<PAGE> 1
As filed with the Securities and Exchange Commission on September 18, 1998.
REGISTRATION NO. 333-57281
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
------------------
HIGHWAYMASTER COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0352879
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16479 DALLAS PARKWAY, SUITE 710 WESLEY E. SCHLENKER
DALLAS, TEXAS 75248 16479 DALLAS PARKWAY, SUITE 710
(972) 732-2500 DALLAS, TEXAS 75248
(Address, including zip code, and (972) 732-2500
telephone number, including area code, of (Name, address, including zip code,
registrant's principal executive offices) and telephone number, including area
code, of agent for service)
-----------
Copies to:
GEOFFREY L. NEWTON
BAKER & BOTTS, L.L.P.
2001 ROSS AVENUE
DALLAS, TEXAS 75201
(214) 953-6500
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, please 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. [ ]
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectus: (i) one
to be used in connection with offers and sales of Warrants to purchase Common
Stock and the issuance of shares of Common Stock (the "Warrant Shares") upon the
exercise of such Warrants and (ii) the other in connection with offers and sales
of shares of Common Stock held by certain stockholders of the Company (the
"Selling Stockholders"). The Prospectuses are identical in all material respects
except for certain alternate pages to be included in the Prospectus (the
"Selling Stockholder Prospectus") relating to offers and sales by the Selling
Stockholders. The Prospectus (the "Selling Warrantholder Prospectus") relating
to offers and sales of the Warrants and the issuance of Warrant Shares upon the
exercise thereof is included herein in its entirety. The alternate pages for the
Selling Stockholder Prospectus included herein are labeled "Alternate Pages for
Selling Stockholder Prospectus." Final forms of each Prospectus will be filed
with the Securities and Exchange Commission under Rule 424(b).
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT, A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED SEPTEMBER 18, 1998
PROSPECTUS
HIGHWAYMASTER COMMUNICATIONS, INC.
125,000 WARRANTS
820,750 SHARES OF COMMON STOCK
This Prospectus relates to (i) 125,000 warrants (the "Warrants") to
purchase shares of common stock, par value $.01 per share ("Common Stock"), of
HighwayMaster Communications, Inc. ( the "Company") and (ii) 820,750 shares of
Common Stock (the "Warrant Shares") that may be issued from time to time by the
Company upon the exercise of the Warrants. The Warrants were originally issued
by the Company as a part of an offering of 125,000 units (the "Units"), each
consisting of $1,000 principal amount of its 13 3/4% Senior Notes due 2005 (the
"Notes") and one Warrant, in an offering that was exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to Rule 144A and Regulation S thereunder. The Notes and the Warrants
became separable on November 4, 1997. The Company is registering the Warrants
and the Warrant Shares under the Securities Act as required pursuant to the
terms of the Warrant Registration Rights Agreement, dated as of September 23,
1997 (the "Warrant Registration Rights Agreement"), among the Company and Bear
Stearns & Co. Inc. and Smith Barney Inc., as the initial purchasers of the Units
(the "Initial Purchasers").
Each Warrant entitles the holder thereof to purchase 6.566 Warrant
Shares at an exercise price of $9.625 per share, subject to certain
anti-dilution provisions. The Warrants may be exercised at any time on or after
the earlier of (i) September 23, 1998 or (ii) in the event a Change of Control
(as defined herein) occurs, the date upon which the Company mails notice thereof
to the holders of the Warrants. Unless exercised, the Warrants will expire on
September 15, 2005. See "Description of Warrants."
The Warrants may be offered and sold from time to time by the holders
named herein or their transferees, pledgees, donees or successors (collectively,
the "Selling Warrantholders") pursuant to this Prospectus. The Warrants may be
sold by the Selling Warrantholders from time to time directly to purchasers or
through agents, underwriters or dealers. See "Plan of Distribution" and "Selling
Warrantholders." To the extent required, the names of any agents or underwriters
and the applicable commissions and discounts and any other required information
with respect to a particular offer or sale will be set forth in an accompanying
supplement to this Prospectus. See "Plan of Distribution."
The Warrant Shares are being offered by the Company to the Selling
Warrantholders in connection with the exercise of the Warrants pursuant to the
Warrant Agreement, dated as of September 23, 1997 (the "Warrant Agreement"),
between the Company and Chase Bank of Texas, National Association (formerly
Texas Commerce Bank National Association), as warrant agent (the "Warrant
Agent").
The Common Stock is traded on the Nasdaq National Market (the "NNM")
under the symbol "HWYM." On September 17, 1998, the last reported sale price of
the Common Stock on the NNM was $1.1875 per share. Prior to this offering,
there has been no public market for the Warrants, and the Company does not
intend to apply for listing or quotation of the Warrants on any securities
exchange or automated quotation system.
The Company will not receive any proceeds from the sale of the Warrants
by the Selling Warrantholders. To the extent that any Warrants are exercised,
the Company will receive the exercise price for the Warrant Shares. The Company
has agreed to bear certain expenses in connection with the registration of the
Warrants and the Warrant Shares being offered hereby. In addition, the Company
has agreed to indemnify the Selling Warrantholders against certain liabilities,
including liabilities under the Securities Act.
See "Plan of Distribution."
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
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.
The date of this Prospectus is September 18, 1998.
<PAGE> 4
AVAILABLE INFORMATION
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 Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549; the Chicago Regional Office,
Suite 1400, 500 West Madison Street, Northwest Atrium Center, Chicago, Illinois
60661; and the New York Regional Office, Suite 1300, 7 World Trade Center, New
York, New York 10048 and through the Commission's Internet site at www.sec.gov.
Copies of such material also can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates.
The Company has filed with the Commission a registration statement on
Form S-3 (together with all exhibits and amendments thereto, the "Registration
Statement") under the Securities Act, covering the securities offered by this
Prospectus. This Prospectus, which is part of the Registration Statement, does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information pertaining to the Company and the
securities offered hereby, reference is made to the Registration Statement,
which may be inspected without charge at, and copies thereof may be obtained at
prescribed rates from, the offices of the Commission at Judiciary Plaza, Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549.
Statements contained herein or in any document incorporated herein by
reference concerning the provisions of any contract or other document are not
necessarily complete and, in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement or such other document. Each such statement is qualified in its
entirely by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:
(i) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997;
(ii) the Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1998;
(iii) the Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1998;
(iv) the Company's Current Report on Form 8-K dated as of
September 3, 1998;
(v) the Company's Current Report on Form 8-K dated as of
September 17, 1998; and
(vi) the description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A (Commission File
No. 0-26140).
In addition, all documents filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date hereof and prior to the termination of the offering of the securities
offered hereby shall be deemed to be incorporated herein by reference and to be
a part hereof from the respective dates of the filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
ii
<PAGE> 5
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a
Prospectus is delivered, upon the written or oral request of such person, a copy
of any and all of the documents incorporated by reference herein, other than
certain exhibits to such documents (unless such exhibits are specifically
incorporated by reference into the documents that this Prospectus incorporates).
Such requests should be addressed to Wesley E. Schlenker, General Counsel and
Secretary, HighwayMaster Communications, Inc., 16479 Dallas Parkway, Suite 710,
Dallas, Texas 75248; telephone (972) 732-2500. After September 25, 1998,
requests should be addressed to Wesley E. Schlenker, General Counsel and
Secretary, HighwayMaster Communications, Inc., 1155 Cas Drive, Richardson,
Texas 75081; telephone (972) 301-2000.
FORWARD LOOKING STATEMENTS: THIS PROSPECTUS AND THE DOCUMENTS
INCORPORATED BY REFERENCE HEREIN CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT
THAT ARE BASED UPON MANAGEMENT'S BELIEFS, AS WELL AS ASSUMPTIONS MADE BY AND
INFORMATION CURRENTLY AVAILABLE TO MANAGEMENT. WHEN USED IN THIS PROSPECTUS, THE
WORDS "ANTICIPATE," "BELIEVE," "ESTIMATE" OR "EXPECT" AND SIMILAR EXPRESSIONS
ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. ANY STATEMENT THAT AN EVENT
WILL HAPPEN IN THE FUTURE IS A FORWARD-LOOKING STATEMENT, AND SHOULD NOT BE
INTERPRETED AS A PROMISE THAT THE EVENT WILL OCCUR. THE COMPANY'S ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS.
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE THOSE
DISCUSSED IN THIS SECTION, AS WELL AS THOSE DISCUSSED ELSEWHERE IN THIS
PROSPECTUS OR IN THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE.
iii
<PAGE> 6
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed
information and financial statements, including the notes thereto, contained or
incorporated by reference in this Prospectus. Unless the context otherwise
requires, all references in this Prospectus to the "Company" include
HighwayMaster Communications, Inc. and its operating subsidiary, HighwayMaster
Corporation.
THE COMPANY
The Company develops and implements mobile communications solutions,
including integrated voice, data and position location services, to meet the
needs of its customers. The initial application for the Company's wireless
enhanced services network has been developed for, and is marketed and sold to,
companies which operate in the long-haul trucking market. The Company provides
long-haul trucking customers with a comprehensive package of mobile
communications and management control services at a fixed rate per minute,
thereby enabling its trucking customers to effectively monitor the operations
and improve the performance of their fleets. As of June 30, 1998, the Company
had an installed base of more than 37,000 Series 5000 mobile communication units
("Series 5000 Mobile Units") in service in the long-haul trucking market.
In early 1997, the Company acquired from Burlington Motor Carriers
("Burlington") its proprietary fleet operating software and hired all the
employees of its Management Information Systems group. The Company enhanced the
Burlington fleet operating software to enable it to provide a new service
offering called the Platinum Service, which it made available to additional
trucking companies in November 1997. The Company, through its Platinum Service,
offers to its customers all software, hardware and services necessary for an
end-to-end information management solution. The Platinum Service supports
electronic data interchange for load tendering, billing, shipment status, and
funds transfer; dispatching; logs; safety and claims; fuel management; vehicle
maintenance; rating and billing; accounts receivable; applicant recruiting;
driver management; driver payroll and settlements; sales and marketing, customer
service and driver load matching optimization.
The Company is currently developing a low cost, wireless trailer
tracking service which it expects to offer to the trucking industry. Pursuant to
a memorandum of understanding, BellSouth Corp. ("BellSouth") has agreed to
negotiate a definitive agreement with the Company
1
<PAGE> 7
whereby Bell South would grant the Company exclusive rights to provide a
tracking solution for detachable trailers utilizing BellSouth Cellemetry(R) Data
Services, based on technology patented by the Company and by BellSouth.
Until August 1998, the Company was involved in a strategic business
alliance with Prince Corporation pursuant to which the parties were engaged in
developing and marketing a wireless automobile safety and security service, the
AutoLink(R) service. In August 1998, the Company announced that it was halting
the development of the AutoLink service and would not launch AutoLink in late
1998 as previously anticipated. The Company is currently developing additional
applications for its wireless enhanced services network to expand the range of
customers that utilize its services and address the needs of other markets. In
August 1998, the Company announced an agreement to install 11,500 mobile units
for use in the service vehicles of Southwestern Bell Telephone Company, Nevada
Bell and Pacific Bell.
