As filed with the Securities and Exchange Commission on March 24, 1999.
Registration No. 333-68991
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SECURITIES AND EXCHANGE COMMISSION
Post-Effective Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
AMERICAN CAPITAL STRATEGIES, LTD.
(Exact Name of Registrant as Specified in its Charter)
Delaware 52-145-1377
--------------------------------- ------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
3 Bethesda Metro Center, Suite 860
Bethesda, Maryland 20814
(301) 951-6122
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Malon Wilkus
Chairman, President and Chief Executive Officer
American Capital Strategies, Ltd.
3 Bethesda Metro Center, Suite 860
Bethesda, Maryland 20814
(301) 951-6122
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
Samuel A. Flax, Esq.
Arnold & Porter
555 Twelfth Street, N.W.
Washington, D.C. 20004
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of the Registration Statement as the Registrant
may determine.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [X]
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. [ ]
================================================================================
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AMERICAN CAPITAL STRATEGIES, LTD.
Dividend Reinvestment Plan
500,000 shares of Common Stock
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Five hundred thousand authorized and unissued shares of common stock,
$0.01 par value per share ("Common Stock"), of American Capital Strategies, Ltd.
(the "Company" or "American Capital") have been authorized for purchase under
the Company's Dividend Reinvestment Plan (the "Plan"). The Common Stock is
quoted on the Nasdaq National Market System ("Nasdaq") under the symbol "ACAS."
The Company suggests that this Prospectus be retained for future reference.
-------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
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The date of this Prospectus is March 24, 1999
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Table of Contents
The Company ............................................................... 2
Use of Proceeds ........................................................... 3
Plan of Distribution ...................................................... 3
Dividend Reinvestment
Plan .................................................................... 3
Legal Matters ............................................................. 9
Experts ................................................................... 9
Where You Can Find More Information .......................................10
Indemnification ...........................................................11
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
the offer contained herein and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any securities offered hereby in any jurisdiction or to any
person in which or to whom it is unlawful to make such offer or solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstance, create any implication that there has been no change in the
affairs of the Company or the facts herein set forth since the date hereof.
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THE COMPANY
Background
The Company, a Delaware corporation, was incorporated in 1986 to
provide financial advisory services to and invest in small and medium sized
businesses. On August 29, 1997, the Company completed an initial public offering
("IPO") of 10,382,437 shares of its Common Stock and became a non-diversified,
closed end investment company that has elected to be treated as a business
development company ("BDC") under the Investment Company Act of 1940, as amended
("1940 Act"). On October 1, 1997, the Company began operations so as to qualify
to be taxed as a regulated investment company ("RIC") as defined in Subtitle A,
Chapter 1, under Subchapter M of the Internal Revenue Code of 1986 as amended
(the "Code"). As contemplated by these transactions, the Company materially
changed its business plan and format from structuring and arranging financing
for buyout transactions on a fee for services basis to primarily being a lender
to and investor in small and medium sized companies. The Company continues to
provide financial advisory services to businesses through ACS Capital
Investments Corporation ("CIC"), a wholly-owned subsidiary. The Company has
established itself as a leading firm in structuring and obtaining funding for
management and employee buyouts of subsidiaries, divisions and product lines
being divested by larger corporations through the use of employee stock
ownership plans ("ESOPs"). From its formation in 1986 through the IPO, the
Company arranged twenty-nine financing transactions aggregating over $400
million.
Business
The Company is a buyout and specialty finance company that is
principally engaged in providing senior debt, subordinated debt and equity to
companies in need of capital for employee buyouts, management buyouts, growth,
acquisitions, liquidity and restructuring. The Company invests up to $20 million
in each transaction and through its subsidiary, CIC, will arrange and secure
capital for larger transactions.
The Company's primary business objectives are to increase its net
operating income and net asset value by investing its assets in senior debt,
subordinated debt with detachable warrants and equity of small to medium sized
businesses with attractive current yields and potential for equity appreciation.
