Unassociated Document
Filed Pursuant
to Rule 424(b)(5)
Registration
No. 333-163605
(To Prospectus Dated
December 18, 2009)
Hudson
Highland Group, Inc.
4,200,000 Shares of
Common Stock
We are
offering 4,200,000 shares of our common stock.
Our
common stock is listed on the NASDAQ Global Market under the symbol “HHGP.” On
March 30, 2010, the last reported sale price of our common stock was $4.81 per
share.
Investing in our common stock
involves risks. See “Risk Factors” beginning on page S-5 of this prospectus
supplement.
|
|
Per
Share
|
|
|
Total
|
Public
offering price
|
|
$
|
4.35
|
|
$ |
18,270,000
|
|
|
|
|
|
|
|
Underwriting
discount
|
|
$
|
0.26
|
|
$ |
1,092,000
|
|
|
|
|
|
|
|
Proceeds,
before expenses, to us
|
|
$
|
4.09
|
|
$ |
17,178,000
|
The
underwriter has a 30-day option to purchase up to 630,000 additional shares from
us on the same terms set forth above to cover over-allotments, if
any.
We expect
the shares will be ready for delivery on or about April 6,
2010.
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved these
securities or passed upon the adequacy or accuracy of this prospectus supplement
or the accompanying prospectus. Any representation to the contrary is a criminal
offense.
Sole Book-Running
Manager
The date of this
prospectus supplement is March 30, 2010.
|
Page
|
About
this Prospectus Supplement
|
|
S-ii
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Cautionary
Statements Concerning Forward-Looking Statements
|
|
S-ii
|
|
Summary
|
|
S-1
|
|
Summary
Consolidated Financial Data
|
|
S-4
|
|
Risk
Factors
|
|
S-5
|
|
Use
of Proceeds
|
|
S-12
|
|
Capitalization
|
|
S-13
|
|
Price
Range of Common Stock and Divided Policy
|
|
S-14
|
|
Underwriting
|
|
S-15
|
|
Legal
Matters
|
|
S-17
|
|
Experts
|
|
S-17
|
|
Where
You Can Find More Information
|
|
S-18
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|
|
Page
|
About
This Prospectus
|
|
1
|
Special
Note Regarding Forward-Looking Statements
|
|
1
|
Hudson
Highland Group, Inc.
|
|
1
|
Use
of Proceeds
|
|
2
|
Ratio
of Earnings to Fixed Charges
|
|
3
|
Description
of Debt Securities
|
|
3
|
Description
of Capital Stock
|
|
11
|
Description
of Warrants
|
|
14
|
Description
of Stock Purchase Contracts and Stock Purchase Units
|
|
15
|
Global
Securities
|
|
16
|
Plan
of Distribution
|
|
17
|
Where
You Can Find More Information
|
|
19
|
Legal
Matters
|
|
20
|
Experts
|
|
20
|
You should rely only on the
information contained or incorporated by reference in this prospectus supplement
and the accompanying prospectus. We have not, and the underwriter has not,
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. We are not, and the underwriter is not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. The
information in this prospectus supplement and the accompanying prospectus is
current as of the date such information is presented. Our business, financial
condition, results of operations and prospects may have changed since those
dates.
About
This Prospectus Supplement
This
document is in two parts. The first part is this prospectus supplement, which
describes the specific terms of this offering. The second part, the accompanying
prospectus, gives more information, some of which may not apply to this
offering. Generally, when we refer only to the “prospectus,” we are referring to
both parts combined.
This
prospectus supplement includes a discussion of risk factors and other special
considerations applicable to this particular offering of securities. This
prospectus supplement, and the information incorporated herein by reference, may
also add, update or change information in the accompanying prospectus. You
should read both this prospectus supplement and the accompanying prospectus
together with additional information described under the heading “Where You Can
Find More Information.” If there is any inconsistency between the information in
the prospectus and this prospectus supplement, you should rely on the
information in this prospectus supplement.
In this
prospectus supplement, “we,” “us,” and “our” refer to Hudson Highland Group,
Inc. and its subsidiaries, except where the context otherwise requires or as
otherwise indicated.
All
references in this prospectus supplement to our consolidated financial
statements include, unless the context indicates otherwise, the related notes.
The market data included or incorporated by reference in this prospectus
supplement and the accompanying prospectus, including growth rates and
information relating to our relative position in the industries we serve, are
based on internal surveys, market research, publicly available information and
industry publications. Although we believe that such independent sources are
reliable, we have not independently verified the information contained in them.
All foreign currencies are translated using the current exchange rate for assets
and liabilities and the weighted average exchange rate for the period for the
consolidated statement of operations items.
Cautionary
Statement Concerning Forward-looking Statements
This prospectus
supplement and the accompanying prospectus, and the documents incorporated by
reference in this prospectus supplement and the accompanying prospectus, may
contain forward-looking statements made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements represent our management’s judgment regarding future events. In many
cases, you can identify forward-looking statements by terminology such as “may,”
“will,” “should,” “plan,” “expect,” “anticipate,” “estimate,” “believe,”
“predict,” “intend,” “potential” or “continue” or the negative of these terms or
other words of similar import, although some forward-looking statements are
expressed differently. All statements other than statements of historical fact
included in this prospectus supplement and the accompanying prospectus and the
documents incorporated by reference in this prospectus supplement and the
accompanying prospectus, regarding our financial position or future performance,
business strategy and plans or objectives for future operations are
forward-looking statements. We cannot guarantee the accuracy of the
forward-looking statements, and you should be aware that results and events
could differ materially and adversely from those contained in the
forward-looking statements due to a number of factors,
including:
|
n
|
|
the
impact of global economic fluctuations including the recent economic
downturn;
|
|
n
|
|
the
ability of clients to terminate their relationship with us at any
time;
|
|
n
|
|
risks
in collecting our accounts receivable;
|
|
n
|
|
implementation
of our cost reduction initiatives effectively;
|
|
n
|
|
our
history of negative cash flows and operating losses may
continue;
|
|
n
|
|
our
limited borrowing availability under our credit facility, which may
negatively impact our liquidity;
|
|
n
|
|
restrictions
on our operating flexibility due to the terms of its credit
facility;
|
|
n
|
|
fluctuations
in our operating results from quarter to quarter;
|
|
n
|
|
risks
relating to our international operations, including foreign currency
fluctuations;
|
|
n
|
|
risks
related to our investment strategy;
|
|
n
|
|
risks
and financial impact associated with dispositions of underperforming
assets;
|
|
n
|
|
our
heavy reliance on information systems and the impact of potentially losing
or failing to develop technology;
|
|
n
|
|
competition
in our markets and our dependence on highly skilled
professionals;
|
|
n
|
|
our
exposure to employment-related claims from both clients and employers and
limits on related insurance coverage;
|
|
n
|
|
our
dependence on key management personnel;
|
|
n
|
|
volatility
of stock price;
|
|
n
|
|
the
impact of government regulations;
|
|
n
|
|
financial
impact of audits by various taxing authorities; and
|
|
n
|
|
restrictions
imposed by blocking arrangements.
|
We urge
you to consider these factors and to review carefully the section captioned
“Risk Factors” in this prospectus supplement, as well as the other factors
described in the documents incorporated by reference into this prospectus
supplement and the accompanying prospectus, for a more complete discussion of
the risks associated with an investment in our common stock. All subsequent
written and oral forward-looking statements attributable to us or to persons
acting on our behalf are expressly qualified in their entirety by the applicable
cautionary statements. The forward-looking statements included in this
prospectus supplement and the accompanying prospectus are made only as of their
respective dates, and we undertake no obligation to update these statements to
reflect subsequent events or circumstances.
The information below is only a
summary of more detailed information included elsewhere in or incorporated by
reference in this prospectus supplement and the accompanying prospectus. This
summary may not contain all the information that is important to you or that you
should consider before making a decision to invest in our common stock. Please
read this entire prospectus supplement and the accompanying prospectus,
including the risk factors, as well as the information incorporated by reference
in this prospectus supplement and the accompanying prospectus,
carefully.
Hudson
Highland Group, Inc.
We are
one of the world’s largest specialized professional staffing and talent
management solutions providers. We provide professional staffing services on a
permanent and contract consulting basis and a range of talent management
services to businesses operating in many industries. We help our clients in
recruiting and developing employees for professional-level functional and
managerial positions.
Our
Business
We are
organized into three reportable segments: Hudson Americas, Hudson Europe and
Hudson Asia Pacific. These reportable segments constituted approximately 16%,
47% and 37% of our gross margin, respectively, for the year ended
December 31, 2009. Our three regional businesses provide
professional contract consultants, permanent recruitment services and talent
management services to a wide range of clients.
With
respect to temporary and contract personnel, we focus on providing candidates
with specialized functional skills and competencies, such as accounting and
finance, legal and information technology. The length of a contract assignment
can vary, but engagements at the professional level tend to be longer than those
in the general clerical or industrial sectors. With respect to permanent
recruitment, we focus on mid-level executives and professionals typically
earning between $50,000 and $150,000 annually and possessing the professional
skills and/or profile required by clients. We provide permanent recruitment
services on both a retained and contingent basis. In larger markets, our sales
strategy focuses on both clients operating in particular industry sectors, such
as financial services or technology, and candidates possessing particular
professional skills, such as accounting and finance, information technology,
legal and human resources. We use both traditional and interactive methods to
select potential candidates for our clients, employing a suite of products that
assesses talent and helps predict whether a candidate will be successful in a
given role.
Certain
of our regional businesses also provide organizational effectiveness and
development services through their talent management units. These services
encompass candidate assessment, competency modeling, leadership development,
performance management, and career transition. Our organizational
effectiveness and development services enable us to offer clients a
comprehensive set of management services across the entire employment life-cycle
from attracting, assessing and selecting best-fit employees to engaging and
developing those individuals to help build a high-performance
organization.
Hudson
Americas operates from 30 offices in the United States and Canada, with 96% of
its 2009 gross margin generated in the United States. Hudson Europe operates
from 39 offices in 14 countries, with 41% of its 2009 gross margin generated in
the United Kingdom. Hudson Asia Pacific operates from 17 offices in 4 countries,
with 66% of its 2009 gross margin generated in Australia.
Corporate
expenses are reported separately from the three reportable segments and pertain
to certain functions, such as executive management, corporate governance, human
resources, accounting, administration, tax and treasury that are not
attributable to the reportable segments.
Our
corporate strategy is to continue to build upon our position as a leader in the
professional staffing markets through global growth, innovation and capture of
market share. We intend to succeed in our strategy and grow our
business through the following initiatives:
|
|
|
|
•
|
Capitalize
on our position as a leading provider of specialized staffing, recruitment
and talent management in a number of high-demand areas including IT,
Finance and Accounting, Legal and Sales/Marketing
|
|
|
|
|
•
|
Further
leverage our global reach to capture new business and customize our
solutions to address local needs
|
|
|
|
|
•
|
Build
upon our market-leading brands in various geographies, including
Australia/New Zealand, the U.K., Belgium, the Americas, and Singapore and
China
|
|
|
|
|
•
|
Drive
profitability improvements through infrastructure rationalization
completed in 2008 and 2009
|
|
|
|
|
•
|
Further
penetrate related markets with our high-value solutions focused on deep
specialization, including talent
management
|
Recent
Developments
We are
seeing strong revenue recovery trends in the first quarter of 2010 in the United
Kingdom and China and in the United States legal practice compared to the same
period last year. We continue to benefit from the restructuring
actions we took in 2009.
We expect
our major markets – the United Kingdom, the United States legal practice,
Australia/New Zealand, China, the Netherlands and Belgium – to deliver positive
operating performance for the first quarter of 2010. We expect our
consolidated revenue to be in the range of $173 million to $179 million for the
first quarter of 2010, an increase of 5% to 8% compared to the same period last
year.
Corporate
Information
Our
principal executive offices are located at 560 Lexington Avenue, New York, New
York, 10022 and our telephone number is (212) 351-7300. Our website address is
www.hudson.com. The
information contained on our website is not part of this prospectus supplement
or the accompanying prospectus.
The summary below describes some of the
terms of this offering. For a more complete description of our common stock, see
“Description of Capital Stock” in the accompanying
prospectus.
Issuer
|
|
Hudson
Highland Group, Inc.
|
|
|
|
Common
stock offered
|
|
4,200,000 shares
|
|
|
|
Over-allotment
option
|
|
630,000 shares
|
|
|
|
Common
stock to be outstanding after this offering
|
|
31,518,895 shares.
If the underwriter exercises its over-allotment option in full, we will
issue an additional 630,000
shares, which will result in 32,148,895 shares
outstanding.
|
|
|
|
Use
of proceeds
|
|
We
intend to use the net proceeds from this offering for general corporate
and working capital purposes.
|
|
|
|
|
|
See
the “Use of Proceeds” section of this prospectus supplement for additional
information.
|
|
|
|
Dividend
policy
|
|
We
have not paid any cash dividends on our common stock and currently intend
to retain any earnings to fund our working capital needs and growth
opportunities and to repay indebtedness. Our credit agreement prohibits us
from declaring or paying any dividends on our common
stock.
|
|
|
|
NASDAQ
Global Market symbol
|
|
HHGP
|
|
|
|
Risk
factors
|
|
Investing
in our common stock involves substantial risks. You should carefully
consider all the information in or incorporated by reference in this
prospectus supplement and the accompanying prospectus prior to investing
in our common stock. In particular, we urge you to carefully consider the
factors set forth under “Risk Factors.”
|
The
number of shares outstanding after the offering is based on 27,318,895 shares
outstanding as of March 22, 2010.
