<PAGE>
PROSPECTUS
TETRA TECH, INC.
266,708 SHARES OF COMMON STOCK
------------------------
The 266,708 shares (the "Shares") of Common Stock, par value $.01 per share
("Common Stock"), of Tetra Tech, Inc. ("Tetra Tech" or the "Company") offered
hereby are to be sold by the persons named herein under "Selling Stockholders."
INVESTORS SHOULD CONSIDER THE INFORMATION SET FORTH IN THIS
PROSPECTUS BEGINNING ON PAGE 5 UNDER "RISK FACTORS" PRIOR TO PURCHASE.
Holders of the Shares may resell the Shares from time to time in
transactions on the Nasdaq National Market, and may sell the Shares through a
broker or brokers or in the over-the-counter market at prices prevailing on such
exchange or over-the-counter market, as appropriate, at the times of such sales.
The Selling Stockholders may also make private sales directly or through such
broker or brokers. See "Plan of Distribution." Sales of the Shares may be
effected by selling such securities to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the sellers thereof. Such sellers and any broker-dealer who
acts in connection with the sales of Shares may be deemed to be "underwriters"
as that term is defined in the Securities Act of 1933, as amended (the
"Securities Act"), and any commissions received by them and profit on any resale
of the Shares might be deemed to be underwriting discounts and commissions under
the Securities Act.
None of the proceeds from the sale of the Shares will be received by the
Company. The Company has agreed to bear all expenses (other than underwriting
discounts and selling commissions and fees and expenses of counsel and other
advisors to the Selling Stockholders) in connection with the registration and
sale of the Shares being registered hereby. See "Plan of Distribution."
------------------------
The Common Stock is traded on the Nasdaq National Market under the symbol
"WATR." On September 23, 1997, the reported closing price of the Common Stock
on the Nasdaq National Market was $25 per share.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
No dealer, salesman or other person has been authorized to give any information
or to make any representations not contained or incorporated by reference in
this Prospectus, and, if given or made, such information or representations must
not be relied upon as having been authorized by the Company or by any other
person. All information contained in this Prospectus is as of the date of this
Prospectus. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company or in the facts herein set forth since the
date hereof. This Prospectus does not constitute an offer to sell or a
solicitation of any offer to buy any security other than the securities covered
by this Prospectus, nor does it constitute an offer to or solicitation of any
person in any jurisdiction in which such offer or solicitation may not lawfully
be made.
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THE DATE OF THIS PROSPECTUS IS SEPTEMBER 24, 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, and the rules and regulations thereunder, and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Company with the Commission can be
inspected and copied at the public reference facilities maintained by 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: Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and Seven
World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can be obtained by mail from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Such reports, proxy statements and other information
concerning the Company are also available for inspection at the offices of The
Nasdaq Stock Market, 1735 K Street, N.W., Washington, D.C. 20006. In addition
the Commission maintains an Internet site at http://www.sec.gov that contains
reports, proxy and information statements and other information regarding
registrants, including the Company, that file electronically with the
Commission.
The Company has filed with the Commission a registration statement on Form
S-3 (together with all exhibits, schedules, amendments, and supplements thereto,
the "Registration Statement") under the Securities Act with respect to the
Common Stock offered by this Prospectus. This Prospectus, which forms a part of
the Registration Statement, does not contain all the information set forth in
the Registration Statement (certain parts of which have been omitted in
accordance with the rules and regulations of the Commission). For further
information with respect to the Company and the Common Stock, reference is made
to the Registration Statement. Statements contained in this Prospectus as to
the contents of any contract, agreement or other document are not necessarily
complete, and, in each instance, reference is made to the copy of the document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by reference to such exhibit. The Registration
Statement may be inspected and copied at the public reference facilities at the
Commission's offices at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices at: Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven
World Trade Center, 13th Floor, New York, New York 10048. Copies of all or any
part thereof may be obtained from such office upon payment of prescribed fees.