The Company's loans typically range from $1 million to $20 million, mature in
five to ten years, and require monthly or quarterly interest payments at
variable rates based on the prime rate plus a margin. The Company's equity
interests in small and medium sized businesses are purchased with the goal of
disposing of such interests and realizing a gain within three to seven years.
The principal executive office of the Company is located at 3 Bethesda
Metro Center, Suite 860, Bethesda, Maryland 20814. The telephone number is (301)
951-6122.
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USE OF PROCEEDS
The Company has no basis for determining precisely the number of shares
of Common Stock that ultimately may be sold pursuant to the Plan, the extent to
which shares will be purchased directly from the Company rather than in the open
market, or the prices at which shares will be sold. The net proceeds from any
purchases of Common Stock directly from the Company under the Plan would provide
the Company with funds that it would expect to use for general corporate
purposes. Shares purchased in market transactions will provide no proceeds to
the Company.
PLAN OF DISTRIBUTION
The Plan allows for dividends to be reinvested into shares purchased by
the Plan Administrator on the market or newly issued shares purchased by the
Plan Administrator from the Company. If the shares are purchased on the market,
the Company will absorb all administrative expenses connected with the operation
of the Plan, except for brokerage commissions. Brokerage commissions shall be
borne pro rata by Participants.
DIVIDENT REINVESTMENT PLAN
The Company's Dividend Reinvestment Plan (the "Plan") is set forth
below in question and answer format. Further questions and correspondence should
be directed to either American Capital Strategies, Ltd. (Attention: Investor
Relations) or the Plan Administrator at the following address:
BankBoston, N.A.
C/o Equiserve L.P.
P.O. Box 8040
Boston, MA 02266-8040
(800) 425-5523
PURPOSE
1. What is the purpose of the Plan?
The purpose of the Plan is to provide the Company's stockholders with a
simple and convenient method of investing cash dividends and
distributions in additional shares of Common Stock of the Company at
the Common Stock's current market price. Participants in the Plan
("Participants") may have cash dividends and distributions
automatically reinvested without charges for recordkeeping, and may
take advantage of the custodial and reporting services provided by
Boston EquiServe (the "Plan Administrator") at no additional cost.
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ADMINISTRATION
2. What does the Plan Administrator do?
The Plan Administrator administers the Plan for Participants, keeps
records, sends statement of accounts to Participants, and performs
other duties relating to the Plan.
ENROLLMENT AND PARTICIPATION
3. How does a stockholder enroll?
The Company's Dividend Reinvestment Plan is an "opt-in" plan. Upon
notifying the Plan Administrator in writing on an Authorization Form,
and if your shares are registered in your own name, all dividends and
distributions on your shares will be reinvested automatically in
additional shares by the Plan Administrator. Authorization Forms may be
obtained from the Plan Administrator or the Company. To be effective on
any given dividend payment date, the Authorization Form must be
received by the Plan Administrator at least two business days before
the record date for such dividend payment.
4. What if the shares are held by a broker, bank or nominee?
If your shares are held on the books of the Plan Administrator in the
name of a broker, bank or other nominee (a "Nominee"), your
distributions will be reinvested automatically by the Nominee in
additional shares under the Plan if your Nominee provides such a
service and you elect to participate in the Plan. Many Nominees do not
provide such a service and routinely request dividends and
distributions to be paid in cash on all shares registered in their
names. If your shares are held for your account by a Nominee and you
would like to participate in the Plan, you should either make
appropriate arrangements for your Nominee to participate on your
behalf, or you must become stockholder of record by having a part or
all of your shares transferred to your own name and enrolling in the
Plan as provided in Question 3. If your shares are held in the name of
a Nominee, you should contact the Nominee for details.
5. What if a stockholder would rather receive cash?
If you would rather receive cash, you should not enroll in the Plan or
terminate participation if you are already enrolled. You may terminate
your participation in the Plan at any time. The procedure for
terminating participation in the Plan is explained in the answer to
Question 17.
