<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration No. 33-62449
PROSPECTUS SUPPLEMENT
(To Prospectus Dated November 1, 1995)
1,000,000 SHARES
GETCHELL GOLD CORPORATION
COMMON STOCK
All of the shares of the common stock of the Company, par value $.0001 per share
(the Common Stock"), being offered hereby (the "Offering") are being sold by the
Company. The Common Stock is traded on the American Stock Exchange and The
Toronto Stock Exchange under the symbol "GGO." On March 11, 1997, the last
reported sale price of the Common Stock as reported by the American Stock
Exchange was $50.875 per share. See "Price Range of Common Stock and Dividends."
---------------------
SEE "RISK FACTORS" COMMENCING ON PAGE S-4 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
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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
FEDERAL OFFENSE.
<TABLE>
<CAPTION>
=======================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.............................. $50.00 $2.00 $48.00
- -------------------------------------------------------------------------------------------------------
Total.................................. $50,000,000 $2,000,000 $48,000,000
=======================================================================================================
</TABLE>
(1) The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting expenses payable by the Company estimated at $250,000.
The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if issued to and accepted by them, and subject to
the approval of certain legal matters by counsel for the Underwriters and
certain other conditions. The Underwriters reserve the right to withdraw, cancel
or modify such offer and to reject orders in whole or in part. It is expected
that the delivery of shares of Common Stock will be made in New York, New York,
on or about March 17, 1997.
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NESBITT BURNS SECURITIES INC.
SCOTIA CAPITAL MARKETS (USA) INC.
FIRST MARATHON SECURITIES LIMITED
TD SECURITIES INC.
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THE DATE OF THIS PROSPECTUS SUPPLEMENT IS MARCH 11, 1997
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING AND
MAY BID FOR AND PURCHASE SHARES OF THE COMMON STOCK IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
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THE COMPANY
Getchell Gold Corporation (formerly FirstMiss Gold Inc.) (including its
subsidiary, the "Company") was incorporated in Nevada in August 1987. In June
1996, the Company changed its state of incorporation to Delaware. The Company's
principal executive offices are located at 5460 South Quebec Street, Suite 240,
Englewood, Colorado 80111, and its telephone number is (303) 771-9000.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission in accordance with the Exchange Act may
be inspected and copied at the public reference facilities of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the following regional offices of the Commission: 7 World Trade Center, Suite
1300, New York, New York 10048 and Suite 1400, Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material can be obtained from
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, such material
concerning the Company can be inspected at the offices of the American Stock
Exchange, 86 Trinity Place, New York, New York 10006. The Commission also
maintains a World Wide Web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission.
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RISK FACTORS
Purchasers of the Common Stock being offered hereby should carefully read
this entire Prospectus Supplement, the accompanying Prospectus and the documents
incorporated by reference therein. Ownership of shares of the Common Stock
involves certain risks. In determining whether to purchase shares of Common
Stock, prospective investors should consider carefully the following factors in
addition to the other information contained in this Prospectus Supplement, the
accompanying Prospectus and the documents incorporated by reference therein.
GOLD PRICE VOLATILITY
The Company's profitability is significantly affected by changes in the
price of gold. Gold prices may fluctuate widely and are affected by numerous
industry factors, such as demand for precious metals, forward selling by
producers, central bank sales and purchases of gold and production and cost
levels in major gold-producing regions. Moreover, gold prices are also affected
by macro-economic factors such as expectations for inflation, interest rates,
currency exchange rates and global or regional political and economic
situations. The current demand for and supply of gold affects gold prices, but
not necessarily in the same manner as current demand for and supply of gold
affects the prices of the other commodities. The potential supply of gold
consists of new mine production plus existing stocks of bullion and fabricated
gold held by governments, financial institutions, industrial organizations and
individuals. Since mine production in any single year constitutes a very small
portion of the total potential supply of gold, normal variations in current
production do not necessarily have a significant effect on the supply of gold or
on its price. If gold prices should decline below the Company's expected cash
costs of production and remain at such levels for any sustained period, the
Company could determine that it is not economically feasible to continue
commercial production.
The volatility of gold prices is illustrated in the following table of the
annual high, low and average London P.M. Fix:
<TABLE>
<CAPTION>
PRICE PER OUNCE
---------------------
CALENDAR YEAR HIGH LOW AVERAGE
------------- ---- ---- -------
<S> <C> <C> <C>
1987........................................................ $500 $390 $446
1988........................................................ $484 $395 $437
1989........................................................ $416 $356 $381
1990........................................................ $424 $346 $383
1991........................................................ $403 $344 $362
1992........................................................ $360 $330 $344
1993........................................................ $406 $326 $360
1994........................................................ $396 $370 $384
1995........................................................ $396 $372 $384
1996........................................................ $415 $367 $387
1997 (through March 6)...................................... $367 $338 $352
</TABLE>
The London P.M. Fix on March 6, 1997, was $353 per ounce.
CONTINUING LOSSES
The Company reported a net loss of $14.0 million for the year ended
December 31, 1996, $5.0 million for the six months ended December 31, 1995 and a
net loss of $18.4 million for the fiscal year ended June 30, 1995. The Company
expects to continue to experience losses until higher grade ore from Turquoise
Ridge or other sources is produced, which other sources could include sources
presently being explored or developed by the Company. There can be no assurance
that such higher grade ores will be obtained by the Company.
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FUNDS NEEDED FOR DEVELOPMENT OF TURQUOISE RIDGE
The Company projects that it will not have sufficient internal funds to
complete the construction of the Turquoise Ridge mine. Shortfalls in funds
required to meet these needs may be supplemented by additional funds raised
through borrowings or securities offerings. The recoverability of the Turquoise
Ridge assets and completion of the underground mine at Turquoise Ridge is
dependent on the Company's ability to raise sufficient funds to complete the
construction. There can be no assurance that funding will be available on
favorable terms, if at all.
DEPENDENCE ON KEY PERSONNEL
The Company is dependent on the services of certain key officers and
employees, including its Chief Executive Officer, its Chief Financial Officer,
its Chief Operating Officer and its Chief Administrative Officer. Competition in
the mining industry for qualified individuals is intense, and the loss of any of
these key officers or employees, if not replaced, could have a material adverse
effect on the Company's business and its operations. The Company currently does
not have key person insurance. The Company has entered into Termination
Agreements with its Chief Executive Officer, Chief Financial Officer, Chief
Operating Officer and Chief Administrative Officer which provide for certain
payments upon termination or resignation resulting from a change of control (as
defined in such agreements).
In connection with the development of Turquoise Ridge, the Company expects
that it will require a significant number of additional skilled employees. The
Company faces intense competition from other mining companies in connection with
the recruitment and retention of such employees. Additionally, although the
Company does not currently have any unionized employees, there can be no
assurance that unionization will not occur in the future.
RESERVES
The ore reserves presented in this Prospectus Supplement are, in large
part, estimates made by the Company and confirmed by independent mining
consultants known as Mine Development Associates ("MDA") and Mineral Resource
Development, Inc. ("MRDI"). The reserves confirmed by MDA and MRDI are subject
to certain risks and assumptions, including those discussed in "Certain
Turquoise Ridge Mine Risks" below. Additionally, no assurance can be given that
the indicated level of recovery of gold will be realized or that the assumed
gold price of $400 per ounce will be obtained. Reserve estimates may require
revision based on actual production experience. Market price fluctuations of
gold, as well as increased production costs or reduced recovery rates, may
render ore reserves containing relatively lower grades of mineralization
uneconomic and may ultimately result in a restatement of reserves. Moreover,
short-term operating factors relating to the ore reserves, such as the need for
sequential development of ore bodies and the processing of new or different ore
grades, may adversely affect the Company's profitability in any particular
period.
Declines in the market price of gold may also render ore reserves
containing relatively lower grades of gold mineralization uneconomic to exploit
unless the utilization of forward sales contracts or other hedging techniques is
sufficient to offset the effects of a drop in the market price of the gold
expected to be mined from such reserves. If the Company's realized price per
ounce of gold, including hedging benefits, were to decline substantially below
the levels set for calculation of reserves for an extended period, there could
be material delays in the development of new projects, increased net losses,
reduced cash flow, reductions in reserves and asset impairments.
PROJECT DEVELOPMENT RISKS
The Company from time to time engages in the development of new ore bodies.
Specific risks associated with the Company's development of the Turquoise Ridge
mine are discussed below. The Company's ability to sustain or increase its
present level of gold production is dependent in part on the successful
development of such new ore bodies and/or expansion of existing mining
operations. The economic feasibility of any such development project, and all
such projects collectively, is based upon, among other things, estimates of
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reserves, metallurgic recoveries, capital and operating costs of such projects
and future gold prices. Development projects are also subject to the successful
completion of feasibility studies, issuance of necessary permits and receipt of
adequate financing.
Development projects have no operating history upon which to base estimates
of future cash operating costs and capital requirements. In particular,
estimates of reserves, metal recoveries and cash operating costs are to a large
extent based upon the interpretation of geologic data obtained from drill holes
and other sampling techniques and feasibility studies which derive estimates of
cash operating costs based upon anticipated tonnage and grades of ore to be
mined and processed, the configuration of the ore body, expected recovery rates
of metals from the ore, comparable facility and equipment costs, anticipated
climate conditions and other factors. As a result, it is possible that actual
cash operating costs and economic returns of any and all development projects
may materially differ from the costs and returns initially estimated.
CERTAIN TURQUOISE RIDGE MINE RISKS
The Turquoise Ridge Project mine involves numerous risks. These include the
following:
Capital Requirements. Expenditures required to advance the Turquoise Ridge
mine to the point of a production test is large, particularly since the Company
has decided to proceed with shaft systems capable of being used in full-scale
production in order to save time and money should trial mining be confirmed as
viable. Thus, to a large extent, expenditures which would usually be supported
by a feasibility study will depend on the data in-hand and assumptions made in
the Company's mine plans with an attendant higher level of uncertainty. See
"-- Funds Needed for Development of Turquoise Ridge."
Reserves. There can be no assurance the probable reserves set forth in MRDI
and MDA's reserve reports for the Turquoise Ridge and Shaft Zone will actually
be mined and milled on an economic basis, if at all. The MDA and MRDI reports
are based upon many assumptions, some or all of which may not prove to be
accurate. The failure of any such assumptions to prove accurate may alter the
conclusions of MDA's and/or MRDI's report on reserves and may have a material
adverse effect on the Company. The resource and reserve estimates were prepared
using geological and engineering judgment based on available data. In the
absence of underground development, such estimates must be regarded as imprecise
and some of the assumptions made may later prove to be incorrect or unreliable.
The grade distribution at Turquoise Ridge is between 0.2 to 0.6 ounces per ton.
Small changes in cutoff grade can cause large shifts in the reserves. If
dilution and/or mining costs related to poor ground conditions are higher than
expected, the reserves could be substantially reduced, resulting in a shortening
of mine life and a reduced or negative cash flow.
Dilution. The tonnage and grade of the mill feed material was estimated by
applying dilution factors to certain resource data. The dilution agents are
backfill, waste from the back of overcut crosscuts and drifts, and from the
walls. In the case of the latter two, MRDI assumed that there would be an
average of one foot of back and wall dilution. MDA used approximately 15%
dilution and 95% recovery of the mineable reserve. If this dilution increases,
there will be corresponding negative effects on the tonnage and grade to mill.
This risk is related to the irregular configuration of the ore body which, even
with the tight cut-and-fill stoping method used, could make achievement of a
dilution thickness of one foot impossible to achieve in practice.