The
number of shares of common stock to be outstanding after this offering
excludes:
|
•
|
1,763,250 shares
of common stock issuable upon the exercise of stock options outstanding at
a weighted average exercise price of $12.79 per share as of December 31,
2009;
|
|
|
|
|
•
|
1,416,018 shares
of common stock reserved for future grants under our stock incentive plan
as of December 31, 2009; and
|
|
|
|
|
•
|
116,329 shares
of common stock reserved for future purchases under our employee stock
purchase plan as of December 31,
2009.
|
Summary
Consolidated Financial Data
We
derived the summary consolidated financial statement data for the years ended
December 31, 2007, 2008 and 2009 set forth below from our audited consolidated
financial statements and related notes incorporated by reference in this
prospectus supplement and the accompanying prospectus. You should read the
information presented below together with our consolidated financial statements,
the notes to those statements and the other financial information incorporated
by reference in this prospectus supplement and the accompanying
prospectus.
|
|
Year Ended
December 31,
|
|
(In thousands, except per
share data)
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
691,149
|
|
|
$
|
1,079,085
|
|
|
$
|
1,170,061
|
|
Direct
costs
|
|
|
430,696
|
|
|
|
624,099
|
|
|
|
673,621
|
|
Gross
margin
|
|
|
260,453
|
|
|
|
454,986
|
|
|
|
496,440
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaried
and related
|
|
|
204,097
|
|
|
|
325,774
|
|
|
|
342,332
|
|
Office
and general
|
|
|
66,713
|
|
|
|
90,110
|
|
|
|
93,110
|
|
Marketing
and promotion
|
|
|
6,824
|
|
|
|
16,919
|
|
|
|
18,752
|
|
Acquisition-related
expenses
|
|
|
–
|
|
|
|
–
|
|
|
|
5,299
|
|
Depreciation
and amortization
|
|
|
12,543
|
|
|
|
14,662
|
|
|
|
14,377
|
|
Business
reorganization and integration expenses
|
|
|
18,180
|
|
|
|
11,217
|
|
|
|
3,575
|
|
Goodwill
and other impairment charges(1)
|
|
|
1,549
|
|
|
|
67,087
|
|
|
|
–
|
|
Total
operating expenses
|
|
|
309,906
|
|
|
|
525,769
|
|
|
|
477,445
|
|
Operating
(loss) income
|
|
|
(49,453
|
)
|
|
|
(70,783
|
)
|
|
|
18,995
|
|
Other
income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest,
net
|
|
|
(694
|
)
|
|
|
1,099
|
|
|
|
629
|
|
Other,
net
|
|
|
1,444
|
|
|
|
3,269
|
|
|
|
3,423
|
|
(Loss)
income from continuing operations before provision for income
taxes
|
|
|
(48,703
|
)
|
|
|
(66,415
|
)
|
|
|
23,047
|
|
(Benefit
from) provision for income taxes
|
|
|
(5,750
|
)
|
|
|
6,681
|
|
|
|
17,519
|
|
(Loss)
income from continuing operations
|
|
|
(42,953
|
)
|
|
|
(73,096
|
)
|
|
|
5,528
|
|
Income
(loss) from discontinued operations, net of income taxes
|
|
|
2,344
|
|
|
|
(1,222
|
)
|
|
|
9,453
|
|
Net
(loss) income
|
|
$
|
(40,609
|
)
|
|
$
|
(74,318
|
)
|
|
$
|
14,981
|
|
Earnings
(loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
income from continuing operations
|
|
$
|
(1.65
|
)
|
|
$
|
(2.90
|
)
|
|
$
|
0.22
|
|
Income
(loss) from discontinued operations
|
|
|
0.09
|
|
|
|
(0.05
|
)
|
|
|
0.37
|
|
Net
(loss) income
|
|
$
|
(1.56
|
)
|
|
$
|
(2.95
|
)
|
|
|
0.59
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
income from continuing operations
|
|
$
|
(1.65
|
)
|
|
$
|
(2.90
|
)
|
|
$
|
0.21
|
|
Income
(loss) from discontinued operations
|
|
|
0.09
|
|
|
|
(0.05
|
)
|
|
|
0.37
|
|
Net
(loss) income
|
|
$
|
(1.56
|
)
|
|
$
|
(2.95
|
)
|
|
$
|
0.58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
weighted average shares outstanding:
|
|
|
26,036
|
|
|
|
25,193
|
|
|
|
25,274
|
|
Diluted
weighted average shares outstanding:
|
|
|
26,036
|
|
|
|
25,193
|
|
|
|
25,914
|
|
|
|
As
of December 31,
|
|
(In
thousands)
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
Working
capital
|
|
$
|
62,212
|
|
|
$
|
89,568
|
|
Total
assets
|
|
|
181,944
|
|
|
|
230,953
|
|
Total
debt
|
|
|
10,456
|
|
|
|
5,307
|
|
Total
stockholders’ equity
|
|
|
76,260
|
|
|
|
107,992
|
|
(1)
|
The
results for the year ended December 31, 2009 included an impairment charge
of $1,669 related to goodwill associated with the Tong Zhi (Beijing)
Consulting Service Ltd. and Guangzhou Dong Li Consulting Service Ltd.
acquisition. The results for the year ended December 31, 2008 included
impairment charges related to goodwill of $64,495, a write down of
long-term assets of $2,224 and impairment charges related to intangible
assets of $368.
|
You should carefully consider the
risk factors set forth below as well as the other information contained or
incorporated by reference in this prospectus supplement and the accompanying
prospectus before investing in our common stock. Any of the following risks
could materially and adversely affect our business, financial condition or
results of operations. In such a case, you may lose all or part of your
investment. The risks described below are not the only risks facing us.
Additional risks and uncertainties not currently known to us or those we
currently view to be immaterial may also materially adversely affect our
business, financial condition or results of
operations.
Risks Related to Our
Business
Our
operations will be affected by global economic fluctuations, including the
global economic conditions prevailing during 2009.
Demand
for our services fluctuates with changes in economic conditions in the markets
in which we operate. Those conditions include slower employment growth or
reductions in employment, as is being experienced at the present time. We have
limited flexibility to reduce expenses during economic downturns due to some
overhead costs which are fixed in the short-term. Furthermore, we may face
increased pricing pressures during economic downturns. During the 2009 economic
downturn, many employers in our operating regions reduced their overall
workforce to reflect the reduced demand for their products and services. The
global weakness impacted virtually all of our markets and, as a result, our 2009
financial results were below the financial results of 2008. Despite indications
of improving economic conditions in the later part of 2009, the economic
recovery is in its early stages and the potential for further decline in
economic activity remains possible. lf this were to occur, it could have a
material adverse effect on our business, financial condition and results of
operations.
Our
revenue can vary because, in most cases, our clients can reduce their level
of use of our services or terminate their relationship with us at any
time with limited or no penalty.
We
provide professional mid-market staffing services on a temporary
assignment-by-assignment basis, which clients can generally terminate at any
time or reduce their level of use when compared to prior periods. Our
professional recruitment business is also significantly affected by our clients’
hiring needs and their views of their future prospects. Clients may, on very
short notice, reduce or postpone their recruiting assignments with us and,
therefore, affect demand for our services. Given the current economic
conditions, many companies may decrease their spending on projects and staffing,
including our clients who may terminate or reduce their level of services with
us, which could have a material adverse effect on our business, financial
condition and results of operations.
We
face risks in collecting our accounts receivable.
In
virtually all of our businesses, we invoice customers after providing services,
which creates accounts receivable. Delays or defaults in payments
owed to us could have a significant adverse impact on our business, financial
condition and results of operations. Factors that could cause a delay
or default include, but are not limited to, business failures, turmoil in the
financial and credit markets, and global economic conditions. Given current
economic conditions, we are particularly susceptible to delays or defaults in
payment by our customers.
We
have had periods of negative cash flows and operating losses that may recur in
the future.
We have
experienced negative cash flows and shown operating and net losses in the past.
For example, our cash flows from operations were negative during 2009 and we had
operating and net losses for the years ended December 31, 2009 and 2008. We
cannot provide any assurance that we will have positive cash flows or operating
profitability in the future, particularly to the extent the global economy is
slow to recover from the global economic downturn. If our revenue declines or if
operating expenses exceed our expectations, we may not be profitable and may not
generate positive operating cash flows.
We
have limited borrowing availability under our credit facilities, which may
negatively impact our liquidity.
Extensions
of credit under our primary credit facility, as amended (the “Credit
Agreement”), with Wells Fargo Foothill Inc. and our lending arrangements in
Europe are permitted based on a borrowing base, which is an agreed percentage of
eligible accounts receivable, less required reserves, letters of credit and
outstanding borrowings. If the amount or quality of our accounts receivable
deteriorates, then our ability to borrow under these credit facilities will be
directly affected. Our lenders can impose other conditions, such as payroll and
other reserves at any time without prior notice to us and these actions would
reduce the amounts available to us under the credit facilities. We cannot
provide assurance that we will be able to borrow under these credit facilities
if we need money to fund working capital or other needs.
If
sources of liquidity are not available or if we cannot generate sufficient cash
flows from operations, then we may be required to obtain additional sources of
funds through additional operating improvements, capital markets transactions,
asset sales or financing from third parties, or a combination thereof and, under
certain conditions, such transactions could substantially dilute the ownership
of existing stockholders. We cannot provide assurance that the additional
sources of funds will be available, or if available, would have reasonable
terms, particularly in light of current credit market conditions.
Our
credit facility restricts our operating flexibility.
Our
Credit Agreement contains various restrictions and covenants that restrict our
operating flexibility including:
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prohibitions
on payments of dividends;
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restrictions
on our ability to make additional borrowings, or to consolidate, merge or
otherwise fundamentally change our ownership;
and
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limitations
on capital expenditures, investments, dispositions of assets, guarantees
of indebtedness, permitted acquisitions and repurchases of
stock.
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These
restrictions and covenants could have important consequences for investors,
including the need to use a portion of our cash flow from operations for debt
service rather than for our operations, restrictions on our ability to incur
additional debt financing for future working capital or capital expenditures, a
lesser ability to take advantage of significant business opportunities, such as
acquisition opportunities, or to react to market conditions by selling
lesser-performing assets.
In
addition, a default or amendment or waiver to our Credit Agreement to avoid a
default may result in higher rates of interest and impact our ability to obtain
additional borrowings. For example, the amendment to our Credit Agreement that
we entered into on December 30, 2008 to eliminate a minimum quarterly EBITDA
covenant resulted in higher interest rates and a reduction in the amount that we
may borrow under the Credit Agreement. Finally, debt incurred under
our Credit Agreement bears interest at variable rates. Any increase in interest
expense could reduce the funds available for operations.
Our
operating results fluctuate from quarter to quarter and therefore quarterly
results cannot be used to predict future periods’ results.
Our
operating results fluctuate quarter to quarter primarily due to the vacation
periods during the first quarter in the Asia Pacific region and the third
quarter in the Americas and Europe regions. Demand for our services is typically
lower during traditional national vacation periods when clients are on
vacation.
We
face risks relating to our international operations.
We
conduct operations in more than twenty countries and face both translation and
transaction risks related to foreign currency exchange. For the year ended
December 31, 2009, approximately 85% of our gross margin was earned outside
of the United States. Our financial results could be materially affected by a
number of factors particular to international operations. These include, but are
not limited to, difficulties in staffing and managing international operations,
operational issues such as longer customer payment cycles and greater
difficulties in collecting accounts receivable, changes in tax laws or other
regulatory requirements, issues relating to uncertainties of laws and
enforcement relating to the regulation and protection of intellectual property,
and currency fluctuation. If we are forced to discontinue any of our
international operations, we could incur material costs to close down such
operations.
Regarding
the foreign currency risk inherent in international operations, the results of
our local operations are reported in the applicable foreign currencies and then
translated into U.S. dollars at the applicable foreign currency exchange rates
for inclusion in our financial statements. In addition, we generally pay
operating expenses in the corresponding local currency. Because of devaluations
and fluctuations in currency exchange rates or the imposition of limitations on
conversion of foreign currencies into U.S. dollars, we are subject to currency
translation exposure on the revenue and income of our operations in addition to
economic exposure. Our consolidated U.S. dollar cash balance could be lower
because a significant amount of cash is generated outside of the United States.
This risk could have a material adverse effect on our business, financial
condition and results of operations.
Our
investment strategy subjects us to risks.
From time
to time, we make investments, including acquisitions, as part of our growth
plans. We may not be able to find suitable investments, or the investments we
make may not perform as expected because they are dependent on a variety of
factors, including our ability to effectively integrate acquired personnel and
operations, our ability to sell new products and services, and our ability to
retain the clients of acquired firms or gain new clients. Furthermore, we may
need to borrow more money from lenders or sell equity or debt securities to the
public to finance future investments and the terms of these financings may be
adverse to us.
We
face risks associated with our dispositions of underperforming or non-core
assets.
We have
disposed of several non-core businesses since the third quarter of 2006. We have
retained liabilities of some of these businesses and may be responsible for
certain potential indemnification claims by the purchasers. We may not be able
to settle the liabilities at the recorded value in our financial statements and
indemnification claims may adversely affect our financial results. Further, we
may have risks associated with our ability to effectively restructure our
operations following these dispositions.
If
we are unable to effectively implement our cost reduction initiatives, including
outsourcing, our ability to compete could be adversely impacted and our regional
operations could be disrupted.
