<PAGE> 1
As filed with the Securities and Exchange Commission on December 10, 1997
REGISTRATION NO. 333-____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-----------------
PONDER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2268672
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
5005 RIVERWAY DRIVE, SUITE 550
HOUSTON, TEXAS 77056
(713) 965-0653
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-----------------
EUGENE L. BUTLER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PONDER INDUSTRIES, INC.
5005 RIVERWAY DRIVE, SUITE 550
HOUSTON, TEXAS 77056
(713) 965-0653
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-----------------
Copies of all communications, including all communications
sent to the agent for service, should be sent to:
PHILLIP M. RENFRO, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
300 CONVENT STREET, SUITE 2200
SAN ANTONIO, TEXAS 78205
(210) 270-7172
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
-----------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box: [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
-----------------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
-----------------
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: [ ]
<TABLE>
<CAPTION>
====================================================================================================================================
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF AMOUNT OF SHARES PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED TO BE REGISTERED PRICE PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, $.01 PAR VALUE 1,346,952 $1.70 $2,289,818 $675.50
PER SHARE . . . . . . . . . .
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL . . . . . . . . . . . . 1,346,952 - $2,289,818 $675.50
====================================================================================================================================
</TABLE>
(1) Pursuant to Rule 457(c), the proposed maximum offering price per
share and proposed maximum aggregate offering price have been
calculated on the basis of the average of the bid and ask prices
of the Common Stock as reported on the NASDAQ SmallCap Market on
December 8, 1997.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
================================================================================
<PAGE> 2
P R O S P E C T U S
1,346,952 SHARES
PONDER INDUSTRIES, INC.
COMMON STOCK
---------------
This Prospectus has been prepared for use in connection with the
proposed sale or distribution by certain stockholders (the "Selling
Stockholders") of an aggregate of 1,346,952 shares (the "Shares") of common
stock, par value $.01 per share ("Common Stock"), of Ponder Industries, Inc.
("Ponder" or the "Company"). The Shares may be sold from time to time by or
for the account of the Selling Stockholders in the over-the-counter market, on
the National Association of Securities Dealers Automated Quotation System, Inc.
("NASDAQ") or otherwise at prices and on terms then prevailing or at prices
related to the then current market price, or in negotiated transactions. The
Shares may be sold by any one or more of the following methods: (a) a block
trade (which may involve crosses) in which the broker or dealer so engaged will
attempt to sell the securities as agent but may position and resell a portion
of the block as principal to facilitate the transaction; (b) purchases by a
broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (d) privately
negotiated transactions.
The Common Stock is traded on the SmallCap Market System of NASDAQ
(the "NASDAQ SmallCap Market") under the symbol "PNDR." On December 8, 1997,
the last reported sale price for the Common Stock on the NASDAQ SmallCap Market
was $1.65625 per share.
The Company will receive no portion of the proceeds of the sale of the
Shares offered hereby and will bear all costs and expenses incident to their
registration. See "Plan of Distribution."
The Shares have not been registered for sale under the securities laws
of any state or jurisdiction as of the date of this Prospectus. Brokers or
dealers effecting transactions in the Shares should confirm the registration
thereof under the securities laws of the states in which such transactions
occur, or the existence of any exemption from registration.
---------------
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET
FORTH UNDER THE CAPTION "RISK FACTORS" ON PAGE 2 HEREOF.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECU-
RITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is December 10, 1997
<PAGE> 3
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"SEC") in Washington, D.C., a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities offered by this Prospectus.
