery of this Agreement and the consummation by
such Selling Shareholder of the transactions herein contemplated and the
fulfillment by such Selling Shareholder of the terms hereof will not require any
consent, approval, authorization, or other order of any court, regulatory body,
administrative agency or other governmental body (except as may be required
under the Act, state securities laws or Blue Sky laws) and will not result in a
breach of any of the terms and provisions of, or constitute a default under,
organizational documents of such Selling Shareholder, if not an individual, or
any indenture, mortgage, deed of trust or other agreement or instrument to which
such Selling Shareholder is a party, or of any order, rule or regulation
applicable to such Selling Shareholder of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction.
(iii) Such Selling Shareholder has not taken and will not take, directly
or indirectly, any action designed to, or which has constituted, or which might
reasonably be expected to cause or result in the stabilization or manipulation
of the price of the Common Stock of the Company and, other than as permitted by
the Act, the Selling Shareholder will not distribute any prospectus or other
offering material in connection with the offering of the Shares.
(iv) Without having undertaken to determine independently the accuracy or
completeness of either the representations and warranties of the Company
contained herein or the information contained in the Registration Statement,
such Selling Shareholder has no reason to believe that the representations and
warranties of the Company contained in this Section 1 are not true and correct,
is familiar with the Registration Statement and has no knowledge of any material
fact, condition or information not disclosed in the Registration Statement which
has adversely affected
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<PAGE>
or may adversely affect the business of the Company or any of the Subsidiaries;
and the sale of the Firm Shares and the Option Shares by such Selling
Shareholder pursuant hereto is not prompted by any information concerning the
Company or any of the Subsidiaries which is not set forth in the Registration
Statement or the documents incorporated
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<PAGE>
by reference therein. The information pertaining to such Selling Shareholder
under the caption "Selling Shareholder" in the Prospectus is complete and
accurate in all material respects.
2. Purchase, Sale and Delivery of the Firm Shares.
(a) On the basis of the representations, warranties and covenants herein
contained, and subject to the conditions herein set forth, the Selling
Shareholder agrees to sell to the Underwriters and each Underwriter agrees,
severally and not jointly, to purchase, at a price of $_____ net price per
share, the number of Firm Shares set forth opposite the name of each Underwriter
in Schedule I hereof, subject to adjustments in accordance with Section 9
hereof. The number of Firm Shares to be purchased by each Underwriter from each
Seller shall be as nearly as practicable in the same proportion to the total
number of Firm Shares being sold by each Seller as the number of Firm Shares
being purchased by each Underwriter bears to the total number of Firm Shares to
be sold hereunder. The obligations of the Company and of each of the Selling
Shareholder shall be several and not joint.
(b) Certificates in negotiable form for the total number of the Shares to
be sold hereunder by the Selling Shareholder have been placed in custody with
____________________ as custodian (the "Custodian") pursuant to the Custodian
Agreement executed by the Selling Shareholder for delivery of all Firm Shares
and any Option Shares to be sold hereunder by the Selling Shareholder. The
Selling Shareholder specifically agrees that the Firm Shares and any Option
Shares represented by the certificates held in custody for the Selling
Shareholder under the Custodian Agreement are subject to the interests of the
Underwriters hereunder, that the arrangements made by the Selling Shareholder
for such custody are to that extent irrevocable, and that the obligations of the
Selling Shareholder hereunder shall not be terminable by any act or deed of the
Selling Shareholder (or by any other person, firm or corporation including the
Company, the Custodian or the Underwriters) or by operation of law (including
the death of the Selling Shareholder) or by the occurrence of any other event or
events, except as set forth in the Custodian Agreement. If any such event should
occur prior to the delivery to the Underwriters of the Firm Shares or the Option
Shares hereunder, certificates for the Firm Shares or the Option Shares, as the
case may be, shall be delivered by the Custodian in accordance with the terms
and conditions of this Agreement as if such event has not occurred. The
Custodian is authorized to receive and acknowledge receipt of the proceeds of
sale of the Shares held by it against delivery of such Shares.
(c) Payment for the Firm Shares to be sold hereunder is to be made in same
day funds via wire transfer to the order of __________________________, "as
Custodian" for the shares to be sold by the Selling Shareholder, against
delivery of certificates to the Underwriters. Such payment and delivery are to
be made at the offices of Alex. Brown & Sons Incorporated, 135 East Baltimore
Street, Baltimore, Maryland, at 10:00 a.m., Baltimore time, on the third
business day after the date of this Agreement or at such other time and date not
later than five business days thereafter as you and the Company shall agree
upon, such time and date being herein referred to as the "Closing Date." (As
used herein, "business day" means a day on which the New York Stock Exchange is
open for trading and on
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<PAGE>
which banks in New York are open for business and not permitted by law or
executive order to be closed.) The certificates for the Firm Shares will be
delivered in such denominations and in such registrations as the Underwriters
request in writing not later than the second full business day prior to the
Closing Date, and will be made available for inspection by the Underwriters at
least one business day prior to the Closing Date.