We have
undertaken a series of cost reduction initiatives. In 2009, we initiated a
number of structural cost reduction and productivity improvement initiatives in
our operations to reduce costs and improve profitability. Our future
profitability depends upon our continued success in achieving anticipated cost
reductions. The impact of these cost reduction actions on our revenue, operating
results and cash flows may be influenced by factors including our ability to
successfully complete these ongoing efforts and our ability to generate the
level of cost savings we expect or that are necessary to enable us to
effectively compete in the staffing industry.
On
January 30, 2009, we entered into an agreement with a company located in India
to outsource certain back-office processes performed in our Australia and New
Zealand regional business. The processes that were outsourced are invoicing,
accounts payable, accounts receivable and transactional accounting. The
efficient operation of that regional business is dependent on the stability of
the Indian political environment. Substantially all of the specially-trained
employees at the Indian company are Indian nationals. Because substantially all
of the named operations have been transferred, it may not be possible to replace
the Indian-based employees in another location, should operations at this Indian
company be disrupted. This could impact the operational efficiency of that
regional business.
We
rely on our information systems, and if we lose that technology or fail to
further develop our technology, our business could be harmed.
Our
success depends in large part upon our ability to store, retrieve, process, and
manage substantial amounts of information, including our client and candidate
databases. To achieve our strategic objectives and to remain competitive, we
must continue to develop and enhance our information systems. This may require
the acquisition of equipment and software and the development, either internally
or through independent consultants, of new proprietary software. Our inability
to design, develop, implement and utilize, in a cost-effective manner,
information systems that provide the capabilities necessary for us to compete
effectively, or any interruption or loss of our information processing
capabilities, for any reason, could harm our business, financial condition and
results of operations.
Our
markets are highly competitive.
The
markets for our services are highly competitive. Our markets are characterized
by pressures to reduce prices, provide high levels of service, incorporate new
capabilities and technologies and accelerate job completion schedules.
Furthermore, we face competition from a number of sources. These sources include
other executive search firms and professional search, staffing and consulting
firms. Several of our competitors have greater financial and marketing resources
than we do. Due to competition, we may experience reduced margins on our
products and services, and loss of market share and our customers. If we are not
able to compete effectively with current or future competitors as a result of
these and other factors, our business, financial condition and results of
operations could be materially adversely affected.
We have
no significant proprietary technology that would preclude or inhibit competitors
from entering the mid-market professional staffing contract and consulting
markets. We cannot provide assurance that existing or future competitors will
not develop or offer services and products that provide significant performance,
price, creative or other advantages over our services. In addition, we believe
that, with continuing development and increased availability of information
technology, the industries in which we compete may attract new competitors.
Specifically, the increased use of the Internet may attract technology-oriented
companies to the professional staffing industry. We cannot provide assurance
that we will be able to continue to compete effectively against existing or
future competitors. Any of these events could have a material adverse effect on
our business, financial condition and results of operations.
We
may be exposed to employment-related claims, legal liability and costs from both
clients and employers that could adversely affect our business, financial
condition or results of operations, and our insurance coverage may not cover all
of our potential liability.
We are in
the business of employing people and placing them in the workplaces of other
businesses. Risks relating to these activities include:
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claims
of misconduct or negligence on the part of our
employees;
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claims
by our employees of discrimination or harassment directed at them,
including claims
relating
to actions of our clients;
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claims
related to the employment of illegal aliens or unlicensed
personnel;
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claims
for payment of workers’ compensation claims and other similar
claims;
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claims
for violations of wage and hour
requirements;
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claims
for retroactive entitlement to employee
benefits;
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claims
of errors and omissions of our temporary employees, particularly in the
case of professionals;
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claims
by taxing authorities related to our independent contractors and the risk
that such contractors could be considered employees for tax
purposes;
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claims
related to our non-compliance with data protection laws, which require the
consent of a candidate to transfer resumes and other data;
and
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claims
by our clients relating to our employees’ misuse of client proprietary
information, misappropriation of funds, other misconduct, criminal
activity or similar claims.
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We are
exposed to potential claims with respect to the recruitment process. A client
could assert a claim for matters such as breach of a blocking arrangement or
recommending a candidate who subsequently proves to be unsuitable for the
position filled. Similarly, a client could assert a claim for deceptive trade
practices on the grounds that we failed to disclose certain referral information
about the candidate or misrepresented material information about the candidate.
Further, the current employer of a candidate whom we place could file a claim
against us alleging interference with an employment contract. In addition, a
candidate could assert an action against us for failure to maintain the
confidentiality of the candidate’s employment search or for alleged
discrimination or other violations of employment law by one of our
clients.
We may
incur fines and other losses or negative publicity with respect to these
problems. In addition, some or all of these claims may give rise to litigation,
which could be time-consuming to our management team, costly and could have a
negative effect on our business. In some cases, we have agreed to indemnify our
clients against some or all of these types of liabilities. We cannot assure you
that we will not experience these problems in the future, that our insurance
will cover all claims, or that our insurance coverage will continue to be
available at economically-feasible rates.
From time
to time, we may still incur liabilities associated with pre-spin off activities
with Monster. Under the terms of our Distribution Agreement with Monster, these
liabilities will be retained by us. If these liabilities are significant, the
retained liabilities could have a material adverse effect on our business,
financial condition and results of operations.
We
depend on our key management personnel.
Our
continued success will depend to a significant extent on our senior management,
including Jon F. Chait, our Chairman and Chief Executive Officer. The loss of
the services of Mr. Chait or one or more key employees could have a
material adverse effect on our business, financial condition and results of
operations. In addition, if one or more key employees join a competitor or form
a competing company, the resulting loss of existing or potential clients could
have a material adverse effect on our business, financial condition and results
of operations.
If
we fail to attract and retain qualified personnel, it may negatively impact our
business, financial condition and results of operations.
Our
success also depends upon our ability to attract and retain highly-skilled
professionals who possess the skills and experience necessary to meet the
staffing requirements of our clients. We must continually evaluate and upgrade
our base of available qualified personnel to keep pace with changing client
needs and emerging technologies. Furthermore, a substantial number of our
contractors during any given year may terminate their employment with us and
accept regular staff employment with our clients. Competition for qualified
professionals with proven skills remains intense, and demand for these
individuals is expected to remain strong for the foreseeable future. There can
be no assurance that qualified personnel will continue to be available to us in
sufficient numbers. If we are unable to attract the necessary qualified
personnel for our clients, it may have a negative impact on our business,
financial condition and results of operations.
Risks
Related to Our Common Stock
The trading price
of our common stock has been volatile, and investors in our common stock may
experience substantial losses.
The
trading price of our common stock has been volatile and may become volatile
again in the future. For example, during 2009, the market prices of our common
stock reported on the NASDAQ Global Market ranged from a high of $5.19 to a low
of $0.68. The trading price of our common stock could decline or fluctuate in
response to a variety of factors, including:
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our
failure to meet the performance estimates of securities
analysts;
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changes
in financial estimates of our net sales and operating results or buy/sell
recommendations by securities analysts;
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the
timing of announcements by us or our competitors concerning significant
developments, acquisitions or financial performance;
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fluctuation
in our quarterly operating results;
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substantial
sales of our common stock;
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general
stock market conditions; or
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other
economic or external factors.
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You may
be unable to sell your stock at or above your purchase price.
Provisions
in our organizational documents and Delaware law will make it more difficult for
someone to acquire control of us.
Our
certificate of incorporation and by-laws and the Delaware General Corporation
Law contain several provisions that make more difficult an acquisition of
control of us in a transaction not approved by our Board of Directors, including
transactions in which stockholders might otherwise receive a premium for their
shares over then current prices, and that may limit the ability of stockholders
to approve transactions that they may deem to be in their best interests. Our
certificate of incorporation and by-laws include provisions:
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dividing
our Board of Directors into three classes to be elected on a staggered
basis, one class each year;
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authorizing
our Board of Directors to issue shares of our preferred stock in one or
more series without further authorization of our
stockholders;
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requiring
that stockholders provide advance notice of any stockholder nomination of
directors or any proposal of new business to be considered at any meeting
of stockholders;
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permitting
removal of directors only for cause by a super-majority vote;
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providing
that vacancies on our Board of Directors will be filled by the remaining
directors then in office;
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requiring
that a super-majority vote be obtained to amend or repeal specified
provisions of our certificate of incorporation or by-laws;
and
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eliminating
the right of stockholders to call a special meeting of stockholders or
take action by written consent without a meeting of
stockholders.
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In
addition, Section 203 of the Delaware General Corporation Law generally provides
that a corporation may not engage in any business combination with any
interested stockholder during the three-year period following the time that the
stockholder becomes an interested stockholder, unless a majority of the
directors then in office approve either the business combination or the
transaction that results in the stockholder becoming an interested stockholder
or specified stockholder approval requirements are met. See “Description of
Capital Stock – Delaware Anti-Takeover Law and Charter and Bylaw Provisions” in
the accompanying prospectus.
Each currently outstanding share of
our common stock includes, and each newly issued share of our common stock will
include, a preferred share purchase right. The rights are attached to and trade
with the shares of common stock and generally are not exercisable. The rights
will become exercisable if a person or group acquires, or announces an intention
to acquire, 15% or more of our outstanding common stock. The rights have some
anti-takeover effects and generally will cause substantial dilution to a person
or group that attempts to acquire control of us without conditioning the offer
on either redemption of the rights or amendment of the rights to prevent this
dilution. The rights could have the effect of delaying, deferring or preventing
a change of control. See “Description of Capital Stock — Preferred Share
Purchase Rights” in the accompanying prospectus.
We
have not paid dividends, and you may not receive funds without selling your
shares.
We have
not paid any cash dividends on our common stock. We currently intend to retain
any earnings to fund our working capital needs and growth opportunities and to
repay indebtedness, and therefore, we do not anticipate paying any cash
dividends in the foreseeable future. Our credit agreement prohibits us from
declaring or paying any dividends on our common stock.
Our
management will have broad discretion in allocating the net proceeds of this
offering.
Our
management has significant flexibility in applying the net proceeds we expect to
receive in this offering. Because the net proceeds are not required to be
allocated to any specific investment or transaction, and therefore you cannot
determine at this time the value or propriety of our application of those
proceeds, you and other stockholders may not agree with our decisions. In
addition, our use of the proceeds from this offering may not yield a significant
return or any return at all for our stockholders. The failure by our management
to apply these funds effectively could have a material adverse effect on our
business, results of operations or financial condition. See “Use of Proceeds”
for a further description of how management intends to apply the proceeds from
this offering.
We
estimate that the net proceeds to us from our sale of 4,200,000 shares of
common stock will be approximately $16.7 million after deducting the
underwriting discount and estimated offering expenses payable by
us.
We intend
to use the net proceeds from this offering for general corporate and working
capital purposes.
The
amounts and timing of our use of proceeds will vary depending on a number of
factors, including the amount of cash generated or used by our operations, and
the rate of growth, if any, of our business. As a result, we will retain broad
discretion in the allocation of the net proceeds of this
offering.
Pending
the final application of the net proceeds of this offering, we intend to invest
the net proceeds of this offering in short-term, interest-bearing,
investment-grade securities.
The
following table sets forth our consolidated capitalization as of
December 31, 2009:
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on
an actual basis; and
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on
an as adjusted basis to give effect to our sale of 4,200,000 shares
of common stock at a public offering price of $4.35 per share, after
deducting the underwriting discount and estimated offering expenses
payable by us (assuming no exercise of the underwriter’s option to
purchase an additional 630,000 shares of our common
stock).
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The
information set forth in the following table should be read in conjunction with
and is qualified in its entirety by reference to the audited and unaudited
financial statements and notes thereto incorporated by reference in this
prospectus supplement and the accompanying prospectus.
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As of December 31,
2009
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(In
thousands)
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Actual
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As
Adjusted
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Cash
and cash equivalents
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$
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36,064
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$
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52,742
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Total
debt
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10,456
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10,456
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Stockholders’
equity:
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Preferred
stock, $0.001 par value, 10,000 shares authorized; none issued or
outstanding
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--
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--
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Common
stock, $0.001 par value, 100,000 shares authorized; issued 26,836 shares,
issued as adjusted 31,036 shares
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27
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31
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Additional
paid-in capital
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445,541
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462,215
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Accumulated
deficit
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(403,514
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)
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(403,514)
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Accumulated
other comprehensive income – translation adjustments
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34,509
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34,509
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Treasury
stock, 114 shares, at cost
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(303
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)
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(303)
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Total
stockholders’ equity
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76,260
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92,938
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Total
capitalization
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$
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86,716
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$
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103,394
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If the underwriter exercises its option
in full, then we will issue and sell an additional 630,000 shares of our common
stock in this offering, and we will use the estimated additional net proceeds of
approximately $2.6 million, after deducting the underwriting discount, for
general corporate and working capital purposes.
Price
Range of Common Stock and Dividend Policy
Our
common stock is traded on the NASDAQ Global Market under the symbol “HHGP.” The
following table sets forth, for the periods indicated, the range of high and low
closing sale prices for our common stock as reported by
NASDAQ.
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High
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Low
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2008:
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First
Quarter
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$
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9.78
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$
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5.82
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Second
Quarter
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13.00
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8.08
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Third
Quarter
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11.94
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6.39
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Fourth
Quarter
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7.25
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2.00
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2009:
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First
Quarter
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$
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3.67
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$
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0.68
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Second
Quarter
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2.63
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1.09
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Third
Quarter
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4.04
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1.70
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Fourth
Quarter
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5.19
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2.99
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2010:
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First
Quarter (Through March 30, 2010)
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5.38
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4.09
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On March
30, 2010, the last reported sale price on the NASDAQ Global Market for our
common stock was $4.81 per share. As of December 31, 2009, there were
approximately 1,022 holders of record of our common stock. We believe the number
of beneficial owners of our common stock on that date was substantially
greater.