Certain of the information contained in the Registration Statement is omitted
from this Prospectus, and reference is hereby made to the Registration
Statement and exhibits and schedules relating thereto for further information
with respect to the Company and the securities offered by this Prospectus. The
Company is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith,
files reports, proxy statements and other information with the SEC. Such
reports, proxy statements and other information are available for inspection
and copies of such materials may be obtained upon payment of the fees
prescribed therefor by the rules and regulations of the SEC from the SEC, at
its principal offices located at Judiciary Plaza, 450 Fifth Street, Room 1024,
Washington, D.C., 20549 and at the following regional offices of the SEC:
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and at Seven World Trade Center, Suite 1300, New York, New York
10048, and copies of all or any part of the Registration Statement may be
obtained from the Public Reference Section of the SEC, at 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549 upon the payment of the fees
prescribed by the SEC. The SEC maintains a WorldWide Web site on the Internet
at http://www.sec.gov that contains reports, proxy statements and other
information regarding registrants that file electronically with the SEC.
INCORPORATION OF CERTAIN DOCUMENTS
The Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1997, is hereby incorporated herein by reference.
The description of the Company's capital stock on the Registration
Statement on Form S-1 (SEC File No. 33-33190) is hereby incorporated by
reference.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act, after the date of this Prospectus and prior to
the termination of the Registration Statement of which this Prospectus is a
part with respect to registration of the Shares, shall be deemed to be
incorporated by reference in this Prospectus and 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 in this Prospectus shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in this Prospectus, or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference, modifies or replaces such statement.
The Company undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon written or oral request
of any such person, a copy of any or all of the documents incorporated by
reference herein, other than exhibits to such documents, unless such exhibits
are specifically incorporated by reference into the information that this
Prospectus incorporates. Written or oral requests for such copies should be
directed to: Ponder Industries, Inc., 5005 Riverway Drive, Suite 550, Houston,
Texas 77056, Attention: Eugene L. Butler, telephone (713) 965-0653.
RISK FACTORS
Other than historical and factual statements, the matters and items
discussed in this Prospectus are forward- looking statements that involve risks
and uncertainties. The Company's actual results may differ materially from the
results discussed in the forward-looking statements. In addition to other
information contained in this Prospectus, the following factors could
contribute to such differences. Prospective investors should carefully
consider the following factors and cautionary statements in determining whether
to purchase shares of Common Stock in the offering made hereby. All factors
should be considered in conjunction with the other information and financial
data appearing elsewhere in this Prospectus and in the documents incorporated
herein by reference. See "Disclosure Regarding Forward-Looking Statements."
Each investor should carefully examine this entire Prospectus and
should give particular attention to the risk factors set forth below, in
addition to other information contained in or incorporated by reference in this
Prospectus.
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<PAGE> 4
NONPAYMENT OF DIVIDENDS. Ponder has never declared or paid dividends
on Common Stock and does not anticipate paying dividends on Common Stock at any
time in the foreseeable future. The terms of certain of the Company's loan
agreements restrict the payment of dividends.
INDUSTRY VOLATILITY. The oil and gas industry in which Ponder
participates historically has experienced significant volatility. Demand for
Ponder's services and products depends primarily upon the number of oil and gas
wells being drilled, the depth and drilling conditions of such wells, the
volume of production, the number of well completions and the level of workover
activity. Drilling and workover activity can fluctuate significantly in a
short period of time, particularly in the United States.
These factors are influenced by the willingness of oil and gas
operators to make capital expenditures for the exploration, development and
production of oil and natural gas. The levels of such capital expenditures and
the ability of oil and gas companies to raise capital will continue to be
influenced by numerous factors over which Ponder has no control, including the
prevailing and expected market prices for oil and natural gas. Such prices are
impacted by, among other factors, the ability of the members of the
Organization of Petroleum Exporting Countries ("OPEC") to maintain price
stability through voluntary production limits, the level of production by
non-OPEC countries, worldwide demand for oil and natural gas, local, national
and international economic and political conditions, costs of exploration and
production of oil and natural gas, availability of new leases and concessions,
and governmental regulations regarding, among other things, environmental
protection, taxation, price controls and product allocations. No assurance can
be given as to the future price of oil or natural gas or the level of future
oil and gas industry activity or demand for Ponder's services and products.