(d) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Selling
Shareholder hereby grants an option to the several Underwriters to purchase the
Option Shares at the price per share as set forth in the first paragraph of this
Section 2. The option granted hereby may be exercised in whole or in part by
giving written notice (i) at any time before the Closing Date and (ii) only once
thereafter within 30 days after the date of this Agreement, by you, as the
Underwriters, to the Company, the Attorney-in-Fact, and the Custodian setting
forth the number of Option Shares as to which the several Underwriters are
exercising the option, the names and denominations in which the Option Shares
are to be registered and the time and date at which such certificates are to be
delivered. The time and date at which certificates for Option Shares are to be
delivered shall be determined by the Underwriters but shall not be earlier than
three nor later than 10 full business days after the exercise of such option,
nor in any event prior to the Closing Date (such time and date being herein
referred to as the "Option Closing Date"). If the date of exercise of the option
is three or more days before the Closing Date, the notice of exercise shall set
the Closing Date as the Option Closing Date. The number of Option Shares to be
purchased by each Underwriter shall be in the same proportion to the total
number of Option Shares being purchased as the number of Firm Shares being
purchased by such Underwriter bears to the total number of Firm Shares, adjusted
by you in such manner as to avoid fractional shares. The option with respect to
the Option Shares granted hereunder may be exercised only to cover over-
allotments in the sale of the Firm Shares by the Underwriters. You, as the
Underwriters, may cancel such option at any time prior to its expiration by
giving written notice of such cancellation to the Company and the Attorney-in-
Fact. To the extent, if any, that the option is exercised, payment for the
Option Shares shall be made on the Option Closing Date in same day funds via
wire transfer to the order of "___________________, as Custodian" for the Option
Shares to be sold by the Selling Shareholder against delivery of certificates
therefor at the offices of Alex. Brown & Sons Incorporated, 135 East Baltimore
Street, Baltimore, Maryland.
(e) If on the Closing Date or Option Closing Date, as the case may be, the
Selling Shareholder fails to sell the Firm Shares or Option Shares which he has
agreed to sell on such date, the Company agrees that it will sell or arrange for
the sale of that number of shares of Common Stock to the Underwriters which
represents Firm Shares or the Option Shares which the Selling Shareholder has
failed to so sell, or such lesser number as may be requested by the
Underwriters.
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<PAGE>
3. Offering by the Underwriters.
It is understood that the several Underwriters are to make a public
offering of the Firm Shares as soon as the Underwriters deem it advisable to do
so. The Firm Shares are to be initially offered to the public at the initial
public offering price set forth in the Prospectus. The Underwriters may from
time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are purchased pursuant
to Section 2 hereof, the Underwriters will offer them to the public on the
foregoing terms.
It is further understood that you will act as the Underwriters in the
offering and sale of the Shares in accordance with a Master Agreement Among
Underwriters.
4. Covenants of the company and the Selling Shareholder.
(a) The Company covenants and agrees with the Underwriters that:
(i) The Company will (A) use its best efforts to cause the Registration
Statement to become effective or, if the procedure in Rule 430A of the Rules and
Regulations is followed, to prepare and timely file with the Commission under
Rule 424(b) of the Rules and Regulations a Prospectus in a form approved by the
Underwriters containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of the
Rules and Regulations, and (B) not file any amendment to the Registration
Statement or supplement to the Prospectus or document incorporated by reference
therein of which the Underwriters shall not previously have been advised and
furnished with a copy or to which the Underwriters shall have reasonably
objected in writing or which is not in compliance with the Rules and Regulations
and (C) file on a timely basis all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
subsequent to the date of the Prospectus and prior to the termination of the
offering of the Shares by the Underwriters.
(ii) The Company will advise the Underwriters promptly (A) when the
Registration Statement or any post-effective amendment thereto shall have become
effective, (B) of receipt of any comments from the Commission, (C) of any
request of the Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information, and (D) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the use of the Prospectus or of the institution of any
proceedings for that purpose. The Company will use its best efforts to prevent
the issuance of any such stop order preventing or suspending the use of the
Prospectus and to obtain as soon as possible the lifting thereof, if issued.
(iii) The Company will cooperate with the Underwriters in endeavoring to
qualify the Shares for sale under the securities laws of such jurisdictions as
the Underwriters may reasonably have designated in writing and will make such
applications, file such documents, and furnish such
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<PAGE>
information as may be reasonably required for that purpose, provided the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction where it is not now so
qualified or required to file such a consent. The Company will, from time to
time, prepare and file such statements, reports, and other documents, as are or
may be required to continue such qualifications in effect for so long a period
as the Underwriters may reasonably request for distribution of the Shares.
(iv) The Company will deliver to, or upon the order of, the Underwriters,
from time to time, as many copies of any Preliminary Prospectus as the
Underwriters may reasonably request. The Company will deliver to, or upon the
order of, the Underwriters during the period when delivery of a Prospectus is
required under the Act, as many copies of the Prospectus in final form, or as
thereafter amended or supplemented, as the Underwriters may reasonably request.