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6. What if a stockholder wishes to receive cash on only some of his or her
shares?
If you wish to receive dividends and distributions in cash on some of
your shares, and have the remaining dividends and distributions
reinvested, you must notify the Plan Administrator, in writing, to that
effect. As a partial participant, you will receive your dividends and
distributions in additional shares only with respect to the number of
shares that you have specified. With respect to any other shares
registered in your name, and with respect to the shares credited to
your account on the books of the Plan Administrator, the corresponding
dividends and distributions will be paid in cash. The number of shares
on which you receive additional stock may be changed at any time simply
by writing the Plan Administrator.
7. May a stockholder elect to re-enroll once he has terminated participation in
the Plan?
Yes. If you previously elected to receive dividends and distributions
in cash and thus terminated participation in the Plan, and later wish
to participate in the Plan, you may re-enroll at any time by completing
an Authorization Form and delivering it to the Plan Administrator. To
be effective on any given dividend payment date, such Authorization
Form must be received by the Plan Administrator at least two business
days prior to the record date in order for such dividend or
distribution.
[A dividend declaration date is a date on which the Company's Board of
Directors (the "Board of Directors") declares a dividend or
distribution to be paid and specifies the amount of such dividend or
distribution.]
PURCHASE OF SHARES UNDER THE PLAN
8. How does the Dividend Reinvestment Plan work and how are shares allocated
under the Plan?
When the Board of Directors declares a dividend or distribution, all
non-participants will receive such dividend or distribution by check
mailed directly to the record holder by or under the direction of the
Plan Administrator. As a Participant, the number of shares allocated to
your Plan Account (a "Plan Account") will be arrived at as follows.
Except under the circumstances outlined in Question 9, the Plan
Administrator will buy shares of Common Stock in the open market, on
Nasdaq or elsewhere, beginning on or before the payment date of the
dividend or distribution, until it has expended for such purchase all
of the cash that would otherwise be payable to the Participants. The
number of shares that will then be credited to your Plan Account and
the Plan Accounts of other Participants will be based on the average
cost of the shares so purchased, including brokerage commissions. Your
Plan Account will be credited with a number of shares, including
fractional shares, equal to the total amount of cash
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dividend or distribution, net of any applicable withholding taxes,
otherwise due to you, divided by the price of the shares.
Neither the Company nor any stockholder has the authority or power to
direct the time or price at which shares of Common Stock may be
purchased or the selection of the broker or dealer through or from whom
purchases are to be made. The Company will absorb all administrative
expenses connected with the operation of the Plan (except brokerage
commissions, which shall be borne pro rata by the Participants). The
Plan Administrator will hold the total shares of Common Stock purchased
for all Participants in the name of its nominee and will have no
responsibility for the value of such shares after their purchase.
9. Will newly issued shares ever be paid to Participants?
The Board of Directors may (but is not required to) declare a dividend
or distribution to be paid to Participants in newly issued shares of
Common Stock. In that situation, the price of newly issued shares
credited to your Plan Account will be equal to the average of the
closing sales prices reported for the shares in The Wall Street Journal
NASDAQ National Market System listings for the five days on which
trading of shares takes place immediately prior to the dividend payment
date (but not less than 95% of the opening sales price on each date).
Even if the Board of Directors has declared the dividend or
distribution to be payable to Participants in newly issued shares, the
Plan Administrator will be under standing instructions not to credit
newly issued shares, and instead to buy shares in the market, if (i)
the price at which newly issued shares are to be credited does not
exceed 110% of the last determined net asset value of the Common Stock
or (ii) the Company has advised the Plan Administrator that since such
net asset value was last determined it has become aware of events that
indicate the possibility of a change in per share net asset value as a
result of which the net asset value of the Common Stock on the payment
date might be higher than the price at which the Plan Administrator
would credit newly issued shares to the Participants' Plan Accounts.