The Company provides its mobile communications services through its
wireless enhanced services network, which utilizes patented technology developed
by the Company to integrate various transmission, long-distance, switching,
tracking and other services provided through contracts with certain
telecommunications companies and more than 70 cellular carriers. Through its
agreements with cellular carriers, the Company is able to take advantage of the
more than $32 billion which cellular carriers have invested to establish and
expand cellular coverage in the United States. The Company's network covers 99%
of the available cellular service areas in the United States and 100% of the
available A-side coverage in Canada. Call processing and related functions for
the Company's network are provided through its network switching center. The
Company holds sixteen United States patents that cover certain key features of
its network which are used in locating and communicating with vehicles using the
cellular infrastructure.
THE OFFERING
Securities Offered.................. 125,000 Warrants and 820,750 shares of
Common Stock issuable upon the exercise
of the Warrants.
Expiration of Warrants.............. The Warrants will expire on September 15,
2005.
Exercise of Warrants................ The Warrants will become exercisable on
the earlier of (i) September 23, 1998 or
(ii) in the event a Change of Control
occurs, the date upon which the Company
mails notice thereof to the holders of
the Warrants. Each Warrant entitles the
holder thereof to purchase 6.566 shares
of Common Stock of the Company at an
exercise price of $9.625 per share. The
number of shares of Common Stock for
which, and the price per share at which,
a Warrant is exercisable are subject to
adjustment upon the occurrence of certain
events as provided in the Warrant
Agreement.
Listing of Common Stock The Common Stock is traded on the NNM
under the symbol "HWYM." In June 1998,
the Company received notification from
The Nasdaq Stock Market, Inc. that it was
not in compliance with the minimum bid
price requirement for listing on the NNM.
The Company's Board of Directors has
authorized the Company, in the event that
it is unable to achieve compliance with
the minimum bid price requirement, to
request that the Common Stock be admitted
for trading on the Nasdaq SmallCap
Market. There can be no assurance that
the Company will be able to achieve
compliance with the NNM criteria or that
the Common Stock will be admitted for
trading on the Nasdaq SmallCap Market. If
the Common Stock is delisted from the
NNM, there can be no assurance that an
active trading market will be maintained
for the Common Stock.
2
<PAGE> 8
Registration........................ The Company is registering the Warrants
and the Warrant Shares as required
pursuant to the Warrant Registration
Rights Agreement. Under the terms of the
Warrant Registration Rights Agreement,
the Company is obligated to use its best
efforts to keep the Registration
Statement continuously effective until
the earlier of (i) the expiration of the
Warrants or (ii) the time when all
Warrants have been exercised; provided,
however, that during any consecutive 365-
day period, the Company may suspend the
effectiveness of the Registration
Statement on up to two occasions for a
period of not more than 45 consecutive
days in connection with a possible
acquisition, business combination or
other development affecting the Company
if the Board of Directors determines that
disclosure thereof would not be in the
best interests of the Company.
Use of Proceeds..................... The Company will not receive any proceeds
from the sale of the Warrants by the
Selling Warrantholders. To the extent
that any Warrants are exercised, the
Company will receive the exercise price
for the Warrant Shares.
3
<PAGE> 9
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the
Warrants by the Selling Warrantholders. To the extent that the Warrants are
exercised, the Company will receive the exercise price for the Warrant Shares,
which is currently $9.625 per share. Any proceeds received for the exercise of
the Warrants will be used by the Company for general corporate purposes.
However, there can be no assurance that any Warrants will be exercised.
SELLING WARRANTHOLDERS
The Warrants were originally issued and sold by the Company in
September 1997 to the Initial Purchasers in a private placement, and were resold
by the Initial Purchasers in transactions exempt from the registration
requirements of the Securities Act within the United States to qualified
institutional buyers (as defined in Rule 144A under the Securities Act) and
outside the United States to non-U.S. persons in offshore transactions in
reliance on Regulation S under the Securities Act.
The following table sets forth as of September 10, 1998, the number of
Warrants and shares of Common Stock beneficially owned by each Selling
Warrantholder and the number of Warrants being offered by such Selling
Warrantholder pursuant to this Prospectus. The information concerning these
Selling Warrantholders may change from time to time. If required, such changes
will be set forth in supplements to this Prospectus.
Except as set forth below, none of the Selling Warrantholders has, or
within the past three years has had, any position, office or material
relationship with the Company or any of its predecessors or affiliates. The
table has been prepared based upon information furnished to the Company by or on
behalf of the Selling Warrantholders. Because the Selling Warrantholders may
sell all, some or none of and may elect to exercise or hold the Warrants shown
in the table below, no estimates can be provided as to the number of Warrants or
shares of Common Stock that will be held by the Selling Warrantholders in the
future.
<TABLE>
<CAPTION>
Securities Beneficially Number of
Owned Warrants
Prior to Offering(1) Being Offered
--------------------------------------------- -------------------
Name of Selling Number of Number of
Warrantholder Warrants Shares Percent(2) Number
- ----------------------------------------- ------------- ------------- ------------- -------------------
<S> <C> <C> <C> <C>
Lutheran Brotherhood Research Corp. 4,600 30203 * 4,600
Liberty High Income Fd., Inc. 4,200 27577 * 4,200
Lutheran Brotherhood Research Corp. 2,900 19041 * 2,900
Federated Investors Inc. Federated High
Yield Trust 2,900 19041 * 2,900
Lutheran Brotherhood A/O LB Series Fd,
NC - High Yield 2,500 16415 * 2,500
Special Situations Fund Advisors Inc. 2,250 14773 * 2,250
PPM America Inc. 1,500 9849 * 1,500
Cosmo Valente Alliance Capital
Management Corp. 1,500 9849 * 1,500
MacKay Shields 1,120 7353 * 1,120
CPR (USA) Inc. 1,000 6566 * 1,000
Cincinnati Asset Mgt. A/O Cincinnati
Phoenix LP 1,000 6566 * 1,000
Western Asset Management 1,000 6566 * 1,000
Cincinnati Phoenix Fund Ltd. Partnership 1,000 6566 * 1,000
Legg Mason Wood Walker High Yield 1,000 6566 * 1,000
High Yield/TDGI Societe Generale
Securities Corp. 1,000 6566 * 1,000
Federated Investors Inc. The High Yield
Bond Portfolio 800 5252 * 800
Liberty View F/O Lehman Brothers 500 3283 * 500
Triage Capital Mgmt LP 500 3283 * 500
OTA Limited Partnership Bond Acct. 500 3283 * 500
Illinois State Board of Investment 500 3283 * 500
Federated Investors Inc. 400 2626 * 400
Peacock Hislop Staley & Given Profit
Sharing Plan & Tr #1 250 1641 * 250
Bruce H. Teeters TTEE Consolidated-
Tomoka Land Co. 133 873 * 133
Ingenesis Clearing Corp. 85 558 * 85
Alan J. Green 80 525 * 80
Maurice Condit Ruth Condit JT Hrds 50 328 * 50
Fredari Inc. 50 328 * 50
Dr. Meredith Mallory, Jr. 50 328 * 50
Fst. Am. Strate. Inc. FD High Yld-FE 50 328 * 50
Federated Investors Vist High Income Bd
Portfolio 50 328 * 50
Marjorie P. Fairchild TTEE UTD
10/21/91 FBO Charles & Marjorie
Fairchild Trust 50 328 * 50
Sunamerica Asset Management Co JU71 -
S.S.T Fixed Income 50 328 * 50
James M. Mills, Jr. 49 321 * 49
Durkee Fam Invst Partshp A Partnership 37 242 * 37
Fred H. Cone Jr. TTEE U/N Walter
Lorenz FBO Betty Jean Lorenz 36 236 * 36
Joseph P. Milton, Eric Leach, James
D'Andrea TTEE Hilton Leach &
D'Andrea P A PS PL & TR, U/A 1/29/93 30 196 * 30
Manley H. Kilgore II & Cheryl A. Kilgore
Jt. Tenancy 27 177 * 27
O/T Sam J. Azzarello Decl. of Tr U/A/D
9-18-96 Sam J. Azzarello or His successor
as trustee 25 164 * 25
Vartan Safarian & Lousine Asadddurian
JT HROS 20 131 * 20
Marjorie K. Mickell, Jr. 20 131 * 20
Jennings R. Backus UTA Charles Schhab
& Co. Inc. TRA Rollover DTD 02/07/95 20 131 * 20
Anne O. Karas 16 105 * 16
Samuel O. Entriken UTA Charles Schhab
& Co. Inc. 16 105 * 16
T Glenn Willimas UTA Charles Schhab
& Co. Inc. IRA Rollover DTD 05/02/96 15 98 * 15
Intl. Union of Operating Engineers 13 85 * 13
Robert G. Metzger TTEE Brand Label Inc
PSP Trust 13 85 * 13
George Burnett & Karen J. Burnett Jt.
Tenancy 11 72 * 11
Donald G. Matthens & Marcelle V.
Matthens Jt. Tenancy 10 65 * 10
Patrick Bergin & Kathleen Bergin TTEES
UTD 8/30/93 FBO The Bergin Family
Trust 10 65 * 10
Jeffrey H. Kikuchi 10 65 * 10
Miriam B. Mamlin 10 65 * 10
William D. Van Gundy 9 59 * 9
NFSC/FHTC IRA FBO Betty Joan Van
Dyke 7 45 * 7
Kendall G. Durkee Cust. Jay Durkee
UTHA Fl 7 45 * 7
Thinkle Friendly Haldy UTA Charles
Schwab & Co. Inc. IRA Rollover DTD
02/01/95 6 39 * 6
William M. Kerlin 5 32 * 5
Joseph J. Walter UTA Charles Schwab &
Co. Inc. IRA Rollover OTD 04/04/95 5 32 * 5
Elizabeth June Plucheck UTA Charles
Schwab & Co. Inc. IRA Contributory
OTD 8/13/83 5 32 * 5
Wayne Lionel Plucheck Sr. UTA Charles
Schwab & Co. Inc. IRA Contributory
DTD 08/13/83 5 32 * 5
Glenda D. Ruhnau UTA Charles Schwab
& Co. Inc. IRA Contributory DTD
01/25/95 4 26 * 4
James A. Mitchell UTA Charles Schwab
& Co. Inc. IRA Rollover DTD 02/04/95 4 26 * 4
Robert C. Hurd & Paulthe A. Hurd Jt.
Tenancy 4 26 * 4
</TABLE>
- ----------
* Less than 0.1%
(1) Reflects beneficial ownership of Warrants and shares of Common Stock
prior to giving effect to the sale by the Selling Warrantholders of the
Warrants or the exercise thereof.
(2) Reflects the percentage of the outstanding shares of Common Stock
beneficially owned by the Selling Warrantholders.
4
<PAGE> 10
PLAN OF DISTRIBUTION
The Warrants offered hereby may be sold from time to time to purchasers
directly by the Selling Warrantholders. Alternatively, the Selling
Warrantholders may from time to time offer the Warrants to or through
underwriters, broker-dealers or agents, who may receive compensation in the form
of underwriting discounts, concessions or commissions from the Selling
Warrantholders or the purchasers of Warrants. The Selling Warrantholders and any
underwriters, broker-dealers or agents that participate in the distribution of
the Warrants may be deemed to be "underwriters" within the meaning of the
Securities Act and any profit on the sale of Warrants by them and any discounts,
commissions, concessions or other compensation received by any of them, may be
deemed to be underwriting discounts and commissions under the Securities Act.