COMPETITION. The Company competes in highly competitive areas of the
oilfield business. The volatility of oil and gas prices has led to a
consolidation of the number of companies providing services similar to the
Company. This reduced number of companies competes intensely for available
projects. Many of the competitors of the Company are larger and have greater
financial and other resources than the Company. Ponder encounters substantial
competition from numerous small, single-site operators, larger concerns
operating at multiple locations and various well servicing companies. Although
the Company believes that it competes on the basis of technical expertise and
reputation of service, there can be no assurance that the Company will be able
to maintain its competitive position. Ponder expects that the substantial
competition currently encountered by it will not be reduced or eliminated.
SEASONALITY. Demand for the Company's services and products is tied
closely to the seasonality of drilling activity. Higher activity is generally
experienced in the spring, summer and fall. In the United States and Europe,
the lowest drilling activity generally occurs during the early months of the
year due to inclement weather. Purchases of the Company's products and
services are also to a substantial extent deferrable in the event oil and gas
companies reduce capital expenditures as a result of conditions existing in the
oil and gas industry or general economic downturns. Fluctuations in the
Company's revenues and costs may have a material adverse effect on the
Company's business and operations. Accordingly, the Company's operating
results may vary from quarter to quarter, depending upon factors outside of its
control.
POSSIBLE PRODUCT LIABILITY CLAIMS. Certain products sold or leased by
Ponder are used in potentially hazardous drilling, completion, production and
workover applications that can cause personal injury or loss of life as well as
damage to property, equipment or the environment and suspension of operations.
Litigation arising from a catastrophic occurrence at a location where Ponder's
equipment and services are used may in the future result in Ponder being named
as a defendant in product liability or other lawsuits asserting potentially
large claims. Ponder maintains insurance coverage that its management believes
to be customary in the industry for a company of its size against these
hazards. However, insurance may not provide complete protection against
casualty losses and a successful claim could have a material adverse effect on
Ponder. Further, no assurance can be given that Ponder will be able to
maintain adequate insurance in the future at rates considered reasonable.
POSSIBLE VOLATILITY OF SECURITIES PRICES. The market price of the
Common Stock has in the past been, and may in the future continue to be,
volatile. A variety of events, including quarter to quarter variations in
operating results, news announcements or the introduction of new products by
the Company or its competitors, as well as market conditions in the oil and gas
industry, or changes in earnings estimates by securities analysts may cause the
market price of the Common Stock to fluctuate significantly. In addition, the
stock market in recent years has experienced significant price and volume
fluctuations which have particularly affected the market prices of equity
securities of many companies
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<PAGE> 5
that service the oil and gas industry and which often have been unrelated to
the operating performance of such companies. These market fluctuations may
adversely affect the price of the Common Stock.
GOVERNMENTAL REGULATION AND ENVIRONMENTAL MATTERS. Ponder's business
is affected both directly and indirectly by governmental regulations relating
to the oilfield service industry and the oil and gas exploration and production
industry in general, as well as by environmental and safety regulations that
specifically apply to such businesses. It is likely that the trend of more
expansive and stricter environmental laws and regulations will continue, and
that the costs of compliance with such laws and regulations will continue to
increase in the foreseeable future, for Ponder and its customers. There can be
no assurance that the cost of compliance with current environmental and safety
regulations or future changes in such laws and regulations will not have a
material adverse effect on Ponder's operations.
DEPENDENCE UPON KEY PERSONNEL; MANAGEMENT OF GROWTH. The Company's
future success depends to a significant degree upon the continued services of
its Chairman of the Board, President and Chief Executive Officer, Eugene L.
Butler, and other key senior management personnel. Ponder's future success
also depends on its continuing ability to attract and retain highly qualified
managerial personnel. Competition for such personnel is intense, and there can
be no assurance that Ponder will be able to retain its key managerial employees
or attract, assimilate or retain other highly qualified managerial personnel in
the future. The Company's ability to manage growth successfully will require
that it continue to improve its operational, management and financial systems
and controls. Failure to do so could have a material adverse effect upon the
Company's business and results of operations.