We have
not paid any cash dividends on our common stock. We currently intend to retain
any earnings to fund our working capital needs and growth opportunities and to
repay indebtedness, and therefore, we do not anticipate paying any cash
dividends in the foreseeable future. Our credit agreement prohibits us from
declaring or paying any dividends on our common stock.
Under an
underwriting agreement dated March 30, 2010, we have agreed to sell to the
underwriter named below, the indicated number of shares of our common
stock:
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Number
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Underwriter
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of
Shares
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Robert
W. Baird & Co. Incorporated
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4,200,000
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Total
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4,200,000
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The
underwriting agreement provides that the underwriter is obligated to purchase
all of the shares of our common stock in this offering if any are purchased,
other than those shares covered by the over-allotment option we describe
below.
We have
granted the underwriter a 30-day option to purchase up to 630,000 additional
shares at the public offering price less the underwriting discount. This option
may be exercised only to cover over-allotments, if any, of our common
stock.
The
underwriter proposes to offer the shares of our common stock initially at the
public offering price on the cover page of this prospectus supplement. The
underwriter may allow a concession not to exceed $0.156 per share on sales
to other broker/dealers. After the offering, the representatives may change
the public offering price and concession and discount to broker/dealers. As used
in this section:
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The
underwriter is a securities broker/dealer that is a party to the
underwriting agreement and will have a contractual commitment to purchase
shares of our common stock from us.
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Broker/dealers
are firms registered under applicable securities laws to sell securities
to the public.
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The
syndicate consists of the
underwriter.
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The
following table summarizes the compensation that we will pay to the underwriter.
The compensation we will pay to the underwriter will consist solely of the
underwriting discount, which is equal to the public offering price per share of
common stock less the amount the underwriter pays to us per share of common
stock. The underwriter has not received and will not receive from us any other
item of compensation or expense in connection with this offering considered by
the Financial Industry Regulatory Authority to be underwriting compensation
under its rule of fair price. The underwriting discount was determined through
arms’ length negotiations between us and the underwriter.
|
|
|
|
|
Total
|
|
|
|
|
|
|
Without
|
|
|
With
|
|
|
|
Per
Share
|
|
|
over-allotment
|
|
|
over-allotment
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting
discount
|
|
$ |
0.26 |
|
|
$ |
1,092,000 |
|
|
$ |
1,255,800 |
|
We
estimate that the expenses payable by us in connection with this offering, other
than the underwriting discount, will be approximately $500,000. Expenses include
the fees and expenses of our accountants and attorneys, the fees of our
registrar and transfer agent, the cost of printing this prospectus supplement
and the accompanying prospectus and filing fees paid to the Securities and
Exchange Commission.
We and
certain or our executive officers have agreed not to offer or transfer any
additional shares of our common stock or securities convertible into or
exchangeable or exercisable for any shares of our common stock without the prior
written consent of Robert W. Baird & Co. Incorporated for a period of
90 days after the date of this prospectus supplement, except in certain
limited circumstances, including in our case for grants of employee or director
equity incentive awards under our equity incentive plans in effect on the date
hereof, issuances of securities as a result of the exercise of any options under
such plans and the issuance of securities to our 401(k)
plan.
We have
agreed to indemnify the underwriter against liabilities under the Securities Act
of 1933, as amended, or to contribute to payments which the underwriter may be
required to make in that respect.
The
shares of our common stock are traded on the NASDAQ Global Market under the
symbol “HHGP.”
The
underwriter may engage in over-allotment transactions, stabilizing transactions
and syndicate covering transactions in accordance with Regulation M under
the Securities Exchange Act of 1934, as amended.
|
•
|
Over-allotment
involves sales by the underwriter of shares in excess of the number of
shares the underwriter is obligated to purchase, which creates a syndicate
short position.
|
|
|
|
|
•
|
Stabilizing
transactions permit bids to purchase shares of our common stock so long as
the stabilizing bids do not exceed a specified
maximum.
|
Syndicate
covering transactions involve purchases of our common stock in the open market
after the distribution has been completed to cover syndicate short positions.
These stabilizing transactions and syndicate covering transactions may cause the
price of our common stock to be higher than the price that might otherwise exist
in the open market. These transactions may be effected on the NASDAQ Global
Market or otherwise and, if commenced, may be discontinued at any
time.
In
relation to each Member State, or Relevant Member State, of the European
Economic Area that has implemented the Prospectus Directive, the underwriter has
represented and agreed that, with effect from and including the date, or the
Relevant Implementation Date, on which the Prospectus Directive is implemented
in that Relevant Member State, it has not made and will not make an offer of the
common stock to the public in that Relevant Member State prior to the
publication of a prospectus in relation to such common stock that has been
approved by the competent authority in that Relevant Member State or, where
appropriate, approved in another Relevant Member State and notified to the
competent authority in that Relevant Member State, all in accordance with the
Prospectus Directive, except that it may, with effect from and including the
Relevant Implementation Date, make an offer of the common stock to the public in
that Relevant Member State at any time:
|
(a)
|
to
legal entities that are authorized or regulated to operate in the
financial markets or, if not so authorized or regulated, whose corporate
purpose is solely to invest in
securities;
|
|
(b)
|
to
any legal entity that has two or more of (1) an average of at least
250 employees during the last financial year; (2) a total balance
sheet of more than €43,000,000
and (3) an annual net turnover of more than €50,000,000,
as shown in its last annual or consolidated
accounts;
|
|
(c)
|
to
fewer than 100 natural or legal persons (other than qualified investors as
defined in the Prospectus Directive) subject to obtaining the prior
consent of the underwriter; or
|
|
(d)
|
in
any other circumstances which do not require the publication by us of a
prospectus pursuant to Article 3 of the Prospectus
Directive,
|
provided
that no such offer of the common stock referred to in (a) to (d) above
shall require us or the underwriter to publish a prospectus pursuant to Article
3 of the Prospective Directive.
For the
purposes of this provision, the expression an “offer of the common stock to the
public” in any Relevant Member State means the communication in any form and by
any means of sufficient information on the terms of the offer and the notes to
be offered so as to enable an investor to decide to purchase or subscribe the
common stock, as the same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State and the expression
“Prospectus Directive” means Directive 2003/71/EC and includes any relevant
implementing measure in each Relevant Member State.
Robert W.
Baird & Co. Incorporated has provided various investment banking
services to us in the past and may continue to do so from time to time in the
future.
Foley &
Lardner LLP will pass upon certain legal matters relating to this offering for
us. McDermott, Will & Emery LLP, Chicago, Illinois, will pass
upon certain legal matters relating to this offering for the underwriter.
The
consolidated financial statements as of and for the years ended December 31,
2009 and 2008 and the related financial statement schedule and management’s
assessment of the effectiveness of internal control over financial reporting,
which is included in management’s report on internal control over financial
reporting, incorporated in this prospectus supplement and the accompanying
prospectus by reference to our Annual Report on Form 10-K for the fiscal year
ended December 31, 2009, have been so incorporated by reference herein, in
reliance upon the reports of KPMG LLP, independent registered public accounting
firm, which are also incorporated by reference herein, and upon the authority of
said firm as experts in auditing and accounting.
The
consolidated financial statements for the year ended December 31, 2007 and the
related financial statement schedule incorporated in this prospectus supplement
and the accompanying prospectus by reference to our Annual Report on Form 10-K
for the fiscal year ended December 31, 2009, have been so incorporated in
reliance on the reports of BDO Seidman, LLP, an independent registered public
accounting firm, given on the authority of said firm as experts in auditing and
accounting.
Where You
Can Find More Information
We file
annual, quarterly and current reports, proxy statements and other information
with the SEC. We also filed a registration statement on Form S-3, including
exhibits, under the Securities Act of 1933, as amended, with respect to the
securities offered by this prospectus supplement. This prospectus supplement and
the accompanying prospectus are a part of the registration statement, but do not
contain all of the information included in the registration statement or the
exhibits. You may read and copy the registration statement and any other
documents that we file at the SEC’s public reference room at
100 F Street, N.E., Washington D.C. 20549. You can call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
room. You can also find our public filings with the SEC on the internet at a web
site maintained by the SEC located at http://www.sec.gov.
We are
“incorporating by reference” specified documents that we file with the SEC which
means:
|
•
|
incorporated
documents are considered part of the prospectus and this prospectus
supplement;
|
|
|
|
|
•
|
we
are disclosing important information to you by referring to those
documents; and
|
|
|
|
|
•
|
information
we file with the SEC will automatically update and supersede information
contained in the prospectus and this prospectus
supplement.
|
We
incorporate by reference the documents listed below and any future information
filed (rather than furnished) with the Commission under Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act between the date of this prospectus
supplement and the termination of the offering pursuant to this prospectus
supplement, provided, however, that we are not incorporating any information
furnished under Item 2.02 or Item 7.01 of any Current Report on
Form 8-K, including the related exhibits under Item
9.01.
|
|
|
Our SEC
Filings
|
|
Period or
Filing Date
|
|
|
|
Annual
Report on Form 10-K
|
|
Year
ended December 31, 2009
|
Current
Reports on Form 8-K
|
|
February
11, 2010
|
Description
of our common stock set forth in our Registration Statement on
Form 10
|
|
March
14, 2003
|
Description
of our preferred share purchase rights set forth in our Registration
Statement on Form 8-A
|
|
February
3, 2005
|
Documents
which we incorporate by reference are available to each person, including any
beneficial owner, to whom a prospectus supplement and accompanying prospectus is
delivered from us without charge, excluding all exhibits unless we have
specifically incorporated by reference an exhibit into this prospectus
supplement and the accompanying prospectus. You may obtain documents
incorporated by reference into this prospectus supplement by requesting them in
writing or by telephone from us at our principal executive offices as
follows:
Hudson
Highland Group, Inc
Attention:
Corporate Secretary
Prospectus
Hudson
Highland Group, Inc.
$30,000,000
Aggregate Amount
Debt
Securities
Common
Stock
Preferred
Stock
Warrants
Stock
Purchase Contracts
Stock
Purchase Units
We may
offer and sell from time to time up to an aggregate initial offering price of
$30,000,000 of our securities in one or more classes or series and in amounts,
at prices and on terms that we will determine at the times of the
offerings.
We will
provide specific terms of the securities, including the offering prices, in one
or more supplements to this prospectus or possibly other offering
material. The supplements or other offering material may also add,
update or change information contained in this prospectus. You should
read this prospectus, any supplement and any other offering material relating to
the specific issue of securities carefully before you invest.
Our
common stock is listed on the Nasdaq Global Market under the symbol
“HHGP.”
An
investment in our securities involves risk. Prior to making a
decision about purchasing any securities, you should carefully consider the
risks and uncertainties specifically set forth in the “Risk Factors” section in
our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and in any
applicable prospectus supplement or other offering material or in such other
document we refer you to in any prospectus supplement or other offering
material.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
The date
of this prospectus is December 18, 2009.
TABLE
OF CONTENTS
|
Page
|
|
|
About
This Prospectus
|
1
|
Special
Note Regarding Forward-Looking Statements
|
1
|
Hudson
Highland Group, Inc.
|
1
|
Use
of Proceeds
|
2
|
Ratio
of Earnings to Fixed Charges
|
3
|
Description
of Debt Securities
|
3
|
Description
of Capital Stock
|
11
|
Description
of Warrants
|
14
|
Description
of Stock Purchase Contracts and Stock Purchase Units
|
15
|
Global
Securities
|
16
|
Plan
of Distribution
|
17
|
Where
You Can Find More Information
|
19
|
Legal
Matters
|
20
|
Experts
|
20
|
ABOUT
THIS PROSPECTUS
Unless
otherwise indicated or unless the context requires otherwise, all references in
this prospectus to “Hudson”, “our company”, “we”, “our”, “us” or similar
references mean Hudson Highland Group, Inc.
This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission, or SEC, utilizing a “shelf” registration
process. Under this shelf registration process, we may, from time to
time, sell the securities or combinations of the securities described in this
prospectus in one or more offerings with a maximum aggregate offering price of
up to $30,000,000. This prospectus provides you with a general
description of the securities that we may offer. Each time we offer
securities, we will provide a prospectus supplement and/or other offering
material that will contain specific information about the terms of that
offering. The prospectus supplement and/or other offering material
may also add, update or change information contained in this
prospectus. You should read this prospectus, any prospectus
supplement and any other offering material together with additional information
described under the heading “Where You Can Find More Information.”
You
should rely only on the information contained or incorporated by reference in
this prospectus, in any prospectus supplement and in any other offering
material. We have not authorized any other person to provide you with
different information. If anyone provides you with different or
inconsistent information, you should not rely on it.
We are
not making offers to sell or solicitations to buy the securities in any
jurisdiction in which an offer or solicitation is not authorized or in which the
person making that offer or solicitation is not qualified to do so or to anyone
to whom it is unlawful to make an offer or solicitation.