The Warrants offered hereby may be sold from time to time in one or
more transactions at fixed prices, at prevailing market prices at the time of
sale, at varying prices determined at the time of sale or at negotiated prices.
Such prices will be determined by the Selling Warrantholders or by agreement
between the Selling Warrantholders and underwriters and dealers who may receive
fees or commissions in connection therewith. The sale of the Warrants may be
effected in transactions (which may involve crosses or block transactions) (i)
on any national securities exchange or quotation service on which the Warrants
may be listed or quoted at the time of sale, (ii) in the over-the-counter
market, (iii) in transactions otherwise than on such exchanges or in the
over-the-counter market or (iv) through the writing of options. If required, at
the time a particular offering of Warrants is made, a Prospectus Supplement
will be distributed which will set forth the aggregate amount and type of
Warrants being offered and the terms of the offering, including the name or
names of any underwriters, broker-dealers or agents, any discounts, commissions
and other terms constituting compensation from the Selling Warrantholders and
any discounts, commissions or concessions allowed or reallowed or paid to
broker-dealers.
The Warrant Shares are being offered by the Company to the Selling
Warrantholders in connection with the exercise of the Warrants pursuant to the
Warrant Agreement. This Prospectus is not intended for use by the Selling
Warrantholders in connection with resales of Warrant Shares acquired from the
Company.
The Company has filed the Registration Statement of which this
Prospectus forms a part with the Commission as required pursuant to the terms of
the Warrant Registration Rights Agreement. See "Description of Warrants -
Registration Rights."
The outstanding Common Stock is listed on the NNM, and the Company has
applied for listing the Warrant Shares on the NNM. In June 1998, the Company
received notification from The Nasdaq Stock Market, Inc. that it was not in
compliance with the minimum bid price requirement for listing on the NNM. The
Company's Board of Directors has authorized the Company, in the event that it is
unable to achieve compliance with the minimum bid price requirement, to request
that the Common Stock be admitted for trading on the Nasdaq SmallCap Market.
There can be no assurance that the Company will be able to achieve compliance
with the NNM criteria or that the Common Stock will be admitted for trading on
the Nasdaq SmallCap Market.
The Company does not intend to apply for listing of the Warrants on any
securities exchange or authorization for quotation of the Warrants on any
quotation system. There can be no assurance as to the liquidity of any trading
market that may develop for the Warrants.
To comply with the securities laws of certain jurisdictions, if
applicable, the Warrants will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the Warrants may not be offered or sold (unless they have been
registered or qualified for sale) in such jurisdictions or an exemption from
registration or qualification is available.
Pursuant to the Warrant Registration Rights Agreement, certain expenses
in connection with the registration of the Warrants and the Warrant Shares will
be paid by the Company, including, without limitation, Commission filing fees;
provided, however, that the Selling Warrantholders will pay all underwriting
discounts, selling commissions and related fees, if any. Holders of Securities
and the Company have agreed to indemnify each other against certain liabilities,
including certain liabilities arising under the Securities Act.
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DESCRIPTION OF THE WARRANTS
The Warrants were issued pursuant to the Warrant Agreement between the
Company and Chase Bank of Texas National Association (formerly Texas Commerce
Bank National Association), as Warrant Agent in a private transaction that was
not subject to the registration requirements of the Securities Act. The
following summary of certain provisions of the Warrant Agreement and the Warrant
Registration Rights Agreement does not purport to be complete and is qualified
in its entirety by reference to the Warrant Agreement, the Warrants and the
Warrant Registration Rights Agreement, including the definitions therein of
certain terms.
GENERAL
Each Warrant, when exercised, will entitle the holder thereof to
purchase 6.566 shares of Common Stock of the Company at an exercise price of
$9.625 per share (the "Exercise Price"). The Exercise Price and the number of
Warrant Shares issuable on exercise of a Warrant are both subject to adjustment
in certain cases referred to below.
The Warrants are exercisable at any time on or after the earlier to
occur of (i) September 23, 1998 or (ii) in the event a Change of Control (as
defined below) occurs, the date the Company mails notice thereof to holders of
Notes and Warrants. Unless exercised, the Warrants will expire on September 15,
2005 provided, the Company has complied with the notice of expiration
requirements described below (the "Expiration Date"). The Company will give
notice of expiration not less than 90 nor more than 120 days prior to the
Expiration Date to the registered holders of the then outstanding Warrants. If
the Company fails to give this notice, the Warrants will not expire until 90
days after the Company gives such notice. In no event will holders be entitled
to any damages or other remedy for the Company's failure to give such notice
other than any such extension.
The Warrants may be exercised by surrendering to the Company the
Warrant certificates evidencing such Warrants, if any, with the accompanying
form of election to purchase, properly completed and executed together with
payment of the Exercise Price. Payment of the Exercise Price may be made in the
form of cash or a certified or official bank check, payable to the order of the
Company, or by surrender of additional Warrants. Upon surrender of the Warrant
certificate and payment of the Exercise Price, the Warrant Agent will deliver or
cause to be delivered, to or upon the written order of such holder, stock
certificates representing the number of whole Warrant Shares or other securities
or property to which such holder is entitled under the Warrants and Warrant
Agreement, including without limitation any cash payment to adjust for
fractional interests in Warrant Shares issuable upon such exercise. If less than
all of the Warrants evidenced by a Warrant certificate are exercised, a new
Warrant certificate will be issued for the remaining number of Warrants.
No fractional Warrant Share will be issued upon exercise of the
Warrants. If any fraction of a Warrant Share would, except for the foregoing
provision, be issuable on the exercise of any Warrants (or specified portion
thereof), the Company must pay to the holder an amount in cash equal to the
current market price per Warrant Share, as determined on the day immediately
preceding the date the Warrant is presented for exercise, multiplied by such
fraction, computed to the nearest whole cent.
Certificates for Warrants will be issued in registered form only, and
no service charge will be made for registration or transfer or exchange upon
surrender of any Warrant certificate at the office of the Warrant Agent
maintained for that purpose. The Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any re-registration or transfer or exchange of Warrant certificates.
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The holders of the Warrants have no right to vote on matters submitted
to the stockholders of the Company and have no right to receive cash dividends.
The holders of the Warrants are not entitled to share in the assets of the
Company in the event of the liquidation, dissolution or winding up of the
Company's affairs.
As used herein, the terms set forth below have the following meanings:
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
(as defined in the Indenture dated September 23, 1997 between the Company,
HighwayMaster Corporation, a Delaware corporation and Chase Bank of Texas
National Association (formerly Texas Commerce Bank National Association), as
trustee (the "Indenture")) taken as a whole to any "person" (as such term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934) other than a
Restricted Subsidiary; (ii) the adoption of a plan relating to the liquidation
or dissolution of the Company; (iii) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which
is that any "person" (as defined above), other than a Permitted Holder (as
defined in the Indenture), becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Securities Exchange Act of 1934),
directly or indirectly, of a greater percentage of the voting stock of the
Company than the percentage of the voting stock of the Company held by the
Permitted Holders; (iv) the first day on which the Permitted Holders in the
aggregate hold less than 35% of the voting stock of the Company; or (v) the
first day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors (as defined in the Indenture).
ADJUSTMENTS
The number of Warrant Shares purchasable upon the exercise of the
Warrants and the Exercise Price both will be subject to adjustment in certain
events, including (i) the payment by the Company of dividends (or other
distributions) on Common Stock of the Company payable in Common Stock of the
Company or other shares of the Company's capital stock, (ii) subdivisions,
combinations and reclassifications of Common Stock of the Company, (iii) the
issuance to all holders of Common Stock of the Company of rights, options or
warrants entitling them to subscribe for Common Stock of the Company, or for
securities convertible into or exchangeable for shares of Common Stock of the
Company, in either case for a consideration per share of Common Stock which is
less than the current market price per share (as defined in the Warrant
Agreement) of Common Stock of the Company, and (iv) the distribution to all
holders of Common Stock of the Company of any of the Company's assets, debt
securities or any rights or warrants to purchase securities (excluding dividends
payable in Common Stock, options or rights described above and excluding cash
dividends which, when aggregated with certain prior dividends not paid from
current or retained earnings, are in an amount that does not exceed 5% of the
current market price per share of Common Stock).
No adjustment in the Exercise Price will be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in
the Exercise Price; provided, however, that any adjustment which is not made
will be carried forward and taken into account in any subsequent adjustment.
In case of certain consolidations or mergers of the Company, each
Warrant shall thereafter be exercisable for the right to receive the kind and
amount of shares of stock or other securities or property to which such holder
would have been entitled as a result of such consolidation, merger or sale had
the Warrants been exercised immediately prior thereto.
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<PAGE> 13
RESERVATION OF SHARES
The Company has authorized and reserved for issuance such number of
shares of Common Stock as will be issuable upon the exercise of all outstanding
Warrants. Such shares of Common Stock, when paid for and issued, will be duly
and validly issued, fully paid and non-assessable, free of preemptive rights and
free from all taxes, liens, charges and security interests with respect to the
issue thereof.
AMENDMENT
From time to time, the Company and the Warrant Agent, without consent
of the holders of the Warrants, may amend or supplement the Warrant Agreement
and the Warrant Registration Rights Agreement for certain purposes, including
curing defects or inconsistencies or making changes that do not materially
adversely affect the rights of any holder. Any amendment or supplement to the
Warrant Agreement or the Warrant Registration Rights Agreement that has a
material adverse effect on the interests of the holders of the Warrants requires
the written consent of the holders of a majority of the then outstanding
Warrants. The consent of each holder of the Warrants affected is required for
any amendment pursuant to which the Exercise Price would be increased or the
number of Warrant Shares purchasable upon exercise of Warrants would be
decreased (other than pursuant to adjustments provided for in the Warrant
Agreement as generally described above).
REPORTS
Whether or not required by the rules and regulations of the Commission,
so long as any of the Warrants remain outstanding, the Company shall cause
copies of certain reports to be filed with the Warrant Agent and mailed to the
holders at their addresses appearing in the register of Warrants maintained by
the Warrant Agent.
REGISTRATION RIGHTS
The Company is required under the Warrant Registration Rights Agreement
to use its best efforts to keep this Registration Statement continuously
effective until the earlier of (i) the expiration of the Warrants or (ii) the
time when all Warrants have been exercised.
During any consecutive 365-day period, the Company shall be entitled to
suspend the effectiveness of the Warrant Shelf Registration Statement on two
occasions for a period of not more than 45 consecutive days (except for the 45
consecutive-day period immediately prior to the expiration of the Warrants) if
there is a possible acquisition or business combination or other transaction,
business development or event involving the Company that may require disclosure
in the Warrant Shelf Registration Statement and the Board of Directors of the
Company determines in the exercise of its reasonable judgment that such
disclosure is not in the best interest of the Company and its stockholders or
obtaining any financial statements relating to an acquisition or business
combination required to be included in the Warrant Shelf Registration Statement
would be impracticable; provided, however, that in no event shall the Company be
required to disclose the business purpose for such suspension if the Company
determines in good faith that such business purpose must remain confidential.