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Prospectus incorporates by reference certain documents relating to the
Company which are not delivered herewith. These documents (other than the
exhibits to such documents, unless such exhibits are specifically incorporated
by reference into such documents) are available without charge, upon oral or
written request by any person, including any beneficial owner, to whom this
Prospectus is delivered, from the Company, 670 N. Rosemead Boulevard, Pasadena,
California 91107-2190, telephone number (626) 351-4664, Attention: Richard A.
Lemmon, Vice President and Secretary.
The following documents have been filed with the Commission pursuant to the
Exchange Act (File No. 0-11695) and are incorporated in this Prospectus by
reference and are made a part hereof:
1. Annual Report on Form 10-K for the fiscal year ended September
29, 1996 (the "Tetra Tech 10-K"), as filed with the Commission on
December 30, 1996;
2. Report on Form 10-K/A (Amendment No. 1) for the fiscal year ended
September 29, 1996, as filed with the Commission on March 26, 1997;
3. Report on Form 10-K/A (Amendment No. 2) for the fiscal year ended
September 29, 1996, as filed with the Commission on June 27, 1997;
4. Report on Form 10-K/A (Amendment No. 3) for the fiscal year ended
September 29, 1996, as filed with the Commission on September 5, 1997;
5. Quarterly Report on Form 10-Q for the fiscal quarter ended
December 29, 1996, as filed with the Commission on February 12, 1997;
6. Quarterly Report on Form 10-Q/A (Amendment No. 1) for the fiscal
quarter ended December 29, 1996, as filed with the Commission on June 27,
1997;
7. Quarterly Report on Form 10-Q for the fiscal quarter ended March
30, 1997, as filed with the Commission on May 15, 1997;
8. Quarterly Report on Form 10-Q/A (Amendment No. 1) for the fiscal
quarter ended March 30, 1997, as filed with the Commission on June 27,
1997;
9. Quarterly Report on Form 10-Q for the fiscal quarter ended
June 29, 1997, as filed with the Commission on August 13, 1997;
10. Quarterly Report on Form 10-Q/A (Amendment No. 1) for the fiscal
quarter ended June 29, 1997, as filed with the Commission on September 19,
1997;
11. Current Report on Form 8-K for event of June 11, 1997, as filed
with the Commission on June 23, 1997;
12. Current Report on Form 8-K/A (Amendment No. 1) for event of June
11, 1997, as filed with the Commission on June 24, 1997;
13. Current Report on Form 8-K/A (Amendment No. 2) for event of
June 11, 1997, as filed with the Commission on August 25, 1997;
14. Current Report on Form 8-K/A (Amendment No. 3) for event of
June 11, 1997, as filed with the Commission on September 19, 1997;
15. The portions of Tetra Tech's Proxy Statement for the Annual
Meeting of Stockholders held on February 7, 1997 that have been
incorporated by reference into the Tetra Tech 10-K, as filed with the
Commission on January 8, 1997;
16. The portions of Tetra Tech's Annual Report to Stockholders for
the fiscal year ended September 29, 1996 that have been incorporated by
reference into the Tetra Tech 10-K, as filed with the Commission on
December 30, 1996;
17. Current Report on Form 8-K/A for event of September 15, 1995, as
filed with the Commission on November 4, 1995; and
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18. The description of the Company's Common Stock which is contained
in the Registration Statement on Form 8-A, filed with the Commission on
November 13, 1991, including any amendments or reports filed for the
purpose of updating such description.
All documents and reports filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Common Stock shall be deemed
to be incorporated by reference in this Prospectus and shall be a part hereof
from the date of filing of such documents. Any statement contained in this
Prospectus or 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
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
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RISK FACTORS
AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED BY THIS PROSPECTUS
INVOLVES A HIGH DEGREE OF RISK. PROSPECTIVE PURCHASERS OF THE COMMON STOCK
OFFERED HEREBY SHOULD CAREFULLY REVIEW THE FOLLOWING RISK FACTORS AS WELL AS THE
OTHER INFORMATION SET FORTH IN THIS PROSPECTUS.