The Company will deliver to the Underwriters at or before the Closing Date, four
signed copies of the Registration Statement and all amendments thereto including
all exhibits filed therewith, and will deliver to the Underwriters such number
of copies of the Registration Statement (including such number of copies of the
exhibits filed therewith that may reasonably be requested), including documents
incorporated by reference therein, and of all amendments thereto, as the
Underwriters may reasonably request.
(v) The Company will comply with the Act and the Rules and Regulations, and
the Securities Exchange Act of 1934 (the "Exchange Act"), and the rules and
regulations of the Commission thereunder, so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and the Prospectus.
If during the period in which a prospectus is required by law to be delivered by
an Underwriter or dealer, any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of the Underwriters, it
becomes necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading, or, if it is necessary
at any time to amend or supplement the Prospectus to comply with any law, the
Company promptly will either (i) prepare and file with the Commission an
appropriate amendment to the Registration Statement or supplement to the
Prospectus or (ii) prepare and file with the Commission an appropriate filing
under the Securities Exchange Act of 1934 which shall be incorporated by
reference in the Prospectus so that the Prospectus as so amended or supplemented
will not, in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with the law.
(vi) The Company will make generally available to its security holders, as
soon as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, an earning statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning after the effective date of the Registration
Statement, which earning statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 of the Rules and Regulations and will advise you
in writing when such statement has been so made available.
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<PAGE>
(vii) The Company will, for a period of five years from the Closing Date,
deliver to the Underwriters copies of annual reports and copies of all other
documents, reports and information furnished by the Company to its stockholders
or filed with any securities exchange pursuant to the requirements of such
exchange or with the Commission pursuant to the Act or the Securities Exchange
Act of 1934, as amended. The Company will deliver to the Underwriters similar
reports with respect to significant subsidiaries, as that term is defined in the
Rules and Regulations, which are not consolidated in the Company's financial
statements.
(viii) No offering, sale, short sale or other disposition of any shares of
Common Stock of the Company or other securities convertible into or exchangeable
or exercisable for shares of Common Stock or derivative of Common Stock (or
agreement for such) will be made for a period of 90 days after the date of this
Agreement, directly or indirectly, by the Company otherwise than hereunder or
with the prior written consent of Alex. Brown & Sons Incorporated.
(ix) The Company has caused the Selling Shareholder to furnish to you, on
or prior to the date of this agreement, a letter, in form and substance
satisfactory to the Underwriters, pursuant to which such person shall agree not
to offer, sell, sell short or otherwise dispose of any shares of Common Stock of
the Company or other capital stock of the Company, or any other securities
convertible, exchangeable or exercisable for Common Shares or derivative of
Common Shares owned by such person or request the registration for the offer or
sale of any of the foregoing (or as to which such person has the right to direct
the disposition of) for a period of 90 days after the date of this Agreement,
directly or indirectly, except with the prior written consent of Alex. Brown &
Sons Incorporated ("Lockup Agreements").
(x) The Company will maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the Common Stock.
(xi) The Company will not take, directly or indirectly, any action designed
to cause or result in, or that has constituted or might reasonably be expected
to constitute, the stabilization or manipulation of the price of any securities
of the Company.
(b) The Selling Shareholder covenants and agrees with the several
Underwriters that:
(i) No offering, sale, short sale or other disposition of any shares of
Common Stock of the Company or other capital stock of the Company or other
securities convertible, exchangeable or exercisable for Common Stock or
derivative of Common Stock owned by the Selling Shareholder or request the
registration for the offer or sale of any of the foregoing (or as to which the
Selling Shareholder has the right to direct the disposition of) will be made for
a period of [90] days after the date of this Agreement, directly or indirectly,
by such Selling Shareholder otherwise than hereunder or with the prior written
consent of Alex. Brown & Sons Incorporated.
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<PAGE>
(ii) In order to document the Underwriters' compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982
and the Interest and Dividend Tax Compliance Act of 1983 with respect to the
transactions herein contemplated, the Selling Shareholder agrees to deliver to
you prior to or at the Closing Date a properly completed and executed United
States Treasury Department Form W-9 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof).
(iii) Such Selling Shareholder will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company.