If the Plan Administrator buys shares on the market, it is possible
that by the time the Plan Administrator has completed its purchases,
the average per share purchase price paid by the Plan Administrator may
exceed the price at which the newly issued shares would have been
credited, or the shares' current net asset value. As a result, there
would be credited to your Plan Account a smaller number of shares than
would have been credited if the dividend or distribution had been paid
in newly issued shares.
10. When will shares of Common Stock be purchased under the Plan?
In the months in which dividends are paid, dividends will be invested
beginning on the dividend payment date. The Plan Administrator will
make every effort to
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invest any dividends it receives promptly beginning on each dividend
payment date, and in no event later than thirty days from such date,
except where necessary under any applicable federal securities laws.
No interest will be paid on funds held by the Plan Administrator
pending investment.
REPORTS TO PARTICIPANTS
11. What accounts are maintained for Participants and what reports on these
accounts do Participants receive?
The Plan Administrator will maintain a separate Plan Account for each
Participant. All shares issued to you under the Plan will be credited
to your Plan Account. The Plan Administrator will mail to each
Participant a statement confirming the issuance of shares within
fifteen days after the allocation of shares is made. The statement will
show the amount of the dividend or distribution, the price at which
shares were credited, the number of full and fractional shares
credited, the number of shares previously credited and the cumulative
total of shares credited. In addition, as a Participant, you will
receive copies of the Company's annual and quarterly reports to
stockholders, proxy statements and dividend income information for tax
purposes.
VOTING OF SHARES
12. How will a Participant's shares be voted at meetings of stockholders?
You will receive a proxy card covering the total number of shares held
by you of record, including shares credited to your Plan Account. If a
proxy card is returned properly signed, but without indicating
instructions as to the manner in which shares are to be voted with
respect to any item thereon, the corresponding shares will be voted in
accordance with the recommendation of the Board of Directors. If the
proxy card is not returned, or it is unexecuted or improperly executed,
the corresponding shares will not be voted unless the you or your duly
appointed representative votes in person at the meeting.
CERTIFICATES FOR SHARES
13. Will certificates be issued for shares issued under the Plan?
No. Certificates for shares issued under the Plan will not be furnished
to you until your Plan Account is terminated or unless you request
certificates in writing for a specified number of shares credited to
your Plan Account. All written requests for certificates should be
directed to the Plan Administrator, allowing two weeks for processing.
The issuance of certificates for shares credited to a Plan Account will
not terminate your participation in the Plan. No certificate for a
fractional
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share will be issued. If you terminate your participation in the Plan
(see Question 17), the Plan Administrator will sell for your account
any fractional share and send you a check for the proceeds.
14. In whose name will certificates be registered when issued?
Plan Accounts are maintained in the name in which your share
certificates were registered at the time that you became a Participant
in the Plan. Certificates for whole shares issued at your request from
your Plan Account will be similarly registered.
DIVIDENDS AND STOCK SPLITS
15. What happens if the Company issues a stock dividend or declares a stock
split?
Any stock dividends or split shares distributed by the Company on
shares held by the Plan Administrator for you will be credited to your
Plan Account.
FEDERAL TAX CONSEQUENCES
16. What is the tax status of reinvested dividends?
The automatic reinvestment of dividends and distributions will not
relieve you of any income tax liability associated with such dividend
or distribution. As a Participant in the Plan, you will be treated for
Federal income tax purposes as having received, on the dividend payment
date, a dividend or distribution in an equal amount to the cash that
you could have received instead of shares. The tax basis of such shares
will equal the amount of such cash.
As a Participant, you will not realize any taxable income upon receipt
of a certificate for whole shares credited to your Plan Account either
upon your request for a specified number of shares or upon termination
of enrollment in the Plan. As a Participant, you will receive early in
each year a Form 1099 regarding the Federal income tax status of all
dividends and distributions taxable during the previous year.