CERTAIN ANTI-TAKEOVER FEATURES. Certain provisions of Delaware
statutory law, could discourage potential acquisition proposals and could delay
or prevent a change in control of the Company. Such provisions could diminish
the opportunities for a stockholder to participate in tender offers, including
tender offers at a price above the then- current market value of Ponder's
Common Stock. Such provisions also may inhibit fluctuations in the market
price of Ponder's Common Stock that could result from takeover attempts.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus contains certain "forward-looking statements" within
the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act. Specifically, all statements other than statements of historical
facts included in this report regarding the Company's financial position,
business strategy and plans and objectives of management of the Company for
future operations are forward-looking statements. These forward-looking
statements are based on the beliefs of the Company's management, as well as
assumptions made by and information currently available to the Company's
management. When used in this report, the words "anticipate," "believe,"
"estimate," "expect" and "intend" and words or phrases of similar import, as
they relate to the Company or Company management are intended to identify
forward-looking statements. Such statements reflect the current view of the
Company with respect to future events and are subject to certain risks,
uncertainties and assumptions related to certain factors including, without
limitation, competitive factors, general economic conditions, customer
relations, relationships, relationships with vendors, the interest rate
environment, governmental regulation and supervision, seasonality, the
operation of the Company's networks, transmission costs, product introductions
and acceptance, technological change, changes in industry practices, one-time
events and other factors described herein ("cautionary statements"). Although
the Company believes that its expectations are reasonable, it can give no
assurance that such expectations will prove to be correct. Based upon changing
conditions, should any one or more of these risks or uncertainties materialize,
or should any underlying assumptions prove incorrect, actual results may vary
materially from those described herein as anticipated, believed, estimated,
expected or intended. All subsequent written and oral forward-looking
statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by the applicable cautionary statements.
THE COMPANY
Ponder Industries is engaged in the business of providing specialized
oilfield services and rental equipment to the oil and gas industry. The
Company's principal executive offices are located in Houston, Texas, at 5005
Riverway Drive, Suite 550, Houston, Texas 77056 and its telephone number at
that address is (713) 965-0653. The Company currently has operating facilities
in Texas, Louisiana, Oklahoma, Arkansas, Illinois, Mississippi and the United
Kingdom.
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<PAGE> 6
Ponder was founded as a Texas corporation in 1981. In 1990, Ponder
became a Delaware corporation through a share exchange between Ponder
Industries, Inc., a Texas corporation, and Ponder Industries, Inc., a Delaware
corporation.
Ponder rents a full line of specialized equipment and tools utilized
in fishing operations. Fishing services are required by the oil and gas
industry whenever there is an obstruction in the borehole of a well. At times
during the life of a well, cable, tubulars, casing, wellbore tools or debris
may become detached and stuck in the well. Likewise, equipment can be
accidentally dropped in a well. Events such as these can create major
obstructions that impede work and raise drilling and completion costs. Ponder
provides expert "fishing" and cutting services to remove such obstructions and
return the wellsite to normal operation.
Fishing services require a variety of equipment designed to catch or
snag "fish" or "junk" in a well or to grind, cut or otherwise eliminate the
obstruction. The equipment is generally rented but may also be designed and
built by the Company. Specialized fishing tool equipment is often not owned by
drilling contractors and operators because of the high cost of owning and
maintaining the full range of equipment required for the various types of
situations encountered in the oil and gas industry throughout many geographic
areas. The items of equipment available for rental from the Company include a
full line of fishing tools, such as milling tools, casing cutters, jars,
spears, overshots and whipstocks. Ponder also provides supervisory services
relating to the operation of their fishing tool equipment and the proper
selection and assembly of the fishing string. The fishing string consists of
jars, subs, overshots (external), spears (internal) and other tools for
removing the item or the "fish" from the well.