5. Costs and Expenses.
------------------
The Selling Shareholder will pay all costs, expenses and fees incident to
the performance of the obligations of the Company under this Agreement,
including, without limiting the generality of the foregoing, the following:
accounting fees of the Company; the fees and disbursements of counsel for the
Selling Shareholder; the cost of printing and delivering to, or as requested by,
the Underwriters copies of the Registration Statement, Preliminary Prospectuses,
the Prospectus, this Agreement, the Underwriters' Invitation Letter, the Blue
Sky Survey and any supplements or amendments thereto; the filing fees of the
Commission; the filing fees of the NASD; the Listing Fee of the Nasdaq Stock
Market; and the expenses, including the fees and disbursements of counsel for
the Underwriters, incurred in connection with the qualification of the Shares
under State securities or Blue Sky laws. Any transfer taxes imposed on the sale
of the Shares to the several Underwriters will be paid by the Selling
Shareholder. The Selling Shareholder shall not, however, be required to pay for
any of the Underwriter's expenses (other than those related to qualification
under State securities or Blue Sky laws) except that, if this Agreement shall
not be consummated because the conditions in Section 6 hereof are not satisfied,
or because this Agreement is terminated by the Underwriters pursuant to Section
11 hereof, or by reason of any failure, refusal or inability on the part of the
Company or the Selling Shareholder to perform any undertaking or satisfy any
condition of this Agreement or to comply with any of the terms hereof on their
part to be performed, unless such failure to satisfy said condition or to comply
with said terms be due to the default or omission of any Underwriter, then the
Selling Shareholder shall reimburse the Underwriters for reasonable out-of-
pocket expenses, including fees and disbursements of counsel, reasonably
incurred in connection with investigating, marketing and proposing to market the
Shares or in contemplation of performing their obligations hereunder; but the
Selling Shareholder shall not in any event be liable to any of the Underwriters
for damages on account of loss of anticipated profits from the sale by them of
the Shares.
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6. Conditions of Obligations of the Underwriters.
---------------------------------------------
The several obligations of the Underwriters to purchase the Firm Shares on
the Closing Date and the Option Shares, if any, on the Option Closing Date are
subject to the accuracy, as of the Closing Date or the Option Closing Date, as
the case may be, of the representations and warranties of the Selling
Shareholder contained herein, and to the performance by the Selling Shareholder
of their covenants and obligations hereunder and to the following additional
conditions:
(a) The Registration Statement and all post-effective amendments thereto
shall have become effective and any and all filings required by Rule 424 and
Rule 430A of the Rules and Regulations shall have been made, and any request of
the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Underwriters and
complied with to their reasonable satisfaction. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, shall
have been issued and no proceedings for that purpose shall have been taken or,
to the knowledge of the Company or the Selling Shareholder, shall be
contemplated by the Commission and no injunction, restraining order, or order of
any nature by a Federal or state court of competent jurisdiction shall have been
issued as of the Closing Date which would prevent the issuance of the Shares.
(b) The Underwriters shall have received on the Closing Date or the Option
Closing Date, as the case may be, the opinion of Scudder Law Firm, P.C., counsel
for Company and the Selling Shareholder, dated the Closing Date or the Option
Closing Date, as the case may be, addressed to the Underwriters (and stating
that it may be relied upon by counsel to the Underwriters) to the effect that:
(i) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Nevada, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement; each of the Subsidiaries
has been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, with corporate
power and authority to own or lease its properties and conduct its business as
described in the Registration Statement; the Company and each of the
Subsidiaries are duly qualified to transact business in all jurisdictions in
which the conduct of their business requires such qualification, or in which the
failure to qualify would have a materially adverse effect upon the business of
the Company and the Subsidiaries taken as a whole; and the outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable and are owned by the Company or a
Subsidiary; and, to the best of such counsel's knowledge, the outstanding shares
of capital stock of each of the Subsidiaries is owned free and clear of all
liens, encumbrances and equities and claims, and no options, warrants or other
rights to purchase, agreements or other obligations to issue or other rights to
convert any obligations into any shares of capital stock or of ownership
interests in the Subsidiaries are outstanding.
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(ii) The Company has authorized and outstanding capital stock as set forth
in the Prospectus; the authorized shares of the Company's Common Stock have been
duly authorized; the outstanding shares of the Company's Common Stock, including
the Shares to be sold by the Selling Shareholder, have been duly authorized and
validly issued and are fully paid and non-assessable; all of the Shares conform
to the description thereof contained or incorporated by reference in the
Prospectus; the certificates for the Shares, assuming they are in the form filed
with the Commission, are in due and proper form; and no preemptive rights of
stockholders exist with respect to any of the Shares or the issue or sale
thereof.
(iii) Except as described in or contemplated by the Prospectus, to the
knowledge of such counsel, there are no outstanding securities of the Company
convertible or exchangeable into or evidencing the right to purchase or
subscribe for any shares of capital stock of the Company and there are no
outstanding or authorized options, warrants or rights of any character
obligating the Company to issue any shares of its capital stock or any
securities convertible or exchangeable into or evidencing the right to purchase
or subscribe for any shares of such stock; and except as described in the
Prospectus, to the knowledge of such counsel, no holder of any securities of the
Company or any other person has the right, contractual or otherwise, which has
not been satisfied or effectively waived, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of, any of the
Shares or the right to have any Common Shares or other securities of the Company
included in the Registration Statement or the right, as a result of the filing
of the Registration Statement, to require registration under the Act of any
shares of Common Stock or other securities of the Company.
(iv) The Registration Statement has become effective under the Act and, to
the best of the knowledge of such counsel, no stop order proceedings with
respect thereto have been instituted or are pending or threatened under the Act.