You
should not assume that the information in this prospectus, any prospectus
supplement or any other offering material, or the information we previously
filed with the SEC that we incorporate by reference in this prospectus, any
prospectus supplement and/or other offering material, is accurate as of any date
other than its respective date. Our business, financial condition,
results of operations and prospects may have changed since those
dates.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus, any supplement to this prospectus and/or other offering material and
the information incorporated by reference in this prospectus, any prospectus
supplement and/or other offering material may contain forward-looking statements
within the meaning of Private Securities Litigation Reform Act of
1995. We intend these forward-looking statements to be covered by the
safe harbor provisions for forward-looking statements in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include
information concerning possible or assumed future risks and may be preceded by
or include forward-looking words such as “believes,” “expects,” “may,”
“anticipates,” “projects” or similar expressions. All statements
other than statements of historical facts included in this prospectus or any
supplement to this prospectus and/or other offering material, including those
regarding our financial position, business strategy and plans and objectives of
management for future operations, are forward-looking statements. We
caution that these statements and any other forward-looking statements in this
prospectus, any supplement to this prospectus and the information incorporated
by reference in this prospectus or any prospectus supplement and/or other
offering material only reflect our expectations and are not guarantees of
performance. These statements involve risks, uncertainties and
assumptions, including, among others, those we identify from time to time in
materials that we file with the SEC that are incorporated by reference into this
prospectus. Numerous important factors described in this prospectus,
or any supplement to this prospectus and/or other offering material and the
information incorporated by reference in this prospectus or any prospectus
supplement and/or other offering material could affect these statements and
could cause actual results to differ materially from our
expectations. We undertake no obligation to update or revise publicly
any forward-looking statements, whether as a result of new information, future
events or otherwise.
HUDSON
HIGHLAND GROUP, INC.
We are
one of the world’s largest specialized professional staffing and talent
management solutions providers. We provide professional staffing services on a
permanent and contract consulting basis and a range of talent management
services to businesses operating in many industries. We help our
clients in recruiting and developing employees for professional level functional
and managerial positions. We are organized into three reportable
segments: Hudson Americas, Hudson Europe and Hudson Asia
Pacific.
Our three
regional businesses provide professional contract consultants and permanent
recruitment services to a wide range of clients. With respect to
temporary and contract personnel, we focus on providing candidates with
specialized functional skills and competencies, such as accounting and finance,
legal and information technology. The length of a contract assignment can vary,
but engagements at the professional level tend to be longer than those in the
general clerical or industrial sectors. With respect to permanent
recruitment, we focus on mid-level professionals typically earning between
$50,000 and $150,000 annually and possessing the professional skills and/or
profile required by clients. We provide permanent recruitment
services on both a retained and contingent basis. In larger markets,
our sales strategy focuses on both clients operating in particular industry
sectors, such as financial services, or technology, and candidates possessing
particular professional skills, such as accounting and finance, information
technology, legal and human resources. We use both traditional and
interactive methods to select potential candidates for our clients, employing a
suite of products that assesses talent and helps predict whether a candidate
will be successful in a given role.
Our
regional businesses also provide organizational effectiveness and development
services through their talent management units. These services
encompass candidate assessment, competency modeling, leadership development,
performance management, and career transition. These services enable
us to offer clients a comprehensive set of management services, across the
entire employment life cycle from attracting, assessing and selecting best-fit
employees to engaging and developing those individuals to help build a
high-performance organization.
Our
principal offices are located at 560 Lexington Avenue, New York, New
York 10022, and our telephone number is (212) 351-7300.
USE
OF PROCEEDS
Unless
otherwise indicated in the applicable prospectus supplement or other offering
material, we expect to use the net proceeds from the sale of any securities
offered by this prospectus for some or all of the following
purposes:
|
·
|
repayment
or refinancing of a portion of our existing short-term and long-term
debt;
|
|
·
|
additional
working capital;
|
|
·
|
other
general corporate purposes.
|
Pending
such uses, we anticipate that we will invest the net proceeds in
interest-bearing instruments or other investment-grade securities or use the net
proceeds to reduce our short-term debt.
RATIO
OF EARNINGS TO FIXED CHARGES
The
following table sets forth our ratio of consolidated earnings to fixed charges
for the periods indicated:
|
|
Year Ended December 31,
|
|
Nine Months
Ended
September 30,
|
|
|
|
2004
|
|
2005
|
|
2006
|
|
|
2007
|
|
2008
|
|
2009
|
|
Ratio
of earnings to fixed charges
|
|
|
(a)
|
|
(a)
|
|
0.5 |
|
|
|
3.2 |
|
|
(a)
|
|
(a)
|
|
(a)
|
The
earnings for the nine months ended September 30, 2009 and the years ended
December 31, 2008, 2006, 2005, and 2004 were inadequate to cover total
fixed charges. The coverage deficiencies in earnings available for fixed
charges for a one-to-one ratio for the nine months ended September 30,
2009 and the years ended December 31, 2008, 2006, 2005, and 2004 were (in
thousands) $40,257, $66,415, $5,900, $12,486, and $34,448
respectively.
|
For
purposes of calculating the ratio of earnings to fixed charges, earnings
(losses) represent income (loss) from continuing operations before provision for
(benefit of) income taxes, cumulative effect of accounting changes and fixed
charges; and fixed charges represent interest expenses and estimated interest
portions of operating leases.
DESCRIPTION
OF DEBT SECURITIES
The
following description of the terms of the debt securities sets forth general
terms that may apply to the debt securities and provisions of the indentures
that will govern the debt securities, and is not complete. We will
describe the particular terms of any debt securities in the prospectus
supplement and/or other offering material relating to those debt
securities.
The debt
securities will be either our senior debt securities or our subordinated debt
securities. The senior debt securities will be issued under an
indenture dated as of November 25, 2003, between us and The Bank of New
York Mellon (formerly known as The Bank of New York), as trustee. We
refer to this indenture as the “senior indenture.” The subordinated
debt securities will be issued under an indenture dated as of November 25,
2003 between us and The Bank of New York Mellon (formerly known as The Bank of
New York), as trustee. We refer to this indenture as the
“subordinated indenture” and the senior indenture and the subordinated indenture
together as the “indentures.”
The
following is a summary of some provisions of the indentures. The
following summary does not purport to be complete, and is subject to, and
qualified in its entirety by reference to, all of the provisions of each
indenture. Copies of the entire indentures are exhibits to the
registration statement of which this prospectus is a part. See “Where
You Can Find More Information.” We encourage you to read our
indentures because the applicable indenture, and not this description, sets
forth your rights as a holder of our debt securities. We will
describe the particular terms of any debt securities in the prospectus
supplement relating to those debt securities. Parenthetical section
references under this heading are references to sections to each of the
indentures unless we indicate otherwise.
General
Terms
Neither
indenture limits the amount of debt securities that we may issue. (Section
301). Each indenture provides that debt securities may be issued up
to the principal amount authorized by us from time to time. The
senior debt securities will be unsecured and will have the same rank as all of
our other unsecured and unsubordinated debt. The subordinated debt
securities will be unsecured and will be subordinated to all senior indebtedness
as set forth below. None of our subsidiaries will have any
obligations with respect to the debt securities. Therefore, our
rights and the rights of our creditors, including holders of senior debt
securities and subordinated debt securities, to participate in the assets of any
subsidiary will be subject to the prior claims of the creditors of our
subsidiaries.
We may
issue the debt securities in one or more separate series of senior debt
securities and/or subordinated debt securities. (Section 301). The
prospectus supplement relating to the particular series of debt securities being
offered will specify the particular amounts, prices and terms of those debt
securities. These terms may include:
|
·
|
the
title of the debt securities and the series in which the debt securities
will be included;
|
|
·
|
the
authorized denominations and aggregate principal amount of the debt
securities;
|
|
·
|
the
date or dates on which the principal and premium, if any, are
payable;
|
|
·
|
the
rate or rates per annum at which the debt securities will bear interest,
if there is any interest, or the method or methods of calculating interest
and the date from which interest will
accrue;
|
|
·
|
the
place or places where the principal of and any premium and interest on the
debt securities will be payable;
|
|
·
|
the
dates on which the interest will be payable and the corresponding record
dates;
|
|
·
|
the
period or periods within which, the price or prices at which, and the
terms and conditions on which, the debt securities may be redeemed, in
whole or in part, at our option;
|
|
·
|
any
obligation to redeem, repay or purchase debt securities pursuant to any
sinking fund or analogous provisions or at the option of a
holder;
|
|
·
|
the
portion of the principal amount of the debt securities payable upon
declaration of the acceleration of the maturity of the debt
securities;
|
|
·
|
the
person to whom any interest on any debt security will be payable if other
than the person in whose name the debt security is registered on the
applicable record date;
|
|
·
|
any
events of default, covenants or warranties applicable to the debt
securities;
|
|
·
|
if
applicable, provisions related to the issuance of debt securities in
book-entry form;
|
|
·
|
the
currency, currencies or composite currency of denomination of the debt
securities;
|
|
·
|
the
currency, currencies or composite currencies in which payments on the debt
securities will be payable and whether the holder may elect payment to be
made in a different currency;
|
|
·
|
whether
and under what conditions we will pay additional amounts to holders of the
debt securities;
|
|
·
|
the
terms and conditions of any conversion or exchange provisions in respect
of the debt securities;
|
|
·
|
the
terms pursuant to which our obligation under the indenture may be
terminated through the deposit of money or government
obligations;
|
|
·
|
whether
the debt securities will be subordinated in right of payment to senior
indebtedness and the terms of any such subordination;
and
|
|
·
|
any
other specific terms of the debt securities not inconsistent with the
applicable indenture. (Section
301).
|
Unless
otherwise specified in the applicable prospectus supplement, the debt securities
will not be listed on any securities exchange.
Unless
the applicable prospectus supplement specifies otherwise, we will issue the debt
securities in fully registered form without coupons. If we issue debt
securities of any series in bearer form, the applicable prospectus supplement
will describe the special restrictions and considerations, including special
offering restrictions and special federal income tax considerations, applicable
to those debt securities and to payment on and transfer and exchange of those
debt securities.
U.S.
Federal Income Tax Considerations
We may
issue the debt securities as original issue discount securities, bearing no
interest or bearing interest at a rate, which, at the time of issuance, is below
market rates, to be sold at a substantial discount below their principal
amount. We will describe some special U.S. federal income tax
and other considerations applicable to any debt securities that are issued as
original issue discount securities in the applicable prospectus
supplement. We encourage you to consult with your own competent tax
and financial advisors on these important matters.
Payment, Registration, Transfer and
Exchange
Subject
to any applicable laws or regulations, we will make payments on the debt
securities at a designated office or agency, unless the applicable prospectus
supplement otherwise sets forth. At our option, however, we may also
make interest payments on the debt securities in registered form:
|
·
|
by
checks mailed to the persons entitled to interest payments at their
registered addresses; or
|
|
·
|
by
wire transfer to an account maintained by the person entitled to interest
payments as specified in the security
register.
|
Unless
the applicable prospectus supplement otherwise indicates, we will pay any
installment of interest on debt securities in registered form to the person in
whose name the debt security is registered at the close of business on the
regular record date for that installment of interest. (Section
307). If a holder wishes to receive a payment by wire transfer, the
holder should provide the paying agent with written wire transfer instructions
at least 15 days prior to the payment date.
Unless
the applicable prospectus supplement otherwise sets forth, debt securities
issued in registered form will be transferable or exchangeable at the agency we
may designate from time to time. Debt securities may be transferred
or exchanged without service charge, other than any tax or other governmental
charge imposed in connection with the transfer or exchange. (Section
305).
Consolidation,
Merger or Sale by the Company
Each
indenture generally permits a consolidation or merger between us and another
U.S. corporation. It also permits the sale or transfer by us of all
or substantially all of our property and assets and the purchase by us of all or
substantially all of the property and assets of another
corporation. These transactions are permitted if:
|
·
|
the
resulting or acquiring corporation, if other than us, assumes all of our
responsibilities and liabilities under the indenture, including the
payment of all amounts due on the debt securities and performance of the
covenants in the indenture; and
|
|
·
|
immediately
after the transaction, no event of default exists. (Section
801).
|
Even
though each indenture contains the provisions described above, we are not
required by either indenture to comply with those provisions if we sell all of
our property and assets to another U.S. corporation if, immediately after the
sale, that corporation is one of our wholly-owned subsidiaries. (Section
801).
If we
consolidate or merge with or into any other corporation or sell all or
substantially all of our assets according to the terms and conditions of each
indenture, the resulting or acquiring corporation will be substituted for us in
the indentures with the same effect as if it had been an original party to the
indentures. As a result, the successor corporation may exercise our
rights and powers under each indenture, in our name or in its own name and we
will be released from all our liabilities and obligations under each indenture
and under the debt securities. (Section 801).
Events
of Default, Notice and Certain Rights on Default
Unless
otherwise stated in the applicable prospectus supplement, an “event of default,”
when used with respect to any series of debt securities, means any of the
following:
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failure
to pay interest on any debt security of that series for 30 days after
the payment is due;
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failure
to pay the principal of or any premium on any debt security of that series
when due;
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failure
to deposit any sinking fund payment on debt securities of that series when
due;
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failure
to perform any other covenant in the applicable indenture that applies to
debt securities of that series for 90 days after we have received
written notice of the failure to perform in the manner specified in the
indenture;
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default
under any debt, including other series of debt securities, or under any
mortgage, lien or other similar encumbrance, indenture or instrument,
including the indentures, which secures any debt, and which results in
acceleration of the maturity of an outstanding principal amount of debt
greater than $50 million, unless the acceleration is rescinded, or
the debt is discharged, within 10 days after we have received written
notice of the default in the manner specified in the
indenture;
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certain
events in bankruptcy, insolvency or reorganization;
or
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any
other event of default that may be specified for the debt securities of
that series when that series is created. (Section
502).
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If an
event of default for any series of debt securities occurs and continues, the
trustee or the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of the series may declare the entire principal of
all the debt securities of that series to be due and payable
immediately. If a declaration occurs, the holders of a majority of
the aggregate principal amount of the outstanding debt securities of that series
can, subject to certain conditions, rescind the declaration. (Section
502).