Production Shaft Completion. The two-year assumed construction period for
the Production Shaft, which was started in the fourth quarter of 1996, is an
aggressive schedule. Delay in construction would necessitate removing ore
through the Ventilation Shaft, which is basically designed for waste and the
limited ore from early production. Additionally, the availability of the final
ventilation circuit required for mining depends upon the completion of the
Production Shaft.
Mining Cost. As part of the project risk assessment, sensitivities were run
on various mining costs. Due to uncertainties about actual ground conditions and
productivities, these costs are only predictable within a broad range and the
predictions may not be valid. Therefore, actual mining costs may have a material
adverse effect on the viability of the Turquoise Ridge project and on the
Company.
Hydrology. Drainage of the ore body and surrounding rock will be critical
to the achievement of the mining efficiencies and costs estimated for the study.
If the deposit is not drained and water remains in this
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clay-rich environment, mining conditions could worsen, and ground support costs
will increase. If, due to the presence of fine clays, the deposit drains slowly,
the start of production may be delayed, and the build-up to full production may
be of longer duration. Additionally, depending upon the quantity and quality of
water encountered, the water treatment/disposal options presently available to
the Company may be insufficient to meet estimated amounts needed to treat water
pumped from Turquoise Ridge during dewatering.
Geotechnical Considerations. The Turquoise Ridge ore zones contain areas of
poor ground conditions due to a high percentage of the ground being comprised of
low rock mass rating rock and clay. As a result, additional ground support may
be required.
DEPENDENCE ON A SINGLE PROPERTY
All of the Company's revenues are derived from its mining and milling
operations at the Getchell Property. If the operations at the Getchell
Underground mine or at any of the Company's processing facilities were to be
reduced, interrupted or curtailed, the Company's ability to generate revenues
and profits in the future would be materially adversely affected.
EXPLORATION
Mineral exploration, particularly for gold, is highly speculative in
nature, involves many risks and frequently is unsuccessful. The Company is
seeking to expand its reserves only through exploration and development at the
Getchell Property. There can be no assurance that the Company's exploration
efforts will result in the discovery of any additional gold mineralization or
that any mineralization discovered will result in an increase of the Company's
reserves. If reserves are developed, it may take a number of years and
substantial expenditures from the initial phases of drilling until production is
possible, during which time the economic feasibility of production may change.
No assurance can be given that the Company's exploration programs will result in
the replacement of current production with new reserves or that the Company's
development program will be able to extend the life of the Company's existing
mines.
HEDGING ACTIVITIES
The Company currently uses spot deferred contracts to protect earnings and
cash flows from the impact of short-term drops in gold price. These transactions
have been designated as hedges of the price of future production and are
accounted for as such.
Spot deferred contracts are agreements between a seller and a counterparty
whereby the seller commits to deliver a set quantity of gold, on an established
future date and at an agreed upon price. The established forward price is equal
to the current spot gold price on the day the agreement is signed plus
"contango." Contango is equal to the difference between the prevailing market
interest rate for cash deposits less the gold lease rate, for comparable
periods. The contango rate was 4.0% per annum for one-month to twelve-month
periods at December 31, 1996.
On the scheduled future delivery date, the seller may deliver gold and
thereby fulfill the contract or defer delivery to a future date. If the spot
price on the delivery date is greater than the contract price, delivery on the
contract may be deferred to a new future date and the gold is sold at the higher
spot price. If the spot price is lower than the contract price, the delivery may
be made against the contract and the higher contract price is realized. In
practice, this generally allows the seller to maximize the price realized. Each
time a seller defers delivery, the forward sales price is increased by the then
prevailing contango (assuming it is positive) for the next period out to the
newly established future delivery date. Generally, the counterparty will allow
the seller to continue to defer contract deliveries providing that there is
sufficient scheduled production from proven and probable reserves to fulfill the
commitment.
At December 31, 1996, the Company had spot deferred contracts on 90,000
ounces of gold of which all are scheduled to be delivered during 1997 at prices
ranging between $370 and $422. Risk of loss from these forward sales agreements
arises from the possible inability of a counterparty to honor contracts and from
changes in the Company's potential ability to deliver gold.
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GOVERNMENT REGULATION
Safety. The mining operations of the Company are subject to inspection and
regulation by the Mine Safety and Health Administration of the United States
Department of Labor ("MSHA") under the provisions of the Mine Safety and Health
Act of 1977. The Occupational Safety and Health Administration ("OSHA") also has
jurisdiction over safety and health standards not covered by MSHA.
On January 15, 1997, a mine site accident involving a mining vehicle
resulted in the death of a Company employee. As required by Federal law, MSHA
officials have investigated the nature and cause of the accident. MSHA has
notified the Company that as a result of the investigation, the Company will
likely be subject to maximum civil penalties of $350,000 and possible further
investigation. The ultimate outcome of the MSHA investigation is uncertain and
the Company is unable to estimate if further penalties will result. While
management of the Company believes that the results of the investigation will
not have a materially adverse impact on the financial position, operating
results or liquidity of the Company, no assurance can be given that this
investigation will not have such effects.
Current Environmental Laws and Regulations. The Company must comply with
standards, laws and regulations which may entail greater or lessor costs and
delays depending on the nature of the regulated activity and how stringently the
regulations are implemented by the regulatory authority. It is possible that the
costs and delays associated with compliance with such laws, regulations and
permits could become such that the Company would not proceed with the
development of a project or the operation or further development of a mine. Laws
and regulations involving the protection and remediation of the environment and
the governmental policies for implementation of such laws and regulations are
constantly changing and are generally becoming more restrictive. The Company has
made, and expects to make in the future, significant expenditures to comply with
such laws and regulations. These requirements include regulations under: (i) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA" or "Superfund") which regulates and establishes liability for the
release of hazardous substances; (ii) the Endangered Species Act ("ESA") which
identifies endangered species of plants and animals and regulates activities to
protect these species and their habitats; (iii) the Clean Water Act; (iv) the
Clean Air Act; (v) the Resource Conservation and Recovery Act for disposal of
hazardous waste; (vi) the Migratory Bird Treaty Act; (vii) the Safe Drinking
Water Act; (viii) the Federal Land Policy and Management Act; (ix) the National
Environmental Policy Act; (x) the National Historic Preservation Act; and many
other state and federal laws and regulations.
The United States Environmental Protection Agency ("EPA") continues the
development of solid waste regulatory program specific to mining operations
under the Resource Conservation and Recovery Act ("RCRA"). EPA is currently
evaluating a Draft Hardrock Mining Framework which, if ultimately implemented,
could create a system of federal regulation of the entire mine site focused on
water quality and waste management. The requirements being considered by the EPA
are very similar to the existing Nevada regulations concerning environmental
controls at mine sites. Many of the requirements being considered by EPA could
be duplicative of existing Nevada regulations. The effect of compliance with a
new EPA program would depend on the extent to which the substantive or
procedural requirements of such new federal regulations would exceed the
existing requirements of the Nevada regulations.
Environmental laws and regulations may also have an indirect impact on the
Company, such as increased cost for electricity due to acid rain provisions of
the Clean Air Act Amendments of 1990. Charges by refiners to which the Company
sells it metallic concentrates and products have substantially increased over
the past several years because of requirements that refiners meet revised
environmental quality standards. The Company has no control over the refiners'
operations or their compliance with environmental laws and regulations.
Potential Legislation. Several recent legislative developments have
affected or may in the future affect the cost of and the ability of mining
claimants to use the Mining Law of 1872, as amended (the "General Mining Law"),
to acquire and use federal lands for mining operations. Since October 1994, a
moratorium has been imposed on processing new patent applications for mining
claims. This moratorium should not affect the status of the patent applications
made by the Company under the General Mining Law before the moratorium was
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imposed. Also, since 1993, a rental or maintenance annual fee of $100 per claim
has been imposed by the Federal government on unpatented mining claims in lieu
of the prior requirement for annual assessment work. During the last several
Congressional sessions, bills have been repeatedly introduced in the U.S.
Congress which would supplant or radically alter the General Mining Law. As of
the end of 1996, no such bills have been passed. Such bills have proposed, among
other things, to permanently eliminate or greatly limit the right to a mineral
patent, impose royalties, and impose new Federal reclamation, environmental
control and other restoration requirements. Royalty proposals have ranged from a
2% royalty on "net profits" from mining claims to an 8% royalty on modified
gross income/net smelter returns. It is anticipated that similar legislation
will again be introduced when the new Congress convenes in 1997. If enacted,
such legislation could substantially impair the ability of companies to
economically develop mineral resources on federal lands. The extent of the
changes, if any, which may be made by Congress to the General Mining Law is not
presently known, and the potential impact on the Company as a result of future
Congressional action is difficult or impossible to predict. Although a majority
of the Company's existing mining operations occur on private or patented
property, the proposed changes to the General Mining Law could adversely affect
the Company's ability to economically develop mineral resources on federal
lands. Disposal of overburden and mineral processing wastes by the Company occur
on both private and federal lands. Exploration activities occur on both private
and federal lands. Other legislative initiatives regarding environmental laws
potentially applicable to mining include proposals to substantially alter
CERCLA, the Clean Water Act, Safe Drinking Water Act, Endangered Species Act and
bills which introduce additional protection of wetlands. Adverse developments
and operating requirements in these acts could impair the ability of the Company
as well as others to develop mineral resources. Revisions to current versions of
these bills could occur prior to passage. Thus, the potential impact on the
Company of such legislative initiatives is not clear at this time.
ENVIRONMENTAL MATTERS
Environmental Liability. Mining is subject to potential risks and
liabilities associated with pollution of the environment and the disposal of
waste products that could occur as a result of the Company's mineral
exploration, development and production. Environmental liability also may result
from mining activities conducted by others prior to the Company's ownership of a
property. Historic mining disturbances, facilities, waste materials and other
discrete areas of potential contamination associated with gold, tungsten, and
molybdenum production between 1937 and 1969 by previous owners and operators are
encompassed within the area of the Company's Getchell Property operations.
Restoration of certain areas of historic disturbance and contamination has been
undertaken in conjunction with current mining operations and has been
incorporated into the Company's state permits in coordination with the federal
land management agency.
Pollution Insurance. Insurance for environmental risks (including potential
liability for pollution or other hazards as a result of the disposal of waste
products occurring from exploration and production) has not been purchased by
the Company as it is not generally available at a reasonable price to the
Company or to other companies within the industry. To the extent the Company is
subject to environmental liabilities, the payment of such liabilities or the
costs which must be incurred to remedy environmental pollution would reduce
funds otherwise available to the Company and could have a material adverse
effect on the Company. Should the Company be unable to fully remedy an
environmental problem, the Company might be required to suspend operations or
enter into interim compliance measures pending completion of the required
remedy. The potential exposure may be significant and could have a material
adverse effect on the Company.
Environmental Permits. All of the Company's exploration, development and
production activities are subject to regulation under one or more of the various
state and federal environmental laws and regulations. These laws address
emissions to the air, discharges to water, management of wastes, management of
hazardous substances, protection of natural resources, protection of antiquities
and restoration of lands which are disturbed by mining. Many of the regulations
require permits to be obtained for the Company's activities. The Company
maintains permits required for its facilities and operations which provide for
ongoing compliance and monitoring. Some of the permits include Bureau of Land
Management Plan of Operations No. N24-87-003P; EPA Hazardous Waste Facility No.