(v) The Registration Statement, the Prospectus and each amendment or
supplement thereto and document incorporated by reference therein comply as to
form in all material respects with the requirements of the Act or the Securities
Exchange Act of 1934, as applicable and the applicable rules and regulations
thereunder (except that such counsel need express no opinion as to the financial
statements and related schedules or incorporated by reference therein). The
conditions for the use of Form S-3, set forth in the General Instructions
thereto, have been satisfied.
(vi) The statements under the captions "____________," "___________,"
"Description of Capital Stock" and ______________ incorporated by reference in
the Prospectus, insofar as such statements constitute a summary of documents
referred to therein or matters of law, fairly summarize in all material respects
the information called for with respect to such documents and matters.
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(vii) Such counsel does not know of any contracts or documents required to
be filed as exhibits to or incorporated by reference in the Registration
Statement or described in the Registration Statement or the Prospectus which are
no so filed, incorporated by reference or described as required, and such
contracts and documents as are summarized in the Registration Statement or the
Prospectus are fairly summarized in all material respects.
(viii) Such counsel knows of no material legal or governmental proceedings
pending or threatened against the Company or any of the Subsidiaries except as
set forth in the Prospectus.
(ix) The execution and delivery of this Agreement and the consummation of
the transactions herein contemplated do not and will not conflict with or result
in a breach of any of the terms or provisions of, or constitute a default under,
the Charter or By-Laws of the Company, or any agreement or instrument known to
such counsel to which the Company or any of the Subsidiaries is a party or by
which the Company or any of the Subsidiaries may be bound.
(x) This Agreement has been duly authorized, executed and delivered by
the Company.
(xi) No approval, consent, order, authorization, designation, declaration
or filing by or with any regulatory, administrative or other governmental body
is necessary in connection with the execution and delivery of this Agreement and
the consummation of the transactions herein contemplated (other than as may be
required by the NASD or as required by State securities and Blue Sky laws as to
which such counsel need express no opinion) except such as have been obtained or
made, specifying the same.
(xii) This Agreement has been duly authorized, executed and delivered on
behalf of the Selling Shareholder.
(xiii) The Selling Shareholder has full legal right, power and authority,
and any approval required by law (other than as required by State securities and
Blue Sky laws as to which such counsel need express no opinion), to sell,
assign, transfer and deliver the Shares.
(xiv) The Custodian Agreement and the Power of Attorney executed and
delivered by the Selling Shareholder is valid and binding.
(xv) The Underwriters (assuming that they are bona fide purchasers within
the meaning of the Uniform Commercial Code) have acquired good and marketable
title to the Shares being sold by the Selling Shareholder on the Closing Date,
and the Option Closing Date, as the case may be, free and clear of all liens,
encumbrances, equities and claims.
In rendering such opinion Scudder Law Firm, P.C. may rely as to matters
governed by the laws of states other than Nevada or Federal laws on local
counsel in such jurisdictions, provided that in each case Scudder Law Firm, P.C.
shall state that they believe that they and the Underwriters are
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justified in relying on such other counsel. In addition to the matters set forth
above, such opinion shall also include a statement to the effect that nothing
has come to the attention of such counsel which leads them to believe that (i)
the Registration Statement, at the time it became effective under the Act (but
after giving effect to any modifications incorporated therein pursuant to Rule
430A under the Act) and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) the Prospectus, or any supplement
thereto, on the date it was filed pursuant to the Rules and Regulations and as
of the Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements, in the light of the circumstances
under which they are made, not misleading (except that such counsel need express
no view as to financial statements, schedules and statistical information
therein). With respect to such statement, Scudder Law Firm, P.C. may state that
their belief is based upon the procedures set forth therein, but is without
independent check and verification.
(c) The Underwriters shall have received from Piper & Marbury L.L.P,
counsel for the Underwriters, an opinion dated the Closing Date or the Option
Closing Date, as the case may be, substantially to the effect specified in
subparagraphs (ii), (iii), (iv), (ix), (x) and (xii) of Paragraph (b) of this
Section 6, and that the Company is a duly organized and validly existing
corporation under the laws of the State of Nevada. In rendering such opinion,
Piper & Marbury L.L.P. may rely as to all matters governed other than by the
laws of the State of Maryland or Federal laws on the opinion of counsel referred
to in Paragraph (b) of this Section 6. In addition to the matters set forth
above, such opinion shall also include a statement to the effect that nothing
has come to the attention of such counsel which leads them to believe that (i)
the Registration Statement, or any amendment thereto, as of the time it became
effective under the Act (but after giving effect to any modifications
incorporated therein pursuant to Rule 430A under the Act) as of the Closing Date
or the Option Closing Date, as the case may be, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and (ii) the
Prospectus, or any supplement thereto, on the date it was filed pursuant to the
Rules and Regulations and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or omitted to
state a material fact, necessary in order to make the statements, in the light
of the circumstances under which they are made, not misleading (except that such
counsel need express no view as to financial statements, schedules and
statistical information therein). With respect to such statement, Piper &
Marbury L.L.P. may state that their belief is based upon the procedures set
forth therein, but is without independent check and verification.