The
prospectus supplement relating to each series of debt securities which are
original issue discount securities will describe the particular provisions that
relate to the acceleration of maturity of a portion of the principal amount of
that series when an event of default occurs and continues.
An event
of default for a particular series of debt securities does not necessarily
constitute an event of default for any other series of debt securities issued
under either indenture.
Each
indenture requires us to file an officers’ certificate with the trustee each
year that states that certain defaults do not exist under the terms of the
indenture. The trustee will transmit by mail to the holders of debt
securities of a series notice of any default.
Other
than its duties in the case of a default, a trustee is not obligated to exercise
any of its rights or powers under an indenture at the request, order or
direction of any holders, unless the holders offer the trustee indemnification
satisfactory to the trustee. (Section 603). If indemnification
satisfactory to the trustee is provided, then, subject to certain other rights
of the trustee, the holders of a majority in principal amount of the outstanding
debt securities of any series may, with respect to the debt securities of that
series, direct the time, method and place of:
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conducting
any proceeding for any remedy available to the trustee;
or
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exercising
any trust or power conferred upon the trustee. (Section
512).
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The
holder of a debt security of any series will have the right to begin any
proceeding with respect to the applicable indenture or for any remedy
only if:
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the
holder has previously given the trustee written notice of a continuing
event of default with respect to that
series;
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the
holders of at least 25% in aggregate principal amount of the outstanding
debt securities of that series have made a written request of, and offered
reasonable indemnification to, the trustee to begin the
proceeding;
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the
trustee has not started the proceeding within 60 days after receiving
the request; and
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the
trustee has not received directions inconsistent with the request from the
holders of a majority in aggregate principal amount of the outstanding
debt securities of that series during those 60 days. (Section
507).
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The
holders of not less than a majority in aggregate principal amount of any series
of debt securities, by notice to the trustee for that series, may waive, on
behalf of the holders of all debt securities of that series, any past default or
event of default with respect to that series and its
consequences. (Section 513). A default or event of default
in the payment of the principal of, or premium or interest on, any debt security
and certain other defaults may not, however, be waived. (Sections 508
and 513).
Modification
of the Indentures
We, as
well as the trustee for a series of debt securities, may enter into one or more
supplemental indentures, without the consent of the holders of any of the debt
securities, in order to:
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evidence
the succession of another corporation to us and the assumption of our
covenants by a successor;
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add
to our covenants or surrender any of our rights or
powers;
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add
additional events of default for any
series;
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add,
change or eliminate any provision affecting debt securities that are not
yet issued;
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secure
the debt securities;
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establish
the form or terms of debt securities not yet
issued;
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evidence
and provide for successor trustees;
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add,
change or eliminate any provision affecting registration as to principal
of debt securities;
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permit
the exchange of debt securities;
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change
or eliminate restrictions on payment in respect of debt
securities;
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change
or eliminate provisions or add any other provisions that are required or
desirable in accordance with any amendments to the Trust Indenture Act, on
the condition that this action does not adversely affect the interests of
any holder of debt securities of any series issued under the indenture in
any material respect; or
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cure
any ambiguity or correct any mistake. (Section
901).
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In
addition, with the consent of the holders of not less than a majority in
aggregate principal amount of the outstanding debt securities of all series
affected by the supplemental indenture, we and the trustee may execute
supplemental indentures adding any provisions to or changing or eliminating any
of the provisions of the applicable indenture or any supplemental indenture or
modifying the rights of the holders of debt securities of that
series. No such supplemental indenture may, however, without the
consent of the holder of each debt security that is affected:
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change
the time for payment of principal or interest on any debt
security;
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reduce
the principal of, or any installment of principal of, or interest on, any
debt security;
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reduce
the amount of premium, if any, payable upon the redemption of any debt
security;
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reduce
the amount of principal payable upon acceleration of the maturity of an
original issue discount debt
security;
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impair
the right to institute suit for the enforcement of any payment on or for
any debt security;
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reduce
the percentage in principal amount of the outstanding debt securities of
any series the consent of whose holders is required for modification or
amendment of the indenture or for waiver of compliance with certain
provisions of the indenture or for waiver of certain
defaults;
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modify
the provisions relating to waiver of some defaults or any of the foregoing
provisions;
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change
the currency of payment;
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adversely
affect the right to repayment of debt securities of any series at the
option of the holders of those debt securities;
or
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change
the place of payment. (Section
902).
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Any
supplemental indenture will be filed with the SEC as an exhibit to:
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a
post-effective amendment to the registration statement of which this
prospectus is a part;
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an
annual report on Form 10-K;
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a
quarterly report on Form 10-Q;
or
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a
current report on Form 8-K.
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Defeasance
and Covenant Defeasance
When we
use the term defeasance, we mean discharge from some or all of our obligations
under an indenture. If we deposit with the trustee sufficient cash or government
obligations to pay the principal, interest, any premium and any mandatory
sinking fund or analogous payments due to the stated maturity or a redemption
date of the debt securities of a particular series, then at our
option:
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we
will be discharged from our obligations for the debt securities of that
series, the holders of the debt securities of the affected series will no
longer be entitled to the benefits of the indenture, except for
registration of transfer and exchange of debt securities and replacement
of lost, stolen or mutilated debt securities, and those holders may look
only to the deposited funds or obligations for payment, which is referred
to as “defeasance”; or
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we
will no longer be under any obligation to comply with certain covenants
under the applicable indenture as it relates to that series, and some
events of default will no longer apply to us, which is referred to as
“covenant defeasance.” (Sections 403 and
1501).
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Unless
the applicable prospectus supplement specifies otherwise and except as described
below, the conditions to both defeasance and covenant defeasance are as
follows:
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it
must not result in a breach or violation of, or constitute a default or
event of default under, the applicable indenture, or result in a breach or
violation of, or constitute a default under, any other of our material
agreements or instruments;
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certain
bankruptcy-related defaults or events of default with respect to us must
not have occurred and be occurring during the period commencing on the
date of the deposit of the trust funds to defease the debt securities and
ending on the 91st day after that
date;
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we
must deliver to the trustee an officer’s certificate and an opinion of
counsel addressing compliance with the conditions of the defeasance or
covenant defeasance; and
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we
must comply with any additional conditions to the defeasance or covenant
defeasance that the applicable indenture may impose on
us. (Sections 403 and
1501).
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In the
event that government obligations deposited with the trustee for the defeasance
of such debt securities decrease in value or default subsequent to their being
deposited, we will have no further obligation, and the holders of the debt
securities will have no additional recourse against us, for any decrease in
value or default. If indicated in the prospectus supplement, in
addition to obligations of the United States or an agency or instrumentality of
the United States, government obligations may include obligations of the
government or an agency or instrumentality of the government issuing the
currency in which debt securities of such series are payable.
We may
exercise our defeasance option for the debt securities even if we have already
exercised our covenant defeasance option. If we exercise our
defeasance option, payment of the debt securities may not be accelerated because
of default or an event of default. If we exercise our covenant defeasance
option, payment of the debt securities may not be accelerated because of default
or an event of default with respect to the covenants to which the covenant
defeasance is applicable. If, however, acceleration occurs, the
realizable value at the acceleration date of the money and government
obligations in the defeasance trust could be less than the principal and
interest then due on the debt securities, because the required deposit in the
defeasance trust is based on scheduled cash flow rather than market value, which
will vary depending on interest rates and other factors.
Conversion
and Exchange Rights
The debt
securities of any series may be convertible into or exchangeable for other
securities of our company or another issuer or property or cash on the terms and
subject to the conditions set forth in the applicable prospectus
supplement. (Section 301).
Governing
Law
The
indentures and the debt securities will be governed by, and construed under, the
laws of the State of New York without regard to conflicts of laws principles
thereof.
Regarding
the Trustee
We may
from time to time maintain lines of credit, and have other customary banking
relationships, with the trustee under the senior indenture or the trustee under
the subordinated indenture.
The
indentures and provisions of the Trust Indenture Act of 1939, which we refer to
in this prospectus as the Trust Indenture Act, that are incorporated by
reference therein, contain limitations on the rights of the trustee, should it
become one of our creditors, to obtain payment of claims in certain cases or to
realize on certain property received by it in respect of any such claim as
security or otherwise. The trustee is permitted to engage in other
transactions with us or any of our affiliates; provided, however, that if it
acquires any conflicting interest (as defined under the Trust Indenture Act), it
must eliminate such conflict or resign.
Additional
Terms Applicable to Subordinated Debt Securities
The
subordinated debt securities will be unsecured. The subordinated debt
securities will be subordinate to the prior payment in full in cash of all
senior indebtedness.
The term
“senior indebtedness” is defined as:
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any
of our indebtedness, whether outstanding on the issue date of the
subordinated debt securities of a series or incurred
later;
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accrued
and unpaid interest, including interest accruing on or after the filing of
any petition in bankruptcy or for reorganization relating to us to the
extent post-filing interest is allowed in such proceeding, in respect
of:
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our
indebtedness for money borrowed;
and
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indebtedness
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which we are responsible or
liable;
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contingent
reimbursement obligations with respect to letters of credit issued or
supported by our working capital lenders for our account;
and
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obligations,
liabilities, fees and expenses that we owe to our working capital
lenders;
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unless
the instrument creating or evidencing these obligations provides that these
obligations are not senior or prior in right of payment to the subordinated debt
securities. Notwithstanding the foregoing, “senior indebtedness” will
not include:
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any
of our obligations to our
subsidiaries;
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any
liability for Federal, state, local or other taxes that we
owe;
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any
accounts payable or other liability to trade creditors arising in the
ordinary course of business, including guarantees of these obligations or
instruments evidencing such
liabilities;
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any
of our indebtedness, and any accrued and unpaid interest in respect of our
indebtedness, that is subordinate or junior in any respect to any other of
our indebtedness or other obligations;
or
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the
subordinated debt securities. (Section 101 of the subordinated
indenture).
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There is
no limitation on our ability to issue additional senior
indebtedness. The senior debt securities constitute senior
indebtedness under the subordinated indenture.
Under the
subordinated indenture, no payment may be made on the subordinated debt
securities and no purchase, redemption or retirement of any subordinated debt
securities may be made in the event:
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any
senior indebtedness is not paid in full in cash when due;
or
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the
maturity of any senior indebtedness is accelerated as a result of a
default, unless the default has been cured or waived and the acceleration
has been rescinded or that senior indebtedness has been paid in full in
cash.
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We may,
however, pay the subordinated debt securities without regard to the above
restriction if the representatives of the holders of the applicable senior
indebtedness approve the payment in writing to us and the
trustee. (Section 1603 of the subordinated indenture).
The
representatives of the holders of senior indebtedness may notify us and the
trustee in writing (a “payment blockage notice”) of a default which can result
in the acceleration of that senior indebtedness’ maturity without further
notice, except such notice as may be required to effect such acceleration, or
the expiration of any grace periods. In this event, we may not pay the
subordinated debt securities for 179 days after receipt of that
notice. The payment blockage period will end earlier if such payment
blockage period is terminated:
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by
written notice to the trustee and us from the person or persons who gave
such payment blockage notice;
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because
the default giving rise to such payment blockage notice is cured, waived
or otherwise no longer continuing;
or
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because
such senior debt has been discharged or repaid in full in
cash.
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Notwithstanding
the foregoing, if the holders of senior indebtedness or their representatives
have not accelerated the maturity of the senior indebtedness at the end of the
179-day period, we may resume payments on the subordinated debt
securities. Not more than one payment blockage notice may be given in
any consecutive 360-day period, irrespective of the number of defaults with
respect to senior indebtedness during that period. No default
existing on the beginning date of any payment blockage period initiated by a
person or persons may be the basis of a subsequent payment blockage period with
respect to the senior indebtedness held by that person unless that default has
been cured or waived for a period of not fewer than 90 consecutive
days.
If we pay
or distribute our assets to creditors upon a total or partial liquidation,
dissolution or reorganization of or similar proceeding relating to us or our
property, then:
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the
holders of senior indebtedness will be entitled to receive payment in full
in cash of the senior indebtedness before the holders of subordinated debt
securities are entitled to receive any payment;
and
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until
the senior indebtedness is paid in full in cash, any payment or
distribution to which holders of subordinated debt securities would be
entitled but for the subordination provisions of the subordinated
indenture will be made to holders of the senior indebtedness, except that
holders of subordinated debt securities may receive certain capital stock
and subordinated debt. (Section 1602 of the subordinated
indenture).
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If a
distribution is made to holders of subordinated debt securities that, due to the
subordination provisions, should not have been made to them, those holders of
subordinated debt securities are required to hold it in trust for the holders of
senior indebtedness, and pay it over to them as their interests may
appear. (Section 1605 of the subordinated indenture).
After all
senior indebtedness is paid in full and until the subordinated debt securities
are paid in full, holders of subordinated debt securities will be subrogated to
the rights of holders of senior indebtedness to receive distributions applicable
to such senior indebtedness. (Section 1606 of the subordinated
indenture).
As a
result of the subordination provisions contained in the subordinated indenture,
in the event of insolvency, our creditors who are holders of senior indebtedness
may recover more, ratably, than the holders of subordinated debt
securities. In addition, our creditors who are not holders of senior
indebtedness may recover less, ratably, than holders of senior indebtedness and
may recover more, ratably, than the holders of subordinated
indebtedness. Furthermore, claims of our subsidiaries’ creditors
generally will have priority with respect to the assets and earnings of the
subsidiaries over the claims of our creditors, including holders of the
subordinated debt securities, even though those obligations may not constitute
senior indebtedness. The subordinated debt securities, therefore,
will be effectively subordinated to creditors, including trade creditors, of our
subsidiaries. It is important to keep this in mind if you decide to hold our
subordinated debt securities.