THIS PROSPECTUS, INCLUDING THE INFORMATION SET FORTH BELOW, CONTAINS
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED, AND ARE INTENDED TO BE COVERED BY THE SAFE HARBORS CREATED THEREBY.
PROSPECTIVE PURCHASERS ARE CAUTIONED THAT ALL FORWARD-LOOKING STATEMENTS ARE
SUBJECT TO RISKS AND UNCERTAINTIES, INCLUDING, WITHOUT LIMITATION, THE RISKS
OUTLINED IN THIS SECTION.
POTENTIAL LIABILITY AND INSURANCE. Because of the type of environmental
projects in which the Company is or may be involved, the Company's current and
anticipated future services may involve risks of potential liability under
Superfund, common law or contractual indemnification agreements. The Company is
involved in numerous environmental and hazardous waste projects. These
projects, and the associated risks, range in both size and complexity. The risk
factors include, but are not limited to, location; site characteristics; past,
present and future uses; and political, legal and economic environments. Such
factors make it difficult to assess accurately both the areas and magnitude of
potential risks.
The Company maintains comprehensive general liability insurance in the
amount of $1,000,000. This amount, together with $9,000,000 coverage under
umbrella policies, provide total general liability coverage of $10,000,000. The
Company's professional liability insurance ("E&O") policy, which includes
pollution coverage, for 1997 provides $10,000,000 in coverage, with a $100,000
self-insured retention. The Company procures insurance coverage through a
broker who is experienced in the engineering field. The broker, together with
the Company's Risk Manager, review the Company's risk/insurance programs with
those of the Company's competitors and clients. This review, combined with
historical experience, claims history and contractual requirements, allow the
Company to determine the adequate amount of insurance. However, because there
are various exclusions and retentions under the Company's insurance policies,
there can be no assurance that all liabilities that may be incurred by the
Company are subject to insurance coverage. In addition, the E&O policy is a
"claims made" policy which only covers claims made during the term of the
policy. If a policy terminates and retroactive coverage is not obtained, a
claim subsequently made, even a claim based on events or acts which occurred
during the term of the policy, would not be covered by the policy. In the event
the Company expands its services into new markets, no assurance can be given
that the Company will be able to obtain insurance coverage for such activities
or, if insurance is obtained, that the dollar amount of any liabilities incurred
in connection with the performance of such services will not exceed policy
limits.
The Company evaluates and determines the risk associated with an uninsured
claim. In the event the Company determines that an uninsured claim has
potential liability, the Company establishes an appropriate reserve. The
Company does not establish a reserve if its determines that the claim has no
merit. The Company's historical levels of insurance coverage and reserves have
been shown to be adequate. However, a partially or completely uninsured claim,
if successful and of significant magnitude, could have a material adverse effect
on the Company.
SIGNIFICANT COMPETITION. The market for the Company's services is highly
competitive. The Company competes with many other firms, ranging from small
local firms to large national firms having greater financial and marketing
resources than the Company. The Company performs engineering and consulting
services across a broad spectrum of business areas including facilities
management, resource management, nuclear management, waste management, and
ground and surface water management. These services are provided to a customer
base including Federal, state and local agencies, as well as the commercial
sector. The Company's competition varies and is a function of the business
areas in which, and client sectors for which, the Company performs its services.
The range of competitors for any one procurement can vary from ten to 100 firms,
depending upon the relative value of the project, the financial terms and risks
associated with the work, and any restrictions placed upon competition by the
client. Historically, competition has been based primarily on the quality and
timeliness of service. However, the Company believes that price has become an
increasingly important competitive factor.
CONTRACTS. The Company's contracts with Federal and State governments and
some of its other client contacts are subject to termination at the discretion
of the client. Some contracts made with the Federal government are subject to
annual approval of funding and audits of the Company's rates. Limitations
imposed on spending by Federal government agencies may limit the continued
funding of the Company's existing contracts with the Federal government and may
limit the Company's ability to obtain additional contracts. These limitations,
if significant, could have a material adverse effect on the Company.