The Company solicits orders for its services, products and incidental
equipment rentals primarily through its employee sales force. Traditionally,
most U.S. orders have been received on a well-by-well basis, while
internationally, the Company generally obtains business through contracts with
customers who commit to use the Company's services, products and equipment for
a specified period of time or for a certain number of wells in a certain
geographic area.
Upon the completion of operations by the customer, the tools are
returned to the Company where the tools are inspected and repaired as needed.
Repairs are at the cost of the customer and if the tools cannot be restored to
first class condition, the cost of the tool is charged to the customer.
The Company has followed a policy of seeking patents and licenses for
products and equipment that appear to have commercial applications. The
Company believes its patents and licenses to be adequate for the conduct of its
products and services business and, while it considers them to be valuable in
the aggregate, the Company does not believe that its business is materially
dependent upon its patents or licenses. In management's opinion, engineering,
operation skills and application experience are more responsible for the
Company's market position than are patents or licenses.
The Company obtains orders through its direct sales force, supervisors
and fishermen. Due to the short-term nature of the equipment rental and
service business, backlog is not meaningful. The Company's backlog for
equipment rentals is not a significant percentage of the Company's consolidated
revenues.
The Company's principal customers are major and independent national
and international oil and gas companies.
USE OF PROCEEDS
The Shares to be sold pursuant to the Prospectus are owned by several
stockholders of the Company. The Company will not receive any of the proceeds
from the sale of the Shares. See "Selling Stockholders."
SELLING STOCKHOLDERS
The following table sets forth the name of each of the Selling
Stockholders and, as of December 8, 1997, the beneficial ownership of Common
Stock held by each of the Selling Stockholders, immediately prior to and upon
completion of this offering. All information as to beneficial ownership has
been furnished by each of the Selling Stockholders. The number of Shares that
may be actually sold by each of the Selling Stockholders will be determined by
each such Selling Stockholder, and may depend upon a number of factors,
including, among other things, the market price of the Common Stock. Because
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<PAGE> 7
each Selling Stockholder may offer all, some or none of the Shares that each
holds, and because the offering contemplated by this Prospectus is currently
not being underwritten, no estimate can be given as to the number of Shares
that will be held by any Selling Stockholder upon or prior to the termination
of this offering. See "Plan of Distribution." Each Selling Stockholder has
sole voting and investment power over the shares listed. Except as set forth
below, no Selling Stockholder has had a material relationship with the Company
or any of its predecessors or affiliates within the past three years.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
BEFORE THE OFFERING AFTER THE OFFERING(1)
------------------------------- -----------------------------
NUMBER PERCENTAGE SHARES TO NUMBER PERCENTAGE
NAME OF SHARES OF CLASS(2) BE SOLD OF SHARES OF CLASS
---- ---------------- ------------- ----------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
AG Superfund International
Partners, L.P. 22,500(3) * 22,500 0 0%
The Gifford Fund 112,500(3) * 112,500 0 0%
Cameron Capital Ltd. 120,000(3) * 120,000 0 0%
Darissco Diversified
Investments, Inc. 27,000(3) * 27,000 0 0%
GAM Arbitrage, Inc. 37,500(3) * 37,500 0 0%
KA Investments, LDC 62,500(3) * 22,500 40,000 *
Lake Management LDC 127,500(3) * 127,500 0 0%
Leonardo, L.P. 187,500(3) * 187,500 0 0%
Raphael, L.P. 45,000(3) * 45,000 0 0%
Richcourt $ Strategies, Inc. 30,000(3) * 30,000 0 0%
The Tail Wind Fund 90,000(3) * 90,000 0 0%
Windward Island Limited 22,500(3) * 22,500 0 0%
Wood Gundy London, Ltd. 112,500(3) * 112,500 0 0%
Orez Ltd. 389,952(4) 1.35 389,952 0 0%
---------
1,386,952
=========
</TABLE>
- -------------------------
* represents less than 1%
(1) Assumes all shares of Common Stock offered hereby are sold.
(2) Based on 28,681,620 shares of the Company outstanding as of November
24, 1997.