NVD986774735; Nevada water pollution control permits NEV86014 (for mining and
mineral processing) and NEV95113 (for excess mine water disposal);
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Nevada reclamation permit 0105; and Nevada air quality permit AP1041-0292. These
permits must be updated and reviewed from time to time, and normally are subject
to environmental impact analyses and public review processes prior to approval
of the activity. For example, the Company has applied for air permits required
by Title V of the 1990 Amendments to the Clean Air Act to maintain compliance
with applicable requirements for air emissions sources of the types utilized by
the Company in its operations. It is possible that future changes in applicable
laws, regulations and permits could have a significant impact on some portion of
the Company's business, causing those activities to be economically re-evaluated
at that time.
Restoration. The Company accrues funds over the productive life of its mine
for anticipated costs associated with restoration of the mine site. Activities
which result in restoration costs include the permanent closure of the mining
and mineral processing operations and the reclamation of the disturbed land to a
productive use. This includes restoration of historic and current mining and
mineral processing operations and associated land disturbances. Restoration
takes place concurrent with and after the productive life of the operations.
Activities which result in restoration costs after permanent closure and
reclamation primarily relate to monitoring and other post mining management
activities.
The uncertainties related to future restoration costs result from unknown
future additional regulatory requirements, significant new surface disturbances
or additional mineral processing facilities and the potential for recognition in
the future of additional activities needed for restoration. The technologies for
restoration are evolving during the life of the operations. Periodic review of
the activities and costs for restoration, and consequent adjustments to the
ongoing accrual, are conducted. The Company conducts concurrent restoration of
mining disturbances and anticipates an ongoing program of restoration over the
productive life of the operations. Activities have included regrading, seeding
and planting, monitoring, and restoration research.
In accordance with the State of Nevada Division of Environmental Protection
("NDEP"), the Company has posted a bond of $4.5 million to cover the costs for
reclamation of the Getchell Property. As of December 31, 1996, the total
estimated restoration costs for the Getchell Property was $5.5 million, of which
the Company had accrued $2.7 million. The amount of total estimated restoration
costs has increased over time due to more stringent regulatory requirements and
expanded mining activities and additional increases may occur in the future for
the same reasons. The Company has begun reclamation of surface mining
disturbances and anticipates an ongoing program of reclamation over the next
several years. Activities have included regrading, revegetation and soil
stabilization. This includes restoration activities for which bonding must be
provided and other restoration costs not included in bonding calculations.
MINING RISKS AND INSURANCE
The gold ore located on the Getchell Property and the existing tailings
ponds and waste dumps located on the Getchell Property contain relatively high
levels of arsenic, and the milling of such ore involves the use of other toxic
substances, including sodium cyanide, sodium hydroxide, sulfuric acid and nitric
acid. In addition, the business of gold mining is generally subject to a number
of risks and hazards, including environmental hazards, industrial accidents,
labor disputes, the encounter of unusual or unexpected geological conditions,
slope failures, changes in the regulatory environment and natural phenomena such
as inclement weather conditions, floods, blizzards and earthquakes. Such
occurrences could result in damage to, or destruction of, mineral properties or
production facilities, personal injury or death, environmental damage, delays in
mining, monetary losses and possible legal liability. The Company maintains
insurance against risks that are typical in the gold mining industry and in
amounts that the Company believes to be reasonable, but which may not provide
adequate coverage in certain unforeseen circumstances. However, insurance
against certain risks (including certain liabilities for environmental pollution
or other hazards as a result of exploration and production) has not been
purchased by the Company as such coverage is not generally available to it or to
other companies within the industry.
TITLE TO PROPERTIES
Certain of the Company's mineral rights consist of unpatented mining
claims. Unpatented mining claims are unique property interests that are
generally considered to be subject to greater title risk than other real
S-10
<PAGE> 11
property interests. The greater title risk results from unpatented mining claims
being dependent on strict compliance with a complex body of federal and state
statutory and decisional law, much of which compliance involves physical
activities on the land, and from the lack of public records which definitively
control the issues of validity and ownership.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Common Stock offered
hereby are estimated to be approximately $47.75 million after deducting
underwriting discounts and estimated offering expenses. The Company intends to
use the net proceeds for the continued development of the Turquoise Ridge mine,
for exploration on the Getchell Property and for general corporate purposes.
Pending the application of the net proceeds, the Company expects to invest such
proceeds in short-term, interest-bearing instruments or other investment-grade
securities.
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Company's Common Stock is traded on the American Stock Exchange and The
Toronto Stock Exchange under the symbol "GGO." Prior to June 25, 1996, the
Company's Common Stock was listed on the Nasdaq National Market. The following
table sets forth for the periods indicated, the high and low recorded prices of
the Company's Common Stock on the Nasdaq National Market prior to June 25, 1996
and the American Stock Exchange thereafter. On March 11, 1997, the last reported
sale price of the Common Stock as reported by the American Stock Exchange was
$50.875 per share.
<TABLE>
<CAPTION>
FISCAL 1995 HIGH LOW
----------- ------ ------
<S> <C> <C>
First Quarter............................................... $ 8.75 $ 6.25
Second Quarter.............................................. $10.50 $ 8.00
Third Quarter............................................... $10.13 $ 7.75
Fourth Quarter.............................................. $21.00 $ 9.75
SIX MONTHS ENDED
DECEMBER 31, 1995
- -----------------
Quarter ended September 30.................................. $25.00 $19.50
Quarter ended December 31................................... $23.75 $17.63
1996
----
First Quarter............................................... $29.25 $21.75
Second Quarter.............................................. $41.00 $27.25
Third Quarter............................................... $50.25 $30.50
Fourth Quarter.............................................. $48.00 $37.38
1997
----
First Quarter............................................... $51.50 $31.75
(through March 11)
</TABLE>
S-11
<PAGE> 12
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
dated March 11, 1997 (the "Underwriting Agreement") among the Company, Nesbitt
Burns Securities Inc. and Scotia Capital Markets (USA) Inc. (the "U.S.
Underwriters") and Nesbitt Burns Inc., ScotiaMcLeod Inc., First Marathon
Securities Limited and TD Securities Inc., (the "Canadian Underwriters"), as
underwriters (collectively, the "Underwriters"), the Company has agreed to sell
and the Underwriters have, subject to the conditions specified therein, agreed
to purchase from the Company the number of shares of Common Stock set forth in
the table below. The obligation of each Underwriter to purchase the shares of
Common Stock set forth against its name in the table is joint with the
obligation of its affiliate set forth beside its name in the table but several
and not joint with respect to each other Underwriter in the table.
<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
----------- ---------
<S> <C>
Nesbitt Burns Securities Inc./Nesbitt Burns Inc. ........... 540,000
Scotia Capital Markets (USA) Inc./ScotiaMcLeod Inc. ........ 260,000
First Marathon Securities Limited........................... 100,000
TD Securities Inc. ......................................... 100,000
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that they may be
terminated upon the occurrence of certain stated events. The Underwriters are,
however, obligated to take up and pay for all of the shares of Common Stock
offered hereby if any are purchased under the Underwriting Agreement.
Under the Underwriting Agreement, the U.S. Underwriters and any dealer to
whom they sell shares of Common Stock will not offer to sell or sell such shares
in Canada or to persons who are Canadian persons, and the Canadian Underwriters
and any dealer to whom they sell shares of Common Stock will not offer to sell
or sell such shares in the United States or to persons who are U.S. persons. The
foregoing limitations do not apply to stabilization transactions or to
transactions between the U.S. Underwriters and the Canadian Underwriters.
Subject to applicable law, the Underwriters may offer the Common Stock outside
Canada and the United States.
The Company has agreed to indemnify the Underwriters and their directors,
officers, employees and agents against certain liabilities, including civil
liabilities under the Canadian provincial securities legislation or the
Securities Act of 1933 (United States), as amended, or will contribute to
payments the Underwriters may be required to make in respect thereof.
The Company has agreed with the Underwriters that it will not, for the
period ending 90 days after the date of this Prospectus Supplement, issue or
sell any shares of Common Stock or any right to acquire shares of Common Stock,
without the prior consent of Nesbitt Burns Inc., except that the Company may
grant options to purchase shares of Common Stock pursuant to the Company's stock
option plans and may issue shares of Common Stock pursuant to the exercise of
options granted under the Company's stock option plans.
In connection with the offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Common Stock in accordance with Regulation M of the Exchange Act. Specifically,
the Underwriters may overallot the offering, creating a syndicate short position
in the Common Stock for their own account. Underwriters may bid for and purchase
shares of Common Stock in the open market to cover syndicate short positions. In
addition, the Underwriters may bid for and purchase shares of Common Stock in
the open market to stabilize the price of the Common Stock. These activities may
stabilize or maintain the market price of the Common Stock above independent
market levels. The Underwriters are not required to engage in these activities,
and may end these activities at any time.
Pursuant to a policy statement of the Ontario Securities Commission, the
Underwriters may not, throughout the period of distribution, bid for or purchase
shares of Common Stock. The policy statement allows certain exceptions to the
foregoing prohibitions. The Underwriters may only avail themselves of such
exceptions on the condition that the bid or purchase not be engaged in for the
purpose of creating actual or
S-12
<PAGE> 13
apparent active trading in, or raising the price of, the shares of Common Stock.
These exceptions include a bid or purchase permitted under the by-laws and rules
of The Toronto Stock Exchange relating to market stabilization and passive
market-making activities and a bid or purchase made for on behalf of a customer
where the order was not solicited during the period of distribution. Subject to
the foregoing, in connection with this offering, the Underwriters may over-allot
or effect transactions which stabilize or maintain the market prices of the
Common Stock at levels other than those which might otherwise prevail on the
open market. Such transactions, if commenced, may be discontinued at any time.
Each of the Underwriters, from time to time, performs investment banking
and other financial services for the Company.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock in Canada is The R-M
Trust Company at its principal office in Toronto. The Transfer Agent and
Registrar for the Common Stock in the United States is Harris Trust & Savings
Bank.
LEGAL MATTERS
Certain U.S. legal matters with respect to the Common Stock offered hereby
will be passed upon for the Company by Latham & Watkins, San Francisco,
California and certain Canadian legal matters will be passed upon for the
Company by McCarthy Tetrault, Toronto, Ontario. Certain U.S. legal matters will
passed upon for the Underwriters by Skadden, Arps, Slate, Meagher & Flom
(International), Toronto, Ontario and certain Canadian legal matters will be
passed upon for the Underwriters by Davies, Ward & Beck, Toronto, Ontario.
EXPERTS
The financial statements of Getchell Gold Corporation as of December 31,
1996 and 1995, and for the year ended December 31, 1996, the six-month period
ended December 31, 1995, and the fiscal years ended June 30, 1995 and June 30,
1994 have been incorporated by reference herein and in the registration
statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
S-13
<PAGE> 14
PROSPECTUS
FIRSTMISS GOLD INC.
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
EQUITY WARRANTS
DEBT WARRANTS
FirstMiss Gold Inc. (the "Company"), directly or through agents, dealers,
or underwriters designated from time to time, may offer, issue and sell,
together or separately, up to $200,000,000 in the aggregate of (a) secured or
unsecured debt securities (the "Debt Securities") of the Company, in one or more
series, which may be either senior debt securities (the "Senior Debt
Securities"), senior subordinated debt securities (the "Senior Subordinated Debt
Securities") or subordinated debt securities (the "Subordinated Debt
Securities"), (b) shares of preferred stock of the Company, par value $.01 per
share (the "Preferred Stock"), in one or more series, (c) fractional interests
in shares of Preferred Stock represented by depositary shares (the "Depositary
Shares"), (d) shares of common stock of the Company, par value $.01 per share
(the "Common Stock"), (e) warrants to purchase Common Stock or Preferred Stock
(the "Equity Warrants") or (f) warrants to purchase Debt Securities (the "Debt
Warrants" and together with the Equity Warrants, the "Warrants"), or any
combination of the foregoing, either individually or as units consisting of one
or more of the foregoing, each on terms to be determined at the time of sale.