MODIFICATION AND TERMINATION
17. What happens if a Participant wishes to terminate participation in the Plan?
You may terminate your participation in the Plan at any time by
notifying the Plan Administrator in writing. To be effective for any
given dividend payment date, the notice to terminate must be received
by the Plan Administrator at least two business days before the record
date for the dividend payment. All dividends with a record date after
receipt of your notification will be sent directly to you. Upon
termination of your participation, you will receive a certificate for
the number of
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full shares of Common Stock held for you by the Plan Administrator at
no charge. At the same time, you will receive a check in payment for
any fractional shares in your account, valued at the then current
market price of the Company's Common Stock, less any applicable
brokerage commissions and any other costs of sale. If you prefer, you
can request that your full shares of Common Stock held by the Plan
Administrator be sold, and you will receive a check for the proceeds,
less any applicable brokerage commissions and any other costs of sale.
18. May the Plan be Changed or Discontinued?
The Company and the Plan Administrator may amend, suspend or terminate
the Plan at any time. Any such amendment, suspension or termination
will be effective upon a designated dividend record date and notice of
such amendment, suspension or termination will be sent to all
Participants at least ninety days prior to such record date.
PLAN ADMINISTRATOR RESPONSIBILITIES
19. What are the Plan Administrator's responsibilities under the Plan?
The Plan Administrator will not be liable under the Plan for any act
done by the Plan Administrator in good faith or for any good faith
omission to act including, without limitation, any claims for liability
(a) arising out of failure to terminate a Participant's participation
in the Plan upon the Participant's death prior to receipt of notice in
writing of such death; (b) with respect to the prices at which shares
are purchased or sold for the Participant's account and the time such
purchases or sales are made; and (c) relating to the value of the
shares acquired for the Participant's account.
The Internal Revenue Code of 1986, as amended, imposes certain
reporting obligations upon brokers and other middlemen. As a result,
the Plan Administrator will be required to report to the Internal
Revenue Service and the Participant any sales of stock by the Plan
Administrator on behalf of a Participant.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Arnold & Porter, Washington, D.C.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our financial
statements included in our Annual report on form 10-K/A for the year ended
December 31, 1997, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated
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by reference in reliance on Ernst & Young LLP's report, given on their authority
as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
American Capital Strategies, Ltd. is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Reports, proxy statements, the Registration Statement referred to below and
other information concerning the Company may be inspected and copied at
prescribed rates at the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. In addition, the Commission maintains an Internet
site that contains reports, proxy and information statements, and other
information regarding registrants, like the Company, that file electronically
with the Commission. Such materials may be accessed electronically at the
Commission's site on the World Wide Web located at http://www.sec.gov. The
common stock of the Company is quoted on the Nasdaq. The aforementioned reports,
proxy statements and other materials concerning the Company may also be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission in Washington, D.C. a
Registration Statement on Form S-3 (including all amendments thereto, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities offered hereby. As permitted
by the rules and regulations of the Commission, this Prospectus does not contain
all of the information set forth in the Registration Statement and the exhibits
and schedules thereto. Such additional information is available for inspection
and copying at the offices of the Commission. Statements contained in this
Prospectus, in any Prospectus Supplement or in any document incorporated by
reference herein or therein as to the contents of any contract or other document
referred to herein or therein are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to, or incorporated by reference in, the Registration Statement, each
such statement being qualified in all respects by such reference.
The following documents previously filed by the Company with the
Commission under the Exchange Act are incorporated herein by reference:
(a) The Company's latest Annual Report on Form 10-K/A for the fiscal
year ended December 31, 1997, filed with the Commission on March 31, 1998.
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998.
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(c) The description of the Company's common stock, par value $0.01 per
share ("Common Stock"), contained in the Company's Registration Statement on
Form 8-A filed with the Commission by the Registrant on August 27, 1997.
(d) All other reports filed 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 of the Common Stock pursuant to the Plan.