(3) Constitutes shares issued or issuable upon the exercise of warrants
granted pursuant to a Settlement Agreement dated September 26, 1997,
among the Company and certain of the Selling Stockholders.
(4) Constitutes shares issuable pursuant to warrants granted pursuant to a
Regulation S Subscription Agreement dated April 23, 1997, between the
Company and Orez Ltd.
PLAN OF DISTRIBUTION
The Company is registering the Shares on behalf of the Selling
Stockholders. All costs, expenses and fees in connection with the registration
of the Shares offered hereby will be borne by the Company. Brokerage
commissions, if any, attributable to the sale of Shares will be borne by the
Selling Stockholders (or his donees or pledgees).
The Shares may be sold from time to time by or for the account of the
Selling Stockholders in the over-the-counter market, on the NASDAQ SmallCap
Market or otherwise at prices and on terms then prevailing or at prices related
to the then current market price, or in negotiated transactions. The Shares
may be sold by any one or more of the following methods: (a) a block trade
(which may involve crosses) in which the broker or dealer so engaged will
attempt to sell the securities as agent but may position and resell a portion
of the block as principal to facilitate the transaction; (b) purchases by a
broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (d) privately
negotiated transactions. Each Selling Stockholder will act independently of
the Company in making decisions with respect to the timing, manner and size of
each sale. To the Company's knowledge, no Selling Stockholder has entered into
any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of the Shares, nor does the Company know the
identity of the brokers or market makers which will participate in the
offering. The Selling Stockholders may effect such transactions by selling the
Shares directly to purchasers or to or through broker-dealers which
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<PAGE> 8
may act as agents or principals. In effecting sales, broker-dealers engaged by
the Selling Stockholders may arrange for other broker-dealers to participate.
Such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders and/or the purchasers
of Common Stock for whom such broker-dealers may act as agents or to whom they
sell as principal, or both (which compensation as to a particular broker-dealer
might be in excess of customary commissions). Each of the Selling Stockholders
and any broker-dealers that act in connection with the sale of the Shares might
be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act and any commission received by them and any profit on the resale
of the shares of Common Stock as principal might be deemed to be underwriting
discounts and commissions under the Securities Act. Each Selling Stockholder
may agree to indemnify any agent, dealer or broker-dealer that participates in
transactions involving sales of the shares against certain liabilities,
including liabilities arising under the Securities Act. Liabilities under the
federal securities laws cannot be waived. Because each Selling Stockholder may
be deemed to be an "underwriter" within the meaning of Section 2(11) of the
Securities Act, each Selling Stockholder will be subject to prospectus delivery
requirements under the Securities Act. Furthermore, each Selling Stockholder,
any broker or dealer and any "affiliated purchasers" will be subject to the
applicable provisions of the Exchange Act and the Securities Act and the rules
and regulations thereunder, including, without limitation, Regulation M under
the Exchange Act, which provisions may limit the timing of the purchases and
sales of the Company's securities by the Selling Stockholders, any broker or
dealer and any "affiliated purchasers."
The Company will receive no portion of the proceeds of the sale of the
Shares offered hereby and will bear all costs and expenses incident to their
registration.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Article XV of the Company's Certificate of Incorporation ("Article XV")
eliminates the personal liability of the Company's directors to the Company or
its stockholders for monetary damages for breach of fiduciary duty except under
certain circumstances. Directors remain liable for (i) any breach of the duty
of loyalty to the Company or its stockholders, (ii) any act or omission not in
good faith or which involves intentional misconduct or a knowing violation of
law, (iii) any violation of Section 174 of the Delaware General Corporation Law
("DGCL"), which proscribes the payment of dividends and stock purchases or
redemptions under certain circumstances, and (iv) any transaction from which a
director derived an improper personal benefit.
Article XV further provides that future repeal or amendment of its terms
will not adversely affect any rights of directors existing thereunder with
respect to acts or omissions occurring prior to such repeal or amendment.