(d) The Underwriters shall have received at or prior to the Closing Date
from Piper & Marbury L.L.P.a memorandum or summary, in form and substance
satisfactory to the Underwriters, with respect to the qualification for offering
and sale by the Underwriters of the Shares under the State securities or Blue
Sky laws of such jurisdictions as the Underwriters may reasonably have
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designated to the Company.
(e) You shall have received, on each of the dates hereof, the Closing Date
and the Option Closing Date, as the case may be, a letter dated the date hereof,
the Closing Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to you, of Arthur Andersen LLP and McGladrey Pullen, LLP
confirming that they are independent public accountants within the meaning of
the Act and the applicable published Rules and Regulations thereunder and
stating that in their opinion the financial statements and schedules examined by
them and included in the Registration Statement comply in form in all material
respects with the applicable accounting requirements of the Act and the related
published Rules and Regulations; and containing such other statements and
information as is ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements and certain financial and
statistical information contained in the Registration Statement and Prospectus.
(f) The Underwriters shall have received on the Closing Date or the Option
Closing Date, as the case may be, a certificate or certificates of the Chairman
of the Board, President and Secretary and the Vice President and Chief Financial
Officer of the Company to the effect that, as of the Closing Date or the Option
Closing Date, as the case may be, each of them severally represents as follows:
(i) The Registration Statement has become effective under the Act and no
stop order suspending the effectiveness of the Registration Statement has been
issued, and no proceedings for such purpose have been taken or are, to his
knowledge, contemplated by the Commission;
(ii) The representations and warranties of the Company contained in Section
1 hereof are true and correct as of the Closing Date or the Option Closing Date,
as the case may be;
(iii) All filings required to have been made pursuant to Rules 424 or 430A
under the Act have been made;
(iv) He or she has carefully examined the Registration Statement and the
Prospectus and, in his or her opinion, as of the effective date of the
Registration Statement, the statements contained in the Registration Statement
were true and correct, and such Registration Statement and Prospectus did not
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, and since the effective
date of the Registration Statement, no event has occurred which should have been
set forth in a supplement to or an amendment of the Prospectus which has not
been so set forth in such supplement or amendment; and
(v) Since the respective dates as of which information is given or
incorporated by reference in the Registration Statement and Prospectus, there
has not been any material adverse change or any development involving a
prospective material adverse change in or affecting the condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole or the earnings,
business,
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management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and the Subsidiaries taken as a whole,
whether or not arising in the ordinary course of business.
(g) The Company and Selling Shareholder shall have furnished to the
Underwriters such further certificates and documents confirming the
representations and warranties, covenants and conditions contained herein and
related matters as the Underwriters may reasonably have requested.
(h) The Firm Shares and Option Shares, if any, have been approved for
designation upon notice of issuance on the Nasdaq Stock Market.
(i) The Lockup Agreements described in Section 4 (a) (ix) are in full force
and effect.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Underwriters and to Piper & Marbury L.L.P., counsel
for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Underwriters by notifying the Selling Shareholder of such termination in writing
or by telegram at or prior to the Closing Date or the Option Closing Date, as
the case may be.
In such event, the Selling Shareholder, the Company and the Underwriters
shall not be under any obligation to each other (except to the extent provided
in Sections 5 and 8 hereof).
7. Conditions of the Obligations of the Selling shareholder.
--------------------------------------------------------
The obligations of the Selling Shareholder to sell and deliver the portion
of the Shares required to be delivered as and when specified in this Agreement
are subject to the conditions that at the Closing Date or the Option Closing
Date, as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
8. Indemnification.
---------------
(a) The Selling Shareholder, jointly and severally, agree to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the Act, against any losses, claims, damages
or liabilities to which such Underwriter or any such controlling person may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement,
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any Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto, or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and will reimburse each Underwriter and each such controlling
person upon demand for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage or liability, action or proceeding or in
responding to a subpoena or governmental inquiry related to the offering of the
Shares, whether or not such Underwriter or controlling person is a party to any
action or proceeding; provided, however, that the Selling Shareholder will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement, or omission or alleged omission made in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by or through the Underwriters specifically for use in the preparation
thereof. In no event, however, shall the liability of the Selling Shareholder
for indemnification under this Section 8(a) exceed the proceeds received by the
Selling Shareholder from the Underwriters in the offering. This indemnity
agreement will be in addition to any liability which the Company or the Selling
Shareholder may otherwise have.
(b) Each Underwriter severally and not jointly will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, the Selling Shareholder, and each person, if
any, who controls the Company or the Selling Shareholder within the meaning of
the Act, against any losses, claims, damages or liabilities to which the Company
or any such director, officer, Selling Shareholder or controlling person may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or (ii) the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made; and will reimburse any
legal or other expenses reasonably incurred by the Company or any such director,
officer, Selling Shareholder or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; provided, however, that each Underwriter will be liable in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Underwriters specifically
for use in the preparation thereof. This indemnity agreement will be in addition
to any liability which such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to this Section 8, such
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person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a) or (b) shall be available to any
party who shall fail to give notice as provided in this Section 8(c) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of the
provisions of Section 8(a) or (b). In case any such proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own counsel
at its own expense. Notwithstanding the foregoing, the indemnifying party shall
pay as incurred (or within 30 days of presentation) the fees and expenses of the
counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them or (iii) the
indemnifying party shall have failed to assume the defense and employ counsel
acceptable to the indemnified party within a reasonable period of time after
notice of commencement of the action. It is understood that the indemnifying
party shall not, in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm for all such indemnified parties. Such firm shall be
designated in writing by you in the case of parties indemnified pursuant to
Section 8(a) and by the Selling Shareholder in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.