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 that is or is deemed to be
incorporated by reference herein) modifies or supercedes such previous
statement. Any statement so modified or superceded shall not be deemed to
constitute a part of this Prospectus except as so modified or superseded.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, on the
written or oral request of such person, a copy of any or all of the documents
described above under "Incorporation of Certain Documents by Reference," other
than exhibits to such documents unless such exhibits are also specifically
incorporated by reference herein or therein. Requests for such copies should be
directed to American Capital Strategies, Ltd., 3 Bethesda Metro Center, Suite
860, Bethesda, Maryland 20814, Attention: John R. Erickson, telephone number
(301) 951-6122.
INDEMNIFICATION
Section 145 of the Delaware General Corporation Law ("DGCL"), permits,
under certain circumstances, the indemnification of any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit, or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving in a similar capacity for another
enterprise at the request of the corporation. To the extent that a director,
officer, employee or agent of the corporation has been successful in defending
any such proceeding, the DGCL provides that he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
With respect to a proceeding by or in the right of the corporation,
such person may be indemnified against expenses (including attorneys' fees),
actually and reasonably incurred, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation. The DGCL provides, however, that indemnification shall not be
permitted in such a proceeding if such person is adjudged liable to the
corporation unless, and only to the extent that, the court, upon application,
determines, that he is entitled to indemnification under the circumstances. With
respect to proceedings other than those brought by or in the right of the
corporation,
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notwithstanding the outcome of such a proceeding, such person may be indemnified
against judgments, fines, and amounts paid in settlement, as well as expenses,
if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action, had no reason to believe his conduct was unlawful. Except with
respect to mandatory indemnification of expenses to successful defendants as
described in the preceding paragraph or pursuant to a court order, the
indemnification described in this paragraph may be made only upon a
determination in each specific case (i) by majority vote of the directors that
are not parties to the proceeding, even though less than a quorum, or (ii) if
there are no such directors, or if such directors so direct, by independent
legal counsel in a written opinion, or (iii) by the stockholders.
The DGCL permits a corporation to advance expenses incurred by a
proposed indemnitee in advance of final disposition of the proceeding, provided
that the indemnitee undertakes to repay such advanced expenses if it is
ultimately determined that he is not entitled to indemnification. Also, a
corporation may purchase insurance on behalf of an indemnitee against any
liability asserted against him in his designated capacity, whether or not the
corporation itself would be empowered to indemnify him against such liability.
The Company has adopted provisions in its Second Amended and Restated
Certificate of Incorporation and its Second Amended and Restated Bylaws that
provide for indemnification of its officers and directors to the maximum extent
permitted under the DGCL.
As authorized by the DGCL, the Company's Second Amended and Restated
Certificate of Incorporation limits the liability of directors of the
Corporation for monetary damages. The effect of this provision is to eliminate
the rights of the Company and its stockholders (through stockholders' derivative
suits on behalf of the Company) to recover monetary damages against a director
for breach of the fiduciary duty of care as a director (including breaches
resulting from negligent or grossly negligent behavior) except in certain
limited situations. This provision does not limit or eliminate the rights of the
Company or any stockholder to seek non-monetary relief such as an injunction or
rescission in the event of a breach of a director's duty of care. This provision
will not alter the liability of directors under federal securities laws.
The Company has purchased an insurance policy which purports to insure
the officers and directors of the Corporation against certain liabilities
incurred by them in the discharge of their functions as such officers and
directors, except for liabilities resulting from their own malfeasance.