Article XV also incorporates any future amendments to Delaware law which
further eliminate or limit the liability of directors.
Under Section 145 of the DGCL, directors and officers as well as other
employees and individuals may be indemnified against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement in connection
with specified actions, suits or proceedings, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation -- a "derivative action"), if they acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interests
of the Company, and with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A similar standard of
care is applicable in the case of derivative actions, except that
indemnification extends only to expenses (including attorneys' fees) incurred
in connection with defense or settlement of such an action and the DGCL
requires court approval before there can be any indemnification where the
person seeking indemnification has been found liable to the Company.
Article VIII of the Company's Bylaws provides that the Company shall
indemnify any person to whom, and to the extent, indemnification may be granted
pursuant to Section 145 of the DGCL.
Article XI of the Company's Certificate of Incorporation provides that
each person who was or is made a party to, or is involved in any action, suit
or proceeding by reason of the fact that he is or was a director, officer or
employee of the Company will be indemnified by the Company against all expenses
and liabilities, including attorneys' fees, reasonably incurred by or imposed
upon him, except in such case where the director, officer or employee is
adjudged guilty of willful misfeasance or malfeasance in the performance of his
duties. Article XI also provides that the right of indemnification shall be in
addition to and not exclusive of all other rights, to which such director,
officer or employee may be entitled.
-7-
<PAGE> 9
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors and officers and controlling persons pursuant
to the foregoing provisions, the Company has been advised that, in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon by
Fulbright & Jaworski L.L.P.
EXPERTS
The consolidated financial statements included in the Company's Annual
Report on Form 10-K for the fiscal years ended August 31, 1997 and 1996,
incorporated by reference in this Prospectus have been audited by Arthur
Andersen LLP, independent public accountants, to the extent and for the periods
set forth in their reports incorporated herein by reference, and are
incorporated herein in reliance upon the authority of said firm as experts in
accounting and auditing.
The consolidated financial statements included in the Company's Annual
Report on Form 10-K for the fiscal year ended August 31, 1995, incorporated by
reference in this Prospectus have been audited by Hairston, Kemp, Sanders &
Stich, P.C., independent public accountants, to the extent and for the periods
set forth in their report incorporated herein by reference, and are
incorporated herein in reliance upon the authority of said firm as experts in
accounting and auditing.
-8-
<PAGE> 10
===============================================================================
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN
ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Disclosure Regarding Forward-Looking
Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
================================================================================
================================================================================
1,346,952 SHARES
PONDER INDUSTRIES, INC.
COMMON STOCK
----------------
P R O S P E C T U S
DECEMBER 10, 1997
----------------
===============================================================================
<PAGE> 11
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with this offering are:
<TABLE>
<S> <C>
SEC registration fee $ 676
Legal fees and expenses* 10,000
Miscellaneous* 6,000
Total $16,676
=======
</TABLE>
--------------------
* Estimated
The Company has agreed to pay all the costs and expenses of
this offering.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law empowers the
Registrant to, and the Bylaws of the Registrant provide that it shall,
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding by reason of
the fact that he is or was a director, officer, employee or agent of the
Registrant, or is or was serving at the request of the Registrant as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interest
of the Registrant, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful; except that, in the
case of an action or suit by or in the right of the Registrant, no
indemnification may be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Registrant unless and only to
the extent that the Court of Chancery or the court in which such action or suit
was brought shall determine that such person is fairly and reasonably entitled
to indemnity for proper expenses.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
The Registrant maintains directors' and officers' liability insurance
that covers the directors and officers of the Registrant.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Exhibit
- ----------- -------
<S> <C>
5.1 Opinion of Fulbright & Jaworski L.L.P. regarding legality (filed herewith)
23.1 Consent of Fulbright & Jaworski L.L.P. (contained in Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP (filed herewith)
23.3 Consent of Hairston, Kemp, Sanders & Stich, P.C. (filed herewith)
24.1 Power of Attorney (included on signature page).
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan
II-1
<PAGE> 12
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post- effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes that, insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston and State of Texas the 24th day of November,
1997.