There can be no assurance that the Company will be able to file, cause to be
declared effective, or keep a registration statement continuously effective
until all of the Warrants have been exercised or have expired.
Each holder of Warrants that sells such Warrants pursuant to this
Registration Statement generally will be required to be named as a selling
securityholder in the related prospectus and to deliver a prospectus to the
purchaser, will be subject to certain of the civil liability provisions under
the Securities Act in connection with such sales and will be bound by certain
provisions of the Warrant Registration Rights Agreement which are applicable to
such holder (including certain indemnification obligations). In addition, each
holder of Warrants and Warrant Shares will be required to deliver information to
be used in connection with this Registration Statement in order to have its
Warrants and Warrant Shares included herein.
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<PAGE> 14
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of (i) 50,000,000
shares of Common Stock, par value $.01 per share, (ii) 1,000 shares of Class B
Common Stock, par value $.01 per share, and (iii) 20,000 shares of Preferred
Stock, par value $.01 per share, of which 1,000 shares have been designated as
Series D Preferred Stock. As of December 31, 1997, a total of 24,898,986 shares
of Common Stock and 1,000 shares of Series D Preferred Stock were outstanding.
The following description of certain terms of the capital stock of the Company
does not purport to be complete and is qualified in its entirety by reference to
the Certificate of Incorporation and Bylaws of the Company and the Amended
Stockholders' Agreement, copies of which are included in or filed as exhibits to
one or more of the documents incorporated herein by reference.
COMMON STOCK
The holders of Common Stock are entitled to all of the rights and
privileges of holders of shares of common stock under the General Corporation
Law of the State of Delaware (the "DGCL"). Subject to the preferences applicable
to shares of preferred stock, the holders of Common Stock are entitled to
receive ratably such dividends, if any, as may be declared from time to time by
the Board of Directors out of legally available funds. In the event of the
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to share ratably in all assets remaining after payment of
liabilities, subject to the prior distribution rights of holders of shares of
preferred stock. There are no redemption or sinking fund provisions applicable
to the Common Stock. All of the outstanding shares of Common Stock are duly
authorized, validly issued, fully paid and nonassessable.
Each holder of Common Stock is entitled to one vote for each share of
Common Stock on all matters submitted to the vote of stockholders, including the
election of directors. Cumulative voting for the election of directors is
prohibited in the Certificate and Bylaws.
CLASS B COMMON STOCK
In December 1996, the Certificate of Incorporation of the Company was
amended to authorize the creation of Class B Common Stock, which is a new class
of common stock into which the shares of Series D Preferred Stock issued to SBC
Communications Inc. ("SBC") are convertible. When issued by the Company, each
outstanding share of Class B Common Stock will be convertible into 1,600 shares
of Common Stock (subject to adjustment to prevent dilution) at the option of
SBC, provided that no such shares may be converted into Common Stock unless the
holders of all outstanding shares of Class B Common Stock elect so to convert
their shares.
The holders of Class B Common Stock will be entitled to receive
dividends and distributions equal to the dividends and distributions payable on
or in respect of the number of shares of Common Stock into which such shares of
Class B Common Stock are then convertible.
The holders of Common Stock and Class B Common Stock will generally
have identical voting rights and will vote together as a single class, with the
holders of Class B Common Stock being entitled to a number of votes equal to the
number of shares of Common Stock into which the shares of Class B Common Stock
held by them are then convertible. There will be two classes of directors of the
Company, those elected by the holders of Common Stock (the "Common Directors")
and those elected by the holders of Class B Common Stock (the "Class B
Directors"). The rights, duties and authority of the Common Directors and the
Class B Directors will be identical in all respects. The holders of Class B
Common Stock will be entitled to elect one Class B Director (or two Class B
Directors if SBC and its affiliates beneficially own at least 20% of the
outstanding shares of Common Stock, including shares issuable upon conversion of
Class B Common Stock or other convertible securities or upon the exercise of
outstanding options, warrants or rights, but
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<PAGE> 15
excluding shares issuable upon the exercise of the SBC Warrants or any options,
warrants or rights issued by any person other than the Company (the "Excluded
Options")). The holders of Class B Common Stock will be entitled to approve
certain actions on the part of Company, including (i) the approval of any annual
budget or business plan for the Company or any deviation from any annual budget
by more than 5%, (ii) the issuance by the Company of equity securities,
including securities convertible into equity securities (subject to specified
exceptions), and the incurrence by the Company of debt obligations in an amount
exceeding $5.0 million in any year, (iii) the hiring or termination by the
Company of its chief executive officer, chief operating officer or chief
financial officer, (iv) the Company entering into any line of business other
than its Existing Line of Business (as defined below) or entering into any joint
ventures, partnerships or similar arrangements, (v) the Company exiting its
Existing Line of Business or disposing of assets (other than assets sold in the
ordinary course of business) in any year with a value in excess of $500,000 or
which are otherwise material to the Company's operations, (vi) the adoption,
implementation or acceptance by the Company of any Anti-Takeover Provisions (as
defined below) and (vii) any corporate action that would reduce the number of
shares of Common Stock into which a share of Class B Common Stock is convertible
to less than 1,600.
As used herein, the terms set forth below have the following meanings:
"Anti-Takeover Provision" means (i) any provision of the certificate of
incorporation or bylaws of the Company or any contract, agreement or plan to
which the Company is a party or by which it is bound or any statutory provision
enacted after September 27, 1996 which is applicable to the Company which the
Company may opt out of if the effect of such provision would be to materially
delay, hinder or prevent a change in control of the Company or (ii) a
stockholder rights plan or "poison pill," including the provisions of any
preferred stock or common stock purchase rights issued pursuant thereto;
provided, however, that such term does not include any customary change of
control provisions contained in employment agreements between the Company and
any of its directors, officers or other employees or in any plans or agreements
relating to stock options or other awards of equity securities made by the
Company to any such persons.
"Existing Line of Business" means a non-facilities based, enhanced
service provider that offers fleet management and/or status or information about
vehicles and/or location capabilities through mobile communications service.
No holder of shares of Class B Common Stock will be entitled to
Transfer (as defined below) any such shares or any interest therein to any
person or entity other than SBC or an affiliate of SBC. As used herein, the term
"Transfer" means any sale, transfer, assignment, disposition or other means of
conveying legal or beneficial ownership, whether direct or indirect and whether
voluntary or involuntary.
SERIES D PREFERRED STOCK
On September 27, 1996, the Company sold 1,000 shares of Series D
Preferred Stock to SBC in exchange for a payment of $20.0 million in cash. Each
share of Series D Preferred Stock is convertible into 1,600 shares of Common
Stock (subject to adjustment to prevent dilution) at the option of SBC,
provided, that shares of Series D Preferred Stock may only be converted into
Common Stock in blocks of 250 shares. In addition, at such time as Regulatory
Relief is obtained, all of the outstanding shares of Series D Preferred Stock
will automatically convert into an equal number of shares of Class B Common
Stock. If Regulatory Relief is not obtained on or before September 27, 2001, all
of the outstanding shares of Series D Preferred Stock will be converted into
shares of Common Stock at the election of the Company on the same basis as if
they had been voluntarily converted by SBC. As used herein, the term "Regulatory
Relief" means that SBC Communications Inc. or its affiliates have, in their sole
judgment, obtained all necessary federal and
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<PAGE> 16
state regulatory approvals to provide landline, interLATA long-distance service
pursuant to the Communications Act of 1934, as amended by the Telecommunications
Act.
The holders of shares of Series D Preferred Stock are entitled to
receive dividends and distributions equal to the aggregate amount of dividends
and distributions payable on or in respect of the number of shares of Common
Stock into which such shares of Series D Preferred Stock are then convertible.
In the event of a liquidation of the Company, the holders of shares of Series D
Preferred Stock are entitled to an aggregate liquidation preference in an amount
equal to the greater of (i) $20.0 million or (ii) the amount of distributions
payable in connection with such liquidation on or in respect of the number of
shares of Common Stock into which such shares of Series D Preferred Stock are
then convertible.
Except as required by law or as described below, the holders of Series
D Preferred Stock are not entitled to vote on any matters submitted to the
stockholders of the Company. However, the holders of Series D Preferred Stock
are entitled to approve certain actions on the part of the Company, including
(i) mergers or consolidations involving the Company that require stockholder
approval under the DGCL, (ii) sales of all or substantially all of the assets of
the Company that require stockholder approval under the DGCL, (iii) amendments
to the Company's Certificate of Incorporation, (iv) the dissolution of the
Company, (v) the adoption, implementation or acceptance by the Company of any
AntiTakeover Provisions, (vi) the issuance by the Company of equity securities,
including securities convertible into equity-securities (subject to specified
exceptions), and the incurrence by the Company of debt obligations in an amount
exceeding $5.0 million in any year, (vii) the Company entering into any line of
business other than its Existing Line of Business or entering into joint
ventures, partnerships or similar arrangements which would require expenditures
of more than $3.0 million, (viii) the disposition by the Company in any 12-month
period of assets (other than assets sold in the ordinary course of business) of
which the value exceeds $3.0 million, (ix) any amendment, alteration or repeal
of the terms of the Series D Preferred Stock or (x) any corporate action that
would reduce the number of shares of Common Stock into which a share of Series D
Preferred Stock is convertible to less than 1,600. Shares of Series D Preferred
Stock are not redeemable at the option of the Company.
SBC WARRANTS
In September 1996, a subsidiary of SBC made a strategic investment in
the Company. In particular, SBC purchased $20.0 million of preferred stock from
the Company, which may under certain circumstances be converted into common
stock, and agreed to provide certain technical services to the Company in
connection with the operation and improvement of its network. In addition, the
Company issued to SBC warrants to purchase an aggregate of 5,000,000 shares of
the Company's common stock (the "SBC Warrants"). The SBC Warrants entitle SBC
to purchase from the Company (i) 3,000,000 shares of Common Stock at an
exercise price of $14.00 per share and (ii) 2,000,000 shares of Common Stock at
an exercise price of $18.00 per share, in each case subject to adjustment to
prevent dilution. The SBC Warrants may be exercised for the cash exercise
prices specified above or, at the option of SBC, may be exercised without any
cash payment for a number of shares of Common Stock with a current market value
equal to the excess of (i) the current market value of the shares of Common
Stock to be purchased upon exercise over (ii) the exercise price of such shares
of Common Stock. Prior to receipt of Regulatory Relief, the SBC Warrants may be
exercised only to the extent that doing so is consistent with the
Communications Act of 1934, as amended by the Telecommunications Act of 1996.
The SBC Warrants will expire on September 27, 2001.
No holder of SBC Warrants will be entitled to Transfer any SBC Warrants
or any interest therein to any person or entity other than SBC or an affiliate
of SBC.