The foregoing descriptions are general summaries only. Reference is
made to the full text of the Company's Second Amended and Restated Certificate
of Incorporation and its Second Amended and Restated Bylaws, both filed with the
Commission on August 12, 1997 as part of Pre-Effective Amendment Number 1 to the
Registration
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Statement on Form N-2 (File No. 333-29943), which are incorporated herein by
reference.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be incurred in connection with the issuance and
distribution of the shares of Common Stock being offered hereby payable by the
Registrant are estimated as follows:
SEC Registration Fee............................................... $ 2,102.38
Printing and Engraving Costs....................................... $10,000.00
Fees and Expenses of Counsel....................................... $25,000.00
Accounting Fees and Expenses....................................... $10,000.00
Miscellaneous...................................................... $2,897.62
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TOTAL.............................................................. $50,000.00
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL"), permits,
under certain circumstances, the indemnification of any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit, or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving in a similar capacity for another
enterprise at the request of the corporation. To the extent that a director,
officer, employee or agent of the corporation has been successful in defending
any such proceeding, the DGCL provides that he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
With respect to a proceeding by or in the right of the corporation,
such person may be indemnified against expenses (including attorneys' fees),
actually and reasonably incurred, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation. The DGCL provides, however, that indemnification shall not be
permitted in such a proceeding if such person is adjudged liable to the
corporation unless, and only to the extent that, the court, upon application,
determines, that he is entitled to indemnification under the circumstances. With
respect to proceedings other than those brought by or in the right of the
corporation, notwithstanding the outcome of such a proceeding, such person may
be indemnified against judgments, fines, and amounts paid in settlement, as well
as expenses, if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation and, with respect
to any criminal action, had no reason to believe his conduct was unlawful.
Except with respect to mandatory indemnification of expenses to successful
defendants as described in the preceding paragraph or pursuant to a court order,
the indemnification described in this paragraph may be made only upon a
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<PAGE>
determination in each specific case (i) by majority vote of the directors that
are not parties to the proceeding, even though less than a quorum, or (ii) if
there are no such directors, or if such directors so direct, by independent
legal counsel in a written opinion, or (iii) by the stockholders.
The DGCL permits a corporation to advance expenses incurred by a
proposed indemnitee in advance of final disposition of the proceeding, provided
that the indemnitee undertakes to repay such advanced expenses if it is
ultimately determined that he is not entitled to indemnification. Also, a
corporation may purchase insurance on behalf of an indemnitee against any
liability asserted against him in his designated capacity, whether or not the
corporation itself would be empowered to indemnify him against such liability.
The Company has adopted provisions in its Second Amended and Restated
Certificate of Incorporation and its Second Amended and Restated Bylaws that
provide for indemnification of its officers and directors to the maximum extent
permitted under the DGCL.
As authorized by the DGCL, the Company's Second Amended and Restated
Certificate of Incorporation limits the liability of directors of the
Corporation for monetary damages. The effect of this provision is to eliminate
the rights of the Company and its stockholders (through stockholders' derivative
suits on behalf of the Company) to recover monetary damages against a director
for breach of the fiduciary duty of care as a director (including breaches
resulting from negligent or grossly negligent behavior) except in certain
limited situations. This provision does not limit or eliminate the rights of the
Company or any stockholder to seek non-monetary relief such as an injunction or
rescission in the event of a breach of a director's duty of care. This provision
will not alter the liability of directors under federal securities laws.
The Company has purchased an insurance policy which purports to insure
the officers and directors of the Corporation against certain liabilities
incurred by them in the discharge of their functions as such officers and
directors, except for liabilities resulting from their own malfeasance.
The foregoing descriptions are general summaries only. Reference is
made to the full text of the Company's Second Amended and Restated Certificate
of Incorporation and its Second Amended and Restated Bylaws, both filed with the
Commission on August 12, 1997 as part of Pre-Effective Amendment Number 1 to the
Registration Statement on Form N-2 (File No. 333-29943), which are incorporated
herein by reference.
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<PAGE>
ITEM 16. EXHIBITS
Exhibit 3.1 American Capital Strategies, Ltd. Second Amended and Restated
Certificate of Incorporation, incorporated herein by
reference to Exhibit 2.a of the Pre-Effective Amendment
Number 1 to the Registration Statement on Form N-2 (File No.