All of the Company's contracts with the Federal government are subject to
audit by the government, primarily by the Defense Contract Audit Agency (the
"DCAA"), which reviews the Company's overhead rates,
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operating systems and cost proposals. During the course of its audit, the DCAA
may disallow costs if it determines that the Company improperly accounted for
such costs in a manner inconsistent with Cost Accounting Standards. A
disallowance of costs by the DCAA could have a material adverse effect on the
Company. Historically, the Company has not had any material cost disallowances
resulting from a government audit. The Company's government contracts are also
subject to renegotiation of profits in the event of a change in the contractual
scope of work to be performed.
On September 15, 1995, the Company acquired 100% of the capital stock of
PRC Environmental Management, Inc. ("EMI"). EMI's customers include the U.S.
Environmental Protection Agency, the U.S. Department of Defense and other
governmental and commercial entities. EMI's Federal government contracts are
subject to the same auditing standards as those of the Company. The government
audits of EMI for the years 1986, 1987, 1988 and 1989 have been finalized.
Audits for the years 1990, 1991 and 1992 have been completed, and negotiations
with EMI are scheduled to take place in October 1997. For these completed
audits, cost disallowances of approximately $2.0 million have been proposed by
the government, and will be vigorously contested by EMI during the negotiations.
Negotiations for the 1993 audit will commence at such time as the 1992 audit is
finalized. Audits for the years 1994, 1995 and 1996, and for the period from
September 30, 1996 through June 29, 1997, have not yet been completed.
The Company enters into various types of contracts with its clients, which
include fixed-price contracts. In fiscal 1996, 17.1% of the Company's net
revenue was derived from fixed-price contracts. Under a fixed-price contract,
the customer agrees to pay a specified price for the Company's performance of
the entire contract. Fixed-price contracts carry certain inherent risks,
including risks of losses from underestimating costs, problems with new
technologies and economic and other changes that may occur over the contract
period. Losses under fixed-price contracts could have a material adverse effect
on the Company.
CONFLICTS OF INTEREST. Many of the Company's clients are concerned about
potential or actual conflicts of interest in retaining environmental consultants
and engineers. For example, Federal government agencies have formal policies
against continuing or awarding contracts that would create actual or potential
conflicts of interest with other activities of a contractor. These policies,
among other things, may prevent the Company in certain cases from bidding for or
performing contracts resulting from or relating to certain work the Company has
performed for the government. In addition, services performed for a private
client may create a conflict of interest which precludes or limits the Company's
ability to obtain work from another private entity. The Company has, on
occasion, declined to bid on a project because of an actual or potential
conflict of interest. However, the Company has not experienced disqualification
during a bidding or award negotiation process by any government or private
client as a result of a conflict of interest.
POTENTIAL VOLATILITY OF STOCK PRICE. The market price of the Company's
Common Stock may be significantly affected by factors such as quarter-to-quarter
variations in the Company's results of operations, changes in environmental
legislation and changes in investors' perception of the business risks and
conditions in the environmental services business. In addition, market
fluctuations, as well as general economic or political conditions, may adversely
affect the market price of the Company's Common Stock, regardless of the
Company's actual performance.
QUALIFIED PROFESSIONALS. The Company's ability to attract and retain
qualified scientists and engineers is an important factor in determining the
Company's future growth and success. The market for environmental professionals
is competitive and there can be no assurance that the Company will continue to
be successful in its efforts to attract and retain such professionals.
TETRA TECH, INC.
Through a network of more than 80 offices, Tetra Tech provides
comprehensive environmental and telecommunications services including research
and development, engineering and design, construction management, and operation
and maintenance. Tetra Tech provides these services to a broad base of
customers worldwide. The Company's principal executive offices are located at
670 N. Rosemead Boulevard, Pasadena, California 91107-2190 and its telephone
number is (626) 351-4664.