The Debt Securities may be issued as exchangeable and/or convertible Debt
Securities exchangeable for or convertible into shares of Common Stock or
Preferred Stock. The Preferred Stock may also be exchangeable for and/or
convertible into shares of Common Stock or another series of Preferred Stock.
The Debt Securities, the Preferred Stock, the Common Stock and the Warrants are
collectively referred to herein as the "Securities." When a particular series of
Securities is offered, a supplement to this Prospectus (each a "Prospectus
Supplement") will be delivered with this Prospectus. The Prospectus Supplement
will set forth the terms of the offering and sale of the offered Securities.
THE PURCHASE OF THE SECURITIES INVOLVES CERTAIN MATERIAL RISKS.
SEE "RISK FACTORS" COMMENCING ON PAGE 3.
Except as described more fully herein or as set forth in the Prospectus
Supplement relating to any offered Debt Securities, the Indenture will not
provide holders of Debt Securities protection in the event of a highly-leveraged
transaction, reorganization, restructuring, merger or similar transaction
involving the Company which could adversely affect holders of Debt Securities.
See "Description of Debt Securities -- Consolidation, Merger and Sale of
Assets."
The Company's Common Stock is traded on the Nasdaq National Market under
the symbol FRMG. On October 30, 1995, the last reported sale price of the Common
Stock as reported by Nasdaq was $17.875 per share. The Company has not yet
determined whether any of the Debt Securities, Preferred Stock or Warrants
offered hereby will be listed on any exchange or over-the-counter market. If the
Company decides to seek listing of any such Securities, the Prospectus
Supplement relating thereto will disclose such exchange or market.
---------------------
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 FEDERAL OFFENSE.
-----------------------------------------
The Securities may be sold directly by the Company, through agents
designated from time to time or to or through underwriters or dealers. The
Company reserves the sole right to accept, and together with its agents, from
time to time, to reject in whole or in part any proposed purchase of Securities
to be made directly or through agents. See "Plan of Distribution." If any such
agents or underwriters are involved in the sale of any Securities, the names of
such agents or underwriters and any applicable fees, commissions or discounts
will be set forth in the applicable Prospectus Supplement.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by the applicable Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS NOVEMBER 1, 1995.
<PAGE> 15
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON
THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 10B-6A UNDER THE SECURITIES
ACT OF 1934. SEE "PLAN OF DISTRIBUTION."
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (together with all amendments
and exhibits thereto, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Securities offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement, part of which has been omitted in accordance with the
rules and regulations of the Commission. For further information about the
Company and the Securities offered hereby, reference is made to the Registration
Statement, including the exhibits filed as a part thereof and otherwise
incorporated therein. Statements made in this Prospectus as to the contents of
any document referred to herein are not necessarily complete, and in each
instance reference is made to such document for a more complete description, and
each such statement is qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files periodic reports, proxy statements and other information with
the Commission. The Registration Statement, including the exhibits thereto, as
well as such reports and other information filed by the Company with the
Commission, can be inspected, without charge, and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington D.C., 20549; 7 World Trade Center, New York, New York 10048 and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Reports and
other information concerning the Company can also be inspected at the offices of
the National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated by reference in this Prospectus: (1) the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1995,
(2) the Company's report on Form 8-K filed with the Commission on September 25,
1995, (3) the Company's report on Form 8-K/A filed with the Commission on
September 27, 1995, (4) the Company's report on Form 8-K/A-2 filed with the
Commission on November 1, 1995, and (5) all other documents subsequently filed
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this Prospectus and before the termination of the offering, which shall
be deemed to be a part hereof from the date of filing of such documents.
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.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon request, a copy of
any documents incorporated into this Prospectus by reference (other than
exhibits incorporated by reference into such document). Requests for documents
should be
2
<PAGE> 16
submitted to FirstMiss Gold Inc., 5460 South Quebec Street, Suite 240,
Englewood, Colorado 80111, Attention: Secretary (telephone (303) 771-9000). The
information relating to the Company contained in this Prospectus does not
purport to be comprehensive and should be read together with the information
contained in the documents incorporated or deemed to be incorporated by
reference herein.
THE COMPANY
FirstMiss Gold Inc. (the "Company") is engaged in the business of mining
and processing gold ores and exploration for such ores. The Company owns and
operates a property (the "Getchell Property") located in the Potosi Mining
District on the eastern side of the Osgood Mountain Range 35 miles northeast of
the town of Winnemucca, Nevada. Operations on the Getchell Property include a
pressure oxidation (autoclave) mill facility and an oxide heap leach facility.
Currently, sulfides ores for the mill are produced from an underground mine
known as the Getchell Main Underground Mine. Oxide ores for the heap leach
facility are produced from existing stockpiles. The Company is actively
conducting exploration on the 33,000-acre Getchell Property.
The Company was incorporated in Nevada in August 1987 by First Mississippi
Corporation ("First Mississippi"), a Mississippi corporation, for the purpose of
financing, developing and operating the Getchell gold mining project and for
conducting minerals exploration. Operations at the autoclave mill facility and
the oxide heap leach facility were commenced in February 1989 and June 1985,
respectively, and as of June 30, 1995, the Company had produced over 1.2 million
ounces of gold. Approximately 81% of the Company's stock is currently held by
First Mississippi. First Mississippi has announced that it intends to distribute
all of its stock in the Company to First Mississippi shareholders, which
distribution will result in a change of ownership of approximately 81% of the
Company's common stock. This distribution will also result in the ownership of
approximately 567,300 additional shares, or 3.1%, of the Company's outstanding
common stock as of August 22, 1995, by the Company's executive officers and
directors.
The Company's principal executive offices are located at 5460 South Quebec
Street, Suite 240, Englewood, Colorado 80111, and its telephone number is (303)
771-9000.
RISK FACTORS
In addition to the other information in this Prospectus, prospective
purchasers of the Securities offered hereby should carefully consider the risk
factors set forth under the heading "Risk Factors" in "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included in the
Company's most recently incorporated Annual Report on Form 10-K or Quarterly
Report on Form 10-Q. See "Information Incorporated by Reference."
USE OF PROCEEDS
The Company currently has no specific plans for the use of the net proceeds
from the sale of Securities offered hereby. However, the Company currently
anticipates that any such net proceeds would be used for general corporate
purposes, which may include but are not limited to working capital, capital
expenditures, repayment of indebtedness (including indebtedness to First
Mississippi) and acquisitions. When a particular series of Securities is
offered, the Prospectus Supplement relating thereto will set forth the Company's
intended use for the net proceeds received from the sale of such Securities.
Pending the application of the net proceeds, the Company expects to invest such
proceeds in short-term, interest-bearing instruments or other investment-grade
securities.
3
<PAGE> 17
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the unaudited consolidated ratios of
earnings to fixed charges and earnings to fixed charges and preferred stock
dividends for the Company for the periods indicated.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
----------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges.......................... * 3.60 * 3.19 *
Ratio of earnings to fixed charges and preferred stock
dividends................................................. * 3.60 * 3.19 *
</TABLE>
- ---------------
* For the fiscal years ended June 30, 1991, 1993 and 1995, earnings were
insufficient to cover fixed charges by $74,000, $3,129,000 and $19,088,000,
respectively. Therefore, no ratios are provided for these fiscal years.
For the purpose of calculating the ratio of earnings to fixed charges and
the ratio of earnings to fixed charges and preferred stock dividends, earnings
consist of income before income taxes and fixed charges (exclusive of preferred
stock dividends). For the purpose of calculating both ratios, fixed charges
include interest expense, capitalized interest and that portion of rentals
representative of an interest factor. Because the Company did not distribute any
preferred stock dividends during fiscal years 1991-1995, the two above ratios
are identical.
4
<PAGE> 18
GENERAL DESCRIPTION OF SECURITIES
The Company directly or through agents, dealers, or underwriters designated
from time to time, may offer, issue and sell, together or separately, up to
$200,000,000 in the aggregate of (a) secured or unsecured debt securities (the
"Debt Securities") of the Company, in one or more series, which may be either
senior debt securities (the "Senior Debt Securities"), senior subordinated debt
securities (the "Senior Subordinated Debt Securities") or subordinated debt
securities (the "Subordinated Debt Securities"), (b) shares of preferred stock
of the Company, par value $.01 per share (the "Preferred Stock"), in one or more
series, (c) fractional interests in shares of Preferred Stock represented by
depositary shares (the "Depositary Shares"), (d) shares of common stock of the
Company, par value $.01 per share (the "Common Stock"), (e) warrants to purchase
Common Stock or Preferred Stock (the "Equity Warrants") or (f) warrants to
purchase Debt Securities (the "Debt Warrants" and together with the Equity
Warrants, the "Warrants"), or any combination of the foregoing, either
individually or as units consisting of one or more of the foregoing, each on
terms to be determined at the time of sale. The Debt Securities may be issued as
exchangeable and/or convertible Debt Securities exchangeable for or convertible
into shares of Common Stock or Preferred Stock. The Preferred Stock may also be
exchangeable for and/or convertible into shares of Common Stock or another
series of Preferred Stock. The Debt Securities, the Preferred Stock, the Common
Stock and the Warrants are collectively referred to herein as the "Securities."
When a particular series of Securities is offered, a supplement to this
Prospectus (each a "Prospectus Supplement") will be delivered with this
Prospectus. The Prospectus Supplement will set forth the terms of the offering
and sale of the offered Securities.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions do not apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
Debt Securities may be issued from time to time in series under an
indenture, and one or more indentures supplemental thereto (collectively, the
"Indenture"), between the Company and a trustee to be identified in the
applicable Prospectus Supplement (the "Trustee"). The terms of the Debt
Securities will include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (the "TIA") as in
effect on the date of the Indenture. The Debt Securities will be subject to all
such terms, and potential investors of the Debt Securities are referred to the
Indenture and the TIA for a statement thereof. The following summary of certain
provisions of the Indenture does not purport to be complete and is qualified in
its entirety by reference to the Indenture, including the definitions therein of
certain terms used below. As used under this caption, unless the context
otherwise requires, "Offered Debt Securities" shall mean the Debt Securities
offered by this Prospectus and the accompanying Prospectus Supplement.
GENERAL
The Indenture will provide for the issuance of Debt Securities in series
and will not limit the principal amount of Debt Securities which may be issued
thereunder. In addition, except as may be provided in the Prospectus Supplement
relating to such Debt Securities, the Indenture will not limit the amount of
additional indebtedness the Company may incur.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the series of Offered Debt Securities in respect
of which this Prospectus is being delivered: (1) the title of the Offered Debt
Securities; (2) whether the Offered Debt Securities are Senior Debt Securities,
Senior Subordinated Debt Securities or Subordinated Debt Securities or any
combination thereof; (3) any limit upon the aggregate principal amount of the
Offered Debt Securities; (4) the date or dates on which the principal of the
Offered Debt Securities is payable; (5) the rate or rates at which the Offered
Debt Securities will bear interest, if any, or the manner in which such rate or
rates are determined; (6) the date or dates from which any
5
<PAGE> 19
such interest will accrue, the interest payment dates on which any such interest
on the Offered Debt Securities will be payable and the record dates for the
determination of holders to whom interest is payable; (7) the place or places
where the principal of and any interest on the Offered Debt Securities will be
payable; (8) the obligation of the Company, if any, to redeem, purchase or repay
the Offered Debt Securities in whole or in part pursuant to any sinking fund or
analogous provisions or at the option of the holders and the price or prices at
which and the period and periods within which and the terms and conditions upon
which the Offered Debt Securities shall be redeemed, purchased or repaid
pursuant to such obligation; (9) the denominations in which any Offered Debt
Securities will be issuable, if other than denominations of U.S. $1,000 and any
integral multiple thereof; (10) if other than the principal amount thereof, the
portion of the principal amount of the Offered Debt Securities of the series
which will be payable upon declaration of the acceleration of the maturity
thereof; (11) any addition to or change in the covenants which apply to the
Offered Debt Securities; (12) any Events of Default with respect to the Offered
Debt Securities, if not otherwise set forth under "Events of Default"; (13)
whether the Offered Debt Securities will be issued in whole or in part in global
form; the terms and conditions, if any, upon which such global Offered Debt
Securities may be exchanged in whole or in part for other individual securities,
and the depositary for the Offered Debt Securities; (14) the terms and
conditions, if any, upon which the Offered Debt Securities shall be exchanged
for or converted into other securities or property; (15) the nature and terms of
the security for any secured Offered Debt Securities; and (16) any other terms
of the Offered Debt Securities which terms shall not be inconsistent with the
provisions of the Indenture.