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AMENDED STOCKHOLDERS' AGREEMENT
General. As of February 4, 1994, the Company, the Erin Mills
Stockholders, the Carlyle Stockholders, the By-Word Stockholders (as defined
herein) and certain other parties entered into a Stockholders' Agreement. In
connection with the transactions with SBC consummated on September 27, 1996,
such agreement was amended and restated in order, among other things to add SBC
as a party thereto. The Amended Stockholders' Agreement contains provisions
relating to, among other things, (i) the transfer of shares of Common Stock by
certain of the stockholders who are parties thereto, (ii) the grant of
registration rights by the Company to the stockholders who are parties thereto
and (iii) the election of members of the Company's Board of Directors. As used
herein, (a) the term "Erin Mills Stockholders" means Erin Mills International
Investment Corporation, The Erin Mills Development Corporation and The Erin
Mills Investment Corporation, (b) the term "Carlyle Stockholders" means the
Clipper Stockholders (as defined below), Carlyle-HighwayMaster Investors, L.P.,
Carlyle-HighwayMaster Investors II, L.P., TC Group, L.L.C., Mark D. Ein, Chase
Manhattan Investment Holdings, Inc., H.M. Rana Investments Limited, Archery
Partners, (c) the term "Clipper Stockholders" means Clipper Capital Associates,
L.P., Clipper/Merban, L.P. and Clipper/Merchant Partners, L.P. and (d) the term
"By-Word Stockholders" means William C. Kennedy, Jr., Donald M. Kennedy, William
C. Saunders, Robert S. Folsom and Robert T. Hayes.
Election of Directors. The Amended Stockholders' Agreement provides
that the parties will take all action (including the voting of shares of Common
Stock owned by them) necessary to ensure that the Board of Directors of the
Company consists of (i) two directors designated by the Erin Mills Stockholders,
(ii) one director designated by the Carlyle Stockholders (other than the Clipper
Stockholders), (iii) two directors designated by the By-Word Stockholders (one
of which will be the chief executive officer of the Company) and (iv) two
independent directors (except that the addition of a second independent director
to the Board of Directors need not occur until the date of the next annual
meeting of the stockholders of the Company). Prior to the receipt of Regulatory
Relief, SBC will not be entitled to designate a director, but will have the
right to designate a non-voting delegate who will attend all meetings of the
Board of Directors and receive all materials distributed to directors of the
Company. Upon the conversion of Series D Preferred Stock into Class B Common
Stock (which will occur upon receipt of Regulatory Relief), SBC will be entitled
to designate one member of the Board of Directors of the Company. In addition,
if at any time after the conversion of Series D Preferred Stock into Class B
Common Stock SBC and its affiliates beneficially own 20% or more of the
outstanding Common Stock (including shares issuable upon conversion of Series D
Preferred Stock or Class B Common Stock or other convertible securities or upon
the exercise of outstanding options, warrants or rights, but excluding shares
issuable upon the exercise of the SBC Warrants or any Excluded Options) on a
fully diluted basis, SBC will be entitled to designate a second member of the
Board of Directors. No stockholder or group of stockholders will be entitled to
designate any director if the percentage of the outstanding Common Stock
(including shares issuable upon conversion of outstanding securities or upon the
exercise of outstanding options, warrants or rights, but excluding shares
issuable upon the exercise of the SBC Warrants or any Excluded Options)
beneficially owned by such stockholder or group of stockholders falls below 5%
(or with respect to the Erin Mills Stockholders and By-Word Stockholders, 20%
for the right to designate two directors and 5% for the right to designate one
director) on a fully diluted basis.
Right of First Refusal. Under the terms of the Amended Stockholders'
Agreement, the Carlyle Stockholders (other than the Clipper Stockholders), the
Erin Mills Stockholders, William C. Kennedy, Jr. and William C. Saunders (the
"First Refusal Stockholders") granted a right of first refusal to SBC with
respect to all shares of Common Stock owned by them. Subject to certain
exceptions, such right of first refusal requires that, prior to selling any
shares of Common Stock, a First Refusal Stockholder must offer such shares for
sale to SBC in accordance with the terms of the Amended Stockholders' Agreement.
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<PAGE> 18
Registration Rights. The Amended Stockholders' Agreement also provides
for the grant of certain demand, piggyback or other registration rights to the
stockholders who are parties thereto. In particular, such agreement provides
that, with respect to an aggregate of 1,818,018 shares of Common Stock issued to
the Erin Mills Stockholders and certain of the Carlyle Stockholders in
connection with the Recapitalization Transactions, the Company would register
one-half each of such shares under the Securities Act, for sale during the
three-month periods beginning March 31, 1997 and September 27, 1997. The Erin
Mills Stockholders and the Carlyle Stockholders waived the right to cause the
Company to register such shares, although they have reserved the right to revoke
such waiver at any time. The Carlyle Stockholders have exercised their piggyback
rights and are offering all 2,723,468 of their group's shares to the public at
the same time as the warrant registration is deemed effective.
In addition, under the Amended Stockholders' Agreement, a majority of
certain stockholders have the right to demand that the shares of Common Stock
held by them be registered under the Securities Act on up to two separate
occasions. However, if the Board of Directors of the Company reasonably
determines that, due to a pending or contemplated acquisition or disposition,
such a demand registration would have a material adverse effect on the Company,
the Company may defer such registration for a period not to exceed 180 days.
Furthermore, if the managing underwriter or underwriters or the holders of a
majority of the registerable securities held by the stockholders demanding the
registration determine that the number of shares of Common Stock proposed to be
sold pursuant to the demand registration provisions exceeds the amount that can
be sold without having a material adverse effect on the proposed offering, the
Company may exclude certain shares from the offering.
The Stockholders' Agreement also grants piggyback registration rights
to certain stockholders. Accordingly, whenever the Company proposes to register
any shares of Common Stock (or securities convertible into or exchangeable for,
or options, warrants or other rights to acquire, Common Stock) under the
Securities Act (other than registrations on Form S-4 or Form S-8), the holder
of shares of Common Stock have the right to include the shares of Common Stock
held by them in any such registration. However, if the inclusion of shares of
Common Stock pursuant to the piggyback registration provisions is reasonably
determined by the managing underwriter or underwriters to materially adversely
affect the success of the proposed offering, the Company may exclude certain
shares from the offering. The Carlyle Stockholders have exercised their
piggyback rights in connection with the offer of the Warrants and Warrant Shares
and are offering all 2,723,468 shares beneficially owned by them to the public
pursuant to the Registration Statement.
LEGAL MATTERS
Certain legal matters with respect to the Securities offered hereby
will be passed upon for the Company by Wesley E. Schlenker, Esq., General
Counsel and Secretary of the Company.
EXPERTS
The consolidated financial statements incorporated in this Prospectus
by reference to the Annual Report on Form 10-K of HighwayMaster Communications,
Inc. for the year ended December 31, 1997, have been so incorporated in reliance
on the report of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
13
<PAGE> 19
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING DESCRIBED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH
DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY ANY SECURITIES OFFERED HEREBY IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT PERMITTED, OR TO ANYONE WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION.
------------------------------
TABLE OF CONTENTS
PAGE
Available Information.................................................. ii
Incorporation of Certain
Documents by Reference.............................................. ii
Prospectus Summary..................................................... 1
The Company............................................................ 1
The Offering........................................................... 2
Use of Proceeds........................................................ 4
Selling Warrantholders................................................. 4
Plan of Distribution................................................... 5
Description of Warrants................................................ 6
Description of Capital Stock........................................... 9
Legal Matters ........................................................ 13
Experts................................................................ 13
================================================================================
================================================================================
125,000 WARRANTS
820,750 SHARES OF COMMON STOCK
HIGHWAYMASTER
COMMUNICATIONS, INC.
----------
PROSPECTUS
----------
September 18, 1998
================================================================================
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PROSPECTUS
HIGHWAYMASTER COMMUNICATIONS, INC.
2,723,468 SHARES
COMMON STOCK
This Prospectus relates to 2,723,468 shares (the "Shares") of Common
Stock, par value $.01 per share (the "Common Stock"), of HighwayMaster
Communications, Inc. (the "Company"). The Shares were acquired by certain
stockholders of the Company (the "Selling Stockholders") in exchange for cash
payments and the cancellation of certain promissory notes payable to the Selling
Stockholders. The Company is registering the Shares under the Securities Act of
1933, as amended (the "Securities Act"), as required pursuant to the terms of an
Amended and Restated Stockholders' Agreement, dated as of September 27, 1996
(the "Amended Stockholders' Agreement"), among the Company, the Selling
Stockholders and certain other persons.
The Selling Stockholders may from time to time offer and sell the
Shares in transactions on the Nasdaq National Market, in privately negotiated
transactions or in a combination of such methods of sale. The Shares may be
offered at fixed prices, at market prices prevailing at the time of sale, at
prices related to such market prices or at negotiated prices. The Selling
Stockholders may effect such transactions directly or through agents or
brokers-dealers on terms to be determined at the time of sale. To the extent
required, the names of any agent or broker-dealer and the applicable commissions
or discounts and any other required information with respect to any particular
offer will be set forth in an accompanying Prospectus Supplement. See "Plan of
Distribution."
The Company will not receive any proceeds from the sale of the Shares
by the Selling Stockholders. The Company has agreed to bear certain expenses in
connection with the registration of the Shares being offered hereby. The Company
has also agreed to indemnify the Selling Stockholders against certain
liabilities, including liabilities under the Securities Act. See "Plan of
Distribution."
The Common Stock of the Company is traded on the Nasdaq National Market
under the symbol "HWYM." The last reported sales price of the Company's Common
Stock on the Nasdaq National Market on September 17, 1998 was $1.1875.
---------------------
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.
The date of this Prospectus is September 18, 1998.
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THE OFFERING
Securities Offered.................. 2,723,468 shares of Common Stock held by
the Selling Stockholders.
Listing of Common Stock............. The Common Stock is traded on the NNM
under the symbol "HWYM." In June 1998,
the Company received notification from
The Nasdaq Stock Market, Inc. that it was
not in compliance with the minimum bid
price requirement for listing on the NNM.
The Company's Board of Directors has
authorized the Company, in the event that
it is unable to achieve compliance with
the minimum bid price requirement, to
request that the Common Stock be admitted
for trading on the Nasdaq SmallCap
Market. There can be no assurance that
the Company will be able to achieve
compliance with the NNM criteria or that
the Common Stock will be admitted for
trading on the Nasdaq SmallCap Market. If
the Common Stock is delisted from the
NNM, there can be no assurance that an
active trading market will be maintained
for the Common stock.
Registration........................ The Company is registering the Shares as
required pursuant to the Amended
Stockholders' Agreement.
Use of Proceeds..................... The Company will not receive any proceeds
from the sale of the Shares by the
Selling Stockholders.
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USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares. All of the proceeds from the sale of the Shares will be received by the
Selling Stockholders.
SELLING STOCKHOLDERS
The Shares being offered hereby were acquired by the Selling
Stockholders in exchange for certain cash payments and the cancellation of
certain promissory notes payable to the Selling Stockholders.
The following table sets forth the name of each Selling Stockholder,
the number of Shares beneficially owned by each Selling Stockholder as of
September 15, 1998 and the number of Shares which may be offered by each Selling
Stockholder pursuant to this Prospectus. Because the Selling Stockholders may
sell all, some or none of the Shares shown in the table below, no estimates can
be provided as to the number of shares that will be held by the Selling
Stockholders in the future.