USE OF PROCEEDS
All of the shares of Common Stock covered hereby are being offered by the
Selling Stockholders. The Company will not receive any proceeds from the sales
of Common Stock by the Selling Stockholders.
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<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS
On December 11, 1996 (the "IWA Closing Date"), Tetra Tech completed the
acquisition of IWA Engineers, a California corporation ("IWA"), pursuant to the
terms of an Agreement and Plan of Reorganization (the "IWA Agreement") dated
December 7, 1996 among Tetra Tech, IWA, IWA Acquisition Corporation, a
California corporation and wholly-owned subsidiary of Tetra Tech
("Acquisition"), and the shareholders of IWA. The IWA Agreement provided for
the merger of Acquisition with and into IWA (the "IWA Merger"). As a result of
the IWA Merger, IWA became a wholly-owned subsidiary of Tetra Tech.
In connection with the IWA Merger, Tetra Tech (i) paid to the shareholders
of IWA an aggregate of $132,497 in cash and (ii) issued to the shareholders of
IWA an aggregate of 70,217 shares of Common Stock on the IWA Closing Date. In
connection with the post-closing purchase price adjustment required under the
IWA Agreement, Tetra Tech (i) paid to the shareholders of IWA an aggregate of
$177,199 in cash and (ii) issued to four shareholders of IWA an aggregate of
6,323 shares of Common Stock.
On December 18, 1996 (the "FLO Closing Date"), Tetra Tech completed the
acquisition of FLO Engineering, Inc., a Colorado corporation ("FLO"), pursuant
to the terms of an Agreement and Plan of Reorganization (the "FLO Agreement")
dated December 18, 1996 among Tetra Tech, FLO, Out the Ranch, Inc., a Colorado
corporation and the wholly-owned subsidiary of Tetra Tech ("OTR"), and the
shareholders of FLO. The FLO Agreement provided for the merger of OTR with and
into FLO (the "FLO Merger"). As a result of the FLO Merger, FLO became a
wholly-owned subsidiary of Tetra Tech.
In connection with the FLO Merger, Tetra Tech (i) paid to the shareholders
of FLO an aggregate of $87,500 in cash and (ii) issued to the shareholders of
FLO an aggregate of 32,110 shares of Common Stock on the FLO Closing Date. In
connection with the post-closing purchase price adjustment required under the
FLO Agreement, Tetra Tech paid to the shareholders of FLO an aggregate of
$51,561 in cash.
On March 20, 1997 (the "SCM Closing Date"), Tetra Tech completed the
acquisition of SCM Consultants, Inc., a Washington corporation ("SCM"), pursuant
to the terms of an Agreement and Plan of Reorganization (the "SCM Agreement")
dated March 20, 1997 among Tetra Tech, SCM, SCM Acquisition Corporation, a
Washington corporation and wholly-owned subsidiary of Tetra Tech ("SCM
Acquisition"), and the shareholders of SCM. the SCM Agreement provided for the
merger of SCM Acquisition with and into SCM (the "SCM Merger"). As a result of
the SCM Merger, SCM became a wholly-owned subsidiary of Tetra Tech.
In connection with the SCM Merger, Tetra Tech (i) paid to the shareholders
of SCM an aggregate of $286,068 in cash and (ii) issued to the shareholders of
SCM an aggregate of 145,393 shares of Common Stock on the SCM Closing Date. In
connection with the post-closing purchase price adjustment required under the
SCM Agreement, Tetra Tech (i) paid to the shareholders of SCM an aggregate of
$24,801 in cash and (ii) issued to the shareholders of SCM an aggregate of
12,665 shares of Common Stock.
The shares of Common Stock to be sold hereunder were issued to the former
shareholders of IWA, FLO and SCM (collectively, the "Selling Stockholders") in
connection with the IWA Merger, the FLO Merger and the SCM Merger, respectively.