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(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under Section 8(a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Selling Shareholder on the
one hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Shareholder on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholder on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Shareholder bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Selling Shareholder on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholder and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section 8(d)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
8(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 8(d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), (i) no Underwriter shall
be required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter, (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation, and (iii) the Selling Shareholder
shall be required to contribute any amount in excess of the lesser of (A) that
proportion of the total of such losses, claims, damages or liabilities
indemnified or contributed against equal to the proportion of the total Shares
sold hereunder which is being sold by the Selling Shareholder, or (B) the
proceeds received by the Selling Shareholder from the Underwriters in the
offering. The Underwriters' obligations in this Section 8(d)
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to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any persons
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 8.
9. Default by Underwriters.
-----------------------
If on the Closing Date or the Option Closing Date, as the case may be, any
Underwriter shall fail to purchase and pay for the portion of the Shares which
such Underwriter has agreed to purchase and pay for on such date (otherwise than
by reason of any default on the part of the Company or a Selling Shareholder),
you, as Underwriters, shall use your reasonable efforts to procure within 36
hours thereafter the other Underwriter, or any other underwriter, to purchase
from the Company and the Selling Shareholder such amounts as may be agreed upon
and upon the terms set forth herein, the Firm Shares or Option Shares, as the
case may be, which the defaulting Underwriter failed to purchase. If during such
36 hours you, as the Underwriters, shall not have procured such other
underwriters, or any others, to purchase the Firm Shares or Option Shares, as
the case may be, agreed to be purchased by the defaulting Underwriter, then (a)
if the aggregate number of shares with respect to which such default shall occur
does not exceed 10% of the Firm Shares or Option Shares, as the case may be,
covered hereby, the non-defaulting Underwriter shall be obligated to purchase
the Firm Shares or Option Shares, as the case may be, which such defaulting
Underwriter failed to purchase, or (b) if the aggregate number of shares of Firm
Shares or Option Shares, as the case may be, with respect to which such default
shall occur exceeds 10% of the Firm Shares or Option Shares, as the case may be,
covered hereby, the Selling Shareholder or you as the non-defaulting Underwriter
will have the right, by written notice given within the next 36-hour period to
the parties to this
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Agreement, to terminate this Agreement without liability on your part (the non-
defaulting Underwriter) or of the Company or of the Selling Shareholder except
to the extent provided in Section 8 hereof. In the event of a default by any
Underwriter, as set forth in this Section 9, the Closing Date or Option Closing
Date, as the case may be, may be postponed for such period, not exceeding seven
days, as you, as Underwriter, may determine in order that the required changes
in the Registration Statement or in the Prospectus or in any other documents or
arrangements may be effected. The term "Underwriter" includes any person
substituted for a defaulting Underwriter. Any action taken under this Section 9
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
10. Notices.
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All communications hereunder shall be in writing and, except as otherwise
provided herein, will be mailed, delivered, telecopied or telegraphed and
confirmed as follows: if to the Underwriters, to Alex. Brown & Sons
Incorporated, 135 East Baltimore Street, Baltimore, Maryland 21202, Attention:
William M. Legg; with a copy to Alex. Brown & Sons Incorporated, 135 East
Baltimore Street, Baltimore, Maryland 21202. Attention: General Counsel; if to
the Company or the Selling Shareholder, to Heartland Express, Inc., 2777
Heartland Drive, Coralville, Iowa 52241, Attention: Russell A. Gerdin, Chairman
of the Board, President and Secretary.
11. Termination.
-----------
This Agreement may be terminated by you by notice to the Company and the
Selling Shareholder as follows:
(a) at any time prior to the earlier of (i) the time the Shares are
released by you for sale by notice to the Underwriters, or (ii) 11:30 a.m. on
the first business day following the date of this Agreement;
(b) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or any
development involving a prospective material adverse change in or affecting the
condition, financial or otherwise, of the Company and its Subsidiaries taken as
a whole or the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company and
its Subsidiaries taken as a whole, whether or not arising in the ordinary course
of business, (ii) any outbreak or escalation of hostilities or declaration of
war or national emergency or other national or international calamity or crisis
or change in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in your reasonable judgment, make it
impracticable to market the Shares or to enforce contracts for the sale of the
Shares, or (iii) suspension of trading in securities generally on the New York
Stock Exchange
-26-
<PAGE>
or the American Stock Exchange or limitation on prices (other than limitations
on hours or numbers of days of trading) for securities on either such Exchange,
(iv) the enactment, publication, decree or other promulgation of any statute,
regulation, rule or order of any court or other governmental authority which in
your opinion materially and adversely affects or may materially and adversely
affect the business or operations of the Company, (v) declaration of a banking
moratorium by United States or New York State authorities, (vi) the suspension
of trading of the Company's common stock by the Commission on the Nasdaq Stock
Market or (vii) the taking of any action by any governmental body or agency in
respect of its monetary or fiscal affairs which in your reasonable opinion has a
material adverse effect on the securities markets in the United States; or
(c) as provided in Sections 6 and 9 of this Agreement.