Debt Securities may be issued at a discount from their principal amount
("Original Issue Discount Securities"). Federal income tax considerations and
other special considerations applicable to any such Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
Debt Securities may be issued in bearer form, with or without coupons.
Federal income tax considerations and other special considerations applicable to
bearer securities will be described in the applicable Prospectus Supplement.
Unless otherwise indicated in this Prospectus or a Prospectus Supplement,
the Debt Securities will not have the benefit of any covenants that limit or
restrict the Company's business or operations, the pledging of the Company's
assets or the incurrence of indebtedness by the Company.
STATUS OF DEBT SECURITIES
The Senior Debt Securities will be unsubordinated obligations of the
Company and will rank on a parity with all other unsecured and unsubordinated
indebtedness of the Company.
The obligations of the Company pursuant to Senior Subordinated Debt
Securities will be subordinate in right of payment, to the extent and in the
manner set forth in the Indenture, to all Senior Indebtedness of the Company.
Except to the extent set forth in the Prospectus Supplement, "Senior
Indebtedness" of the Company is defined to mean the principal of, and premium,
if any, and any interest (including interest accruing subsequent to the
commencement of any proceeding for the bankruptcy or reorganization of the
Company under any applicable bankruptcy, insolvency or similar law now or
hereafter in effect) on (a) all indebtedness of the Company whether heretofore
or hereafter incurred (i) for borrowed money or (ii) in connection with the
acquisition by the Company or a subsidiary of assets other than in the ordinary
course of business, for the payment of which the Company is liable directly or
indirectly by guarantee, letter of credit, obligation to purchase or acquire or
otherwise, or the payment of which is secured by a lien, charge or encumbrance
on assets acquired by the Company, (b) amendments, modifications, renewals,
extensions and deferrals of any such indebtedness, and (c) any indebtedness
issued in exchange for any such indebtedness (clauses (a) through (c) hereof
being collectively referred to herein as "Debt"); provided, however, that the
following will not constitute Senior Indebtedness with respect to Senior
Subordinated Debt Securities: (1) any Debt as to which, in the instrument
evidencing such Debt or pursuant to which such Debt was issued, it is expressly
provided that such Debt is subordinate in right of payment to all Debt of the
Company not expressly subordinated to such Debt; (2) any Debt which by its terms
refers explicitly to the Senior Subordinated Debt Securities and states that
such Debt shall not be senior in right of payment; and (3) any Debt of the
Company
6
<PAGE> 20
in respect of the Senior Subordinated Debt Securities or any Subordinated Debt
Securities. The Company will not issue Debt which is subordinated in right of
payment to any other Debt of the Company and which is not expressly made pari
passu with, or subordinate and junior in right of payment to, the Senior
Subordinated Debt Securities.
The obligations of the Company pursuant to Subordinated Debt Securities
will be subordinate in right of payment to all Senior Indebtedness of the
Company and to any Senior Subordinated Debt Securities; provided, however, that
the following will not constitute Senior Indebtedness with respect to
Subordinated Debt Securities: (1) any Debt as to which, in the instrument
evidencing such Debt or pursuant to which such Debt was issued, it is expressly
provided that such Debt is subordinate in right of payment to all Debt of the
Company not expressly subordinated to such Debt; and (2) any Debt of the Company
in respect of Subordinated Debt Securities and any Debt which by its terms
refers explicitly to the Subordinated Debt Securities and states that such Debt
shall not be senior in right of payment.
No payment pursuant to the Senior Subordinated Debt Securities or the
Subordinated Debt Securities, as the case may be, may be made unless all amounts
of principal, premium, if any, and interest then due on all applicable Senior
Indebtedness of the Company shall have been paid in full or if there shall have
occurred and be continuing beyond any applicable grace period a default in any
payment with respect to any such Senior Indebtedness, or if there shall have
occurred any event of default with respect to any such Senior Indebtedness
permitting the holders thereof to accelerate the maturity thereof, or if any
judicial proceeding shall be pending with respect to any such default. However,
the Company may make payments pursuant to the Senior Subordinated Debt
Securities or the Subordinated Debt Securities, as the case may be, if a default
in payment or an event of default with respect to the Senior Indebtedness
permitting the holder thereof to accelerate the maturity thereof has occurred
and is continuing and judicial proceedings with respect thereto have not been
commenced within a certain number of days of such default in payment or event of
default. Upon any distribution of the assets of the Company upon dissolution,
winding-up, liquidation or reorganization, the holders of Senior Indebtedness of
the Company will be entitled to receive payment in full of principal, premium,
if any, and interest (including interest accruing subsequent to the commencement
of any proceeding for the bankruptcy or reorganization of the Company under any
applicable bankruptcy, insolvency or similar law now or hereafter in effect)
before any payment is made on the Senior Subordinated Debt Securities or
Subordinated Debt Securities, as applicable. By reason of such subordination, in
the event of insolvency of the Company, holders of Senior Indebtedness of the
Company may receive more, ratably, and holders of the Senior Subordinated Debt
Securities or Subordinated Debt Securities, as applicable, having a claim
pursuant to the Senior Subordinated Debt Securities or Subordinated Debt
Securities, as applicable, may receive less, ratably, than the other creditors
of the Company. Such subordination will not prevent the occurrence of any event
of default (an "Event of Default") in respect of the Senior Subordinated Debt
Securities or the Subordinated Debt Securities.
If the Company offers Debt Securities, the applicable Prospectus Supplement
will set forth the aggregate amount of outstanding indebtedness, if any, as of
the most recent practicable date that by the terms of such Debt Securities would
be senior to such Debt Securities. The applicable Prospectus Supplement will
also set forth any limitation on the issuance by the Company of any additional
senior indebtedness.
CONVERSION RIGHTS
The terms, if any, on which Debt Securities of a series may be exchanged
for or converted into shares of Common Stock or Preferred Stock will be set
forth in the Prospectus Supplement relating thereto.
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise specified in the applicable Prospectus Supplement, payment
of principal, premium, if any, and any interest on the Debt Securities will be
payable, and the exchange of and the transfer of Debt Securities will be
registerable, at the office of the Trustee or at any other office or agency
maintained by the Company for such purpose subject to the limitations of the
Indenture. Unless otherwise indicated in the applicable Prospectus Supplement,
the Debt Securities will be issued in denominations of U.S. $1,000 or
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integral multiples thereof. No service charge will be made for any registration
of transfer or exchange of the Debt Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
imposed in connection therewith.
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in the form of one or more
Global Securities (the "Global Securities") that will be deposited with a
Depositary or its nominee identified in the applicable Prospectus Supplement. In
such a case, one or more Global Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of outstanding Debt Securities of the series to be represented by such Global
Security or Securities. Each Global Security will be deposited with such
Depositary or nominee or a custodian therefor and will bear a legend regarding
the restrictions on exchanges and registration of transfer thereof referred to
below and any such other matters as may be provided for pursuant to the
applicable Indenture.
Notwithstanding any provision of the Indenture or any Debt Security
described herein, no Global Security may be transferred to, or registered or
exchanged for Debt Securities registered in the name of, any person other than
the Depositary for such Global Security or any nominee of such Depositary, and
no such transfer may be registered, unless (i) the Depositary has notified the
Company that it is unwilling or unable to continue as Depositary for such Global
Security or has ceased to be qualified to act as such as required by the
applicable Indenture, (ii) the Company executes and delivers to the Trustee an
order that such Global Security shall be so transferable, registrable and
exchangeable, and such transfers shall be registrable, or (iii) there shall
exist such circumstances, if any, as may be described in the applicable
Prospectus Supplement. All Debt Securities issued in exchange for a Global
Security or any portion thereof will be registered in such names as the
Depositary may direct.
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in the applicable Prospectus Supplement. The Company expects
that the following provisions will apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited with
or on behalf of a Depositary will be represented by a Global Security registered
in the name of such Depositary or its nominee. Upon the issuance of such Global
Security and the deposit of such Global Security with or on behalf of the
Depositary for such Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the Debt Securities represented by such Global Security to the accounts of
institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited will be designated by the
underwriters or agents of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in such Global Security will be limited to participants or persons
that may hold interests through participants. Ownership of beneficial interests
by participants in such Global Security will be shown on, and the transfer of
that ownership interest will be effected only through, records maintained by the
Depositary or its nominee for such Global Security. Ownership of beneficial
interests in such Global Security by Persons that hold through participants will
be shown on, and the transfer of that ownership interest within such participant
will be effected only through, records maintained by such participant. The laws
of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in certificated form. The foregoing
limitations and such laws may impair the ability to transfer beneficial
interests in such Global Securities.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Unless otherwise specified in the applicable Prospectus Supplement,
owners of beneficial interests in such Global Security will not be entitled to
have Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities of such series in certified form and will not be
considered the holders thereof for any purposes under the Indenture.
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Accordingly, each person owning a beneficial interest in such Global Security
must rely on the procedures of the Depositary and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest, to exercise any rights of a holder under the Indenture. If the
Company requests any action of holders or an owner of a beneficial interest in
such Global Security desires to give any notice or take any action a holder is
entitled to give or take under the Indenture, the Depositary will authorize the
participants to give such notice or take such action, and participants would
authorize beneficial owners owning through such participants to give such notice
or take such action or would otherwise act upon the instructions of beneficial
owners owning through them.
Notwithstanding any other provisions to the contrary in the Indenture, the
rights of the beneficial owners of the Debt Securities to receive payment of the
principal and premium, if any, of and interest on such Debt Securities, on or
after the respective due dates expressed in such Debt Securities, or to
institute suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of the
beneficial owners.
Principal of and any interest on a Global Security will be payable in the
manner described in the applicable Prospectus Supplement.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any holders of outstanding Debt
Securities, may not consolidate with or merge into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its property
or assets to any person unless (a) the Company is the surviving corporation or
the entity or the person formed by or surviving any such consolidation or merger
(if other than the Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made is a corporation organized
and existing under the laws of the United States, any state thereof or the
District of Columbia; (b) the entity or person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the Debt
Securities and the Indenture; and (c) immediately prior to and after the
transaction no Default or Event of Default exists.
Except as may be described in a Prospectus Supplement applicable to a
particular series of Debt Securities, there are no covenants or other provisions
in the Indenture providing for a put or increased interest or otherwise that
would afford holders of Debt Securities additional protection in the event of a
recapitalization transaction, a change of control of the Company or a highly
leveraged transaction.