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The following table sets forth information regarding the ownership of the
Company's Common Stock as of September 1, 1997 by (i) all those persons known by
the Company to own beneficially more than 5% of the Company's Common Stock,
(ii) each director and certain executive officers of the Company, (iii) all
executive officers and directors as a group, and (iv) each Selling Stockholder.
Except as otherwise noted, the Company knows of no agreements among its
stockholders which relate to voting or investment power over its Common Stock.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF PERCENTAGE OF
SHARES SHARES OF SHARES
BENEFICIALLY COMMON STOCK BENEFICIALLY
NAME OF BENEFICIAL OWNER(1) OWNED OFFERED OWNED(1)
--------------------------- ------------- -------------- -------------
<S> <C> <C> <C>
Li-San Hwang (2)
Tetra Tech, Inc.
670 N. Rosemead Blvd.
Pasadena, California 91107. . . . . . . . . . . . . 1,119,357 -- 6.3%
Daniel A. Whalen (3)
Whalen & Company, Inc.
3675 Mt. Diablo Blvd.
Suite 360
Lafayette, California 94549. . . . . . . . . . . . 2,911,840 -- 16.4
Pilgrim Baxter & Associates, Ltd. (4)
Harold J. Baxter
Gary I. Pilgrim
1255 Drummers Lane
Wayne, Pennsylvania 19087. . . . . . . . . . . . . 1,450,864 -- 8.3
The Northwestern Mutual Life Insurance Company (5)
720 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202 . . . . . . . . . . . . 934,500 -- 5.3
RCM Capital Management, L.L.C. (6)
RCM Limited L.P.
RCM General Corporation
Four Embarcadero Center, Suite 2900
San Francisco, California 94111. . . . . . . . . . 1,374,300 -- 7.9
Dresdner Bank AG (7)
Jurgen-Ponto-Platz 1
60301 Frankfurt, Germany. . . . . . . . . . . . . . 1,374,300 -- 7.9
J. Christopher Lewis (8) . . . . . . . . . . . . . . . 48,311 -- *
Patrick C. Haden (9) . . . . . . . . . . . . . . . . . 13,131 -- *
James J. Shelton (10). . . . . . . . . . . . . . . . . 7,226 -- *
Thomas D. Brisbin (11) . . . . . . . . . . . . . . . . 16,232 -- *
Charles R. Faust (12). . . . . . . . . . . . . . . . . 39,702 -- *
James M. Jaska (13). . . . . . . . . . . . . . . . . . 30,241 -- *
All directors and executive officers
as a group (12 persons) (14). . . . . . . . . . . . 4,451,489 -- 25.0
SELLING STOCKHOLDERS
--------------------
Mark A. Bogh . . . . . . . . . . . . . . . . . . . . . 9,848 9,848 *
Llewellyn D. Incledon and Darl I. Incledon . . . . . . 51,297 51,297 *
Susan L. Incledon. . . . . . . . . . . . . . . . . . . 6,033 6,033 *
J. Marie Marston . . . . . . . . . . . . . . . . . . . 5,002 5,002 *
Kelly E. Nolan . . . . . . . . . . . . . . . . . . . . 4,360 4,360 *
James A. Lenzotti. . . . . . . . . . . . . . . . . . . 15,596 15,596 *
William T. Fullerton . . . . . . . . . . . . . . . . . 16,514 16,514 *
Bruce G. Schwan. . . . . . . . . . . . . . . . . . . . 67,314 67,314 *
Gerald T. Caprio . . . . . . . . . . . . . . . . . . . 62,355 62,355 *
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<CAPTION>
<S> <C> <C> <C>
Joan M. Schwan . . . . . . . . . . . . . . . . . . . . 6,890 6,890 *
Joanne L. Caprio . . . . . . . . . . . . . . . . . . . 6,382 6,382 *
Dale G. Van Schoiack . . . . . . . . . . . . . . . . . 4,340 4,340 *
Michael J. Brightman . . . . . . . . . . . . . . . . . 5,679 5,679 *
Adina M. Kennell . . . . . . . . . . . . . . . . . . . 2,103 2,103 *
George W. Umbright, Jr.. . . . . . . . . . . . . . . . 2,995 2,995 *
</TABLE>
- ---------------
* Amount represents less than 1% of the Company's Common Stock.