<TABLE>
<CAPTION>
Shares Beneficially Number of
Owned Shares
Prior to Offering(1) Being Offered
------------------------------------- ----------------------
Name of Selling
Stockholders Number Percent Number
- ---------------------------------------------------- ------------------ ----------------- ----------------------
<S> <C> <C> <C>
Carlyle HighwayMaster Investors, L.P. (2) 2,723,468 10.94 2,229,799
Carlyle HighwayMaster Investors II, L.P. (2) 2,723,468 10.94 209,354
TC Group, L.L.C.(2) 2,723,468 10.94 291,315
</TABLE>
- ----------
* Less than 0.1%
(1) Reflects beneficial ownership of shares of Common Stock prior to giving
effect to the sale by the Selling Stockholders of the Shares offered
hereby.
(2) Includes 2,222,799 shares owned of record by Carlyle HighwayMaster
Investors, L.P., 209,354 shares owned of record by Carlyle
HighwayMaster Investors II, L.P. and 291,315 shares owned of record by
TC Group Investment Holdings, L.L.C. Information regarding beneficial
ownership of shares of Common Stock by the Carlyle Stockholders is
based on the most recent Schedule 13D filed with the Commission by the
beneficial owners named above.
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DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of (i) 50,000,000
shares of Common Stock, par value $.01 per share, (ii) 1,000 shares of Class B
Common Stock, par value $.01 per share, and (iii) 20,000 shares of Preferred
Stock, par value $.01 per share, of which 1,000 shares have been designated as
Series D Preferred Stock. As of June 30, 1998, a total of 24,898,986 shares of
Common Stock and 1,000 shares of Series D Preferred Stock were outstanding. The
following description of certain terms of the capital stock of the Company does
not purport to be complete and is qualified in its entirety by reference to the
Certificate of Incorporation and Bylaws of the Company and the Amended
Stockholders' Agreement, copies of which are included in or filed as exhibits to
one or more of the documents incorporated herein by reference.
COMMON STOCK
The holders of Common Stock are entitled to all of the rights and
privileges of holders of shares of common stock under the General Corporation
Law of the State of Delaware (the "DGCL"). Subject to the preferences applicable
to shares of preferred stock, the holders of Common Stock are entitled to
receive ratably such dividends, if any, as may be declared from time to time by
the Board of Directors out of legally available funds. In the event of the
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to share ratably in all assets remaining after payment of
liabilities, subject to the prior distribution rights of holders of shares of
preferred stock. There are no redemption or sinking fund provisions applicable
to the Common Stock. All of the outstanding shares of Common Stock are duly
authorized, validly issued, fully paid and nonassessable.
Each holder of Common Stock is entitled to one vote for each share of
Common Stock on all matters submitted to the vote of stockholders, including the
election of directors. Cumulative voting for the election of directors is
prohibited in the Certificate and Bylaws.
CLASS B COMMON STOCK
In December 1996, the Certificate of Incorporation of the Company was
amended to authorize the creation of Class B Common Stock, which is a new class
of common stock into which the shares of Series D Preferred Stock issued to SBC
Communications Inc. ("SBC") are convertible. When issued by the Company, each
outstanding share of Class B Common Stock will be convertible into 1,600 shares
of Common Stock (subject to adjustment to prevent dilution) at the option of
SBC, provided that no such shares may be converted into Common Stock unless the
holders of all outstanding shares of Class B Common Stock elect so to convert
their shares.
The holders of Class B Common Stock will be entitled to receive
dividends and distributions equal to the dividends and distributions payable on
or in respect of the number of shares of Common Stock into which such shares of
Class B Common Stock are then convertible.
The holders of Common Stock and Class B Common Stock will generally
have identical voting rights and will vote together as a single class, with the
holders of Class B Common Stock being entitled to a number of votes equal to the
number of shares of Common Stock into which the shares of Class B Common Stock
held by them are then convertible. There will be two classes of directors of the
Company, those elected by the holders of Common Stock (the "Common Directors")
and those elected by the holders of Class B Common Stock (the "Class B
Directors"). The rights, duties and authority of the Common Directors and the
Class B Directors will be identical in all respects. The holders of Class B
Common Stock will be entitled to elect one Class B Director (or two Class B
Directors if SBC and its affiliates beneficially own at least 20% of the
outstanding shares of Common Stock, including shares issuable upon conversion of
Class B Common Stock or other convertible securities or upon the exercise of
outstanding options, warrants or rights, but excluding shares issuable upon the
exercise of the SBC Warrants or any options,
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warrants or rights issued by any person other than the Company (the "Excluded
Options")). The holders of Class B Common Stock will be entitled to approve
certain actions on the part of Company, including (i) the approval of any annual
budget or business plan for the Company or any deviation from any annual budget
by more than 5%, (ii) the issuance by the Company of equity securities,
including securities convertible into equity securities (subject to specified
exceptions), and the incurrence by the Company of debt obligations in an amount
exceeding $5.0 million in any year, (iii) the hiring or termination by the
Company of its chief executive officer, chief operating officer or chief
financial officer, (iv) the Company entering into any line of business other
than its Existing Line of Business (as defined below) or entering into any joint
ventures, partnerships or similar arrangements, (v) the Company exiting its
Existing Line of Business or disposing of assets (other than assets sold in the
ordinary course of business) in any year with a value in excess of $500,000 or
which are otherwise material to the Company's operations, (vi) the adoption,
implementation or acceptance by the Company of any Anti-Takeover Provisions (as
defined below) and (vii) any corporate action that would reduce the number of
shares of Common Stock into which a share of Class B Common Stock is convertible
to less than 1,600.
As used herein, the terms set forth below have the following meanings:
"Anti-Takeover Provision" means (i) any provision of the certificate of
incorporation or bylaws of the Company or any contract, agreement or plan to
which the Company is a party or by which it is bound or any statutory provision
enacted after September 27, 1996 which is applicable to the Company which the
Company may opt out of if the effect of such provision would be to materially
delay, hinder or prevent a change in control of the Company or (ii) a
stockholder rights plan or "poison pill," including the provisions of any
preferred stock or common stock purchase rights issued pursuant thereto;
provided, however, that such term does not include any customary change of
control provisions contained in employment agreements between the Company and
any of its directors, officers or other employees or in any plans or agreements
relating to stock options or other awards of equity securities made by the
Company to any such persons.
"Existing Line of Business" means a non-facilities based, enhanced
service provider that offers fleet management and/or status or information about
vehicles and/or location capabilities through mobile communications service.
No holder of shares of Class B Common Stock will be entitled to
Transfer (as defined below) any such shares or any interest therein to any
person or entity other than SBC or an affiliate of SBC. As used herein, the term
"Transfer" means any sale, transfer, assignment, disposition or other means of
conveying legal or beneficial ownership, whether direct or indirect and whether
voluntary or involuntary.
SERIES D PREFERRED STOCK
On September 27, 1996, the Company sold 1,000 shares of Series D
Preferred Stock to SBC in exchange for a payment of $20.0 million in cash. Each
share of Series D Preferred Stock is convertible into 1,600 shares of Common
Stock (subject to adjustment to prevent dilution) at the option of SBC,
provided, that shares of Series D Preferred Stock may only be converted into
Common Stock in blocks of 250 shares. In addition, at such time as Regulatory
Relief is obtained, all of the outstanding shares of Series D Preferred Stock
will automatically convert into an equal number of shares of Class B Common
Stock. If Regulatory Relief is not obtained on or before September 27, 2001, all
of the outstanding shares of Series D Preferred Stock will be converted into
shares of Common Stock at the election of the Company on the same basis as if
they had been voluntarily converted by SBC. As used herein, the term "Regulatory
Relief" means that SBC Communications Inc. or its affiliates have, in their sole
judgment, obtained all necessary federal and state regulatory approvals to
provide landline, interLATA long-distance service pursuant to the Communications
Act of 1934, as amended by the Telecommunications Act.
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The holders of shares of Series D Preferred Stock are entitled to
receive dividends and distributions equal to the aggregate amount of dividends
and distributions payable on or in respect of the number of shares of Common
Stock into which such shares of Series D Preferred Stock are then convertible.
In the event of a liquidation of the Company, the holders of shares of Series D
Preferred Stock are entitled to an aggregate liquidation preference in an amount
equal to the greater of (i) $20.0 million or (ii) the amount of distributions
payable in connection with such liquidation on or in respect of the number of
shares of Common Stock into which such shares of Series D Preferred Stock are
then convertible.
Except as required by law or as described below, the holders of Series
D Preferred Stock are not entitled to vote on any matters submitted to the
stockholders of the Company. However, the holders of Series D Preferred Stock
are entitled to approve certain actions on the part of the Company, including
(i) mergers or consolidations involving the Company that require stockholder
approval under the DGCL, (ii) sales of all or substantially all of the assets of
the Company that require stockholder approval under the DGCL, (iii) amendments
to the Company's Certificate of Incorporation, (iv) the dissolution of the
Company, (v) the adoption, implementation or acceptance by the Company of any
AntiTakeover Provisions, (vi) the issuance by the Company of equity securities,
including securities convertible into equity-securities (subject to specified
exceptions), and the incurrence by the Company of debt obligations in an amount
exceeding $5.0 million in any year, (vii) the Company entering into any line of
business other than its Existing Line of Business or entering into joint
ventures, partnerships or similar arrangements which would require expenditures
of more than $3.0 million, (viii) the disposition by the Company in any 12-month
period of assets (other than assets sold in the ordinary course of business) of
which the value exceeds $3.0 million, (ix) any amendment, alteration or repeal
of the terms of the Series D Preferred Stock or (x) any corporate action that
would reduce the number of shares of Common Stock into which a share of Series D
Preferred Stock is convertible to less than 1,600. Shares of Series D Preferred
Stock are not redeemable at the option of the Company.
SBC WARRANTS
In September 1996, a subsidiary of SBC made a strategic investment in
the Company. In particular, SBC purchased $20.0 million of preferred stock from
the Company, which may under certain circumstances be converted into common
stock, and agreed to provide certain technical services to the Company in
connection with the operation and improvement of its network. In addition, the
Company issued to SBC warrants to purchase an aggregate of 5,000,000 shares of
the Company's common stock (the "SBC Warrants"). The SBC Warrants entitle SBC to
purchase from the Company (i) 3,000,000 shares of Common Stock at an exercise
price of $14.00 per share and (ii) 2,000,000 shares of Common Stock at an
exercise price of $18.00 per share, in each case subject to adjustment to
prevent dilution. The SBC Warrants may be exercised for the cash exercise prices
specified above or, at the option of SBC, may be exercised without any cash
payment for a number of shares of Common Stock with a current market value equal
to the excess of (i) the current market value of the shares of Common Stock to
be purchased upon exercise over (ii) the exercise price of such shares of Common
Stock. Prior to receipt of Regulatory Relief, the SBC Warrants may be exercised
only to the extent that doing so is consistent with the Communications Act of
1934, as amended by the Telecommunications Act. The SBC Warrants will expire on
September 27, 2001.
No holder of SBC Warrants will be entitled to Transfer any SBC Warrants
or any interest therein to any person or entity other than SBC or an affiliate
of SBC.
WARRANTS ISSUED IN CONNECTION WITH DEBT OFFERING
The Company issued 125,000 warrants (the "Warrants") to purchase Common
Stock as part of an offering of 125,000 units, each consisting of $1,000
principal amount of its 13 3/4% Senior Notes due 2005 and one Warrant, in an
offering that was exempt from the registration requirements of the Securities
Act of 1933, as amended, pursuant to Rule 144A and Regulation S thereunder.