COVENANTS OF THE COMPANY
The applicable Prospectus Supplement will describe any material covenants
in respect of a series of Offered Debt Securities. Other than the covenants of
the Company included in the Indenture as described above or as described in the
applicable Prospectus Supplement, the Indenture will not provide holders of Debt
Securities protection in the event of a highly-leveraged transaction,
reorganization, restructuring, merger or similar transaction involving the
Company which could adversely affect holders of Debt Securities.
EVENTS OF DEFAULT
Unless otherwise specified in the applicable Prospectus Supplement, the
following will constitute Events of Default under the Indenture with respect to
Debt Securities of any series: (a) failure to pay principal of any Debt Security
of that series when due and payable at maturity, upon redemption or otherwise;
(b) failure to pay any interest on any Debt Security of that series when due,
and the Default continues for 30 days; (c) an Event of Default, as defined in
the Debt Securities of that series, occurs and is continuing, or the Company
fails to comply with any of its other agreements in the Debt Securities of that
series or in the Indenture with respect to that series and the Default continues
for the period and after the notice provided therein (and described below); and
(d) certain events of bankruptcy, insolvency or reorganization. A Default under
clause (c) above is not an Event of Default with respect to a particular series
of Securities until the Trustee or the holders of at least 25% in principal
amount of the then outstanding Securities of that series notify the
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<PAGE> 23
Company of the Default and the Company does not cure the Default within 30 days
after receipt of the notice. The notice must specify the Default, demand that it
be remedied and state that the notice is a "Notice of Default."
If an Event of Default with respect to outstanding Debt Securities of any
series (other than an Event or Default relating to certain events of bankruptcy,
insolvency or reorganization) shall occur and be continuing, either the Trustee
or the holders of at least 25% in principal amount of the outstanding Debt
Securities of that series by notice, as provided in the Indenture, may declare
the unpaid principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities, such lesser amount as may be specified in
the terms of that series) of, and any accrued and unpaid interest on, all Debt
Securities of that series to be due and payable immediately. However, at any
time after a declaration of acceleration with respect to Debt Securities of any
series has been made, but before a judgment or decree based on such acceleration
has been obtained, the holders of a majority in principal amount of the
outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration. For information as to waiver of defaults,
see "Modification and Waiver" below.
The Indenture will provide that, subject to the duty of the Trustee during
an Event of Default to act with the required standard of care, the Trustee will
be under no obligation to exercise any of its rights or powers under the
applicable Indenture at the request or direction of any of the holders, unless
such holders shall have offered to the Trustee reasonable security or indemnity.
Subject to certain provisions, including those requiring security or
indemnification of the Trustee, the holders of a majority in principal amount of
the outstanding Debt Securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Debt Securities of that series.
The Company will be required to furnish to the Trustee under the Indenture
annually a statement as to the performance by the Company of its obligations
under that Indenture and as to any default in such performance.
MODIFICATION AND WAIVER
Subject to certain exceptions, the Company and the Trustee may amend the
Indenture or the Debt Securities with the written consent of the holders of a
majority in principal amount of the then outstanding Debt Securities of each
series affected by the amendment with each series voting as a separate class.
The holders of a majority in principal amount of the then outstanding Debt
Securities of any series may also waive compliance in a particular instance by
the Company with any provision of the Indenture with respect to the Debt
Securities of that series; provided, however, that without the consent of each
holder of Debt Securities affected, an amendment or waiver may not (i) reduce
the percentage of the principal amount of Debt Securities whose holders must
consent to an amendment or waiver; (ii) reduce the rate or change the time for
payment of interest on any Debt Security; (iii) reduce the principal of or
change the fixed maturity of any Debt Security, or alter the redemption
provisions which respect thereto; (iv) make any Debt Security payable in money
other than that stated in the Debt Security; (v) make any change in the
provisions concerning waivers of Default or Events of Default by holders or the
rights of holders to recover the principal of or interest on any Debt Security;
or (vi) waive a default in the payment of the principal of, or interest on, any
Debt Security, except as otherwise provided in the Indenture. The Company and
the Trustee may amend the Indenture or the Debt Securities without notice to or
the consent of any holder of a Debt Security: (i) to cure any ambiguity, defect
or inconsistency; (ii) to comply with the Indenture's provisions with respect to
successor corporations; (iii) to comply with any requirements of the Commission
in connection with the qualification of the Indenture under the TIA; (iv) to
provide for Debt Securities in addition to or in place of certificated Debt
Securities; (v) to add to, change or eliminate any of the provisions of the
Indenture in respect of one of more series of Debt Securities, provided,
however, that any such addition, change or elimination (A) shall neither (1)
apply to any Debt Security of any series created prior to the execution of such
amendment and entitled to the benefit of such provision, nor (2) modify the
rights of a holder of any such Debt Security with respect to such provision, or
(B) shall become effective only when there is no outstanding Debt Security of
any series created prior to such amendment and entitled to the benefit of such
provision; (vi) to make any change that
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does not adversely affect in any material respect the interest on any holder; or
(vii) to establish additional series of Debt Securities as permitted by the
Indenture.
Subject to certain exceptions, the holders of a majority in principal
amount of the then outstanding Debt Securities of any series, by notice to the
Trustee, may waive an existing Default or Event of Default and its consequences
except a Default or Event of Default in the payment of the principal of or
interest on any Debt Security with respect to the Debt Securities of that
series.
TERMINATION OF THE COMPANY'S OBLIGATIONS UNDER THE DEBT SECURITIES AND THE
INDENTURE
Except as otherwise described below, the Company may terminate its
obligations under the Debt Securities and the Indenture with respect to the Debt
Securities if:
(a) all previously authenticated and delivered (other than destroyed,
lost or stolen Debt Securities which have been replaced or Debt Securities
which are paid or Debt Securities for whose payment money or securities has
theretofore been held in trust and thereafter repaid to the Company) have
been delivered to the Trustee for cancellation and the Company has paid all
sums payable by it under the Indenture; or
(b) (1) the Debt Securities mature within one year; and
(2) the Company irrevocably deposits in trust with the Trustee during
such one-year period, under the terms of an irrevocable trust agreement in
form and substance satisfactory to the Trustee, as trust funds solely for
the benefit of the holders of Debt Securities for that purpose, money or
U.S. Government Obligations, or a combination thereof, with the U.S.
Government Obligations maturing as to principal and interest in such
amounts and at such times as are sufficient, without consideration of any
reinvestment of such interest, to pay principal of and interest on the Debt
Securities to maturity and to pay all other sums payable by it under the
Indenture; or
(c) (1) the Company irrevocably deposits in trust with the Trustee
under the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds solely for the benefit of the
holders of Debt Securities for that purpose, money or U.S. Government
Obligations, or a combination thereof, with the U.S. Government Obligations
maturing as to principal and interest in such amounts and at such times as
are sufficient, without consideration of any reinvestment of such interest,
to pay principal of and interest on the Debt Securities to maturity;
(2) The Company shall have delivered to the Trustee (A) a ruling
directed to the Trustee received from the Internal Revenue Service to the
effect that the holders of the Debt Securities will not recognize income,
gain or loss for federal income tax purposes as a result of the Company's
exercise of its option under this clause (c) and will be subject to federal
income tax on the same amount and in the same manner and at the same times
as would have been the case if such option had not been exercised, or (B)
an opinion of counsel to the same effect as the ruling described in
subclause (A) above accompanied by a ruling to that effect published by the
Internal Revenue Service, unless there has been a change in the applicable
federal income tax law since the date of the Indenture such that a ruling
from the Internal Revenue Service is no longer required;
(3) The Company has paid or caused to be paid all sums then payable by
the Company under the Indenture; and
(4) the Company has delivered to the Trustee an officers' certificate
and an opinion of counsel, each stating that all conditions precedent
provided for in this clause (c) relating to termination of obligations of
the Company have been complied with.
The Company's obligations under sections of the Indenture relating to the
registrar and the paying agent, their obligations, the maintenance of a list of
holders, transfers of Debt Securities, replacement of securities, payment
(together with payment obligations under the Debt Securities), compensation and
indemnity of the Trustee, replacement of the Trustee and repayment to the
Company of excess money held by the Trustee or the paying Agent, shall survive
until the Debt Securities are no longer outstanding. If the ruling from the
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Internal Revenue Service or opinion of counsel referred to in clause (c)(2)
above is based on or assumes that the Company's payment obligations under the
Indenture or its payment obligations under the Debt Securities will continue (or
is silent with respect thereto), then such discharge shall constitute only a
"covenant defeasance" and, consequently, the Company shall remain liable for the
payment of the Debt Securities. However, if and when a ruling from the Internal
Revenue Service or opinion of counsel referred to in clause (c)(2) above is able
to be provided specifically without regard to, and not in reliance upon, the
continuance of the Company's payment obligations under the Indenture and its
payment obligations under the Debt Securities, then the Company's payment
obligations under the Indenture and the Debt Securities shall cease upon
delivery to the Trustee of such ruling or opinion of counsel and compliance with
the other conditions precedent provided for in clause (c) above relating to the
satisfaction and discharge of the Indenture. In such a case (a "legal
defeasance") holders would be able to look only to the trust fund for payment of
principal or interest on the Debt Securities.
REGARDING THE TRUSTEES
The Trustee with respect to the first series of Debt Securities, if any,
will be identified in the Prospectus Supplement relating to such Debt
Securities. Other Trustees may be designated for any subsequent series of Debt
Securities. The Indenture and provisions of the TIA incorporated by reference
therein, contain certain limitations on the rights of the Trustee, should it
become a creditor of the Company, to obtain payment of claims in certain cases,
or to realize on certain property received in respect of any such claim, as
security or otherwise. The Trustee and its affiliates engage in, and will be
permitted to continue to engage in, other transactions with the Company and its
affiliates; provided, however, that if it acquires any conflicting interest (as
defined), it must eliminate such conflict or resign.
The holders of a majority in principal amount of the then outstanding Debt
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee. The TIA and the Indenture provide that in case an Event of Default
shall occur (and be continuing), the Trustee will be required, in the exercise
of its rights and powers, to use the degree of care and skill of a prudent man
in the conduct of his own affairs. Subject to such provision, the Trustee will
be under no obligation to exercise any of its rights or powers under the
Indenture at the request of any of the holders of the Debt Securities issued
thereunder, unless they have offered to the Trustee indemnity satisfactory to
it.
DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of any series of the
Preferred Stock offered by any Prospectus Supplement will be described in such
Prospectus Supplement. The description of certain provisions of the Preferred
Stock set forth below and in any Prospectus Supplement does not purport to be
complete and is subject to and qualified in its entirety by reference to the
Company's Articles of Incorporation, as amended (the "Articles of
Incorporation"), and the certificate of designation (a "Certificate of
Designation") relating to each series of the Preferred Stock which will be filed
with the Commission and incorporated by reference in the Registration Statement
of which this Prospectus is a part at or prior to the time of the issuance of
such series of the Preferred Stock. As of August 22, 1995, the Company had no
shares of Preferred Stock outstanding.
GENERAL
The Company has the authority to issue up to 10,000,000 shares of preferred
stock, $.01 par value per share ("preferred stock of the Company," which term,
as used herein, includes the Preferred Stock offered hereby). Under the Articles
of Incorporation, the Board of Directors of the Company is authorized without
further stockholder action to designate and provide for the issuance of such
shares of preferred stock of the Company, in one or more series, with such
voting powers, full or limited, and with such designations, preferences and
relative participating, optional or other special rights, and qualifications,
limitations or
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restrictions thereof, as shall be stated in the resolution or resolutions
providing for the issue of a series of such stock adopted, at any time or from
time to time, by the Board of Directors of the Company (as used herein the term
"Board of Directors of the Company" includes any duly authorized committee
thereof).
