SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
PACKAGED ICE, INC.
(Exact Name of Registrant as Specified in Its Charter)
TEXAS 76-0316492
(State of Incorporation or Organization) (I.R.S. Employer
Identification No.)
8572 KATY FREEWAY, SUITE 101, HOUSTON, TEXAS 77024
(Address of Principal Executive Offices) (Zip Code)
If this Form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective upon filing pursuant to
General Instruction A.(c), please check the following box [ ]
If this Form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is to become effective pursuant to General
Instruction A.(d), please check the following box [ X ]
Securities to be registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE REGISTERED EACH CLASS IS TO BE REGISTERED
None.
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.01 per share
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
A description of the securities to be registered hereunder is
contained in the sections entitled "Description of Capital Stock" and "Taxation"
of the prospectus (the "Prospectus") included in the Registrant's Registration
Statement on Form S-1 (File No. 333-60627), filed with the Securities and
Exchange Commission (the "Commission") on August 5, 1998 (the "Registration
Statement"). A copy of pages 47 through 53 of the Prospectus are attached as
Exhibit 3 to this filing pursuant to Rule 12(b)-23 under the Securities Exchange
Act of 1934, as amended.
ITEM 2. EXHIBITS.
EXHIBIT NUMBER DESCRIPTION
1. Restated Articles of Incorporation of the Registrant.(1)
2. Amended and Restated Bylaws of the Registrant.(2)
3. Copy of pages 47-53 of the Prospectus included in the
Registration Statement.
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(1) Incorporated by reference to Exhibit 3.2 to the Registration
Statement on Form S-4 (File No. 333-29357), filed with the
Commission on June 16, 1997.
(2) Incorporated by reference to Exhibit 3.5 to the Registration
Statement on Form S-4 (File No. 333-29357), filed with the
Commission on June 16, 1997.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereto duly authorized.
PACKAGED ICE, INC.
Date: August 31, 1998 By:/s/ JAMES F. STUART
-----------------------
James F. Stuart
Chief Executive Officer
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EXHIBIT INDEX
1. Restated Articles of Incorporation of the Registrant.
2. Amended and Restated Bylaws of the Registrant.
3. Copy of pages 47-53 of the Prospectus included in the
Registration Statement.
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DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 50,000,000 shares
of Common Stock, of which [ ] shares will be outstanding immediately
following the Offerings and of which 298,231 shares will be held as treasury
stock, and 5,000,000 shares of preferred stock, par value $.01 per share. The
Company's Board of Directors has authorized the designation of 2,750,100 shares
of preferred stock as follows: 450,000 shares as the Series A Convertible
Preferred Stock, all of which are outstanding; 200,000 shares as the Series B
Convertible Preferred Stock, of which 124,831 shares are outstanding; 500,000
shares as the 10% Mandatorily Redeemable Preferred Stock, of which 250,000
shares are outstanding; 100 shares as the Series C Preferred Stock, of which 100
shares are outstanding; and 1,600,000 shares of 13% Exchangeable Preferred
Stock, of which 325,000 shares will be outstanding at the closing of the
Offerings. In addition, 400,000 shares and 1,000,000 shares of Common Stock have
been reserved for issuance upon exercise of stock options under the 1994 and
1998 Stock Option Plans, respectively, 574,831 shares of Common Stock have been
reserved for issuance upon conversion of the Convertible Preferred Stock (such
Common Stock will be issued upon the completion of the Offerings), and 3,985,473
shares have been reserved for issuance upon exercise of warrants. The following
summary of the Company's capital stock is qualified in its entirety by reference
to the Company's Articles of Incorporation and its Bylaws.
COMMON STOCK
The holders of Common Stock are entitled to one vote per share on all
matters to be voted on by shareholders of the Company. Subject to any
preferential rights of any outstanding series of preferred stock designated by
the Board of Directors, the holders of Common Stock are entitled to receive,
ratably, with the holders of the Convertible Preferred Stock, such dividends, if
any, as may be declared from time to time by the Board of Directors out of funds
legally available therefor. In the event of liquidation, dissolution or winding
up of the Company, the holders of Common Stock are entitled to receive pro rata
all assets of the Company available for distribution to such holders after
distribution in full of the preferential amount to be distributed to holders of
shares of the Convertible Preferred Stock, the 10% Mandatorily Redeemable
Preferred Stock, the Series C Preferred Stock and the 13% Exchangeable Preferred
Stock. The Company's Articles of Incorporation deny preemptive rights and
cumulative voting. The Common Stock has no conversion rights or other
subscription rights and there are no redemption or sinking fund provisions
applicable to the Common Stock.