333-29943) filed on August 12, 1997.*
Exhibit 3.2 American Capital Strategies, Ltd. Second Amended and Restated
Bylaws, incorporated herein by reference to Exhibit 2.b of
the Pre-Effective Amendment Number 1 to the Registration
Statement on Form N-2 (File No. 333-29943) filed on August
12, 1997.*
Exhibit 4 Instruments defining the rights of security holders - see
Exhibits 3.1 and 3.2.*
Exhibit 5 Opinion of Arnold & Porter regarding legality of common stock
being registered.*
Exhibit 23.1 Consent of Arnold & Porter, included in the opinion filed as
Exhibit 5 hereto.*
Exhibit 23.2 Consent of Ernst & Young LLP.
Exhibit 24 Powers of Attorney of certain directors and officers of
American Capital Strategies, Ltd.*
- -------------
*Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate,
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<PAGE>
represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the Registration Statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the Registration Statement;
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof;
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering;
4. That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this amendment to
the registration statement to be signed on its behalf by the undersigned
thereunto duly authorized in the city of Bethesda, state of Maryland, on March
24, 1999.
AMERICAN CAPITAL STRATEGIES, LTD.
By: /s/ John R. Erickson
------------------------------------------
John R. Erickson
Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the registration statement has been signed by the following persons
in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
* Director March 24, 1999
- ---------------------------
Robert L. Allbriton
* Director, Executive Vice President and March 24, 1999
- --------------------------- Secretary
Adam Blumenthal
/s/ John R. Erickson Vice President and Chief Financial March 24, 1999
- --------------------------- Officer
John R. Erickson
* Vice Chairman of the Board of Directors March 24, 1999
- ---------------------------
David Gladstone
* Director March 24, 1999
- ---------------------------
Neil M. Hahl
* Director March 24, 1999
- ---------------------------
Philip R. Harper
* Vice President March 24, 1999
- ---------------------------
Stephen L. Hester
* Director March 24, 1999
- ---------------------------
Stan Lundine
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
* Director March 24, 1999
- ---------------------------
Alvin N. Puryear
* Director March 24, 1999
- ---------------------------
Stephen P. Walko
* Chairman of the Board of Directors, March 24, 1999
- --------------------------- President and Chief Executive Officer
Malon Wilkus
*/s/ John R. Erickson Power of Attorney March 24, 1999
- ---------------------------
John R. Erickson
</TABLE>
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<PAGE>
Exhibit Index
Exhibit Description
Exhibit 3.1 American Capital Strategies, Ltd. Second Amended and
Restated Certificate of Incorporation, incorporated
herein by reference to Exhibit 2.a of the Pre-Effective
Amendment Number 1 to the Registration Statement on Form
N-2 (File No. 333-29943) filed on August 12, 1997.*
Exhibit 3.2 American Capital Strategies, Ltd. Second Amended and
Restated Bylaws, incorporated herein by reference to
Exhibit 2.b of the Pre-Effective Amendment Number 1 to
the Registration Statement on Form N-2 (File No.
333-29943) filed on August 12, 1997.*
Exhibit 4 Instruments defining the rights of security holders - see
Exhibits 3.1 and 3.2.*
Exhibit 5 Opinion of Arnold & Porter regarding legality of common
stock being registered.*
Exhibit 23.1 Consent of Arnold & Porter, included in the opinion filed
as Exhibit 5 hereto.*
Exhibit 23.2 Consent of Ernst & Young LLP.
Exhibit 24 Powers of Attorney of certain directors and officers of
American Capital Strategies, Ltd.*
- ------------
*Previously filed.
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EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in Post
Effective Amendment No. 1 to the Registration Statement (Form S-3 No. 333-68991)
and related Prospectus pertaining to the 1997 Stock Option Plan of American
Capital Strategies, Ltd. and to the incorporation by reference therein of our
report dated February 12, 1998, with respect to the financial statements of
American Capital Strategies, Ltd. included in its Annual Report (Form 10-K/A)
for the year ended December 31, 1997, filed with the Securities and Exchange
Commission.
Washington, DC
March 24, 1999