(1) Unless otherwise indicated, the persons named in the table have sole voting
and sole investment power with respect to all shares of Common Stock shown
as beneficially owned by them, subject to community property rules where
applicable and the information contained in this table and these notes.
Includes 1,231,840 shares of Common Stock issuable upon conversion of the
outstanding shares of Series A Preferred Stock. See Note (3).
(2) Excludes an aggregate of 16,415 shares of Common Stock owned by Dr. Hwang's
adult children as to which Dr. Hwang disclaims beneficial ownership.
Includes 5,468 shares issuable with respect to stock options exercisable
within 60 days after September 1, 1997.
(3) Includes 1,185,646 shares of Common Stock issuable upon conversion of
shares of the Registrant's Series A Preferred Stock, $.01 par value
("Series A Stock") held by the Registrant. Also includes (i) 10,500 shares
of Common Stock and 7,699 shares of Common Stock issuable upon conversion
of Series A Stock held by Daniel A. Whalen and Katharine C. Whalen as
Trustees for the MJW Whalen Trust 1997 - D, (ii) 10,500 shares of Common
Stock and 7,699 shares of Common Stock issuable upon conversion of Series A
Stock held by Daniel A. Whalen and Katharine C. Whalen as Trustees for the
ACW Whalen Trust 1997 - D, (iii) 10,500 shares of Common Stock and 7,699
shares of Common Stock issuable upon conversion of Series A Stock held by
Daniel A. Whalen and Katharine C. Whalen as Trustees for the MCW Whalen
Trust 1997 - D, (iv) 10,500 shares of Common Stock and 7,699 shares of
Common Stock issuable upon conversion of Series A Stock held by Daniel A.
Whalen and Katharine C. Whalen as Trustees for the MJW Whalen Trust 1997 -
K, (v) 10,500 shares of Common Stock and 7,699 shares of Common Stock
issuable upon conversion of Series A Stock held by Daniel A. Whalen and
Katharine C. Whalen as Trustees for the ACW Whalen Trust 1997 - K, and (vi)
10,500 shares of Common Stock and 7,699 shares of Common Stock issuable
upon conversion of Series A Stock held by Daniel A. Whalen and Katharine C.
Whalen as Trustees for the MCW Whalen Trust 1997 - K.
(4) All information regarding share ownership is taken from and furnished in
reliance upon the Schedule 13G (Amendment No. 4), dated as of June 20,
1997, jointly filed by Pilgrim Baxter & Associates, Ltd., Harold J. Baxter
and Gary I. Pilgrim.
(5) All information regarding share ownership is taken from and furnished in
reliance upon the Schedule 13G (Amendment No. 1), dated February 7, 1997,
filed by The Northwestern Mutual Life Insurance Company.
(6) All information regarding share ownership is taken from and furnished in
reliance upon the Schedule 13G, dated February 3, 1997, jointly filed by
RCM Capital Management, L.L.C., RCM Limited L.P. and RCM General
Corporation.
(7) All information regarding share ownership is taken from and furnished in
reliance upon the Schedule 13G, dated February 7, 1997, filed by Dresdner
Bank AG. RCM Capital Management, L.L.C. is a wholly owned subsidiary of
Dresdner Bank AG.
(8) Includes 7,323 shares issuable with respect to stock options exercisable
within 60 days after September 1, 1997.
(9) Excludes an aggregate of 1,718 shares of Common Stock owned by Mr. Haden's
wife as to which Mr. Haden disclaims beneficial ownership. Includes 7,323
shares issuable with respect to stock options exercisable within 60 days
after September 1, 1997.