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Each Warrant entitles the holder thereof to purchase 6.566 shares of
Common Stock at an exercise price of $9.625 per share, subject to certain
anti-dilution provisions. The Warrants may be exercised at any time on or after
the earlier of (i) September 23, 1998 or (ii) in the event a Change of Control
(as defined herein) occurs, the date upon which the Company mails notice thereof
to the holders of the Warrants. Unless exercised, the Warrants will expire on
September 15, 2005.
As used herein, the terms set forth below have the following meanings:
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
(as defined in the Indenture dated September 23, 1997 between the Company,
HighwayMaster Corporation, a Delaware corporation and Texas Commerce Bank
National Association, as trustee (the "Indenture")) taken as a whole to any
"person" (as such term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934) other than a Restricted Subsidiary; (ii) the adoption of a plan
relating to the liquidation or dissolution of the Company; (iii) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as defined above),
other than a Permitted Holder (as defined in the Indenture), becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under
the Securities Exchange Act of 1934), directly or indirectly, of a greater
percentage of the voting stock of the Company than the percentage of the voting
stock of the Company held by the Permitted Holders; (iv) the first day on which
the Permitted Holders in the aggregate hold less than 35% of the voting stock of
the Company; or (v) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors (as defined in
the Indenture).
AMENDED STOCKHOLDERS' AGREEMENT
General. As of February 4, 1994, the Company, the Erin Mills
Stockholders, the Carlyle Stockholders, the By-Word Stockholders (as defined
herein) and certain other parties entered into a Stockholders' Agreement. In
connection with the transactions with SBC consummated on September 27, 1996,
such agreement was amended and restated in order, among other things to add SBC
as a party thereto. The Amended Stockholders' Agreement contains provisions
relating to, among other things, (i) the transfer of shares of Common Stock by
certain of the stockholders who are parties thereto, (ii) the grant of
registration rights by the Company to the stockholders who are parties thereto
and (iii) the election of members of the Company's Board of Directors. As used
herein, (a) the term "Erin Mills Stockholders" means Erin Mills International
Investment Corporation, The Erin Mills Development Corporation and The Erin
Mills Investment Corporation, (b) the term "Carlyle Stockholders" means the
Clipper Stockholders (as defined below), Carlyle-HighwayMaster Investors, L.P.,
Carlyle-HighwayMaster Investors II, L.P., TC Group, L.L.C., Mark D. Ein, Chase
Manhattan Investment Holdings, Inc., H.M. Rana Investments Limited, Archery
Partners, (c) the term "Clipper Stockholders" means Clipper Capital Associates,
L.P., Clipper/Merban, L.P. and Clipper/Merchant Partners, L.P. and (d) the term
"By-Word Stockholders" means William C. Kennedy, Jr., Donald M. Kennedy, William
C. Saunders, Robert S. Folsom and Robert T.
Hayes.
Election of Directors. The Amended Stockholders' Agreement provides
that the parties will take all action (including the voting of shares of Common
Stock owned by them) necessary to ensure that the Board of Directors of the
Company consists of (i) two directors designated by the Erin Mills Stockholders,
(ii) one director designated by the Carlyle Stockholders (other than the Clipper
Stockholders), (iii) two directors designated by the By-Word Stockholders (one
of which will be the chief executive officer of the Company) and (iv) two
independent directors (except that the addition of a second independent director
to the Board of Directors need not occur until the date of the next annual
meeting of the stockholders of the Company). Prior to the receipt of Regulatory
Relief, SBC will not be entitled to designate a director, but will have the
right to designate a non-voting delegate who will attend all meetings of the
Board of Directors and receive all materials distributed to directors of the
Company. Upon the conversion of Series D Preferred Stock into Class B Common
Stock (which will occur upon receipt of Regulatory Relief), SBC will be entitled
to designate one member of the Board of Directors of the Company. In addition,
if at any time after the conversion of Series D Preferred Stock into Class B
Common Stock SBC and its affiliates beneficially own 20% or more of the
outstanding Common Stock (including shares issuable upon conversion of Series D
Preferred Stock or Class B Common Stock or other convertible securities or upon
the exercise of outstanding options, warrants or rights, but excluding shares
issuable upon the exercise of the SBC Warrants or any Excluded Options) on a
fully diluted basis, SBC will be entitled to designate a second member of the
Board of Directors. No stockholder or group of stockholders will be entitled to
designate any director if the percentage of the outstanding Common Stock
(including shares issuable upon conversion of outstanding securities or upon the
exercise of outstanding options, warrants or rights, but excluding shares
issuable upon the exercise of the SBC Warrants or any Excluded Options)
beneficially owned by such stockholder or group of stockholders falls below 5%
(or with respect to the Erin Mills Stockholders and By-Word Stockholders, 20%
for the right to designate two directors and 5% for the right to designate one
director) on a fully diluted basis.
Right of First Refusal. Under the terms of the Amended Stockholders'
Agreement, the Carlyle Stockholders (other than the Clipper Stockholders), the
Erin Mills Stockholders, William C. Kennedy, Jr. and William C. Saunders (the
"First Refusal Stockholders") granted a right of first refusal to SBC with
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respect to all shares of Common Stock owned by them. Subject to certain
exceptions, such right of first refusal requires that, prior to selling any
shares of Common Stock, a First Refusal Stockholder must offer such shares for
sale to SBC in accordance with the terms of the Amended Stockholders' Agreement.
Registration Rights. The Amended Stockholders' Agreement also provides
for the grant of certain demand, piggyback or other registration rights to the
stockholders who are parties thereto. In particular, such agreement provides
that, with respect to an aggregate of 1,818,018 shares of Common Stock issued to
the Erin Mills Stockholders and certain of the Carlyle Stockholders in
connection with the Recapitalization Transactions, the Company would register
one-half each of such shares under the Securities Act, for sale during the
three-month periods beginning March 31, 1997 and September 27, 1997. The Erin
Mills Stockholders and the Carlyle Stockholders waived the right to cause the
Company to register such shares, although they have reserved the right to revoke
such waiver at any time. The Carlyle Stockholders have exercised their piggyback
rights and are offering all 2,723,468 of their group's shares to the public at
the same time as the warrant registration is deemed effective.
In addition, under the Amended Stockholders' Agreement, a majority of
certain stockholders have the right to demand that the shares of Common Stock
held by them be registered under the Securities Act on up to two separate
occasions. However, if the Board of Directors of the Company reasonably
determines that, due to a pending or contemplated acquisition or disposition,
such a demand registration would have a material adverse effect on the Company,
the Company may defer such registration for a period not to exceed 180 days.
Furthermore, if the managing underwriter or underwriters or the holders of a
majority of the registerable securities held by the stockholders demanding the
registration determine that the number of shares of Common Stock proposed to be
sold pursuant to the demand registration provisions exceeds the amount that can
be sold without having a material adverse effect on the proposed offering, the
Company may exclude certain shares from the offering.
The Stockholders' Agreement also grants piggyback registration rights
to certain stockholders. Accordingly, whenever the Company proposes to register
any shares of Common Stock (or securities convertible into or exchangeable for,
or options, warrants or other rights to acquire, Common Stock) under the
Securities Act (other than registrations on Form S-4 or Form S-8), the holder of
shares of Common Stock have the right to include the shares of Common Stock held
by them in any such registration. However, if the inclusion of shares of Common
Stock pursuant to the piggyback registration provisions is reasonably determined
by the managing underwriter or underwriters to materially adversely affect the
success of the proposed offering, the Company may exclude certain shares from
the offering. The Carlyle Stockholders have exercised their piggyback rights in
connection with the offer of the Warrants and Warrant Shares and are offering
all 2,723,468 shares beneficially owned by them to the public pursuant to the
Registration Statement.
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PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Stockholders on
the Nasdaq National Market (or any other securities exchange or automated
quotation system on which such shares are then listed or quoted or in the
over-the-counter market), in privately negotiated transactions or a combination
of such methods of sale. The Shares will be sold at fixed prices (which may be
changed), at market prices prevailing at the time of sale, at prices related to
such market prices or at negotiated prices. The Selling Stockholders may effect
sales of the Shares directly or by or through agents, brokers, dealers or
underwriters in one or more of the following types of transactions: (i)
underwritten public offerings, (ii) ordinary brokerage transactions and in
transactions in which the broker solicits purchasers, (iii) purchases by a
broker-dealer as principal and resale by such broker-dealer for its own account
pursuant to this Prospectus, (iv) for the purpose of covering short positions
and (v) in "block" sales. In effecting sales, brokers or dealers engaged by the
Selling Stockholders may arrange for other brokers or dealers to participate in
the resales. In addition, any shares covered by this Prospectus which qualify
for sale pursuant to Section 4(1) of the Securities Act of 1933 or Rule 144
promulgated thereunder may be sold under such provisions rather than pursuant
to this Prospectus.
At the time a particular offer is made, a Prospectus Supplement, if
required, will be distributed that sets forth the number of Shares offered and
other terms of the offering, including the name or names of any underwriters,
dealers or agents, the purchase price paid by any underwriters for the Shares
purchased from the Selling Stockholders, any discounts, commissions or other
items constituting compensation from the Selling Stockholders any discounts,
concessions or commissions allowed or reallowed or paid to dealers.
In offering the Shares covered by this Prospectus, the Selling
Stockholders and any brokers, dealers or agents who participate in a sale of the
Shares by the Selling Stockholders may be considered "underwriters" within the
meaning of Section 2(11) of the Securities Act, and any profits realized by the
Selling Stockholders and the compensation of any such brokers, dealers or agents
may be deemed to be underwriting discounts and commissions.
The Company has filed the Registration Statement of which this
Prospectus forms a part with the Commission as required pursuant to the terms of
the Amended Stockholders' Agreement.
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders. The Company will bear the costs of
registering the Shares, including the registration fee under the Securities Act,
legal and accounting fees and any printing fees but excluding the fees and
expenses of any counsel, accountants or other representatives of the Selling
Stockholders. The Selling Stockholders will bear all other expenses in
connection with this offering, including underwriting discounts or discounts, if
any, and brokerage commissions.
In June 1998, the Company received notification from The Nasdaq Stock
Market, Inc. that it was not in compliance with the minimum bid price
requirement for listing on the NNM. The Company's Board of Directors has
authorized the Company, in the event that it is unable to achieve compliance
with the minimum bid price requirement, to apply for the Common Stock to be
admitted for trading on the Nasdaq SmallCap Market. There can be no assurance
that the Company will be able to achieve compliance with the NNM criteria or
that the Common Stock will be admitted for trading on the Nasdaq SmallCap
Market.
Pursuant to the terms of the Amended Stockholders' Agreement, the
Company and the Selling Stockholders have agreed to indemnify each other for
certain liabilities, including liabilities under the Securities Act, in
connection with the registration of the Shares.
A-9
<PAGE> 29
[ALTERNATE PAGES FOR SELLING STOCKHOLDER PROSPECTUS]
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING DESCRIBED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH
DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY ANY SECURITIES OFFERED HEREBY IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT PERMITTED, OR TO ANYONE WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION.