SERIES A CONVERTIBLE PREFERRED STOCK
The Series A Convertible Preferred Stock has no rights of redemption or
sinking fund provisions, but upon liquidation of the Company, the Company must
pay the holders of Series A Convertible Preferred Stock $5.56 per share (an
aggregate of $2.5 million) before any amounts may be paid to the holders of
Common Stock. Holders of Series A Convertible Preferred Stock are entitled to
vote on all matters upon which the holders of Common Stock have the right to
vote and are generally entitled to vote as a class on any matters adversely
affecting their rights as holders of this series of preferred stock. Each share
of Series A Convertible Preferred Stock entitles the holder thereof to such
number of votes per share as equals the whole number of shares of Common Stock
into which each share of Series A Convertible Preferred Stock is then
convertible. Upon the closing of the Offerings, each share of Series A
Convertible Preferred Stock will be automatically converted into Common Stock
without payment of additional consideration at a conversion price of $5.56 per
share, subject to anti-dilution adjustments. The Company may not reissue the
Series A Convertible Preferred Stock once it has been converted into Common
Stock.
SERIES B CONVERTIBLE PREFERRED STOCK
The Series B Convertible Preferred Stock has no rights of redemption or
sinking fund provisions, but upon liquidation of the Company, the Company must
pay the holders of Series B Convertible Preferred Stock $6.07 per share (an
aggregate of $757,724) before any amounts may be paid to the holders of Common
Stock. Holders of Series B Convertible Preferred Stock are entitled to vote on
all matters upon which the holders of Common Stock have the right to vote and
are generally entitled to vote as a class on
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any matters adversely affecting their rights as holders of this series of
preferred stock. Each share of Series B Convertible Preferred Stock entitles the
holder thereof to such number of votes per share as equals the whole number of
shares of Common Stock into which each share of Series B Convertible Preferred
Stock is then convertible. Upon the closing of the Offerings, each share of
Series B Convertible Preferred Stock shall be automatically converted into
Common Stock without payment of additional consideration at a conversion price
of $6.07 per share, subject to anti-dilution adjustments. The Company may not
reissue the Series B Convertible Preferred Stock once it has been converted into
Common Stock.
10% MANDATORILY REDEEMABLE PREFERRED STOCK
The 10% Mandatorily Redeemable Preferred Stock has a liquidation preference
of $100 per share. Holders of the 10% Mandatorily Redeemable Preferred Stock are
entitled to receive dividends equal to 10% of the liquidation preference
thereof, and all dividends are fully cumulative. Dividends may be paid in cash
or in kind by issuing a number of additional shares of 10% Mandatorily
Redeemable Preferred Stock. If dividends are paid in kind, the Company is also
required to issue additional warrants to purchase a number of shares of Common
Stock (including fractional shares) in an amount equal to the liquidation
preference of such additional shares of 10% Mandatorily Redeemable Preferred
Stock divided by the per share exercise price of the warrants in effect
immediately prior to such dividend payment date. Holders of the 10% Mandatorily
Redeemable Preferred Stock have no voting rights other than approval rights with
respect to the issuance of parity or senior securities. The Company intends to
redeem the 10% Mandatorily Redeemable Preferred Stock with the proceeds of these
Offerings.
SERIES C PREFERRED STOCK
The Series C Preferred Stock has a liquidation preference of $10 per share
and was created to provide the holders thereof with the right to vote a number
of shares equal to the number of Culligan Warrants issued to them, such rights
to be effective only at such time or times that Culligan owns less than 20% of
the fully diluted Common Stock. The Company may redeem all (but not less than
all) of the Series C Preferred Stock at such time as the investors cease to own
at least 50% of the Fully Diluted Warrant Common Stock (as defined in the
Certificate of Designation of the Series C Preferred Stock).
13% EXCHANGEABLE PREFERRED STOCK
In April 1998, the Board of Directors authorized the designation of an
aggregate of 1,600,000 shares of the 13% Exchangeable Preferred Stock with a
liquidation preference of $100 per share. Holders of the 13% Exchangeable
Preferred Stock are entitled to receive dividends until April 30, 1999 at a rate
of 11.5% per annum at which time the dividend rate will increase to 12.25% per
annum. On May 1, 2000, the dividend rate on the 13% Exchangeable Preferred Stock
will increase to 13%. Dividends are fully cumulative and payable quarterly in
cash, except that until May 1, 2003 dividends may be paid in kind by issuing a
number of additional shares of 13% Exchangeable Preferred Stock. If the Company
is unable for any reason to pay dividends in cash after May 1, 2003, or in the
event of a default, the holders of the 13% Exchangeable Preferred Stock have the
right to add up to two directors to the Company's Board of Directors and the
dividend rate will be increased by 2% per annum until the default is cured.