The terms
of the subordination provisions described above will not apply to payments from
money or the proceeds of government securities held in trust by the trustee for
any series of subordinated debt securities for the payment of principal and
interest on such subordinated debt securities pursuant to the defeasance
procedures described under “Defeasance and Covenant Defeasance.”
DESCRIPTION
OF CAPITAL STOCK
The
following description of our capital stock summarizes general terms and
provisions that apply to our capital stock. Since this is only a
summary, it does not contain all of the information that may be important to
you. The summary is subject to and qualified in its entirety by
reference to our certificate of incorporation, by-laws and rights agreement,
which are filed as exhibits to the registration statement of which this
prospectus is a part. See “Where You Can Find More
Information.”
General
Our
certificate of incorporation provides us with the authority to issue 100,000,000
shares of common stock, $.001 par value per share, and 10,000,000 shares of
preferred stock, $.001 par value per share. We will disclose in an
applicable prospectus supplement the number of shares of our common stock then
outstanding. As of the date of this prospectus, no shares of our
preferred stock were outstanding.
Common
Stock
Each
share of our common stock is entitled to dividends if, as and when dividends are
declared by our board of directors and paid. Under Delaware corporate law, we
may declare and pay dividends only out of our surplus, or in case there is no
such surplus, out of our net profits for the fiscal year in which the dividend
is declared and/or the preceding year. We will pay any dividend so declared and
payable in cash, capital stock or other property equally, share for share, on
our common stock. We may not declare dividends, however, if our capital has been
diminished by depreciation, losses or otherwise to an amount less than the
aggregate amount of capital represented by any issued and outstanding stock
having a preference on distribution. In addition, the terms of our
credit facility prohibit us from paying any dividends.
Each
share of our common stock is entitled to one vote on all matters. No
holder of our common stock has preemptive or other rights to subscribe for
additional shares of our common stock. In the event of our
liquidation, dissolution or winding up, holders of the shares of our common
stock are entitled to share equally, share for share, in the assets available
for distribution, subject to any liquidation preference on any outstanding
shares of our preferred stock.
Preferred
Stock
We may
issue our preferred stock from time to time in one or more series as determined
by our board of directors. Our board of directors is authorized to issue the
shares of our preferred stock in one or more series and to fix the rights,
preferences, privileges and restrictions thereof, including dividend rights,
dividend rates, conversion rights, voting rights, terms of redemption,
redemption prices, liquidation preferences and the number of shares constituting
any series or the designation of such series, without further vote or action by
the stockholders.
Our board
of directors has designated 1,000,000 shares of our preferred stock as Series A
Junior Participating Preferred Stock in connection with the adoption of our
stockholder rights plan, as described below. Each holder of Series A preferred
shares will be entitled to a minimum preferential quarterly dividend payment of
$1.00 per share, but will be entitled to an aggregate dividend of 100 times the
dividend declared per share of our common stock. In the event of liquidation,
the holders of the Series A preferred shares will be entitled to a minimum
preferential liquidation payment of $100 per share, but will be entitled to an
aggregate payment of 100 times the payment made per share of our common stock.
Each Series A preferred share will have 100 votes, voting together with shares
of our common stock. In the event of any merger, consolidation or other
transaction in which shares of our common stock are exchanged, each Series A
preferred share will be entitled to receive 100 times the amount received per
share of our common stock. As of the date of this prospectus, no shares of our
Series A Junior Participating Preferred Stock were outstanding.
If we
offer preferred stock, we will file the terms of the preferred stock with the
SEC and the prospectus supplement and/or other offering material relating to
that offering will include a description of the specific terms of the offering,
including the following specific terms:
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the
series, the number of shares offered and the liquidation value of the
preferred stock;
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the
price at which the preferred stock will be
issued;
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the
dividend rate, the dates on which the dividends will be payable and other
terms relating to the payment of dividends on the preferred
stock;
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the
liquidation preference of the preferred
stock;
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the
voting rights of the preferred
stock;
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whether
the preferred stock is redeemable or subject to a sinking fund, and the
terms of any such redemption or sinking
fund;
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whether
the preferred stock is convertible or exchangeable for any other
securities, and the terms of any such conversion;
and
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any
additional rights, preferences, qualifications, limitations and
restrictions of the preferred
stock.
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It is not
possible to state the actual effect of the issuance of any shares of preferred
stock upon the rights of holders of our common stock until the board of
directors determines the specific rights of the holders of the preferred stock.
However, these effects might include:
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restricting
dividends on the common stock;
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diluting
the voting power of the common
stock;
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impairing
the liquidation rights of the common stock;
and
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delaying
or preventing a change in control of our
company.
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Preferred
Share Purchase Rights
We have
entered into a rights agreement pursuant to which each share of our common stock
outstanding on February 28, 2005 received a dividend of a right to purchase from
us one one-hundredth of a share of our Series A Junior Participating Preferred
Stock. Each share of our common stock subsequently issued by us prior
to the expiration of the rights agreement will likewise have attached one
right. Unless the context requires otherwise, all references in this
prospectus to our common stock include the accompanying rights.
Currently,
the rights are not exercisable and trade with our common stock. If
the rights become exercisable, then each full right, unless held by a person or
group that beneficially owns more than 15% of our outstanding common stock, will
initially entitle the holder to purchase one one-hundredth of a Series A
preferred share at a purchase price of $60 per one one-hundredth of a Series A
preferred share, subject to adjustment. The rights will become
exercisable only if a person or group has acquired, or announced an intention to
acquire, 15% or more of our outstanding common stock. Under some
circumstances, including the existence of a 15% acquiring party, each holder of
a right, other than the acquiring party, will be entitled to purchase at the
right’s then-current exercise price, shares of our common stock having a market
value of two times the exercise price. If another corporation
acquires our company after a party acquires 15% or more of our common stock,
then each holder of a right will be entitled to receive the acquiring
corporation’s common shares having a market value of two times the exercise
price.
The
rights may be redeemed at a price of $.001 until a party acquires 15% or more of
our common stock and, after that time, may be exchanged until a party acquires
50% or more of our common stock at a ratio of one share of common stock, or one
one-hundredth of a Series A preferred share, per right, subject to
adjustment. Series A preferred shares purchased upon the exercise of
rights will not be redeemable. The rights expire on February 23,
2015, subject to extension. Under the rights agreement, our board of
directors may reduce the thresholds applicable to the rights from 15% to not
less than 10%. The rights do not have voting or dividend rights and,
until they become exercisable, have no dilutive effect on our
earnings.
The
rights have certain anti-takeover effects, in that they could have the effect of
delaying, deferring or preventing a change of control of our company by causing
substantial dilution to a person or group that attempts to acquire a significant
interest in our company on terms not approved by our board of
directors.
Delaware
Anti-Takeover Law and Charter and By-law Provisions
We are
subject to the provisions of Section 203 of the Delaware General Corporation
Law. In general, the statute prohibits a publicly held Delaware
corporation from engaging in a “business combination” with an “interested
stockholder” for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless the business
combination or the transaction by which the person became an interested
stockholder is approved by the corporation’s board of directors and/or
stockholders in a prescribed manner or the person owns at least 85% of the
corporation’s outstanding voting stock after giving effect to the transaction in
which the person became an interested stockholder. The term “business
combination” includes mergers, asset sales and other transactions resulting in a
financial benefit to the interested stockholder. Subject to certain
exceptions, an “interested stockholder” is a person who, together with
affiliates and associates, owns, or within three years did own, 15% or more of
the corporation’s voting stock. A Delaware corporation may “opt out”
from the application of Section 203 through a provision in its certificate of
incorporation or by-laws. We have not “opted out” from the
application of Section 203.
Our
certificate of incorporation and by-laws divide our board of directors into
three equal classes with staggered terms. In addition, our
certificate of incorporation and by-laws provide that directors may only be
removed by stockholders for “cause” and only upon the affirmative vote of the
holders of at least 70% of the voting power of our outstanding capital
stock.
Further,
our by-laws provide that stockholders may nominate candidates for election to
the board of directors or bring other business before a meeting of stockholders
only by complying with advance notice provisions described in the by-laws and
that special meetings of stockholders may not be called by
stockholders. In addition, our certificate of incorporation and
by-laws provide that any action to be taken by our stockholders must be effected
at a duly called annual or special meeting of stockholders.
The
foregoing provisions of Section 203 of the Delaware General Corporation Law and
the provisions of our certificate of incorporation and by-laws could have the
effect of delaying, deferring or preventing a change of control of our
company.
Liability
and Indemnification of Officers and Directors
Our
certificate of incorporation provides that our directors will not be personally
liable to us or our stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (1) for any breach of a director’s duty
of loyalty to us or our stockholders, (2) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law, (3)
under Section 174 of the Delaware General Corporation Law, or (4) for any
transaction from which the director derives an improper personal
benefit. Moreover, the provisions do not apply to claims against a
director for violations of certain laws, including federal securities
laws. If the Delaware General Corporation Law is amended to authorize
the further elimination or limitation of directors’ liability, then the
liability of our directors will automatically be limited to the fullest extent
provided by law. Our certificate of incorporation and by-laws also
contain provisions to indemnify our directors and officers to the fullest extent
permitted by the Delaware General Corporation Law. In addition, we
may enter into indemnification agreements with our directors and
officers. These provisions and agreements may have the practical
effect in certain cases of eliminating the ability of stockholders to collect
monetary damages from our directors and officers. We believe that
these contractual agreements and the provisions in our certificate of
incorporation and by-laws are necessary to attract and retain qualified persons
as directors and officers.
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock is BNY Mellon Shareowner
Services.
DESCRIPTION
OF WARRANTS
We may
issue warrants for the purchase of debt securities, preferred stock, common
stock or other securities. Warrants may be issued independently or
together with debt securities, preferred stock or common stock offered by any
prospectus supplement and/or other offering material and may be attached to or
separate from any such offered securities. Each series of warrants
will be issued under a separate warrant agreement to be entered into between us
and a bank or trust company, as warrant agent, all as will be set forth in the
prospectus supplement and/or other offering material relating to the particular
issue of warrants. The warrant agent will act solely as our agent in
connection with the warrants and will not assume any obligation or relationship
of agency or trust for or with any holders of warrants or beneficial owners of
warrants.
The
following summary of certain provisions of the warrants does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all provisions of the warrant agreements.
Reference
is made to the prospectus supplement and/or other offering material relating to
the particular issue of warrants offered pursuant to such prospectus supplement
and/or other offering material for the terms of and information relating to such
warrants, including, where applicable:
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the
designation, aggregate principal amount, currencies, denominations and
terms of the series of debt securities purchasable upon exercise of
warrants to purchase debt securities and the price at which such debt
securities may be purchased upon such
exercise;
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the
number of shares of common stock purchasable upon the exercise of warrants
to purchase common stock and the price at which such number of shares of
common stock may be purchased upon such
exercise;
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the
number of shares and series of preferred stock purchasable upon the
exercise of warrants to purchase preferred stock and the price at which
such number of shares of such series of preferred stock may be purchased
upon such exercise;
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the
designation and number of units of other securities purchasable upon the
exercise of warrants to purchase other securities and the price at which
such number of units of such other securities may be purchased upon such
exercise;
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the
date on which the right to exercise such warrants shall commence and the
date on which such right shall
expire;
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United
States federal income tax consequences applicable to such
warrants;
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the
amount of warrants outstanding as of the most recent practicable date;
and
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any
other terms of such warrants.
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Warrants
will be issued in registered form only. The exercise price for warrants will be
subject to adjustment in accordance with the applicable prospectus supplement
and/or other offering material.
Each
warrant will entitle the holder thereof to purchase such principal amount of
debt securities or such number of shares of preferred stock, common stock or
other securities at such exercise price as shall in each case be set forth in,
or calculable from, the prospectus supplement and/or other offering material
relating to the warrants, which exercise price may be subject to adjustment upon
the occurrence of certain events as set forth in such prospectus supplement
and/or other offering material. After the close of business on the
expiration date, or such later date to which such expiration date may be
extended by us, unexercised warrants will become void. The place or places
where, and the manner in which, warrants may be exercised shall be specified in
the prospectus supplement and/or other offering material relating to such
warrants.
Prior to
the exercise of any warrants to purchase debt securities, preferred stock,
common stock or other securities, holders of such warrants will not have any of
the rights of holders of debt securities, preferred stock, common stock or other
securities, as the case may be, purchasable upon such exercise, including the
right to receive payments of principal of, premium, if any, or interest, if any,
on the debt securities purchasable upon such exercise or to enforce covenants in
the applicable Indenture, or to receive payments of dividends, if any, on the
preferred stock, or common stock purchasable upon such exercise, or to exercise
any applicable right to vote.
DESCRIPTION
OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may
issue stock purchase contracts, including contracts obligating holders to
purchase from us, and obligating us to sell to the holders, a specified number
of shares of common stock or other securities at a future date or dates, which
we refer to in this prospectus as “stock purchase contracts.” The
price per share of the securities and the number of shares of the securities may
be fixed at the time the stock purchase contracts are issued or may be
determined by reference to a specific formula set forth in the stock purchase
contracts. The stock purchase contracts may be issued separately or
as part of units consisting of a stock purchase contract and debt securities,
preferred stock, warrants or other securities or debt obligations of third
parties, including U.S. treasury securities, securing the holders’ obligations
to purchase the securities under the stock purchase contracts, which we refer to
herein as “stock purchase units.” The stock purchase contracts may
require holders to secure their obligations under the stock purchase contracts
in a specified manner. The stock purchase contracts also may require us to make
periodic payments to the holders of the stock purchase units or vice versa, and
those payments may be unsecured or refunded on some basis.