------------------------------
TABLE OF CONTENTS
PAGE
Available Information................................................... ii
Incorporation of certain
Documents by Reference............................................. ii
Prospectus Summary...................................................... 1
The Company............................................................. 1
The Offering............................................................ A-2
Use of Proceeds......................................................... A-3
Selling Stockholders.................................................... A-3
Description of Warrants................................................. 6
Description of Capital Stock............................................ A-4
Plan of Distribution.................................................... A-9
Legal Matters........................................................... 13
Experts................................................................. 13
================================================================================
================================================================================
2,723,468 SHARES
HIGHWAYMASTER
COMMUNICATIONS, INC.
COMMON STOCK
----------
PROSPECTUS
----------
SEPTEMBER 18, 1998
================================================================================
A-10
<PAGE> 30
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following are the estimated expenses (other than underwriting
discounts and commissions) of the issuance and distribution of the securities
being registered to be paid by the Company.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee........... $ 4,324
-------
Printing and engraving expenses............................... 9,500
Accounting fees and expenses.................................. 5,000
Blue Sky fees and expenses.................................... 200
Listing fees.................................................. 0
Counsel fees.................................................. 30,000
Miscellaneous................................................. 3,500
-------
Total.................................................. 52,524
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "DGCL")
permits a corporation to indemnify any director or officer of the corporation
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with any action,
suit or proceeding brought by reason of the fact that such person is or was a
director or officer of the corporation, if such person acted in good faith and
in a manner that he reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, if he had no reason to believe his conduct was unlawful. In a
derivative action (i.e., one brought by or on behalf of the corporation),
indemnification may be made only for expenses actually and reasonably incurred
by any director or officer in connection with the defense or settlement of such
an action or suit, if such person acted in good faith and in a manner that he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged to be liable to the corporation, unless and only to the
extent that the court in which the action or suit was brought shall determine
that the defendant is fairly and reasonably entitled to indemnity for such
expenses despite such adjudication of liability.
Delaware law also permits a corporation to purchase and maintain
insurance on behalf of any person who is or was a director or officer against
any liability asserted against him and incurred by him in such capacity or
arising out of his status as such, whether or not the corporation has the power
to indemnify him against that liability under Section 145 of the DGCL.
Article X of the Company's Certificate and Article VIII of the
Company's Bylaws provide for indemnification of directors and officers and for
the purchase of insurance for their benefit.
Article X of the Certificate provides that the Company 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, whether civil,
criminal, administrative, arbitrative or investigative, any appeal in such an
action, suit or proceeding and any inquiry or investigation that could lead to
such an action, suit or proceeding (whether or not by or in the right of the
Company), by reason of the fact that he is or was a director, officer, employee
or agent of the Company, or is or was serving at the request of the Company as a
director, officer, partner, venturer, proprietor, trustee, employee, agent or
similar functionary of another corporation, partnership, joint venture, sole
proprietorship, trust, nonprofit entity, employee benefit plan or other
enterprise, against all judgments, penalties (including excise and similar
taxes), fines, settlements and expenses (including attorneys' fees and court
costs) actually and reasonably incurred by him or her in connection with such
action, suit or proceeding to the fullest extent permitted by any applicable
law, and such indemnity shall inure to the benefit of the heirs, executors and
administrators of any such person so indemnified.
The right to indemnification under Article X of the Certificate is a
contract right which includes, with respect to directors and officers, the right
to be paid by the Company the expenses incurred in defending any such proceeding
II-1
<PAGE> 31
in advance of its disposition; provided, however, that, if the DGCL requires,
the payment of such expenses incurred by a director or officer in advance of the
final disposition of a proceeding shall be made only upon delivery to the
Company of an undertaking, by or on behalf of such director or officer, to repay
all amounts so advanced if it shall ultimately be determined that such director
or officer is not entitled to be indemnified under Article X of the Certificate
or otherwise. The Company will, by action of its Board of Directors, pay such
expenses incurred by employees and agents of the Company upon such terms as the
Board of Directors deems appropriate. The indemnification and advancement of
expenses provided by, or granted pursuant to, Article X of the Certificate shall
not be deemed exclusive of any other right to which those seeking
indemnification may be entitled under any law, bylaw, agreement, vote of
stockholders or disinterested directors otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
Article IX of the Certificate provides that to the fullest extent
permitted by the DGCL a director of the Company shall not be liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty as
a director.
Article VIII of the Bylaws provides that the Company 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, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company), by reason of the fact that he or she is or was a
director, officer, employee or agent of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), 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 interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Article VIII of the Bylaws also provides that the Company 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 or suit by or in the right of the
Company to procure a judgment in its favor by reason of the fact that he is or
was a director, officer, employee or agent of the Company, or is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture or trust or other enterprise,
against expenses (including attorneys' fees) actually and reasonably incurred by
him or her in connection with the defense or settlement of such action or suit
if he acted in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the Company, and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Company unless
and only to the extent that the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper.
The above discussion of HighwayMaster's Bylaws and Certificate of
Incorporation is not intended to be exhaustive and is respectively qualified in
its entirety by such documents.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
*5.1 -- Opinion of Wesley E. Schlenker, General Counsel and
Secretary of the Company.
*23.1 -- Consent of PricewaterhouseCoopers LLP, independent
accountants.
*23.3 -- Consent of Wesley E. Schlenker, General Counsel and
Secretary of the Company (included in Exhibit 5 to
this Registration Statement).
+24 -- Powers of Attorney of directors and officers of the
Company (included on signature pages to this
Registration Statement).
- ----------
* Filed herewith
+ Previously filed
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
II-2
<PAGE> 32
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) of the Securities Act if, in the aggregate,
the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section
13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(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 section
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) 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-3
<PAGE> 33
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Dallas, State of Texas, on the 16th day of September,
1998.
HIGHWAYMASTER COMMUNICATIONS, INC.
By: /s/ JANA AHLFINGER BELL
-------------------------------------
Jana Ahlfinger Bell
President and Chief Executive Officer
II-4
<PAGE> 34
POWER OF ATTORNEY
The undersigned directors and executive officers of HighwayMaster
Communications, Inc. hereby constitute and appoint Jana Ahlfinger Bell and
Wesley E. Schlenker, and each of them, with full power to act without the other
and with full power of substitution and resubstitution, our true and lawful
attorneys-in-fact with full power to execute in our name and behalf in the
capacities indicated below any and all amendments (including post-effective
amendments and amendments thereto) to this Registration Statement and to file
the same, with all exhibits thereto and other documents in connection therewith
with the Securities and Exchange Commission and hereby ratify and confirm all
that such attorneys-in-fact, or either of them, or their substitutes shall
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment has been signed by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ WILLIAM C. SAUNDERS
- --------------------------- Chairman of the Board of Directors September 16, 1998
William C. Saunders
/s/ JANA AHLFINGER BELL
- --------------------------- President, Chief Executive Officer, and September 16, 1998
Jana Ahlfinger Bell Director (Principal Executive Officer)
and acting Chief Financial Officer
(Principal Financial Officer)
/s/ STEPHEN P. TACKE
- --------------------------- Vice President and Controller (Principal September 16, 1998
Stephen P. Tacke Accounting Officer)
/s/ WILLIAM C. KENNEDY, JR.
- --------------------------- Director September 16, 1998
William C. Kennedy, Jr.
/s/ TERRY PARKER
- --------------------------- Director September 16, 1998
Terry Parker
/s/ STEPHEN GREAVES
- --------------------------- Director September 16, 1998
Stephen Greaves
/s/ GERRY C. QUINN
- --------------------------- Director September 16, 1998
Gerry C. Quinn
/s/ JOHN STUPKA
- --------------------------- Director September 16, 1998
John Stupka
</TABLE>
II-5
<PAGE> 35
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
*5.1 -- Opinion of Wesley E. Schlenker, General Counsel and
Secretary of the Company.
*23.1 -- Consent of PricewaterhouseCoopers LLP, independent
accountants.
*23.3 -- Consent of Wesley E. Schlenker, General Counsel and
Secretary of the Company (included in Exhibit 5 to
this Registration Statement).
+24 -- Powers of Attorney of directors and officers of the
Company (included on signature pages to this
Registration Statement).
</TABLE>
- ----------
* Filed herewith
+ Previously filed
<PAGE> 1
Exhibit 5.1
September 16, 1998
Highwaymaster Communications, Inc.
16479 Dallas Parkway, Suite 710
Dallas, Texas 75248
Ladies and Gentlemen:
As set forth in the Registration Statement on Form S-3
(Commission File No. 333- 57281) (the "Registration Statement") filed by
HighwayMaster Communications, Inc., a Delaware corporation (the "Company"), with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, relating to (i) 125,000 warrants (the "Warrants") to purchase shares of
the Company's common stock, par value $.01 per share (the "Common Stock"),
issued pursuant to the Warrant Agreement, dated as of September 23, 1997 (the
"Warrant Agreement"), between the Company and Bear Stearns & Co. Inc. and Smith
Barney Inc., (ii) 820,750 shares of Common Stock (the "Warrant Shares") that may
be issued from time to time by the Company upon the exercise of the Warrants and
(iii) 2,723,468 shares of Common Stock (the "Additional Shares") that may be
sold by the Selling Stockholders identified in the Registration Statement (the
"Selling Stockholders"), certain legal matters in connection with the Warrants,
the Warrant Shares and the Additional Shares are being passed upon for the
Company by me. At your request, this opinion is being furnished to you for
filing as Exhibit 5.1 to the Registration Statement.
In my capacity as general counsel of the Company, I have
examined the Certificate of Incorporation and the Bylaws of the Company, each as
amended to date, the originals, or copies certified or otherwise identified, of
corporate records of the Company, including minute books of the Company as
furnished to me by the Company, certificates of public officials and of
representatives of the Company, statutes and other instruments and documents as
a basis for the opinions hereinafter expressed. In giving such opinions, I have
relied upon certificates of officers of the Company with respect to the accuracy
of certain factual matters contained in such certificates.
On the basis of the foregoing, and subject to the assumptions,
limitations and qualifications set forth herein, I am of the opinion that:
<PAGE> 2
-2- September 16, 1998
1. The Company is a corporation duly incorporated and validly
existing under the laws of the State of Delaware.
2. The Warrants are duly authorized and validly issued in
accordance with the terms of the Warrant Agreement.
3. The issuance of the Warrant Shares has been duly authorized
by all necessary corporate action on the part of the Company, and when
the Warrant Shares are issued upon exercise of the Warrants in
accordance with the terms of the Warrant Agreement against payment of
the consideration therefor, they will be validly issued, fully paid and
nonassessable.
4. The Additional Shares to be sold by the Selling
Stockholders are duly authorized, validly issued, fully paid and
nonassessable.
The opinions set forth above are limited in all respects to
the General Corporation Law of the State of Delaware, as in effect on the date
hereof.
I hereby consent to the filing of this opinion as Exhibit 5.1
to the Registration Statement.
Very truly yours,
/s/ WESLEY E. SCHLENKER
GENERAL COUNSEL
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference to the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
February 11, 1998, appearing on page F-1 of HighwayMaster Communications, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1997. We also consent
to the reference to us under the heading "Experts" in such Prospectus.
PRICEWATERHOUSECOOPERS LLP
Dallas, Texas
September 16, 1998