Holders of the 13% Exchangeable Preferred Stock have the benefit of certain
affirmative and negative covenants, but do not have voting rights. The Company
may redeem the 13% Exchangeable Preferred Stock at any time after the fourth
anniversary of the issue date and, in certain circumstances, upon an initial
public equity offering prior to the third anniversary of the issue date, in each
case subject to contractual and other restrictions with respect thereto
(including the Indenture and the Credit Facility) and to applicable provisions
of the TBCA. The Company is obligated to redeem the 13% Exchangeable Preferred
Stock for cash after the maturity date of the 9 3/4% Senior Notes in 2005, or,
if earlier, upon the occurrence of certain change of control or asset sale
events, in each case subject to applicable provisions of the TBCA and all the
other restrictions (including the Indenture and the Credit Facility). The
Company may exchange the 13% Exchangeable Preferred Stock for Senior
Subordinated Debentures in an aggregate principal amount of the liquidation
preference amount of the 13% Exchangeable Preferred Stock. Upon the closing of
the Offerings, $7.5 million of 13% Exchangeable Preferred Stock plus accrued
dividends payable on such preferred stock
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will be converted into shares of Common Stock at 91.75% of the Price to Public
on the cover page of this Prospectus.
Payment of cash dividends, redemption of the 13% Exchangeable Preferred
Stock and the exchange of the 13% Exchangeable Preferred Stock for subordinated
notes is restricted by covenants under the Indenture and Credit Facility.
To the extent the Underwriters' over-allotment options are exercised, the
proceeds thereof will be used to redeem shares of 13% Exchangeable Preferred
Stock for 109% of the liquidation preference thereof. In addition, Ares has
agreed to allow the Company to redeem any remaining outstanding 13% Exchangeable
Preferred Stock for 109% of the liquidation preference thereof until May 1, 1999
and 111% of the liquidation preference thereof until May 1, 2000.
WARRANTS
The following table delineates the terms of certain warrants the Company
has outstanding. Among other terms, these warrants contain certain anti-dilution
provisions and certain registration rights. See "-- Registration Rights."
<TABLE>
<CAPTION>
UNDERLYING EXERCISE EXPIRATION
NAME COMMON SHARES PRICE DATE
- ---------------------------------------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
12% Senior Note Warrants(1)............. 767,828 $0.01/Share April 15, 2004
Jefferies Warrants(1)................... 127,972 $0.01/Share April 15, 2004
Culligan Warrants(2).................... 1,998,921 $13.00/Share April 15, 2005(3)
SV Warrants(4).......................... 100,000 $14.00/Share July 17, 2002
Ares Warrants(5)........................ 975,752 $0.01/Share May 1, 2005(6)
------------- ------------
Total.............................. 3,970,473 $6.90/Share(7)
============= ============
</TABLE>
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(1) Issued in connection with the issuance of 12% Senior Notes.
(2) Issued pursuant to warrant agreements entered into in connection with an
issuance of 10% Mandatorily Redeemable Preferred Stock and Series C
Preferred Stock.
(3) Required to be exercised on or before the earlier to occur of April 15, 2005
or (ii) the first anniversary of the last day of the first period of 20
consecutive trading days following the closing of these Offerings during
which the closing price of the Common Stock is above $26 per share.
(4) Issued in connection with the issuance of 300,000 shares of Common Stock.
(5) Issued pursuant to warrant agreements entered into in connection with the
issuance of 13% Exchangeable Preferred Stock.
(6) Required to be exercised on or before the earlier to occur of (i) May 1,
2005 or (ii) 10 business days following the closing of the Offerings.
(7) Weighted average exercise price.
CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION
The Company's Articles provide that the Board of Directors is vested with
authority to establish, from time to time, series of unissued shares of any
class, to determine and fix the designation and the relative rights, preferences
and limitations of the shares of each series so established, and to increase or
decrease the number of shares within each such series. The relative rights and
preferences of shares may vary in any respect among series, but all shares of
the same series shall be identical in all respects. The authority possessed by
the Board of Directors to issue different classes and series of stock could
potentially be used to discourage attempts by others to obtain control of the
Company through a merger, tender offer, proxy contest or otherwise by making
such attempts more difficult to achieve or more costly. The Board of Directors
may issue preferred stock with voting and conversion rights that could adversely
affect the voting power of the holders of Common Stock.
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Article 1302-7.06 of the Texas Miscellaneous Corporation Act ("TMCA")
authorizes a Texas corporation to include a provision in its articles of
incorporation limiting or eliminating the personal liability of its directors to
the corporation and its shareholders for monetary damages for breach of
directors' fiduciary duty of care. The duty of care requires that, when acting
on behalf of the corporation, directors exercise an informed business judgment
based on all material information reasonably available to them. Absent the
limitations authorized by such provision, directors are accountable to
corporations and their shareholders for monetary damages for conduct
constituting gross negligence in the exercise of their duty of care. Although
Article 1302-7.06 of the TMCA does not change a director's duty of care, it
enables corporations to limit available relief to equitable remedies such as
injunction or rescission. Pursuant to such provision, the Articles of
Incorporation limit the personal liability of directors of the Company (in their
capacity as directors but not in their capacity as officers) to the Company or
its shareholders to the fullest extent permitted by the TMCA. Specifically, a
director of the Company will not be personally liable to the corporation or its
shareholders for monetary damages for breach of fiduciary duty as a director,
except for (i) any breach of the director's duty of loyalty to the Company or
its shareholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) unlawful payments of
dividends or unlawful stock repurchases, redemptions or other distributions, and
(iv) any transaction from which the director derived an improper personal
benefit.
The inclusion of this provision may have the effect of reducing the
likelihood of derivative litigation against directors and may discourage or
deter shareholders or management from bringing a lawsuit against directors for
breach of their duty of care, even though such an action, if successful, might
otherwise have benefited the Company and its shareholders. However, the
inclusion of this provision together with a provision which requires the Company
to indemnify its officers and directors against certain liabilities, is intended
to enable the Company to attract qualified persons to serve as directors who
might otherwise be reluctant to do so. The Commission has taken the position
that this provision will have no effect on claims arising under the federal
securities laws.
ANTI-TAKEOVER CONSIDERATIONS
ANTI-TAKEOVER STATUTE. On September 1, 1997, the Company became subject to
newly-enacted Part 13 of the TBCA ("Part 13"), which subject to certain
exceptions, prohibits a Texas corporation from engaging in any "business
combination" with an "affiliated shareholder" for three years following the
date that such shareholder became an affiliated shareholder, unless: (i) prior
to such date, the board of directors of the corporation approved either the
business combination or the transaction that resulted in the shareholder
becoming an affiliated shareholder or (ii) the business combination is
authorized at a meeting of shareholders called not less than six months after
such date by the affirmative vote of at least two-thirds of the outstanding
voting shares not owned by the affiliated shareholder.
Part 13 generally defines a "business combination" to include: (i) any
merger, share exchange or conversion involving the corporation and the
affiliated shareholder, (ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition of 10% or more of the assets of the corporation to
the affiliated shareholder, (iii) subject to certain exceptions, any transaction
that results in the issuance or transfer by the corporation of any stock of the
corporation to the affiliated shareholder, (iv) any transaction involving the
corporation that has the effect of increasing the proportionate ownership
percentage of the stock of any class or series of the corporation beneficially
owned by the affiliated shareholder, (v) any receipt by the affiliated
shareholder of the benefit of any loans, advances, guarantees, pledges or other
financial benefits provided by or through the corporation, or (vi) any adoption
of a plan or proposal for the liquidation or dissolution of the corporation
proposed by, or pursuant to any agreement or understanding with, an affiliated
shareholder. In general, Part 13 defines an "affiliated shareholder" as any
entity or person beneficially owning 20% or more of the outstanding voting stock
of the corporation and any entity or person affiliated with or controlling or
controlled by such entity or person. The provisions of Part 13 could have the
effect of delaying, deferring or preventing a change of control of the Company
even if a change of control were in the shareholders' interests.
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TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.