(10) Includes 2,344 shares held by James J. Shelton, Sarah Belle Shelton and
James J. Shelton, Jr., Trustees of the James J. Shelton and Sarah Belle
Shelton Family Trust dated August 19, 1987, and 4,882 shares issuable with
respect to stock options exercisable within 60 days after September 1,
1997.
(11) Includes 15,397 shares issuable with respect to stock options exercisable
within 60 days after September 1, 1997.
(12) Includes 6,047 shares issuable with respect to stock options exercisable
within 60 days after September 1, 1997. Additionally, Dr. Faust's minor
children own an aggregate of 1,406 shares of Common Stock as to which Dr.
Faust disclaims beneficial ownership.
(13) Includes 29,992 shares issuable with respect to stock options exercisable
within 60 days after September 1, 1997.
(14) Includes 117,609 shares issuable with respect to stock options exercisable
within 60 days after September 1, 1997.
Except as provided above, (i) all Selling Stockholders are employees or
former employees of IWA, FLO or SCM and (ii) during the past three years, no
Selling Stockholder has had any material relationship with the Company, or any
of its predecessors or affiliates. Because the Selling Stockholders may sell
all or part of their shares of Common Stock offered hereby, no estimate can be
given as to the number of shares of Common Stock that will be held by any
Selling Stockholder upon termination of any offering made hereby.
PLAN OF DISTRIBUTION
The Shares are being registered to permit public secondary sales of the
Shares by the Selling Stockholders from time to time until the earlier of (i)
such date as all of the Shares offered by have been sold or (ii) such time as
all of the Shares offered hereby can be sold without compliance with the
registration requirements of the Securities Act pursuant to Rule 144 promulgated
thereunder. The Company has agreed, among other things, to bear all expenses
(other than underwriting discounts, selling commissions and fees and the
expenses of counsel and other advisors to the Selling Stockholders) in
connection with the registration and sale of the Shares.
Any distribution hereunder of the Common Stock by the Selling Stockholders
may be effected from time to time in one or more of the following transactions:
(a) through brokers acting as principal or agent, in transactions
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(which may involve block transactions), in special offerings, on the Nasdaq
National Market, in the over-the-counter market, or otherwise, at market prices
obtainable at the time of sale, at prices related to such prevailing market
prices, at negotiated prices or at fixed prices, (b) to underwriters who will
acquire shares of Common Stock for their own account and resell such shares in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale (any public
offering price and any discount or concessions allowed or reallowed or paid to
dealers may be changed from time to time), (c) directly or through brokers or
agents in private sales at negotiated prices, (d) to lenders pledged as
collateral to secure loans, credit or other financing arrangements and any
subsequent foreclosure, if any, thereunder, or (e) by any other legally
available means. Also, offers to purchase the Common Stock may be solicited by
agents designated by the Selling Stockholders from time to time. Underwriters
or other agents participating in an offering made pursuant to this Prospectus
(as amended or supplemented from time to time) may receive underwriting
discounts and commissions under the Securities Act, and discounts or concessions
may be allowed or reallowed or paid to dealers, and brokers or agents
participating in such transactions may receive brokerage or agent's commissions
or fees.
In order to comply with the securities laws of certain states, if
applicable, the Common Stock will be sold hereunder in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states the Common Stock may not be sold hereunder unless the Common Stock has
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and complied with.
The Company has been advised that, as of the date hereof, the Selling
Stockholders have made no arrangement with any broker for the sale of their
shares of Common Stock. The Selling Stockholders and any underwriters, brokers
or dealers involved in the sale of the Common Stock may be considered
"underwriters" as that term is defined by the Securities Act, although the
Selling Stockholders and such brokers and dealers disclaim such status.
LEGAL MATTERS
The validity of the Common Stock in respect of which this Prospectus is
being delivered will be passed on for the Company by Riordan & McKinzie, a
Professional Corporation, Los Angeles, California.
EXPERTS
The financial statements and the related financial statement schedule
incorporated in this Prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended September 29, 1996 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing.
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