PONDER INDUSTRIES, INC.
By: /s/ Eugene L. Butler
-------------------------------------------
Eugene L. Butler
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints Eugene L. Butler and Gerald A. Slaughter, or
either of them, his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
and all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or either of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Eugene L. Butler Chairman of the Board, November 24, 1997
- ---------------------------------- President, Chief Executive Officer
Eugene L. Butler and a Director
(Principal Executive Officer)
/s/ Frank J. Wall Senior Vice President of Operations November 24, 1997
- ---------------------------------- and a Director
Frank J. Wall
/s/ Gerald A. Slaughter Senior Vice President November 24, 1997
- ---------------------------------- and Chief Financial Officer
Gerald A. Slaughter (Principal Financial and
Accounting Officer)
/s/ Rittie W. Milliman, Sr. Director November 24, 1997
- ----------------------------------
Rittie W. Milliman, Sr.
/s/ John Roane Director November 24, 1997
- ----------------------------------
John Roane
/s/ John Le Seelleur Director November 24, 1997
- ----------------------------------
John Le Seelleur
/s/ Joe R. Nemec Director November 24, 1997
- ----------------------------------
Joe R. Nemec
</TABLE>
II-3
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT PAGE
- ---------- ------- ----
<S> <C> <C>
5.1 Opinion of Fulbright & Jaworski L.L.P. regarding legality (filed herewith) . . . . . . . . . . . . II-5
23.1 Consent of Fulbright & Jaworski L.L.P. (contained in Exhibit 5) . . . . . . . . . . . . . . . . . II-5
23.2 Consent of Arthur Andersen LLP (filed herewith) . . . . . . . . . . . . . . . . . . . . . . . . . II-6
23.3 Consent of Hairston, Kemp, Sanders & Stich, P.C. (filed herewith) . . . . . . . . . . . . . . . . II-7
24.1 Power of Attorney (included on signature page) . . . . . . . . . . . . . . . . . . . . . . . . . . II-3
</TABLE>
II-4
<PAGE> 1
[FULBRIGHT & JAWORSKI L.L.P. LETTERHEAD]
December 9, 1997
Ponder Industries, Inc.
5005 Riverway drive, Suite 550
Houston, Texas 77056
Dear Sirs:
As counsel to Ponder Industries, Inc., a Delaware corporation (the
"Company"), we are familiar with the Registration Statement on Form S-3 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission on or about December 10, 1997, under the Securities Act of 1933, as
amended, relating to an aggregate of 1,346,752 shares (the "Shares") of common
stock, $.01 par value ("Common Stock"), of the Company to be sold by certain
selling stockholders listed in the Registration Statement (the "Selling
Stockholders"). The Shares will be issued pursuant to the proper and valid
exercise of certain warrants (the "Warrants") held by the Selling Stockholders,
each as described in the Registration Statement.
In connection therewith, we have examined such corporate records,
documents and such questions of law as we have considered necessary or
appropriate for the purposes of this opinion and, upon the basis of such
examination, advise you that in our opinion the 1,346,752 shares of Common
Stock to be sold by the Selling Stockholders have been duly and validly
authorized, and when issued in accordance with the terms of the Warrants will
be validly issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Fulbright & Jaworski L.L.P.
II-5
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated October 17, 1997
incorporated by reference in Ponder Industries, Inc.'s Form 10-K for the year
ended August 31, 1997 and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
San Antonio, Texas
December 5, 1997
II-6
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated November 20, 1995
included in Ponder Industries, Inc.'s Form 10-K for the year ended August 31,
1997 and to all references to our firm included in this registration statement.
/s/ HAIRSTON, KEMP, SANDERS & STICH, P.C.
HAIRSTON, KEMP, SANDERS & STICH, P.C.
San Antonio, Texas
December 5, 1997
II-7