REGISTRATION RIGHTS AGREEMENTS
Approximately shares of Common Stock, 3,985,473 shares of Common
Stock underlying warrants and 574,831 shares of Common Stock underlying
Convertible Preferred Stock have the benefit of "demand" registration rights
that allow the holder to require the Company at any time, subject to certain
limitations, to file a registration statement under the Securities Act at the
Company's expense covering all or part of such securities. In addition, holders
of these securities and an additional shares of Common Stock have the
benefit of "piggyback" registration rights that allow the holders thereof to
require the Company to register the underlying shares of common stock if the
Company files a registration statement under the Securities Act. If such
registration statement is with respect to an underwritten offering, the
underwriter thereof may reduce the amount of "piggyback" shares to be
registered in the underwriting in its discretion. These registration rights
agreements include traditional covenants and indemnification provisions
including the indemnification of the selling shareholders for violations of the
Securities Act. These rights expire on various dates from to
.
SHARES ELIGIBLE FOR FUTURE SALE
Future sales of a substantial number of shares of Common Stock in the
public market could adversely affect trading prices prevailing from time to
time.
Upon completion of the Offerings, the Company will have outstanding
shares of Common Stock. The shares sold in the Offerings will be freely
tradable without restriction under the Securities Act, unless purchased by
"affiliates" of the Company as that term is defined in Rule 144, which is
summarized below. Of the remaining shares, shares are freely
transferable and shares are "restricted securities" as that term is
defined in Rule 144 ("Restricted Shares"). Restricted Shares may be sold in
the public market only if such sale is registered under the Securities Act or if
such sale qualifies for an exemption from registration, such as the one provided
by Rule 144. Sales of the Restricted Shares in the open market, or the
availability of such shares for sale, could adversely affect the trading price
of the Common Stock.
In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned Restricted Shares for at
least one year following the later of the date of the acquisition of such shares
from the issuer or an affiliate of the issuer would be entitled to sell within
any three-month period a number of shares that does not exceed the greater of:
(i) 1% of the number of shares of Common Stock then outstanding (approximately
shares immediately after the Offerings) or (ii) the average weekly
trading volume of the Common Stock during the four calendar weeks preceding the
filing of a Form 144 with respect to such sale. Sales under Rule 144 are also
subject to certain manner of sale provisions and notice requirements and the
availability of current public information about the Company. Under Rule 144(k),
a person who is not deemed to have been an affiliate of the Company at any time
during the 90 days preceding a sale, and who has beneficially owned the shares
proposed to be sold for at least two years following the later of the date of
the acquisition of such shares from the issuer or an affiliate of the issuer, is
entitled to sell such shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144.
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES TO NON-U.S. HOLDERS
The following is a general summary of certain United States federal income
and estate tax consequences expected to result under current law from the
purchase, ownership and taxable disposition of Common Stock by Non-U.S. Holders
of Common Stock. A "Non-U.S. Holder" is any person or entity other than (i) a
citizen or resident of the United States, (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
of any state thereof, (iii) an estate, the income of which is subject to United
States federal income taxation regardless of its source or (iv) a trust whose
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administration is subject to the primary supervision of a United States court
and which has one or more United States fiduciaries who have the authority to
control all substantial decisions of the trust. This summary is for general
information only and does not address all of the United States federal income
and estate tax considerations that may be relevant to Non-U.S. Holders in light
of their particular circumstances or to Non-U.S. Holders that may be subject to
special treatment under United States federal income tax laws. Furthermore, this
summary does not discuss any aspect of state, local or foreign taxation. This
summary is based on current provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury regulations, judicial opinions, published
positions of the United States Internal Revenue Service and other applicable
authorities, all of which are subject to change, possibly with retroactive
effect. Prospective purchasers of Common Stock are advised to consult their tax
advisors regarding the federal, state and local and foreign income and other tax
consequences of acquiring, holding and disposing of Common Stock.
DIVIDENDS
Dividends paid to a Non-U.S. Holder on shares of Common Stock will be
subject to withholding of United States federal income tax at a 30 percent rate
(or such lower rate as may be provided by an applicable income tax treaty
between the United States and a foreign country) unless the dividends are
effectively connected with the conduct of a trade or business of the Non-U.S.
Holder within the United States (or, in the case of an applicable tax treaty,
are attributable to a United States permanent establishment maintained by such
Non-U.S. Holder). Dividends that are effectively connected with the conduct of a
trade or business within the United States (or are attributable to a United
States permanent establishment) will be subject to United States federal income
tax on a net income basis (that is, after allowance for applicable deductions)
which is not collected by withholding provided the Non-U.S. Holder files the
appropriate certification with the Company or its agent. Any such effectively
connected dividends received by a foreign corporation may, under certain
circumstances, be subject to an additional "branch profits tax" at a 30
percent rate or such lower rate as may be specified by an applicable income tax
treaty.