The stock
purchase contracts, and, if applicable, collateral or depositary arrangements,
relating to the stock purchase contracts or stock purchase units, will be filed
with the SEC in connection with the offering of stock purchase contracts or
stock purchase units. The prospectus supplement and/or other offering
material relating to a particular issue of stock purchase contracts or stock
purchase units will describe the terms of those stock purchase contracts or
stock purchase units, including the following:
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if
applicable, a discussion of material United States Federal income tax
considerations; and
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any
other information we think is important about the stock purchase contracts
or the stock purchase units.
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GLOBAL
SECURITIES
We may
issue the securities in whole or in part in the form of one or more global
certificates or notes, which we refer to as global securities, that we will
deposit with a depository or its nominee that we identify in the applicable
prospectus supplement.
We will
describe the specific terms of the depository arrangement covering the
securities in the prospectus supplement and/or other offering material relating
to that series. We anticipate that the following provisions will apply to all
depository arrangements.
Upon the
issuance of the securities in the form of one or more global securities, the
depository or its custodian will credit, on its book-entry registration and
transfer system, the number of shares or principal amount of securities of the
individual beneficial interests represented by these global securities to the
respective accounts of persons who have accounts with the depository. Ownership
of beneficial interests in the global securities will be shown on, and the
transfer of this ownership will be effected only through, records maintained by
the depository or its nominee with respect to interests of participants and the
records of participants with respect to interests of persons other than
participants. These accounts initially will be designated by or on behalf of the
underwriters, initial purchasers or agents, or by us if we offer and sell the
securities directly, and ownership of beneficial interests in the global
securities will be limited to participants or persons who hold interests through
participants. Qualified institutional buyers may hold their interests in the
global securities directly through the depository if they are participants in
this system, or indirectly through organizations which are participants in this
system. The laws of some states of the United States may require that some
purchasers of securities take physical delivery of the securities in definitive
registered form. These limits and the laws may impair your ability to own,
transfer or pledge interests in the global securities.
So long
as the depository, or its nominee, is the registered owner or holder of the
securities, the depository or its nominee, as the case may be, will be
considered the sole owner or holder of the securities represented by the global
securities for all purposes. No beneficial owner of an interest in the global
securities will be able to transfer that interest except in accordance with the
depository’s procedures.
We will
make dividend payments on, or payments of the principal of, and premium, if any,
and interest on, the global securities to the depository or its nominee, as the
case may be, as the registered owner of the global securities. We will not have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the global
securities or for maintaining, supervising or reviewing any records relating to
the beneficial ownership interest.
We expect
that the depository or its nominee, upon receipt of any dividend payment on, or
payment of the principal of, and premium, if any, and interest on, the global
securities, will credit participants’ accounts with payments in amounts
proportionate to their respective beneficial interests in the securities as
shown on the records of the depository or its nominee. We also expect that
payments by participants to owners of beneficial interests in the global
securities held through the participants will be governed by standing
instructions and customary practice, as is now the case with securities held for
the accounts of customers registered in the names of nominees for their
customers. These payments will be the responsibility of the participants.
Transfers between participants in the depository will be effected in the
ordinary way through the depository’s settlement system in accordance with the
depository rules and will be settled in same day funds.
We will
issue securities in certificated form in exchange for global securities
(subject, in the case of the third bullet point, to the procedures of the
depository) if:
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the
depository notifies us that it is unwilling or unable to continue as a
depository for the global securities or ceases to be a “clearing agency”
registered under the Securities Exchange Act of 1934 and a successor
depository is not appointed by us within 90 days of the
notice;
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an
event of default under the instrument governing the securities has
occurred and is continuing; or
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we
determine that the securities will no longer be represented by global
securities.
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PLAN
OF DISTRIBUTION
We
may sell our securities in any one or more of the following ways from time
to time: (1) through agents; (2) to or through underwriters;
(3) through brokers or dealers; (4) directly by us to purchasers,
including through a specific bidding, auction or other process; or
(5) through a combination of any of these methods of sale. The
applicable prospectus supplement and/or other offering materials will contain
the terms of the transaction, name or names of any underwriters, dealers, agents
and the respective amounts of securities underwritten or purchased by them, the
initial public offering price of the securities, and the applicable agent’s
commission, dealer’s purchase price or underwriter’s discount. Any
dealers and agents participating in the distribution of the securities may be
deemed to be underwriters, and compensation received by them on resale of the
securities may be deemed to be underwriting discounts.
Any
initial offering price, dealer purchase price, discount or commission may be
changed from time to time.
The
securities may be distributed from time to time in one or more transactions, at
negotiated prices, at a fixed price or fixed prices (that may be subject to
change), at market prices prevailing at the time of sale, at various prices
determined at the time of sale or at prices related to prevailing market
prices.
Offers to
purchase securities may be solicited directly by us or by agents designated by
us from time to time. Any such agent may be deemed to be an
underwriter, as that term is defined in the Securities Act of 1933, of the
securities so offered and sold.
If
underwriters are utilized in the sale of any securities in respect of which this
prospectus is being delivered, such securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at fixed public offering
prices or at varying prices determined by the underwriters at the time of
sale. Securities may be offered to the public either through
underwriting syndicates represented by managing underwriters or directly by one
or more underwriters. If any underwriter or underwriters are utilized
in the sale of securities, unless otherwise indicated in the applicable
prospectus supplement and/or other offering material, the obligations of the
underwriters are subject to certain conditions precedent, and the underwriters
will be obligated to purchase all such securities if they purchase any of
them.
If a
dealer is utilized in the sale of the securities in respect of which this
prospectus is delivered, we will sell such securities as
principal. The dealer may then resell such securities to the public
at varying prices to be determined by such dealer at the time of
resale. Transactions through brokers or dealers may include block
trades in which brokers or dealers will attempt to sell shares as agent but may
position and resell as principal to facilitate the transaction or in cross
trades, in which the same broker or dealer acts as agent on both sides of the
trade. Any such dealer may be deemed to be an underwriter, as such
term is defined in the Securities Act of 1933, of the securities so offered and
sold.
Offers to
purchase securities may be solicited directly by us and the sale thereof may be
made by us directly to institutional investors or others, who may be deemed
to be underwriters within the meaning of the Securities Act of 1933 with respect
to any resale thereof.
Agents,
underwriters and dealers may be entitled under relevant agreements with us to
indemnification by us against certain liabilities, including liabilities under
the Securities Act of 1933, or to contribution with respect to payments which
such agents, underwriters and dealers may be required to make in respect
thereof. The terms and conditions of any indemnification or
contribution will be described in the applicable prospectus supplement and/or
other offering material.
We may
also sell shares of our common stock through various arrangements involving
mandatorily or optionally exchangeable securities, and this prospectus may be
delivered in connection with those sales.
We may
enter into derivative, sale or forward sale transactions with third parties, or
sell securities not covered by this prospectus to third parties in privately
negotiated transactions. If the applicable prospectus supplement
and/or other offering material indicates, in connection with those transactions,
the third parties may sell securities covered by this prospectus and the
applicable prospectus supplement and/or other offering material, including in
short sale transactions and by issuing securities not covered by this prospectus
but convertible into, exchangeable for or representing beneficial interests in
securities covered by this prospectus, or the return of which is derived in
whole or in part from the value of such securities. The third parties
may use securities received under derivative, sale or forward sale transactions
or securities pledged by us or borrowed from us or others to settle those sales
or to close out any related open borrowings of stock, and may use securities
received from us in settlement of those transactions to close out any related
open borrowings of stock. The third party in such sale transactions
will be an underwriter and will be identified in the applicable prospectus
supplement (or a post-effective amendment) and/or other offering
material.
Underwriters,
broker-dealers or agents may receive compensation in the form of commissions,
discounts or concessions from us. Underwriters, broker-dealers or
agents may also receive compensation from the purchasers of shares for whom they
act as agents or to whom they sell as principals, or
both. Compensation as to a particular underwriter, broker-dealer or
agent will be in amounts to be negotiated in connection with transactions
involving shares and might be in excess of customary commissions. In
effecting sales, broker-dealers engaged by us may arrange for other
broker-dealers to participate in the resales.
Any
securities offered other than common stock will be a new issue and, other than
the common stock, which is listed on the Nasdaq National Market, will have no
established trading market. We may elect to list any series of
securities on an exchange, and in the case of the common stock, on any
additional exchange, but, unless otherwise specified in the applicable
prospectus supplement and/or other offering material, we shall not be obligated
to do so. No assurance can be given as to the liquidity of the
trading market for any of the securities.
Agents,
underwriters and dealers may engage in transactions with, or perform services
for, us or our subsidiaries in the ordinary course of business.
Any
underwriter may engage in overallotment, stabilizing transactions, short
covering transactions and penalty bids in accordance with Regulation M under the
Securities Exchange Act of 1934. Overallotment involves sales in
excess of the offering size, which create a short
position. Stabilizing transactions permit bids to purchase the
underlying security so long as the stabilizing bids do not exceed a specified
maximum. Short covering transactions involve purchases of the
securities in the open market after the distribution is completed to cover short
positions. Penalty bids permit the underwriters to reclaim a selling concession
from a dealer when the securities originally sold by the dealer are purchased in
a covering transaction to cover short positions. Those activities may
cause the price of the securities to be higher than it would otherwise
be. If commenced, the underwriters may discontinue any of the
activities at any time. An underwriter may carry out these
transactions on a national securities exchange, in the over-the-counter market
or otherwise.
The place
and time of delivery for securities will be set forth in the accompanying
prospectus supplement and/or other offering material for such
securities.
WHERE
YOU CAN FIND MORE INFORMATION
We file
annual, quarterly and current reports, proxy statements and other information
with the SEC. We also filed a registration statement on Form S-3,
including exhibits, under the Securities Act of 1933 with respect to the
securities offered by this prospectus. This prospectus is a part of
the registration statement, but does not contain all of the information included
in the registration statement or the exhibits. You may read and copy
the registration statement and any other document that we file at the SEC’s
public reference room at 100 F Street N.E., Washington D.C., 20549. You can call
the SEC at 1-800-SEC-0330 for further information on the operation of the public
reference room. You can also find our public filings with the SEC on
the internet at a web site maintained by the SEC located at
http://www.sec.gov.
We are
“incorporating by reference” specified documents that we file with the SEC,
which means:
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incorporated
documents are considered part of this
prospectus;
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we
are disclosing important information to you by referring you to those
documents; and
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information
we file with the SEC will automatically update and supersede information
contained in this prospectus.
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We
incorporate by reference the documents listed below:
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our
Annual Report on Form 10-K for the year ended December 31, 2008
(filed with the SEC on March 3, 2009 and as updated by our Current Report
on Form 8-K filed with the SEC on December 9, 2009, as referred to
below);
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our
Quarterly Report on Form 10-Q for the quarters ended March 31, 2009, June
30, 2009 and September 30, 2009;
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our
Current Reports on Form 8-K, dated February 9, 2009, February 10, 2009,
May 12, 2009, May 13, 2009, and December 9, 2009;
and
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the
description of our common stock contained in our Registration Statement on
Form 10, dated March 14, 2003, and any amendment or report updating
that description;
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the
description of our preferred share purchase rights contained in our
Registration Statement on Form 8-A, dated February 3, 2005, and any
amendment or report updating that description;
and
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any
future filings we make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 (i) after the date of the
registration statement on Form S-3 filed under the Securities Act of 1933
with respect to securities offered by this prospectus and prior to the
effectiveness of such registration statement and (ii) after the date of
this prospectus and before the end of the offering of the securities
pursuant to this prospectus.
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Notwithstanding
the foregoing, information furnished under Items 2.02 and 7.01 of any Current
Report on Form 8-K, including the related exhibits under Item 9.01, is not
incorporated by reference in this prospectus.
You may
request a copy of any of these filings, at no cost, by request directed to us at
the following address or telephone number:
Hudson
Highland Group, Inc.
560
Lexington Avenue, 5th
Floor
New York,
New York 10022
(212)
351-7300
Attention: Corporate
Secretary
LEGAL
MATTERS
The
validity of the securities offered by this prospectus will be passed upon for us
by Foley & Lardner LLP.
EXPERTS
The
consolidated financial statements as of and for the year ended December 31, 2008
incorporated in this prospectus by reference to our Current Report on Form 8-K
dated December 9, 2009 and management’s assessment of the effectiveness of
internal control over financial reporting, which is included in management’s
report on internal control over financial reporting, incorporated in this
prospectus by reference to our Annual Report on Form 10-K for the fiscal year
ended December 31, 2008, have been so incorporated by reference herein, in
reliance upon the reports of KPMG LLP, independent registered public accounting
firm, which are also incorporated by reference herein, and upon the authority of
said firm as experts in auditing and accounting.
The
consolidated financial statements as of and for the year ended December 31, 2007
and for the year ended December 31, 2006 incorporated in this prospectus by
reference to our Current Report on Form 8-K dated December 9, 2009 and Schedule
II – Valuation and Quality Accounts and Reserves for the fiscal years ended
December 31, 2007 and 2006 incorporated in this prospectus by reference to our
Annual Report on Form 10-K for the fiscal year ended December 31, 2008, have
been so incorporated in reliance on the reports of BDO Seidman, LLP, an
independent registered public accounting firm, given on the authority of said
firm as experts in auditing and accounting.
Prospectus
Supplement
March 30,
2010
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