12. Successors.
----------
This Agreement has been and is made solely for the benefit of the
Underwriters, the Company and the Selling Shareholder and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person will
have any right or obligation hereunder. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign merely because of such
purchase.
13. Information Provided by Underwriters.
------------------------------------
The Company, the Selling Shareholder and the Underwriters acknowledge and
agree that the only information furnished or to be furnished by any Underwriter
to the Company for inclusion in any Prospectus or the Registration Statement
consists of the information set forth in the last paragraph on the front cover
page (insofar as such information relates to the Underwriters), legends required
by Item 502(d) of Regulation S-K under the Act and the information under the
caption "Underwriting" in the Prospectus.
14. Miscellaneous.
-------------
The reimbursement, indemnification and contribution agreements contained in
this Agreement and the representations, warranties and covenants in this
Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers and (c) delivery of and payment for the Shares under
this Agreement.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Maryland.
-27-
<PAGE>
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Shareholder, the
Company and the Underwriters in accordance with its terms.
Any person executing and delivering this Agreement as Attorney-in-Fact for
the Selling Shareholder represents by so doing that he has been duly appointed
as Attorney-in-Fact by such Selling Shareholder pursuant to a validly existing
and binding Power of Attorney which authorizes such Attorney-in-Fact to take
such action.
Very truly yours,
HEARTLAND EXPRESS, INC.
By ________________________________
Russell A. Gerdin, Chairman,
President and Secretary
SELLING SHAREHOLDER
By ________________________________
Attorney-in-Fact
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
ALEX. BROWN & SONS INCORPORATED
MORGAN KEEGAN & COMPANY, INC.
By: Alex. Brown & Sons Incorporated
By: _______________________________
Authorized Officer
-28-
<PAGE>
SCHEDULE I
Schedule of Underwriters
Number of Firm Shares
Underwriter to be Purchased
- ----------- ---------------------------
Alex. Brown & Sons Incorporated
Morgan Keegan & Company, Inc.
----------
Total
----------
-29-
<PAGE>
Exhibit 5
September 26, 1996
Heartland Express, Inc.
2777 Heartland Drive
Coralville, IA 52241
RE: Registration Statement on Form S-3
1,500,000 Shares of Common Stock
Ladies and Gentlemen:
Scudder Law Firm, P.C. has served as legal counsel to Heartland
Express, Inc., a Nevada corporation (the "Company"), in the preparation
and filing with the Securities and Exchange Commission of the Company's
Registration Statement on Form S-3 dated September 26, 1996, as amended.
Such Registration Statement was filed pursuant to the requirements of the
Securities Act of 1933, as amended, and the General Rules and Regulations
thereunder for the registration of 1,500,000 shares of Common Stock of the
Company (1,725,000 shares if the underwriters' over-allotment option is
exercised in full) to be sold by the Company's principal stockholder,
Russell A. Gerdin.
In connection with the following opinion, we have examined and
have relied upon such documents, records, certificates, statements, and
instruments as we have deemed necessary and appropriate.
Based upon the foregoing, it is our opinion that the Company's
shares of Common Stock, when sold in the manner set forth in the
Registration Statement, will be legally and validly issued, fully paid,
and nonassessable.
The undersigned hereby consents to the filing of this opinion as
Exhibit 5 to the Registration Statement and the use of its name in the
Registration Statement under the caption of the prospectus entitled "Legal
Matters" and elsewhere it may appear.
Very truly yours,
Scudder Law Firm, P.C.
By: /s/ Mark A. Scudder
--------------------------
Mark A. Scudder, Principal
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-3 used to register
1,725,000 common shares of our reports dated February 2, 1996, included in
and incorporated by reference in Heartland Express, Inc.'s Form 10-K for
the year ended December 31, 1995, and to all references to our Firm
included in this Registration Statement.
/s/ Arthur Andersen LLP
-----------------------
ARTHUR ANDERSEN LLP
Kansas City, Missouri
September 26, 1996
<PAGE>
Exhibit 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 used to register 1,725,000 common shares of our
report dated January 27, 1994, included in and incorporated by reference in
Heartland Express, Inc.'s Form 10-K for the year ended December 31, 1993,
and to all references to our Firm included in this Registration Statement.
/s/ McGladrey & Pullen, LLP
---------------------------
McGLADREY & PULLEN, LLP
Iowa City, Iowa
September 26, 1996