Under United States Treasury Regulations currently in effect, dividends
paid to an address outside the United States will be presumed to be paid to a
resident of the country of address (unless the payor has knowledge to the
contrary) for purposes of the withholding tax rules discussed above and for
purposes of determining the applicability of a tax treaty rate. Under
recently-issued United States Treasury Regulations that are effective for
payments made after December 31, 1999 ("Final Regulations"), a Non-U.S. Holder
of Common Stock who wishes to claim the benefit of a tax treaty rate would be
required to satisfy applicable certification requirements. In addition, under
such Final Regulations, in the case of Common Stock held by a foreign
partnership, (i) the certification requirement generally would be applied to the
partners of the partnership, and (ii) the partnership would be required to
provide certain information, including a United States taxpayer identification
number.
A Non-U.S. Holder of Common Stock that is eligible for a reduced rate of
United States withholding tax pursuant to a tax treaty may obtain a refund of
any excess amounts currently withheld by filing an appropriate claim for refund
with the Internal Revenue Service.
SALE OR DISPOSITION OF COMMON STOCK
A Non-U.S. Holder generally will not be subject to United States federal
income tax in respect of any gain recognized on the sale or other taxable
disposition of Common Stock so long as (i) the gain is not effectively connected
with the conduct of a trade or business of the Non-U.S. Holder in the United
States; (ii) in the case of a Non-U.S. Holder who is an individual and holds the
Common Stock as a capital asset, either (a) such holder is not present in the
United States for 183 or more days in the taxable year of the disposition or (b)
such holder does not have a "tax home" in the United States for United States
federal income tax purposes nor does such holder maintain an office or other
fixed place of business in the United States to which such gain is attributable;
(iii) such Non-U.S. Holder is not subject to tax pursuant to the provisions of
United States federal income tax law applicable to certain United States
expatriates or (iv) the Common Stock continues to be "regularly traded on an
established securities market" for United States
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federal income tax purposes and the Non-U.S. Holder has not held, directly or
indirectly, at any time during the five-year period ending on the date of
disposition (or, if shorter, the Non-U.S. Holder's holding period) more than 5
percent of the outstanding Common Stock.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Company must report annually to the Internal Revenue Service and to
each Non-U.S. Holder the amount of dividends paid to, and the tax withheld with
respect to, each Non-U.S. Holder. These reporting requirements apply regardless
of whether withholding was reduced by an applicable tax treaty. Copies of these
information returns may also be made available under the provisions of a treaty
or information exchange agreement with the tax authorities in the country in
which the Non-U.S. Holder resides. Under current law, U.S. backup withholding
tax (which is a withholding tax currently imposed at the rate of 31 percent on
certain payments to persons who fail to furnish the information required under
U.S. information reporting requirements) generally will not apply to dividends
paid on Common Stock to a Non-U.S. Holder at an address outside the United
States unless the payor has knowledge that the payee is a United States person.
However, under the Final Regulations described above, dividends paid on Common
Stock after December 31, 1999 may be subject to backup withholding unless
applicable certification requirements are satisfied.
Payments of the proceeds from a sale of Common Stock to or through a U. S.
office of a broker will be subject to information reporting and backup
withholding unless the owner certifies as to its status as a Non-U.S. Holder
under penalties of perjury or otherwise establishes an exemption. Payment of the
proceeds from a sale of Common Stock to or through a non-U.S. office of a broker
generally will not be subject to information reporting or backup withholding;
however, if such broker is (i) a United States person, (ii) a "controlled
foreign corporation," or (iii) a foreign person that derives 50 percent or more
of its gross income from the conduct of a trade or business in the United
States, such payment will be subject to information reporting (but currently not
backup withholding) unless such broker has documentary evidence in its records
that the owner is a Non-U.S. Holder and certain other conditions are met or the
owner otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules will be credited
against the Non-U.S. Holder's federal income tax liability, if any, or refunded,
provided the required information is furnished to the Internal Revenue Service.
ESTATE TAX
The fair market value of Common Stock owned (or treated as owned) by an
individual at the time of his death will be includible in his gross estate for
U. S. federal estate tax purposes and thus may be subject to U. S. estate tax,
even though the individual at the time of death is neither a citizen of nor
domiciled in the United States, unless an applicable estate tax treaty provides
otherwise.
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