The Preferred Stock shall have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in a Prospectus
Supplement relating to a particular series of the Preferred Stock. Reference is
made to the Prospectus Supplement relating to the particular series of the
Preferred Stock offered thereby for specific terms, including: (i) the
designation and stated value per share of such Preferred Stock and the number of
shares offered; (ii) the amount of liquidation preference per share; (iii) the
initial public offering price at which such Preferred Stock will be issued; (iv)
the dividend rate (or method of calculation), the dates on which dividends shall
be payable and the dates from which dividends shall commence to cumulate, if
any; (v) any redemption or sinking fund provisions; (vi) any conversion or
exchange rights; (vii) whether depositary shares representing shares of such
Preferred Stock will be offered and, if so, the fraction of a share of such
Preferred Stock represented by each depositary share; and (viii) any additional
voting, dividend, liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations and restrictions.
The Preferred Stock will, when issued, be fully paid and nonassessable and
will have no preemptive rights. The rights of the holders of each series of the
Preferred Stock will be subordinate to those of the Company's general creditors.
DIVIDEND RIGHTS
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of the Company, out of funds
of the Company legally available therefor, cash dividends on such dates and at
such rates as are set forth in, or as are determined by the method described in,
the Prospectus Supplement relating to such series of the Preferred Stock. Such
rate may be fixed or variable or both. Each such dividend will be payable to the
holders of record as they appear on the stock books of the Company on such
record dates, fixed by the Board of Directors of the Company, as specified in
the Prospectus Supplement relating to such series of Preferred Stock.
Such dividends may be cumulative or noncumulative, as provided in the
Prospectus Supplement relating to such series of Preferred Stock. If the Board
of Directors of the Company fails to declare a dividend payable on a dividend
payment date on any series of Preferred Stock for which dividends are
noncumulative, then the right to receive a dividend in respect of the dividend
period ending on such dividend payment date will be lost, and the Company will
have no obligation to pay any dividend for such period, whether or not dividends
on such series are declared payable on any future dividend payment dates.
Dividends on the shares of each series of Preferred Stock for which dividends
are cumulative will accrue from the date on which the Company initially issues
shares of such series.
Unless otherwise specified in the applicable Prospectus Supplement, so long
as the shares of any series of the Preferred Stock are outstanding, unless (i)
full dividends (including if such Preferred Stock is cumulative, dividends for
prior dividend periods) have been paid or declared and set apart for payment on
all outstanding shares of the Preferred Stock of such series and all other
classes and series of preferred stock of the Company (other than Junior Stock,
as defined below) and (ii) the Company is not in default or in arrears with
respect to the mandatory or optional redemption or mandatory repurchase or other
mandatory retirement of, or with respect to any sinking or other analogous funds
for, any shares of Preferred Stock of such series or any shares of any other
preferred stock of the Company of any class or series (other than Junior Stock),
the Company may not declare any dividends on any shares of Common Stock of the
Company or any other stock of the Company ranking as to dividends or
distributions of assets junior to such series of Preferred Stock (the Common
Stock and any such other stock being herein referred to as "Junior Stock"), or
make any payment on account of, or set apart money for, the purchase, redemption
or other retirement of, or for a sinking or other analogous fund for, any shares
of Junior Stock or make any distribution in respect thereof, whether in cash or
property or in obligations of stock of the Company, other than in Junior Stock
which is neither convertible into, nor exchangeable or exercisable for, any
securities of the Company other than Junior Stock.
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LIQUIDATION PREFERENCES
Unless otherwise specified in the applicable Prospectus Supplement, in the
event of any liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, the holders of each series of the Preferred Stock will
be entitled to receive out of the assets of the Company available for
distribution to stockholders, before any distribution of assets is made to the
holders of Common Stock or any other shares of stock of the Company ranking
junior as to such distribution to such series of the Preferred Stock, the amount
set forth in the Prospectus Supplement relating to such series of the Preferred
Stock. If, upon any voluntary or involuntary liquidation, dissolution or winding
up of the Company, the amounts payable with respect to the Preferred Stock of
any series and any other shares of preferred stock of the Company (including any
other series of the Preferred Stock) ranking as to any such distribution on a
parity with such series of the Preferred Stock are not paid in full, the holders
of the Preferred Stock of such series and of such other shares of preferred
stock of the Company will share ratably in any such distribution of assets of
the Company in proportion to the full respective preferential amounts to which
they are entitled. After payment to the holders of the Preferred Stock of each
series of the full preferential amounts of the liquidating distribution to which
they are entitled, unless otherwise provided in the applicable Prospectus
Supplement, the holders of each such series of the Preferred Stock will be
entitled to no further participation in any distribution of assets by the
Company.
REDEMPTION
A series of the Preferred Stock may be redeemable, in whole or from time to
time in part, at the option of the Company, and may be subject to mandatory
redemption pursuant to a sinking fund or otherwise, in each case upon terms, at
the times and at the redemption prices set forth in the Prospectus Supplement
relating to such series. Shares of the Preferred Stock redeemed by the Company
will be restored to the status of authorized but unissued shares of preferred
stock of the Company.
In the event that fewer than all of the outstanding shares of a series of
the Preferred Stock are to be redeemed, whether by mandatory or optional
redemption, the number of shares to be redeemed will be determined by lot or pro
rata (subject to rounding to avoid fractional shares) as may be determined by
the Company or by any other method as may be determined by the Company in its
sole discretion to be equitable. From and after the redemption date (unless
default is made by the Company in providing for the payment of the redemption
price plus cumulated and unpaid dividends, if any) dividends will cease to
accumulate on the shares of the Preferred Stock called for redemption and all
rights of the holders thereof (except the right to receive the redemption price
plus accumulated and unpaid dividends, if any) will cease.
Unless otherwise specified in the applicable Prospectus Supplement, so long
as any dividends on shares of any series of the Preferred Stock or any other
series of preferred stock of the Company ranking on a parity as to dividends and
distribution of assets with such series of the Preferred Stock are in arrears,
no shares of any such series of the Preferred Stock or such other series of
preferred stock of the Company will be redeemed (whether by mandatory or
optional redemption) unless all such shares are simultaneously redeemed, and the
Company will not purchase or otherwise acquire any such shares; provided,
however, that the foregoing will not prevent the purchase or acquisition of
share shares pursuant to a purchase or exchange offer made on the same terms to
holders of all such shares outstanding.
CONVERSION AND EXCHANGE RIGHTS
The terms, if any, on which shares of Preferred Stock of any series may be
exchanged for or converted into shares of Common Stock or another series of
Preferred Stock will be set forth in the Prospectus Supplement relating thereto.
Such terms may include provisions for conversion, either mandatory, at the
option of the holder, or at the option of the Company, in which case the number
of shares of Common Stock or the number of shares of another series of Preferred
Stock to be received by the holders of Preferred Stock would be calculated as of
a time and in the manner stated in the Prospectus Supplement.
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VOTING RIGHTS
Except as indicated in a Prospectus Supplement relating to a particular
series of the Preferred Stock, or except as required by applicable law, the
holders of the Preferred Stock will not be entitled to vote for any purpose.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares (as defined below) and Depositary Receipts (as defined below) does not
purport to be complete and is subject to and qualified in its entirety by
reference to the forms of Deposit Agreement and Depositary Receipts relating to
each series of Preferred Stock which will be filed with the Commission in
connection with the offering of any such series of Preferred Stock.
GENERAL
The Company may, at its option, elect to offer fractional interest in
shares of Preferred Stock, rather than shares of Preferred Stock. In the event
such option is exercised, the Company will provide for the issuance by a
Depositary to the public of receipts for depositary shares ("Depositary
Shares"), each of which will represent fractional interests of a particular
series of Preferred Stock (which will be set forth in the Prospectus Supplement
relating to a particular series of Preferred Stock).
The shares of any series of Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between the Company and a bank or trust company selected by the
Company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000 (the "Depositary"). The Prospectus
Supplement relating to a series of Depositary Shares will set forth the name and
address of the Depositary. Subject to the terms of the Deposit Agreement, each
owner of Depositary Shares will be entitled, in proportion to the applicable
fractional interests in shares of Preferred Stock underlying such Depositary
Shares, to all the rights and preferences of the Preferred Stock underlying such
Depositary Shares (including dividend, voting, redemption, conversion and
liquidation rights). Additionally, each owner of Depositary Shares is entitled
to receive the shares of Preferred Stock underlying such Depositary Shares.
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement (the "Depositary Receipts"). Depositary
Receipts will be distributed to those persons purchasing the fractional
interests in shares of the related series of Preferred Stock in accordance with
the terms of the offering for Preferred Stock described in the related
Prospectus Supplement.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of Preferred Stock to the record holders of
Depositary Shares relating to such Preferred Stock in proportion, as nearly as
practicable, to the numbers of such Depositary Shares owned by such holders on
the relevant record date, subject to any applicable tax withholding. The
Depositary shall distribute only such amount, however, as can be distributed
without attributing to any holder of Depositary Shares a fraction of one cent,
and any balance not so distributed shall be added to and treated as part of the
next sum received by the Depositary for distribution to record holders of
Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, adopt such method as it deems equitable and practicable for the
purpose of effecting such distribution, including the sale of such property and
distribution of the net proceeds from such sale to such holders, subject to any
applicable tax withholding.
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<PAGE> 29
Any subscription or similar rights offered by the Company to holders of
Preferred Stock will be made available to the holders of Depositary Shares in
such manner as the Depositary may determine, with the approval of the Company.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever the Company redeems shares of Preferred Stock
held by the Depositary, the Depositary will redeem as of the same redemption
date the number of Depositary Shares relating to shares of Preferred Stock so
redeemed. If less than all of the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as may be
determined by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys, securities or other property payable upon such redemption and any money,
securities or other property to which the holders of such Depositary Shares were
entitled, including any accrued and unpaid dividends payable in connection with
such redemption, upon such redemption upon surrender to the Depositary of the
Depositary Receipts evidencing such Depositary Shares.
VOTING OF PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the
applicable Preferred Stock are entitled to vote, the Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Shares relating to such Preferred Stock. Each record holder of such
Depositary Shares on the record date (which will be the same date as the record
date for the Preferred Stock) will be entitled, subject to any applicable
restrictions, to instruct the Depositary as to the exercise of the voting rights
pertaining to the number of shares of Preferred Stock underlying such holder's
Depositary Shares. The Depositary will endeavor, insofar as practicable, to vote
the number of shares of Preferred Stock underlying such Depositary Shares in
accordance with such instructions, and the Company will agree to take all action
which may be deemed necessary by the Depositary in order to enable the
Depositary to do so.
AMENDMENT AND TERMINATION OF DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which materially
and adversely alters the rights of the existing holders of Depositary Shares
will not be effective unless such amendment has been approved by the record
holders of at least a majority of the Depositary Shares than outstanding. A
Deposit Agreement may be terminated by the Company or the Depositary only if (i)
all outstanding Depositary Shares relating thereto have been redeemed or (ii)
there has been a final distribution in respect of the Preferred Stock of the
relevant series in connection with any liquidation, dissolution or winding up of
the Company and such distribution has been distributed to the holders of the
related Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of any
Preferred Stock and any redemption of such Preferred Stock. Holders of
Depositary
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<PAGE> 30
Shares will pay transfer and other taxes and governmental charges and such other
charges as are expressly provided in the Deposit Agreement to be for their
accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice
of its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Company which are delivered to the Depositary and
which the Company is required to furnish to the holders of the applicable
Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or information provided by persons presenting
Preferred Stock for deposit, holders of Depositary Shares or other persons
believed to be competent and on documents believed to be genuine.
DESCRIPTION OF COMMON STOCK
The Company has authority to issue up to 50,000,000 shares of Common Stock,
par value $.01 per share. As of August 22, 1995, there were 18,182,600 shares of
Common Stock issued and outstanding. The holders of Common Stock are entitled to
one vote per share on all matters to be voted on by shareholders, including the
election of directors. Shareholders are not entitled to cumulative voting
rights, and, accordingly, the holders of a majority of the shares voting for the
election of directors can elect the entire Board if they choose to do so and, in
that event, the holders of the remaining shares will not be able to elect any
person to the Board of Directors.
The holders of Common Stock are entitled to receive such dividends, if any,
as may be declared from time to time by the Board of Directors, in its
discretion, from funds legally available thereof and subject to prior dividend
rights of holders of any shares of preferred stock of the Company which may be
outstanding. Upon liquidation or dissolution of the Company subject to prior
liquidation rights of the holders of preferred stock of the Company, the holders
of Common Stock are entitled to receive on a pro rata basis the remaining assets
of the Company available for distribution. Holders of Common Stock have no
preemptive or other subscription rights, and there are no conversion rights or
redemption or sinking fund provisions with respect to such shares. KeyCorp
Shareholder Services, Inc. acts as transfer agent and registrar for the Common
Stock.
DESCRIPTION OF WARRANTS
The Company may issue Warrants to purchase Debt Securities ("Debt
Warrants"), as well as Warrants to purchase Preferred Stock or Common Stock
("Equity Warrants") (together, the "Warrants"). Warrants may be issued
independently or together with any Securities and may be attached to or separate
from such Securities. The Warrants are to be issued under warrant agreements
(each a "Warrant Agreement") to be entered into between the Company and a bank
or trust company, as warrant agent (the "Warrant Agent"), all as shall be set
forth in the Prospectus Supplement relating to Warrants being offered pursuant
thereto. As of August 22, 1995, the Company has no Warrants outstanding.
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<PAGE> 31
DEBT WARRANTS
The applicable Prospectus Supplement will describe the terms of Debt
Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants
and the debt warrant certificates representing such Debt Warrants ("Debt Warrant
Certificates"), including the following: (1) the title of such Debt Warrants;
(2) the aggregate number of such Debt Warrants; (3) the price or prices at which
such Debt Warrants will be issued; (4) the designation, aggregate principal
amount and terms of the Debt Securities purchasable upon exercise of such Debt
Warrants, and the procedures and conditions relating to the exercise of such
Debt Warrants; (5) the designation and terms of any related Debt Securities with
which such Debt Warrants are issued, and the number of such Debt Warrants issued
with each such Debt Security; (6) the date, if any, on and after which such Debt
Warrants and the related Debt Securities will be separately transferable; (7)
the principal amount of Debt Securities purchasable upon exercise of each Debt
Warrant; (8) the date on which the right to exercise such Debt Warrants will
commence, and the date on which such right will expire; (9) the maximum or
minimum number of such Debt Warrants which may be exercised at any time; (10) a
discussion of any material federal income tax considerations; and (11) any other
terms of such Debt Warrants and terms, procedures and limitations relating to
the exercise of such Debt Warrants.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations, and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated in
the Prospectus Supplement. Prior to the exercise of their Debt Warrants, holders
of Debt Warrants will not have any of the rights of holders of the Debt
Securities purchasable upon such exercise and will not be entitled to payment of
principal of or any premium or interest on the Debt Securities purchasable upon
such exercise.
EQUITY WARRANTS
The applicable Prospectus Supplement will describe the following terms of
Equity Warrants offered thereby: (1) the title of such Equity Warrants; (2) the
Securities (i.e. Preferred Stock or Common Stock) for which such Equity Warrants
are exercisable; (3) the price or prices at which such Equity Warrants will be
issued; (4) if applicable, the designation and terms of the Preferred Stock or
Common Stock with which such Equity Warrants are issued, and the number of such
Equity Warrants issued with each such share of Preferred Stock or Common Stock;
(5) if applicable, the date on and after which such Equity Warrants and the
related Preferred Stock or Common Stock will be separately transferable; (6) if
applicable, a discussion of any material federal income tax considerations; and
(7) any other terms of such Equity Warrants, including terms, procedures and
limitations relating to the exchange and exercise of such Equity Warrants.
Holders of Equity Warrants will not be entitled, by virtue of being such
holders, to vote, to consent, to receive dividends, to receive notice as
stockholders with respect to any meeting of stockholders for the election of
directors of the Company or any other matter, or to exercise any rights
whatsoever as stockholders of the Company.
The exercise price payable and the number of shares of Common Stock of
Preferred Stock purchasable upon the exercise of each Equity Warrant will be
subject to adjustment in certain events, including the issuance of a stock
dividend to holders of Common Stock or Preferred Stock or a stock split, reverse
stock split, combination, subdivision or reclassification of Common Stock or
Preferred Stock. In lieu of adjusting the number of shares of Common Stock or
Preferred Stock purchasable upon exercise of each Equity Warrant, the Company
may elect to adjust the number of Equity Warrants. No adjustments in the number
of shares purchasable upon exercise of the Equity Warrants will be required
until cumulative adjustments require an adjustment of at least 1% thereof. The
Company may, at its option, reduce the exercise price at any time. No fractional
shares will be issued upon exercise of Equity Warrants, but the Company will pay
the cash value of any fractional shares otherwise issuable. Notwithstanding the
foregoing, in case of any consolidation, merger, or sale or conveyance of the
property of the Company as an entirety or substantially as an entirety, the
holder of each outstanding Equity Warrant shall have the right to the kind and
amount of shares of stock and other securities and property (including cash)
receivable by a holder of the number of shares of Common Stock of Preferred
Stock into which such Equity Warrant was exercisable immediately prior thereto.
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<PAGE> 32
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase for cash such principal
amount of Securities at such exercise price as shall in each case be set forth
in, or be determinable as set forth in, the Prospectus Supplement relating to
the Warrants offered thereby. Warrants may be exercised at any time up to the
close of business on the expiration date set forth in the Prospectus Supplement
relating to the Warrants offered thereby. After the close of business on the
expiration date, unexercised Warrants will become void.
Warrants may be exercised as set forth in the Prospectus Supplement
relating to the Warrants offered thereby. Upon receipt of payment and the
warrant certificate properly completed and duly executed at the corporate trust
office of the Warrant Agent or any other office indicated in the Prospectus
Supplement, the Company will, as soon as practicable, forward the Securities
purchasable upon such exercise. If less than all of the Warrants represented by
such warrant certificate are exercised, a new warrant certificate will be issued
for the remaining Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Securities to one or more underwriters, which may
include Salomon Brothers Inc, for public offering and sale in the United States
or Canada by them or may sell the Securities to investors directly or through
agents. Any such underwriter or agent involved in the offer and sale of
Securities will be named in the applicable Prospectus Supplement. The Company
has reserved the right to sell Securities directly to investors on its own
behalf in those jurisdictions where and in such manner as it is authorized to do
so.
Underwriters may offer and sell Securities at a fixed price or prices,
which may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, or at negotiated prices. The Company
also may, from time to time, authorize dealers, acting as the Company's agents,
to offer and sell Securities upon the terms and conditions as are set forth in
the applicable Prospectus Supplement. In connection with the sale of Securities,
underwriters may receive compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of the Securities for whom they may act as agent. Underwriters may
sell Securities to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers, will be set forth
in the applicable Prospectus Supplement. Dealers and agents participating in the
distribution of Securities may be deemed to be underwriters, and any discounts
and commissions received by them and any profit realized by them on resale of
the Securities may be deemed to be underwriting discounts and commissions.
Underwriters, dealers and agents may be entitled, under agreements entered into
with the Company, to indemnification against and contribution toward certain
civil liabilities, including liabilities under the Securities Act of 1933.
If so indicated in the Prospectus Supplement, the Company will authorize
dealers acting as the Company's agents to solicit offers by certain institutions
to purchase the Securities from the Company at the public offering price set
forth in the applicable Prospectus Supplement pursuant to delayed delivery
contracts ("Contracts") providing for payment and delivery on the date or dates
stated in such Prospectus Supplement. Each Contract will be for an amount not
less than the amounts stated in the applicable Prospectus Supplement.
Institutions with whom Contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions, and other institutions but
will in all cases be subject to the approval of the Company. Contracts will not
be subject to any conditions except (i) the purchase by the institution of the
Securities covered by its Contract shall not at the time of delivery be
prohibited under the laws of any jurisdiction in the United States to which such
institution is subject, and (ii) if the Securities are being sold to
underwriters, the Company shall have sold to such underwriters the total amount
specified in the applicable Prospectus Supplement. A
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<PAGE> 33
commission indicated in the applicable Prospectus Supplement will be paid to
underwriters and agents soliciting purchases of Securities pursuant to Contracts
accepted by the Company.
The rules of the Commission generally prohibit underwriters and other
members of the selling group from making a market in the Company's Common Stock
during the "cooling off" period immediately preceding the commencement of sales
in the offering. The Commission has, however, adopted an exemption from these
rules that permits passive market making under certain conditions. These rules
permit an underwriter or other member of the selling group to continue to make a
market in the Company's Common Stock subject to the conditions, among others,
that its bid not exceed the highest bid by a market maker not connected with the
offering and that its net purchases on any one trading day not exceed prescribed
limits. Pursuant to these exemptions, certain underwriters and other members of
the selling group may engage in passive market making in the Company's Common
Stock during the cooling off period.
LEGAL MATTERS
Certain legal matters with respect to the Securities offered hereby will be
passed upon for the Company by Latham & Watkins, San Francisco, California.
Certain legal matters will be passed upon for any agents or underwriters by
counsel for such agents or underwriters identified in the applicable Prospectus
Supplement.
EXPERTS
The financial statements of FirstMiss Gold Inc. as of June 30, 1995 and
1994, and for each of the years in the three-year period ended June 30, 1995
have been incorporated by reference herein and in the registration statement in
reliance upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
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NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN SO AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER.
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY BY ANYONE IN ANY JURISDICTION
IN WHICH SUCH OFFER TO SELL IS NOT AUTHORIZED, OR IN WHICH THE PERSON IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS NOR ANY SALE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Company........................... S-3
Available Information................. S-3
Risk Factors.......................... S-4
Use of Proceeds....................... S-11
Price Range of Common Stock and
Dividends........................... S-11
Underwriting.......................... S-12
Transfer Agent and Registrar.......... S-13
Legal Matters......................... S-13
Experts............................... S-13
PROSPECTUS
Available Information................. 2
Information Incorporated by
Reference........................... 2
The Company........................... 3
Risk Factors.......................... 3
Use of Proceeds....................... 3
Ratios of Earnings to Fixed Charges
and Earnings to Combined Fixed
Charges and Preferred Stock
Dividends........................... 4
General Description of Securities..... 5
Description of Debt Securities........ 5
Description of Preferred Stock........ 12
Description of Depositary Shares...... 15
Description of Common Stock........... 17
Description of Warrants............... 17
Plan of Distribution.................. 19
Legal Matters......................... 20
Experts............................... 20
</TABLE>
1,000,000 SHARES
GETCHELL GOLD CORPORATION
COMMON STOCK
(PAR VALUE $.0001 PER SHARE)
NESBITT BURNS SECURITIES INC.
SCOTIA CAPITAL MARKETS (USA) INC.
FIRST MARATHON SECURITIES LIMITED
TD SECURITIES INC.
MARCH 11, 1997
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